Washington has threatened several times to clamp down in the past.
ADVERTISEMENTThe US has tightened visa-free access for Hungarians to its territory, amid security concerns stemming from policies by Prime Minister Viktor Orban.
Hungarians will now be limited to a single entry into the United States, while the validity period of travel has been reduced from two years to one.
Like citizens of 39 other countries in the Visa Waiver Program, Hungarians could previously travel to the US for three months, as many times as they wanted.
"Security flaws" stemming from the massive naturalisation policy put in place by Orban have now changed this policy, according to the US Embassy in Budapest.
Washington has long threatened to impose travel restrictions on Hungary over concerns the identities of nearly 1 million foreigners granted Hungarian passports in the past decade were not properly verified.
Hungary - a country of 10 million - has given citizenship to Hungarian speakers in neighbouring countries since 2011, provoking geopolitical tensions with Ukraine especially.
Criminal networks were able to take advantage of this scheme to fraudulently obtain authentic Hungarian passports, according to the US.
Citizenship has been quickly granted "without adequate verification of the identity" of the applicants, wrote the US embassy, slamming Orban for refusing to "fully remedy this vulnerability".
US officials have reportedly tried to resolve this issue for years.
Budapest called the move “revenge by [US] President Joe Biden” because it refused to share with Washington its list of overseas Hungarians.
Since his return to power in 2010, Viktor Orban has regularly clashed with the US.
The far-right nationalist leader was close to former President Donald Trump and accuses the current US government of trying to weaken him.
At least 2 million ethnic Hungarians live in neighbouring countries, primarily Romania, Serbia and Ukraine.
Critics of the naturalisation programme said it also allowed non-taxpaying ethnic Hungarians residing abroad to vote in Hungarian elections, giving Orban’s ruling Fidesz party an electoral edge.