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Stricter Measures Introduced for Suspicious Transactions Reporting
Hanoi, Vietnam - The Vietnamese government has implemented a new law aimed at enhancing the fight against money laundering (ML) and terrorist financing (TF). The Law on Anti-Money Laundering and Combatting Financing of Terrorism (AML/CFT) introduces stricter measures for reporting suspicious transactions.
Suspicious Transaction Reporting (STR)
The new law sets out a list of suspicious signs for various sectors, including:
- Banking
- Payment intermediary
- Life insurance
- Securities
- Prize-awarding game/gaming
- Casino businesses
- Real estate business sectors
It also clarifies the elements of suspicious transactions that are subject to regulatory reporting.
Under the new law, if a reporting entity detects a transaction conducted at the request of an accused, defendant, or convicted person, and the assets involved belong to them, they must apply a postponement measure on the transaction. This measure aims to prevent the misuse of assets and ensure the integrity of financial transactions.
Time Limit for Reporting
The new law introduces changes to the time limit for reporting suspicious transactions:
- High-value transactions and electronic money transfers: within one working day for e-reporting and two working days for paper reporting.
- Suspicious transactions: within three working days from the transaction date or within one working day from the date of detection.
- If a reporting entity detects a suspicious transaction requested by a customer that indicates criminal activities, they must report to relevant authorities and the State Bank of Vietnam (SBV) within 24 hours.
What Do Firms Need to Do?
To implement the new AML/CFT law, firms need to consider several practical solutions:
Robust Governance
- Establish a strong oversight mechanism across all levels of management.
Effective Management Reporting Framework
- Provide senior management with timely and actionable information to perform effective oversight.
Effective Implementation of AML Technology System
- Ensure conformity to data requirements, accuracy, and completeness, as well as interaction with upstream and downstream applications.
Effective Investigation
- Ensure staff are adequately skilled and experienced to identify and assess criminal activity, and make appropriate decisions for escalation or reporting.
Effective Outsourcing Programme
- Establish good governance and strong oversight of any outsourced function.
Effective Quality Assurance (QA) Programme
- Implement a risk-focused QA programme with sufficient independence and reporting lines.
Conclusion
The new AML/CFT law aims to strengthen Vietnam’s fight against ML and TF by introducing stricter measures for reporting suspicious transactions. Firms must implement these practical solutions to ensure compliance with the new law and maintain a robust AML/CFT framework.