Hungary: a central register of ultimate beneficial owners is established
The 4th Money Laundering Directive (Directive 2015/849/EU of 20 May 2015) required EU Member States to establish a central register of ultimate beneficial ownership information (the “Register”). As we wrote in our previous newsletter, Hungary has fulfilled its transposition obligation for the Directive, but the actual date for the start of the Register was uncertain.
Under Act XLIII of 2021 on Setting Up and Operating the Data Reporting Background Relating to the Identification Obligation of Providers of Financial and Other Services, promulgated on 21.05.2021, a payment service provider must supply the data to the registration authority (National Tax and Customs Administration) for the Register. Each organisation concerned is assigned a national registration number and a so-called TT index, which is an indicator of the organisation’s reliability, ranging from 1 to 10.
For the time being, the data contained in the Register may only be accessed by the authority, the prosecution office, or the court in order to perform statutory duties. However, as of 01.10.2021, a service provider within the meaning of the Hungarian Money Laundering Act (Act LIII of 2017, Pmt.), i.e., a lawyer, will also be entitled to access the Register free of charge in order to carry out customer due diligence measures and data verification obligations. Subsequently, from 01.07.2022, third parties will also be entitled to obtain specific data on the ultimate beneficial owner of the data for a fee, in the framework of individual data disclosure.
The TT index of an organisation may change from time to time based on notification from the authority, the prosecution office, the court, or a service provider under the Pmt. If an authority, prosecution office, court or service provider under the Pmt. notices a material discrepancy concerning the ultimate beneficial owner, it may report this to the registration authority. On this basis, if the TT index falls below 8 points, the organisation is classified as “unstable” and if it falls below 6 points, it is classified as “unreliable”. It is of course also possible to improve the TT index.
Accurate and up-to-date information on the ultimate beneficial owner will clearly help detect criminals who would otherwise hide their identity behind a corporate structure, so establishing the Register will clearly help to detect money laundering.
Act XLIII of 2021 on Setting Up and Operating the Data Reporting Background Relating to the Identification Obligation of Providers of Financial and Other Services
Directive (EU) 2015/849 on the prevention of the use of the fi-nancial system for the purposes of money laundering or terrorist financing