Hungary Implements Beneficial Ownership Regulations to Boost Anti-Money Laundering Efforts

Strengthening the Fight Against Money Laundering

The Hungarian government has taken a significant step in enhancing its anti-money laundering (AML) framework by introducing new beneficial ownership regulations. These regulations aim to improve transparency in business operations and strengthen the country’s AML efforts.

Key Provisions of the Regulations

• Accurate Record-Keeping: Companies are required to maintain accurate records of their ultimate beneficial owners (UBOs).
• UBO Index Score: Each Hungarian entity is assigned an UBO index score based on the accuracy and completeness of its UBO data.
• Discrepancies and Consequences:
  • Discrepancies between reported information and actual facts may result in points being deducted from the score.
  • Entities with a low UBO index score (below 8 points) may be classified as “uncertain” and face further action, including publication of their status on the UBO register website.
  • Entities with an UBO index score below 6 points for 60 days or more will be classified as “unreliable” and subject to additional restrictions.

Consequences of Non-Compliance

• Publication of Entity Status: Entities with an unreliable UBO status may have their status published on the UBO register website.
• Refusal of Transactions: Service providers are obligated to refuse transactions exceeding HUF 4.5 million for entities holding an unreliable UBO status.

Recommendations from the Hungarian Government

The Hungarian government advises all entities to regularly verify their UBO data in the UBO register and notify their banks and service providers of any changes as soon as possible to avoid serious consequences. By implementing these regulations, Hungary aims to enhance its AML efforts and improve transparency in business operations.