Financial Crime World

Hungary Fails to Meet International Anti-Money Laundering Standards

Lack of Training and Supervision

BUDAPEST, HUNGARY - A recent report has revealed that Hungary’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regime falls short of international standards in several areas.

  • Many Hungarian businesses with over 10 employees have not conducted training on AML/CFT regulations, despite being required to do so.
  • Supervisory bodies have not conducted adequate on-site checks to ensure compliance with these requirements.

Awareness and Due Diligence

The report also highlights that Hungary’s designated non-financial businesses and professions (DNFBPs) are not uniformly aware of the enhanced due diligence requirements for politically exposed persons (PEPs) and jurisdictions of concern.

  • This lack of awareness raises concerns about the potential misuse of funds by DNFBPs.
  • The report recommends that Hungary takes steps to improve awareness among DNFBPs on AML/CFT regulations.

Non-Profit Organization Sector

Furthermore, the Hungarian authorities have failed to review the vulnerabilities of their non-profit organization (NPO) sector, despite being required to do so. This lack of oversight has raised concerns about the potential misuse of funds by NPOs.

  • The report recommends that Hungary conducts a review of its NPO sector and improves its AML/CFT regulations.

International Cooperation

Hungary’s national and international cooperation efforts are also lacking.

  • The country has not ratified the Palermo Convention, a key international treaty aimed at combating money laundering and terrorism financing.
  • There is no domestic legislation in place to implement United Nations Security Council Resolutions 1267, 1269, 1333, and 1390.

Recommendations

The report recommends that Hungary:

  • Ratifies the Palermo Convention
  • Adopts domestic legislation to implement UNSCR 1267 and 1373
  • Conducts a review of its NPO sector
  • Improves its AML/CFT regulations
  • Enhances international cooperation efforts

Conclusion

Hungary’s failure to meet international standards has raised concerns about the potential risks to its financial system and economy. The country’s authorities must take immediate action to address these weaknesses and ensure that Hungary is in compliance with global anti-money laundering and combating the financing of terrorism requirements.