An Overview of Hungary’s AML Regulations in the Fight Against Money Laundering
Hungary is constantly improving its AML (anti-money laundering) laws and regulations to ensure that its status as a compliant member state is not compromised.
As such, the country complies with 32 out of 40 recommendations supplied by the Financial Action Task Force (FATF). Hungary is also working on compliance with technology, cash couriers, and non-profit organizations.
Which Institutions Are Affected By AML Laws?
Financial institutions established in the country and providing local services are covered by AML laws. This means nearly every business, including financial service providers, law firms, tax consultants, credit providers, and even casinos, must comply with AML laws.
Who Regulates the AML Laws?
The NAV (The Central Management of the National Tax and Customs Administration) oversees AML regulations in Hungary. It enforces the law and responds to suspicious transactional reports. This also means the NAV works hand-in-hand with the National Courts Office and Prosecutor General’s Office.
How Businesses Can Stay Compliant With AML Laws
The main law or regulation that applies to AML requirements is the Act LIII of 2017. This law covers CDD (customer due diligence), reporting, risk assessment, and penalties.
Businesses in Hungary must follow all the regulations the AML law sets to ensure they are compliant. This means companies must set up internal policies that are sent for approval by the relevant authorities. When these policies are approved, companies must give their employees time to read and understand them.
Most companies invest in AML training programs to get employees, especially new hires, up to speed.
Hungary businesses are also expected to conduct CDD under several different circumstances. Due diligence should be a given with all new customers or large transactions.
The process includes collecting customer information that gets verified via government-supplied documents.
Additionally, companies must report all suspicious activities using a Suspicious Activity Report. These reports must be completed within five days after suspicious activities are detected and sent to the relevant authority.
Moreover, according to AML law, companies must keep the customer information collected for eight years after the business relationship ends.
What If Companies Fail to Adhere to the AML Law?
Businesses that willfully neglect to adhere to AML regulations may be severely penalized. The extent of the penalty will depend on several factors, including the severity of the infringement and its impact on customers.
Serious violations will see penalties imposed that extend to millions.
Hungary’s AML Regulations Guide the Way Forward
Hungary’s AML regulations continue to play a vital role in protecting the country from illicit activities. By maintaining an AML framework, Hungary also contributes to the global fight against money laundering and terrorist financing.
Sources
https://sumsub.com/blog/aml-regulations-in-hungary/
https://www.fatf-gafi.org/en/publications/Mutualevaluations/Mer-hungary-2016.html
https://www.sanctionscanner.com/Aml-Guide/anti-money-laundering-aml-in-hungary-589
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