Banker's Academy AML Training by Country

Anti Money Laundering (AML) By Country: Hungary

Anti Money Laundering (AML) in Hungary

Money laundering in Hungary is a growing problem. As a result, the Government of Hungary has taken an active approach at establishing a comprehensive Anti Money Laundering (AML) regime.

In Hungary, money laundering is related to a variety of criminal activities, including narcotics, prostitution, human trafficking, and organized crime. Additional financial crimes such as counterfeiting of Euros, real estate fraud and the copying or stealing of bankcards are also prevalent. Financial crime has not increased in recent years; however, there have been some isolated, albeit well-publicized, cases.

Hungary became a full member of the European Union (EU) on May 1, 2004. Upon EU accession, all EU regulations became effective immediately in Hungary. As a full EU member, Hungary is also working to implement EU directives, including those relating to money laundering.

Hungary’s money laundering legislation covers all serious crimes punishable by imprisonment. The government re-codified its money laundering legislation in Act of 2003 On the Prevention and Impeding of Money Laundering, which became effective on June 16, 2003.

Hungary’s financial regulatory body, the Hungarian Financial Supervisory Authority (HFSA), is charged with supervising all types of financial service providers. The one exception to this is cash processing, which is supervised by Hungary’s Central Bank, the National Bank of Hungary. Auditors, casinos, lawyers, and notaries are supervised by their own trade associations. The Hungarian National Police supervises all other professions covered under Act XV of 2003, because they have neither self-regulatory professional bodies nor state supervision.

AML Training in Hungary

Hungary’s Prevention and Impeding of Money Laundering Law requires financial institutions in the country to implement an AML training program that instructs employees on how to handle suspicious transactions and conduct proper customer identification to prevent and combat money laundering and other related financial crimes.

The Economy of Hungary

Hungary has made the transition from a centrally planned economy to a market economy. In the 1990s Hungary's economy experienced a complex evolution as it moved from producing goods primarily for export to the former Union of Soviet Social Republics (USSR) to establishing a market-based economy and obtaining new global trading partners. Although these economic reforms stimulated unemployment and inflation, today Hungary's economy is one of the most prosperous in Eastern Europe. The private sector accounts for more than 80% of Gross Domestic Product (GDP) and Hungary boasts a per capita income nearly two-thirds greater than that of the EU-25 average.

Hungary continues to benefit from its rich agricultural history. The country is self sufficient in food and enjoys a diversified crop and livestock production including wheat, corn, sunflower seeds, potatoes, sugar beets, grapes, as well as pigs, cattle, sheep and poultry.

Banking in Hungary

The National Bank of Hungary is the Central Bank of the Republic of Hungary. The Central Bank Act, passed in October of 1991 and amended several times since then, reinstated the independence of the Bank and re-established its range of duties.

The Central Bank is a member of the European System of Central Banks and carries out its tasks and obligations according to Act of 2001 On the National Bank of Hungary.

The Central Bank aims to achieve and maintain price stability in Hungary. In order to accomplish this task the Central Bank defines and implements the countries monetary policy, issues banknotes and coins, holds and manages official reserves in foreign exchange and gold, as well as promotes the stability of the financial system and the development and smooth conduct of policies related to the prudential supervision of the financial system.

Hungary's Currency

The Hungarian forint, often denoted HUF, is the official currency of Hungary.

The Central Bank issued a new series of coins in 1992, with denominations of 1, 2, 5, 10, 20, 50 and 100 forint. In 1946 the Central Bank introduced Hungary’s first forint notes in 10 and 100 denominations. These denominations were followed by 20, 50, 500, 1,000, 5000, 10,000 and 20,000 forint notes.

The Central Bank revealed plans for a new 200 forint coin in June 2008. The 200 forint coin will be 28.3 mm in diameter, made of bimetal, and will be introduced in the first half of 2009.