Financial Crime World

Vietnam’s Anti-Money Laundering Policies and Procedures: Enhancing the Country’s Financial Landscape

Introduction

As Vietnam continues its integration into regional and global economies, the country has become increasingly vulnerable to international money laundering activities. To combat this threat, the State Bank of Vietnam (SBV) and other relevant authorities have made combating money laundering a top priority.

Key Changes in the AML Law of 2022

The Anti-Money Laundering (AML) Law of 2022 brings significant changes to establish a more stringent AML framework. These include:

  • Broadening the definition of money laundering activities: The law expands the scope of money laundering offenses, making it easier to identify and prosecute related crimes.
  • Imposing additional reporting requirements on digital wallet providers: Digital wallet providers are now required to report suspicious transactions and maintain accurate records of customer information.
  • Introducing new procedures for verifying client information: Businesses must implement robust Know Your Customer (KYC) processes to verify the identity of their clients.

Vietnam’s AML Regulations

Vietnam has established legislative standards for Know Your Customer (KYC) and Suspicious Transaction Reports (STR). The revised Penal Code, effective January 1, 2018, introduced changes to money laundering crimes and extended criminal liability to legal entities involved in money laundering.

However, while Vietnam theoretically aligns with international standards, there is room for improvement in financial oversight for AML activities. Customer Due Diligence (CDD) and KYC processes within domestic banks must be enhanced and rigorously enforced.

Roles of AML Regulators

The SBV has a general responsibility for AML regulation and state management, inspecting and monitoring AML activities in reporting organizations within the currency, banking, and foreign exchange sectors. The Ministry of Finance (MOF) oversees AML operations in the insurance and securities industries.

Other authorities involved in anti-money laundering efforts include:

  • The Ministry of Public Security: Responsible for gathering and investigating money laundering-related information.
  • The Ministry of Construction: In charge of implementing AML measures in the real estate sector.
  • The Ministry of Justice: Responsible for AML measures related to attorneys, legal practice groups, notaries, and notary public offices.
  • The People’s Procuracy and the People’s Court: Collaborate with other authorities to investigate, prosecute, and adjudicate money laundering offenses.
  • People’s Committees at all levels: Responsible for providing legal training on anti-money laundering and working with state agencies to formulate policies and strategies to prevent and combat money laundering.
  • The Anti-Money Laundering Steering Committee: Assists the Prime Minister in developing strategies, policies, and programs to combat money laundering.

FATF Status of Vietnam

Vietnam is not a member of the Financial Action Task Force (FATF) but is part of the Asia/Pacific Group on Money Laundering (APG), a regional body similar to FATF. In the most recent Mutual Evaluation Report completed in 2022, Vietnam’s implementation of anti-money laundering and counter-terrorist financing measures yielded the following results:

  • Compliant with 2 of the FATF 40 Recommendations.
  • Largely Compliant with 11 of the FATF 40 Recommendations.
  • Highly Effective for 0 aspects.
  • Substantially Effective with 2 of the Effectiveness & Technical Compliance ratings.

AML Solutions for Vietnam

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