The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a permanent monitoring body of the Council of Europe, has conducted field research on 7-18 March 2016 in Budapest within the framework of the country evaluation process, which began in February 2015.

The nine-member international delegation headed by Moneyval Executive Secretary Matthias Kloth held meetings, organized by experts of the Ministry for National Economy, with several Hungarian authorities and financial services providers involved in the fight against money laundering and the financing of terrorism. The delegation has also met with Deputy State Secretary László Balog.  The aim of field research is to assess efficiency and adequacy, as well as to gain insight into the practices and operation mechanisms of certain institutions. In Hungary, technical management and the coordination of combating money laundering and the financing of terrorism has been under the sphere of competence of the minister responsible for financial affairs for more than a decade.

The country evaluation process, coordinated by Moneyval, has mainly aimed to monitor and assess compliance with and outcomes of the implementation of international standards designed to fight money laundering and the financing of terrorism in Hungary, with regard to regulations, institutions as well as to market participants. These evaluations take place regularly, in each European country. The first such report on Hungary was completed in 2009-2010.

The actual, so-called five-stage country evaluation process based on new recommendations and assessment methodology of the Financial Action Task Force (FATF), the OECD’s top policy-making body in the international fights against money laundering, is posing new challenges for member states. In addition to formal compliance with norms (such as those on the regulatory and institutional background), special emphasis is being placed on the assessment of the system’s efficiency and adequacy.  The evaluation process also monitors every aspect of the mechanism, from awareness and attentiveness within the financial sector, the acknowledgement and forwarding of red flags, supervisory controls, investigations of money laundering affairs, indictments by attorneys, all the way through to the delivery of verdicts. Ensuring competent regulation and effective implementation aims to hamper, or even potentially hinder, efforts by criminals to launder money “clean” that has been earned through economic crimes.

Combating money laundering and the financing of terrorism has been traditionally handled as a priority by Hungary’s financial regulations. A major element of the reform of the Hungarian system is – in addition to full compliance with effective EU directives -- to adopt international best practices, for which the Moneyval country evaluation report provides an essential forum. The objective of negotiations is to get a realistic, fact-based overview of the structure and operation of Hungary’s regulatory and institutional systems as well as the formulation of forward-looking recommendations to make the fight against money laundering and the financing of terrorism even more effectual and competent.

(Ministry of National Economy)