Financial Crime World

Beneficial Ownership Regulations in Hungary: What You Need to Know

Introduction

Hungary is set to establish a central register for information on the ultimate beneficial owners (UBOs) of companies, as required by the 4th EU Anti-Money Laundering Directive. This article provides an overview of the new regulations and what you need to know.

Requirements for Identifying and Registering UBOs

According to the Anti-Money Laundering Act (Act LIII of 2017), companies and other entities will be required to identify and register their UBOs. The relevant thresholds for determining a UBO include:

  • Owning or controlling at least 25% of shares or voting rights
  • Having a dominant influence
  • Exercising effective control over a company’s activities

Required Information on the Beneficial Owner

The following information on the beneficial owner must be provided:

  • First and last name
  • Date and place of birth
  • Nationality
  • Home address
  • Nature and extent of ownership interest
  • Whether the beneficial owner is a politically exposed person

Access to the Central Register

The central register will have direct access to and can request data from:

  • Investigating authorities
  • National security services
  • Public prosecutors
  • Courts
  • National Bank of Hungary
  • Gaming supervisory authority
  • Chamber of Hungarian Auditors
  • Regional bar associations
  • Regional associations of notaries
  • Authorities for trade and commerce
  • Financial intelligence unit
  • Service providers

Requesting Data from the Central Register

Third parties may request data from the central register on a case-by-case basis if they can verify the purpose for which the data will be used and have a legitimate interest in combating money laundering and terrorist financing.

Non-Compliance with AML Act Provisions

Non-compliance with the provisions of the AML Act may result in sanctions, including fines ranging from HUF 100,000 to HUF 2 billion (approximately EUR 300 to EUR 6.3 million).

Seeking Assistance with Compliance

Companies seeking assistance with complying with these regulations can contact Noerr, an international law firm with expertise in anti-money laundering and financial services law.

By understanding the requirements for identifying and registering UBOs in Hungary, companies can ensure compliance with the new regulations and avoid potential sanctions.