Commission Report 2002 (Hungary)

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 1: Free movement of goods

Progress since the last Regular Report

Hungary has continued to register steady progress in the field of free movement of goods.

In the area of horizontal and procedural measures, Hungary continued the rapid adoption of European standards as Hungarian national standards. By December 2001, the Hungarian Standards Institution (MSZT) had implemented 11968 European standards as national standards, or 90% of all European standards. They include 96% of the European standards harmonised to the New Approach Directives. This, combined with the adoption in December 2001 of Act CXII on national standardisation and the entry into force in January 2002 of the amendment to the Copyright Act, extending copyright protection to voluntary standards, paved the way for full membership of CEN and CENELEC. The MSZT became a full member of CENELEC in June 2002 and should become a member of CEN in January 2003.

Hungary has continued transposition as regards sector specific legislation. In the areas covered by New Approach Directives, Community rules on equipment for use in potentially explosive atmospheres, personal protective equipment, radio and telecommunications terminal equipment and lifts were transposed. As regards sectors covered by the Old Approach Directives, some further pieces of legislation were adopted in the fields of cosmetics, metrology, medical devices, pharmaceuticals for human and for veterinary use, motor vehicles and classification of wood.

As regards the issue of food safety and foodstuffs legislation (see also Chapter 7 - Agriculture), Hungary has made significant progress with the entry into force in January 2002 of amendments to the Food Act and subsequent implementing legislation that entered into force in May 2002.

Progress has continued to be made in institutional development, with the establishment of bodies involved in market surveillance and inspection, such as the Lift and Elevator Supervision Body and the Market Surveillance Council, and the reinforcement of the capacity of some existing bodies. Furthermore, as announced in last year`s Report, Hungary decided to set up a National Food Safety Agency, but its functions have still to be specified.

With regard to non-harmonised sectors, legislation on cultural goods has been adopted in November 2001. However, there have been no developments regarding the transposition of the acquis on firearms.

In the area of public procurement, Hungary has adopted legislation in July 2002 amending the regime for award of contracts in the field of motorway construction. This legislation has entered into force in August 2002. However, all remaining shortcomings concerning motorway construction as well as those in the area of public procurement in general have still to be addressed. Legislation had also entered into force in January 2002 fine-tuning public procurement rules. In 2001, the total number of public procurement procedures processed increased slightly to 3846, with the total value increasing by almost 16% compared to 2000 to HUF 607 billion (around EUR 2.4 billion). The proportion of open procedures rose to 78 % in value terms in 2001, and in terms of aggregate value, almost 8% of the tenders were won by bidders with headquarters abroad, mostly in the EU. In terms of administrative capacity the Council for Public Procurement and its administrative authority, the Public Procurement Arbitration Committee, have been strengthened. The number of public procedures addressed to the Arbitration Committee rose by 21% in 2001.

Overall assessment

As regards horizontal and procedural measures, the New and Global Approach is well established in Hungary. As stated in the 2001 report, the infrastructure required for legislation, standardisation, accreditation and certification is in place. Full membership of CEN should be achieved by January 2003. As regards safety checks on products, while the infrastructure is now in place, efforts need to continue to strengthen effective administrative co-operation between competent regulatory and surveillance authorities and to ensure the full implementation of the Central Information System on Market Surveillance (CMSIS), which has been fully operational since June 2002. Continued infrastructure development is required as regards market surveillance and testing and certification. Safety control checks still do not take place at the border and need to be addressed. However, steps are being taken to fully equip the border facilities and to provide appropriate training.

A large part of the sector-specific acquis is also in place. With regard to the New Approach Directives, work remains to be done on construction products, civil explosives, in vitro diagnostic medical devices and cableway installations. The outstanding legislative issues under the Old Approach relate mainly to metrology, where an impact analysis has been carried out in relation to legislation aimed at harmonising with the acquis; transparency of pricing of pharmaceuticals for human use; and the acquis on chemicals.

The transposition and implementation of the food safety acquis is almost completed and remaining efforts between now and accession will need to focus on further amending the Food Act and related legislation and on bringing these into line with EC law. The Food Act will require changes in particular on infant formulae, definitions, remaining pre-market approval procedures, food contact materials, additives and production licence. Implementing decrees will need to be adapted in particular on labelling, novel foods, food for special nutritional uses and control.

Institutionally, Hungary has decided to set up an Agency to deal with scientific assessment and to co-ordinate some of the activities of the bodies involved in food safety. The responsibilities of the Agency will need to be clarified in the light of the competencies of the institutes and ministries involved. Better co-ordination between the bodies in charge of food safety will need to be ensured so as to set up an effective rapid alert system for food and feed and a national contact point is still to be designated. Such improved co-ordination between the ministries and agencies involved will facilitate controls and assessment for novel foods and genetically modified foods, which do not at present take place. Hungary is promoting the introduction of Hazard Analysis and Critical Control Points (HACCP) principles across the entire food chain and HACCP training, which is now mandatory, is taking place. HACCP is now applied by 30-40% of food business operators - this accounts for 85% of Hungarian food production.

As a result of a new screening of laws and regulations which Hungary carried out in order to identify those measures that might be in conflict with the Articles 28 to 30 of the EC Treaty, a number of measures were identified. However, this screening was incomplete and needs to be carried out in a more comprehensive way in order to identify all the national measures that could be contrary to the acquis.

It was already highlighted in the 2001 report that the principle of mutual recognition will have to be well established by accession. For this to occur in good time, a detailed review of the national regulations that do not yet comply with the principle of mutual recognition needs to be carried out urgently. Further delays have resulted in the acquis on firearms not yet being transposed and this needs to be dealt with speedily.

A particular effort will be needed to adopt legislation on public procurement and to ensure that legislation and practice are brought into line with Community standards. In particular, further efforts are necessary to address shortcomings such as coverage (e.g. limited definition of public works, far reaching exemptions) and with regard to time limits and the treatment of utilities.

As noted in the 2001 report, Hungary had already put in place the necessary bodies to implement this part of the acquis. The relevant bodies have since been strengthened, but the rising number of complaints means that further reinforcement is still required if these bodies are to discharge their duties in a satisfactory manner. Efforts are still needed to ensure effective review mechanisms and review procedures.

Conclusion

In its 1997 Opinion, the Commission concluded that significant progress had been made and that Hungary was progressively taking on the acquis related to the free movement of goods, and had already taken on the most important directives. Implementation had generally been good. It was pointed out that further work was required in the areas of standards and certification. It was highlighted that special attention will have to be paid to type-approval of motor vehicles, tractors and motorbikes, the procedures for authorising market placement and the rules on labeling. Attention also needed to be paid to ensuring that national legislation in areas not covered by Community harmonisation would not act as a barrier to trade, and to check that the measures in force are proportionate to the objectives pursued.

Since the Opinion, Hungary has made steady progress in transposing the acquis in this area, and has continued to strengthen enforcement and surveillance capacity and infrastructure. Hungary has overall achieved a high degree of transposition of the acquis in the field of free movement of goods, with the exception of that on public procurement. Administrative capacity is generally good.

Negotiations on this chapter have been provisionally closed. Hungary has not requested any transitional arrangements in this area. Hungary is generally meeting the commitments it has made in the accession negotiations in this field.

In order to complete preparations for membership, Hungary's efforts now need to focus on the adoption of the limited amount of outstanding legislation, and on further strengthening surveillance infrastructure and institutional capacity. A particular effort will be needed to bring public procurement legislation and practice into line with Community standards.

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