Vietnam Issues Comprehensive Guide to Anti-Money Laundering Laws

The Vietnamese government has issued Decree No. 19/2023/ND-CP, a comprehensive guide to the country’s anti-money laundering laws, effective as of April 28th. The decree sets out new know-your-customer (KYC) guidelines for financial institutions aimed at preventing money laundering and terrorist financing.

New KYC Guidelines for Financial Institutions

According to Decree 19, financial institutions are now required to conduct KYC procedures in specific situations, including:

When clients open digital wallets for the first time
When clients have no accounts or have not conducted transactions in six months
When depositing, withdrawing, or transferring funds worth VND 400 million (approximately USD 17,000) or more within a day

Criteria for Determining Beneficial Owners

The decree provides criteria for determining beneficial owners, outlining guidelines for identifying individuals who possess actual ownership of assets and have the authority to influence transaction decisions. For individual clients, financial institutions must collect information on:

Name
Address
Account number

For organizational clients, they must gather data on:

Trustees
Beneficiaries
Related parties
Individuals with ultimate control

Regulations for Unusually High-Value and Complicated Transactions

Decree 19 introduces more comprehensive regulations for unusually high-value and complicated transactions. Financial institutions are required to report any transactions that seem disproportionate to the client’s regular transaction amounts or income, as well as those that do not align with their usual business operations.

In cases where financial institutions suspect or identify transaction-related parties on a “blacklist,” they must delay transactions and promptly report to competent state agencies. The decree lists specific grounds for suspecting or identifying blacklisted individuals or organizations, including:

Matches with Blacklist information
Partial matches that suggest involvement in terrorism or terrorist financing

Compliance Requirements

The new decree requires reporting entities, including financial and non-financial institutions, to update themselves on the latest regulations to fulfill their obligations when conducting business activities and transactions. Failure to comply could result in severe legal consequences.

Expert Insights

“The Decree 19 provides a more detailed and comprehensive framework for financial institutions to prevent money laundering and terrorist financing,” said Kevin Hawkins, partner at DFDL’s Vietnam office. “It is essential for businesses operating in Vietnam to familiarize themselves with the new regulations to ensure compliance and avoid potential legal risks.”

Contact Us

For more information on Decree 19 and its implications for financial institutions, please contact [DFDL’s Vietnam office].