COMMUNICATION FROM THE COMMISSION TO THE COUNCIL on the remedial measures notified by Hungary under Regulation (EU, Euratom) 2020/2092 for the protection of the Union budget
Date: 2022-11-30
Institutions: Directorate-General for Budget, European Commission
Subjects: EU budget, Hungary, budget policy, conflict of interest, corruption, eligibility criteria, financial management, implementation of the budget, public procurement, rule of law

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   EUROPEAN COMMISSION  Brussels, 30.11.2022  COM(2022) 687 final  COMMUNICATION FROM THE COMMISSION TO THE COUNCIL on the remedial measures notified by Hungary under Regulation (EU, Euratom) 2020/2092 for the protection of the Union budget  
 
 
  This  Communication  follows  the  European  Commission’s  proposal  for  a  Council 
implementing  decision  on  measures  for  the  protection  of  the  Union  budget  against 
breaches  of  the  principles  of  the  rule  of  law  in  Hungary1  (‘CID  Proposal’)  of  18 
September  2022.  It  provides  the  Council  with  the  necessary  information  to  take  a 
decision  pursuant  to  Article  6(10)  of  Regulation  (EU,  Euratom)  2020/2092  of  the 
European Parliament and of the Council of 16 December 2020 on a general regime of 
conditionality  for  the  protection  of  the  Union  budget  (‘Conditionality  Regulation’)2 
before 19 December 2022. 

  The  procedure  under  the  Conditionality  Regulation  was  initiated  by  a  written 
notification transmitted to Hungary on 27 April 2022 (‘Notification’). On 18 September 
2022,  the  European  Commission  (‘Commission’)  adopted  the  CID  Proposal  in 
accordance with Article 6(9) of the Conditionality Regulation.  

In the CID Proposal, the Commission presented its assessment of the proposed remedial 
measures  as  they  were  submitted  by  the  Hungarian  Government  to  address  the 
Commission’s findings. In particular, recital (28) of the CID proposal states that ‘since 
the issues identified in Hungary concern both the legal framework and, to a large extent, 
administrative  practices,  the  assessment  of  the  adequacy  of  the  remedial  measures 
proposed by Hungary to achieve their aim of putting an end to the breaches and/or to the 
risks for the Union’s financial interests will depend on the analysis of the details of the 
measures and of the correct, full and effective implementation of all key implementation 
steps as indicated in the relevant timelines submitted by Hungary on 22 August. In this 
respect, key steps for many of the proposed remedial measures still need to be taken by 
Hungary’.  The  key  implementation  steps  are  also  reproduced  in  the  Annex  to  the 
explanatory memorandum of the CID Proposal (the ‘Key Implementation Steps’). 

In recitals 11 and 12, the CID Proposal  summarises the Commission’s findings in  the 
Notification about situations that constitute breaches of the principles of the rule of law 
and the situations or cases concerned by such breaches in Hungary that are detrimental 
to or may create risks for the sound financial management of the Union budget or the 
financial  interests  of  the  Union.  The  findings  concern  serious  systemic  irregularities, 
deficiencies and weaknesses in public procurement procedures, leading to concentration 
of  contract  awards,  serious  deficiencies  in  the  attribution  of  framework  agreements, 
non-application  of  public  procurement  and  conflict  of  interest  rules  to  ‘public  interest 
trusts’  and  the  entities  managed  by  them,  and  lack  of  transparency  with  regard  to  the 
management  of  funds  by  those  trusts.  In  addition,  the  findings  also  concerned 
limitations to effective investigation and prosecution of alleged criminal activity, issues 
regarding the organisation of the prosecution services, and the absence of a functioning 
and effective anti-corruption framework. The Commission considered that those issues 
and 
inability,  failure  or 
unwillingness, on the part of the Hungarian authorities, to prevent decisions that are in 
breach  of  the  applicable  law,  as  regards  public  procurement  and  conflicts  of  interest, 
and  thus  to  adequately  tackle  risks  of  corruption.  They  constitute  breaches  of  the 
principle of the rule of law, in particular the principles of legal certainty and prohibition 
of arbitrariness of the executive powers and raise concerns as regards the separation of 
powers. 

time  demonstrate  a  systemic 

their  recurrence  over 

1  
2  

COM(2022) 485 final, 2022/0295 (NLE). 
OJ L 433I , 22.12.2020, p. 1. 

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In  Recital  38  of  the  CID  Proposal  the  Commission  considered  that  ‘the  proposed 
remedial  measures,  taken  together,  would  in  principle  be  capable  of  addressing  the 
issues  regarding  systemic  irregularities,  deficiencies  and  weaknesses  in  public 
procurement,  risks  of  conflicts  of  interest,  and  concerns  regarding  ‘public  interest 
trusts’,  as  well  as  the  additional  grounds  regarding  investigation,  prosecution  and  the 
anti-corruption framework, provided that all the measures are correctly and effectively 
implemented’.  

  Recital  39  added  that  the  detailed  implementing  rules  for  the  proposed  remedial 
measures were still to be determined, notably how key elements of the measures would 
be  transposed  in  the  actual  legal  texts  to  be  adopted  for  the  implementation  of  the 
remedial  measures.  Recital  39  also  recalled  that,  given  that  several  of  the  issues 
identified  in  Hungary  are  not  only  about  changes  in  the  legal  framework,  but  more 
prominently  about  the  concrete  implementation  of  changes  in  practice,  the  latter 
requiring  a  more  extended  timeframe  to  produce  concrete  results,  pending  the 
implementation  of  at  least  the  key  elements  of  some  of  the  remedial  measures  at  the 
time  of  the  CID  Proposal,  as  indicated  in  the  timelines  of  the  remedial  measures 
submitted by Hungary on 22 August, a risk for the Union budget remained. Pending the 
entry  into  force  of  key  legislative  texts  that  would  implement  many  of  the  proposed 
remedial measures and taking into account the assessment contained in the Explanatory 
Memorandum,  as  well  as  the  possibility  that  the  measures  might  not  be  correctly 
implemented,  or  that  their  effectiveness  would  be  weakened  in  the  details  of  the 
measures,  the  Commission  estimated  the  ensuing  risk  for  the  Union  budget  and 
proposed measures to the Council under Article 6(9) of the Conditionality Regulation. 

  On  that  basis,  the  Commission  proposed  the  suspension  of  65%  of  the  commitments 
under three Cohesion  policy programmes under the Multiannual  Financial  Framework 
the  (i)  Environmental  and  Energy  Efficiency  Operational 
2021-2027,  namely 
Programme Plus, (ii) the Integrated Transport Operational Programme Plus, and (iii) the 
Territorial  and  Settlement  Development  Operational  Programme  Plus.  For  the  case 
where  those  programmes  would  not  be  approved  by  the  time  the  Council  adopts  its 
decision, the Commission proposed the suspension of approval of one or more of them. 
Furthermore,  the  Commission  proposed  the  prohibition  of  entering  into  new  legal 
commitments  with  any  public  interest  trust  and  any  entity  maintained  by  them  under 
any Union programme under direct and indirect management.  

  The CID Proposal reflected Hungary’s commitment to report to the Commission, by 19 
November  2022,  about  the  implementation  of  the  remedial  measures  submitted  by 
Hungary.  In  the  CID  Proposal,  the  Commission  also  stated  that  it  would  keep  the 
Council informed of any relevant element which might have an effect of its assessment. 

  Following  the  discussions  between  the  Hungarian  authorities  and  the  Commission 
services, the Commission received information from Hungary on 19 November 2022 on 
the  actions  taken  to  implement  the  commitments  undertook  by  the  Hungarian 
Government. 

  Having  now  considered  the  remedial  measures  in  the  light  of  their  more  detailed 
implementation  by  Hungary,  this  Communication  provides  the    Council  with  the 
necessary  information  to  take  a  decision  on  the  CID  Proposal.  The  assessment  in  this 

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Communication is based on the documents received from the Hungarian authorities by 
19 November 2022, which is the cut-off date for the assessment3.  

ASSESSMENT  OF  THE  ADEQUACY  OF  AND  PROGRESS  ON  THE  REMEDIAL  MEASURES 

SUBMITTED BY HUNGARY 

  Following  the  adoption  of  the  CID  Proposal,  the  Commission  has  analysed,  in 
particular, the details of relevant legal acts submitted by Hungary and the fulfilment of 
the  Key  Implementation  Steps.  On  that  basis,  it  has  assessed  the  adequacy  of  the 
17 remedial  measures  as  submitted  by  Hungary  in  the  letter  of  22  August  2022  to 
address the Commission’s findings in the Notification, as complemented by additional 
commitments  undertaken  in  the  letter  of  13 September  2022  (the  ‘September  Letter’), 
taking into account the progress made on their implementation by 19 November 2022. 
The Commission also took into account the letter on the implementation of the remedial 
measures  sent  by  Hungary’s  Minister  of  Justice  Varga  to  Commissioner  Hahn  on  19 
November 2022 (‘the November Letter’). 

  The remedial measures are the following:  

i. 

ii. 

iii. 

iv. 

v. 

vi. 

Reinforcing prevention, detection and correction of illegalities and irregularities 
concerning  the  implementation  of  Union  funds  through  a  newly  established 
Integrity Authority;  

Anti-Corruption Task Force;  

Strengthening the Anti-Corruption Framework;  

Ensuring  the  transparency  of  the  use  of  Union  support  by  public  interest  asset 
management foundations;  

Introduction of a specific procedure in the case of special crimes related to the 
exercise of public authority or the management of public property;  

Strengthening  audit and  control mechanisms  to  guarantee the sound use  of EU 
support;  

vii. 

Reducing  the share of tender procedures with  single bids  financed from  Union 
funds;  

viii.  Reducing  the  share  of  tender  procedures  with  single  bids  financed  from  the 

national budget;  

ix. 

x. 

Development  of  a  single-bid  reporting  tool  to  monitor  and  report  on  public 
procurements closed with single-bids;  

Development  of  the  Electronic  Public  Procurement  System  (EPS)  to  increase 
transparency;  

3  

The Commission acknowledges receipt of the letter that Minister of Justice Varga sent to  Commissioner 
Hahn on 26 November 2022. The content of that letter is not part of the present assessment. 

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xi. 

Development of a performance measurement framework assessing the efficiency 
and cost effectiveness of public procurements;  

xii.  Adoption  of  an  action  plan  to  increase  the  level  of  competition  in  public 

procurement;  

xiii.  Training to be provided for micro, small and medium-sized enterprises on public 

procurement practices;  

xiv. 

Setting  up  a  support  scheme  for  compensating  the  costs  associated  with 
participating  in  public  procurement  of  micro,  small  and  medium-sized 
enterprises;  

xv. 

Application of Arachne;  

xvi. 

Strengthening cooperation with OLAF; and  

xvii.  Adoption of a legislative act ensuring enhanced transparency of public spending.  

  Thirteen of the  remedial measures  set  Key  Implementation Steps to  be fulfilled by 19 
November  2022.  For  four  remedial  measures,  namely  remedial  measures  (viii.)  and 
(xii.)  to  (xiv.),  the  Commission  indicated  that  there  were  no  immediate  Key 
Implementation Steps, as they require a longer implementation period.  

  In order to meet the deadlines set in the Key Implementation Steps, Hungary proceeded 
with  the  adoption  of  several  legislative  acts  between  the  end  of  September  and  the 
beginning  of  October  2022.  However,  intense  discussions  between  the  Hungarian 
authorities and the Commission services were necessary to try to ensure that these acts 
would be fully aligned with the remedial measures and that they would be effective. An 
earlier  adherence  to  the  wording  and  spirit  of  the  remedial  measures,  ensuring  their 
effectiveness,  would  have  allowed  for  a  smoother  process  and  for  this  updated 
assessment  to  be  presented  earlier.  The  Hungarian  Government  submitted  to  the 
National Assembly a so-called “service package” on 15 November 2022, with a number 
of proposed amendments to  the legal texts  that were  adopted at  the end of September 
and beginning of October 2022. The service package is composed of two draft bills, one 
(T/2033) for adoption according to the ordinary procedure, for which the final vote took 
place on 22 November 2022, and the other draft bill (T/2032) for adoption according to 
the procedure applicable for cardinal acts (requiring a two-thirds majority), with a final 
vote set for 6 December 2022. As a result, amendments that concern the implementation 
of  a  single  remedial  measure  may  be  split  in  these  two  bills,  with  different  dates  of 
adoption. The working English version of this service package reached the Commission 
services only late on 18 November 2022.  

  In  accordance  with  the  Conditionality  Regulation,  and  in  the  light  of  Articles  4  and  6 
thereof, the assessment of the adequacy of the remedial measures requires determining 
whether those measures, as adopted and in view of their details, are capable of putting 
an end to the relevant breaches of the principles of the rule of law and/or to the impacts 
or risks for the sound financial management of the Union’s budget and for the Union’s 
financial  interests,  and  therefore  to  reach  the  conclusion  that  the  conditions  for  the 
application of the Regulation are no longer met.  

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  The  current  assessment  is  without  prejudice  to  any  possible  future  action  by  the 
Commission in case of changes in the relevant legal acts or in their implementing rules, 
or in case the remedial measures are not, or cease to be, effectively implemented or do 
not bring about the expected results. On that basis, the Commission reserves the right to 
reconsider  its  position  on  each  of  the  issues,  and,  if  all  conditions  under  the 
Conditionality Regulation are fulfilled, to start a new procedure. 

  With  the  November  Letter,  the  Hungarian  Government  committed  to  report  to  the 
Commission  on  the  implementation  of  all  remedial  measures  on  a  quarterly  basis  and 
unconditionally  until  31  December  2028,  i.e.  by  the  end  of  the  year  where  the  first 
six-year  mandate  of  the  board  of  the  Integrity  Authority  would  expire.  Without 
prejudice  to  the  proposed  measures  for  the  protection  of  the  Union  budget,  the 
Commission will continue to monitor the correct, full and effective implementation of 
all remedial measures, including the implementation of all the steps Hungary committed 
to  in  the remedial  measures, including those requiring a longer implementation  period 
(i.e.  beyond  19  November  2022),  and  of  any  further  commitments  undertaken  by 
Hungary in the context of the remedial measures.  

i.  Reinforcing  prevention,  detection  and  correction  of 

illegalities  and 
irregularities  concerning  the  implementation  of  Union  funds  through  a 
newly established Integrity Authority 

  The  Hungarian  Government  committed  to  establish  an  Integrity  Authority  with  the 
objective  of  reinforcing  the  prevention,  detection  and  correction  of  fraud,  conflicts  of 
interest  and  corruption,  as  well  as  other  illegalities  and  irregularities  in  the 
implementation of any Union financial support. For that purpose, Hungary committed to 
provide  the  Integrity  Authority  with  extensive  powers.  It  also  committed  to  specific 
rules on the appointment of the Integrity Authority’s board and on the involvement of 
an  eligibility  committee  (the  ‘Eligibility  Committee’),  aimed  at  guaranteeing  that  the 
Integrity Authority and the members of its board will be fully independent.  

  The  creation  of  the  Integrity  Authority,  a  new  body  in  the  Hungarian  context,  is  a 
horizontal  measure  that  aims  at  remedying  the  systemic  breaches  of  the  rule  of  law 
concerning public procurement affecting the Union’s financial interests. It is one of the 
central remedial measures proposed by Hungary. 

  The Key Implementation Steps for this measure were: (i) the adoption of a Government 
Decision providing for the tasking and the timeline for the establishment of the Integrity 
Authority by 5 September 2022, (ii) the submission to the National Assembly of a draft 
Act  on  the  establishment  of  the  Integrity  Authority  by  30  September  2022,  (iii) the 
appointment  of  the  board  by  4  November  2022  and  (iv) the  beginning  of  the  actual 
activities of the Integrity Authority as of 19 November 2022. 

  Hungary took the following steps to address the Key Implementation Steps. 

  On  5  September  2022,  the  Hungarian  Government  adopted  Government  Decision 
1424/2022 on tasks relating to setting up an independent authority operating to prevent, 
detect  and  correct  illegalities  and  irregularities  concerning  the  implementation  of  EU 
funds. This Government Decision entered into force on 6 September 2022.  

  On 23 September 2022, the Hungarian Government submitted to the National Assembly 
the  draft  Act  aiming  at  establishing  the  Integrity  Authority.  On  4  October  2022,  the 

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National Assembly adopted the Act establishing the Integrity Authority (Act XXVII of 
2022 on the control of the use of European Union budget funds, the ‘Integrity Authority 
Act’), which was promulgated on 10 October 2022 and entered into force on 11 October 
2022.  The  Hungarian  authorities  discussed  several  amendments  to  the  Integrity 
Authority Act with the Commission services; most of the amendments were introduced 
in  the  part  of  the  service  package  on  which  the  National  Assembly  voted  on  22 
November  2022.  However,  the  amendments  concerning  the  Integrity  Authority’s 
powers regarding asset declarations were inserted in the part of the service package with 
a final vote set for 6 December 2022. Following the submission of the service package 
to  the  National  Assembly,  the  Hungarian  authorities  sent  the  Commission  services  a 
revised  draft  legal  text  of  the  Integrity  Authority  Act  on  16  November  20224.  The 
amending  act  regarding  most  of  the  amendments  was  adopted  on  22  November  2022 
and it reflects the changes included in the legal text received by the Commission on 16 
November  2022.  The  Commission  is  not  in  a  position  to  assess  whether  the 
amendments regarding asset declarations, scheduled for vote in the National Assembly 
for 6 December 2022, will enter into force as proposed or if further amendments will be 
tabled before the date of adoption. 

  With  regard  to  the  preparation  of  the  draft  Integrity  Authority  Act,  the  Hungarian 
Government  had  committed  to  consult  extensively  with  national  and  international 
stakeholders,  to  seek  the  Organisation  for  Economic  Co-operation  and  Development’s 
(OECD)  policy  advice  and  to  take  into  account  the  related  recommendations.  In 
addition  to  consulting  the  Commission,  the  Hungarian  Government  effectively 
consulted the OECD, which provided drafting suggestions on 27 September 2022. On 4 
November, the Hungarian government informed the OECD about how it addressed the 
OECD’s  opinions  in  the  Integrity  Authority  Act  promulgated  on  10  October  2022.  In 
addition,  the  Hungarian  Government  consulted  the  Council  of  Europe  on  the  draft 
Integrity  Authority  Act  on  15  September  2022.  The  Council  of  Europe  provided 
comments on 13 October 2022, after the promulgation of the Integrity Authority Act on 
10 October 2022. The Hungarian Government replied on 16 November 2022, after the 
submission of amendments to the Integrity Authority Act as part of the service package 
of 15 November 2022.  The Hungarian Government took into account certain opinions 
or  drafting  suggestions,  including  following  recommendations  from  the  Commission 
that  were  in  line  with  the  positions  of  the  OECD  and  of  the  Council  Europe.  The 
Hungarian authorities explained why certain  opinions or suggestions could not be taken 
into account5. On this basis, the Commission considers that the Hungarian Government 
fulfilled  the  relevant  commitments  in  the  remedial  measure  with  regard  to  the 
consultation process. The Commission notes that some recommendations were accepted 
and reflected in the legal text and others not. To the extent that certain recommendations 

4  

5  

The Commission notes that there were some discrepancies in the numbering and in the content of certain 
provisions  amending  the  Integrity  Authority  Act  as  shown  in  bill  T/2033  and  in  the  draft  Integrity 
Authority  Act  submitted  to  the  Commission  services  on  16  November  2022.  However,  these 
discrepancies do not concern substantive issues. 
The  opinion  of  the  Council  of  Europe,  for  example,  signalled  concerns  relating  to  a  limited  set  of 
provisions  for  external  audit  processes,  reporting  and  accountability  arrangements,  including  that  the 
annual  analytical  integrity  report  is  submitted  to  the  National  Assembly  only  for  information.  Hungary 
replied  that  this  solution  was  chosen  consciously,  so  to  ensure  that  the  Integrity  Authority  is  fully 
independent in the performance of its tasks. 

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were  reflected,  the  Commission  considers  that  the  consultation  of  the  OECD  and  the 
Council of Europe contributed to improve the design of the Integrity Authority Act6.  

  As  regards  the  selection  and  appointment  of  the  board  of  the  Integrity  Authority,  the 
relevant Hungarian authorities acted in line with the timeline and the basic requirements 
set in the remedial measure that aimed at guaranteeing that the Integrity Authority and 
the  members  of  its  board  be  fully  independent.  On  23  September  2022,  the  Director 
General of the Directorate General for Audit of European Funds (‘EUTAF’) issued an 
international  open  call  for  expression  of  interest  regarding  the  selection  of  the  three 
members of the Eligibility Committee, based on the criteria established by the remedial 
measure7. On 11 October 2022, the Director General of the EUTAF appointed the three 
members8 of the Eligibility Committee. On 14 October 2022, the Eligibility Committee 
published  a  call  for  applications  for  the  board  of  the  Integrity  Authority  based  on  the 
criteria established by the remedial measure9, with the deadline of 25 October 2022. On 
28 October 2022, the Eligibility Committee issued the list of eligible candidates for the 
position of President and Vice Presidents of the board of the Integrity Authority. On the 
same  date,  the  President  of  the  State  Audit  Office  published  the  evaluation  grid  to  be 
used  for  the  selection  of  the  members  of  the  board10.  On  3  November  2022,  the 
President  of  the  State  Audit  Office  nominated  the  selected  members11,  who  were 
appointed by the President of the Republic on 4 November 2022.  

  The selection process of the members of the  board of the  Integrity Authority formally 
complied  with  the  commitments  under  the  remedial  measure.  Nevertheless,  the 
Commission notes that, based on information published by the State Audit Office, the 
second  Vice  President  of  the  board  was  appointed  although  other  candidates  had 
obtained  a  higher  number  of  points  in  the  selection  process.  According  to  the 
information  provided  by  the  Hungarian  authorities  to  the  Commission  services,  this 
followed a process by which the nominee for the position of President of the board was 
given  the  possibility  to  interview  two  candidates  for  the  second  Vice  President 
position12. The  choice  was then made based on  feedback  from  the  nominee President, 

6  

7  

8  

9  

10  
11  

12  

Beyond the official consultations, the Commission also notes some critical external specialist assessments 
about the design of the integrity authority, for example by the Hungarian Helsinki Committee, K-Monitor 
and  Transparency  International  Hungary  https://transparency.hu/en/news/the-eu-comm-should-to-stop-
systemic-corruption-in-hungary-joint-analysis-by-ngos/. 
The call for expression of interest, the result and other relevant information are published on the website 
of the EUTAF, at https://eutaf.kormany.hu/alkalmassagi-bizottsag.  
Following  a  resignation,  the  Director  General  of  the  EUTAF  replaced  one of  the  three  members  of  the 
Eligibility Committee on 21 October 2022 with another appointee. 
The conditions for application, similarly to those for the Eligibility Committee, require that the candidates 
do not hold certain posts or political mandates, that they are not members of or employed by a political 
party  or  a  party  foundation  and,  in  addition,  that  they  have  no  management  or  ownership  links  with  a 
company.  The  call  for  expression  of  interest  and  the  eligible  candidates  following  the  screening  of  the 
Eligibility Committee are published on the website of the EUTAF, at https://eutaf.kormany.hu/integritas-
hatosag-igazgatosag. 
See https://www.aszhirportal.hu/hirek/az-allami-szamvevoszek-elnokenek-kozlemenye. 
See 
elnokenek-kozlemenye-2022-11-03-20-39-00?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en-
US&_x_tr_pto=wapp. In line with the remedial measure, the applicants eligible were more than twice the 
posts in the board (five applicants for the position of President and 13 applicants for the position of Vice 
President). 
Dr Kálmán Dabóczi,  nominated by  the  State  Audit  Office  and appointed as Vice President,  scored 102 
See 
points, 
https://www.aszhirportal.hu/hu/sajtokozlemenyek/az-allami-szamvevoszek-elnokenek-kozlemenye-2022-

https://www-aszhirportal-hu.translate.goog/hu/sajtokozlemenyek/az-allami-szamvevoszek-

candidates 

points. 

scored 

while 

other 

more 

had 

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based on the need to select a candidate with experience in managing large organisations. 
While  in  principle  this  facilitates  the  establishment  of  a  board  that  could  effectively 
cooperate, this procedure is not foreseen as such by the remedial measure, which states 
that  the  board  would  be  appointed  following  an  eligibility  check  by  the  Eligibility 
Committee and a selection by the State Audit Office. The procedure has thus not been 
fully  transparent  as  regards  this  choice.  It  is  also  noted  that  the  available  information 
does not allow the Commission to conclude that the appointed candidate fully meets the 
criterion of sufficient international experience with regard to anti-corruption and public 
procurement, even if he meets all the other criteria set out in the remedial measures. The 
two other members of the board fully meet all criteria set out in the remedial measures.  

  The President of the Integrity Authority has informed the Commission that he envisages 
a  larger  organisation  (with  at  least  120  staff  members)  than  the  minimum  of  50  staff 
members foreseen in the remedial measure, with a commensurate budget. He envisages 
also  remuneration  packages  for  staff  members  that  allow  him  to  attract  private  sector 
experts  even  if  these  would  exceed  the  pay  levels  of  the  Integrity  Authority  board 
members. He also reported that the Hungarian Government had not opposed this request 
even if discussions on the finalisation of the budget were still ongoing. Recruitment of 
staff is  ongoing and the  President confirmed that he was the sole appointing authority 
with  no  government  involvement  in  this  process.  These  staffing  and  resources  plans 
remain subject to budgetary decisions which still need to be adopted.  If confirmed, the 
Commission considers that these developments would contribute to the effectiveness of 
the institution. 

  On  18  November  2022,  the  board  of  the  Integrity  Authority  held  the  first  official 

meeting, the minutes of which were provided to the Commission services. 

  With regard to the powers of the Integrity Authority, relevant Sections13 of the Integrity 
Authority  Act  provide  it  with  most  of  the  powers  required  by  the  remedial  measure, 
including:  (i) having  full  access  to  information  of  on-going  and  upcoming  or  planned 
interest  declarations14  (Sections  5 
public  procurement  procedures,  conflict  of 
(5)(a), 8 (1)  and  (2);  Section  18  (8));  (ii) instructing  other  authorities  to  carry  out 
administrative  investigative  acts  on  its  behalf  (Section 5 (2)(a)  and  Chapter  III, 
Subtitle 7);  (iii) instructing  the  relevant  authorities  to  initiate  procedures  to  verify 
conflict  of  interest  declarations  upon  complaints  and  suspicion  in  relation  to  the 
management  of  Union  funds  (Section  18  (2);  Section 24 (1);  Section  25  (1)); 
(iv) initiating  procedures  to  verify  certain  asset  declarations  (Section 5 (6),  (6)(a) 

11-03-20-39-00.  The  State  Audit  Office  explained  to  the  Commission’s  services  that  candidates  were 
ranked based on the points they scored and that, in addition to that, in case of even points, the State Audit 
Office  considered  the  leadership  skills  of  the  candidates  and  whether  the  Eligibility  Committee  had 
recommended them for nomination. The nominee for the position of President of the Integrity Authority 
was  given  the  opportunity  to  interview  the  candidates  with  the  highest  scores  recommended  by  the 
Eligibility Committee for nomination.  
The  numbering  of  Chapters,  Subtitles  and  Sections  refers  to  the  consolidated  version  of  the  Integrity 
Authority  Act  that  the  Hungarian  authorities  submitted  to  the  Commission  services  on  16  November 
2022. 
Under remedial measure (vi.) on strengthening audit and control mechanisms to guarantee the sound use 
of EU support, the Hungarian Government committed to oblige the newly created Directorate of Internal 
Audit and Integrity (DIAI) to provide the Integrity Authority, on request, with  full access to conflict of 
interest declarations or DIAI’s files without delay. This commitment has been implemented in a legal act 
(see assessment under section vi. below). 

13  

14  

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and (7)); (v) recommending contracting authorities to use a certain public procurement 
procedure  in  a  specific  procedure  or  for  a  category  of  procedures  (Section 15 (1)(a) 
to (e)); (vi) instructing the relevant contracting authority to suspend a tender in case of 
suspected  fraud,  corruption,  conflict  of  interests  or  other  serious  illegalities  or 
irregularities  detected  in  the  procedure  (Section 21);  (vii) recommending  contracting 
authorities  on  grounds  for  exclusion  of  economic  operators  from  public  procurement 
(Sections 15 (1)(e)  and 16);  (viii) initiating  proceedings  before  the  Public  Procurement 
Arbitration  Board  for  behaviour  or  default  in  violation  of  public  procurement  rules 
pursuant  to  the  Act  CXLIII  of  2015  on  Public  Procurement  (Section 15 (4)); 
(ix) requesting  judicial  review  of  all  decisions  of  authorities  concerning  public 
procurement procedures that involve any Union support and may be subject to judicial 
review  (Section 15  (4));  (x)  issuing  an  annual  analytical  Integrity  Report  including 
recommendations  and  findings,  with  the  obligation  for  the  Hungarian  Government  to 
reply  to  the  Integrity  Authority  and  explain  how  it  will  address  the  report’s 
findings(Chapter I, Subtitles 5 and 6; Section 74). 

  The Commission notes that the last sentence of Section 3 of the Integrity Authority Act, 
regarding the performance of the tasks of the Integrity Authority, states that ‘[s]hould a 
project be removed from European Union financing, this shall not lead to depriving the 
Authority  from  its  powers  if  the  fraud,  conflict  of  interest,  corruption  and  other 
illegalities  or  irregularities  affect  or  seriously  risk  affecting  the  sound  financial 
management of the European Union budget or the protection of the financial interests of 
the European Union’. Depending on the way it is interpreted, this provision as such does 
not need to deprive the Integrity Authority of its powers in case a project is withdrawn 
from  Union  financing.  Insofar  as  the  Integrity  Authority  maintains  its  appreciation  on 
the  underlying  issues  concerning  fraud,  conflict  of  interest,  corruption  and  other 
illegalities or irregularities and their link with the Union budget, the provision could be 
taken  to  mean  that  even  the  said  projects  would  remain  subject  to  the  scrutiny  of  the 
Integrity  Authority.  However,  the  interpretation  and  application  of  this  provision  will 
depend  on  decisions  by  the  Hungarian  authorities,  and  it  is  also  possible  that  such  a 
provision  is  interpreted  in  a  way  that  allows  depriving  the  Integrity  Authority  of  its 
powers  as  soon  as  it  starts  examining  certain  public  procurement  procedures.  This 
provision could thus be used to render the Integrity Authority ineffective and unable to 
put  an  end  to  the  structural  problems  that  led  the  Commission  to  open  the  procedure 
under  the  Conditionality  Regulation.  Legal  certainty  and  the  effectiveness  of  the 
Integrity Authority would have required the wording of the relevant provisions to state 
explicitly  that  the  Integrity  Authority’s  powers  are  maintained  even  after  a  project  is 
withdrawn from Union funding, with no exception or limitation.  

  The  Commission  welcomes  Section  27/A  of  the  Integrity  Authority  Act.  Under  that 
provision,  the  Integrity  Authority  may  file  a  motion  for  revision  or  a  motion  for 
repeated revision of decisions of the prosecution service or of investigating authorities 
to  dismiss  a  crime  report  or  terminate  proceedings,  in  accordance  with  the  new 
procedure  introduced  as  a  result  of  remedial  measure  (v.)15.  This  provision  would 
contribute  to  make  both  the  remedial  measure  (v.)  and  the  remedial  measure  on  the 
Integrity  Authority  more  effective.  The  Integrity  Authority  would  have  first-hand 
information and evidence on situations that may be relevant for criminal proceedings. It 

15  

Introduction of a specific procedure in the case of special crimes related to the exercise of public authority 
or the management of public property 

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would be able to provide elements necessary to ensure that investigation or prosecution 
of the criminal offences covered by the new procedure under the remedial measure (v.) 
is  duly  resumed.  However,  as  will  be  explained  below,  the  details  of  the  remedial 
measure on the introduction of a specific procedure in the case of special crimes related 
to the exercise of public authority or the management of public property presents itself 
certain deficiencies. 

if 

to 

issue 

recommendations 

to  contracting  authorities, 

  The  Commission  also  notes  that,  since  the  Integrity  Authority  will  in  most  cases  be 
those 
empowered 
recommendations are not followed and the ensuing situation is unlawful, it is essential 
that the Integrity Authority is able to initiate swift and effective judicial proceedings to 
ensure legality and effectively prevent damage to the Union’s financial interests. This is 
crucial  to  ensure  that  the  Integrity  Authority  would  be  in  a  position  to  remedy  the 
structural  breaches  that  led  the  Commission  to  open  the  procedure  under  the 
Conditionality  Regulation.  Section  15  (4)  refers  to  the  possibility  for  the  Integrity 
Authority to ‘initiate proceedings at the competent organ or court, and in particular, as 
regards an illegality relating to public procurement, it may initiate the proceeding of the 
Public  Procurement  Arbitration  Board’,  also  being  able  to  request  the  adoption  of 
interim  measures.  Section  27  (1)  allows  the  Integrity  Authority  to  challenge,  in  an 
administrative court action, the decisions of the Public Procurement Arbitration Board 
(‘PPAB’)  or  of  another  authority  concerning  public  procurement  that  relates  to  Union 
funds, including the possibility of applying for interim measures. 

  The  Commission  notes  that  the  Integrity  Authority  may  initiate  the  proceeding  of  the 
PPAB  and  that  the  applicable  rules  foresee  that  the  duration  of  such  proceedings  is 
limited  to  up  to  25  days  with  one  specific  and  limited  exception16.  The  Integrity 
Authority may request  the review of the decision of the PPAB at  the competent  court 
immediately after its review procedure is terminated. However, some important aspects 
are not clearly articulated in the Integrity Authority Act: the necessary suspension of the 
public procurement procedure while the PPAB procedure is ongoing and the possibility 
of  judicial  review  if  the  time  limit  for  a  decision  of  the  PPAB  expires  without  one 
having  been  taken.  The  Commission  also  notes  that  the  Integrity  Authority  does  not 
have  the  option  to  seize courts  directly  which  might  be  more  effective  in  some  cases. 
Consequently, there are doubts about the effectiveness of the judicial review of cases in 
which  the  contracting  authority  does  not  follow  the  recommendation  of  the  Integrity 
Authority. 

16  

The time limits for the PPAB to take a decision are set by Section 164 of Act CXLIII of 2015 on Public 
Procurement, as follows: (1) When no hearing is held in the case, the PPAB shall be required to finish the 
case within 15 days counted from the launch of the proceeding, save for the case specified in paragraph 2. 
(2)  If  the  PPAB  has  held  a  hearing  in  the  case,  it  shall  be  required  to  finish  the  case  within  25  days 
counted from the launch of the proceeding, save for the case specified in paragraph 3. 
(3) The PPAB shall conclude the case concerning an amendment or performance violating this Act of the 
contract  concluded  on  the  basis  of  the  procurement  procedure  and  concerning  the  bypass  of  the 
procurement procedure within 60 days from the launching of the procedure. 
(5) The time limit referred to in paragraphs 1 and 3 may be extended with up to 10 days on one occasion, 
in justified cases. Parties must be notified. 
(7)  Time  limit  for  arrangement  of  para.  1-3  shall  start  form  the  day  where  all  the  documents  were 
available (if they were requested). 

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  Importantly, as regards the powers of the Integrity Authority related to the verification 
of  asset  declarations,  contained  in  amendments  to  be  adopted  on  6  December  2022, 
Section 5, paragraphs (6), (6a) and (7) set a regime by which:  

(i)  for  the  public  asset  declarations  of  certain  individuals17,  the  Integrity  Authority 
would be entitled to conduct an unspecified ‘asset declaration examination procedure’. 
On the basis of its result, the Authority could initiate the procedure related to the asset 
declaration before the relevant body, which should inform the Integrity Authority of the 
results of such procedure; 

(ii) for the public asset declarations of other individuals18, the Integrity Authority would 
be  entitled  only  to  initiate  the  verification  procedure  related  to  the  asset  declarations 
before  the  relevant  body  tasked  with  their  verification,  which  should  inform  the 
Integrity Authority of the results of such procedure; and  

(iii)  for  the  (non-public)  asset  declarations  of  individuals  who  are  obliged  to  make 
declarations  of  assets  based  on  their  advisory,  decision  making  or  control  powers  in 
relation to Union funds, the Integrity Authority would be able to initiate a verification 
procedure before the relevant body and be informed about its result and the initiation of 
investigation of asset enrichment.  

  As the Commission services explained to the Hungarian authorities in their comments 
of 18 November 2022, such a regime is not fully in line with the remedial measure, by 
which  the  Hungarian  Government  committed  to  transfer  to  the  Integrity  Authority 
competences related to the verification of asset declarations filed under Section 183 of 
Act CXXV of 2018 (i.e. senior political leaders not having a mandate as members of the 
National  Assembly:  Prime  Minister,  ministers,  the  Prime  Minister’s  political  director, 
secretaries of state). Under that commitment, the Integrity Authority should be the only 
body  to  have  the  power  to  verify,  directly,  such  asset  declarations.  Moreover,  this 
regime also appears not to fulfil the further commitment set in the September Letter, by 
which the Integrity Authority shall have the power to verify public asset declarations of 
all  high-risk  officials  and  have  access  to  relevant  databases  and  registries  for  the 
purpose  of  verifying  the  veracity  of  the  information  contained  in  the  declarations.  It 
limits the powers of the Integrity Authority to a right to request other bodies to verify 
the asset declarations and to receive information about the results of such verifications. 
Furthermore, the personal scope of the individuals for which the Integrity Authority is 
competent does not include all officials that would fall within the concept of ‘high-risk’ 
officials19. The procedure for verification of non-public asset declarations is limited to 
individuals  in  charge  of  advising  on,  managing  or  controlling  Union  funds,  whereas 
such  delimitation  is  not  foreseen  in  the  commitments  taken  by  the  Hungarian 
Government20. 

17  

18  
19  
20  

E.g.  president  and  vice-president  of  the  Hungarian  Competition  Authority,  member  of  the  Competition 
Council, president and vice-president of the State Audit Office, president, vice-president and member of 
the Council under the Public Procurement Authority, person entrusted with senior political function who 
does not have a mandate as a member of the National Assembly (i.e. Prime Minister, ministers, the Prime 
Minister’s political director, secretaries of state). 
E.g. President of the Republic, members of the National Assembly, judges. 
See footnote 50 in the Explanatory Memorandum. 
In spite of the provisions described in paragraph (34) above and of the Commission services’ comments 
described  in  this  paragraph,  in  a  written  reply  of  19  November  2022  to  the  Commission  regarding 

EN 

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  As  regards  the  procedure  for  the  dismissal  of  members  of  the  board  of  the  Integrity 
Authority,  the  Commission  positively  notes  that  Hungary  has  agreed  to  reverse  the 
initially proposed dismissal procedure to give competence to a court for the decision on 
the dismissal. However, the Commission notes that the procedure is short, of thirty days 
only between the application and the judicial decision at first instance. Such time limit 
would make it difficult for the member of the board concerned by a dismissal procedure 
to organise his or her defence in an effective way, and for the competent court to ensure 
the  exchange  of  pleadings,  to  hold  hearings  and  to  protect  defence  and  procedural 
rights.  In addition, the effects of the appeal  for the position of the concerned member, 
and  in  particular,  whether  an  appeal  would  have  suspensory  effect,  are  unclear  in  the 
Integrity Authority Act. Since the first instance judgment seems to lead to the dismissal 
immediately  after  a  short  procedure,  the  effectiveness  of  the  appeal  appears  to  be 
limited. The way the dismissal procedure is organised as a whole does not sufficiently 
protect  the  members  of  the  Integrity  Authority  from  undue  influence  and  risks 
undermining the independence of the Integrity Authority.  

  The Commission thus finds that the regulatory framework for the Integrity Authority as 
set out in the Integrity Authority Act does not fully fulfil the commitments taken under 
the  remedial  measure,  which,  therefore,  cannot  be  considered  fully  effective  and 
adequate  pursuant  to  the  Conditionality  Regulation.  The  weaknesses,  risks  and 
shortcomings  of  the  remedial  measure,  which  compromise  the  effectiveness  and 
independence  of  the  Integrity  Authority  and  its  capacity  to  address  the  Commission’s 
findings, are the following: (i) the lack of a clear rule stating that the Integrity Authority 
will  retain  its  competence  after  a  project  is  withdrawn  from  Union  financing;  (ii)  the 
weaknesses  of  the  system  for  the  judicial  review  of  the  decisions  of  contracting 
authorities that do not follow the recommendations of the  Integrity Authority; (iii) the 
weaknesses  of  the  dismissal  procedure;  (iv)  the  direct  as  opposed  to  the  supervisory 
powers of the Integrity Authority in relation to the different groups of declarants and the 
lack  of  the  transfer  of  competence  to  the  Integrity  Authority  to  verify  the  asset 
declarations  of  members  of  the  government;  (v)  the  limited  scope  related  to  lack  of 
inclusion of all ‘high-risk officials’ in the scope of the Integrity Authority’s verification 
powers  in  relation  to  asset  declarations;  (vi)  limited  international  experience  of  an 
appointed candidate to the Board of the Integrity Authority which could pose a risk to 
the effective functioning of the body.  

ii.  Anti-Corruption Task Force 

  The  Hungarian  Government  undertook  to  establish  an  Anti-Corruption  Task  Force  by 

1 December 2022 (“new Anti-Corruption Task Force”) with the following tasks:  

(i) examining 
the  existing  anti-corruption  measures  and  elaborating  proposals 
concerning the improvement of detection, investigation, prosecution and sanctioning of 
corrupt practices;  

(ii) proposing measures aimed at improving corruption prevention and detection;  

comments about verification of asset declarations by the Integrity Authority, the Hungarian Government 
confirmed  at  State  Secretary  level  that  ‘the  Authority  will  have  the  power  to  directly  verify  asset 
declarations submitted by persons listed in Section 5 (6)’. 

EN 

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(iii)  drafting  an  annual  report  analysing  the  risks  and  trends  of  corruption  and  corrupt 
practices, proposing effective countermeasures and best practices for and assessing their 
effective implementation.  

  The regulatory framework of the new Anti-Corruption Task Force would be included in 
the Act establishing the Integrity Authority (see remedial measure (i.) described above) 
and the chair of the Integrity Authority would be the chair of the Task Force. Other key 
elements  of  the  remedial  measure  concerned  the  participation  of  non-governmental 
actors  active  in  the  field  of  anti-corruption  independent  from  the  government,  public 
authorities,  political  parties  and  business 
interests  along  with  government 
representatives  in  a  full,  structured  and  effective  manner.  This  should  ensure  parity 
between  both  governmental  and  non-governmental  actors  by  means  of  number  of 
members and voting power. Moreover, provisions  should provide for the follow-up of 
the new Anti-Corruption Task Force’s reports and recommendations by the Hungarian 
Government. The new Anti-Corruption Task Force should hold its first meeting before 
15 December 2022. It should adopt its first report for the year 2022 and send it to the 
Government by 15 March 2023.  

  The  Key  Implementation  Steps  for  this  measure  were  (i)  the  adoption  of  the 
Government Decision by 5 September 2022 repealing Government Decision 1337/2022 
of 15 July 2022 on the basis of which the Anti-Corruption Task Force established by the 
latter would be discontinued, and (ii) the submission to the National Assembly of a draft 
Act on the establishment of the Integrity Authority by 30 September 2022, setting out 
the regulatory framework for the new Anti-Corruption Task Force. 

  Hungary took the following steps to address the Key Implementation Steps. 

  On  5  September  2022,  the  Hungarian  Government  repealed  Government  Decision 
1337/2022  of  15  July  2022  on  the  Anti-Corruption  Task  Force  with  the  adoption  of 
Government  Decision  1424/2022  on  tasks  relating  to  setting  up  an  independent 
authority  operating  to  prevent,  detect  and  correct  illegalities  and  irregularities 
concerning  the  implementation  of  EU  funds.  This  Government  Decision  set  out  the 
commitment  for  Hungary  to  establish  a  new  Anti-Corruption  Task  Force  by 
1 December 2022  in  a  manner  that  ensures  participation,  by  means  of  number  of 
members  and  voting  power,  on  a  parity  basis  of  both  governmental  and  non-
governmental  actors,  and  with  the  administrative  support  of  the  Integrity  Authority. 
Government Decision 1424/2022 entered into force on 6 September 2022.  

  On 23 September 2022, the Hungarian Government submitted to the National Assembly 
the  draft  Act  aiming  at  establishing  the  Integrity  Authority.  On  4  October  2022,  the 
National Assembly adopted the Integrity Authority Act, which also established the new 
Anti-Corruption  Task  Force.  The  Integrity  Authority  Act  was  promulgated  on  10 
October 2022 and entered into force on 11 October 2022. On 15 November 2022, the 
Hungarian  Government  submitted  to  the  National  Assembly  an  amending  bill 
concerning  the  Integrity  Authority  Act,  as  part  of  the  service  package.  Following  the 
submission of the service package to the National Assembly, the Commission received 
the revised legal text with the November Letter. The amending Act was adopted on 22 
November  2022  and  it  reflects  the  changes  included  in  the  legal  text  received  by  the 
Commission on 19 November 2022.  

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  In  the  preparation  of  this  draft  Act,  the  Hungarian  Government  had  committed  to 
consult  extensively  with  national  and  international  stakeholders,  to  seek  the  OECD’s 
policy  advice  and  to  take  into  account  the  related  recommendations.  In  addition  to 
consulting  the  Commission,  the  Hungarian  Government  effectively  consulted  the 
OECD,  as  well  as  the  Council  of  Europe.  It  informed  the  Commission  of  how  it 
addressed  the  organisation’s  opinions  and/or  drafting  suggestions  as  described  in 
paragraph  (24).  On  this  basis,  the  Commission  considers  that  the  Hungarian 
Government  fulfilled  the  relevant  commitments  in  the  remedial  measure.  The 
consultation  of  the  OECD  and  the  Council  of  Europe  contributed  to  improve  the 
regulatory  framework  for  the  set-up  of  the  new  Anti-Corruption  Task  Force  to  the 
extent  that  some  recommendations  were  accepted  and  reflected  in  the  legal  text. 
Nevertheless,  the  Commission  notes  that  some  concerns  expressed,  e.g.  a  risk  of 
duplication  with  existing  work21  although  acknowledged  by  Hungary,  or  the  lack  of 
tools  to  request  or  obtain  information  from  other  institutions  necessary  for  the 
preparation of the Task Force’s work were not addressed in the legal texts.  

  Part Two of the Integrity Authority Act describes the regulatory framework for the new 
Anti-Corruption Task Force. It sets out the tasks of the new Anti-Corruption Task Force 
(Section  50)  with  explicit  mention  to  situations  of  conflict  of  interest  as  defined  in 
relevant EU provisions, which shall be taken into account by the new Anti-Corruption 
Task  Force,  in  line  with  the  remedial  measure.  The  chair  of  the  new  Anti-Corruption 
Task  Force  shall  be  the  President  of  the  Integrity  Authority  (Section  59).  It  also  lays 
down  the  process  on  the  follow-up  of  the  new  Anti-Corruption  Task  Force’s  annual 
reports  and  recommendations,  by  which  the  Hungarian  Government  shall  discuss  the 
report  and  the  proposals  included  therein  within  two  months.  If  it  decides  not  to 
implement a proposal, it shall send a detailed reasoning for its decision to the Chair of 
the new Anti-Corruption Task  Force  within one  month (Section 52). The composition 
(Section 54) and voting rules (Section 61) of the new Anti-Corruption Task Force are 
described  in  the  Act.  In  line  with  the  remedial  measure,  the  number  of  non-
governmental members shall be 50% of the members of the new Anti-Corruption Task 
Force,  excluding  the  chair.  If  the  50%  representation  cannot  be  reached,  the  voting 
powers  of  such  members  are  modulated  so  as  to  cast  50%  of  the  votes,  the  chair 
excluded.  The  members  representing  non-governmental  actors  shall  be  selected  based 
on  an  open,  transparent,  non-discriminatory  selection  process  with  objective  criteria 
related to expertise and merit. The Eligibility Committee shall be involved as referred in 
paragraph  11  (Section  57).  It  shall  be  entitled  to  prepare  a  shadow  report  to  be  made 
publicly available on the website of the Task  Force where the report of the  new Anti-
Corruption Task Force would also published (Section 53). Finally, Part Four of the Act 
lays down that the new Anti-Corruption Task Force shall be established by 1 December 
2022  and  shall  hold  its  first  meeting  before  15  December  2022.  The  new 
Anti-Corruption Task Force shall adopt and send to the Government its first report for 
2022 by 15 March 2023 (Section 77).  

  The  Commission  finds  that  Hungary  took  the  Key  Implementation  Steps.  The 
regulatory framework for the new Anti-Corruption Task Force as set out in the Integrity 
Authority Act fulfils the commitments set by the remedial measure.  

21  

In particular, the National Protective Service which is mandated with preparing the government  Strategy 
against  corruption  and  submitting  it  to  the  Ministry  of  Interior  and  is  also  responsible  for  the 
harmonisation  and  development  of  an  integrity  management  system  of  public  administration 
organisations. 

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14 

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  The  Commission  notes  that  an  open  call  for  application  to  select  the  members 
representing  non-governmental  actors  of  the  new  Anti-Corruption  Task  Force  was 
launched on 11 November 2022, with a deadline to apply set on 24 November 2022.  

iii. 

Strengthening the Anti-Corruption Framework 

  The  Hungarian  Government  undertook  to  adopt  by  30  September  2022  anti-fraud  and 
anti-corruption strategies defining the tasks of entities involved in the implementation of 
any  Union  financial  support  in  relation  to  the  prevention,  detection  and  correction  of 
fraud, conflict of interest and corruption. The strategies were to include the assessment 
of the main risks, factors and practices of fraud, conflict of interest, and corruption. The 
Hungarian  Government  also  committed  to  adopt  a  new  National  Anti-Corruption 
Strategy (“NACS”) and Action Plan (“AP”) by 30 June 2023. Special attention should 
be given to the strengthening of the institutional and normative framework for the fight 
against  high-level  corruption,  by  enhancing  the  transparency  of  the  work  of  public 
authorities  including  at  the  senior  political  level.  The  Hungarian  Government  also 
committed  to  fully  implement  by  30  June  2023  all  actions  of  the  existing  National 
Anti-Corruption Strategy for the period 2020-2022.  

  As the establishment of the Integrity Authority, this remedial measure has a horizontal 
and systemic nature in order to fight against corruption and ensure transparency in the 
political sphere. It is one of the central remedial measures proposed by Hungary in the 
procedure under the Conditionality Regulation. 

  In 

the  September  Letter, 

the  Hungarian  Government  also  undertook  further 
commitments on the personal and material scope of asset declarations. In this respect, it 
committed to submit to the National Assembly draft legislation (to be effective as from 
1 November 2022) that should extend the personal scope of the asset declaration system 
to  (i)  persons  entrusted  with  senior  political  functions  under  Sections  183  and  184  of 
Act CXXV of 2018 on government administration and their relatives living in the same 
household with the person concerned, and (ii) members of the National Assembly and 
their  relatives  living  in  the  same  household  with  the  person  concerned.  Hungary  also 
committed to widen the material scope to include not only revenues but also assets22.  

  Additionally, with the September Letter, Hungary committed to establish by 31 March 
2023 a system of asset declarations filed electronically in a digital format, to be stored 
in a public database that will be searchable without fee or the need to register. Finally, 
the  Integrity  Authority  would  be  tasked  with  the  review  of  both  the  regulatory 
framework and the functioning of the asset declarations system, including its scope and 
verification processes, which shall be included in a review report by 31 December 2023. 

  The Key Implementation Steps for this measure were (i) the adoption of the anti-fraud 
the 
and  anti-corruption  strategies  defining 
implementation of any Union support by 30 September 2022 and (ii) the submission to 
the  National  Assembly  of  the  draft  legislation,  including  on  the  extension  of  the 
personal and material scope of asset declarations, effective from 1 November 2022. 

tasks  of  entities 

involved 

the 

in 

22 

In this respect, the September Letter mentions real estate properties; other valuable properties (vehicles, 
vessels,  valuable antiques and  work of art,  etc.);  savings in bank deposits and in cash;  assets  in  stocks, 
securities and private equity funds; life insurance policies; trusts, and beneficial ownership of enterprises. 

EN 

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  Hungary took the following steps to address the Key Implementation Steps. 

  On 30 September 2022, the Hungarian Government adopted the strategy against fraud 
and  corruption  for  the  2021-2027  programming  period  and  for  the  implementation  of 
the Recovery and Resilience Plan (Government Decision 1470/2022). The Strategy was 
subsequently amended and a new version was adopted and published on 15 November 
2022 (Government  Decision  1540/2022,  the  “Strategy”). The strategy  was  renamed to 
“Strategy  against  fraud  and  corruption  for  European  Union  funds”.  The  Strategy  is 
comprehensive, as it covers the implementation of financial support from the EU budget 
under  the  2014-2020  and  2021-2027  programming  periods,  in  particular  Cohesion 
policy funds, the European Agricultural Fund for Rural Development, and the Recovery 
and Resilience Facility. The European Agricultural Guarantee Fund is covered, but with 
fewer details. The Strategy defines, in general terms, the tasks of entities involved in the 
implementation  of Union financial support in  relation  to  the prevention,  detection and 
correction of fraud, conflict of interest and corruption (chapter III Analysis of situation 
and  in  particular  3.2  Institutional  environment  for  combating  fraud).The  Strategy  also 
includes  an  assessment  of  the  main  risks,  factors  and  practices  of  fraud,  conflict  of 
interest and corruption in Hungary with regards to Union funding (chapter 3.3 Data on 
fraud and corruption in Hungary and 5.1.3 Risk analysis and risk management to avoid 
fraud).  Chapter  V  of  the  Strategy  sets  out  in  general  terms  the  envisaged  measures, 
which are listed in more detail in an Action Plan (Annex 3 of the Strategy). One of the 
actions  is  to  prepare  a  yearly  risk  assessment  of  fraud,  conflict  of  interest  and 
corruption.  Several  actions  of  the  Action  Plan  stem  from  commitments  under  other 
remedial measures, including reviewing the Strategy in parallel with drafting the NACS 
by  30  June  2023.  Hungary  will  prepare  and  publish  an  annual  report  on  the 
implementation of the Strategy. 

  On 27 September 2022, the Hungarian Government submitted to the National Assembly 
a  draft  Act  with  the  aim  of  extending  the  personal  and  material  scope  of  the  current 
system  of  asset  declarations.  In  the  preparation  of  this  draft  Act,  the  Hungarian 
Government  consulted  the  Commission,  as  required  by  the  remedial  measure.  On  25 
October  2022,  the  National  Assembly  adopted  Act  XXXI  of  2022  amending  certain 
Acts on declaration of assets relating to the control of the use of European Union budget 
funds, which was promulgated on 26 October 2022 (the “Act on Asset Declarations”). 
The  Act  on  Asset  Declarations  entered  into  force  on  1  November  2022  with  certain 
exceptions.  On  15  November  2022,  the  Hungarian  Government  submitted  to  the 
National Assembly an amending bill concerning the Act on Asset Declarations, as part 
of the service package. Following the submission of the service package to the National 
Assembly, Hungary sent the Commission services amendments to the legal text on 16 
November  2022;  a  consolidated  version  of  the  legal  text  was  submitted  with  the 
November letter. The current assessment is based on the latter legal text, although this 
has not been adopted yet. The amending bill is scheduled for adoption on 6 December 
2022.  

  In line with the remedial measure, the Act on Asset Declarations extends the personal 
scope of asset declarations to include persons entrusted with senior political functions23 
and  members  of  the  National  Assembly,  as  well  as  relatives  living  in  the  same 

23  

Under Sections 183 and 184 of Act CXXV of 2018 on government administration. 

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household24. The Act also extends the material scope of asset declarations to include all 
relevant assets (Annex I of the Act on Asset Declarations).  

  Regarding  the  latter,  the  Commission  notes  that  Annex  I,  Part  A  of  the  Act  on  Asset 
Declarations provides for an exception concerning the real estate reserved for exclusive 
use of the declarant and his or her spouse or cohabitant and child(ren) living in the same 
household.  Annex  I  further  clarifies  that  on  this  basis,  up  to  one  real  estate  may  be 
excluded  from  the  disclosure  obligation  and  thus  not  be  declared.  The  Commission 
regrets  that  this  exception  does  not  regard  solely  the  primary  residence,  with  the 
consequence that it may be used to hide luxury real estate. Hungary indicated in various 
calls at State Secretary level that this issue would be addressed in the legal texts but this 
has  not  been  implemented  to  this  date.  In  addition,  despite  explanations  provided 
confirming  that  the  disclosure  obligations  would  also  include  real  estate  outside  the 
jurisdiction of Hungary, appropriate wording has not been reflected in the relevant legal 
text25.  These  are  gaps  in  the  system  of  asset  declarations  that  risk  undermining  its 
effectiveness. 

  At the same time, the Commission notes the draft amendments to all relevant acts26 that 
apply the obligation to make a declaration of assets as on 1 November 2022 (instead of 
31 December 2022) by  31 January 2023 in  accordance with  the provisions introduced 
by the Act on Asset Declarations. This will ensure that the new rules would also apply 
to any changes occurring between 1 November 2022 and 31 December 2022. However, 
the relevant  legal  text  does not  provide sufficient  clarity and legal  certainty  as it does 
not  explicitly  provide  that  the  period  November-December  2022  shall  be  covered  by 
asset declarations to be made in 2024 which would then exceptionally cover a period of 
14 months (i.e. from November 2022 until December 2023). 

   Finally,  the  Commission  notes  that  the  commitment  by  the  Hungarian  government  to 
establish  by  31  March  2023  a  system  of  asset  declarations  filed  electronically  in  a 
digital  format,  to  be  stored  in  a  public  database  searchable  without  fee  or  the  need  to 
register  is  not  yet  reflected  in  the  regulatory  framework.  According  to  Hungary,  the 
rules  on  the  system  will  be  elaborated  and  adopted  later  on,  by  31  March  2023.  The 
Commission regrets the lack of inclusion of an explicit reference to this public database 
in the Act on Asset Declarations by Hungary. These shortcomings could also undermine 
the effectiveness of the system of asset declarations. 

24 

25  

26 

In this respect, relevant amendments were introduced in Act LVII of 1996 on the prohibition of unfair and 
restrictive  market  practices,  Act  CLXXXV  of  2010  on  media  services  and  mass  communication,  Act 
LXVI  of  2011  on  the  State  Audit  Office,  Act  CX  of  2011  on  the  legal  status  and  remuneration  of  the 
President of the Republic, Act CXI of 2011 on the Commissioner for Fundamental Rights, Act CXII of 
2011 on the right to informational self-determination and on the freedom of information, Act CLI of 2011 
on  the  Constitutional  Court,  Act  CLXIV  of  2011  on  the  legal  status  of  the  Prosecutor  General, 
prosecutors and other prosecution service employees and the prosecutor career, Act CXCIV of 2011 on 
the economic stability of Hungary, Act XXXVI of 2012 on the National Assembly, Act XXXVI of 2013 
on election procedure, Act CXXXIX of 2013 on the Hungarian National Bank, Act CCXLI of 2013 on 
the Committee of National Remembrance, Act CXLIII of 2015 on public procurement, and Act CXXV of 
2018 on government administration. 
This is also in line  with the provisions in the Integrity  Authority  Act, stipulating that the Authority can 
enter into agreements with foreign entities to obtain information for its verification tasks. 
See acts under footnote 24. 

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  As  regards  the  introduction  of  a  sanctioning  regime  for  breaches  of  asset  declaration 
obligations,  the  Commission  notes  that  the  Strategy  against  fraud  and  corruption  for 
European  Union  funds  (adopted  per  Government  Decision  1540/2022)  referred  to  in 
paragraph (54) above refers to the specific commitment to set out a concrete measures 
in the Action Plan accompanying the new NACS beyond 2022 to develop an effective, 
proportionate and dissuasive system of administrative and criminal sanctions in relation 
to asset declarations, by 1 October 2023 at the latest, in line with the remedial measure.  

  On 23 September 2022, the Hungarian Government submitted to the National Assembly 
the  draft  Act  aiming  at  establishing  the  Integrity  Authority.  On  4  October  2022,  the 
National Assembly adopted the Integrity Authority Act, which was promulgated on 10 
October  2022  and  entered  into  force  on  11  October  2022  (see  remedial  measure  (i.) 
described above). In compliance with the remedial measure, Section 75 of the Integrity 
Authority Act established that the Integrity Authority must prepare an ad hoc report by 
31 December 2023, which would survey the regulatory framework and operation of the 
Hungarian system of declarations of assets, including its scope and control process.  

   As  regards  the  anti-fraud  and  anti-corruption  strategies,  the  Commission  finds  that 
Hungary took the Key Implementation Steps, despite the adoption of a revised strategy 
by  Government  Decision  on  15  November  2022  instead  of  the  set  deadline  of  30 
September 2022. The Commission finds that the Strategy fulfils the commitments set by 
the  remedial  measure.  As  regards  the  Action  Plan  accompanying  the  future  National 
Anti-Corruption  Strategy  beyond  2022,  providing  for  the  implementation  of  the 
commitment  to  set  out  concrete  measures  to  develop  an  effective,  proportionate  and 
dissuasive set of sanctions, the Commission reserves the right to assess its transposition 
and implementation in 2023 and beyond. Hungary agreed in this context to consult the 
Commission  on  the  draft  National  Anti-Corruption  Strategy  by  31  January  2023.  The 
Commission also recalls the commitment by the Hungarian Government to report to the 
Commission  on  the  implementation  of  all  remedial  measures  on  a  quarterly  basis,  as 
noted in paragraph (17). 

  Regarding  asset  declarations,  the  Commission  finds  that  the  regulatory  framework  on 
those  declarations  as  set  out  in  the  Act  on  Asset  Declarations  to  be  effective  from  1 
November  2022  does  not  completely  fulfil  the  commitments  on  the  asset  declaration 
system as set out in the September Letter, since the framework leaves out an important 
category of assets, as mentioned in paragraph (57). The Commission considers that the 
issues raised in that paragraph represent a loophole in the law and may undermine the 
effectiveness of the remedial measure. 

  For these reasons, the Commission finds that the relevant legal texts do not fully ensure 
the  adequacy  of  the  remedial  measure,  in  view  of  the  weaknesses,  risks  and 
shortcomings noted in paragraphs (57) to (59) above.  

iv.  Ensuring  the  transparency  of  the  use  of  Union  support  by  public  interest 

asset management foundations 

  The Hungarian Government committed to adopt by 30 September 2022 an amending act 
to  ensure  the  generalised  application  of  public  procurement  rules  to  public  asset 
management  foundations  performing  public  interest  activity  and  legal  persons 
established  and  maintained  by  them.  It  also  committed  to  adopt  by  the  same  date  an 
amending  act  in  order  to  ensure  full  compliance  with  Article  61  of  the  Financial 

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Regulation27, as well as align the instructions and practice to the Commission Guidance 
Notice  on  the  avoidance  and  management  of  conflicts  of  interest  under  the  Financial 
Regulation28. This would improve and clarify general conflict of interest rules related to 
public interest asset management foundations and the members of their boards.  

  The Key Implementation Step for this measure was the adoption of the two amending 

acts mentioned in the preceding paragraph by 30 September 2022. 

  Hungary took the following steps to address the Key Implementation Step. 

  On  4  October  2022,  the  National  Assembly  adopted  Act  XXIX  of  2022  amending 
certain  Acts  concerning  public  interest  asset  management  foundations  performing 
public  duty,  the  National  Tax  and  Customs  Administration  and  the  checks  of  the 
European Anti-Fraud Office in relation with the control of the use of European Union 
budget funds. This Act was promulgated on 10 October 2022. The provisions of the Act 
relating  to  the  public  interest  asset  management  foundations  performing  public  duty 
entered into force on 13 October 2022. 

  In  line  with  the  remedial  measure,  Act  XXIX  of  2022  introduced  amendments  to  Act 
CXLIII  of  2015  on  public  procurement  and  Act  IX  of  2021  on  public  interest  asset 
management foundations performing public duty. In Section 5 of Act CXLIII of 2015 
on public procurement, a new point f) was added to paragraph (1) stipulating that public 
interest  asset  management  foundations  performing  public  duty  and  legal  persons 
established  or  maintained  by  them  were  subject  to  the  obligation  to  conduct 
procurement  procedures  in  accordance  with  the  aforementioned  Act.  Paragraph (3)  of 
Section 15  of  Act  IX  of  2021  on  public  interest  asset  management  foundations 
performing  public  duty  was  also  modified  establishing  conflict  of  interest  rules.  This 
paragraph  now  includes  an  explicit  mention  of  family,  emotional  life,  political  or 
national affinity or any other direct or indirect personal interest, for public interest asset 
management  foundations  performing  public  duty  and  legal  persons  established  or 
maintained  by  them,  including  the  chairs  and  members  of  the  board  and  supervisory 
board,  as  well  as  their  employees.  Furthermore,  the  Act  amended  provisions  in  other 
pieces  of  legislation29  aligning  with  the  modification  in  Section  15  (3)  of  Act  IX  of 
2021. 

  The  Commission  notes,  however,  that  top-level  officials,  including  senior  political 
executives  from  the  National  Assembly  and  Hungary’s  autonomous  bodies,  have  not 
been excluded from sitting on boards of public interest asset management foundations, 
as  requested  in  the  course  of  the  exchanges  with  Hungary.  Instead,  since  the 
Commission’s  CID  proposal  of  18  September  2022,  and  despite  this  concern  having 
also  been  consistently  raised  by  the  Commission  in  its  annual  Rule  of  Law  reports, 
Hungary  has  reintroduced  as  of  1  November  2022  the  possibility  (by  means  of  an 
exception30 from the general prohibition31) for senior political executives to have other 

27  

28  
29  

30  

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on 
the financial rules applicable to the general budget of the Union, OJ L 193, 30.7.2018, p. 1. 
OJ C 121, 9.4.2021, p. 1. 
Act CLXXXIX of 2011 on Local Governments in Hungary (Sections 6 and 7), Act CXCIX of 2011 on 
Public  Servants  (Sections  9  and  10),  Act  XXXVI  of  2012  on  the  National  Assembly  (Section  12),  Act 
CXXV of 2018 on government administration (Sections 15, 16 and 17), Act CVII of 2019 on bodies with 
special legal status and the status of their employees (Sections 18 and 19). 
Section 182 (3a) of Act CXXV of 2018 on Government Administration. 

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remunerated employments.  This  exception creates  a situation in  which senior political 
executives  may  participate  in  decision-making  relating  to  the  disbursement  of  public 
funds to entities, in which they themselves are employed and have key decision-making 
powers32..Consequently, even though Hungary addressed the concerns raised in the CID 
proposal of 18 September 2022, the exception introduced on 1 November 2022 renders 
the implementation of the remedial measure nevertheless inadequate. 

v. 

Introduction of a specific procedure in the case of special crimes related to 
the exercise of public authority or the management of public property 

  The Hungarian Government committed to amend the Code of Criminal Procedure with 
the aim of establishing a new procedure concerning special criminal offences related to 
the  exercise  of  public  authority  or  the  management  of  public  procurement.  Under  the 
remedial  measure,  the  new  procedure  must  provide  for  the  judicial  review  of  the 
decision  of  the  prosecution  service  or  the  investigating  authority  to  dismiss  a  crime 
report  or  terminate  the  criminal  proceedings  (i.e.  to  close  a  criminal  investigation 
without an indictment) regarding corruption and corruption-related practices as defined 
in Article 4(2) of Directive (EU) 2017/137133 and in Chapter III of the United Nations 
Convention  Against  Corruption.  The  new  procedure  must  confer  on  an  investigating 
judge  the  authority  to  order  the  commencement  or  the  continuation  of  the  criminal 
proceedings.  Any  natural  person  and  legal  person,  with  the  exception  of  public 
authorities,  could  file  motions  under  the  procedure,  which  could  also  lead  to  the 
possibility  to  file  an  indictment  before  a  court.  The  Hungarian  Government  also 
committed to ensure that the new procedure would be applicable from 1 January 2023. 
It committed to  allocate  additional dedicated posts by  31  December 2022  to  the  court 
responsible  for  the  judicial  review  of  the  decision  of  the  prosecution  service  or  the 
investigating authority to dismiss a crime report or terminate the criminal proceedings.  

  The  September  Letter  included  the  commitment  to  identify  in  the  Act  on  Judicial 
Review the Buda Central District Court as the court having exclusive jurisdiction over 
the  Hungarian  territory  to  review  such  decisions  and  order  the  commencement  or  the 
continuation  of  criminal  proceedings.  It  also  confirmed  that  all  courts  in  Hungary, 
including  investigating  judges  in  the  context  of  the  procedure  under  this  remedial 
measure,  should  comply  with  the  requirements  of  independence,  impartiality,  being 
established by law in accordance with Article 19(1) Treaty on European Union (“TEU”) 
and with the relevant EU acquis.  

  This  remedial  measure  is  a  horizontal  measure  that  aims  at  remedying  structural 
problems  with  effectiveness  of  prosecutorial  action  in  Hungary  and  to  ensure  that 
effective  and  deterrent  measures  are  taken  to  ensure  the  protection  of  the  Union’s 
financial interests, in line with Article 325 TFEU. 

  The Key Implementation Steps for this measure were (i) the finalisation of the draft text 
of implementing regulations (necessary for the application of the review procedure) and 

31  
32  

33  

Section 182 (1) of Act CXXV of 2018 on Government Administration. 
Senior  political  executives  are  not  ex  officio  members  but  they  sit  on  the  boards  of  trustees  in  their 
personal  capacity;  while  public  interest  asset  management  foundations  are  private  entities  without  any 
control by the state. 
Directive  (EU)  2017/1371  of  the  European  Parliament  and  of  the  Council  of  5  July  2017  on  the  fight 
against fraud to the Union's financial interests by means of criminal law, OJ L 198, 28.7.2017, p. 29. 

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adoption immediately after the entry into force of the new law by 31 October 2022 and 
(ii)  the  entry  into  force  of  the  new  law  amending  the  Criminal  Procedure  Code 
following an ex ante review by the Constitutional Court (initiated by the Government) 
by 15 November 2022.  

  On 3 October 2022, the National Assembly adopted a first version of the Act to amend 
Act  XC  of  2017  on  the  Code  of  Criminal  Procedure  (the  “Act  on  Judicial  Review”); 
these provisions entered into force on 15 November 2022. On 14 November 2022, the 
Hungarian authorities shared a revised version of the Act on Judicial Review with the 
Commission  services;  the  same  version  was  also  contained  in  the  act  of  the  service 
package of 15 November 2022 whose adoption was scheduled for 22 November 202234. 
The amending Act was adopted on 22 November 2022 and reflects the changes included 
in the legal text received by the Commission on 14 November 2022. In the decision on 
the ex  ante review of the Act  on Judicial  Review, the Hungarian Constitutional Court 
found that the Act on Judicial Review is not in breach of the principle of the prosecution 
monopoly  of  the  prosecution  service,  as  laid  down  in  Article  29(1)  of  the  Hungarian 
Fundamental Law35.  

  On 11 October 2022, Hungary submitted to  the Commission  (i) the draft Government 
Decree amending Government Decree 100/2018 (8 June) laying down the detailed rules 
of investigation and preparatory procedure, and (ii) the draft Decree of the Minister of 
Justice amending Decree 12/2018 (12 June) IM laying down rules for certain acts, and 
persons  participating,  in  criminal  procedure.  Those  draft  decrees  represent  the  draft 
implementing regulations (‘Implementing Regulations’) necessary for the application of 
the  review  procedure  as  set  in  the  Key  Implementation  Steps.  The  Hungarian 
Government  submitted  to  the  Commission  the  latest  draft  of  these  implementing 
regulations, whose entry into force is scheduled for 1 January 2023, with the November 
Letter.  

  The  Act  on  Judicial  Review  implements  most  of  the  commitments  proposed  in  the 
remedial measures by introducing relevant amendments to Act XC of 2017 on the Code 
of Criminal Procedure. In particular, the new procedure concerns the relevant criminal 
offences as proposed under the remedial measure (Section 817/A (1)). It allows natural 
and legal persons to submit a motion for revision (Section 817/C) and, provided certain 
conditions are fulfilled, it allows the filing of a motion for prosecution (Section 817/H). 
The  Buda  Central  District  Court  will  have  exclusive  jurisdiction  over  the  new  review 
procedure (Section 817/E (1)).  

  The Commission also welcomes certain provisions introduced after the first version of 
the Act on Judicial Review was adopted by the National Assembly, as they are intended 
to  contribute  to  the  effectiveness  of  the  remedial  measure.  According  to  those 
provisions, the Integrity Authority (see above remedial measure (i.)), which in principle 
will  have  in-depth  knowledge  about  issues  that  are  relevant  for  the  investigation  and 
prosecution  of  the  criminal  offences  covered  by  the  new  procedure,  can  also  file  a 
motion  for  revision  and  for  repeated  revision  (Section  817/C  (7);  Section  817/H  (3)). 
The Integrity Authority, as a public body, cannot submit a motion for prosecution, not 

The  Commission  services  commented  on  the  revised  Act  on  Judicial  Review  on  16  November  2022, 
before receiving from Hungary the information and acts of the service package. 
Decision 
https://hunconcourt.hu/uploads/sites/3/2022/11/sz_i_2252_2022_eng_final.pdf.  

I/2252/2022, 

available 

English 

in 

at 

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34  

35 

EN 

 
                                                           
to  prejudice  the  Hungarian  constitutional  principle  that  public  prosecution  is  reserved 
for the prosecution service36. However, any natural or legal persons will be able to file a 
motion  for  prosecution  following  a  motion  for  review  filed  by  the  Integrity  Authority 
(Section 817/I).  

  In addition, under the new procedure there is the possibility, including for the Integrity 
Authority,  to  file  a  motion  for  repeated  revision,  in  case,  even  after  a  first  motion  for 
review, the prosecution service or the investigating authority decides again to dismiss a 
crime report or to terminate the criminal proceedings (Section 817/H). This possibility 
is  open  only  for  a  person  who  earlier  in  the  case  filed  a  motion  for  revision.  The 
Commission  also  welcomes  the  removal  from  Section  817/V  of  the  provision  that 
would  have  allowed  the  Prosecutor  General  to  file  an  extraordinary  remedy  against 
decisions taken in the course of the procedure. 

  At the same time, other commitments have not been correctly reflected into the Act on 

Judicial Review or in the implementing regulations, namely: 

(i) the commitment to provide, by 31 December 2022, sufficient human, infrastructural 
and  other  resource  allocations  to  ensure  the  proper  functioning  of  the  procedure 
(including  additional  dedicated  posts  for  at  least  two  judges  and  at  least  two  legal 
secretaries) within the Buda Central District Court, and  

(ii)  the  commitment  to  conduct  a  review  on  the  functioning  of  the  procedure  by  31 
December  2023,  and,  if  necessary,  to  provide  for  the  adoption  of  amendments  to  the 
legislative framework following consultations with the Commission by 30 June 2024.  

  As  regards  the  first  commitment,  the  Hungarian  authorities  informed  the  Commission 
that such measures  are not for the Hungarian Government to take, but for the body of 
the  judiciary  in  charge  of  the  administration  of  courts.  The  Commission  has  not  been 
informed  of  any  concrete  implementation  of  this  commitment.  For  the  second 
commitment,  the  Commission  has  not  been  informed  of  any  concrete  provision  that 
would  set  out  the  obligation  to  conduct  the  review  of  the  procedure  and  amend  it  if 
necessary. These elements may still be materially fulfilled after the entry into force of 
the new legislation and thus do not prejudice at this stage the possible effectiveness of 
the  implementation  of  the  remedial  measure.  The  Commission  will  therefore  remain 
vigilant  on  these  issues  and  will  monitor  the  situation  closely  based  on  the  quarterly 
reporting from Hungary referred to in paragraph (17) above, or any information it may 
obtain  otherwise.  Failure  to  fulfil  these  elements  as  of  1  January  2023,  when  the  new 
procedure will be applicable, could risk undermining the effectiveness of the procedure.  

  At the same time, the Commission finds that specific provisions introduce a margin of 
discretion  in  the  procedure,  which  could  be  used    to  affect  the  outcome  of  the  new 
procedure  following  a  motion  for  revision  (or  repeated  revision)  or  for  prosecution, 
compromising the effectiveness of the remedial measure. 

  In  particular,  the  legal  consequences  for  the  prosecutor  of  a  judicial  decision  setting 
aside its decision following a motion for revision are not clearly stated in the applicable 
rules. Section 817/G (3) provides that, ‘[i]n the case of an investigation commencing or 

36  

However, the Integrity  Authority can report information that is relevant to start investigations regarding 
criminal offences to the prosecution service. 

EN 

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the  proceeding  continuing,  the  prosecution  service  or  investigating  authority  shall 
continue the proceeding taking account of the statement of reasons for the decision by 
the  court,  and,  where  any  issue  remained  undetected,  endeavouring  to  remedy  the 
deficiencies  indicated  therein’  (emphasis  added).  The  language  of  the  provision 
suggests a  certain  margin of discretion for the prosecutor, which would  not  be legally 
bound to take a decision that is fully in line with the judicial decision and could simply 
take  it  into  account  or  simply  ‘endeavour’  to  remedy  the  illegalities  found  by  the 
reviewing  court.  The  Commission  proposed  more  stringent  language  by  which  the 
prosecutor  would  be  bound  to  take  a  decision  ‘in  full  respect  of  the  grounds  of  the 
decision by the court’ and that it ‘shall remedy the deficiencies indicated therein’. The 
Commission  considers  that  the  discretion  granted  to  the  prosecutor  by  the  applicable 
rule  weakens  the  effectiveness  and  thus  the  adequacy  of  this  remedial  measure,  since 
there  is  no  guarantee  that  judicial  review  decisions  will  be  duly  followed  up  through 
correct prosecutorial action. 

  Furthermore,  for  the  cases  where  a  motion  for  prosecution  may  be  filed,  the  Act  on 
Judicial  Review requires an examination of the  ground for the motion  for prosecution 
(Sections 817/O and 817/P) by the trial court in camera and without hearing evidence, 
which is additional to the preliminary examination of formal grounds established under 
the new procedure. 

  The Commission notes that such an examination by the trial court of the ground for the 
motion  for  prosecution  does  not  exist  under  the  general  rules  (where  the  public 
prosecutor  files  the  bill  of  indictment)  and  under  the  substitute  private  prosecution 
procedure (where the victim files the bill of indictment). In the view of the Commission, 
it amounts to a substantive filtering by the trial court that presents the risk of having a 
statement  by  the  trial  court  as  regards  the  merits  of  the  case  before  hearing  evidence. 
Such a filtering would risk anticipating or preventing a ruling on the merits, without the 
possibility  to  seek  and  hear  evidence  in  the  case37.  It  may  also  in  practice  reverse  the 
assessment of the Investigating Judge Department of the Buda Central District Court: if 
proceedings  are  terminated  again  after  the  investigating  judge  had  set  aside  the  initial 
decision  to  dismiss  the  crime  report  or  terminate  the  proceedings  and  without  taking 
into account the decision of such investigating judge, the examination by the trial court 
might  have  the  effect  of  discarding  the  investigating  judge’s  findings,  without  any 
further  evidence being heard by  the trial  court.  For these reasons,  and  considering the 
key role of the investigating judge in the pre-trial stage, this further filtering by the trial 
court is unnecessary and undermines the effectiveness of the remedial measure. 

  Furthermore,  the  final  provision  of  the  legal  text  made  available  to  the  Commission 
services did  not  set  out clearly the scope of application  ratione temporis of these new 
rules. In fact, the text does not set out clearly that the new procedure will be applicable 
to  crime  reports  filed  after  1  January  2023  covering  crimes  allegedly  committed  also 
before  that  date,  with  the  exception  of  time-barred  crimes  (see  Section  876/C  (2)).  In 
particular, the text  does not  clarify that the existence of a decision dismissing a crime 
report or a decision terminating the proceedings, adopted before 1 January 2023 (related 
to  an  alleged  crime  that  is  not  time-barred  due  to  the  statute  of  limitations)  does  not 

37  

In  recital  (95)  of  the  Explanatory  Memorandum,  the  Commission  stated  explicitly  that  the  draft  law 
would also require in particular that the trial court does not decide on the merits of the indictment without 
having considered evidence.  

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remove the obligation of the investigating authority or the prosecution service to adopt a 
new decision under Section 379 of the Criminal Procedure Code38, which can be subject 
to  a  (repeated)  motion  for  review  under  the  new  procedure.  Also,  the  text  does  not 
provide that the new procedure can apply to crime reports filed before 1 January 2023, 
awaiting a decision by the investigating authority or the prosecution service. 

  On this basis, the Commission finds that the regulatory framework for the introduction 
of  a  specific  procedure  in  the  case  of  special  crimes  related  to  the  exercise  of  public 
authority or the management of public property as set out in the amendments to Act XC 
of 2017 on the Code of Criminal Procedure does not fulfil the commitments set by the 
remedial  measure  and  contains  rules  that  undermine  its  effectiveness.  As  explained  in 
the  Explanatory  Memorandum  (paragraph  96),  Hungary  was  required  to  correctly 
specify  its  commitments  in  detailed  rules  in  order  to  ensure  the  effectiveness  of  the 
measure. The manner in which Hungary has currently specified its commitments in law 
does not allow the Commission to establish that this remedial measure can  effectively 
address 
investigation,  prosecution  and  sanctioning. 
Consequently,  the  remedial  measure  as  implemented  is  not  adequate  to  sufficiently 
address the Commission’s findings under the Conditionality Regulation. 

ineffective 

issues  of 

the 

vi. 

Strengthening audit and control mechanisms to guarantee the sound use of 
EU support 

intermediate  bodies  and 

  The Hungarian Government committed to establish a working group by 31 August 2022 
to include provisions in relevant Government Decrees on the implementation of Union 
support. These provisions should aim at strengthening the rules and procedures to more 
effectively  prevent,  detect  and  correct  conflict  of  interest  in  accordance  with  the 
definition contained in Article 61 of the Financial Regulation. These provisions should 
include  an  effective  control  mechanism  over  the  validity  of  conflict  of  interest 
declarations.  The  provisions  should  also  aim  at  increasing  procedural  capacities  of 
managing  authorities, 
the 
implementation of the Hungarian Recovery and Resilience Plan, to apply strengthened 
risk  management  and  prevention,  detection  and  correction  of  fraud,  corruption  and 
double funding. The Hungarian Government  also  committed to  establish a Directorate 
of Internal Audit and Integrity (“DIAI”) responsible for regularly checking the validity 
of conflict of interest declarations and interest declarations. It committed to provide the 
Directorate with the relevant guarantees for its independence (e.g. nomination of high-
ranking  staff,  duration  of  the  director’s  mandate  without  possibility  to  dismiss  them) 
and to establish rules for regular control of the validity of declarations. The Hungarian 
Government also committed to provide the necessary financial and human resources to 
the EUTAF, to guarantee the sound use of Union support, to safeguard its independence 
and enable it to carry out its current tasks and the additional tasks allocated by a number 
of the remedial measures. 

the  national  authority  of 

  The  Key  Implementation  Steps  for  this  measure  were  (i)  the  establishment  of  the 
working  group  by  31  August  2022,  (ii)  the  establishment  of  the  DIAI  in  the  Prime 
Minister’s  Office  by  30  September  2022  and  (iii)  the  adoption  of  amendments  to  the 
relevant Government Decrees by 30 September 2022.  

38  

The  prosecution  service  or  the  investigating  authority  shall  examine,  within  three  working  days  after 
receipt  of  the  crime  report,  if  an  investigation  is  to  be  ordered  in  the  case,  if  the  crime  report  is  to  be 
supplemented or dismissed, or if the case is to be transferred. 

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  Hungary took the following steps to address the relevant Key Implementation Steps.  

  In  line  with  the  remedial  measure,  a  working  group  was  established  within  the 
applicable deadline with the participation of the services of the Prime Minister’s Office 
responsible  for  the  management,  control  and  audit  of  the  use  of  EU  funds  and  the 
EUTAF. The working group met with the Commission services for the first time on 8 
September 2022 and on average twice a week until the beginning of November 2022. 

  On 30 September 2022 the Hungarian Government adopted: 

(i)  Government  Decree  374/2022  (30  September)  amending  Government  Decree 
272/2014  (5  November)  on  Rules  of  the  Use  of  Funds  from  Certain  European  Union 
Funds  in  the  2014-2020  Programming  Period  and  Government  Decree  256/2021  (18 
May) on Rules of the Use of Funds from Certain European Union Funds in the 2021-
2027 Programming Period, and  

(ii)  Government  Decree  373/2022  (30  September)  on  the  rules  and  responsible 
institutions of implementing Hungary’s Recovery and Resilience Plan.  

The  decrees  entered  into  force  on  the  same  day,  with  certain  exceptions  in  particular 
regarding certain provisions related to conflict of interest declarations.  

  On  15  November  2022,  the  Hungarian  Government  adopted  Government  Decree 
463/2022  amending  Government  Decrees  373/2022,  256/2021  and  272/2014,  which 
brought  forward  the  entry  into  force  of  the  aforementioned  provisions  on  conflict  of 
interest declarations to 15 November. Lastly, Act XXVIII of 2022 on amending certain 
acts related to the control of the use of European Union budget funds, which established 
the DIAI in the work organisation of the Minister responsible for the use of European 
Union funds (i.e. the Prime Minister’s Office), was adopted by the National Assembly 
on  4  October  2022  and  promulgated  on  10  October  2022.  It  entered  into  force  on  13 
October  2022.  On  15  November  2022,  the  Hungarian  Government  submitted  to  the 
National Assembly an amending bill concerning this Act, as part of the service package. 
Following  the  submission  of  the  service  package  to  the  National  Assembly,  the 
Hungarian authorities sent the Commission services a revised legal text as an annex to 
the  November  Letter.  The  amending  Act  was  adopted  on  22  November  2022  and  it 
reflects  the  changes  included  in  the  legal  text  received  by  the  Commission  on  19 
November. The acting director (for the period of 1 October 2022 to 31 December 2022) 
of the DIAI was appointed on 30 September 2022.  

  In  line  with  the  remedial  measure,  Government  Decree  373/2022,  amending  decree 
374/2022  as  well  as  Government  Decree  463/2022  introduce  provisions  to  strengthen 
rules and procedures to more effectively prevent, detect and correct conflict of interest 
in  accordance  with  Article  61  of  the  Financial  Regulation  and  the  Commission 
Guidance  Notice  on  the  avoidance  and  management  of  conflicts  of  interest  under  the 
Financial  Regulation39.  The  new  provisions  cover  the  notion  of  perceived  conflict  of 
interest  and  ensure  an  effective  control  mechanism  over  the  validity  of  conflict  of 
interest  declarations.  The  amended  Government  Decrees  set  out  that  the relevant  staff 

39  

See  Chapter  VI  on  Conflict  of  Interest  of  Government  Decree  272/2014,  Chapter  IV  on  Rules  on  the 
operation of the development policy institutional system, including on conflict of interest, of Government 
Decree 256/2021 and sub-chapter 15 on conflicts of interest of Government Decree 373/2022. 

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25 

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members of national authorities shall file a general declaration of conflict of interest and 
a declaration of interests when establishing a legal relationship or before commencing 
an activity with an actor of the institutional system. They shall also file a declaration of 
conflict  of  interest  before  commencing  any  procedural  act40.  Final  recipients, 
contractors, sub-contractors and persons involved in the preparation and implementation 
of  a  project  shall  declare  any  conflict  of  interest  in  the  cases  provided  for  by  the 
Commission Guidance Notice41. The new provisions set out that the DIAI shall verify 
the veracity of the declarations with the exception of declarations made by its own staff 
and the members of the audit authority (which will instead be verified by the Integrity 
Authority), on a sample basis, and based on a two-year audit plan, covering at least 5% 
of  the  number  of  persons  required  to  submit  a  declaration  of  conflict  of  interest  each 
year42 as well as any suspicion of conflict of interest reported to it. The obligation by all 
actors to file conflict of interest declarations and by the DIAI to perform checks applies 
since 15 November 2022.  

  The amended Decrees set out that regular and effective oversight and regular rotation of 
staff in sensitive positions shall be ensured, in particular those dealing with irregularity 
management, control or risk assessment. This will be further developed in a dedicated 
methodology43.  The  Commission  will  follow-up  on  the  implementation  of  this 
commitment in practice. Moreover, in line with the commitment to ensure appropriate 
data  collection  and  with  the  remedial  measure  on  Arachne  (see  a  more  detailed 
assessment below), the amended Decrees include provisions to ensure the transmission 
of data to Arachne and set out in their annexes the relevant data fields that need to be 
transmitted  to  Arachne44.  Furthermore,  the  amended  Decrees  have  provisions  to 
consistently, systematically and extensively apply and take into account all the functions 
of Arachne in the preparation and adoption of the decisions regarding EU funding45. 

  Section  81  on  the  Amendment  to  Act  CXLIII  of  2015  on  public  procurement  of  the 
Integrity Authority Act, which was adopted on 10 October 2022 and entered into force 
on 11 October 2022 sets a provision to prevent bidders from participating in tenders in 
public procurement procedures if they are in a situation of conflict of interests relevant 
in the specific tender. 

  In  line  with  the  remedial  measure,  the  legislation  on  the  DIAI  outlines  the  fully 
independent  role  of  the  DIAI,  with  relevant  guarantees  (e.g.  as  regards  the  dismissal 
procedure).  It  also  outlines  its  competence  relating  to  actors  involved  in  EU  budget 
implementation  of  any  fund  (Section  29/B  (3)  of  Act  CXXV  of  2018  on  government 
administration). Moreover, the relevant legislation clearly sets out that the director shall 
carry  out  the  tasks  without  any  interference  from  any  other  institution,  body,  political 

40  

41  

42  

43  

44  

45  

See Section 39 (6) of Government Decree 272/2014, Section 52/A (1) of Government Decree 256/2021 
and Section 34 (1) of Government Decree 373/2022. 
See Section 39 (8) of Government Decree 272/2014, Section 52/A (6) of Government Decree 256/2021 
and Section 34 (6) of Government Decree 373/2022. 
See Section 39 (7) of Government Decree 272/2014, Section 52/A (2) of Government Decree 256/2021 
and Section 34 (2) of Government Decree 373/2022. 
See Section 8 (3) 13. of Government Decree 272/2014, Section 7 (1) m) of Government Decree 256/2021 
and Section 5 21. of Government Decree 373/2022. 
See  Section  22  (1)  22.  of  Government  Decree  272/2014,  Section  19  (2)  c)  of  Government  Decree 
256/2021 and Section 9 (1) i) of Government Decree 373/2022. 
See Section 10 (2) 9. and Annex 7 of Government Decree 272/2014, Section 13 (1) h)  and Annex 4 of 
Government Decree 256/2021 and Section 5 23. and Annex 2 of Government Decree 373/2022. 

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26 

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party, economic entity, association or legal or physical person (Section 29/B (5)). The 
DIAI’s  employees  will  be  selected  based  on  an  objective  set  of  criteria  that  will  be 
approved  by  the  Integrity  Authority.  The  Authority  will  also  control  the  recruitment 
process of the government officials and employees of the Directorate (Section 29/B (6)). 
Furthermore, the Integrity Authority will control the functioning of the Directorate, as 
well as the compliance with rules of procedure and guidelines (Section 29/B (9)). The 
Authority  will  be  competent  to  verify  declarations  of  conflict  of  interest  and 
declarations of interest  of the DIAI director and  its employees  (Section 29/B (9c)).  In 
case  of  serious  or  recurrent  compliance  issues,  the  Integrity  Authority  will  be  able  to 
audit the DIAI (Section 29/B (9)). The DIAI is obliged by law to provide the Integrity 
Authority upon its request with full access to any declarations of conflict of interest and 
of  interest  handled  by  the  Directorate.  The  DIAI  should  also  provide  all  documents 
managed  by  the  Directorate  that  are  necessary  for  the  Authority’s  exercise  of  powers 
(Section  29/B  (9b)  b)).  The  Directorate  will  submit  an  annual  report  to  the  Integrity 
Authority  informing  about  its  activities  and  in  particular  the  results  of  checks  carried 
out,  measures  taken,  number  of  reports  received  and  cases  investigated  (Section 
29/B (10)).  Finally,  the  Commission  welcomes  that  Hungary  has  agreed46  that  the 
Integrity Authority would not be required to prove the intent of the declarant in case of 
false or incorrectly filled out declarations. This was confirmed in amendments adopted 
as part of the service package on 22 November 2022.  

  On 15 November 2022, the Hungarian Government submitted to the National Assembly 
a bill concerning the change in status of the EUTAF, as part of the service package. The 
bill  was  adopted  on  22 November  2022.  EUTAF  will  be  transformed  from  its  current 
status as a central budgetary organisation operating under the authority of the Minister 
responsible  for  public  finances  into  an  autonomous  state  administration  organ  as  of  1 
January 2023 (Section 1 (1) and Section 35 (1)). EUTAF will have a separate heading in 
the structure of the central budget. It will submit the proposal for its budget, which the 
Government  shall  transmit  without  change  to  the  National  Assembly  as  part  of  the 
legislative  proposal  on  the  central  budget  and  its  implementation.  Its  budget  may  be 
modified  only  with  consent  of  the  Directorate-General  if  the  modification  is  duly  and 
publicly  justified  and  does  not  jeopardise  the  effective  and  timely  performance  of  the 
tasks of the Directorate-General (Section 2). The remuneration of the Director-General 
and  of  the  Deputy  Director-General  shall  be  equal  to  respectively  8.4  times  and  7.4 
times  the  average  monthly  gross  earnings  in  the  national  economy  (Section  30).  The 
Director-General  shall  decide  on  the  principles  of  the  remuneration  policy  of  the 
Directorate-General  and  non-wage  benefits  (Section  31).  The  functional  and 
professional independence of the EUTAF will be maintained. The staff of EUTAF will 
continue  not  to  seek  or  accept  instructions  regarding  its  audit  work.  The  Commission 
welcomes  the  above  changes  to  the  regulatory  framework  governing  EUTAF,  which 
effectively implement the commitment submitted by Hungary in the September Letter. 

  The  Commission  finds  that  Hungary  took  the  Key  Implementation  Steps  and  that  the 

relevant legislative texts fulfil the commitments set by the remedial measure. 

46  

By e-mail of 18 November 2022. 

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27 

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vii.  Reducing  the  share  of  tender  procedures  with  single  bids  financed  from 

Union funds 

 The  Hungarian  Government  undertook  to  reduce  the  share  of  tender  procedures 
financed from Union funds and closed in the year of 2022 with single bids below 15%, 
as measured with the Single Market Scoreboard methodology, by 31 December 2022. It 
committed to fulfil this target unconditionally and maintain it without a time limit. The 
Hungarian Government committed also to take additional measures within four months, 
in case the share of single bids exceeds 15% in any given calendar year, to facilitate the 
reduction of the single bid procurements and to bring them back below the threshold of 
15%.  In  such  a  case,  the  Hungarian  Government  undertook  to  inform  the  Integrity 
Authority and the Commission accordingly.  

 The Key Implementation Step for this measure was the performance of the first audit by 
the EUTAF on the compliance with the Single Market Scoreboard methodology (and on 
individual  data  provision  to  the  Commission  and  to  the  public,  if  applicable)  by  30 
September 2022. 

 On 7 October 2022, the Hungarian authorities sent to the Commission services the audit 
report on the adequacy of the single bid methodology issued by the EUTAF. Following 
comments from the Commission services, the EUTAF amended its report and issued a 
revised  final  audit  report  on  3  November  2022.  The  audit  concluded  that  the  used 
methodology was adequate and in line with the methodology used by the Single Market 
Scoreboard,  with  one  exception  for  which  EUTAF  has  formulated  a  recommendation. 
The Commission will monitor the follow-up to the EUTAF recommendation as part of 
the reporting from the Hungarian Government in accordance with paragraph (17) above. 

 The  Commission  finds  that  Hungary  took  the  Key  Implementation  Step  and  has 
received sufficient assurance from the EUTAF audit report that the used methodology is 
in line with the methodology used by the Single Market Scoreboard, as required by the 
remedial measure. This assessment is without prejudice to the achievement of the 15% 
threshold set in accordance with paragraph (100) above. The Commission will monitor 
the implementation of this remedial measure as part of the reporting from the Hungarian 
Government in accordance with paragraph (17) above.  

viii.  Reducing the share of tender procedures with single bids financed from the 

national budget 

 Similarly  to  the  preceding  remedial  measure  (vii.),  the  Hungarian  Government 
undertook  to  reduce  in  three  steps  the  share  of  tender  procedures  financed  from  the 
national budget and closed in a calendar year with single bids below 15%, as measured 
with the Single Market Scoreboard methodology, by 31 December 2024.  It committed 
to fulfil this target unconditionally and maintain it without a time limit. The Hungarian 
Government also committed to propose additional measures within four months in case 
the  share  of  single  bids  exceeds  15%  in  any  given  calendar  year,  to  facilitate  the 
reduction of the single bid procurements and to bring them back below the threshold of 
15%.  In  such  case,  the  Hungarian  Government  undertook  to  inform  the  Integrity 
Authority and the Commission accordingly.  

 In line with the Annex to the Explanatory Memorandum, there were no immediate Key 
Implementation  Steps  for  this  remedial  measure.  The  Commission  will  monitor  the 

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28 

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implementation  of  this  remedial  measure  as  part  of  the  reporting  from  the  Hungarian 
Government in accordance with paragraph (17) above. 

ix.  Development of a single-bid reporting tool to monitor and report on public 

procurements closed with single-bids 

 In  addition  to  the  remedial  measures  related  to  the  reduction  of  single-bid  procedures 
described above (vii. and viii.), the Hungarian Government committed to develop a new 
monitoring  and  reporting  tool  for  measuring  the  share  of  procurement  procedures 
resulting  in  single  bids  financed  from  national  resources  or  from  EU  support  or  from 
both by 30 September 2022. It committed to maintain it for an unlimited period of time. 
The Hungarian Government also undertook to publish an annual written report based on 
the information gathered by the single-bid reporting tool, to be prepared by the Ministry 
responsible  for  public  procurement  and  published  by  15  February  each  year  on  the 
website of the Electronic Public Procurement System (EPS).  

 The  Key  Implementation  Steps  for  this  measure  were  (i)  the  development  of  a  new 
monitoring  and  reporting  tool  based  on  data  sourced  from  the  EPS  by  30  September 
2022 and (ii) the confirmation by the EUTAF that the tool would be fully functional and 
operational by 30 September 2022.  

 On 7 October 2022, the Hungarian authorities sent to the Commission services the audit 
report  of  the  monitoring  and  reporting  tool  on  single-bid  procurements  issued  by 
EUTAF. Following comments from the Commission services, EUTAF issued a revised 
final  audit  report  on  3  November  2022.  The  report  finds  that  the  single-bid  reporting 
tool is in place, operational, functional and capable of monitoring the ratio of single bid 
procurement  procedures. The  report finds that  consistency  with the  EPS data could in 
principle be established.  In line  with  the remedial  measure, the reporting tool shall be 
developed further by 31 December 2022 to include data on geographic indications. The 
first report shall be published by 15 February 2023.  

 The  Commission  finds  that  Hungary  took  the  relevant  Key  Implementation  Steps  and 
that  the  single-bid  reporting  tool  has  been  developed.  Its  operability  and  functionality 
were  confirmed  by  the  EUTAF  report,  as  required  by  the  relevant  remedial  measure. 
This assessment is without prejudice to the further developments and the publication of 
the first report, which will substantiate the remedial measure in practice, which require a 
longer implementation date in line with the remedial measure.  

x.  Development of the Electronic Public Procurement System (EPS) to increase 

transparency 

 The  Hungarian  Government  committed  to  create  and  publish  on  the  EPS  website  a 
database,  containing  information  on  all  contract  award  notices  of  public  procurement 
procedures  in  a  structured  form,  including  company  identification  numbers  and  the 
names of each individual member of the consortia and the subcontractors. This database 
would be updated regularly (at least quarterly) and would be available to the public free 
of charge. It would have to be fit to be processed by machine means and in particular 
allow for structured research and bulk export of data related to procurement procedures. 
The  Hungarian  Government  also  undertook  to  take  all  the  necessary  measures  to 
develop  the  EPS  and  to  ensure  that  the  newly  developed  functions  were  fully 
operational by 30 September 2022. Furthermore, the Hungarian Government committed 

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29 

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to maintain the EPS and relevant functions unconditionally and for an unlimited period 
of time.  

 The  Key  Implementation  Step  for  this  measure  was  to  ensure  the  full  operability  of 
newly developed functions allowing for the structured search and export of data in the 
EPS, in a format that can be processed by machine means, by 30 September 2022.  

 On  7  October  2022,  the  Hungarian  authorities  informed  the  Commission  services  that 
the new  function of the  EPS allowing for the structured search and export of contract 
award notice data in the EPS in a format that can be processed by machine means, was 
completed 
at 
2022 
https://ekr.gov.hu/portal/kozbeszerzes/eredmeny-tajekoztato-hirdetmenyek. 

September 

available 

publicly 

and 

30 

by 

is 

  The  new  EPS  function  allows  the  structured  search  and  bulk  export  of  all  contract 
award notice data available in the EPS (including company identification numbers) in a 
format that can be processed by machine means (.csv or .xlsx). The database contains 
data on members of consortia47 and subcontractors, the latter currently only available in 
free-text  format.  In  line  with  the  remedial  measure,  the  function  will  be  further 
developed to include structured data on subcontractors by 30 November 2022. Data are 
updated  twice  a  month;  the  new  function  is  available  to  the  public  free  of  charge  and 
without registration. Data is available from April 2018 onwards, in compliance with the 
remedial measure; data from January 2014 shall be made available by 31 March 2023. 
Furthermore, on 5 November 2022, upon request of the Commission, Hungary provided 
the  Commission  with  the  internal  instruction  issued  by  the  Prime  Minister’s  Office  to 
the  company  operating  and  updating  the  database,  the  company's  ISO  certificates  and 
the Customer Support  Group's Code of  Conduct,  which confirm  the periodicity of the 
publication and the process for rectification of information.  

 The  Commission  finds  that  Hungary  took  the  Key  Implementation  Step.  The  new 
function of the EPS has been developed and it allows to search in a structured manner 
and  export  in  bulk  contract  award  notice  data  in  the  EPS,  in  a  format  that  can  be 
processed  by  machine  means,  in  accordance  with  the  remedial  measure.  This 
assessment  is  without  prejudice  to  the  further  developments  in  relation  to  the  EPS, 
which require a longer implementation date in line with the remedial measure (see also 
paragraph (113) above).  

xi.  Development  of  a  performance  measurement  framework  assessing  the 

efficiency and cost effectiveness of public procurements 

 The  Hungarian  Government  committed  to  develop  a  performance  measurement 
framework to assess the efficiency and cost effectiveness of public procurements by 30 
September 2022. The performance measurement framework shall be operational by 30 
to  maintain 
November  2022.  The  Hungarian  Government  also  undertook 
unconditionally  the  regular  use  of  the  performance  measurement  framework  and  the 
publication of its results for an unlimited period of time.  

47  

Upon  request  from  the  Commission,  on  29  October  2022  the  Hungarian  authorities  provided  further 
clarification on the processing by machine methods of data relevant to the EPS downloadable data when a 
consortium wins a public procurement. 

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 The Key Implementation Step for this measure was the development of the performance 
measurement  framework  itself,  including  the  adoption  of  the  relevant  Government 
Decision by 30 September 2022.  

 Hungary took the following steps to address the Key Implementation Step.  

 On 5 September 2022, the Hungarian Government adopted and published Government 
Decision  1425/2022  on  the  development  of  a  performance  measurement  framework 
assessing the efficiency and cost effectiveness of public procurements.  

 Government  Decision  1425/2022  sets  out  the  obligation  of  the  Minister  for  Regional 
Development  regarding  the  collection  of  data  and  examining  the  possible  reasons  for 
single bid public procurements. The Minister for Regional Development is responsible 
to  select  non-governmental  organisations  (NGOs)  and  public  procurement  experts  to 
take part in the setting up and operations of the performance measurement framework. 
The  proposals  and  opinions  of  such  NGOs  and  experts  must  be  taken  into  account 
during the setting up and operation of the framework. Under the Government Decision, 
the  performance  measurement  framework  will  enable  in  particular  the  annual  analysis 
of  the  (i)  level  of  unsuccessful  public  procurement  processes  and  the  reasons  thereof, 
(ii)  share  (number  and  value)  of  contracts  cancelled  during  contract  execution,  (iii) 
share  of  occurrence  of  delays  in  contract  completion,  (iv)  share  of  occurrence  of  cost 
overruns,  (v)  share  of  awarded  procurement  contracts  in  which  life-cycle  or  life-cycle 
costing  is  taken  into  consideration,  (vi)  share  of  successful  participation  of  micro  and 
small  enterprises  (across  and  per  sector),  (vii)  value  of  procedures  with  single  bids 
financed from national resources and from Union funds separately and/or both and how 
that value compares to the total value of public procurement procedures financed from 
national  resources  and  Union  funds  separately  and/or  both.  In  line  with  the  remedial 
measure,  the  performance  measurement  framework  shall  be  operational  by  30 
November 2022. By 28 February each year, the results of the performance measurement 
shall be made publicly available.  

 The Commission finds that Hungary took the Key Implementation Step and fulfilled the 
commitments related to the operational framework within which the remedial measure 
shall be established and implemented. This assesment is without prejudice to the actual 
establishment  of  the  performance  measurement  framework  and  the  publication  of  the 
first report, which will substantiate the remedial measure in practice and which requires 
a longer implementation period (see also paragraph (119) above). 

 The Commission notes that the call for application for NGOs and experts, the draft text 
of  which  was  sent  to  the  Commission,  was  announced  on  11  October  2022  with  the 
deadline  of  26  October  2022.  15  applications  were  received,  of  which  two  by 
organisations  and  13  by  individuals.  Therefore,  while  three  posts  were  reserved  for 
organisations, only two could actually be filled by organisations. For the third post, one 
individual  applicant  from  a  university  was  selected;  however,  according  to  the 
information  available  to  the  Commission,  that  person  does  not  seem  to  have 
demonstrated  public  procurement  related  experience.  Additionally,  four  independent 
experts were selected. 

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xii.  Adoption  of  an  action  plan  to  increase  the  level  of  competition  in  public 

procurement 

 The  Hungarian  Government  undertook  to  adopt,  by  31  March  2023,  a  comprehensive 
action  plan  aiming  at  improving  the  level  of  competition  in  public  procurement  with 
clear  and  ambitious  deadlines  for  implementing  each  of  the  actions  set  in  the  action 
plan.  The  action  plan  should  take  into  account,  inter  alia,  the  first  results  of  the 
performance measurement framework, to be operational by 31 December 2022.  

 In line with the Annex to the Explanatory Memorandum, there were no immediate Key 
Implementation  Steps  for  this  remedial  measure.  The  Commission  will  monitor  the 
implementation  of  this  remedial  measure  as  part  of  the  reporting  from  the  Hungarian 
Government in accordance with paragraph (17) above. 

xiii.  Training  to  be  provided  for  micro,  small  and  medium-sized  enterprises  on 

public procurement practices 

 The  Hungarian  Government  committed  to  provide,  by  31  March  2024,  free  of  charge 
training  in  public  procurement  for  at  least  1 000  micro,  small  and  medium  sized 
enterprises  (with  particular  focus  on  micro  and  small  enterprises)  with  the  aim  to 
facilitate  their  participation  in  public  procurement.  By  30  June  2026,  the  Hungarian 
Government  undertook  to  provide  such  training  occasions  for  at  least  an  additional 
1 200  micro,  small  and  medium  sized  enterprises  (hence,  a  total  of  at  least  2 200 
enterprises).  Furthermore,  the  Hungarian  Government  committed  to  monitor  and 
evaluate the efficiency and added value of the trainings.  

 In line with the Annex to the Explanatory Memorandum, there were no immediate Key 
Implementation  Steps  for  this  remedial  measure.  The  Commission  will  monitor  the 
implementation  of  this  remedial  measure  as  part  of  the  reporting  from  the  Hungarian 
Government in accordance with paragraph (17) above. 

xiv. 

Setting  up  a  support  scheme  for  compensating  the  costs  associated  with 
participating  in  public  procurement  of  micro,  small  and  medium-sized 
enterprises 

 In  addition  to  the  preceding  remedial  measure  (xiii.),  the  Hungarian  Government 
committed  to  launch  a  support  scheme  for  micro,  small  and  medium-sized  enterprises 
with regard to public procurement procedures, by 31 March 2023. This scheme should 
provide  a  lump  sum  compensation,  based  on  objective,  non-discriminatory  and 
transparent selection criteria, for at least 1 800 eligible micro, small and medium-sized 
enterprises, with focus on micro and small enterprises. This scheme would cover their 
costs associated with their participation in public procurement procedures, with the aim 
of facilitating their participation in public procurement and reducing their entry barriers. 
A  mid-term  evaluation  should  be  performed  by  30  September  2024  and  a  final 
evaluation should be completed by the end of the support programme on 31 July 2026.  

 In line with the Annex to the Explanatory Memorandum, there were no immediate Key 
Implementation  Steps  for  this  remedial  measure.  The  Commission  will  monitor  the 
implementation  of  this  remedial  measure  as  part  of  the  reporting  from  the  Hungarian 
Government in accordance with paragraph (17) above. 

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xv. 

 Application of Arachne 

 The  Hungarian  Government  undertook  to  apply  procedures  for  the  systematic  and 
extended  use  of  all  the  functionalities  of  the  single  data-mining  and  risk-scoring  tool 
Arachne,  which  the  Commission  puts  at  the  disposal  of  the  Member  States,  in  the 
implementation  of  any  Union  support  and  for  all  programming  periods,  to  effectively 
prevent  and  detect  conflict  of  interest,  fraud,  corruption,  double  funding  and  other 
irregularities.  The  Hungarian  Government  committed  to  unconditionally  maintain  the 
full and effective application of the Arachne tool for an unlimited period of time. All the 
relevant  audit  and  control  bodies  shall  also  have  full  access  to  the  data  sets  uploaded 
into Arachne. The Commission notes that it understands this commitment to apply also 
to potential successor systems of Arachne. 

 The Key Implementation Step for this measure was the application of the procedures for 
the systematic and effective use of Arachne by 30 September 2022.  

 Hungary took the following steps to address the Key Implementation Step.  

 On  30  September  2022,  the  Hungarian  Government  adopted  Government  Decree 
373/2022  and  amending  decree  374/2022,  which  entered  into  force  on  the  same  day, 
with certain exceptions in accordance with the remedial measure.  

 The  Government  Decrees  set  out  provisions  to  ensure  the  transmission  of  data  to 
Arachne on a bi-monthly basis and in their annexes set out the relevant data fields that 
need  to  be  transmitted48.  Moreover,  the  Decrees  set  out  provisions  to  develop  and 
regularly  review a methodology for the use of  Arachne and its results49 and to  ensure 
that the relevant authorities consistently, systematically and extensively apply and take 
into  account  all  the  functions  of  Arachne  in  the  preparation  and  adoption  of  the 
decisions  regarding  EU  funding50.  The  Government  Decrees  also  ensure  access  to  the 
functionalities  and  data  of  Arachne  for  relevant  actors,  including  the  relevant  audit 
authorities51.  The  first  package  of  data  was  transmitted  to  the  Arachne  tool  on  30 
September  2022.  Arachne  now  includes  data  from  almost  65 000  projects  in  Hungary 
with over 41 000 beneficiaries and almost 6 000 contracts. The next upload by Hungary 
is envisaged to take place by 30 November 2022, in line with the remedial measure. The 
Commission will continue to monitor the timely performance of any data uploads. 

 The Commission finds that Hungary took the Key Implementation Step and the relevant 
Government  Decrees  set  out  the  detailed  rules  for  the  systematic  and  effective  use  of 
Arachne, in line with the remedial measure.  

48  

49  

50  

51  

See Section 10 (2) 9. and Annex 7 of Government Decree 272/2014, Section 13 (1) h) and Annex 4 of 
Government Decree 256/2021 and Section 5 23. and Annex 2 of Government Decree 373/2022. 
See Section 10 (2) 3. of Government Decree 272/2014, Section 13 (1) c) of Government Decree 256/2021 
and Section 5 22. of Government Decree 373/2022. 
See  Section  20  (1)  22.  (e)  of  Government  Decree  272/2014,  Section  19  (2)  c)  of  Government  Decree 
256/2021 and Section 9 (1) i) of Government Decree 373/2022. 
See  Section  10  (2)  10.  of  Government  Decree  272/2014,  Section  13  (1)  i)  of  Government  Decree 
256/2021 and Section 5 24. of Government Decree 373/2022. 

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xvi. 

Strengthening cooperation with OLAF 

 The Hungarian Government undertook to  submit to  the National  Assembly a draft act 
on  the  amendment  to  Act  CXXII  of  2010  on  the  National  Tax  and  Customs 
Administration (Nemzeti Adó- és Vámhivatal), which shall be adopted by 30 September 
2022  and  shall  designate  the  National  Tax  and  Customs  Administration  as  the 
competent  national  authority  to  assist  OLAF  when  carrying  out  on-the-spot  checks  in 
Hungary and when an economic operator subject to those checks refuses to cooperate. It 
also committed to submit to the National Assembly a draft act on the amendment to Act 
XXIX of 2004 to introduce a dissuasive financial-type of sanction to be imposed in case 
an economic operator refuses to cooperate with OLAF for the purposes of on-the-spot 
checks and inspections.  

 The  Key  Implementation  Step  for  this  measure  was  the  adoption  of  the  two  above-
mentioned acts by 30 September 2022. 

 Hungary took the following steps to address the Key Implementation Step. 

  On  4  October  2022,  the  National  Assembly  adopted  Act  XXIX  of  2022  amending 
certain  Acts  concerning  public  interest  asset  management  foundations  performing 
public  duty,  the  National  Tax  and  Customs  Administration  and  the  checks  of  the 
European Anti-Fraud Office in relation with the control of the use of European Union 
budget  funds, which  was promulgated on 10 October 2022. The provisions of the Act 
relating to OLAF entered into force on 26 October 2022. 

 In  line  with  the  remedial  measure,  Act  CXXII  of  2010  was  amended  to  designate  the 
National  Tax  and  Customs  Administration  (Nemzeti  Adó-  és  Vámhivatal)  as  the 
competent national authority to assist OLAF when carrying out on-the-spot checks and 
inspections in Hungary and when an economic operator subject to those checks refuses 
to  cooperate.  The  Act  also  describes  the  procedure  to  follow.  It  also  introduced  the 
possibility  of  the  presence  of  a  finance  guard  at  the  request  of  OLAF.  Act  XXIX  of 
2004 was amended to introduce a dissuasive financial type of sanction to be imposed in 
case an economic operator refuses to cooperate with OLAF for the purposes of OLAF’s 
on-the-spot checks and inspections. 

 The  Commission  finds  that  Hungary  took  the  Key  Implementation  Step,  and  that  the 
amendments introduced with the aforementioned Act fulfil the commitments set by the 
remedial measure.  

xvii.  Adoption  of  a  legislative  act  ensuring  enhanced  transparency  of  public 

spending 

 The Hungarian Government committed to submit to the National Assembly a legislative 
act setting out an obligation for all public bodies to proactively publish a pre-defined set 
of  information  on  the  use  of  public  funds  into  a  central  register,  and  to  have  the  act 
adopted  by  the  National  Assembly,  by  31  October  2022.  The  Hungarian  Government 
also  undertook  to  provide  information  on  the  subcontractors  in  the  central  register. 
Furthermore,  it  committed  to  unconditionally  maintain  in  force  the  above-mentioned 
Act for an unlimited period of time. It also committed to ensure its enforcement, and in 
particular that public bodies upload all relevant data in full and in a timely manner to the 
registry.  

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 The Key Implementation Steps for this measure were (i) the sending to the Commission 
of the advanced draft of the legislative act setting out an obligation for all public bodies 
to proactively publish a pre-defined set of information on the use of public funds by 30 
September 2022, and (ii) the adoption of this legislative act by 31 October 2022.  

 Hungary took the following steps to address the Key Implementation Steps. 

 On 15 September, the Hungarian Government sent to the Commission the draft text of 
the Act to set out an obligation for public bodies to proactively publish a pre-defined set 
of information on the use of public funds for consultation.  

 On 8 November 2022, the National Assembly adopted Act XL of 2022  amending Act 
CXII  of  2011  on  the  right  to  informational  self-determination  and  on  the  freedom  of 
information, which was promulgated on 14 November 2022 and will enter into force on 
29  November  2022,  with  certain  exceptions.  On  15  November  2022,  the  Hungarian 
Government  submitted  to  the  National  Assembly  two  amending  bills  concerning  Act 
XL  of  2022  and  Act  CXII  of  2021,  as  part  of  the  service  package.  Most  of  the 
amendments from the Hungarian Government were introduced in the part of the service 
package  on  which  the  final  vote  took  place  on  22  November  2022.  The  amendments 
concerning the new rules for enforcement of the obligation to proactively publish a pre-
defined  set  of  information  on  the  use  of  public  funds  ,  including  sanctions 
(‘administrative  procedure  for  transparency’),  were  inserted  in  the  part  of  the  service 
package  with  a  final  vote  set  for  6  December  2022.  Following  the  submission  of  the 
service  package  to  the  National  Assembly,  the  Hungarian  authorities  sent  the 
Commission services a revised legal text of Act XL amending Act CXII of 2011 on the 
right  to  informational  self-determination  and  on  the  freedom  of  information  on  18 
November  2022.  That  legal  text  was  also  contained  in  the  November  Letter.  The 
amending  act  regarding  most  of  the  amendments  was  adopted  on  22  November  2022 
and it reflects the changes included in the legal text received by the Commission. The 
Commission cannot at this juncture assess the amendments regarding the administrative 
procedure  for  transparency,  scheduled  for  vote  in  the  National  Assembly  for  6 
December  2022.  The  Commission’s  assessment  is  therefore  based  on  the  legal  text 
received on 19 November 2022. 

 Act  XL  of  2022  sets  out  an  obligation  for  budgetary  organs  under  the  Act  of  Public 
Finances to publish, on a bi-monthly basis and in a manner ensuring availability  for at 
least ten years from publication, data relating to the use of public funds on the platform 
of the Central Information Register of Public Data. This central register is available to 
everyone  for  free,  without  the  need  to  create  accounts  to  access  the  data  and  in  a 
machine-readable format, which allows bulk download and data to be sorted, searched, 
extracted and compared. A reference will indicate if a procurement is financed, in whole 
or in part, from Union support. For procurements not exceeding the  national threshold 
under the Public Procurement Act, Hungary shall indicate this for procurements starting 
from  31  March  2023,  in  line  with  the  remedial  measure.  The  platform  shall  be 
established  by  the  maintainer  of  the  platform  by  31  December  2022  at  the  latest  and 
publish  the  data  sheet  required  for  publication  on  the  platform.  Entities  required  to 
publish  on  the  platform  shall  publish  data  on  the  platform  continuously.  The  first 
publication shall take place no later than 28 February 2023, also in accordance with the 
remedial  measure.  Moreover,  as  mentioned  above,  new  rules  for  enforcement  of  the 
obligation,  including  sanctions,  would  be  created  by  means  of  a  new  administrative 
procedure  for  transparency  to  be  carried  out  by  the  National  Authority  for  Data 

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Protection and  Freedom  of  Information to  investigate cases of non-compliance,  which 
would  enter  into  force  on  28  February  2023.  On  14  November  2022,  the  Hungarian 
authorities  also  sent  to  the  Commission  services  the  draft  Decree  of  the  Government 
laying down detailed rules for the Central  Information  Register of Public  Data, which 
contains the data sheet required for publication on the platform. 

 The Commission notes that not all contracting authorities defined in Section 5 (1) of Act 
CXLIII  of  2015  on  public  procurement  (PPA)  are  subject  to  the  obligation  to  publish 
information  pursuant  to  the  Act.  However,  the  Commission  notes  that  data  for  public 
procurement procedures carried out by the entities referred in section 5 (1) of the PPA, 
including  public  interest  asset  management  foundations,  are  displayed  in  the  EPS 
system fulfilling the requirement for transparency. The Commission also notes that the 
legal text provided by Hungary is not in line with the remedial measure, as it does not 
include data provided from all public bodies in the minimum set of data to be uploaded 
in  the  central  system  including  on  the  contracting  authority  or  service  providers, 
suppliers, and capacity providers. This data is instead to be made available, according to 
Hungary,  only  on  contract-by-contract  basis.  The  lack  of  these  elements  risks 
incomplete  implementation  of  the  remedial  measure,  which  could  weaken  its 
effectiveness. 

 The Commission  finds that  Hungary has  taken the Key  Implementation  Steps, despite 
the delay in the implementation of the Key Implementation Step relating to the adoption 
of the Act and that the legal framework on enhanced transparency of public spending as 
set  out  in  Act  XL  of  2022  and  Act  CXII  of  2021  fulfils  the  commitments  set  by  the 
remedial  measure,  with  the  exception  of  the  elements  referred  to  in  paragraph  (145) 
above.  The  Commission  will  remain  vigilant  on  the  issues  set  out  in  paragraph  (146) 
above  for  future  implementation,  and  will  monitor  the  situation  closely  based  on  the 
quarterly  reporting  from  Hungary  referred  to  in  paragraph  (17),  or  any  information  it 
may obtain otherwise.  

CONCLUSION 

 In  recital  38  of  the  CID  Proposal,  the  Commission  found  that  the  remedial  measures 
proposed  by  Hungary  would  in  principle  be  capable  of  addressing  the  Commission’s 
findings presented in the Notification, provided that all the said measures were correctly 
and effectively implemented. 

 Recital  39  added  that  the  detailed  implementing  rules  for  the  remedial  measures  were 
still to be determined, notably how key elements of the measures would be transposed 
in the actual legal texts to be adopted for the implementation of the remedial measures. 
That recital also recalled that, given that several of the issues identified in Hungary are 
not only about changes in the legal framework, but more prominently about the concrete 
implementation of changes in practice, the latter requiring a more extended timeframe 
to produce concrete results, pending the implementation of at least the key elements of 
some of the remedial measures at that stage, as indicated in the timelines of the remedial 
measures submitted by the Hungarian Government on 22 August, a risk for the Union 
budget  remained.  Pending  the  entry  into  force  of  key  legislative  texts  that  would 
implement  many  of  the  remedial  measures  and  taking  into  account  the  assessment 
carried out by the Commission, as well as the possibility that the measures may not be 
correctly implemented, or that their effectiveness would be weakened in  the details  of 
the measures, the Commission’s reasonable estimation of the level of risk for the Union 

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budget corresponded to 65% of the programmes concerned, i.e. 5 percentage points less 
than the risk estimated in the absence of remedial measures. 

 The Commission concludes its assessment of the remedial measures in the light of the 
Key  Implementation  Steps  as  well  as  the  details  of  the  legal  acts  proposed  or  entered 
into  force  and  further  procedures  and  measures  set  by  Hungary  to  implement  the 
remedial measures, where applicable, and as notified by Hungary to the Commission by 
19 November 2022. 

 The Commission notes that Hungary took a number of steps to address the (legislative 
and non-legislative) Key  Implementation  Steps listed in  the Annex to  the Explanatory 
Memorandum, and, as set out in this assessment, many of the commitments undertaken 
by Hungary in the remedial measures may be considered as fulfilled. 

 Nevertheless, important weaknesses, risks and shortcomings remain in the key remedial 
measures, including in relation to central aspects of those remedial measures, which as 
set out above, could seriously undermine their effectiveness.  

 The Commission has identified important weaknesses in relation to which Hungary has 
not introduced the changes that were required in the relevant legal texts to ensure that 
the measures are adequate under the Conditionality Regulation. These are:  

(i) 

(ii) 

(iii) 

(iv) 

(v) 

(vi) 

the  possibility  that  the  Integrity  Authority  may  not  automatically  retain  its 
competence  once  a  project  is  withdrawn  from  Union  financing  (see  paragraph 
(30) above);  

the  weaknesses  of  the  system  for  the  judicial  review  of  the  decisions  of 
contracting  authorities  that  do  not  follow  the  recommendations  of  the  Integrity 
Authority; 

the  weaknesses  of  the  dismissal  procedure  for  members  of  the  Integrity 
Authority; 

the  absence  of  the  transfer  of  competence  to  the  Integrity  Authority  for  the 
verification  of  asset  declarations  of  senior  political  executives  (i.e.  Prime 
Minister,  Ministers,  the  Prime  Minister’s  political  director,  Secretaries  of  State, 
as  covered  by  Section  183  of  Act  CXXV  of  2018  on  Government 
Administration) and the lack of clarity in  the legal  text as  regards the power of 
the Integrity Authority to verify public asset declarations of all high-risk officials 
(see paragraph (35) above); 

the possibility that judicial decisions setting aside prosecutorial decisions would 
not be binding on the prosecutor (paragraph (83) above); 

the inclusion of an unnecessary step by the trial court (‘filtering’), in the context 
of  the  new  procedure  for  the  judicial  review  of  the  decision  of  the  prosecution 
service  or  the  investigating  authority  to  dismiss  a  crime  report  or  terminate  the 
criminal proceedings (see paragraph (85) above), and the absence of clear rules 
confirming the possibility to  apply the new procedure also  to  (non-time-barred) 
criminal offences committed before 1 January 2023 (see paragraph (86) above); 

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(vii) 

the lack of an obligation for all contracting authorities to publish information in 
the absence of data on the ‘responsible body’ for public expenditure, contracting 
authority or service providers, suppliers, and capacity providers in the minimum 
set of data to be uploaded in the central register (see paragraph (146) above). 

 Furthermore, important risks remain as regards a number of other issues, namely: 

(i) 

(ii) 

(iii) 

(iv) 

(v) 

(vi) 

the lack of clarity and legal certainty relating to the disclosure obligations for real 
estate including outside the jurisdiction of Hungary (see paragraph (57) above); 

the lack of clarity on the personal, material and temporal scope of the declaration 
of  assets,  income  and  economic  interests  of  certain  executives,  officials  and 
Members  of  the  National  Assembly,  and  for  their  spouses  or  cohabitants  and 
child(ren) living in the same household (see paragraph (57) above); 

the electronic submission and publication of asset declarations of members of the 
National  Assembly  and  persons  entrusted  with  senior  political  functions  in  a 
publicly searchable database (whose  access  must be  free of charge and  without 
the need of registration) (see paragraph (59) above); 

the lack of a clear commitment for a review on the functioning of the procedure 
of  judicial  review  of  prosecutor  decisions  by  31  December  2023,  and,  if 
necessary,  to  provide  for  the  adoption  of  amendments  to  the  legislative 
framework  following  consultations  with  the  Commission  by  30  June  2024  (see 
paragraph (81) above); 

provisions on an ‘administrative procedure for transparency’, whose purpose is to 
ensure  the  enforcement  of  the  requirements  of  transparency  and  correctness  of 
the  data  to  be  published  pursuant  to  the  remedial  measure  on  the  enhanced 
transparency  of  public  spending,  and  their  adoption  on  6  December  2022,  for 
entry into force on 28 February 2023 (see paragraph (144) above); 

the  further  facilitation,  after  the  Commission’s  September  assessment  of  the 
proposed  remedial  measure,  of  the  presence  of  top-level  officials  on  boards  of 
public  interest  management  foundations  whose  purpose  it  is  to  disburse  large 
amounts of public funds.  

 In summary, the overall assessment presented above does not allow the Commission to 
conclude  that  the  remedial  measures  notified  by  Hungary,  considered  as  a  whole,  as 
adopted and in view of their details, and the ensuing uncertainty about their application 
in practice, would put an end to the relevant breaches of the principles of the rule of law 
and/or to the impacts or risks for the sound financial management of the Union’s budget 
and  for  the  Union’s  financial  interests.  This  is  aggravated  by  concerns  about  the 
administrative practices in Hungary. Therefore, the conditions for the application of the 
Regulation remain.  

 In  the  light  of  the  above  assessment  and  the  continued  risk  for  the  budget, 
notwithstanding  the  steps  taken  by  Hungary,  and  given  the  structural  and  horizontal 
nature of the remedial measures which remain to be fulfilled, the Commission maintains 
its proposal for measures for the protection of the Union budget against breaches of the 
principles of the rule of law and invites the Council to proceed on this basis.  

EN 

38 

  EN