Firms Must Heed New AML Law Requirements

To combat money laundering and terrorist financing, Vietnam has introduced significant changes to its Anti-Money Laundering (AML) Law. Financial institutions must adapt to these new requirements to ensure compliance.

Key Changes in Reporting Suspicious Transactions

The new law introduces several key changes to the way financial institutions report suspicious transactions:

• Firms must apply a transaction postponement measure when they have reason to believe that a transaction was conducted at the request of an accused, defendant, or convicted person and that the assets involved belong to them.
• The reporting entity is exempt from legal liability for any consequences arising from the application of this measure.

Enhanced Reporting Requirements

The new law also introduces enhanced reporting requirements:

• High-value transactions and electronic money transfers must be reported within one working day using e-reporting, and two working days using paper reporting.
• Suspicious transactions must be reported within three working days or one working day after detection, whichever is earlier.
• In cases where a firm detects a suspicious transaction requested by a customer that indicates criminal activity, it must report to relevant authorities and the State Bank of Vietnam (SBV) within 24 hours.

Compliance Strategies

To ensure compliance with the new law, firms are advised to implement robust governance, culture, policy, and procedure frameworks that include:

• Strong Oversight:
  • Strong oversight from top management
• Clear Duty Segregation and Collaboration Mechanism:
  • A clear duty segregation and collaboration mechanism across three lines of defense (LOD)
• Enterprise Risk Assessment Guidelines:
  • Enterprise risk assessment guidelines on money laundering, terrorist financing, and sanctions
• Training and Updates:
  • Periodic training and updates for staff on the new law’s requirements and implications

Firms should also establish effective management reporting frameworks to provide senior management with timely and actionable information. This will enable them to perform effective oversight and promote a robust AML/CTF culture across the organization.

Implementation of AML Technology System

The implementation of an AML technology system is crucial, with firms required to:

• Ensure data accuracy and completeness
• Sufficient resources with the necessary skills and experience to conduct assessments and refinements of the system

Effective Investigation Processes

Firms should have effective investigation processes in place, including minimum standards for investigating suspicious transaction alerts. This will help maintain the quality and accuracy of investigations.

Effective Outsourcing Programmes

Firms must establish effective outsourcing programmes that ensure good governance and strong oversight of any outsourced function. This will enable them to free up resources to focus on higher-risk transactions and activities.

Risk-Focused Quality Assurance Programme

A risk-focused Quality Assurance (QA) programme is essential, with varying frequency and intensity of monitoring dependent on the level of risk identified. The QA programme should also promote the desired AML/CTF mind-set and ethical standards amongst employees.

By implementing these measures, firms can ensure compliance with the new AML Law and play their part in combating money laundering and terrorist financing.