3. Assessing the content of Hungary’s NACS 2023-2025 and its Action Plan
This chapter examines the content of Hungary’s NACS 2023-2025 and related action plan. It assesses the presentation and content of the commitments in the NACS and action plan and suggests objectives would be more realisable in practice if they were better linked to actions, outputs and milestones. It also explores the expectations placed on responsible authorities through the NACS and action plan and offers recommendations for clarifying these expectations to improve implementation. And it suggests that certain actions could be clarified and others added to improve the coverage of the NACS and action plan.
As established in the Recommendation on Public Integrity and laid out in the Public Integrity Handbook, strategic objectives are the guiding stars for those responsible for executing the strategy, and are used to form indicators and targets on the basis of which the strategy will be evaluated (OECD, 2017[1]) (OECD, 2020[2]). Objectives must be aligned with the overall vision established for public integrity, as well as specific sector policy. Strategic objectives, from the general to the specific, directly link the findings of the problem analysis and align with indicators, their baselines (i.e. those of the indicators) and targets. Major integrity risks identified in the problem analysis should be addressed through primary objectives, which then cascade down to more specific secondary objectives, actions, indicators, milestones and targets.
This section looks at how the Medium Term National Anti-Corruption Strategy for 2023-2025’s (hereinafter referred to as NACS) goal and objectives were defined, and if they are clear and linked to the analysis of the situation / problem analysis included in sections 2 and 3 of the NACS. It also assesses whether the activities and outputs detailed in the AP of the NACS translate the objectives of the strategy into actionable measures that are likely to produce the desired changes, and provides recommendations to strengthen the content of both the NACS and the AP within the framework of Hungary’s commitments in the remedial measures and RRP.
As mentioned above, Hungary committed in remedial measure No.3 (Strengthening the Anti-Corruption Framework) and the RRP that a key priority of the NACS shall be the improvement of mechanisms ensuring the prevention, detection and correction of fraud and corruption, including in the public procurement system, and the strengthening of systems addressing the risks of conflict of interest. In this context, Hungary noted that special attention shall be given to the strengthening of the institutional and normative framework for the fight against high level corruption through enhancing the transparency of the work of public authorities including at a senior political level.
Through remedial measure No.3 and the RRP, Hungary committed that the Action Plan shall include specific actions aimed at:
ii) strengthening administrative control procedures independent from investigations by law enforcement authorities (including the verification, control and sanctioning mechanisms) related to asset declarations (including specific actions to introduce no later than 1 October 2023 an effective, proportionate and sufficiently dissuasive sanctioning regime, including administrative and criminal sanctions with regard to serious violations related to obligations under the asset declaration system)
iii) developing efficient internal mechanisms to promote and raise awareness of integrity matters in the government (including by general training for all staff and confidential counselling for senior executive and political level)
iv) reviewing the application of the Code of Professional Ethics by the Hungarian Government Official Corps as well as practices of local governments to identify and promote best practices regarding contacts with lobbyists and preventing conflict of interest
v) adopting, making publicly available and start applying a code of conduct for persons with top executive functions (as defined by GRECO), providing clear guidance on integrity matters (including in relation to a) contact with lobbyists, b) post-employment restrictions [addressing the practice of “revolving doors” between positions in the public and private sectors] and c) relatives’ employment and the promotion for employment [nepotism])
vi) with an immediate deadline for implementation of any residual actions stemming from the Government Decision 1328/2020 (VI. 19.) not implemented by 30 June 2023.
According to the draft NACS, the goal of the draft strategy is to “Enhance awareness and responsibility regarding the fight against corruption across the whole of society.” To achieve this goal, the NACS provides a series of objectives laid out in its Section 4 and summarised below in Table 3.1.
A meaningful and realistic strategy is hard to develop without a robust problem analysis (OECD, 2020[2]). Equally important though is that the design process for the strategy takes into account the findings of the problem analysis, and that strategic objectives are prioritised systematically on the basis of evidence. As set out in Chapter 2 of this report, there is scope to improve the evidence base, risk assessments and systems analysis in the NACS. But the NACS could also benefit from Hungary making a stronger connection between the problem analysis and the objectives set out in Section 4 of the NACS. This means going beyond the normative statements which underpin many of the NACS’s objectives and making an explicit connection with the evidence base. For instance, objective 4.2.1.1 suggests that ‘gaps in the available guidance need to be filled’. It would be helpful to link this statement back to an analysis of the gaps in the guidance, setting out what the gaps are, why they are problematic, or what risk to integrity the gaps pose. Likewise, in objective 4.2.2.5 relating to whistleblower protections, it could be clearer what evidence suggests current reporting mechanisms leave ‘room for improvement’ and what the risks are in the current system. Or at objective 4.2.4.1, it is not clear how the risk to the misuse of funds in public procurement has been measured and quantified, or what solutions the evidence suggests would be most relevant.
To ensure further alignment of the NACS with the commitments of remedial measure No. 3 and the relevant milestones set out in Hungary’s Recovery and Resilience Plan, the NACS strategic objectives could benefit from certain additions. For example, objective 3 could include a sub-objective on effective action against high level corruption, as per the commitment in the remedial measures and RRP to give this issue special attention. Specific actions of the AP could also be further fine-tuned in line with these commitments. Hungary committed to include in the AP actions aimed at developing, among others, confidential counselling on integrity matters at senior executive and political levels. This is reflected in the NACS strategic sub-objective 4.2.1.1. on setting out, and putting into practice, ethics and conduct requirements tackling current challenges, which recognises that providing guidance regarding ethical dilemmas is useful in shaping ethical behaviours. However, the action plan itself does not include an action about establishing avenues for confidential counselling at senior executive and political levels. Also, Hungary’s commitment to adopt and publish a code of conduct for persons with top executive functions providing clear guidance on integrity related matters, including contacts with lobbyists, post-employment restrictions, as well as nepotism1 is consolidated in Actions 3.1 and 3.2 of the NACS Action Plan. These refer to the development of codes of conduct and codes of ethics for persons holding a top executive officer position, their advisors, Prime Ministerial Delegates and Members of the National Assembly, as well as employees of the Office of the National Assembly. While the description of the actions seems to cover the requirements regarding post-employment restrictions and nepotism, the element of regulating contacts with lobbyists is currently missing. It should also be noted that the commitment in the AP to develop separate codes of conduct for these different groups better reflects the separation of powers and their distinct roles and responsibilities than the wording in the remedial measure and RRP which implies they will be subject to a single code of conduct. Officials in the Hungarian Government confirmed to the OECD that different codes of conduct would be developed for each group.
3.2.1. Link each objective with the corresponding actions, outputs and milestones in the Action Plan to show how the objectives will be realised through relevant activity
Clear strategic objectives require previous risk assessments to identify areas in which resources and efforts should be allocated first. This prioritisation needs to take into consideration the context and particularities of each country while focusing on the more vulnerable areas. Moreover, evidence-based strategic objectives are more likely to have meaningful impact in national public policy. Table 3.2 provides an overview of the minimum coverage areas of primary strategic objectives to mitigate public integrity risks, according to the OECD Public Integrity Indicators.
Strategies should articulate a clear vision, explaining envisaged outcomes, objectives and how planned activities will contribute to the achievement of that vision. A coherent and overarching theory of change is increasingly recognised as pivotal to anti-corruption interventions and becomes fundamental to assess outcomes within monitoring and evaluation (OECD, 2020[2]); (G20, 2021[4]). A good theory of change requires a clear vision and goals, a strong problem identification, the interventions and the outcomes that are needed to effect change and the underlying assumptions that are necessary for these outcomes to materialise (UNDG, 2017[5]).
The current draft’s inclusion of objectives at individual, organisational, state and international levels (Objectives 1, 2, 3 and 5 respectively), along with objectives relating to the wider economy (Objective 4), is a useful framing and offers scope for a wide-ranging set of actions which could match the NACS’s goal of a ‘whole-of-society’ approach to fighting corruption.
However, the measures of an action plan should logically lead to the fulfilment of the objectives of a strategy. The NACS could make clearer how the goal and objectives, via prioritisation in the intervention areas in Section 5, will be achieved by the specific actions set out in the AP. Officials in the NPS said in consultations with the OECD that they would improve this coherence through annexing an implementation matrix in the NACS and AP. This matrix would connect the relevant parts of the problem analysis with the related objectives, intervention areas, and actions, and will include space for an assessment of the final result following implementation. The addition of this matrix sounds positive, but it should supplement clearer framing and more commentary throughout the NACS which demonstrates how the different sections build on each other, making it easier to understand the underlying logic and theory of change in the NACS.
Two of the intervention areas set out in Section 5 of the NACS do not appear in the AP with corresponding actions (immunity, and the integrity of public procurement and economic competition). Officials in the Ministry of Justice and NPS suggested in consultations that, although actions were not included in the AP for these intervention areas, work was being undertaken in separate workstreams elsewhere in the Hungarian Government. Hungary could make this clearer in the NACS, as the current drafting makes it seem that although these intervention areas have been identified as priorities no work is being done in relation to them. For instance, reference could be made to the work which Hungary is currently undertaking with the OECD to increase competition in public procurement and develop a performance measurement framework, and a commitment could be included to implement the results of that work.
It could also be helpful for the naming of the intervention areas in the Action Plan to reflect the nature of the actions which sit under them. This could be achieved by transforming the titles of the sections included in the AP (the six intervention areas listed in Table 2.3, Chapter 2) into objectives. Table 3.3 presents suggestions for how these objectives could be drafted.
Once the strategic objectives are established and indicators and targets are set, the next step is to plan the specific activities needed so the objectives can realistically be met (this is the action plan) (OECD, 2020[2]). Presentation of the action plan should be kept simple, and also enable readers from outside the administration to identify at first glance answers to key questions such as, “What are the actions?”, “Who will be responsible for them?”, “When will they happen?” and “How will their impact be measured?” (Hoppe, 2013[6]). Even in the seemingly simple case of whether a new code of conduct has to be drafted, breaking the process into a series of steps (e.g. drafting the code, consultations, submission for approval and dissemination) could be helpful.
To develop effective and efficient action plans, the activities in it should have direct reference to the primary strategic objectives established by government. Thus, primary strategic objectives based on thorough risk assessments, require action plans with measures and activities oriented to mitigate integrity risks and achieve such strategic objectives. Table 3.4 below presents the key criteria for developing adequate action plans in line with the OECD Public Integrity Indicators.
This section presents recommendations to improve the measures proposed in the AP of the draft NACS. More specifically, this section looks both into the form (how they are drafted) and content (what they propose) of the measures and how effective they may be. It also suggests some additional measures which could be included in the AP, or ways to develop existing actions, based on the European Commission’s recommendations in its report The rule of law situation in the European Union and Hungary’s RRP (European Commission, 2022[7]). And it sets out how Hungary could better define indicators to aid implementation of the AP, and suggests some specific indicators for certain priority actions.
3.3.1. The Action Plan could be more detailed, setting out clearer expectations on implementing authorities and clarifying timings and delivery milestones, outputs, and indicators for tracking progress
The current version of the AP of the NACS presents a series of measures associated with each of the intervention areas listed in Table 2.3, Chapter 2. These measures are then assigned to one or more responsible institutions, mostly, within a concrete time frame.
However, in its current version, the AP could provide more detail in terms of the intermediary steps and milestones required to achieve the objectives and facilitate an effective co-ordination and monitoring of measures. This could be achieved through a more in-depth planning exercise to envisage which intermediary steps are required to realise each action.
Some actions in the AP set a target completion date of ‘immediately’ (for instance, Actions 1.1 or 5.2). This seems to be based on the commitment in Hungary’s Recovery and Resilience Plan to close off the remaining actions from the 2020-2022 Anti-Corruption Strategy. The commitment in the RRP to fully implement the outstanding actions from the last strategy is positive. But authorities will be clearer about what is being expected from them, and a more effective assessment of whether these commitments have been satisfactorily implemented could be made, if Hungary specified a date for implementation. Similarly, several actions’ implementation is set as ‘continuous’ (for instance Actions 3.2b, 4.1-4.4, or 5.4). In these cases, implementation could be more effective if Hungary set milestones for delivery and for checking implementation and ensuring adequate progress is being made.
For instance, Action 3.2 of the AP could be broken-down into several intermediary steps, including:
Elaborate codes of ethics for persons holding a top executive officer position, their advisors, Members of the National Assembly, and the employees of the Office of the National Assembly.
Adopt and publish codes of ethics for persons holding a top executive officer position, their advisors, Members of the National Assembly, and the employees of the Office of the National Assembly.
Conduct awareness-raising activities on the following issues: conflicts of interest, acceptance of gifts and other benefits, restrictions following the termination of the employment relationship and the employment of their relatives as well as the recommendation of their relatives for employment.
In the current version of the AP, several measures are drafted “The Government instructs…”. On the one hand, this raises the question of when a measure can be considered as completed – once the Government has instructed or once the implementing agency has managed to deliver the activity foreseen in the AP, affecting both the implementation and monitoring of the NACS. On the other hand, this wording makes it less clear to readers of the AP how involved stakeholders were in the development of the NACS or what level of ownership the entities responsible for the implementation of the different measures may have. Similarly, in the current version of the AP, some measures are drafted “The Government invites…”. In these cases, it is not clear what the obligation of the invitee is to implement the measure proposed in the AP, and therefore how delivery of the action would be measured (for example, measures 4.1-4.3, 5.7, 5.10 and 6.9).
Some actions in the AP are drafted “[x organisation] to make a proposal for…”. This language may make sense in instances where proposed action is preparatory for work which will be longer-running than the reporting period of the strategy. But it can also make it unclear whether the action is to prepare a proposal or to then also deliver the activity the proposal relates to (for example, measures 3.1, 3.2, 5.1, 5.5, 5.12, 6.12). It may be clearer to readers and to the authorities responsible for implementing measures if the wording in these actions clarifies whether the development of the proposal is the intended action, or whether the work relating to the proposal must be delivered as well. If the intended action is simply to deliver a proposal, these actions could benefit from more clarity around what outcome the proposals are intended to produce (as a proposal by itself will not help to improve integrity). Likewise, several actions ask implementing authorities “to assess” a particular issue or policy proposal (for example, Actions 2.2, 2.3, 5.2, 6.4, 6.6, 6.7, 7.4). Requiring these assessments is a useful technique for ensuring a solid evidential and planning basis for future work. However, it is not always clear what these assessments will lead to. These actions could increase the potential for impact if there was a clearer sense of what outcome the assessments were aiming to produce.
The draft AP could also provide more information relating to the results and outputs of proposed measures, the indicators which will be used to measure implementation, and a risk assessment to aid implementation. The results and outputs refer to the desired changes or products which a given measure will produce upon successful implementation. Clarity about the desired results and outputs then informs the indicators needed to track the implementation of the strategy and determine whether a measure was successful or not.
Conducting risk assessments for the proposed measures, including specific information about financing for a given action, could also allow responsible institutions to mitigate potential risks that may otherwise hinder the implementation of the NACS. Risk assessments should not be isolated, one-time activities, but rather they need to be updated periodically.
The NACS and AP could benefit from identifying indicators and establishing their baselines, milestones and targets. This was a key point made by the civilian members of the Anti-Corruption Task Force in the OECD’s fact-finding conversations with that body. Indicators should reflect the strategic objectives, some of which may be part of the strategy document and others part of the action plan. Indicators, and in particular their baselines, milestones and targets, are often neglected in the strategy design phase and developed too late in the process to be useful. This leaves those charged with implementing the strategy without a proper roadmap for which concrete results should be achieved and how. It also makes it difficult for the government as well as non-state actors to assess the level of success, progress towards the strategic objectives, and necessary corrections, as needed.
The goal of indicators is to support comparability over time. Benchmarking can allow governments and non-state actors to assess the effectiveness of different interventions in the strategy and in other parts of the public integrity system. In a national context, such benchmarks can be established using a before-and-after approach, if indicators are established and data collected well in advance of implementing the strategy, or a with-and-without approach where the performance of a comparison group is measured alongside the treatment group (OECD, 2020[2]).
Although there are no universal principles to be followed when defining indicators, as they depend on the purpose they serve and the nature of the policy or programme they seek to monitor, Hungary could consider the CREAM approach (Box 3.1) to help it develop indicators for the measures included in the NACS and AP. In addition, some suggestions for indicators which could provide a baseline and allow for monitoring and evaluation, and the sources of evidence that they could be developed from, are set out in Section 4.2.1, Chapter 4.
The “CREAM” of selecting good performance indicators is essentially a set of criteria to aid in developing indicators for a specific project, program, or policy (Schiavo-Campo 1999, p. 85). Performance indicators should be clear, relevant, economic, adequate, and monitorable. CREAM amounts to an insurance policy, because the more precise and coherent the indicators, the better focused the measurement strategies will be.
If any one of these five criteria are not met, formal performance indicators will suffer and be less useful. Performance indicators should be as clear, direct, and unambiguous as possible. Indicators may be qualitative or quantitative.
Source: World Bank (2004[8]), A Handbook for development Practitioners: Ten steps to a results-based monitoring and evaluation system, https://www.oecd.org/dac/peer-reviews/World%20bank%202004%2010_Steps_to_a_Results_Based_ME_System.pdf.
3.3.2. Some measures in the Action Plan could be drafted more clearly to ensure they are actionable, and some measures could be added to improve coverage and make sure the Action Plan is effective
Transparency
The Recommendation on Public Integrity makes clear the importance of setting clear and proportionate procedures to help prevent violations of public integrity standards and to manage actual or potential conflicts of interest (OECD, 2017[1]). The inclusion of actions in the NACS and AP on asset declarations is therefore commendable. The focus in Action 2.1 on digital asset declarations and the extension of asset declaration obligations to new priority positions in Action 2.2 both seem positive and could increase scope for greater transparency and better analysis of trends in asset declaration data.
However, there is scope to develop these measures further. The OECD Public Integrity Handbook sets out that disclosure is among the key mechanisms for strengthening accountability and safeguards against undue influence on policymakers and policymaking processes (OECD, 2020[2]). Moreover, implementation of asset and interest disclosure mechanisms helps detect and prevent unethical behaviours and abuse of power in the public service, as well as risks of money laundering and corruption. The OECD Trust Survey makes clear why preventing abuse of power in this way is so important, concluding that countries with lower levels of perceived corruption among public employees have in general higher levels of trust in national government (OECD, 2022[9]).
Asset declarations encompass the disclosure of pecuniary interests and are intended as a post factum verification process of unjustified wealth and illicit enrichment. An effective asset declarations system should avoid cumbersome filing procedures, include comprehensive disclosure forms and ensure enforcement through robust controls and verifications. Currently, the compilation process of asset declarations as described in Act CLII of 2007 (covering the staff of the enlisted public bodies) and XXXI of 2022 (regulating the asset declarations of high-level public officials and members of the Parliament) is quite complicated. For example, various institutions are declared responsible for managing asset declarations depending on each category of declarant. The asset declarations of the President of the Republic are managed by the Head of the Office responsible for economic affairs, while the Secretary General of the Office of the Commissioner for Fundamental Rights collects the asset declarations of Commissioner for Fundamental Rights and his or her deputies. Similarly, the asset declarations of members of the National Assembly are compiled by the Committee on Immunity. The list of declarants and managing institutions is extensive, however the Act does not indicate a dedicated oversight body for verifying and reviewing the submitted asset declarations. In some cases, the Integrity Authority may verify the asset declarations of high-level position holders and public officials prescribed by law, according to Section 5(6) and (7) of Act XXVII of 2022. The Integrity Authority’s verification may not extend beyond the scope of its mandate related to the use of EU funds. In this regard, it remains unclear what happens with the asset declarations, and information which do not fall under the mandate of the Integrity Authority and whether there is a central oversight body in place to fulfil this function. To address these shortcomings, this section of the Action Plan could include an action for a clear legislative framework that establishes the verification mandate of a central oversight body, such as the Integrity Authority or National Tax Authority, which already has a mandate to pursue illicit enrichment procedures upon the initiative of the public body to which the asset declaration is submitted (§14(6) of Act CLII of 2007). This mandate should equip the central oversight body with sufficient powers and resources to perform its duties, including access to government registers and databases and the possibility to request access to information from public and private entities and abroad (World Bank/UNODC, 2023[10]).
More than facilitating the electronic submission and management of asset declarations of public officials, the new system should seek to streamline the processes for submission, review and publication. The electronic system should aim to simplify the submission process by making the declaration form more user-friendly, reduce the number of mistakes made in the forms, facilitate further analysis and verification of declarations, and improve data management and security. In fulfilling these objectives, electronic filing systems ultimately help raise the level of compliance with submission requirements (Kotlyar and Pop, 2019[11]). To this end, Action 2.1 on the creation of an electronic system for filing and managing asset declarations could be complemented by the development of an automated risk analysis framework. The automated risk analysis is both a prioritisation and detection tool. It helps prioritise the verification of numerous declarations. In addition, it can be used to better detect violations following the risk indicators identified by the analysis. The automated risk analysis helps to remove or limit the discretionary decision-making concerning the targets of verification. Some general considerations, which could be examined when developing the risk analysis framework are presented in Box 3.2.
Use of a risk-based approach to trigger and prioritise verification when inherent risks are found in the declarations form, such as the position or duties of the declarant. Systems which automatically trigger the verification on formal grounds (e.g. late submission) are ineffective as they overburden the verification agency. This is especially relevant for systems where the number of disclosures is substantial and not matched with the resources to verify them.
When the number of mandatory verifications is substantial, the verification agency has to prioritise its work by focusing on high-risk declarations. Such prioritisation should be transparent and based on clear criteria limiting discretionary decision-making. The system may categorise declarations submitted by certain top officials as high-risk by default. This will give credibility to the system and avoid focus on low-level officials or petty inconsistencies.
External signals (e.g., media reports, complaints of citizens or watchdog CSOs, referrals from other authorities) should take priority. The agency should verify them if they give rise to a substantiated suspicion of irregularity. Anonymous reports about verifiable facts should also be included.
The verification should include IT solutions that automate certain operations. Such solutions can perform a risk analysis of each declaration, compare several declarations of the filer or compare with declarations of similar filers. Applying analytical software to the disclosure data can help to find patterns that can be then used to develop red flags for future verifications.
Cross-checking disclosures with other government held registers and databases is an important element of the verification that effectively uses government data. The system can also automate such cross-checks and perform them shortly after the declaration is filed or even at the time of the submission.
Source: Pop and Kotlyar (2021[12]), Automated Risk Analysis of Asset and Interest Declarations of Public Officials, World Bank, https://star.worldbank.org/publications/automated-risk-analysis-asset-and-interest-declarations-public-officials.
Furthermore, this section of the Action Plan could benefit from including an action to strengthen Hungary’s sanctions system when irregularities arise in the review of the asset declarations of public officials. Currently, Act XXXI of 2022 does not provide a comprehensive sanctioning regime, except for prohibitions for public officials to exercise their mandates following a violation of the Act and to receive remuneration until the submission of the declaration. Indeed, the establishment of an electronic system for the submission and management of asset declarations aiming to uncover irregularities is just the first step. The sanctioning proceedings have to follow and adequately respond to the discovered violations, as required in the OECD Recommendation on Public Integrity (OECD, 2017[1]). In line with the principle of proportionality, certain breaches may attract softer corrective measures, while serious violations related to asset disclosures should lead to disciplinary and criminal sanctions (OECD, 2020[2]). Notably, the section of the Action Plan on “Integrity in the public sector” includes an Action 5.12 for introducing an effective, proportional and dissuasive sanctioning system involving also administrative and criminal sanctions applying to serious violations of obligations existing on the basis of the asset declaration system. However, to improve coherence within the priority areas and measures of the NACS, it would be recommended to move Action 5.12 under the NACS section on “Transparency”, which includes all other actions concerning asset declarations. In this way, this section will present a comprehensive system for asset declarations with measures for detection and enforcement of the relevant regulations.
Finally, asset declarations do not only depend on the legal obligation to report, but also the quality of the information provided by public officials. Therefore, ensuring forms are understood and filled in correctly, and having access to guidance when needed, is a key part of the success of any system. Indeed, the act itself of completing a declaration can strengthen the integrity of public officials as they need to first self-evaluate which assets they have, and the extent to which these could undermine their responsibilities to serve the public interest. Through access to impartial guidance, officials also benefit from opportunities to discuss potential doubts and dilemmas concerning their assets and interests.
In other countries (Box 3.3), much of this information has been systematised and clearer channels established for consultation. In this regard, Hungary could complement this section with an additional action assigning the Ministry of Justice and Minister heading the Cabinet Office of the Prime Minister the responsibility to develop guidelines on filing asset declarations by use of the envisaged electronic filing system. A syllabus containing lessons learned from previous cases on incorrect declarations could be the basis of this guidance. This could consider a range of examples on financial and economic interests, debts and assets.
Countries may provide support mechanisms to asset declarations filers through for example websites, media, designated staff, telephone-hotlines, detailed guidelines and frequently asked questions attached to blank forms.
For example, in Brazil, the Comptroller General Office manages the disclosure system for federal public officials and its website provides information on who, what, when and how to disclose as well as the legal framework on the disclosure process. The Brazilian tax authorities also publish guidelines and information online for public officials completing the declarations. For the Chamber 8 of Deputies, there are three websites that provide guidance: the first covers who, when and how to declare; the second provides a list of documents deputies must complete before assuming public office; and the third is a guidance note on how to fill in the tax form used as the financial disclosure.
In the United States, the Office of Government Ethics offers a range of support and guidance, from providing a Public Financial Disclosure Guide, to educating and training ethics officials and public financial disclosure reviewers.
Source: OECD/World Bank (2014[13]), Good practices in asset disclosure systems in G20 countries.
The OECD’s Public Integrity Indicators 13.2 and 13.6 would be particularly helpful in measuring the implementation of the actions suggested above. Hungary could review these indicators and incorporate them into its monitoring and evaluation processes.
The principle of Transparency goes wider than asset declaration, however, and includes, for instance, ensuring access to information and open data (along with timely responses to requests for information), or instilling transparency in lobbying activities and in the financing of political parties and election campaigns (OECD, 2020[2]; OECD, 2023[3]). While it is fair to prioritise activity and focus in on specific aspects of transparency, it is not clear in the current NACS and action plan why these specific transparency commitments have been included in the AP and not others. This lack of clarity is in part because the transparency section in the intervention areas part of the NACS (Section 5.1) focuses mainly on past activity, rather than explaining what future activity could look like and why. In addition, given the commitment in Hungary’s RRP and remedial measure No.3 for ‘special attention’ to be given to the strengthening of the institutional and normative framework for the fight against high level corruption through enhancing the transparency of the work of public authorities including on senior political level, more thought could be given to actions relating to improving transparency at these high levels of government.
With regards to the financing of political parties and election campaigns, the NACS, indeed, recognises that “abusive practices observed in relation to the parliamentary election campaign call for a revision of the financing of political parties”. Nevertheless, the Action Plan only envisages relevant measures under Action 7.1 concerning the operation of rules on the financing of domestic political parties in the light of action against international bribery. The rationale behind this measure is to prevent foreign economic influence or other interests from interfering with the results of elections through illegal contributions. However, regulations to ensure transparency and integrity in the financing of political parties and electoral campaigns are crucial to policymaking and go beyond averting the risks of foreign influence (OECD, 2020[2]). If the financing of political parties and electoral campaigns is not adequately regulated, money may become an instrument of undue influence and policy capture both internationally and domestically. In this regard, Hungary could include an action to strengthen the national legal framework for transparency and integrity in the financing of political parties and electoral campaigns. The specific measures should, indeed, include banning contributions from foreign states or enterprises, as currently stipulated in Action 7.1.
However, the measures should also seek to address identified loopholes in the existing legal framework and promote a level playing field. Indeed, according to observations from civil society, government parties seem to overspend and fail to sufficiently report on their resources and expenditure (K-Monitor/Transparency International Hungary, 2023[14]). Moreover, recent elections have shown that most of the political party campaigning is taking place on the social media platform Facebook, but advertising on this communication tool is not considered to fall within the legal definition of political advertising under the Electoral Procedure Act and cannot therefore be subject to audits (European Commission, 2022[7])). With the emergence of new digital platforms, hidden political advertising is an ever-evolving risk for the integrity of political financing systems. To address this risk, the Action Plan could provide an action to expand the definition of political advertising under the Electoral Procedure Act to also cover advertisements on social media platforms, including by financed third parties. Other policy initiatives may include the adoption of a Code of Conduct on online political advertising or even agreements with social media networks on information sharing and the removal of illegal campaign material (Box 3.4).
Before the March 2021 parliamentary elections, political parties, and social media platforms (Facebook, Google, Snapchat, and TikTok) in the Netherlands agreed on voluntary rules on online political advertising in the form of a Code of Conduct. The Code is the result of growing concerns in the country regarding both election transparency and disinformation in the digital sphere. With this initiative, Dutch political parties and online platforms jointly aim to uphold the integrity, safety and fairness of Dutch elections. The Code’s core values include guarantees of voter privacy and freedom of expression, as well as providing a better level playing field for political parties in election campaigns without detracting from widely accepted marketing or campaign strategies.
The Code includes agreements to be transparent about the buyers of political advertising, its costs and the target audience. While the guidelines focus primarily on paid online political advertising, they call upon signatories to recognise the importance of unpaid content for fair and democratic online political campaigns. With regards to disinformation, political parties have committed not to posting or spreading misleading information or accepting foreign funding to pay for political advertisements. In addition, social media platforms pledge to publish key data related to online political advertising and help prevent foreign interference in elections through a ban on political advertisements purchased and run outside the European Union.
Similarly, the Latvian Anti-corruption agency (KNAB) has reached agreements with social media networks on information sharing and the removal of illegal campaign material. In 2018, KNAB also proceeded with the development of an easily downloadable and user-friendly “Report to KNAB” application which enables the anonymous reporting of potential foreign electoral interference online through photo, audio or video evidence.
Source: (European Parliament, 2021[15]); (Ministry of the Interior and Kingdom Relations of the Netherlands, 2021[16]); (IDEA, 2022[17]).
Recent findings from civil society stress the need to address corruption risks arising from the lack of regulation on third party engagement in campaigns and the abuse of public administration or government capacities (K-Monitor/Transparency International Hungary, 2023[14]). This is also a requirement of the OECD Public Indicator on the accountability of policymaking to ensure the adequacy of national regulatory frameworks on political financing (OECD, 2023[3]).To this end, regulations to strengthen the national legal framework on the financing of political parties could also ban the use of public funds and resources in favour of or against a political party.
Regulating the financing of political parties and election campaigns cannot be effective without compliance and review mechanisms to ensure transparency and integrity. In particular, an independent body that has the mandate to oversee the financing of political parties and election campaigns ensures oversight of the whole system (OECD, 2020[2]). In Hungary, this role is assigned to the State Audit Office (SAO). Nevertheless, the role of the SAO is interpreted narrowly. As a result, the SAO has in practice limited competence to control the expenditure of political parties, and only parties that have gained at least one percent on the ballot from the party list can be monitored. Corruption risks therefore exist for public funds, for example, if parties below this threshold are founded to obtain access to state subsidies, terminating their operations after the elections (European Commission, 2022[7]). To ensure the enforcement of regulations on political financing, the SAO should be able to investigate financial irregularities. This can be addressed by expanding the mandate of the SAO to cover all political parties and assuring its analytical capacity to detect irregularities through co-ordination and exchange of information between the SAO with other law enforcement bodies.
The OECD’s Public Integrity Indicators 13.2 and 13.7 could be particularly helpful for monitoring the implementation of the actions suggested above.
Legislative integrity
Including commitments relating to the preparation and elaboration of codes of conduct and codes of ethics is positive. High standards set out in the legal framework clarify which behaviours are expected of public officials and provide a framework for governments to enable ethical behaviour. Setting standards of conduct that can be learned, internalised and enforced can support the creation of a shared understanding across government and among citizens. Recommendations for codes for high level appointed and elected officials are set out at Box 3.5.
Standards for integrity for high level appointed and elected officials can be dispersed throughout different legislative and policy tools. As such, governments can use codes of ethics to collect and clarify in one place the standards that guide these officials’ behaviours and actions.
Codes of ethics can be designed to be regulatory, educational, or inspirational. Regulatory codes include detailed rules and standards of conduct that are usually enforceable through a monitoring system and the imposition of sanctions. Educational codes seek to familiarise public officials with its provisions through extensive commentaries and guidelines for interpretation. Aspirational codes are a declaration of values to which practitioners should adhere to in their daily decisions. In practice, most codes combine elements of these three aspects.
Independently of the method used, codes of ethics should be clear and simple, logically structured, and linked to all other related documents or legislation that make part of the broader legal and regulatory framework of public integrity for high level appointed and elected officials.
In their aim to anticipate and prevent certain types of undesired behaviour, most codes of ethics describe specific actions that are prohibited to public officials. Some of the duties and prohibitions that could be included in codes of ethics for high level appointed and elected officials are a set of values that should guide the behaviour, actions and decisions and provisions on the use of information, on engaging with lobbyists and third parties, on managing and preventing conflicts of interest, on declarations of assets, on receiving and bestowing gifts and other benefits, and on pre- and post-public employment. More importantly, values and standards of conduct should ideally be defined through a participative process to ensure that the result is both meaningful and actionable for those who are expected to follow them.
Source: OECD (2020[2]), OECD Public Integrity Handbook, OECD Publishing, Paris, https://doi.org/10.1787/ac8ed8e8-en.
As mentioned above, however, it is not immediately clear what activity is being required of the responsible authorities in these actions, whether it is to develop proposals for these codes or whether it is to develop proposals and the codes as well. Greater clarity in this regard could help responsible authorities understand the expectations on them, and could assist monitoring and evaluation of these actions’ implementation too. It could also be clearer what is meant in Action 3.1 by the requirement to prepare a ‘legislative environment’ to enable the preparation of codes of conduct.
In addition, it may be helpful in Action 3.2 to separate out the actions to elaborate a code of ethics and to enhance awareness of the standards it contains. These are separate tasks which, although related, require different indicators to monitor and evaluate implementation. This point is evident in the target completion dates of these separate tasks, which for the elaboration of a code of ethics is set at 31 December 2024, while the completion date for the awareness raising is continuous.
Action 3.2 touches upon the topic of post-employment restrictions. While the NACS includes objectives relating to lobbying and the revolving-door phenomenon (e.g. sub-objective 4.2.2.2. Efficient and effective management of situations involving conflicts of interest or lobbying and objective 5.5. Integrity of public sector organs), the Action Plan does not provide any other specific actions in this area. Hungary’s scarce regulations on “revolving doors”, including post-employment rules and cooling-off periods, have already been stressed by the EC’s 2022 Rule of Law Report and by GRECO’s 3rd Interim Compliance Report for the Fourth Evaluation Round (European Commission, 2022[7]) (GRECO, 2021[18]). Indeed, rules exist only for a few institutions, such as the State Audit Office, the National Media and Infocommunications Authority, the Supervisory Authority for Regulatory Affairs and the recently established Integrity Authority (K-Monitor/Transparency International Hungary, 2023[14])
To this end and in line with the previous recommendation, Hungary could separate the measure concerning “restrictions following the termination of the employment relationship and the employment of their relatives” from Action 3.2. In this regard, a new action could be introduced focusing on the adoption of provisions to regulate the revolving-door phenomenon. These could include setting rules of procedure for joining the public sector from the private sector and vice versa, imposing cooling-off periods to temporarily restrict former public officials from lobbying their past organisations and imposing similar temporary cooling-off period restrictions on appointing or hiring a lobbyist to fill a regulatory or an advisory post (OECD, 2022[19]). Box 3.6 presents international good practices that regulate movement between the public and private sectors and which could inspire Hungary to strengthen its regulations on the revolving-door phenomenon. Moreover, a dedicated action on the regulation of the revolving-door phenomenon would align the measures of the Action Plan with the NACS objectives in this area, thus improving the overall strategic policy co-ordination. The OECD’s Public Integrity Indicators 13.2 and 13.15 could be particularly helpful in measuring the implementation of these suggested actions.
In Australia, Ministers and Parliamentary Secretaries cannot, for a period of 18 months after they cease to hold office, engage in lobbying activities relating to any matter that they had official dealings within their last 18 months in office. Additionally, persons employed in the Offices of Ministers or Parliamentary Secretaries at Adviser level and above, members of the Australian Defence Force at Colonel level or above (or equivalent), and Agency Heads or persons employed in the Senior Executive Service (or equivalent), shall not, for a period of 12 months after they cease their employment, engage in lobbying activities relating to any matter that they had official dealings with in their last 12 months of employment.
In Canada, during the five-year period after they cease to hold office, former designated public office holders are prohibited from engaging in any consultant lobbying activities. Similarly, former designated public office holders who are employed by an organisation are also prohibited from engaging in any inhouse lobbying activities for this same five-year period.
In the Netherlands, a circular adopted in October 2020 – “Lobbying ban on former ministries” – prohibits ministers and any officials employed in ministries to take up employment as lobbyists, mediators or intermediaries in business contacts with a ministry representing a policy area for which they previously had public responsibilities. The length of the lobbying ban is two years. The objective of the ban is to prevent retiring or resigning ministers from using their position, and the knowledge and network they acquired in public office, to benefit an organisation employing them after their resignation. The secretary general of the relevant ministry has the option of granting a reasoned request to former ministers who request an exception to the lobbying ban.
In the United States, Section 207 of Title 18 of the U.S. Code imposes a “cooling-off period” on former Members of Congress, officers and covered employees. As a general matter, for one or two years after leaving office, those individuals may not seek official action on behalf of anyone else by either communicating with or appearing before specified current officials with the intent to influence them.
Source: OECD (2021[20]), Lobbying in the 21st Century: Transparency, Integrity and Access, OECD Publishing, https://doi.org/10.1787/c6d8eff8-en.
Judicial integrity
Inclusion of actions relating to law enforcement and judicial integrity is encouraging, especially as these actions expand the scope of public sector integrity measures beyond central government into different parts of the public sector, and because of the joint nature of some of these actions. Promoting mechanisms for horizontal and vertical co-operation between public officials, units or bodies and where possible, with and between subnational levels of government, through formal or informal means to support coherence and avoid overlap and gaps, and to share and build on lessons learned from good practices is an important aspect of improving public integrity (OECD, 2017[1]). This grouping of actions could be clarified by changing the grouping’s name (and the associated intervention area as noted in Table 3.2 above) to reflect that law enforcement and the judiciary are separate.
The inclusion of actions relating to training and awareness raising is also positive. Building knowledge and skills on ethics and anti-corruption is an essential element of a strategic approach to public integrity. To be effective, the timing, content and delivery methods, and target audiences need to be considered. Integrity training should also be interesting and engaging, with different methods used to reach learners (Table 3.8). Hungary could give more thought to how the successes of its existing training practices, such as the judiciary training system and training provided by the NPS, can be developed and taken forward, and where any gaps may need to be addressed (Courts of Hungary, 2023[21]).
However, training and awareness raising is only one type of intervention, and Hungary could reflect on whether other types of action relating to other public integrity indicators could be developed here. These other types of action could emerge through the more rigorous approach to problem analysis outlined above.
The actions in this section could be strengthened by disaggregating the target completion dates for Actions 4.1-4.4. Action 4.2 relates to the review of the judicial code of ethics, particularly as regards the acceptance of gifts, and, unless the code will be under continuous review or subject to a type of continuous improvement process, could benefit from being given a target completion date. Actions 4.1, 4.3 and 4.4. all relate to the provision of training to different parts of the law enforcement and judicial system. Monitoring and evaluation of these actions could be improved by including interim target completion dates relating, for instance, to the finalisation of training materials or curricula, capacity building materials, or the delivery of a specified number of sessions in a given timeframe.
With regards to action 4.6 on supplementing the Code of Ethics of the Police Profession with more detailed and practical guidance, good practice can be drawn from OECD member countries, where police codes of ethics are supported by useful examples on how to carry out daily activities (Box 3.7).
In 2016, the Policing Authority in Ireland carried out two rounds of consultations as part of the preparation of the Code of Ethics for the Garda Síochána, the national police service of the Republic of Ireland. In the first round of consultations the Authority invited initial views. Ideas and comments were received from a wide range of contributors, including those who work in the Garda Síochána, members of the public, and statutory and civil society organisations. The Authority considered all submissions received, and then conducted further research to develop a draft Code of Ethics, which was published on the Authority website for further public consultation.
The Code of Ethics was published in 2017 and sets out guiding principles to inform and guide the actions of every member of staff of the Garda Síochána at every level of the organisation. Recognising that in fulfilling their responsibilities, employees are required to exercise considerable discretion, the Code intends to provide practical guidance on responding to given situations and making instant decisions. It is at once a statement of ethical requirements and a clear indication to the public of the norms of behaviour that are entitled to expect.
The Code is structured around the following standards:
Each standard is explained and accompanied by ethical commitments and relevant examples.
Source: Policing Authority (2020[22]), Code of Ethics for the Garda Síochána, https://www.garda.ie/en/about-us/publications/policy-documents/code-of-ethics-2020.pdf; OECD (2023[23]), Reforming Integrity Checks and Code of Ethics in Bulgaria: Recommendations for the Anti-Corruption Commission, https://doi.org/10.1787/d19f60c1-en.
Integrity of public sector organs
There is an ambitious range of actions in this section of the action plan. It could be the case, given how wide in scope the ‘integrity of public organs’ grouping is, that this section could benefit from being narrowed down or from more prioritisation. This prioritisation could be achieved, as mentioned in Section 2.2 in Chapter 2, from more rigorous use of evidence in Section 5 (intervention areas) to establish where the greatest risks are and to project the greatest returns on activity.
Several of the actions in this section are designed to be implemented on a continuous basis (Actions 5.4, 5.8, 5.9 and 5.11). All these actions would benefit from the inclusion of intermediary completion target dates, set according to key milestones in the work’s development and delivery, which could be used to monitor and evaluate their overall implementation. Two actions in this section do not appear to have responsible owners or completion dates, both of which should be added.
In terms of the content of the actions, Action 5.1 requires the Minister of Construction and Transport and other competent ministers to develop proposals for mitigating integrity risks relating to major investment projects financed with public funds and for the creation of a training system specifically on investment projects. This action could be further enriched with concrete measures and mechanisms that could be employed at each phase of the public investment cycle in order to safeguard integrity. Good practice on this can be drawn from the OECD Integrity Framework for Public Investment (OECD, 2016[24]). Table 3.10 presents some indicative policy options for this purpose.
Action 5.3 instructs Ministers to use the NPS’s risk analysis model to support the development of public sector organs’ integrity. The use of this kind of risk analysis is positive and, as noted in other sections of this report, could be extended to other aspects of Hungary’s anti-corruption work. However, applying this kind of analysis to all public sector organs is a large undertaking, and this action could benefit from being separated into, for instance, the individual stages of the risk analysis process, with corresponding deadlines. Doing so could aid monitoring and evaluation, providing more opportunity to assess progress across public sector organs and evidence of how the risk analysis process works in practice.
This section envisages also the implementation of measures to protect reporting persons in accordance with Directive (EU) 2019/1937 of the European Parliament and of the Council on the protection of persons who report breaches of Union law in its Actions 5.5 and 5.6. The EC 2022 Rule of Law Report has previously highlighted that Hungary shows operational deficiencies in the whistleblower regime, including the limited protection against retaliation and the risks of disclosure of whistleblowers’ identities (European Commission, 2022[7]). Likewise, the OECD Working Group on Bribery has underscored in its recommendations to Hungary in its implementation of the OECD Anti-Bribery Convention (see below under Section 3.3.2 “Action against International Bribery”) the need for Hungary to increase the effectiveness of its whistleblower system, including by addressing the limited protections against retaliation and the uncertainties pertaining to the protection of reporting persons’ identity (OECD, 2022[25]) (OECD, 2023[26]). Indeed, according to international standards, the identity of the reporting person may only be disclosed where there is a legal obligation to do so, and such obligation should be confined to the context of investigations by national authorities or judicial proceedings and should be necessary and proportionate, including with the view to safeguard the rights of defence of the person concerned (Directive (EU) 2019/1937, 2019[27]). The use of technological means could help ensure confidentiality. For example, the Italian Anti-corruption Authority (ANAC) in co-operation with Transparency International Italia is promoting the use of a unified reporting platform by all public sector entities, to guarantee the confidentiality of the reporting person’s identity and the possibility of communication throughout the process (Box 3.8). The objective is for public entities to use the platform as an internal reporting tool (ANAC, 2021[28]). Apart from ensuring confidentiality, the use of digital technology tools in public organisations and the advertising of their benefits and guarantees, especially where the tool unifies different systems and provides a single point of access, can inspire confidence in the reporting system, more coherent reports, and legal and administrative certainty for reporters and the authorities dealing with their disclosures.
Whistleblowing PA is a project aiming to offer all Public Administrations free IT software to communicate with whistleblowers, based on methods that guarantee anonymity. All Italian public administration can join the project by registering online. Once the registration is completed, the institution has access to its own personal platform which will be made available in the cloud and accessible on the internet at a specific address for each Public Administration.
The Whistleblowing PA IT platform is created using the GlobaLeaks software and complies with the law on the protection of whistleblowers. It allows the Head of Corruption Prevention to receive reports of offenses from the employees of the entity and to communicate with whistleblowers, even anonymously. The platform is available with a questionnaire specifically designed by Transparency International Italia for the fight against corrupt activities and compliant with Regulation 179/2017. It guarantees the maintenance and updating of the platform and does not require technical interventions by internal or external entities.
Apart from access to the platform, the project also provides participating Public Administrations with the following:
Specific texts on whistleblowing and on the use of the platform to be published on the body’s website;
Standard text for a newsletter addressed to the employees of the institution;
Poster in digital format to be printed for posting at the institution;
The availability of an assistance forum and exchange of best practices;
Data export and configurations for migration to autonomous information systems (no lock-in);
Following continuous requests for support received from other entities, the project will be expended to also cover public and private controlled companies
Source : https ://www.whistleblowing.it/proposte/wb-pa-per-enti-pubblici/.
Action 5.6 requires the relevant Ministers to provide for the delivery of training on the new reporting person protection regulation. While it is positive that this action has a defined completion date, given the draft law requires that most public bodies must set up their whistleblowing channels by December 2023 (and others by January 2025), Hungary could shorten the deadline to improve knowledge and effectiveness sooner among the organs receiving reports under the new regulation (Government of Hungary, 2023[29]).
Action 5.9 focuses on the carrying out of the corruption perception survey developed by the National University of Public Service in co-operation with the SAO and Statistical Office. Officials in the Hungarian government told the OECD in consultations that the survey will be co-ordinated by the Prime Minister’s Office and will be based on the Eurobarometer methodology. Surveys can provide valuable insights to help governments understand the incidence of corrupt and unethical practices and how these are perceived in the public sector. Hungary could reframe this measure to increase the scope of the survey to also include experiences and attitudes. Indeed, a combined approach of perceptions and experience surveys can bring more conclusive results. Public sector surveys from OECD Members can provide further guidance on this. For example, the Government of Brazil in co-operation with the World Bank recently organised a survey among civil servants to generate empirical knowledge about the different types of unethical behaviour, their incidence levels and the possible motivations behind these acts. The survey includes sections on experiences with corruption, reporting mechanisms, as well as rules and regulations and management of human resources (World Bank, 2021[30]). In the United Kingdom, the Civil Service People Survey asks respondents if they are confident that, if they raise a concern under the Civil Service Code in their organisation, it would be investigated properly (UK Cabinet Office, 2022[31]). Similarly, the Integrity Assessment of the Anti-Corruption and Civil Service Commission in Korea includes the Work Integrity Index, which is a set of indicators aiming to gauge civil servants’ perceptions of integrity in public organisations. The survey asks, among other things, if civil servants consider that the institution is doing well in detecting and punishing corrupt behaviours (ACRC, 2021[32]). In addition, Hungary could consider how the results of this survey could be used to assess existing practices and aid future policymaking, perhaps by allowing the Anti-Corruption Task Force access to the results as part of its evaluation work.
This section could further benefit from measures to strengthen integrity leadership behaviour among middle managers. While leaders are usually considered as “senior civil servants who occupy the highest-ranking positions of administrative bureaucracies and who lead public civil servants in the pursuit of governmental goals” (Gerson, 2020[33]), line / middle managers are also important because of their larger day-to-day proximity to most public servants who tend to take values and moral signals from those they see around them (OECD, 2018[34]; OECD, 2020[2]; OECD, forthcoming[35]). For example, a study of local governments in the United Kingdom found evidence for the role played by leaders in promoting and reinforcing standards of conduct especially when they intervene informally to steer behaviour and resolve emerging problems rather than just relying on formal mechanisms (Downe, Cowell and Morgan, 2016[36]). In this context, Hungary could consider measures to identify a set of leaders from middle management as internal allies for promoting integrity values and integrity risk management. As a next step, this initiative could be supported by integrity leadership training to support people in carrying out their functions as integrity leaders (OECD, 2020[2]). This could include providing leaders with training opportunities on aspects of the government’s integrity standards and system, as well as providing them with opportunities to further develop relevant skills of moral managers.
Finally, the AP could further provide for improved integrity in public sector organs through measures which enhance the Integrity Authority’s ability to oversee the functions of bodies tasked with implementing EU funds. As noted above, Hungary committed in its remedial measures to reinforce prevention, detection and correction of illegalities and irregularities concerning the implementation of European Union funds through a newly established Integrity Authority. Act XXVII of 2022 gave the Integrity Authority powers to conduct assessments, investigations and audits in relation to the use of EU funds in Hungary. Section 8 of Act XXVII sets out that the Authority “may conclude agreements with other organs on communication and exchange of information as well as, within the scope of its functions, to facilitate practical arrangements for the exercise of its powers”. Beyond that, though, there is little sense of specifically how the Authority is expected to co-operate with and exchange information with other bodies to execute its function effectively. Hungary could therefore include actions to amend Act XXVII to clarify these arrangements.
The Integrity Authority’s effectiveness could be improved if Hungary added an action to empower the Authority to access data so it can better carry out its functions. Specifically, the action could give the Authority access to information otherwise protected by law, on banking, tax, and insurance, for example. The action could also stipulate that this data should be conveyed through a direct channel, established between the body or organisation holding the data and the Authority, to improve the efficiency and security of the data sharing.
In addition, the AP could include an action to expand the Authority’s investigatory powers, set out in Chapter 3 of Act XXVII, in line with other similar organisations in Hungary, such as the Competition Authority or the National Pharmaceutical Administration. The action could enable the Authority, without having to rely on any other body to do so, to examine and make copies of data held by any organisation or person relevant to the Authority’s investigations. The AP could also give the Authority powers to conduct physical searches where relevant to its investigations, and to legally require investigated bodies or persons to provide information requested by the Authority. These are measures being taken by other OECD members, and Box 3.9 sets out how Latvia has established similar capabilities for its Corruption Prevention and Combatting Bureau (KNAB). Making these additions to the AP would ensure the Integrity Authority was more effective at combating corruption, and could also better enable the Authority to fulfil the requirements set out in the RRP and remedial measures.
Latvia’s Corruption Prevention and Combating Bureau (KNAB) is a direct administration body in Latvia that performs its legally-prescribed functions of preventing and combating corruption, and supervises compliance with the rules on financing political organisations (parties) and their associations, and with restrictions on pre-election campaigning.
Section 10 of the Law on Corruption Prevention and Combating Bureau details the Bureau’s functions and powers, which include powers to access data (including from credit institutions and registered databases) and the ability to conduct physical searches as part of its corruption combating function.
The European Commission has recently cited the KNAB as an example of best practice in its Handbook of good practices in the fight against corruption.
Source: OECD (2020[2]), OECD Public Integrity Handbook, OECD Publishing, Paris, https://doi.org/10.1787/ac8ed8e8-en.
Social integrity
Principle 5 of the OECD Recommendation on Public Integrity stresses that raising awareness in society of the benefits of public integrity, reducing tolerance of violations of public integrity standards and carrying out, where appropriate, campaigns to promote civic education on public integrity, among individuals and particularly in schools is a key aspect of promoting a whole of society culture of integrity (OECD, 2017[1]). The OECD has previously emphasised that “buy-in from core stakeholders is necessary if education for public integrity is to be effective” (OECD, 2018[37]). Without their support, the programme, no matter how fascinating the content, will not be successful. To facilitate engagement, policymakers may wish to identify a working group of key stakeholders, including representatives from the ministry of interior, the relevant integrity body, educators, and other interested parties, such as universities, religious groups, teachers’ unions, parent associations and/or student groups, and other civil society organisations. It may therefore be worth considering how this type of society involvement can be incorporated into the actions in this section of the AP.
Several measures in this section of the AP could benefit from clarity about what implementing authorities are being required to deliver. Action 6.1 instructs the Ministry of Culture to develop a recommendation with a completion date well within the reporting period of the NACS, so there is therefore scope to expand on what will be delivered following the recommendation’s development. Similarly, Actions 6.4 and 6.7 require assessments to be made across three sectors. Both actions could benefit from more clarity about what outcome the assessment is designed to support. Action 6.4 could also make clearer why these three sectors have been chosen. It may be the case that the assessment at Action 6.4 will support other actions in this section (such as Actions 6.5, 6.8b and 6.10), but if so this connection could be made clearer and target delivery dates sequenced appropriately. And in a similar way, Action 6.9 could benefit from more clarity on what type of contribution the Commissioner for Fundamental Rights is invited to make to the implementation of point 6.8a, particularly given the Commissioner is only responsible for one part of the reporting system.
Action against international bribery
Hungary has been a Party to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention) since the Convention’s entry into force in 1999. The OECD Anti-Bribery Convention is the first and only international anti-corruption instrument focused on the ‘supply side’ of the bribery transaction. It establishes legally binding obligations on Parties to criminalise the bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective. These include requiring Parties to hold their companies liable, to impose effective, proportionate and dissuasive sanctions, and to provide mutual legal assistance in foreign bribery cases. As a Party to the OECD Anti-Bribery Convention, Hungary is also subject to the peer-review monitoring system required under Art. 12 of the Convention, which is undertaken by the Working Group on Bribery (WGB) that is comprised of the 44 States Parties to the OECD Anti-Bribery Convention.
The draft National Anti-Corruption Strategy rightly places a strong emphasis on the importance of combating international bribery, including with a reference to Hungary’s role as a Party to the Convention and member of the WGB and efforts taken to date to address some of the recommendations made by the WGB to strengthen Hungary’s implementation of the OECD Anti-Bribery Convention. However, the Strategy and relevant Actions could more accurately reflect the publicly stated expectations of the WGB on steps Hungary should take to address the WGB’s recommendations – some of which remain outstanding since March 2012 (OECD, 2023[38]).
These recommendations in Box 3.10 relate to Hungary’s lack of understanding of foreign bribery risk exposure, absence of strategy for proactively detecting and investigating foreign bribery cases, inadequate time to apply investigative measures to suspects in highly complex multijurisdictional cases and lack of legal clarity in relation to corporate responsibility for foreign bribery. The WGB also remains seriously concerned about Hungary’s low level of foreign bribery enforcement.
As of December 2022, the following WGB recommendations remained outstanding in the ongoing evaluation of Hungary’s implementation of its obligations under the OECD Anti-Bribery Convention:
Text of recommendation 1(a):
1. Regarding the detection of foreign bribery in the government and private sectors, the Working Group recommends that Hungary take the following steps to increase the effectiveness of its whistleblower system for the purpose of detecting the bribery of foreign public officials:
a) Raise awareness in the public and private sectors, including SMEs, of how an effective whistleblower system helps to detect crimes, including foreign bribery, and increases integrity in public and private governance. [2009 Recommendation IX, iii)]
Text of recommendation 4(a):
4. Regarding the detection and investigation of foreign bribery by the competent authorities, the Working Group recommends that Hungary:
a) Undertake an assessment of the foreign bribery risk exposure of: i) Hungarian companies, including SMEs, ii) MNEs using Hungary as a manufacturing base and then re-exporting goods to other markets, 3) the expanding presence of MNEs for the purpose of developing and exporting new technology-based industrial production, including in the transportation, healthcare and pharmaceutical industries, and 4) SOEs, including in the electricity, gas, transport and finance sectors
Text of recommendation 4(b):
4. Regarding the detection and investigation of foreign bribery by the competent authorities, the Working Group recommends that Hungary:
b) Develop and implement a strategy for proactively detecting and investigating foreign bribery cases, including through the use of all available sources of detection inside and outside of the law enforcement community, and training specifically targeted at foreign bribery. [Convention, Article 5; 2009 Recommendation, I, paragraph D)]
Text of recommendation 6(b):
6. Regarding the investigation and prosecution of foreign bribery, the Working Group recommends that Hungary:
b) Urgently implement the Phase 3 recommendation to extend the two-year investigation time limit for foreign bribery offences in a manner that ensures that there is adequate time to apply investigative measures to natural person suspects including in highly complex multijurisdictional cases. [Convention, Article 6]
Text of recommendation 9(b):
9. Regarding corporate responsibility for foreign bribery, the Working Group recommends that Hungary:
b) Review Act CIV of 2001 on the liability of legal persons, in consultation with business, NGOs and the legal profession, to identify possible opportunities to improve the clarity and efficacy of the law on the liability of legal persons in relation to the foreign bribery offence. [Convention, Articles 1 and 2; 2009 Recommendation, Annex I, paragraph B)]
Source: OECD (2023[26]), Hungary – OECD Anti-Bribery Convention Monitoring and peer review history, https://www.oecd.org/daf/anti-bribery/hungary-oecdanti-briberyconvention.htm.
The WGB expects Hungary to present material progress against these recommendations by June 2023. The draft NACS and AP should address these outstanding recommendations more explicitly and include objectives and actions which reflect how the recommendations will be implemented. These objectives and actions could also reflect any new measures considered by the WGB arising from the discussions of Hungary’s progress report in June.
In the meantime, the following additional observations can be made:
The Actions should involve all those agencies responsible for implementing the Convention in Hungary, including the Ministry of Interior, the Ministry of Justice, the Ministry of Foreign Affairs and Trade, the General Prosecutor’s Office, the National Tax and Customs Administration, the Hungarian Financial Intelligence Unit and the Integrity Authority. For the purposes of engaging the private sector and awareness-raising, the following government agencies should also be consulted in the Strategy and its Action Plan: the National Protection Service, the Public Procurement Authority, the Hungarian Export Promotion Agency, the Hungarian Export-Import Bank Private Limited Company, and the Hungarian Export Credit Insurance Private Limited Company.
References to the financing of domestic political parties and to political organisations should be clarified so that it is clearer how Hungarian efforts on this issue strengthen Hungary’s fight against foreign bribery under the OECD Anti-Bribery Convention.
Actions 7.1a and 7.1b may further benefit from greater clarity about what kind of scrutiny the Ministries of Justice and Interior should undertake, and what outcome this scrutiny will support. Likewise, the assessment required in Action 7.4 seems positive, but the action could be strengthened by clarifying what this assessment will lead to.
References
[32] ACRC (2021), Public Institution Measurement Questionnaire, https://www.acrc.go.kr/board.es?mid=a10106050000&bid=36&act=view&list_no=11835.
[28] ANAC (2021), Whistleblowing, https://www.anticorruzione.it/-/whistleblowing-1-1.
[21] Courts of Hungary (2023), Training system, https://birosag.hu/en/training-system.
[27] Directive (EU) 2019/1937 (2019), Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law, https://op.europa.eu/web/eu-law-in-force/bibliographic-details/-/elif-publication/cc54a8ef-1036-11ea-8c1f-01aa75ed71a1.
[36] Downe, J., R. Cowell and K. Morgan (2016), “What Determines Ethical Behavior in Public Organizations: Is It Rules or Leadership?”, Public Administration Review, Vol. 76/6, pp. 898-909, https://doi.org/10.1111/puar.12562.
[7] European Commission (2022), 2022 Rule of Law Report Country Chapter on the rule of law situation in Hungary, https://commission.europa.eu/system/files/2022-07/40_1_193993_coun_chap_hungary_en.pdf.
[15] European Parliament (2021), Financing of Political Structures in EU Member States, https://www.europarl.europa.eu/RegData/etudes/STUD/2021/694836/IPOL_STU(2021)69483.
[4] G20 (2021), G20 High-Level Principles for the Development and Implementation of National Anti-Corruption Strategies, G20.
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On asset declarations
Develop a clear legislative framework that establishes the verification mandate of a central oversight body, such as the Integrity Authority. This mandate should equip the central oversight body with sufficient powers and resources to perform its duties, including access to government registers and databases and the possibility to request access information from public and private entities and abroad.
Develop an automated risk analysis framework for the verification of asset declarations, in parallel with the creation of an electronic system for filing and managing asset declarations.
Move Action 5.12 for introducing an effective, proportional and dissuasive sanctioning system involving also administrative and criminal sanctions applying to serious violations of obligations existing on the basis of the asset declaration system under the section on “Transparency” to improve coherence within the NACS.
Develop guidelines on filing asset declarations by use of the envisaged electronic filing system including a range of examples on financial and economic interests, debts and assets to improve the understanding of public officials regarding their obligations and the overall quality of the information provided.
On the financing of political parties and election campaigns
Strengthen the national legal framework for transparency and integrity in the financing of political parties and electoral campaigns, in particular through:
expanding the definition of political advertising under the Electoral Procedure Act to also cover advertisements on social media platforms, including by financed third parties
banning the use of public funds and resources in favour of or against a political party
expanding the mandate of the SAO to cover all political parties
assuring the SAO’s analytical capacity to detect irregularities through co-ordination and exchange of information between the SAO with other law enforcement bodies.
Clarify the activities assigned to responsible implementing authorities to improve their understanding of the expected actions and facilitate monitoring and evaluation during the implementation phase.
Separate out the measures to elaborate a code of ethics and to enhance awareness of the standards it contains under Action 3.
On post-employment restrictions
Separating the measure concerning “restrictions following the termination of the employment relationship and the employment of their relatives” from Action 3.2 and introduce a new action focusing on the adoption of provisions to regulate the revolving-door phenomenon, in particular through:
setting rules of procedure for joining the public sector from the private sector and vice versa
imposing cooling-off periods to temporarily restrict former public officials from lobbying their past organisations
imposing similar temporary cooling-off period restrictions on appointing or hiring a lobbyist to fill a regulatory or an advisory post.
Clarify the grouping of actions under this section by changing the grouping’s name (and the associated intervention area as noted in Table 3.2) to reflect that law enforcement and the judiciary are separate.
Consider successes of existing training practices, such as the judiciary training system, and identify gaps, which may need to be addressed.
Disaggregating the target completion dates for Actions 4.1-4.4.
Considering the ambitious range of actions in this section of the action plan and the continuous planning of the relevant actions, include intermediary completion target dates, set according to key milestones in the work’s development and delivery, which could be used to monitor and evaluate their overall implementation.
Ensure that all actions are assigned to responsible owners with indicated completion dates.
On whistleblower protection
On integrity leadership behaviour
Include measures to strengthen integrity leadership behaviour among middle managers, in particular:
identify a set of leaders from middle management as internal allies for promoting integrity values and integrity risk management
organise integrity leadership training to support people in carrying out their functions as integrity leaders. The training could cover aspects of the government’s integrity standards, as well as developing skills of moral managers.
Include measures to facilitate society engagement in the development and implementation of education programmes on public integrity, for example by identifying a working group of key stakeholders, including representatives from the Ministry of Interior, the relevant integrity body, educators, and other interested parties, such as universities, religious groups, teachers’ unions, parent associations and/or student groups, and other civil society organisations.
Clarify the assigned actions to implementing authorities by explaining what is expected to be delivered.
Note
← 1. The term “nepotism” as used in the NACS refers to the employment and promotion for employment of relatives.