1. Bribery in the home (private to public)
1.1 The Legal Environment
Bribery of public officials is prohibited by Articles 293-294 and 298-300 of the Hungarian Criminal Code (Act C of 2012). In addition, relevant rules can be found in Act CIV of 2001 on Measures Applicable to Legal Entities Under Criminal Law.
1.2 What does bribery mean?
Bribery can be committed by individuals, but it can also be committed by public authorities. Furthermore, in some cases, legal entities may be prosecuted for bribery of public authorities.
(a) By a single person
This refers to anyone who tries to sway a public official in connection with his or her official acts by promising or offering a (unlawful) benefit to that person or another person in exchange for that person’s official acts (active corruption).
a) By a government official
Any public official who requests or accepts a (unlawful) advantage for himself or herself, or for a third party, in connection with his or her official actions, or accepts a promise of such an advantage, or is in league with the person requesting or accepting the advantage for himself or herself, or for a third party on his or her behest, is in league with the person requesting or accepting the advantage for himself or herself, or for a third party on his or her behest (passive corruption).
1.3 What does it mean to be a public official?
The term “public official” is defined broadly under the Hungarian Criminal Code, and it refers to anyone who performs public tasks. Not just public servants, but also members of parliament, people working for public authorities (if their employment is related to the authority’s public duty), notaries, and bailiffs are included in this category.
1.4 Bribery and its Consequences
If a voluntary disclosure describing the facts of the bribe is made before authorities discover the bribe, and the (unlawful) advantage is surrendered, the sentence may be lowered without limits (or removed in unusual cases) in most cases.
(a) In the case of the people involved
Those who bribe public authorities face harsher penalties under the Hungarian Criminal Code than individuals who bribe public authorities. If company executives fail to conduct sufficient oversight and this failure leads in public bribery, they may face criminal charges. The following are the penalties:
If a firm executive or anyone in an oversight capacity (e.g., a compliance officer) fails to conduct sufficient oversight in connection with the prevention of such crime, they could face up to two years in prison.
Corruption can result in a sentence of up to three years in prison if it is done by an executive officer or someone who has authority to supervise an economic operator.
If the benefit is intended to persuade a public official to violate his or her official duties, exceed his or her competence, or abuse his or her position of authority
For public officials who have been bribed
For failing to report a bribery that he was aware of, he may face up to three years in prison.
For the most basic situation, you might face up to five years in prison (see above as passive corruption)
If a high-ranking public official commits the crime, he or she faces up to eight years in prison if the public official violates his or her official duty, exceeds his or her competence, or abuses his or her position of authority to gain an unlawful advantage; also, if the crime is committed in criminal association or on a commercial scale.
If there are additional significant conditions, the sentence could be extended to ten years.
In addition to the aforementioned punishments, Hungarian courts have considerable discretion to permanently seize the assets of individual culprits under specific circumstances, regardless of whether the assets are tied to corrupt activity.
(b) For the business / legal entity (if the legal entity benefited from an intentional crime that was caused by its executive, employee or board member)
A fine of three times the required advantage is imposed (but at least HUF 500,000, or approximately EUR 1,625)
The legal entity is dissolved.
Certain acts are forbidden to be carried out (as determined by the court)
Denial of public contracts and subsidies from the state and the EU
1.5 Contributions from politics
Political contributions are governed under Act XXXIII of 1989, which governs the operation and financial management of political parties. Contributions to political parties are generally authorized only by natural persons and are prohibited by legal entities, with a few exceptions.
1.6 Hospitality expenses are subject to a limit (gifts, travel, meals, entertainment, among others)
Hospitality expenses are not subject to any quantitative or qualitative restrictions under the Criminal Code. The following two standards have been established by case law to determine when a hospitality expense may be constituted bribery:
(a) The hospitality given or received is not considered “socially acceptable.”
Whether a hospitality expense is bribery must be evaluated on a case-by-case basis, taking into account all of the facts and circumstances surrounding the case and applying the two criteria mentioned above. In addition, the Code of Ethics for Government Officials stipulates that an appropriate general gift cannot exceed 10% of the compensation base (about EUR 12), and that such a present may be accepted only in conjunction with the government official’s participation in an event.
In the pharmaceutical and life sciences industries, more rigorous hospitality spending limits may apply.
It’s worth noting that Act XXXVI of 2012 on the Hungarian Parliament stipulates that members of Parliament (MPs) may accept a gift or benefit of value equal to or less than the base amount of their monthly compensation if it’s relevant to their mission (approximately EUR 2,400).
This precise provision does not exempt MPs from the Hungarian Criminal Code’s anti-bribery provisions.
2. Bribery in the home (private to private)
2.1 Legal framework
Private bribery is governed by Articles 290-291, 295-296, and 298-300 of Act C of 2012 on the Hungarian Criminal Code, as well as Act CIV of 2001 on Criminal Law Measures Applicable to Legal Entities.
2.2 Bribery in the private sector
(a) General
Active corruption is defined as giving or promising an unlawful advantage to a person working for or on behalf of an economic operator, or to another person on such employee’s behalf, in order to induce him or her to break his or her duties.
Passive corruption is committed by anyone who requests or accepts an unlawful advantage in connection with activities performed for or on behalf of an economic operator, for himself or for a third party, or accepts a promise of such an advantage, or is in league with the person requesting or accepting the advantage for a third party on his or her behest.
b) During legal processes
Any person who promises or provides an unlawful advantage to another person for himself or for a third party in exchange for him or her not acting in accordance with his or her duty or in the exercise of his or her rights in court, arbitration, or other judicial proceedings, or proceedings of an international criminal court established under an act, or u
In a court, arbitration, or other judicial proceeding, or proceedings of an international criminal court established under an international convention promulgated by an act, or under a statutory resolution adopted by the United Nations Security Council, any person who requests or accepts an unlawful advantage to refrain from acting in accordance with his or her duty or in the exercise of his or her rights
2.3 Private bribery’s ramifications
In most cases, a voluntary disclosure, which includes revealing the circumstances and renouncing the (illegal) advantage before authorities become aware of the matter, may result in the punishment being lowered without limits (or dismissed in certain cases).
(a) In the case of the people involved
Individuals who have been corrupted
Basic commercial bribery carries a sentence of up to three years in prison.
Corruption committed against a person authorized to act individually on behalf of the economic operator, in criminal association, or on a commercial scale can result in a sentence of up to five years in prison.
If more serious circumstances exist, you might face up to eight years in prison.
For those who are tainted
For being corrupted, you might face up to three years in prison.
If a person empowered to act individually on behalf of the economic operator breaches his or her responsibility for the unlawful benefit, he or she faces up to five years in prison.
If done in a criminal ring or on a commercial scale, or if more serious circumstances exist, you could face up to ten years in prison.