Hungary AML Regulations: Comprehensive Guide
Money Laundering Regulations in Hungary: Key Requirements and Penalties
In Hungary, companies are subject to strict anti-money laundering (AML) regulations, as outlined in Act LIII of 2017 on Preventing and Combating Money Laundering and Terrorist Financing (AML Law). This legislation covers various aspects, including customer due diligence (CDD) procedures, risk assessment, reporting obligations, and penalties for non-compliant companies.
One of the primary requirements is client identification and verification. Companies must verify the identity of clients, particularly for transactions exceeding HUF 100,000. This involves collecting and verifying essential personal information, such as full name, nationality, place and date of birth, identification number, mother's maiden name, and place of residence. Verification can be done through government-issued documents or external services.
Another crucial requirement is record-keeping of transaction data. Companies must maintain accurate records of all customer transactions throughout the business relationship and for eight years afterwards. Regulators have the power to request recordkeeping for ten years.
To ensure ongoing compliance, companies should implement ongoing monitoring procedures. This involves closely monitoring transactions and business relationships for any suspicious activity. If such activity is detected, a Suspicious Activity Report (SAR) should be submitted within five business days, and the execution of the transaction should be suspended.
Regarding penalties, while the exact sanctions are not detailed in the provided search results, Hungarian AML law generally includes administrative fines, suspension of business activities, and potentially criminal liability for serious breaches. These penalties typically apply to companies failing to comply with identification, record-keeping, or reporting requirements under Act LIII of 2017.
Companies in Hungary must also perform CDD in various circumstances, such as when establishing business relationships, when there are changes in the customer's circumstances, and when there are unusual transactions.
To comply with all the regulations and avoid penalties, companies working in Hungary should implement efficient compliance solutions with a built-in compliance solution to help navigate local regulations. Additionally, companies need to create internal policies for AML compliance, familiarize their employees with these policies, and provide AML training programs or hire employees with suitable prior knowledge.
It's also important for companies to check customers for presence on sanctions lists, Politically Exposed Persons (PEP) lists, and adverse media.
The Central Management of the National Tax and Customs Administration (NAV) is the main AML supervising body in Hungary, responsible for ensuring affected institutions follow the AML Law.
Hungary is continuously working to improve its AML regulations to ensure better security for customers and stricter rules for financial institutions. The country is considered a "largely compliant" member state by the Council of Europe in terms of AML regulations.
For authoritative and detailed requirements and precise penalties, consulting the full text of Act LIII of 2017 and applicable Hungarian regulatory guidelines would be necessary.
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