Hungary Takes Steps to Improve Anti-Money Laundering Regulations
Budapest, Hungary - In recent years, Hungary has been working to strengthen its anti-money laundering (AML) regulations, making significant progress in improving transparency and cooperation between financial institutions.
Positive Progress
According to the Council of Europe, Hungary has taken positive steps in its banking relationships and transparency of beneficial ownership information, earning it a “largely compliant” rating. The country’s commitment to combating money laundering and terrorist financing is seen as an important step forward for financial stability and security.
AML Framework
Hungary’s AML framework is based on Act LIII of 2017 on Preventing and Combating Money Laundering and Terrorist Financing, which sets out the obligations for financial institutions operating in the country. The law requires these institutions to:
- Implement customer due diligence procedures
- Perform risk assessments
- Report suspicious transactions
Supervision and Monitoring
The Central Management of the National Tax and Customs Administration (NAV) is the main AML supervising body in Hungary, responsible for ensuring compliance with the law and analyzing and responding to suspicious transaction reports. Other government bodies, such as the National Bank of Hungary and the Chamber of Hungarian Auditors, also play a role in monitoring financial institutions for AML compliance.
Company Requirements
Companies operating in Hungary must:
- Establish internal policies
- Provide AML training programs for employees
- Perform customer due diligence procedures, including verifying personal information and checking customers against sanctions lists
- Report suspicious activities to the authorities within five business days of detection
- Keep records of all customer transactions for eight years
Consequences of Non-Compliance
The penalties for non-compliance with Hungary’s AML regulations can be severe, ranging from fines of up to HUF 2 billion (approximately $4.76 million) to seizure of operations. Executive officers may also face personal penalties of up to HUF 500 million (approximately $1.2 million).
Conclusion
Hungary’s efforts to improve its AML regulations are seen as an important step forward for the country’s financial stability and security. To ensure compliance with these regulations, companies operating in Hungary should implement efficient compliance solutions that can help navigate local regulations.
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