On 17 September 2022, a difficult but constructive negotiation process between the Hungarian Government and the European Commission, which lasted several months, came to an end. The negotiations were a success. The Commission has concluded that the proposed measures submitted by the Hungarian Government as a result of the discussions with the Commission address the concerns that led the Commission to open the conditionality procedure. Hungary has not lost any EU funds so far and the Commission's decision of 18 September shows that there is no risk of this happening. If the Hungarian Government delivers on its commitments, the conditionality procedure will be closed before the end of the year. The Commission's decision paves the way for a swift conclusion of the negotiations on the reconstruction fund and cohesion funds. These are on schedule to be concluded before the end of the year, so that Hungary can enter 2023 without any loss of resources.
Commitments taken by Hungary in the framework of the general budgetary conditionality procedure
I. Integrity Authority
The Hungarian Government commits to the establishment of an Integrity Authority (provisional name). The Authority shall intervene in all cases where in its views competent authorities have not taken the necessary steps to prevent, detect and correct fraud, conflicts of interests, corruption and other illegalities or irregularities that have or may have the effect of prejudicing on the implementation of any Union financial support.
The independence of the Authority is ensured by comprehensive guarantees.
II. Anti-Corruption Task Force
The Government commits to a significant restructuring of the Anti-Corruption Task Force. The Task Force shall be chaired by the chair of the Integrity Authority. The Task Force shall operate with the participation on a parity basis of both governmental and non-governmental actors. In its annual reports, the Task Force shall submit proposals to the Government for measures aimed at improving corruption prevention and detection.
III. Strengthening the Anti-Corruption Framework
The Hungarian Government commits to the adoption by 30 September 2022 of 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 Hungarian Government commits to adopt a new National Anti-Corruption Strategy and Action Plan by 30 June 2023 and also to implement the current Strategy and Action Plan by that time.
By 1 November 2022, the Hungarian Government commits to introduce an asset declaration system applicable to members of the National Assembly and persons entrusted with senior political functions as well as their relatives living in the same household that covers revenues; 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.
The Hungarian Government commits to strengthening the verification system for asset declarations through the Integrity Authority and through an effective, proportionate and dissuasive sanctioning regime with regard to serious violations related to obligations under the asset declaration system.
IV. Ensuring the transparency of the use of Union support by public interest asset management foundations
The Government submits a draft law for adoption to clarify that public interest asset management foundations fall under the scope of the Act on public procurement.
To clarify general conflict of interest rules related to public interest asset management foundations, the Government commits to submitting a draft law to the National Assembly for adoption in order to ensure full compliance with the EU Financial Regulation.
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 commits to the amendment of the Code of Criminal Procedure with the aim of establishing a procedure concerning special criminal offences related to the exercise of public authority or the management of public property.
The procedure establishes judicial review of the decision of the prosecution service or the investigating authority to dismiss a crime report or terminate the criminal proceedings. Based on the review, an investigating judge will have the authority to order the commencement or the continuation of criminal proceedings. Ultimately, the procedure opens the right to file an indictment to a court of justice.
VI. Strengthening audit and control mechanisms to guarantee the sound use of EU support
In order to strengthen audit and control mechanisms, the Government commits to amend relevant Government Decrees on the implementation of Union support by 30 September 2022. A Directorate of Internal Audit and Integrity shall be established within the Prime Minister’s Office.
1. Reducing the share of tender procedures with single bids financed from EU funds
The Hungarian Government undertakes to reduce by 31 December 2022 the share of public procurement tender procedures financed (fully or partially) from EU funds and closed in the year of 2022 with single bids below 15%, as measured in line with the Single Market Scoreboard methodology.
2. Reducing the share of tender procedures with single bids financed from the national budget
The Hungarian Government undertakes, in accordance with annual benchmarks, to gradually reduce by 31 December 2024 the share of public procurement tender procedures financed from the national budget and closed in a calendar year with single bids below 15%, as measured in line with the Single Market Scoreboard methodology.
3. Development of a single-bid reporting tool to monitor and report on public procurements closed with single-bids
The Hungarian Government undertakes to develop a new monitoring and reporting tool based on data sourced from the Electronic Public Procurement System (EPS) for separately measuring the share of procurement procedures resulting in single bids.
4. Development of the Electronic Public Procurement System (EPS) to increase transparency
The Hungarian Government commits to a significant development of the Electronic Public Procurement System (EPS). The Hungarian Government creates and publishes in the EPS website a regularly updated database which contains information on all contract award notices of public procurement procedures in a structured form, which is fit to be processed by machine means.
5. Development of a performance measurement framework assessing the efficiency and cost effectiveness of public procurements
The Hungarian Government undertakes to develop a performance measurement framework to assess the efficiency and cost effectiveness of public procurements by 30 September 2022.
6. Adoption of an action plan to increase the level of competition in public procurement
The Hungarian Government undertakes to adopt, by 31 March 2023, a comprehensive action plan aiming at improving the level of competition in public procurement.
7. Training to be provided for micro, small and medium-sized enterprises on public procurement practices
To facilitate the participation of micro-, small and medium enterprises in public procurement, the Hungarian Government undertakes to provide for 2,200 micro, small and medium-sized enterprises free-of-charge training occasions, designed and hosted by public procurement experts.
8. Setting up a support scheme for compensating the costs associated with participating in public procurement of micro, small and medium-sized enterprises
To facilitate the participation of micro-, small and medium enterprises in public procurement, the Hungarian Government undertakes to set up a support scheme providing a partial lump sum compensation for at least 1,800 eligible micro, small and medium-sized enterprises for their costs associated with their participation in public procurement procedures.
9. Application of ARACHNE
The Hungarian Government undertakes to apply all the functionalities of the ARACHNE risk-scoring tool in the implementation of any Union support.
10. Strengthening cooperation with OLAF
The Hungarian Government undertakes to designate the National Tax and Customs Administration (Nemzeti Adó- és Vámhivatal, NAV) 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. A finance guard shall enable OLAF to carry out its on-the-spot checks and inspections at the request of OLAF.
11. Adoption of a legislative act ensuring enhanced transparency of public spending
The Hungarian Government commits to establish a central register to publish a wide range of information related to public spending. Data sets published in the central register can be used for public scrutiny, analysis and research without limitations and for free