Financial Crime World

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Hungary Takes Steps to Enhance Anti-Money Laundering Regulations

Hungary has been working to improve its anti-money laundering (AML) regulations in recent years, with positive results according to the Council of Europe. The country is considered a “largely compliant” member state by the Council, and fully complies with 32 out of the Financial Action Task Force’s (FATF) 40 recommendations.

Compliance Status

Hungary has also partially complied with FATF recommendations on non-profit organizations, new technologies, and cash couriers. However, companies operating in Hungary must still ensure they comply with regulations and adapt to any changes.

Key Regulations

Financial institutions established in Hungary or providing services in the country are subject to regulation according to Act LIII of 2017 on Preventing and Combating Money Laundering and Terrorist Financing (AML Law). This includes:

  • Credit institutions
  • Financial service providers
  • Casinos
  • Certified tax experts
  • Lawyers
  • Custodian wallet providers

Responsibilities

The Central Management of the National Tax and Customs Administration (NAV) is responsible for ensuring compliance with AML regulations, as well as analyzing and responding to suspicious transaction reports. The NAV cooperates with the Prosecutor General’s Office and the National Courts Office to enforce AML regulations.

Main Regulation

Act LIII of 2017 outlines the main regulation dealing with AML requirements in Hungary. The law covers:

  • Customer due diligence (CDD) procedures
  • Risk assessment processes
  • Reporting obligations
  • Penalties for non-compliant companies

Compliance Obligations

To stay compliant, companies must follow the obligations set out by the AML law, including:

  • Establishing internal policies
  • Performing CDD
  • Keeping records of customer transactions
  • Reporting suspicious activities
  • Providing training to employees on AML regulations

Penalties for Non-Compliance

The penalties for non-compliance with AML regulations in Hungary can be severe, ranging from fines to seizure of operations. Executive officers may also face personal liability for non-compliance.

Conclusion

Hungary’s continued efforts to improve its AML regulations demonstrate the country’s commitment to ensuring better security for customers and stricter rules for financial institutions. To comply with all the regulations and avoid penalties, companies working in Hungary should implement efficient compliance solutions that take into account local regulations.

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