Hungarian National Bank Imposes Fines on Takarékbank and Raiffeisen Bank for AML Compliance Failures at Partner Currency Exchanges
The Hungarian National Bank (MNB) has fined local banks Takarékbank and Raiffeisen Bank for their partner currency exchanges’ failure to adhere to anti-money laundering (AML) regulations.
Identified Non-Compliance with Local AML Rules
The MNB conducted a thematic review of currency exchange activities and identified non-compliance with local AML rules at five partner currency exchanges. The central bank levied the following penalties:
- HUF108.6m (£250,000) against the banks
Holding Banks Accountable for Affiliated Agents
The examination focused on currency exchange activities, but the MNB held the banks accountable for the AML shortcomings of their affiliated agents. During the review, currency exchanges were found to have repeatedly disregarded AML regulations, resulting in either tardy or omitted reports of suspected money laundering transactions.
- Currency exchanges failed to gather essential information from high-risk clients as required by law
- The MNB discovered inconsistencies in the recording of decisions made during the screening process
Legislative Requirements
Hungarian legislation mandates banks to diligently monitor their crucial currency exchange agents to ensure full adherence to their AML responsibilities. The banks failed to carry out the necessary checks.
Importance of External Audits
The MNB emphasized the importance of external audits, as certain small currency exchanges are exempt from internal audit requirements. Banks must establish adequate controls to identify risks inherent in currency exchange activities. Failure to do so can prevent timely notification of deficiencies to currency exchanges.
Penalties Imposed
Consequently, the MNB imposed the following penalties:
- HUF16.25m (£38,600) on Raiffeisen Bank
- HUF12.5m (£29,300) on Takarékbank
- HUF36.8m (£86,200) on Ciklámén-Tourist
- HUF19.25m (£45,000) on Corner Trade
- HUF23.75m (£55,600) on IBUSZ
The MNB acknowledged that certain parties had taken steps to rectify the violations.