Hungarian law permits citizens to report frauds against the U.S. Government under the False Claims Act, or violations of the provisions of the Securities & Exchange Act, Foreign Corrupt Practice Act, or Commodities Exchange Act.
What disclosures are currently protected?
Hungary is one of a few nations in Europe that has stand-alone legislation on the protection of whistleblowers in both the private and public sector. This law is the Act CLXV of 2013 on Complaints and Public Interest Disclosures. Under this law, whistleblowers may make complaints of violations of individual rights (not already at issue in another proceeding) and, more importantly, disclosures of violations that affect a community, or society as a whole.
Under these definitions, disclosures protected under this law are very broad. However, protection for disclosures is limited to employment retaliation. Additionally, there is no overarching authority or whistleblower office to which such disclosures should be made and there are no reward provisions for successful whistleblowers in Hungary.
Importantly, another quirk of this law is if a whistleblower does choose to submit a complaint internally, the law requires corporate compliance officers to inform targets of whistleblower disclosures that they are the subject of a complaint, which naturally exposes the whistleblower to discovery and undermines the subsequent investigations into the reported misconduct.
Therefore, whistleblowers may be better off reporting to U.S. regulators, at least until the transposition of the Whistleblower Directive is complete.
Can Hungarian whistleblowers receive rewards?
There is no law in Hungary providing whistleblowers rewards, however, they may receive rewards through U.S. laws.
Recent updates and future legislative developments
Hungary is required to implement the requirements of the EU Directive on Whistleblowing into its national law. However, it has not yet announced that it has begun this process.
Can/should Hungarian whistleblowers report to U.S. officials?
No law in Hungary currently prohibits Hungarian citizens from reporting frauds against the U.S. government under the False Claims Act, or violations of provisions of other statutes including the Securities & Exchange Act, Foreign Corrupt Practice Act, or Commodities Exchange Act. Therefore, Hungarian whistleblowers can and should report relevant violations to U.S. officials under these laws.