Firms Must Be Vigilant in Reporting Suspicious Transactions Under New AML Law
In a move to strengthen anti-money laundering (AML) and combating the financing of terrorism (CFT) measures, the Vietnamese government has introduced new regulations requiring financial institutions to report suspicious transactions within a specified timeframe.
Timeframe for Reporting Suspicious Transactions
According to the new law, firms must:
- Report high-value transactions and electronic money transfers within one working day for e-reporting and two working days for paper reporting.
- Report suspicious transactions within three working days from the transaction date or within one working day from the date of detection.
Additional Requirements for Reporting Suspicious Transactions
If a firm detects that a suspicious transaction requested by a customer is linked to criminal activities, it must report to relevant authorities and the State Bank of Vietnam (SBV) within 24 hours.
Practical Solutions for Firms
To ensure compliance with the new regulations, firms are advised to implement robust governance, culture, policy, and procedure frameworks. This includes:
- Establishing strong oversight from top management and clear segregation of duties across three lines of defense.
- Conducting enterprise risk assessments on money laundering (ML), terrorist financing (TF), and sanctions risks.
- Providing regular training and updates to staff on the new AML Law and its implications.
Effective Management Reporting Framework
Firms are required to establish an effective management reporting framework, which provides timely and actionable information to senior management. This will enable them to perform effective oversight and promote a robust AML/CFT culture.
Key Takeaways
- Firms must report high-value transactions and electronic money transfers within one to two working days.
- Suspicious transactions must be reported within three working days or within one day of detection.
- Firms must apply transaction postponement measures for suspicious transactions with assets belonging to accused, defendants, or convicted persons.
- The time limit for applying transaction postponement measures is 03 working days from the commencement date.
By implementing these practical solutions and adhering to the new regulations, firms can ensure compliance with AML/CFT requirements and mitigate the risk of financial crime.