Hungary’s new National Asset Recovery and Protection Office to gain sweeping powers to oversee public assets and procurements

Hungary has issued a legislative proposal for public consultation that reflects the government’s new commitment to uncover misuse of public assets and centralise enforcement in a single institution. 

The proposal establishes the National Asset Recovery and Protection Office (NVVH), which is a newly established autonomous authority accountable only to parliament that would have two principal functions: broad public asset protection investigations; and full prosecutorial authority over criminal offences relating to public authority and public asset management, effectively replacing the prosecution service in those cases.

Public asset protection investigations to get wide-reaching scope

The NVVH's non-criminal investigative arm would cover central and local government budgets, EU-funded projects, state-owned enterprises, public procurement, concessions and public-task financing. Where an entity receives budgetary or EU funding, the NVVH may investigate its entire business operations (not just the subsidised activity) and may examine full contractual chains, including subcontractors, service providers, concession holders and any party involved in performing a state-funded contract.

The NVVH can conduct public asset protection investigations on its own initiative, based on its own risk assessment activities or on a report, a complaint, or referral from another authority.

During the public asset protection investigation, the NVVH can, for the purpose of clarifying the facts, request data, documents, electronic files, and registry data, inspect documents and make copies, request clarification of certain information, conduct on-site inspections, copy electronic documents, data files, contact other authorities, obtain data from public records, link and analyse data lawfully available to the NVVH, and engage experts or other professional collaborators for further clarification. 

All persons and bodies managing public assets are subject to a broad cooperation duty, including disclosure of business, bank and tax secrets. Only defence-related documents, attorney-client privilege, and a few limited cases are exempt from this obligation. Intentional breaches may result in administrative fines of up to HUF 50 million for natural persons and HUF 5 billion for legal entities.

Based on the findings of the investigation, the NVVH can prepare a report or close the investigation without further action; or it can initiate proceedings of another authority, supervisory body or a court. In certain cases involving the audit of public funds and EU resources, the competent authority is required to act ex officio when receiving the NVVH request.

The NVVH also gains the right to bring public-interest civil claims to eliminate harm caused to the public interest, which means it may bring an action to establish the contract’s nullity or an action to apply the legal consequences of nullity.

A provision of practical significance introduces a 75% public procurement revenue threshold. Where an economic operator and its affiliates derived at least 75% of their combined net revenue from public procurement or concession procedures in any closed tax year within five years prior to the entry into force of the future legislation, the National Tax and Customs Authority must notify the NVVH, which then opens an ex officio investigation. If that investigation reveals a risk of further harm to public assets, the NVVH may place the operator under state supervision. Under such supervision, the NVVH's Vice-President for Financial Investigations may countersign the entity's financial commitments, exclusively decide matters within the competence of its supreme body, dismiss and replace its officers, and terminate the entity's financial contracts with immediate effect.

Criminal branch – prosecutorial powers

Where an investigation reveals a criminal offence within the NVVH's jurisdiction, the NVVH may assume the case and exercise full prosecutorial powers from preliminary proceedings through to indictment and trial representation. This replaces the general prosecution service, which may not reclaim the case.

Given these powers, the NVVH will also function as a “specialised prosecutorial office” in matters within its jurisdiction.

Enactment and next steps

If adopted, the law would follow a two-stage entry into force. The institutional and budgetary framework would take effect the day after promulgation while the criminal procedural powers would apply from the 61st day. The new government expects the NVVH to begin operations in early fall 2026.

The proposal is relevant to companies active in public procurement supply chains, recipients of state or EU funding, state-owned enterprises, concession holders, and their subcontractors and affiliates. Those near the 75% threshold should assess their revenue composition without delay while funding recipients should review how the NVVH's power to investigate their operations may affect compliance and internal governance.

For information and assistance assessing your exposure to the proposed regime, contact your CMS client partner or the CMS experts who contributed to this article. For ongoing insights into Hungary's evolving legal, regulatory and tax landscape, visit our Hungary Forward hub.

This article was co-authored by Klaudia Székely, Lili Kovács and Gábor Ratkovics.