Expert Guide to Financial Sanctions Enforcement in Hungary

Hungary applies EU sanctions laws, including those against Russia, directly through EU regulations, which automatically apply without the need for a separate national legislation.

Sanctions are primarily governed by Act LII of 2017 on the Implementation of Restrictive Measures imposed by the EU and the UN Security Council. This act outlines the procedures for enforcing sanctions and freezing assets.

If EU sanctions do not apply, Hungary may still enforce national laws related to financial sanctions, such as those addressing money laundering and terrorism financing under Act LIII of 2017.

The EU sanctions framework applies universally across member states for sanctions against countries like Iran, North Korea, and Syria. Hungary implements these sanctions as per EU regulations without additional national legislation.

The Hungarian government refers to the EU’s consolidated sanctions list and resources for guidance, which can be accessed on the European Commission’s official website (European Commission Sanctions) and the EU Sanctions Map (EU Sanctions Map).

The Hungarian Financial Intelligence Unit within the National Tax and Customs Administration (NAV) is responsible for issuing licenses that permit certain activities otherwise restricted by financial sanctions.

Hungarian Financial Intelligence Unit

The court competent to impose asset freezes is also competent to unfreeze assets.

The Consolidated List of individuals and companies subject to financial sanctions can be found on the official website of the EU’s sanctions list, which is regularly updated.

Link to EU Consolidated List: EU Sanctions Map

Breaches of financial sanctions may be considered as a criminal offence under Act C of 2012 on the Criminal Code (specifically under sections related to illegal economic activities or violation of international obligations, see Sections 327 and 328 in this regard). 

Penalties for criminal breaches include imprisonment, fines, or asset seizure, depending on the severity of the breach and involvement in illegal activities. Specific penalties are detailed under general sections of the Criminal Code.

Criminal breaches of financial sanctions laws are typically investigated by the Hungarian police, based on Section 34 of Act XC of 2017 on Criminal Procedure Code.

Yes, please see the details below.

Non-criminal breaches can result in warnings, additional regulatory requirements imposed on entities that fail to comply or fines that vary based on the nature of the violation. The maximum penalty can be significant, reflecting the severity of the breach.

In Hungary, non-criminal breaches of financial sanctions laws are primarily investigated by the Hungarian National Bank (MNB) . The MNB is responsible for overseeing compliance with financial regulations, including sanctions, and can impose penalties for breaches. For breaches of money laundering and terrorism financing provisions, the competent authority differs based on the specific obliged entity.

The Hungarian Ministry of Foreign Affairs and Trade provides guidance on the implementation of financial sanctions, including frequently asked questions and updates:  Ministry of Foreign Affairs and Trade - Sanctions.

The Hungarian Financial Intelligence Unit also provides recommendations and case studies on the implementation of financial sanctions: Hungarian Financial Intelligence Unit - Recommendations and case studies.