New Law Clarifies Suspicious Transactions and Reporting Requirements in Vietnam
The government of Vietnam has introduced a new law to strengthen anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations in the country. The law aims to clarify the definition of suspicious transactions and establish stricter reporting requirements for financial institutions.
Key Provisions
Reporting Requirements
- Reporting entities must report high-value transactions and electronic money transfers within one working day for e-reporting and two working days for paper reporting.
- Suspicious transactions must be reported within three working days from the transaction date or within one working day from the date of detection.
Postponement Measure
- Reporting entities are required to apply a postponement measure on suspicious transactions if they have reasonable grounds to believe that the transaction was conducted at the request of an accused, defendant, or convicted person.
- The reporting entity must report such transactions to relevant authorities and the State Bank of Vietnam (SBV) within 24 hours.
What Do Firms Need to Do?
To comply with the new law, financial institutions are advised to take the following steps:
Governance
- Establish a strong governance structure, clear policies, and procedures across three lines of defense (LOD).
- Ensure robust management reporting framework that provides senior management with necessary information for effective oversight.
Technology System
- Implement an effective AML technology system that is compliant with data requirements, accurate, and complete.
- Ensure the system integrates with upstream and downstream applications.
Investigation
- Establish minimum standards for investigating suspicious transactions.
- Ensure staff involved in handling alerts are adequately skilled and experienced.
Outsourcing Programme
- Implement a governance framework to oversee outsourced functions.
- Ensure compliance with local regulations.
Quality Assurance Programme
- Establish a risk-focused QA programme that is independent, reporting directly to senior management.
- Ensure the programme promotes a robust AML/CFT culture within the organization.
By implementing these measures, financial institutions can effectively manage the risks associated with money laundering and terrorist financing, while also promoting a robust AML/ CFT culture within their organizations.