Legal FAQ: Anti-money laundering (AML) regulations in Vietnam

Question 1: What is the legal definition of money laundering?

Answer: Money laundering is the act of organizations or individuals aiming to legitimize the origin of assets derived from crime. Such assets include those obtained directly or indirectly from criminal activities, as well as any income, fruit, interest, or profit generated from them.

Question 2: Who are the subjects governed by the Law on Anti-Money Laundering?

Answer: The subjects include:

- Financial institutions.

- Relevant non-financial businesses and professions (DNFBPs) (e.g., real estate businesses, lawyers, accountants).

- Vietnamese individuals/organizations, foreign individuals/organizations, and international organizations conducting transactions with the aforementioned entities.

- Other relevant organizations, individuals, and state agencies involved in AML efforts.

Question 3: What is the "Blacklist" in anti-money laundering?

Answer: The Blacklist is a list of organizations and individuals involved in terrorism or terrorist financing (managed by the Ministry of Public Security), and those designated in connection with the proliferation and financing of weapons of mass destruction (managed by the Ministry of National Defense).

Question 4: What acts are strictly prohibited in AML activities?

Answer: Prohibited acts include:

1. Organizing, participating in, or facilitating money laundering.

2. Establishing or maintaining anonymous accounts or using pseudonyms; establishing or maintaining relationships with shell banks.

3. Illegally providing services for receiving cash, checks, or other monetary instruments.

4. Abusing positions or powers to infringe upon the legal rights and interests of individuals or organizations.

5. Obstructing information disclosure or retaliating against whistleblowers.

Question 5: When must financial institutions perform Customer Due Diligence (CDD)?

Answer: CDD is mandatory when:

• A customer opens an account or establishes a relationship for the first time.

• A customer performs high-value occasional transactions.

• Conducting electronic transfers lacking originator information.

• There is a suspicion of money laundering or doubts about the authenticity of previously collected information.

Question 6: What should reporting entities do for high-risk customers?

Answer: In addition to standard CDD, reporting entities must apply enhanced measures, including updating and verifying enhanced customer identity information and closely monitoring their transactions.

Question 7: When should "transaction delay" measures be applied?

Answer: Transaction delays must be applied immediately when:

• There are grounds to suspect or discover that parties involved are on the Blacklist.

• There is a reason to believe the transaction is linked to criminal activity.

• Requested by competent state authorities.

Question 8: What is the deadline for reporting large-value and electronic transfer transactions?

Answer: Reports must be submitted before 4:00 PM on the next business day following the transaction. If it falls on a holiday, the deadline is moved to the next working day.

Question 9: How long does the State Bank of Vietnam (SBV) have to transfer suspicious information?

Answer: Upon reasonable suspicion, the SBV must transfer information or case files to competent authorities within 07 working days.

Question 10: Where do money laundering risks typically arise in legal practice for lawyers?

Answer: In practice, risks for lawyers often arise during real estate transactions, specifically during contract drafting and legal consultancy. These services fall under the group required to perform AML reporting.