Hungary Bans Anonymous Accounts In response To FATF Listing

by Ulrika Lomas, Tax-News.com, Brussels

03 September 2001

Following Hungary's addition to the FATF (Financial Action Task Force) money-laundering black-list last June, the country's banking supervisor has announced plans to tighten up legal controls.

The State Banking Inspectorate detailed a range of measures, including the abolition of anonymous accounts, one of the main reasons for the FATF listing. Hungarian economic experts said they doubted the connection between anonymous accounts and money-laundering, but as an EU aspirant, the country has no choice but to submit. It will be impossible to open new anonymous accounts as from 1st January 2002. Hungary therefore follows Austria, its one-time imperial bed-fellow, in abandoning the 'Sparbuch' system which allowed people to put their 'black' money into numbered deposit accounts rather than keeping it 'under the mattress'. Where will they put it now? Switzerland is close by . . .

The Inspectorate is also recommending that banks should report suspicious transactions, including those involved in insurance or investment operations. There is no information on how much money has been laundered via banks in Hungary; but last year the banks signalled to the police that there was a suspicion of money-laundering in more than 1,000 cases.

The definition of money-laundering has been substantially broadened in recent years, as OECD member states have tried to tighten up on tax evasion. The term used to refer to the legalisation of the proceeds of arms or drug dealing, but now also extends to money stemming from tax fraud, tax-evasion or corruption.

The inspectorate hopes that its measures will result in the removal of Hungary from the FATF black-list when it is reviewed next June.

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