Dear Client,
The new European Union Anti-Money Laundering Regulation (EU) 2024/1624, which comes into force on July 10, 2027, introduces significant changes in the handling of beneficial ownership (UBO) data. The purpose of the regulation is to enhance transparency and improve the fight against money laundering and terrorism financing across the EU. These new rules also apply to asset-management foundations in Hungary.
Below, we outline the key changes affecting asset-management foundations and the steps required to ensure compliance with the new regulation.
—
1. Identification and Reporting of Beneficial Owners (UBOs)
Under the new regulation, asset-management foundations are now required to identify and report their beneficial owners (UBOs). A “beneficial owner” is a natural person who:
directly or indirectly owns the foundation or its assets,
controls or influences its decision-making processes.
Beneficial owners may include not only the founders of the foundation but also beneficiaries, board members, or other influential individuals who have a decisive role in the foundation’s operation.
2. Additional Requirements and Verification
The regulation introduces stricter verification requirements. Asset-management foundations will now need to verify UBO data from multiple sources, including:
notarial deeds,
company registers,
electronic identification systems (e.g., eIDAS).
This change means that foundations must provide more accurate and comprehensive data about their structure, owners, and decision-makers.
3. Two-Tier Identification of Beneficial Owners
The new rules also impose stricter requirements for complex structures. If the foundation exerts influence through intermediate companies, those indirect owners must also be identified. The indirect ownership calculation requires adding up the ownership stakes of companies controlled by the foundation to determine the ultimate beneficial owner.
4. Detailed Reporting and Record-Keeping
The regulation mandates that asset-management foundations regularly update and maintain their beneficial ownership registers, and verify the data each year. Foundations will need to ensure that their beneficial ownership data complies with the applicable regulations and be prepared to provide this data to the relevant authorities upon request.
5. Practical Impact of the Changes
The implementation of these new rules will likely place a significant burden on asset-management foundations, particularly those with complex structures. Foundations will need to ensure they accurately identify individuals who ultimately control the organization, and fully comply with the data reporting obligations under the new regulation.
What Should Asset-Management Foundations Do Now?
1. Prepare a comprehensive record of all beneficial owners, including founders, beneficiaries, and anyone who directly or indirectly influences the foundation’s operations.
2. Update and maintain the foundation’s records to ensure that all information is current.
3. Conduct regular verifications to ensure the accuracy of the reported data.
4. Be prepared to submit the necessary data to the relevant authorities once the regulation comes into effect.
6. How Can We Assist You?
Our firm can assist with identifying beneficial ownership structures, ensuring compliance with reporting obligations, and developing internal policies to comply with the new rules. If you have any questions or require assistance, please do not hesitate to contact us!
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57
The New EU Anti-Money Laundering Regulation (2024/1624/EU) and Hungarian Asset-Management Foundations
Dear Client,
The new European Union Anti-Money Laundering Regulation (EU) 2024/1624, which comes into force on July 10, 2027, introduces significant changes in the handling of beneficial ownership (UBO) data. The purpose of the regulation is to enhance transparency and improve the fight against money laundering and terrorism financing across the EU. These new rules also apply to asset-management foundations in Hungary.
Below, we outline the key changes affecting asset-management foundations and the steps required to ensure compliance with the new regulation.
—
1. Identification and Reporting of Beneficial Owners (UBOs)
Under the new regulation, asset-management foundations are now required to identify and report their beneficial owners (UBOs). A “beneficial owner” is a natural person who:
directly or indirectly owns the foundation or its assets,
controls or influences its decision-making processes.
Beneficial owners may include not only the founders of the foundation but also beneficiaries, board members, or other influential individuals who have a decisive role in the foundation’s operation.
2. Additional Requirements and Verification
The regulation introduces stricter verification requirements. Asset-management foundations will now need to verify UBO data from multiple sources, including:
notarial deeds,
company registers,
electronic identification systems (e.g., eIDAS).
This change means that foundations must provide more accurate and comprehensive data about their structure, owners, and decision-makers.
3. Two-Tier Identification of Beneficial Owners
The new rules also impose stricter requirements for complex structures. If the foundation exerts influence through intermediate companies, those indirect owners must also be identified. The indirect ownership calculation requires adding up the ownership stakes of companies controlled by the foundation to determine the ultimate beneficial owner.
4. Detailed Reporting and Record-Keeping
The regulation mandates that asset-management foundations regularly update and maintain their beneficial ownership registers, and verify the data each year. Foundations will need to ensure that their beneficial ownership data complies with the applicable regulations and be prepared to provide this data to the relevant authorities upon request.
5. Practical Impact of the Changes
The implementation of these new rules will likely place a significant burden on asset-management foundations, particularly those with complex structures. Foundations will need to ensure they accurately identify individuals who ultimately control the organization, and fully comply with the data reporting obligations under the new regulation.
What Should Asset-Management Foundations Do Now?
1. Prepare a comprehensive record of all beneficial owners, including founders, beneficiaries, and anyone who directly or indirectly influences the foundation’s operations.
2. Update and maintain the foundation’s records to ensure that all information is current.
3. Conduct regular verifications to ensure the accuracy of the reported data.
4. Be prepared to submit the necessary data to the relevant authorities once the regulation comes into effect.
6. How Can We Assist You?
Our firm can assist with identifying beneficial ownership structures, ensuring compliance with reporting obligations, and developing internal policies to comply with the new rules. If you have any questions or require assistance, please do not hesitate to contact us!
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57