Amendments to the rules on money laundering in Hungary

Act No. XV of 2003 on Preventing and Impeding Money Laundering of the Republic of Hungary (the "Money Laundering Act") (published on 18 March 2003 in Volume 2003/27 of the Official Gazette) will come into force on 16 June 2003. The Money Laundering Act consolidates (and replaces) the current legislation prohibiting money laundering, i.e. Act No. XXIV of 1994 and Government Decree No. 299/2001 (XII. 27) and has resulted in less ambiguous and more precise legislation.

The most important new and amended rules of the Money Laundering Act are:

• the scope of the Money Laundering Act has been broadened to cover institutions accepting postal money orders and receiving and delivering domestic and international postal orders
• introduces more precise and detailed definitions and interpretations
• sets out which authorities/organisations have the role of supervising each particular class of service provider
• removes certain types of insurance transactions from the scope of the legislation
• increases the number of persons who must identify themselves and the circumstances in which such identifications have to be made
• provides that a person taking travellers cheques, negotiable securities, money market instruments and recorded delivery slips of international postal orders, amounting to or exceeding a value of HUF 1 million (approx. EUR 4,000), across the Hungarian national border, must notify the Hungarian customs authority of this fact
• lays down the procedure that must be followed to report any information, fact or circumstance that suggests that money laundering may be taking place
• provides detailed rules of how someone reporting suspected money laundering must co-operate with the National Police Headquarters and lays down the sanctions available to the National Police Headquarters for failure of a service provider to comply with such obligations
• sets out detailed provisions governing funds held by lawyers and public notaries.

The comprehensive regulation introduced by the Money Laundering Act fully harmonises Council Directive 91/308/EEC on the prevention of the use of financial systems for the purpose of money laundering and Directive 2001/97/EC amending the above Directive, into Hungarian law.

For further information please contact Dr Gabriella Ormai at [email protected] or on 00 36 1 4834800.