Commission Report 2002 (Hungary)

Anti-Corruption measures

Declarations of assets became compulsory for senior civil servants as from the end of October 2001 (see above under The executive).

In December 2001 this obligation was extended to the President of the Republic, judges, ombudsmen, chairman, vice-chairmen and controllers of the State Audit Office, chairman, vice-chairmen and employees of the National Bank, public notaries, mayors, members of local governments and other persons entitled to manage public properties. The first set of declarations of assets for these categories had to be submitted to the competent authorities within the first three months of 2002. They are subject to regular controls. As mentioned in last year's Regular Report, members of Parliament are also required to make asset declarations. These are regularly published in the Hungarian Official Journal.

The revised Law on Public Procurement adopted in November 2001 tightened up the surveillance of contract award procedures. Among other things, it introduced in particular an obligation to supply data related to the awarding of contracts concluded under public procurement procedures. In addition, the penalties for remedy procedures were differentiated according to the seriousness of the offence committed. The impact of the revised Law on tackling the problems of corruption in this area remains to be seen.

In December 2001 a new law was adopted concerning the liability of legal persons. Under this law, penalties may be imposed upon a legal person in respect of crimes committed by a natural person for the benefit of a legal person. The law will come into force upon Hungary`s accession to the EU.

Within the amended Penal Code, which entered into force in April 2002, more severe punishments and sentences for bribery were introduced. Rules on the immunity of elected persons exercising public powers and those on the possible confiscation of property gained through contacts with organised crime were made more stringent. In order to apply more efficient measures against bribe-takers, bribe-givers may be exempted from punishment if they provide information to the authorities and help to identify the bribe-taker. Officials may now be punished if they fail to fulfil their obligation of reporting the case to the competent authorities.

With the entry into force in December 2001 of the new law on combating terrorism, on tightening the provisions to prevent money laundering and on the ordering of restrictive measures, measures to prevent and combat money laundering imposed stricter requirements on auditors, accountants, tax-advisers, real estate agents, traders of high-value moveable assets, and members of legal professions. These persons must also report any data, facts or circumstance indicating money laundering to the police. The scope of business secrecy - banking secrecy in particular - has been restricted (see also chapter 4 - Free movement of capital).

Practical measures revising the salary structure in the customs service, whereby salaries were increased and a bonus system introduced, should have a positive impact on problems of corruption in that area.

On the institutional side, the Ministry of the Interior and the Ministry of Justice share overall responsibility for the implementation of the anti-corruption strategy. In addition, several enforcement agencies such as police, tax administration, and customs authorities have now a special unit to detect corruption. The corruption cases of high-level authorities (Members of Parliament, Ministers, heads of public departments) are in the hands of a special department at the Prosecutor`s Office, the Central Investigation Office.

Hungary is a party to the Council of Europe Convention on Money Laundering, Search, Seizure and Confiscation of the Proceeds from Crime; the Criminal Law Convention on Corruption, which entered into force in July 2002; and the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions. Hungary has not yet signed the Council of Europe Civil Law Convention on corruption. It has concluded bilateral agreements of relevance for the fight against corruption with 45 countries. A further 17 bilateral agreements are under preparation.

Hungary is participating in the monitoring of anti-corruption measures effected by the OECD Working Group on Bribery in international commercial transactions, and is a member of GRECO, the Council of Europe Group of States against Corruption, which has made provisions in its statute for regular evaluation of its member countries. An evaluation of Hungary took place in October 2001, but the report has not yet been adopted by GRECO.

Despite these efforts, overall public perception of efforts to fight corruption has not really improved and many areas in the public sphere continue to have a bad reputation in this respect.

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