Hungarian Central Register of Ultimate Beneficial Ownership

Key information on obligations to identify your beneficial owner and its registration, based on the 4th EU Anti-Money Laundering Directive

Current status of legislation with regard to the establishment of the central register for information on the ultimate beneficial owner (UBO) of companies

The new Anti-Money Laundering Act (Act LIII of 2017; AML Act) containing provisions for the central register of UBO information entered into force on 26 June 2017.

However, legal regulations that will set up the central register have not entered into force yet and are currently in draft.

Relevant dates with regards to the reporting requirement

No information is currently available as to when the obligation to identify and register beneficial owners will start. The relevant legal provisions were originally scheduled to enter into force in January 2019, but are currently expected later during the year.

Official name of the register

Tényleges tulajdonosok központi nyilvántartása (Central Register of Ultimate Beneficial Owners).

Where to find the register

No website is available yet.

Relevant thresholds for determination of the UBO 

The following person is considered to be the UBO:

• The natural person who owns or controls at least 25 percent of the shares or voting rights in a legal entity or an unincorporated business association directly, or indirectly, or otherwise exercises effective control over a legal entity or a business association without legal entity, if that legal entity or business association is not listed on a regulated market and is subject to disclosure requirements consistent with EU legislation or subject to equivalent international standards.
• The natural person who has a dominant influence in a legal entity or unincorporated business association.
• The natural person on whose behalf a transaction is carried out, or otherwise exercises effective control over the activities of a natural person client.
• In the absence of the natural person referred to above, the executive officer of the legal entity or unincorporated business association.

Information required

The following information on the beneficial owner has to be provided according to the AML Act. It is likely that the same set of information will require registration in the central register:

• †first and last name;
• †first and last name at birth;
• †nationality;
• †date and place of birth;
• †home address, or habitual residence in the absence thereof;
• †the nature and extent of ownership interest; and
• †whether the beneficial owner is a politically exposed person.

Access to the register

The following authorities will have direct, unrestricted access to and can request data from the central register:

• †the financial intelligence unit,
• investigating authorities,
• †the anti-terrorist organization,
• †national security services,
• †public prosecutors and
• †the courts.

The following authorities and entities will have access to the register, in order to perform their tasks under the Anti-Money Laundering Act (supervision, customer due diligence):

• †National Bank of Hungary;
• †the gaming supervisory authority;
• †Chamber of Hungarian Auditors;
• †regional bar associations;
• †regional associations of notaries;
• †authorities for trade and commerce;
• †financial intelligence unit;
• †service providers.

Third parties may request data from the central register on a case-by-case basis strictly to the extent necessary in order to achieve the purpose of use, if:

• †such third party is able to verify and produce documentary evidence regarding the purpose for which the data will be used and a legitimate interest with a view to combating money laundering and terrorist financing; and
• †the data requested is necessary for the enforcement of their rights and legitimate interests; and
• †the conditions prescribed by law on setting up the central register are met.

Sanctions

In case of non-compliance with the aforementioned provisions, the AML Act provides for a set of sanctions proportional to the breach of law. Accordingly, the supervisory body may:

• †issue a warning to the service provider
• †order the service provider cease breaching the law
• †order the service provider to revise its internal policy and present it to the supervisory body
• †withdraw or suspend the activity or operating permits until the breach is terminated
• †delete or initiate the deletion of the service provider from the register
• †request that the liability of the director of the service provider, or its employee or contributing family member for the breach be established
• †initiate the dismissal of the executive officer from office until the termination of the breach
• †impose a fine in addition to or independent of the above, ranging from HUF 100 000 to HUF 2 billion (approximately EUR 300 to EUR 6.3 million) 

Need help figuring out your next steps?

Noerr can assist you with your obligation to comply with the strict AML regulation.

We would be glad to help you provide accurate information on your beneficial owner and guide you through the future registration process. Please, find our contact details below.