FinCEN: four Hungarian banks are involved in the major money laundering scandal

The FinCEN Files have revealed 63 suspicious transactions from Hungarian banks to countries like Tanzania, and earlier this year, the Central Bank of Hungary also had to impose fines on six banks for deficiencies in their anti-money laundering policy.

As Napi writes, the recent turmoil around the FinCEN Files – in which 2,100 reports from the US Treasury Department on suspicious banking activities were leaked a few weeks ago – involved four Hungarian banks as well.

Over the period 1999–2017, 63 suspicious (not necessarily illegal) transactions were linked to Hungarian banks.

The bank with the highest number of transactions (35, all outgoing) was UniCredit, worth USD 6,025,100. It is followed by Raiffeisen (22): USD 650,069 for outgoing and USD 1,100,000 for incoming transactions.

The other two banks on the list are K&H and Magnet, both with three suspicious incoming transactions (USD 218,800 and 847,990, respectively). The 63 transactions of these four banks are linked to the countries of Tanzania, Cyprus, Russia, India, Monaco, and the United States.

Central Bank of Hungary: six banks fined for inadequate monitoring

Earlier this year, the Central Bank of Hungary (MNB) carried out a target probe on Hungarian banks, and have also revealed shortcomings regarding banks’ anti-money laundering procedures. The Bank found that six banks had deficiencies in monitoring suspicious transactions since 2018.

The highest penalties are to be paid by Magnet Bank (USD 157,800), Raiffeisen and UniCredit (both USD 65,500). They are followed by Sberbank, Erste, OTP and CIB. K&H was fined with the smallest amount, USD 23,000.

The most severe problems were that banks often failed to report suspicious transactions (on time) and to efficiently monitor transactions worth more than HUF 10 million (USD 32,700).

As Napi writes, if we compare these penalties to international examples (such as the money-laundering scandal of Australian Westpac, which was recently fined with a record-high penalty of USD 920 million), the fines imposed by MNB on Hungarian banks (a total of USD 426,000 this year) are relatively moderate.

According to MNB, it was a mitigating factor if, at the time of monitoring, the bank had already introduced corrective measures. In this regard, it is positive news that OTP, one of the largest banks in Hungary with branches in ten countries, has recently agreed with the Southeast European Law Enforcement Center (SELEC), to combat money laundering and the financing of terrorism.

Read alsoHungarian financial regulator fines 6 banks for failure to implement money laundering safeguards

Source: napi.hu