Financial Crime World

VIETNAM: New Banking Regulations for Anti-Money Laundering Come into Effect

The State Bank of Vietnam (SBV) has issued Circular 09/2023/TT-NHNN, a comprehensive guide to implementing Vietnam’s anti-money laundering (AML) law. The new regulations aim to strengthen the country’s financial system and prevent illegal activities such as money laundering and terrorist financing.

Key Features of the Regulations

The circular outlines several key criteria for assessing money laundering risks, including:

  • Business sectors
  • Countries or territories
  • Customer types
  • Products or services
  • Internal policies and regulations

It also recommends a scoring system ranging from one to five to evaluate the risk associated with each transaction.

Firms’ AML Procedures

Firms are required to develop their own AML procedures based on the outlined criteria, which should include:

  • Objectives
  • Scope
  • Identification of AML risks
  • Customer risk ratings
  • Handling of high-risk customers
  • Procedures for identifying money laundering risks

Simplified Due Diligence for Low-Risk Customers

Low-risk customers may be subject to a simplified due diligence process, including:

  • Reducing the frequency of updating customer information
  • Reducing supervision of transactions
  • Not collecting nature of business relationship

Enhanced Due Diligence for High-Risk Customers

High-risk customers, on the other hand, require enhanced due diligence measures, including:

  • Additional personal and organizational information collection
  • Transaction approval by management level higher than the initiating level
  • Increased monitoring of customer transactions

AML Compliance Requirements

Firms are required to:

  • Provide AML training for leaders and employees annually
  • Update regulations in line with AML laws and policies
  • Review internal processes and procedures
  • Send internal audit reports to relevant authorities
  • Register their AML compliance officers and notify the authorities of any changes

Reporting on Electronic Funds Transfers

Firms are required to report electronic funds transfers when:

  • All parties involved are located in Vietnam and the transfer value exceeds 500 million VND (US$21,000)
  • At least one party is outside of Vietnam and the transfer value is US$1,000 or more Reports must include:
    • Financial institution information
    • Transaction details
    • Other requested data

Transactions made by debit card, credit card, or prepaid card, as well as transactions involving only financial institutions, are exempt from reporting requirements.

Effective Date

Most clauses outlined in the circular come into effect on July 28, 2023. However, regulations on:

  • Money laundering risk management
  • Large transaction reporting
  • Electronic funds transfer reporting
  • Suspicious transaction report forms take effect on December 1, 2023.

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