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Vietnam’s Fight Against Money Laundering: What You Need to Know

As Vietnam’s economy continues to grow and integrate into regional and global economies, the country has become a hotspot for money laundering activities. To combat this issue, the State Bank of Vietnam (SBV) and other relevant authorities have made it a top priority to put in place stringent anti-money laundering (AML) measures.

New AML Law Brings Significant Changes

Since March 1, 2023, Vietnam has implemented the Anti-Money Laundering Law of 2022, which amends the 2012 law. The updated legislation brings significant changes to establish a more robust AML framework. Businesses must be aware of these alterations to comply with the law and adjust their internal rules accordingly.

  • Broadens the definition of money laundering activities
  • Imposes additional reporting requirements on digital wallet providers
  • Introduces new procedures for verifying client information
  • Implements a fresh risk assessment policy

Vietnam Aligns with Global Standards

In light of Vietnam’s ongoing economic growth and development, the government is taking measures to align its policies, including the new AML Law, with global standards. These policies are designed not only to protect the integrity of Vietnam’s financial system but also to enhance the confidence of foreign investors.

AML Laws and Regulations in Vietnam

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

  • Standardized STR forms have been introduced
  • Local banks are required to submit printed copies of STRs

Room for Improvement

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. Regulations related to updating client information in other sectors are limited and inadequately enforced.

Roles of AML Regulators

The SBV has a general responsibility for AML regulation and state management, tasked with 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:

  • Ministry of Public Security: responsible for gathering and investigating money laundering-related information
  • Ministry of Construction: in charge of implementing AML measures in the real estate sector
  • Ministry of Justice: responsible for AML measures related to attorneys, legal practice groups, notaries, and notary public offices
  • People’s Procuracy and 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

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

In the dynamic financial landscape of Vietnam, where stringent regulations govern every transaction, Sanction Scanner stands as a reliable partner. We utilize advanced technologies to offer highly efficient anti-money laundering solutions. These innovative tools empower businesses operating in Vietnam to address their AML requirements seamlessly. Our platform simplifies AML compliance procedures, enabling you to fulfill your AML obligations within Vietnam’s regulatory framework effortlessly.

You can explore our website to initiate contact or request a demo and embark on a journey to success while ensuring full compliance with Vietnam’s financial regulations.