Budapest, Hungary – In a recent report evaluating the implementation of its Anti-Bribery Convention, the Organisation for Economic Cooperation and Development (OECD) has expressed its concerns over the fact that Hungary “has not commenced any foreign bribery investigations or prosecutions in over nine years”.
In its report, The OECD Working Group on Bribery claims that the companies operating in the country have significant exposure to export-related risks of the bribery of foreign public officials. This includes foreign subsidiaries of multinational enterprises (MNEs) that use Hungary as a manufacturing base and re-export goods to other markets.
To avoid Hungary becoming a safe harbour for MNEs with subsidiaries in Hungary that commit bribery abroad, the OECD recommends that “the authorities must overcome their reluctance to enforce relevant criminal legal provisions and assign responsibility to detect and investigate such bribery”.
The report nevertheless highlights the fact that Hungary is in a transitional phase, having recently initiated important reforms that could impact on foreign bribery enforcement, such as a settlement procedure, a gradual system for encouraging confessions, and new covert investigative techniques. In addition, it points out that Hungary has successfully implemented a recommendation to compile statistics on investigative measures and reasons for discontinuing any foreign bribery investigations, and the Hungarian Export Promotion Agency has delivered a substantial number of trainings and courses to small and medium-sized enterprises.
The OECD’s report also notes positively that the Hungarian authorities welcomed insights from the Working Group on how to ensure that these reforms translate into more effective implementation of the Convention.
The OECD Anti-Bribery Convention establishes standards to criminalise bribery of foreign public officials in international business transactions. Monitoring of implementation and enforcement of the OECD Anti-Bribery Convention takes places in successive phases through a rigorous peer-review monitoring system.
You can read the full report here.