New Anti-Money Laundering Law in Vietnam: What Businesses Need to Know

Vietnam’s National Assembly passed and implemented the updated Anti-Money Laundering (AML) Law on March 1, 2023, replacing the 2012 legislation. This enactment represents a more stringent stance against financial crimes, aiming to strengthen Vietnam’s financial system and bolster investor confidence.

Key Modifications in the AML 2022 Law

Broadened money laundering definition: The law now covers those trying to legitimize the origins of criminal gains, broadening the definition of money laundering.
Additional reporting obligations: Digital wallet providers and other payment service entities are now required to implement “know-your-customer” (KYC) measures.
New client information verification measures: Organizations must verify customers’ nationalities, assess if they fall under the Politically Exposed Persons (PEPs) category, and identify whether they’re organizations.
New risk assessment policy: The government will review risk assessments every five years with the State Bank of Vietnam, while reporting entities must undertake their own assessments and disseminate updates publicly.

A Modernized AML Regime

The 2022 AML Law targets various sectors to improve their anti-money laundering defenses, including:

Financial leasing activities
Payment services
Currency exchange activities
Accounting and legal services
Life insurance business
Securities investment consulting services

Implementing KYC Measures

The new AML regulations make it mandatory for digital wallet providers and other payment service entities to adhere to KYC requirements to combat money laundering risks. Previously, this duty fell on all reporting entities, including micro-enterprises and individuals. Now, the law provides more leeway for the latter.

Verifying Client Information

Reporting entities must obtain extensive client information through KYC procedures, such as:

Nationality
Citizenship
Determination of whether the client falls under the PEP category

Risk Assessment and Reporting

Entities must establish a risk assessment framework and conduct regular reviews. Reporting entities must report any suspicious transactions within 3 days, following guidelines provided by the State Bank of Vietnam and relevant ministries.

Adapting to the Changes

To comply with the new AML regulations, businesses in Vietnam should invest in anti-money laundering systems, such as software with key data intelligence, train employees, and establish a risk assessment framework.

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