New decree on money laundering has stringent requirements for banks, jewelers, casinos and even charities
A local commercial bank staff receives bricks of dong bank notes from a customer in Hanoi. A new decree has stringent requirements as part of the Vietnamese government’s efforts to combat money laundering. PHOTO: AFP
Vietnam is seeking to tighten regulations against money laundering following suspicious transactions worth several billion dollars last year and blacklisting by the anti-money laundering Financial Action Task Force in June.
According to a decree on preventing and fighting money laundering which took effect October 10, individuals and entities have to provide certain personal information when undertaking transactions that are open to abuse by launderers.
For instance, gold and jewelry shop owners have to obtain name, date of birth, nationality, occupation, phone number, ID card or passport number, and address of any customer transacting business worth VND300 million (US$14,000) and above.
Real estate floors and brokers have to do the same about both sellers and buyers irrespective of the value of deals.
According to the State Bank of Vietnam’s Anti-Money Laundering Department, no official assessment has been done of money laundering in the country.
But it said it detected 165 suspicious transactions last year valued at nearly VND51 trillion ($2.4 billion) in total.
The central bank received 51 requests from judicial law-enforcement agencies for information about suspects accused of involvement in money laundering, it said.
The Financial Action Task Force (FATF), a global body set up to fight money laundering and financing of terrorism, in a report June listed Vietnam among 14 countries identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.
Vietnam has taken steps to improve its anti-money laundering and terrorism funding regime, including passage of a counter-terrorism law, it said.
But the country has not made sufficient progress in implementing its action plan, and certain strategic deficiencies remain, it said.
It urged Vietnam to set up a regime to identify and freeze terrorist assets, make legal persons subject to criminal liability in line with international standards, and strengthen international co-operation.
Nguyen Van Ngoc, director of the Anti-Money Laundering Department, said money laundering in Vietnam has mostly been discovered in bank transactions and some criminals have been found using credit cards to withdraw money.
“The new decree shows Vietnam’s commitment in tackling money laundering,” he said.
The decree requires banks and other financial agencies to obtain information about customers using their service for the first time or doing a transaction worth VND300 million in a single day if they have not done any transactions in the previous six month.
They also have to obtain information about all transactions suspected to be linked to money laundering.
Casinos will have to obtain personal information about gamblers who bet or win VND60 million ($2,850) or more in a day.
In August the Communist Party’s decision-making Politburo gave the green light for Vietnamese to enter one of the country’s casinos for a trial period, a move that could attract more foreign investment in the field.
Another provision in the decree seeks to ensure transparency in the operations of non-profit organizations by requiring them to report names, addresses, and amounts given by donors.
They also have to obtain information like name and address of recipients, the amount given, how it is given, and how the money is used.
The decree has strict requirements for “new technology-based” services like online money transfer: service providers need to personally meet customers to obtain information.
They also have to submit an assessment of the risk of money laundering through their services and propose preventive and response measures.
In a recent case of online money transfer that was suspected to be money laundering, Vietnamese police in June uncovered illegal transactions related to global digital currency operator Liberty Reserve, which is under investigation in the US for laundering $6 billion globally.
They discovered that Thinh Vu Joint Stock Company, set up by Vu Van Lang, 30, of Hai Phong in 2008, illegally carried out transactions using Liberty Reserve virtual currency.
The police have completed their investigations and said charges would be filed soon.
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By Vietweek Staff, Thanh Nien News (The story can be found in the October 11th issue of our print edition Vietweek)