Hungary amended public procurement rules – fines now apply to economic operators

Hungary has passed Act XVIII of 2026 on the amendment of certain laws necessary to access European Union Funds, which amends Act CXLIII of 2015 on public procurement (PPA), including a key change for economic operators of all sectors that requires the Public Procurement Disputes Board (PPDB) to consider an economic operator’s conduct when assessing liability and fines for public procurement infringements. These amendments entered into force on 29 June 2026, while further changes will apply from 20 August 2026.

Other amendments address transparency and anti-corruption safeguards.

Why the amendment increases exposure for market participants

Under current rules, the PPDB must impose fines for serious infringements, including the unlawful omission of a public procurement procedure or breach of standstill rules. Fines can reach up to 15% of the estimated or contract value. The amendment addresses the rules on determining the necessity for and the amount of the PPDB-imposed fine. Furthermore, it mandates the PPDB to publish a notice on the principles of its fining practices and the standard fine amounts for specific infringements.

The legislative reasoning behind the amendment explains that the PPA did not previously contain an express rule on whether an infringement and sanction could be established against the contracting party on the economic operator side for breach of public procurement rules but did not exclude this possibility either.

The explanation also refers to the judgment in Case C-263/19, in which the CJEU ruled that EU law does not preclude establishing responsibility and imposing a fine on the successful tenderer or contracting party for an unlawful contract modification if proportionality is respected.

The key point is that proportionality must be applied when establishing responsibility, not only when setting the amount of the fine. The PPDB should examine which party was subject to the relevant obligation, whether the economic operator’s conduct was the type that the rule sought to prevent, and what information and conduct could have reasonably been expected from that operator.

Contrary to this, the reasoning states that a company entering into a high-value contract with a state or municipal body can clearly be expected to know that such a procurement requires a public procurement procedure. It would not be proportionate, however, to impose a sanction on the economic operator where a corporate-form contracting authority omitted a procurement procedure and was not listed in the official register of contracting authorities.

The reasoning distinguishes between contracting authorities, whose objective responsibility remains broadly justified, and economic operators, whose conduct should be assessed according to what was generally expected in the circumstances, which is a concept usually reserved to civil-law contracts.

Open questions on omission and fines

While the new concept of fines is generally welcome, key questions remain open in connection with the new omission-related provisions. As the present amendment does not sufficiently define what conduct is expected from market participants, further legislative or regulatory clarification is needed. 

On 29 June 2026, the PPDB published its notice on the principles of fining practices and the standard fine amounts for specific infringements. The principles in the notice reiterate what was already stated in the legislative reasoning regarding omission and refers to the PPDB’s formerly published notice on the case-law concerning fines. The PPDB expects the fine for unlawful omission of a public procurement procedure to be between 3% and 5% of the contract value, and a further 3% to 5% if the contract is deemed not void and/or that the original state of affairs cannot be restored. 

Until a consistent body of decisions develops, however, uncertainty will remain regarding the compliance actions a company must undertake before entering a contract with a public entity. These ranges of fines published by the PPDB improve predictability somewhat, but they are not binding and the PPDB can still disregard them in individual circumstances.

What is changing

Aside from the fines-related provisions, the package also introduced new rules on the following: 

• transparency and eligibility; 
• public access and monitoring; and 
• strengthening the role of the Integrity Authority. 

Furthermore, in line with the Hungarian government’s efforts concerning corruption, the amendments introduced several measures to fight corruption. These are notable because they move compliance expectations beyond the tender stage and into contract performance, for example, by allowing contracting authorities to include proportionate anti-corruption conditions linked to the subject matter of the contract.

The detailed rules in connection with the amendments of the PPA were introduced by Government Decree No. 105/2026. (VII.1.) in implementing decrees from 2 July 2026.

Practical implications and key takeaways

The newly introduced provisions for fines are a welcome attempt to regulate an existing enforcement practice in legislation, but their implications for public procurement compliance and the responsible use of public funds are yet to be fully known. While the PPDB’s notices and the legislative reasoning, although not the legislation, rely on CJEU Case C-263/19, this judgment does not directly require the new Hungarian fining rules. Instead, the judgment confirms that sanctions against an economic operator contracting as the successful tenderer may be compatible with EU law if proportionality is respected.

For assistance on navigating these new requirements, contact your CMS client partner or the CMS experts who contributed to this article.

This article was co-authored by Lili Benyovszki.