Hungary Country Summary

FATF Status

Hungary is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Hungary was undertaken in 2024. According to that Evaluation, Hungary was deemed Compliant for 5 and Largely Compliant for 33 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective for 2 of the Effectiveness ratings.

Hungary is grappling with significant challenges related to crime and corruption, particularly in the realm of public procurement and governance. The government's reluctance to investigate high-level corruption, coupled with a legal framework that is poorly enforced, has led to a pervasive culture of impunity, undermining the effectiveness of anti-corruption efforts and diminishing public trust in institutions.

Hungary's economy is characterized by its strategic location in Europe and robust infrastructure, making it a favorable destination for Foreign Direct Investment (FDI), particularly from the United States and EU countries. However, concerns have arisen regarding the government's preferential treatment of domestic ownership over foreign investments, leading to a challenging environment for foreign investors, especially in key sectors such as banking and telecommunications. The economic outlook is currently bleak, with a projected GDP contraction in 2023 and inflation rates peaking at 17.5%, prompting analysts to lower growth forecasts for 2024, amidst ongoing uncertainties regarding government policies and EU funding.