KYC Information and Correspondent Banking: New Requirements Under the Revised AML Law
Hanoi/Ho Chi Minh City, Vietnam - The revised Anti-Money Laundering (AML) law in Vietnam has introduced several new requirements for financial institutions to enhance transparency and prevent illegal activities. One of the key changes is the requirement for correspondent banks to ensure that their customers have performed due diligence on the ultimate beneficiaries of transactions.
New Requirements
According to the revised AML law, when performing due diligence on a customer as a Trustee, the reporting entity may request identity information from the settlor/grantor, the trustee, and the beneficiary. The law also requires correspondent banks to maintain records of all transactions and report any suspicious activities to the relevant authorities.
Strengthening Transparency
The new requirements aim to strengthen the fight against money laundering and terrorist financing by increasing transparency in the financial system. Correspondent banks must ensure that their customers have implemented robust Know Your Customer (KYC) procedures, including:
- Identity verification
- Background checks
- Ongoing monitoring of customer activity
Quote from PwC Vietnam Director
“The revised AML law is a significant step forward in Vietnam’s efforts to combat money laundering and terrorist financing,” said Hiran Cabraal, Director at PwC Vietnam. “Correspondent banks must take immediate action to ensure compliance with the new requirements, which include implementing robust KYC procedures, maintaining accurate records of transactions, and reporting any suspicious activities.”
Solutions from PwC Vietnam
To help financial institutions comply with the revised AML law, PwC Vietnam has developed a range of solutions, including:
- Training programs for staff
- Risk assessments
- Implementation of effective KYC procedures
Effective Implementation of the Revised AML Law
To ensure successful implementation of the revised AML law, correspondent banks must take several steps:
- Establish a robust governance framework to oversee the implementation of AML/CFT measures
- Develop and implement effective KYC procedures, including identity verification, background checks, and ongoing monitoring of customer activity
- Maintain accurate records of all transactions and report any suspicious activities to the relevant authorities
- Ensure that staff involved in handling suspicious transaction alerts are adequately skilled and experienced to identify and assess criminal activity
By taking these steps, correspondent banks can ensure compliance with the revised AML law and play a key role in preventing illegal activities in Vietnam’s financial system.
About PwC Vietnam
PricewaterhouseCoopers Consulting (Vietnam) Ltd is a leading professional services firm that provides consulting services to clients across various industries. With a team of experienced professionals, PwC Vietnam helps clients address complex business challenges and achieve their strategic objectives. For more information, please visit www.pwc.com/vn.