Financial Crime World

Vietnam Fails to Implement Enhanced Measures Against Money Laundering and Terrorist Financing Risks

The Asia-Pacific Group on Money Laundering (APG) has released a report highlighting Vietnam’s failure to implement enhanced measures against money laundering and terrorist financing risks. Despite having a policy-level inter-agency cooperation framework in place, operational coordination mechanisms for anti-money laundering and counter-terrorist financing (AML/CFT) are limited.

Lack of Awareness among Private Sector Entities

The report reveals that private sector entities, particularly smaller financial institutions and designated non-financial businesses and professions (DNFBPs), lack awareness about money laundering and terrorist financing risks. Larger financial institutions have some understanding of these risks, but significant improvements are needed to address the high-risk areas such as banking, real estate, foreign exchange, and remittance sectors.

Key Findings:

  • Limited awareness among private sector entities about money laundering and terrorist financing risks.
  • Larger financial institutions have some understanding of these risks, but significant improvements are needed.

Challenges in Law Enforcement

Vietnam’s law enforcement agencies (LEAs) face challenges in using financial intelligence to investigate predicate offenses and trace criminal proceeds. The report found that LEAs rarely request information from the country’s Financial Intelligence Unit (FIU) or other competent authorities to support their investigations.

Key Findings:

  • LEAs face challenges in using financial intelligence to investigate predicate offenses and trace criminal proceeds.
  • LEAs rarely request information from the FIU or other competent authorities to support their investigations.

Limitations of the Financial Intelligence Unit

The FIU, which is responsible for analyzing suspicious transactions reports (STRs), produces limited analysis and has a low recovery rate of confiscated property, with only approximately 29% of judgments being recovered. The report also highlights the lack of an integrated IT tool to facilitate analysis and the limited exchange of financial information and intelligence between authorities.

Key Findings:

  • FIU produces limited analysis and has a low recovery rate of confiscated property.
  • Lack of integrated IT tool to facilitate analysis and limited exchange of financial information and intelligence between authorities.

Recommendations

The APG report recommends that Vietnam strengthen its AML/CFT regime by implementing enhanced measures in high-risk sectors, improving private sector awareness, and enhancing law enforcement agencies’ use of financial intelligence. It also suggests strengthening the FIU’s capacity to analyze STRs and improve the recovery rate of confiscated property.

Recommendations:

  • Implement enhanced measures in high-risk sectors.
  • Improve private sector awareness about money laundering and terrorist financing risks.
  • Enhance law enforcement agencies’ use of financial intelligence.
  • Strengthen FIU’s capacity to analyze STRs.
  • Improve recovery rate of confiscated property.