Hungary launches new era in management of assets in criminal proceedings by amending rules governing seizure and freezing orders

On 1 July 2026 in Hungary, an amendment to Act XC of 2017 on Criminal Proceedings, which reshapes the system of coercive measures affecting property in criminal proceedings, went into effect.

The primary objective of the amendment is to implement EU Directive 2024/1260 on asset recovery and confiscation, but the reform extends beyond mere compliance with EU law. Through this amendment, the Hungarian legislator has reconsidered both the role of seizure and freezing orders in criminal proceedings and the manner assets subject to such measures should be managed.

The fundamental shift in approach underlying the amendment is that seized or frozen assets are no longer regarded merely as objects to be safeguarded, but as items of economic value whose preservation constitutes an independent objective throughout the course of the proceedings.

In line with this objective, the amendment emphasises the institutionalisation of asset management, the prevention and mitigation of depreciation, and the continuous monitoring and review of the purposes underlying the application of coercive measures.

Main objectives of the new regulatory framework

The amendment is built around three fundamental objectives.

First, it seeks to preserve the value of assets that are subject to coercive measures. The legislator proceeded from the premise that, over the course of criminal proceedings, seized or frozen assets may suffer significant depreciation, which may ultimately harm the interests of both the Hungarian state and the persons concerned. As a result, the amendments place greater emphasis on active asset management that takes economic considerations into account.

Second, the amendment establishes a more transparent and coherent framework for determining, documenting and reviewing the purposes of seizure and freezing orders. The continued existence of such measures can no longer be regarded as automatic. Their necessity must be continuously assessed and, where appropriate, reviewed throughout the proceedings.

Third, the amendment introduces a national unified registry concerning the management of criminal assets. The purpose of this registry is to improve the flow of information and to enhance the efficiency of asset management.

Restructuring the purposes of seizure

One of the significant innovations of the amendment is the precise determination of the purpose system governing seizure. 

Section 308 of the Act on Criminal Proceedings now expressly provides that seizure may only be ordered for the purpose of the effective conduct of evidentiary proceedings, facilitating confiscation, or securing asset confiscation. Although these purposes were already discernible in the previous regulation, they have now been given explicit standalone recognition. 

The practical significance of the amendment is that the decision ordering seizure must in every case specify the concrete purpose of the coercive measure. If the purpose of the seizure changes during the proceedings, this must be documented. If the purpose ceases to exist, the seizure must be terminated. 

The amendment reinforces the requirements of necessity and proportionality and prevents seizure from remaining in effect for the entire duration of the criminal proceedings without a substantive review of its continued justification. 

New conceptual foundations of freezing orders

The amendment has also transformed the regulation governing freezing orders.

The previous regulation centred on whether there was a real risk that the execution of asset confiscation or the satisfaction of a civil claim would be frustrated. The new regulation, by contrast, adopts a purpose-based approach, defining the purpose of a freezing order as securing the object of the freezing order for the purpose of asset confiscation or the satisfaction of a civil claim. 

The significance of the change is not so much in an alteration of the range of interests being protected, but rather that the purpose-system of the freezing order is now built on the same logical foundation as the seizure, thereby unifying the purpose-linked documentation of the two coercive measures. This is supported by the fact that the legislator has also regulated the continuous review of the justification for both seizure and freezing orders in a single provision applicable to both institutions.

The amendments make the documentation, monitoring and review of these two asset-related coercive measures more coherent and consistent.

Introduction of active asset management in criminal proceedings

The amendment’s most significant innovation is the creation of an active asset management regime covering assets affected by both seizure and freezing orders.

According to the legislative explanation attached to statutory provisions, the management of seized and frozen assets is intended not merely to safeguard such assets but also to preserve their economic value. To this end, the reform introduces the concept of the criminal asset management body, a designated organisational unit of the court, the public prosecutor's office, or the investigating authority that participates in the management of assets.

During the management of the assets, courts, prosecutors, investigating authorities and criminal asset management bodies are required to act in accordance with the principles of prudent management. An individual assessment of the assets must be conducted to lay the groundwork for decisions that help prevent depreciation and reduce the costs of asset management.

This approach is a departure from the previous system, which focused on the physical safekeeping of criminal assets and placed less emphasis on preserving their economic value. 

Security deposit as a new legal instrument

From a business perspective, an important innovation is the introduction of security deposits.

Regarding assets that may be managed as economic assets, the amendments make it possible to execute a seizure or freezing order in such a way that the asset remains in the possession of the affected person, subject to the provision of adequate security in return.

The significance of this will be apparent in the case of business entities since the complete withdrawal of a tool or piece of equipment essential to a business's operations from daily use will bring economic consequences. The security deposit creates the possibility of securing the purpose served by the seizure or freezing order while allowing the asset to continue to participate in the economic activity of the affected business. 

Enhanced role of redemption within the new asset management framework

The growing importance of active asset management is also reflected in the way redemption has been incorporated into the new regulatory framework. Although redemption is not entirely new in Hungarian criminal proceedings, the amendment integrates it into the unified system governing the management of criminal assets and treats it as an asset-management tool. 

In the amendment, redemption becomes, alongside the security deposit and sale, a tool that can help preserve the value of assets and reduce the costs of asset management.

In essence, redemption allows the monetary value of a seized or frozen asset to replace the asset itself, under certain conditions. This makes it possible to secure the objectives of the proceedings without keeping the asset under the coercive measure for an extended period.

Modernisation of the rules on sale

The amendment has also reshaped the rules governing the sale of assets. 

The most important innovation is the creation of the possibility of a consensual, asset-management-oriented sale of criminal assets. This allows the person with a pecuniary interest and the acting authority to sell an asset even in cases where the law does not require its forced sale. 

The rationale is the recognition that the most effective means of preserving the value of an asset is not its continued physical retention but rather the preservation of the proceeds generated from its sale.

Key takeaways

The amendments that entered into force on 1 July 2026 are more than the modification of technical rules governing seizure and freezing orders. The legislator has introduced a new approach to the treatment of assets involved in criminal proceedings, shifting the focus from passive preservation to active, value-oriented asset management.

Taken together, the purpose-based regulatory model, the introduction of the security deposit, the possibility of consensual asset disposal and the establishment of a unified registry indicate that the management of criminal assets may evolve into a distinct area of professional expertise within criminal proceedings. 

The practical importance of these reforms will likely extend beyond the immediate participants in criminal proceedings and impact a broad range of actors within the business community.

For further information on the recent amendments to the Hungarian Act on Criminal Proceedings, contact your CMS client partner or the CMS experts who contributed to this article.

Hungary’s legal, tax and regulatory landscape is evolving rapidly following the change of government. Stay informed with timely updates and expert analysis from our dedicated hub, Hungary Forward: Hungary Forward | CMS Hungary

This article was co-authored by Belián Ferenc Czellér.