Financial Crime World

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Hungary Toughens Stance on Financial Crimes: Definition and Regulations

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Budapest, Hungary - Despite not being a global financial hub, Hungary has taken significant steps to combat financial crimes and prevent money laundering. With 32 banks operating in the market, the country’s financial services sector is thriving.

Primary Risks Facing the Financial System

According to the Hungarian National Risk Assessment (2018), the primary risks facing the financial system include:

  • Criminal organizations
  • Offshore businesses
  • Money transfer services
  • Shell companies

To address these concerns, Hungary enacted legislation in 2017 to prevent and combat money laundering and terrorist financing.

Compliance with International Standards

The Financial Action Task Force (FATF) assessed Hungary’s anti-money laundering system and deemed it compliant with international standards. The country’s AML Act outlines the responsibilities of reporting entities, including:

  • Customer due diligence
  • Risk evaluation
  • Suspicious transaction reporting

AML Supervisory Authority

Hungary’s AML Supervisory Authority is the National Tax and Customs Administration (NAV). NAV is responsible for:

  • Receiving suspicious transaction information
  • Analyzing and publishing suspicious transaction data
  • Overseeing compliance with the AML Act

Other agencies authorized to oversee compliance include:

  • Government
  • Hungarian Bar Association
  • Financial institutions

Restrictive Measures

Hungary has implemented restrictive measures to freeze cash and assets and ban financial services in response to EU and UN sanctions. Service providers are required to screen their clients’ data against EU and UN lists of restricted individuals and entities.

AML Compliance Software

To help organizations comply with these regulations, Sanction Scanner offers AML compliance software that can analyze risk and prevent sanctions. The company’s solution includes features such as:

  • Customer due diligence
  • Risk evaluation
  • Suspicious transaction reporting

Conclusion

Hungary’s efforts to combat financial crimes demonstrate its commitment to maintaining a secure and stable financial system. As the country continues to grow its economy, it is essential that financial institutions prioritize AML compliance to protect against money laundering and terrorist financing.