Hungary has improved measures to combat money laundering and terrorist financing, demonstrating good progress in the level of compliance with the FATF (Financial Action Task Force) standards, according to a new follow-up report published today by the Council of Europe anti-money laundering body MONEYVAL. The positive steps taken by the authorities have led to the upgrade of Hungary from “partially compliant” to “largely compliant” in three areas related to correspondent banking relationships, internal controls in financial institutions and transparency and beneficial ownership (BO) of legal persons.
Today’s review focused on Hungary’s enhanced due diligence requirements for correspondent banking relationships, obligations for financial groups and companies register. MONEYVAL has examined a range of legislative, regulatory, and institutional measures introduced by Hungary in these areas, however, due to its procedural limitations, it has not assessed the degree to which they have been effectively implemented in practice.
Among the positive developments noted by MONEYVAL are the amendments to the Companies register, which has established the necessary requirements to ensure the accuracy of basic information of legal persons submitted to the register. Besides, Hungary has introduced requirements for financial institutions on screening procedures when hiring employees and on-going trainings. Moreover, new requirements have been introduced on correspondent banking relationship with financial institutions established within the EU.
All in all, Hungary has succeeded in meeting the general expectation of MONEYVAL for countries to have addressed most - if not all - of the technical compliance deficiencies within five years after the adoption of the mutual evaluation report. The jurisdiction has achieved full compliance with five of the 40 FATF Recommendations constituting the international AML/CFT standard. Hungary retains minor deficiencies in the implementation of 32 Recommendations where it has been found “largely compliant”. Three Recommendations (on non-profit organisations, on new technologies, on cash courriers) remain “partially complaint”. Hungary has no “non-compliant” ratings.
Hungary will remain in enhanced follow-up and will continue to report back to MONEYVAL on progress to strengthen its implementation of AML/CFT measures. It is expected to report back in two years’ time.