meta_id 3417312

The Hungarian Anti-Money Laundering and Counter-Terrorism Financing Office (Pénzmosás és Terrorizmusfinanszírozás Elleni Iroda) published anonymous case examples and lessons learned regarding supervisory sanctions in anti-money laundering and counter-terrorism financing enforcement. The publication aims to demonstrate the professional rationale underlying supervisory decision-making and the practical application of risk-based approaches to regulated service providers falling within the scope of Hungary's anti-money laundering legislation. The office identified significant risks in supervised service providers' operations, particularly inconsistencies in customer due diligence procedures, inadequately substantiated risk classifications, deficiencies in monitoring activities, and failures to meet reporting obligations. In response, the office applies risk-based supervision focused on higher-risk service providers and activities, examining not only formal compliance but also the actual effectiveness and proportionality of risk-reduction measures. The office's sanctioning practice aligns with Financial Action Task Force (FATF) recommendations, ensuring sanctions are effective, proportionate, and deterrent while remaining applicable to both natural and legal persons, including service provider executives and senior management. Sanctions aim to ensure future compliance across both the affected service provider and the broader sector. The office emphasises that sanctions are based on fully established facts and available evidence, with decision-making grounded in objective criteria documented in its sanctioning handbook. The office considers circumstances favouring both the service provider and the supervisory authority, ensuring transparent, subjective-element-free procedures that encourage consistent statutory compliance. The office continuously uploads anonymous case examples to provide service providers with current information demonstrating how supervisory authorities evaluate situations and the circumstances that may trigger supervisory measures.