Analysis of the bill on the Asset Recovery Office

For weeks, public attention has been focused on government communication concerning the establishment of a new anti-corruption office, which may be able, with particularly strong powers, to recover state assets lost through corrupt processes. After the limited concrete information previously available, the draft legislation on the National Asset Recovery and Protection Office was published on 22 June 2026. It is important to emphasise that for the time being this is only a draft, and many of its points may still change.

This draft legislation clearly deserves analysis from the defence perspective, because the establishment of the new organisation is expected to fundamentally influence the practice of criminal cases in the coming years, and the possible strong powers appearing on the authorities’ side may quickly lead to the erosion of defendants’ right of defence and procedural safeguards.

The bill on the NVVH envisages the creation of a new public-asset protection institution with broad powers. Its stated purpose is to ensure that earlier losses of public assets, unlawful asset transfers, abuses involving public funds and unlawful enrichment are uncovered within a more unified, effective and institutionalised framework.

The significance of the proposal lies in the fact that it would not merely create a new supervisory body, but an office that would connect the public-asset protection examination function, in certain cases, with a criminal-procedure and public-prosecution role. This means that in some cases the Office could not only identify risks and abuses affecting public assets, but — if the statutory conditions are met — could also become a decisive actor in criminal proceedings.

The basic concept of the bill

The starting point of the bill is that harm to public assets is not merely a financial issue, but also a significant problem from the perspective of public trust and rule-of-law functioning. Misuse of public assets may adversely affect not only the state or municipalities, but also citizens indirectly, because the proper use of public funds and public assets is a matter of public interest.

The bill therefore defines the concept of public assets broadly. It would include not only things, assets and financial instruments currently owned by the state or municipalities, but also those that were formerly in such ownership or have been transferred out of it. The concept would also extend to asset-value rights and participations currently or formerly due to the state or a municipality, as well as, within a defined scope, assets connected to the National Bank of Hungary and organisations under its influence.

This broad definition is important because the Office’s room for examination would be correspondingly wide. Examinations could concern not only a specific contract or payment, but also money movements, contractual chains, beneficial-ownership links, public procurement, concessions, subsidies, European Union funds, state- or municipality-owned companies and other asset-related processes.

Two interconnected operational branches

One of the most important features of the bill is that the Office would operate through two interconnected branches.

The first is the public-asset protection examination branch. Its essence is that the Office could examine matters affecting public assets even without suspicion of a criminal offence. The examination could be initiated ex officio, on the basis of risk assessment, upon a report, complaint or notification by another body. This branch therefore does not start from the premise that a criminal case already exists, but from the fact that a risk, irregularity or asset process connected to the use of public assets needs to be clarified.

The second is the criminal-procedure branch. If a suspicion of a criminal offence is established during a public-asset protection examination and the matter falls within the Office’s criminal-procedure competence, the NVVH could proceed in its own competence. In that case, the Office would not simply be a complainant or an external initiator, but could step into the place of the prosecution service in the criminal proceedings. In practice, this would mean that in a case taken into its own competence, the Office would exercise prosecutorial rights, could investigate itself or have investigations carried out, supervise and direct the investigation, bring charges and then represent the prosecution before the court.

An important safeguard and structural point is that this would not mean parallel prosecutorial competence. If the NVVH took over a case before indictment, the prosecutorial powers in that proceeding would be transferred to the NVVH. According to the executive summary, the general prosecution organisation could not take back a case that had been taken into the Office’s own competence in this way.

Risk-based case selection and public-asset protection examination

The Office would carry out public-asset protection risk-assessment activity. Its purpose would be to identify individual and systemic risks, institutional deficiencies and possible solutions connected to the use and management of public assets. Under the bill, the Office would publish the methodology it applies on its website, which may serve as one safeguard of objective and pre-known case selection.

The public-asset protection examination could extend to central and local-government budget management, the use of appropriations, state-budget or European Union subsidies, free asset transfers, the management of state and local-government assets, and asset management by publicly owned companies. The NVVH could examine not only state actors: if a beneficiary received a state-budget or EU subsidy, or a free asset transfer, the Office could even examine the beneficiary’s entire economic activity.

The toolbox for examination would also be broad. The Office could:

• obtain data and documents
• inspect files and make copies
• request statements
• conduct on-site examinations
• perform electronic data preservation
• use registry data and data connections, connect and analyse data
• and involve experts or other state bodies

At the same time, the bill also contains safeguard-type limitations. The examination would have to be ordered in writing, and the ordering document would have to specify the legal basis, subject, purpose and main directions of the examination. Prior notification of the person concerned could be omitted if it would jeopardise the effectiveness of the examination, but information would have to be provided no later than at the first examination act requiring that person’s cooperation. The person concerned could also object to certain examination acts.

Fine and duty to cooperate

The enforcement of the Office’s examination powers would also be supported by the possibility of imposing fines. A person who intentionally breaches their duty to provide data, allow file inspection, provide information, tolerate an on-site examination or otherwise cooperate could be fined.

The upper limit of the fine would be significant: for natural persons it could range from HUF 50,000 to HUF 50 million, and for legal persons or organisations without legal personality from HUF 500,000 to as much as HUF 5 billion. This regulatory solution clearly aims to ensure that the fine has real deterrent force even against economically significant actors.

From a defence and rule-of-law perspective, however, it is particularly important that in proceedings aimed at imposing a fine, the legality, necessity and proportionality of the request or examination act underlying the duty to cooperate would also have to be examined. This is an important safeguard, because protecting public assets is a legitimate aim, but restrictions on the rights of affected persons may only occur in a lawful, necessary and proportionate manner.

Criminal-procedure significance

The criminal-procedure part of the bill is particularly significant. The Office could proceed in relation to a narrower range of offences defined in the Act on Criminal Procedure. This means that its public-asset protection examination competence would be broader than its criminal-procedure competence. Not every public-asset management problem would therefore automatically become a criminal case.

If, however, the matter moves onto a criminal-law track, the NVVH could perform a full public-prosecutor role from the preparatory procedure to representation of the charge. It could conduct a preparatory procedure, supervise the lawfulness of detection, direct the investigation, investigate itself, bring charges and represent the prosecution before the court. According to the executive summary, before indictment the Office could also take into its own competence another already pending case if this would more effectively ensure the recovery of assets derived from public assets and obtained in connection with a criminal offence, and the enforcement of the state’s punitive claim.

This solution could strengthen an asset-focused approach to criminal proceedings. The task of the Office would not only be to secure accountability, but also to identify and secure assets derived from crime, benefits subject to confiscation and related instruments, and to lay the groundwork for later asset deprivation. The final decision on asset deprivation would, however, remain with the court.

Asset protection outside criminal proceedings as well

The significance of the bill also lies in the fact that action by the Office could have legal consequences even where no suspicion of a criminal offence arises. In the branch outside criminal proceedings, the NVVH could prepare a report, initiate authority or court proceedings, bring a public-interest action, exercise client rights in administrative authority proceedings, and take legality action in the interest of protecting public assets.

This is particularly important in cases where harm to public assets, an irregular decision-making process or an economic risk can be established, but the conditions for criminal liability are not met, or the case does not fall within the Office’s criminal-procedure competence. Under the logic of the bill, a public-asset protection examination could have meaningful legal consequences in such cases as well.

Organisational and personal safeguards

The NVVH would be a central budgetary body named in the Fundamental Law, led by officials elected by Parliament and having the legal status of a body directing a budgetary chapter. It would have its own budgetary chapter, would not be subject to external instructions in the performance of its tasks, and would submit an annual public report on its operation to Parliament.

The Office would be led by a president, assisted by four vice-presidents: the vice-president for public finances, the vice-president for investigations, the vice-president responsible for indictment and the appellate vice-president. The investigative, indictment and appellate vice-presidents would be prosecutors in prosecutorial service. This model seeks to ensure that public-finance, asset-tracing and criminal-procedure expertise are all present within the Office. At the same time, the prosecutorial service status of the vice-presidents raises an interesting question, because as prosecutors they are, in principle, part of the prosecutorial hierarchy and, by virtue of their oath, could be instructed by superior prosecutors. The legislator presumably intends to break through this chain of instructions in the interest of the NVVH’s independence, while still maintaining their prosecutorial service status.

The bill attaches detailed rules to the selection, conflicts of interest, asset declarations and immunity of the leaders. The president and vice-presidents would be elected by Parliament, and re-election would be excluded. Distance from political influence is served by the rule that certain political offices held during the six years preceding nomination would exclude election.

A particularly sensitive point: strong powers and rule-of-law safeguards

The bill undoubtedly enables strong state action. This is a justifiable aim from the perspective of protecting public assets, because uncovering abuses involving public funds and public assets and recovering assets is an important public interest.

At the same time, precisely because of the broad powers of examination, data acquisition, fining and criminal procedure, it is particularly important that the NVVH’s operation in practice meet the requirements of legality, impartiality, proportionality, data security and the right of defence. Access to protected data, electronic data preservation, on-site examinations, enforcement of the duty to cooperate and taking criminal proceedings into the Office’s own competence are all tools that can be applied in a rule-of-law manner only with clear safeguards.

From the defence perspective, it is especially important that the rights of accused persons, access to case files, the right to file motions, legal remedies, the protection of defence documents and the integrity of attorney-client privilege be ensured at every stage of the proceedings. Effective asset recovery must not stand opposed to the requirement of a fair trial; both must prevail at the same time.

Entry into force and practical operation

According to the executive summary, the regulation would start in two stages. As a general rule, the status act would enter into force on the day following its promulgation, while the provisions amending the Act on Criminal Procedure would enter into force on the 61st day following promulgation. The first president and the four vice-presidents would have to be elected within thirty days of entry into force.

It is important, however, that legal entry into force and the build-up of actual operational capacity are not the same. Establishing the Office would require the election of leaders, adoption of organisational and operational rules, the creation of the budgetary and security background, recruitment of prosecutorial, law-enforcement, tax and customs authority and expert staff, and the development of electronic data connections and case-management systems. In practice, the Office could therefore be expected to reach full functionality gradually.