Hungary - internal market

Short-term priorities:

• certification and standardisation (further alignment of legislative measures);
• State aid (adoption of a legislative framework, definition of the role and powers of the monitoring authority, coercive measures);
• greater transparency through improvements in the list of State aid;
• application of intellectual property rights;
• further alignment of company law;
• complete alignment of the legislation on procurement contracts to cover the local community services sector in full.

Assessment (October 1999)

There has been progress in implementing these priorities, particularly in the fields of company law and standardisation. In the intellectual property rights sector, progress has been made on copyright. Hungary should, however, persevere with these efforts, particularly concerning pharmaceutical products, in order to offer protection through retroactive patents and to change current practices to allow companies manufacturing generic medicines to carry out development work before patents expire.

Progress has also been made in the State aid sector, where the role of the authority monitoring such aid has been strengthened, ex ante monitoring rules have been drawn up and the annual reports on State aid have been improved so that they now meet the transparency criteria.

In the public contracts sector, Hungary has continued to bring its legislation in line with Community law, having excluded projects co-financed by the European Union from the national preference clause. It does, however, need to press on with the alignment of coercive measures and appeals procedures, particularly in the local community services sector.

Assessment (November 2000)

Hungary has made progress in bringing its legislation in line with Community law. However, no progress has been seen in market surveillance, nor in conformity assessment structures.

As regards the transparency of State aid, progress has been made thanks to the obligation of prior notification for some aid. The State aid inventory is still incomplete.

As for telecommunications, the Regulatory Authority has not gained any further independence or powers. The Government has prepared laws on radio and television broadcasting, but they have not been approved by Parliament.

Some reduced VAT rates have been abolished, but the rate of 12% remains in use for social reasons for certain goods and services. The principle of a code of good practice regarding enterprise taxation has been accepted. A new law on customs has prepared the way for alignment with Community law. The alignment of the Common Customs Tariff and of the Combined Nomenclature have progressed.

Assessment (November 2001)

Market surveillance and conformity assessment have been strengthened. Efforts have been made to improve the transparency of State aid, but the inventory is incomplete. The independence and powers of the regulatory authority in the telecommunications sector are to be strengthened. Good progress is being made with VAT harmonisation, but the list of products benefiting from reduced rates needs to be re-examined and the zero rating system repealed.

Assessment (November 2003)

Please refer to the fact sheets on the adoption of the Community acquis.

Medium-term priorities:

• continuation of the process of harmonising and developing the organisations responsible for assessing compliance and setting up a system for monitoring the market, technical legislation on industrial products;
• further alignment of the law on competition, particularly as regards State aid;
• strengthening of the body monitoring State aid;
• effective application of the law on competition;
• alignment of the provisions relating to the liberalisation of capital, financial services, audiovisual policy and consumer protection;
• promotion of business development (particularly SMEs);
• alignment of telecommunications, consumer protection and the internal energy market with Community legislation.

Assessment (October 1999)

Progress has been made in assessing compliance, monitoring the market and adopting EN standards and technical legislation on industrial products. In the field of State aid, new legislation has been adopted in which the responsibilities of the monitoring authority are clearly defined. The aid programmes have been improved and made more transparent. The coercive measures available to the office in charge of competition can be considered as satisfactory; the powers of the authority responsible for monitoring State aid require further strengthening in order for this body to carry out its duties effectively. Significant progress was made in 1998 and through into 1999 in the liberalisation of capital movements, consumer protection, telecommunications and energy. SMEs have continued to benefit from support measures, through the implementation of a new policy and the granting of adequate budgetary resources.

Assessment (November 2000)

No progress has been made in this area.

Assessment (November 2001)

In the public utilities sector, there was progress in application and appeals procedures. Good progress is being made on aligning the free movement of goods, whilst the process is not yet complete for the recognition of diplomas. Practically all restrictions on the free movement of capital have been removed. The laws on competition and State aid still have to be effectively implemented. Progress is being made on the alignment of customs arrangements and simplified procedures are in force. The administrative and operational capabilities of the customs guard have been strengthened. The computerisation of customs formalities is continuing, but further efforts still need to be made regarding free zones.

Assessment (November 2003)

Please refer to the fact sheets on the adoption of the Community acquis.

Following the signing of the Accession Treaty on 16 April 2003, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia acceded to the European Union on 1 May 2004.

REFERENCES

Decision 99/850/EC of 6 December 1999Official Journal L 335, 28.12.1999

Commission opinion COM(97) 2001 finalNot published in the Official Journal

Report from the Commission COM(98) 700 finalNot published in the Official Journal

Report from the Commission COM(1999) 505 finalNot published in the Official Journal

Report from the Commission COM(2000) 705 finalNot published in the Official Journal

Report from the Commission COM(2001) 700 final - SEC(2001) 1748Not published in the Official Journal

Commission Report COM(2003) 675 final - SEC(2003) 1205Not published in the Official Journal

Treaty of Accession to the European Union [Official Journal L 236, 23.09.2003]

Last updated: 19.11.2004