Current obligations related to the ultimate beneficial ownership register

Although the Afad Act, amending the provisions of the Money Laundering Prevention Act ("Pmt."), is applicable as of 1 February 2022, our experience so far has shown that few companies are aware of the practical importance of the ultimate beneficial ownership ("TT") register and the reporting obligation related hereto, as well as of the fact that failure to report may affect the so-called trustworthiness index ("TT-index") of the company, which may have further negative consequences as well.

Main information relating to the ultimate beneficial owner („UBO”) is currently recorded in Hungary in a central domestic, non-public register (“UBO database”) operated by the Hungarian Tax Authority („NAV”). The “TT index” is practically an indicator assigned to the beneficial ownership data of companies qualifying as reporting agents and indicating their level of reliability, with a value between 1 and 10.

The value of TT index at the time of the first recording is 10 points for all reporting entities concerned. If the NAV receives a report or any notification that the ultimate beneficial owner data of the reporting agent is not in line with the data of the beneficial ownership register, the TT index may decrease with 1-2 points as defined in the Afad Act.

If the TT index of the company is scored with a number between:

  • 6 or 7, it means that the TT index of the reporting agent is "uncertain",
  • 1 to 5, this means that the company as reporting agent is categorized as "unreliable".

However, the good news is that the process and the scoring can be corrected or improved with another confirmation or updated data reporting and thus the 10-point TT index can be reinstated.

If the rating of a reporting agent is "uncertain" or "unreliable", this can lead to a number of negative consequences, such as:

  • publication on the NAV website;
  • high-risk customer classification – in combination with customer due diligence measures appropriate to the high level of risk;
  • refusal by service providers such as banks and notaries subject to the law to perform transactions with a value of HUF 4.5 million.

It is important to highlight that the entities registered in the UBO database do not have the possibility to directly report any changes of their UBO data to the NAV themselves, as this is the obligation of the payment service providers (typically banks) but as reporting agents the companies are responsible for reporting to the payment service providers and for the correctness of the UBO data provided.

The companies as reporting agents are also obliged to maintain and keep up-to-date records of their ultimate beneficial owners. At the same time, for some companies it may be necessary to establish a separate internal procedure for this purpose, by indicating the tasks and responsibilities for reporting to the actual UBO data to the UBO register and how this process should be handled.

Based on the above, we strongly advise our clients to check the correctness of their UBO data available in the UBO database as well as to establish an internal procedure to meet the requirements on keeping up-to-date records set by the law and to avoid any further negative consequences as presented above.

Should you have any further questions you may of course rely on our professional support in this matter as well.


The purpose of this article is to provide a brief, concise information on certain issues. The content of this article is not exhaustive and does not constitute a legal advice.

Should you have any questions do not hesitate to rely on our services.