European Commission launches three infringement proceedings against Hungary

October 19. 2023. – 11:47 AM



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The European Commission has launched infringement proceedings against Hungary in three areas.

– the body said in a statement on Wednesday, which was also sent to Telex.

Along with three other countries, Hungary is threatened with a penalty for non-compliance with EU rules on public procurement and concessions. The Commission has identified several cases where national legislation allows for the use of negotiated procedures without prior publication. Other identified issues address certain national rules, which allow the modification of contracts related to public tasks and services, impose limits to subcontracting or introduce direct discrimination in favour of certain products originating in the region where the contracting authority is established.

Hungary is one of eight member states where the Commission has found failure to transpose the EU's "proportionality tests" set out in the Proportionality Test Directive, i.e. these countries have kept in force "unduly restrictive national rules". Five other member states have already rectified similar situations, following the ECJ's previous letters of formal notice. The Commission identified a number of problems, such as the exclusion of rules originating with national parliaments or in professional associations or bodies from the scope of the proportionality test obligation.

The EU's quasi-government has also called on Hungary and six other Member States to fully transpose the Directive on procedural safeguards for children who are suspects or accused persons in criminal proceedings into national law, as these countries haven’t yet done so. This Directive aims to guarantee common minimum standards regarding the rights of children who are suspects or accused persons in criminal proceedings to ensure their right to a fair trial across the EU. The Commission also adds that all seven member states have failed to fulfill the requirement to include a reference to the Directive in or accompanying the adoption of transposing measures.

Okay, but what is an infringement procedure?

The purpose of infringement procedures, which cover different sectors and areas of policy, is to ensure that Member States apply EU law fully and correctly in the interests of citizens and businesses. The European Commission primarily seeks to resolve problems with the concerned Member States through dialogue, but if this is not successful, the Commission may refer the matter to the Court of Justice of the European Union to enforce EU law.

As can be seen from the above, the Commission does not specifically discuss suspected cases of non-compliance by country, so the specific cases deemed problematic are not known. However, in light of recent history, Porfolio believes that in Hungary’s case, non-compliance with EU rules on public procurement and concessions may concern the recent concessioning of waste treatment and motorways. In 2022, Transparency International Hungary submitted a notification to the European Commission, arguing that the Hungarian motorway concession is not compliant with EU law because it is in fact disguised as a public procurement, but is carried out without respecting public procurement rules and the inclusion of subcontractors is also contestable under competition law.

In the case of waste management, it was expected that the Commission might investigate the legality of the monopoly granted to MOL by the Hungarian government for a period of 35 years, as well as why the government had amended the legislation to make the task a public service.

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