Viktor Zoltán Kazai - Central European University, Budapest

This legislative reform package was adopted to meet the so-called super milestones aimed at restoring the independence of the judiciary that were set by the Council of the European Union as a precondition for accessing frozen EU funds under Hungary’s Recovery and Resilience Fund. The changes concern the National Judicial Council, the Supreme Court (Kúria), the references for preliminary rulings to the CJEU, and the competence of the Constitutional Court.

Hungarian NGOs qualified the act a remarkable step to achieve the partial restoration of the rule of law in Hungary. Nevertheless, significant shortcomings remain in force and the Hungarian Government has only partially fulfilled the requirements of the Council. In addition, the enactment process of the law was strongly criticized.

2022 was a year marked by continuous protests organized by the teachers’ union. Teachers, parents and students expressed their dissatisfaction with the increasing centralization and the decreasing autonomy of the public education system, the low salaries and working conditions, and the growing workload, among others. As a reaction the Hungarian Government used its regulatory power to further curtail of the teachers’ right to strike. This step was followed by instances of civil disobedience.

On 6 June 2023 the Interior Minister introduced a bill aimed at the re-regulation of the legal framework on the rights and duties of teachers working in the public education system. The bill was adopted on 4 July and was promulgated on 6 July as Act no. LII of 2023 on the new career path of teachers.

AUTHOR (name and surname)

Viktor Zoltán Kazai

COUNTRY

Hungary

YEAR

2022

Name of the act/s*

Anti-corruption legislative package

 

Act no. XXX of 2022 on the amendments to Act no. CXXX of 2010 on Law-making and Act no. CXXXI of 2010 on Public Participation in Preparing Laws in the interest of reaching an agreement with the European Commission (2022. évi XXX. törvény az Európai Bizottsággal való megegyezés érdekében a jogalkotásról szóló 2010. évi CXXX. törvény és a jogszabályok előkészítésében való társadalmi részvételről szóló 2010. évi CXXXI. törvény módosításáról) – T/705

Bill no. 706 on the amendment zo Act no. XC of 2017 on the Code of Criminal Procedure in the interest of reaching an agreement with the European Commission (Az Európai Bizottsággal való megegyezés érdekében a büntetőeljárásról szóló 2017. évi XC. törvény módosításáról szóló T/706 számú törvényjavaslat)

Act. no XXIX of 2022 on the amendments to certain acts on public interest asset management foundations, the National Tax Authority, and the European Anti-Fraud Office concerning the monitoring of the use of European Union funds (2022. évi XXIX. törvény az európai uniós költségvetési források felhasználásának ellenőrzésével összefüggő egyes, a közfeladatot ellátó közérdekű vagyonkezelő alapítványokat, a Nemzeti Adó- és Vámhivatalt, valamint az Európai Csalásellenes Hivatal ellenőrzéseit érintő törvények módosításáról)

Act no. XXVII of 2022 on the monitoring of the use of European Union funds (2022. évi XXVII. törvény az európai uniós költségvetési források felhasználásának ellenőrzéséről) – T/1260

Act no. XXVIII of 2022 on the amendments to certain acts on the monitoring of the use of European Union funds (2022. évi XXVIII. törvény az európai uniós költségvetési források felhasználásának ellenőrzésével összefüggő egyes törvények módosításáról) – T/1261

Act no. XXXI of 2022 on the amendments to certain acts on asset declarations, related to the monitoring of the use of European Union funds (2022. évi XXXI. törvény az európai uniós költségvetési források felhasználásának ellenőrzésével összefüggő egyes, vagyonnyilatkozattal kapcsolatos törvények módosításáról) – T/1311

Subject area

European Union, European Union funds, rule of law, conditionality mechanism, corruption

Brief description of the contents of the act

This anti-corruption legislative package was adopted by the National Assembly upon the proposals of the Government as a response to the concerns voiced by the European Commission following the triggering of the Conditionality Mechanism (Regulation 2020/2092).

The most important measures introduced by the legislative package:

1)     Establishment of an Integrity Authority and a new Anti-Corruption Task Force

Instead of joining the European Public Prosecutor’s Office, the National Assembly (Act no. XXVII of 2022) set up a state agency called Integrity Authority, and the Anti-corruption Task Force which serves as a forum to involve non-state players in the fight against corruption.

The Integrity Authority is charged with the task of protecting EU funds. Its role is complementary to other, already existing anti-corruption agencies. Most of the Authority’s powers are soft. It has the competence

-              to request information,

-              to carry out analyses,

-              to make recommendations,

-              to suspend temporarily ongoing public procurement procedures,

-              to request a court to declare that a state body competent to protect EU funds has failed to act and to comply with the Authority’s earlier request to act.

The president and the vice president of the Integrity Authority were selected in the following procedure. The Directorate General for Audit of European Funds (established by the Government and placed within the Finance Ministry) selected the three members of the Eligibility Committee. This Eligibility Committee published a call for application for the positions and shortlisted the candidates. The president and the vice-president of the Integrity Authority were selected from the short list by the president of the State Audit Office. The selected candidates were appointed by the President of the Republic.

The Anti-Corruption Task Force is a forum to that offers Hungarian NGOs a change to get involved in the fight against anti-corruption. It convenes twice a year. Its competence is limited to form an opinion on the anti-corruption framework, to publish an annual report, and to formulate recommendations.

2)     Introduction of an extraordinary legal remedy to bring corruption cases to justice by private prosecution

Bill no. 706 would allow private individuals and legal entities to take certain serious crimes related to corruption, such as embezzlement, misappropriation of funds, fraud, budgetary fraud, etc., to court if the prosecution service fails to do so. In this case, private individuals and legal entities can challenge the prosecutor’s decision, and after a long and complicated process, an investigate judge may order the prosecutor to continue the criminal proceedings. Alternately, private individuals and legal entities may bring the case to court as a private prosecutor.

3)     Introduction of new rules on asset declarations

In July 2022 the National Assembly amended the law on the MPs’ asset declarations. The duty to submit a declaration on an annual basis was abolished; and the obligation to submit a declaration only in case of a change in the MPs’ income and position occurs was introduced. In addition, MPs were required to declare their income within ranges (not the exact sum) and their family members were no longer obliged to a submit a declaration at all.

Act no. XXXI of 2022 bascially just withdrew most changes put in place in July.

4)     Introduction of new rules on conflicts of interest in public interest asset management foundations

Public interest asset management foundations are established by the State by operate as private foundations. In 2021 the National Assembly transferred EUR billions worth of public assets (including state companies’ stakes, properties, such as castles, resorts, parks, theater, and higher education institutions) to these foundations. Some of them are financed by the State, others receive their funding from previously state-owned companies. The assets transferred to the foundations cease to be public assets, and the State loses control over them. The members of the foundations’ board of trustees (who exercise the rights of the founders) were appointed by the current government.

The new legislation (Act XXIX of 2022) stipulates that public interest asset management foundations and the legal entities established or maintained by them fall under the obligation to carry out public procurements.

Also, according to the new rules on conflicts of interest, members of the boards and the supervisory bodies of the foundations shall not take part in the decision-making of the foundation in case of a conflict of interest with regard to that particular decision. Those affected by a conflict of interest, or the risk or appearance thereof shall report this before the concerned decision would be adopted.

Comment

1)     Establishment of an Integrity Authority and a new Anti-Corruption Task Force

According to the opinion of prominent Hungarian NGOs “even with its relatively soft tools, the Integrity Authority may make a difference in the way corruption has been tackled in Hungary since 2010 by simply identifying incidents where the existing authorities fail to take appropriate action and compel them to adequately fulfil their mandate”. They point out, however, that much depends on the selection of its leaders.

Scholars point out that “dependency is hard-wired into the way that the Authority’s officials are appointed” because several persons playing an important role in the selection process (such as the members of Directorate General for Audit of European Funds, the president of the State Audit Office and the President of the Republic) are either subordinated to the Government or have been selected by the ruling majority. The also highlight that “the Authority’s ability to investigate complaints is severely limited because it has no powers to do anything other than ‘invite’ others to give it information or delegate the investigation to ‘the organization with the tasks and powers in the field of monitoring the use of European Union funds.” And even if its investigations find something, the Authority must refer the case to the Chief Public Prosecutor’s Office that is often criticized for failing to investigate high profile corruption cases.

As to the Task Force, NGOs opine that its “role is very weak, and it will not be able to perform strong oversight functions, nor will it be empowered to initiate the procedure of either the Integrity Authority or any other state organ.”

2)     Introduction of an extraordinary legal remedy to bring corruption cases to justice by private prosecution

Scholars emphasize that “the new procedure is nearly impossible to use and adds little value to existing controls on the public prosecutor.” They point out the regulation introduces too many procedural hurdles for private individuals and legal entities and makes the prosecutorial service almost impossible to circumvent.

3)     Introduction of new rules on asset declarations

NGOs conclude in their analysis that the new rules basically just reastalblished the previous asset declaration system without addressing its most important shortcomings.

4)     Introduction of new rules on conflicts of interest in public interest asset management foundations

According to three prominent Hungarian NGOs, the new rules do not address the most important problems of the existing system. The argue in their report that the act “fails to address the main issue at stake: that public assets in unprecedented quantities were transferred to these special entities of private law and were hence basically privatised, while the government appointed to the foundations’ boards members or dependents of the governing majority and individuals with close ties to the governing party”.

Secondary sources/ doctrinal works (if any)

Hungarian Helsinki Committee, K-Monitor, Transparency International (2022), ‘Half-hearted Promises, Disappointing Delivery. An Assessment of the Hungarian Government’s New Measures to Protect the EU Budget and Related Recommendations’, Report, at: https://transparency.hu/wp-content/uploads/2022/10/Assessment-of-measures-to-protect-EU-budget.pdf  

Mészáros, Gábor; Scheppele, Kim Lane: How NOT to Be an Independent Agency: The Hungarian Integrity Authority, VerfBlog, 2022/10/06, https://verfassungsblog.de/how-not-to-be-an-independent-agency/

Drinóczi, Tímea: Sham and Smokescreen: Hungary and the Rule of law conditionality mechanism, VerfBlog, 2022/10/05, https://verfassungsblog.de/sham-and-smokescreen/

Scheppele, Kim Lane, Mészáros, Gábor; Bárd, Petra: Useless and Maybe Unconstitutional: Hungary’s Proposed Judicial Review of the Prosecutorial Decisions, VerfBlog, 2022/10/26, https://verfassungsblog.de/useless-and-maybe-unconstitutional/

Ésik, Sándor: Hungary’s Shambolic Anticorruption Proposals: A Practicioner’s View , VerfBlog, 2022/10/31, https://verfassungsblog.de/hungarys-shambolic-anticorruption-proposals/

*Act citation /year and number

Act no. XXX of 2022 on the amendments to Act no. CXXX of 2010 on Law-making and Act no. CXXXI of 2010 on Public Participation in Preparing Laws in the interest of reaching an agreement with the European Commission

Bill no. 706 on the amendment zo Act no. XC of 2017 on the Code of Criminal Procedure in the interest of reaching an agreement with the European Commission

Act. no XXIX of 2022 on the amendments to certain acts on public interest asset management foundations, the National Tax Authority, and the European Anti-Fraud Office concerning the monitoring of the use of European Union funds

Act no. XXVII of 2022 on the monitoring of the use of European Union funds

Act no. XXVIII of 2022 on the amendments to certain acts on the monitoring of the use of European Union funds

Act no. XXXI of 2022 on the amendments to certain acts on asset declarations, related to the monitoring of the use of European Union funds

Enacted by

Hungarian National Assembly

Official link to the text of the act

Act no. XXX of 2022

Bill no. 706

Act. no XXIX of 2022

Act no. XXVII of 2022

Act no. XXVIII of 2022

Act no. XXXI of 2022

 

AUTHOR (name and surname)

Viktor Z. Kazai

COUNTRY

Hungary

YEAR

2021

Name of the act/s*

Decision of the Constitutional Court delivered in case no. IV/1093/2021.

Subject area

covid 19, covid pass, vaccination, discrimination

Brief description of the contents of the act

The Constitutional Court rejected the petitions challenging the constitutionality of Resolution no. 484/2020. (XI. 10.) of the government.

Comment

A large number of petitioners challanged the constitutionality of Resolution no. 484/2020. (XI. 10.) of the government that accorded some privileges to those who got a covid pass after their vaccination. The petitioners argued that the legislation discriminated against those who did not get vaccinated because of health reasons and thus did not receive a covid pass. The Constitutional Court observed that in a state of danger (i.e. a form of special legal order) the exercise of certain fundamental rights can be temporarily suspended or limited to a greater extent than in normal circumstances. The justices accepted that the government’s legitimate aim was to eliminate the covid pandemic and to attenuate its consequences. The court noted that the government regularly revised its legislation in light of the changing circumstances. The Constitutional Cour concluded that the challenged regulation does not violate the prohibition of discrimination and does not constitute an undue interference with personal autonomy.

Secondary sources/ doctrinal works (if any)

*Act citation /year and number

Decision of the Constitutional Court delivered in case no. IV/1093/2021. on 5 October 2021

Enacted by

Constitutional Court of Hungary

Official link to the text of the act

http://public.mkab.hu/dev/dontesek.nsf/0/8d6bf573ac5f3b9ec1258764003470b2/$FILE/Sz_IV_1093_2021.pdf

AUTHOR (name and surname)

Viktor Z. Kazai

COUNTRY

Hungary

YEAR

2021

Name of the act/s*

Resolution no. 1630/2021 (IX. 9.) of the Government on the decision of the European Commission of 7 September 2021 concerning Poland

Subject area

European Union, rule of law

Brief description of the contents of the act

Based on the opinion of the Minister of Justice on the European Commission’s decision of 7 September 2021 seeking penalties on Poland in the legal dispute pending before the CJEU over the judicial reform, the Hungarian government issued a resolution to express its solidarity with Poland and to condemn the Commission’s decision. The resolution provides :

“3. Poland – similarly to Hungary – defends the external borders of the European Union and thus protects its internal security. Meanwhile, the European Commission stabs Poland in the back, abuses its power and puts the unity of the EU in danger.

4. Hungary stands by Poland. The government notes that by initiating the imposition of penalties the European Commission violated the principle of national sovereignty because it interfered with the Polish legislative process and with the relationship between the executive power and the judiciary.”

Comment

Secondary sources/ doctrinal works (if any)

Order of the Vice-President of the Court in Case C-204/21 R, https://curia.europa.eu/jcms/upload/docs/application/pdf/2021-10/cp210192en.pdf

*Act citation /year and number

Resolution no. 1630/2021 (IX. 9.) of the Government on the decision of the European Commission of 7 September 2021 concerning Poland

Enacted by

Government

Official link to the text of the act

file:///C:/Users/KVZ/AppData/Local/Temp/MK_21_167.pdf

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