Financial Crime World

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Hungary Takes a Risk-Based Approach to Combat Money Laundering and Terrorist Financing

The Hungarian government has announced its commitment to implementing a risk-based approach in combating money laundering (ML) and terrorist financing (TF). This strategic shift aims to enhance the country’s ability to effectively identify and mitigate ML/TF risks.

New Legislation

According to recent legislation, supervised institutions will be required to prepare internal policies tailored to their specific risk profile. Model policies and guidelines have been issued by international organizations such as the Financial Action Task Force (FATF) and the European Union (EU). These resources are designed to aid financial institutions in developing robust anti-money laundering (AML) and countering the financing of terrorism (CFT) measures.

Guidance from the Hungarian National Bank

The Hungarian National Bank (MNB), responsible for supervising financial institutions, has issued recommendations outlining the necessary steps to be taken. The MNB’s guidance emphasizes the importance of conducting thorough risk assessments and implementing effective AML/CFT programs.

Key Requirements

Under this new approach, financial institutions will be required to:

  • Maintain specific sanctions lists, including those designated by the EU and the United Nations (UN)
  • Conduct thorough risk assessments
  • Implement effective AML/CFT programs

Additional Resources

The government has also linked relevant documents and websites for further information on AML/CFT best practices, methodologies, and typologies. An evaluation of Hungary’s system against ML/TF is currently underway to assess its effectiveness in combating these threats.

Aims and Benefits

By adopting a risk-based approach, Hungary aims to:

  • Strengthen its position as a reliable and stable financial center
  • Enhance the overall security and integrity of its financial system

This strategic shift is expected to have a positive impact on Hungary’s ability to combat money laundering and terrorist financing, while also promoting a more efficient and effective use of resources.