Article Vietnam: Anti-Money Laundering Law Takes Effect

Vietnam’s new Anti-Money Laundering Law (Law No. 14/2022/QH15) took effect on March 1, 2023. The law was passed by the Vietnam National Assembly on November 15, 2022, to replace Anti-Money Laundering Law No. 07/2012/QH13.

Highlights of the New Law

The new law defines “money laundering” as an act of an individual or an organization to legitimize the origin of property obtained from a crime. (Law No. 14/2022/QH15, art. 3, subpara. 1.)

Reporting entities have obligations to implement measures against money laundering and comply with other obligations as required by the new law. (Arts. 9–20.) Reporting entities include financial institutions licensed to perform listed activities. (Art. 4, para. 1.) The new law adds activities of payment intermediary service providers to the list. (Art. 4, para. 1(dd).) Other reporting entities are organizations and individuals that engage in listed nonfinancial businesses, such as trading in prize-awarding games and casinos, real estate businesses, trading in precious metals and gems, and business accounting services. (Art. 4, para. 2.) After obtaining the consent of the National Assembly Standing Committee, the government is also allowed to add to the list specific activities that pose money laundering risks to reporting entities. (Art. 4, para. 3.)

Reporting entities must collect and update customer identification information that is specified in the law (art. 10) and may legally exploit information in national databases through competent state agencies for collation and verification of information provided by customers (art. 12, para. 2). The law also prescribes conditions to verify customer identification information through other organizations. (Arts. 13, 14.)

Reporting entities are required to conduct a money laundering risk assessment aimed at developing a risk-management process that classifies customers as low, medium, and high risks, and then apply risk-management measures in accordance with the customers’ risk levels. (Arts. 15–16.)

Reporting entities must review the list of politically influential foreign individuals announced by the State Bank of Vietnam and compile a list of their customers that appear on the State Bank list. The reporting entities must take appropriate measures to verify the origin of the assets of such customers and beneficial owners and supervise their business relationships in the course of conducting transactions with them. (Art. 17.) Additionally, reporting entities must establish policies and procedures to identify and assess customers’ money laundering risk levels before providing new products and services. (Art. 18.)

Reporting entities are also responsible for reporting large-value transactions and suspicious transactions to the State Bank of Vietnam. (Art. 25.) The law lists signs of suspicious transactions according to business sector. (Arts. 27–34.)

Reporting entities must immediately apply measures to delay transactions for up to three working days and report to competent agencies and the State Bank of Vietnam in the following cases:

• There are grounds for suspecting that or ascertaining if parties involved in transactions are on the black list.
• There is reason to believe that the requested transaction is related to criminal activities.
• Competent state agencies request it. (Art. 44.)