Vietnam's increased integration into the regional and global economies has provided a huge opportunity for international money laundering offenses for the past several years. However, money laundering operations have only lately become more evident through the establishment of bank accounts, securities trading, gambling, illicit movement of foreign currency out of the country, usage of credit cards, and so on. Combating money laundering has become a high priority for the State Bank of Vietnam (SBV) and other related authorities in Vietnam. According to a SBV report, suspicious transactions totaled VND51,000 billion in 2012, VND79,000 billion in 2013, and VND119,000 billion in 2014. This demonstrates a rising and concerning amount of questionable transactions of money laundering.
In response to the growth in money laundering crimes within Vietnam, Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam to consider updating the 2012 Money Laundering Prevention and Control Law.
The State Bank has announced that it is working on a new anti-money laundering law focusing on e-wallet services, virtual currency, peer-to-peer (P2P) lending, and pawn services. According to the Central Bank, virtual currencies such as Bitcoin are exchanged as "securities" on virtual currency exchanges. They have attracted millions of investors from throughout the world, including Vietnam.
AML Laws And Regulations in Vietnam
The amended Penal Code, which took place on January 1, 2018, revises the money laundering crime and adds criminal liability for legal individuals who participate in money laundering. Vietnam has legislative standards for KYC and STR. To guarantee uniformity of reported data, the SBV introduced standardized STR forms; however, the system is not yet online, so local banks must file printed copies of STRs.
While Vietnam is theoretically compatible with current international standards, particularly in terms of its legislative framework, financial supervision for AML still has to be improved, and CDD and KYC processes inside domestic banks must be improved and properly implemented. Regulations on updating client information in other countries are limited and poorly enforced.
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What are the KYC and AML Checks?
Whereas AML checks guarantee that no funds you receive are the result of illegal or terrorist activity, KYC checks precisely verify the identities of your clients and investors', their financial activities, and any dangers they may represent.
The Relationship Between KYC and CDD
Customer Due Diligence is the subform of the "Know Your Customer" service. KYC supports CDD in verifying customers' information. Transactions for past KYC procedures have now turned into CDD transactions.
SBV has a general obligation under AML regulations to implement State management on AML. The SBV is especially responsible for inspecting and monitoring AML activities of reporting organizations subject to the control of currency, banking, and foreign exchange transactions, among other things. The Ministry of Finance (MOF) is responsible for examining and monitoring AML operations of reporting firms subject to State control in the insurance and securities industries, among other things. The SBV/MOF has the authority to manage or recommend to competent authorities the handling of AML violations.
Other Anti-Money Laundering Regulators
● The Ministry of Public Security is responsible for gathering, receiving, and investigating information about money laundering-related offenses.
● The Ministry of Construction is in charge of implementing AML measures in the real estate industry.
● The Ministry of Justice is in charge of implementing AML measures for attorneys, legal practice groups, notaries, and notary public offices.
● The People's Procuracy and the People's Court collaborate with other authorities to investigate, prosecute, and settle money laundering offenses.
● People's Committees at all levels are in charge of providing legal training on anti-money laundering in the province and collaborating with state authorities to establish policies, strategies, and plans to prevent and combat money laundering.
● The Anti-Money Laundering Steering Committee is in charge of aiding the Prime Minister in developing strategies, plans, policies, and programs for preventing and combating money laundering.
Vietnam is not a member of FATF, but it is a member of the Asia/Pacific Group on Money Laundering (APG), a regional group similar to the FATF.
The most recent Mutual Evaluation Report on Vietnam's implementation of anti-money laundering and counter-terrorist financing criteria was completed in 2022. And the following outcomes were stated:
The country was deemed;
● Compliant for 2,
● Largely Compliant with 11 of the FATF 40 Recommendations.
The country was also deemed;
● Highly Effective for 0,
● Substantially Effective with 2 of the Effectiveness & Technical Compliance rating.
Sanction Scanner Solutions to Comply with Vietnam AML Regulations
According to the Enhanced Due Diligence standards under Vietnam's legislation, you must identify whether your customer is a Politically Exposed Person (PEP), occupies a public position, or has a higher risk profile. In addition, when you onboard a new customer, you must undertake Identity Verification. When dealing with transaction data, you should use Identity Verification in accordance with the monetary levels set in Vietnamese legislation.
Sanction Scanner helps businesses manage their AML, Know Your Customer (KYC), and Identity Verification processes. Protect yourself from penalties by complying with Vietnamese AML regulations with Sanction Scanner solutions.
Sanction Scanner Solutions to Comply with AML Regulations
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