Update to HUN31727.E of 27 April 1999 on the extent of organized economic crime; government actions to combat organized crime and corruption; state protection available to those threatened or victimized by organized crime (May 1999 - February 2001) [HUN36401.E]

A 2 February 2000 MTI News Agency article states:

The overall number of crimes reported to the authorities in Hungary last year was about the same as in 1998. The number of economic crimes and corruption cases, however, rose by 40-50 per cent as compared to a year ago, runs a report issued by the Chief Public Prosecutor's Office on Monday [31st January]. The rise in economic crimes was mainly related to the large number of currency counterfeiting cases, while alien smuggling accounted for the rise in crimes involving public corruption. The value of economic crimes committed stood at 30.9 bn forints (one dollar is approximately 250 forints), which was 14.5 percent up as compared to 1998.

For information on police corruption in Hungary and on government measures to combat it, please consult HUN35274.E of 8 September 2000.

A 1 January 2001 Jane's Intelligence Review article contains the following information on the extent of organized crime in Hungary and on the state response:

Organised crime remains a significant problem in Hungary, despite the success of the country's transition to democracy and market economics in the last 10 years. Criminal gangs in Hungary are engaged in a wide range of operations, and these have come under close scrutiny since the Hungarian government announced its desire to push for European Union (EU) membership in the next round of enlargement. The fear is that such a move would allow criminal gangs easy access to other European states and affect security across the continent....
Today, it is estimated that as many as 60% of Hungarian enterprises (including many of the leading financial institutions) may be controlled by organised crime.
Latest reports estimate that there are 160-180 criminal gangs operational in Hungary, many based in and around Budapest, which has been described as a 'mafia honeypot'. Many of these gangs have connections with criminals outside Hungary, particularly in Russia, Ukraine, Serbia and Bulgaria, who view Hungary as a strategic gateway into Europe. Recent intelligence has suggested that the Moscow-based 'Solntsevskaya' group has increased its operations in Budapest.
The infiltration of Hungary by gangs from outside Hungarian borders has sparked a violent restructuring of the criminal underworld during the last five years, as criminals fought to gain or retain spheres of influence. Over 150 explosions linked to gang warfare have taken place in and around Budapest, attacks most commonly involving hand grenades or car bombs. An attack on a suspected mob leader and police informant in July 1998 killed four and injured 20 civilians. A tailing off of such high-profile attacks during the last 18 months would seem to suggest that the Hungarian underworld is now more stable....
The relative success of the economic transition in Hungary, coupled with the secrecy that surrounds banking and financial transactions, has made Hungary a popular choice with criminal gangs wanting to launder their ill-gotten gains. Within the last two years Hungary has been named as a country suspected of involvement in two major money-laundering scams.
Allegedly connected to money-laundering scandals [is] one Ukrainian mafia leader, who leads his own 'red mafia' from his base in Budapest. He has achieved international notoriety for his alleged involvement in prostitution rings, smuggling of drugs, arms, nuclear materials, artwork and jewellery. He has invested in many seemingly 'legitimate' Hungarian businesses and, although his dealings have been investigated by the Hungarian authorities, no charges have been brought against him to date.
The increased visibility of organised crime caused by gang warfare, coupled with the desire of the Hungarian authorities to attract foreign investment and greater integration into European institutions, has prompted determined efforts to reduce crime levels in Hungary. The election of Viktor Orban's FIDESZ-Hungarian Civic Party in July 1998 reflected the anxiety felt by many Hungarians, as Prime Minister Orban made fighting organised crime a centrepiece of his government's programme.
Orban has frequently spoken of a 'war against organised crime' and has put before parliament a range of measures designed to prevent criminal operations and reduce existing crime levels.
The most controversial legislation passed, dubbed the 'anti-mafia laws' by the Hungarian press, increased police powers against suspected gangsters by allowing for the use of secret service methods of information gathering and surveillance techniques. These proposals were rejected as unconstitutional in February 1999 but the government succeeded in passing similar legislation early in 2000.
The government has also approved legislation designed to prevent money laundering. High levels of secrecy surrounding banking and financial transactions remain a problem, however. Of 2,000 reports of suspicious financial transactions made between 1995-99, only four cases resulted in prosecution.
The Orban government has also increased the levels of authority and the funding available to police involved in the fight against crime. On entering office, Orban pledged to increase investment in the police by US$539 million over a 10-year period.
In February 2000 a new police centre dedicated to fighting cross-border crime opened in Budapest, designed to facilitate co-operation and information sharing with police forces in other European countries.
Orban has promoted international co-operation against organised crime - Hungary has signed bilateral crime-fighting agreements with many European countries. The greatest emphasis, however, has been placed on partnership with the USA. Hungarian efforts to reduce crime have received praise from US officials, with Director Louis Freeh of the Federal Bureau of Investigation (FBI) declaring Hungary 'a model' in the fight against organised crime in Europe.
The founding of an International Law Enforcement Academy in Budapest in 1996 was a joint Hungarian-US initiative aimed at training East European police forces in crime-fighting techniques. FBI agents have also advised Hungarian officers in dealing with a number of criminal cases, even prompting rumours that an FBI office was to be set up in Budapest. This relationship has borne fruit in recent months, with two alleged mafia members from Hungary being arrested in Miami, Florida.
Efforts to curb organised crime in Hungary have met with considerable success. Levels of criminal activity remain high, however, and the relative quietude of the gangs in the aftermath of the gang violence does not mean that their operations have decreased (1 Jan. 2001).

No additional information on the extent of organized economic crime in Hungary or on government actions to combat organized crime and corruption, nor on the state protecion available to those threatened or victimized by organized crime, could be found among the sources consulted by the Research Directorate.

This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.


Jane's Intelligence Review [London]. 1 January 2001. Kelly Hignett. "Hungary Takes on the Mafia." (NEXIS)

MTI News Agency [Budapest, in English]. 31 January 2000. "Economic Crimes, Corruption Sharply Rise in 1999." (BBC Summary 2 Feb. 2000/NEXIS)

Additional Sources Consulted

Correspondence sent to two sources

IRB databases

Internet sites including:

American Bar Associaion - Central and Eastern European Law Initiative

European Institute for Crime Prevention and Control

Hokkaido University Slavic Research Centre

Hungarian Helsinki Committee

International Commission of Jurists

Lawyers Committee for Human Rights

Nathanson Centre for the Study of Organized Crime and Corruption

Transparency International

World News Connection