Financial Crime World

Vietnam Fails to Implement Enhanced Measures for High-Risk Sectors, Experts Warn

Despite being identified as high-risk areas, key sectors such as banking, real estate, foreign exchange, and remittance have not implemented enhanced measures to combat money laundering (ML) and terrorist financing (TF).

Limited Capacity and Lack of Integrated IT Tool

According to a recent report, Vietnam’s financial intelligence unit (FIU), the State Bank of Vietnam’s Anti-Money Laundering Department (AMLD), has limited capacity to analyze reports and lacks an integrated IT tool to facilitate its work.

Mixed Awareness of ML/TF Risks Across Sectors

The report also highlights that private sector awareness of ML/TF risks is mixed across sectors:

  • Larger financial institutions show some understanding of the risks
  • Smaller ones require significant improvements in awareness
  • Designated non-financial businesses and professions (DNFBPs) need to improve their understanding of ML/TF risks

Limited Use of Financial Intelligence by Law Enforcement Agencies

Additionally, law enforcement agencies (LEAs) in Vietnam make limited use of financial intelligence to investigate predicate offenses and trace criminal proceeds. There is also minimal exchange of financial information and intelligence between LEAs and other competent authorities in the country.

Low-Quality Suspicious Transaction Reports

The report further notes that AMLD receives a limited number of low-quality suspicious transaction reports (STRs) from a narrow range of reporting entities, which does not provide a good basis for analysis. Disseminations are primarily related to predicate offenses, and there is little indication that further analysis has been undertaken to strengthen or add value to STRs received.

Experts Warn of Significant Risks

Experts warn that Vietnam’s lack of implementation of enhanced measures in high-risk sectors poses significant risks to the country’s financial system and its ability to combat ML/TF. The report recommends that Vietnam take immediate action to address these shortcomings and improve its AML/CFT regime.