Hungary Takes Steps to Prevent Financial Crimes, But Room for Improvement Remains

Budapest, Hungary - A Bid to Combat Financial Crimes

In an effort to combat financial crimes and money laundering, the Hungarian government has implemented various measures to align with international standards set by the Financial Action Task Force (FATF). However, a recent evaluation suggests that while progress has been made, there is still room for improvement in several areas.

Progress Made in Key Areas

The FATF Recommendations provide a framework for countries to prevent and combat financial crimes, including money laundering and terrorist financing. The Hungarian government’s efforts have resulted in improvements in key areas such as:

Customer Due Diligence: Hungary has strengthened its customer due diligence requirements, making it more difficult for criminals to hide behind pseudonyms or fake identities.
Record-Keeping: The country has improved its record-keeping practices, enabling authorities to track financial transactions and identify potential suspicious activity.
Regulation of Non-Profit Organizations: Hungary has implemented stricter regulations on non-profit organizations, reducing the risk of these groups being used for money laundering or terrorist financing.

Areas for Improvement

Despite progress in key areas, there are still concerns about:

High-Risk Countries: Hungary needs to improve its measures to address high-risk countries and their corresponding financial institutions.
Correspondent Banking: The country must enhance its supervision of correspondent banking relationships to prevent money laundering and terrorist financing.
Supervision of Financial Institutions: Hungary should strengthen its oversight of financial institutions to ensure they are complying with anti-money laundering regulations.

Future Plans

To further strengthen its anti-money laundering framework, Hungary has committed to:

Improving Risk Assessment: The country will enhance its risk assessment and national cooperation and coordination mechanisms.
Enhancing Customer Due Diligence Requirements: Hungary plans to introduce more comprehensive customer due diligence requirements.
Regulating Non-Profit Organizations: The government aims to improve the regulation of non-profit organizations.

Recommendations for Improvement

The evaluation also suggests that Hungary consider introducing a:

Comprehensive Beneficial Ownership Register: This would help authorities track and identify beneficial owners of companies, reducing the risk of money laundering.
Improved Cash Courier Tracking System: Hungary should enhance its ability to track cash couriers and money launderers.

Positive Step Towards Transparency

While there is still much work to be done, Hungary’s efforts to prevent financial crimes are seen as a positive step towards enhancing transparency and trust in the country’s financial system. As the government continues to implement reforms and improve its anti-money laundering framework, it is expected that the country will become increasingly attractive to foreign investors and businesses.

Government Response

In response to the evaluation, a Hungarian government spokesperson stated: “We acknowledge the recommendations made by the FATF and are committed to implementing further improvements to our anti-money laundering framework. We believe that these efforts will not only strengthen our financial system but also contribute to a more secure and stable economic environment for all citizens.”