Hungary’s Integrity Authority launches public procurement exclusion registry with new self-cleaning rules and expanded UBO scrutiny for public procurement

Hungary has adopted important amendments to Act CXLIII of 2015 on Public Procurements (PPA), which introduce a public registry of economic operators excluded from public procurements due to criminal offences and expand the scope of such exclusion grounds to cover ultimate beneficial owners (UBOs). 

These changes, originally enacted through Act XXVII of 2022 on the Control of the Use of European Union Budgetary Funds (Eufetv) and Act XLIV of 2022, also establish a new self-cleaning regime specific to the registry and operated by the Integrity Authority (Integritás Hatóság). In harmony with this, Government Decree No. 321/2015 (X. 30) slightly amended the certification method of the related exclusion grounds.

Key amendments 

The main changes to the PPA’s exclusion grounds include the following:

Section 62 (1) a) – Criminal conviction-based exclusion

Under the amended Section 62 (1) a) of the PPA, an economic operator is excluded from public procurements if it has committed any of the listed criminal offences (e.g. bribery, budget fraud, money laundering, terrorism, cartel in public procurement or concession procedure, etc.) established in a final court decision (jogerős ügydöntő határozat). This broadens the previous requirement of a “convicting judgment” (jogerős ítélet) to any final adjudicatory court decision. 

The exclusion applies until the date determined by the Integrity Authority, which cannot be longer than four years from the date the court decision becomes final or failing such a determination, four years from the date the decision becomes final, provided that they have not been exempted from the disadvantages associated with a criminal record earlier. 

The previous term of the exclusion was generally five years.

Section 62 (2) – Extension to UBOs

The amended Section 62 (2) of the PPA provides that an economic operator is excluded from public procurements if its executive officer, supervisory board member, managing director, or its UBO (as defined in Section 3 (38) of Act LIII of 2017 on the Prevention and Combating of Money Laundering and Terrorist Financing or AML Act) is or has been a person against whom a final court decision has been rendered for any Section 62 (1) a) criminal offence. 

The same new exclusion period applies as detailed above.

The UBO definition of the AML Act has also been changed, broadening the definition of persons who may qualify as UBOs. For a summary on this topic, refer to this Legal Update.

Integrity Authority’s exclusion registry

The Integrity Authority maintains a registry of economic operators excluded from public procurement procedures due to a final court decision rendered against either the economic operator or its executive officer, supervisory board member, managing director or UBO due to the commission of a criminal offence listed in Section 62 (1) a) aa)–ag) of the PPA.  

The registry is publicly accessible through the Electronic Public Procurement System (EKR) and contracting authorities are required to use it to examine the related exclusion grounds. Nonetheless, notarized declaration by bidders regarding the absence of these exclusion grounds still remains necessary.

New self-cleaning rules specific to the registry

The amendments also introduce a dedicated self-cleaning (öntisztázás) mechanism administered by the Integrity Authority:

• During the enlistment procedure: Prior to enlisting an economic operator in the registry, the Integrity Authority notifies the economic operator and provides eight days to submit observations and documentary evidence of its reliability measures.
• After enlistment: An economic operator already listed in the registry may submit a self-cleaning application at any time during the period of its exclusion.

Conditions for successful self-cleaning

All of the following conditions must be cumulatively satisfied:

• the economic operator has compensated the damage caused by the offence (to the extent accepted by the injured party) or has undertaken a commitment to do so within a specified deadline;
• the economic operator has actively cooperated with the competent authorities and comprehensively clarified the facts and circumstances of the case; and
• the economic operator has adopted technical, organisational and personnel measures suitable for preventing further criminal offences.

The burden of proof lies with the economic operator, which must present its measures in detail, justify their adequacy and support the measures with appropriate documentation.

Consequences of successful self-cleaning

If the Integrity Authority determines that the self-cleaning measures sufficiently demonstrate the economic operator’s restored reliability, it may decide either not to enlist the economic operator in the first place or, if already enlisted, to remove it from the registry. The Integrity Authority’s self-cleaning decision is binding on contracting authorities, which may not reassess the economic operator’s reliability.

This new self-cleaning regime operates alongside the existing general self-cleaning mechanism administered by the Public Procurement Authority (Közbeszerzési Hatóság).

Key takeaways for economic operators

These amendments signal a fundamental shift toward transparency and accountability in Hungarian public procurement, driven in part by Hungary’s EU fund-access commitments. 

Companies should review their ownership chains and the backgrounds of all persons qualifying as UBOs now and in the past four years. Should this examination reveal that a company falls under the above exclusion grounds, preparations should be made for the new self-cleaning process. 

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

Hungary's legal, tax and regulatory landscape continues to evolve. Stay informed with timely updates and expert analysis from our dedicated hub, Hungary Forward: Hungary Forward | CMS Hungary 

This article was co-authored by Lili Benyovszki.