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Know Your Customer Guidelines in Vietnam: Key Highlights of the 2022 Law
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Introduction
The Vietnamese government has introduced a stricter regime to prevent money laundering and terrorist financing with the passing of the Law on Anti-Money Laundering No. 14/2022/QH15 on November 15, 2022. The law came into effect on March 1, 2023, replacing the previous Law on Anti-Money Laundering No. 07/2012/QH13.
Key Changes
- Broadens the definition of money laundering to capture all acts of legitimizing the origin of properties acquired directly or indirectly from criminal activities.
- Expands the list of reporting subjects that must implement Know-Your-Customer (KYC) measures to verify customers’ identity and report large value transactions and suspicious transactions to the Anti-Money Laundering Department of the State Bank of Vietnam.
Reporting Subjects
The 2022 Law introduces payment intermediary services, securities brokerage, management of securities investment funds, and securities portfolio management as reporting subjects. This brings the total number of reporting subjects to 24, including:
- Organizations or individuals performing business activities such as:
- Receiving saving deposits
- Lending
- Financial leasing
- Payment services
Reporting Obligations
Under the 2022 Law, reporting subjects must report:
- Suspicious transactions
- Large value transactions
The law provides guidance on identifying suspicious transactions by generalizing signs of suspicious transactions and requiring reporting subjects to implement KYC measures more thoroughly.
Transaction Value Thresholds
The 2022 Law does not specify transaction value thresholds for reporting obligations, but further guidance is expected from the Prime Minister.
Compliance
Vietnamese businesses and organizations are advised to familiarize themselves with the new requirements to prevent money laundering and terrorist financing, and comply with the revised guidelines to avoid penalties and reputational damage.
Importance of Compliance
Strengthening regulations and aligning with international practices is crucial to ensure the security and safety of Vietnam’s national finance system and currency.