It is indispensable for Hungary's renewal that corruption is recognized as a common enemy. In recent years, unpunished and systemic corruption and its toleration has had a major role in the development of the country's financial and economic situation, and in the degradation of everyday moral standards and trust in society. The government which came to power in May is committed to raising the level of trust in the state, and it will ensure responsible management of national assets and public funds, the exposure of corruption, and the prosecution of those found guilty of criminal malpractice.

In the Government's first six months there has been a strengthening of the conditions necessary for the fight against corruption in the areas of the legal system, public administration and the economy. In September Hungary joined the International Anti Corruption Academy (IACA), which was created under the auspices of the UN, Interpol, the European Anti-fraud Office (OLAF) and the Austrian State. This is the world's first educational institution devoted to combating corruption. The Institution trains specialists from all over the world in both government and non-government bodies (in the private sector, civil society, judges, prosecutors and police officials).

The justice system and public administration in the battle against corruption

The detection of crime related to corruption will improve noticeably in the near future, and in the interest of this the Government has strengthened the Department of Public Prosecution. The Government has secured further strengthening of the independence of the Department of Public Prosecution through statutory amendments, and has devoted significant public funds to the formation of an anti-corruption team within the Department. The Prosecutor's Department will receive billions of forints more in the 2011 budget, a portion of which the cabinet has earmarked for the operation of the anti-corruption action group. The Government has also expanded the scope of the Public Prosecutor's mandate, and in order to uncover criminal activity in the public sector it has also made it possible for prosecutors to use intelligence service surveillance techniques.

The Government has also taken major steps in accelerating the workings of the judiciary, so that offenders should not remain unpunished for years. This aim was promoted by the constitutional amendment which was passed in Parliament in the summer. The statute allows court secretaries to prosecute minor offences, which will effectively reduce the time taken to process cases in the courts. In order to improve the workings of the courts, the Government put before Parliament the so-called 'acceleration package' aimed at speeding up the judicial process, and in addition to this it increased 2011 spending on the judiciary by 3 billion forints compared to previous years. In addition to development of the new Penal Code, a comprehensive review of criminal procedure has been launched: the primary aim is the speeding up and simplification of processes, and preventing defendants or their counsels deliberately prolonging proceedings.

One of the first bills that the Government put before Parliament was the package of measures amending the laws necessary to safeguard responsible use of state assets. The new law imposes strict conditions on the management of state assets and ensures that income derived from the use of such assets must be reinvested in asset management, and not diverted to the central budget.

An important result of the transformation of public administration already under way is that new regulations can be used more effectively to fight any corruption that might occur. In September, public administration offices regained legal oversight of local government. Far stricter rules now apply to government officials and civil servants than had previously been in force.

The bill recently passed on certain law enforcement matters and the amendment of laws relating to them have expanded the scope of crime prevention and detection tasks defined in the law related to the police. This will also play a significant role in the prevention and detection of corruption in the law enforcement services. The Government has delegated this task to the National Protection Service, created on the basis of the Law Enforcement Agencies Protection Service. This body will carry out security checks and crime detection as defined in the government ruling.

The Government is also committed to providing adequate protection for whistle-blowers acting in the public interest: the Ministry of Public Administration and Justice is already examining how to prevent negative consequences being felt by those acting out of a sense of duty, and not in their own interest.

Prosecuting offenders, investigations, reducing opportunities for corruption

Following the formation of the current government, members of earlier elite power circles were started to be held to account, and the suspected irresponsible management of national were started to be investigated.

The Government has appointed an official responsible for the delivery of justice and for anti-corruption government tasks. The task of this official is to examine earlier abuses at state companies and the illegal disposal of public land. Thanks to the work of this official and to the Government Audit Office (KEHI), comprehensive reviews have been initiated, complaints have been filed and investigations have been launched. The following are some of these cases: the Sukoró casino project, the 'Dream Island' (Álomsziget) project, the Institute of National Health Reserve (EKI), HospInvest, the MVM Group (a Hungarian electricity supplier), the Wallis Group, Dataplex, Ferihegy Airport, the privatisation of Malév airline, and the Hungarian pavilion for the Shanghai World Expo. The Government has also launched wide-ranging investigations into the functioning of public foundations and organisations for the public good operating with public funds. This resulted in, for example, the exposing of irresponsible management and the amassing of nearly eight billion forints of debt at the Hungarian Motion Picture Public Foundation. Similarly, the Government has begun a review of so-called PPP projects using a combination of state and private capital, which have resulted in serious abuses in recent years, and which have frequently caused the state considerable losses.

In addition to saving money, there is also an anti-corruption effect gained from those government decisions which prevent the disreputable - though apparently legal - siphoning off of public funds (the taxing of multi-million forint severance packages in the public sphere and the radical reduction of paid administrative and supervisory committee members in state companies have been introduced).

Reducing the size of the black economy

With the radical reduction of corporate tax from 19% to 10%, the Government has taken a significant step towards eliminating incentives for market players to seek loopholes and evade taxes. Similarly, the Government has reduced unjustified administrative costs for Hungarian small and medium-sized enterprises which imposed burdens on employers and employees. Economically stimulatory measures such as these also have a significant effect in strengthening the legitimate economy.

Measures against corruption in public procurement

In order to fight corruption in public procurement - which is extremely high in Hungary - on 22 July Parliament amended the Statute on Procurement, in line with the Government's proposals.

The new regulations increase the period during which calls for tenders and other documentation can be retrospectively challenged, reduce the procedural fees related to such legal challenges, and expand the opportunity for preliminary settlement of disagreements in this period. The regulations describe the formal requirements for tenders, and prevent those calling for tenders increasing the complexity of these requirements. Facilitating electronic procurement will also aid the fight against corruption, in that it will make evident any retrospective amendments to procurement documentation, and any attempts to unfairly influence the outcome of tendering procedures. There will no longer be a regulation which up until now has demanded the invalidation of procurement processes in which only one valid tender is received. The amendment limits supplementary procedures to only the most necessary degree, and in every other instance allows them. The amendment limits invalidation due to tender guarantees to those cases in which the tender guarantee is not made available by the stated deadline, or not made available to the extent prescribed. Tenders which have been unbundled must be re-bundled after receipt, thus closing a loophole which some recipients of tenders have used to unethical ends. The opportunity to scrutinise public procurement documentation has been expanded, which is especially significant, because even at the tender opening stage it will be possible to see the documentation relating to the tender price and other quantitative information related to the final decision.