Financial Crime World

Vietnam’s AML/CFT Regime Undergoes Significant Reform, But Improvement Needed

In a bid to strengthen its anti-money laundering and counter-terrorist financing (AML/CFT) regime, Vietnam has undergone significant reforms in recent years. However, despite some improvements, the country still faces numerous technical deficiencies and needs to make fundamental improvements in several areas.

Progress Made

According to a report by [name of organization], Vietnam’s AML/CFT system has made progress since the enactment of the new Penal Code in 2015, which introduced revised ML and TF offences and corporate criminal liability. Additionally, the Law on Anti-Money Laundering (AML) 2012, the Law on Anti-Terrorism 2013, and their implementing decrees have led to an increase in technical compliance.

Key Reforms

  • Revised ML and TF offenses
  • Corporate criminal liability introduced
  • Laws and implementing decrees enhancing technical compliance

Technical Deficiencies Remain

However, the report highlights that significant technical deficiencies remain, particularly in terms of:

  • Supervision: Lack of effective supervision of financial institutions and non-financial businesses and professions.
  • Preventive Measures: Insufficient preventive measures to detect and prevent ML/TF activities.
  • Development and Use of Financial Intelligence: Limited development and use of financial intelligence to identify ML/TF risks.
  • ML Investigations and Prosecution: Lack of effective investigations and prosecution of ML cases.
  • TF Preventive Measures: Inadequate TF preventive measures to detect and prevent TF activities.
  • Transparency of Legal Persons and Legal Arrangements: Limited transparency of legal persons and legal arrangements.

Effectiveness

In terms of effectiveness, Vietnam has moderate results regarding:

  • Risk Assessment: Risk assessment is not comprehensive or timely.
  • Policy and Coordination: Policy and coordination between authorities are limited.
  • International Cooperation: International cooperation is sporadic.
  • TF Investigation and Prosecution: TF investigations and prosecution are limited.

Challenges

The report highlights several challenges facing Vietnam’s AML/CFT regime, including:

  • Limited Number of Suspicious Transaction Reports (STRs): Limited number and low quality of STRs received by the Anti-Money Laundering Department.
  • Lack of Integrated IT Tool: Lack of an integrated IT tool to facilitate analysis.
  • Manual Receipt of Reports: Manual receipt of many reports, which hinders efficient processing.

Conclusion

While Vietnam has made progress in strengthening its AML/CFT regime, significant improvement is still needed to address technical deficiencies and ensure effective implementation of anti-money laundering and counter-terrorist financing measures. The country must make fundamental improvements in several areas to effectively combat ML/TF risks.