Decree 19/2023/ND-CP detailing the Anti-Money Laundering Law

DECREE

Detailing a number of articles of the Anti-Money Laundering Law

Pursuant to the Law on Organization of the Government dated June 19, 2015; Law on Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Anti-Money Laundering Law dated November 15, 2022;

At the request of the Governor of the State Bank of Vietnam;

The Government hereby promulgates the Decree on detailing a number of articles of the Anti-Money Laundering Law.

Chapter I
GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree details a number of articles and clauses of the Anti-Money Laundering Law regarding to principles of, criteria for, and method of, national risk assessment of money laundering; know-your-customer; criteria for identification of beneficial owners; transactions with abnormally high values or complicated transactions; state agencies competent to receive information, dossiers, documents and reports; collection, processing and analysis of information on money laundering prevention and combat; exchange, provision and transfer of information on money laundering prevention and combat with/to domestic competent agencies; grounds for suspecting or detecting the parties involved in transactions being on the blacklist and state agencies competent to receive reports on transaction delay.

Article 2. Subjects of application

1. Financial institutions.

2. Organizations or individuals engaged in related non-financial sectors and trades.

3. Vietnamese organizations and individuals, foreign organizations, foreigners, and international organizations that have transactions with financial institutions or organizations and individuals engaged in related non-financial sectors and trades.

4. Other organizations and individuals and agencies involved in anti-money laundering activities.

Chapter II
NATIONAL RISK ASSESSMENT OF MONEY LAUNDERING

Article 3. Principles for national risk assessment of money laundering

1. The national risk assessment of money laundering shall be carried out by the competent agency according to criteria for, and method of, national risk assessment of money laundering specified by law, in conformity with international standards and practical conditions in Vietnam.

2. The national risk assessment of money laundering must determine the level of national money laundering risk.

3. The national risk assessment of money laundering shall be a basis for developing post-assessment plans and updating corresponding anti-money laundering policies and strategies in each period.

4. Information, documents and data for the national risk assessment of money laundering shall be collected from the databases of competent agencies, reporting entities, domestic and foreign research documents on the principle of publicity and transparency, ensuring compliance with regulations on protection of state secrets.

Article 4. Criteria for national risk assessment of money laundering

1. Criteria for national risk assessment of money laundering include money laundering risk criteria; criteria on the appropriateness of anti-money laundering policies and measures, and criteria on consequences of money laundering of the country and of sectors, fields.

2. Money laundering risk criteria include criteria on money laundering risk from predicate crimes of money laundering and criteria on money laundering risk applicable to sectors and fields, to be specific:

a) Criteria on money laundering risk from predicate crimes of money laundering including money laundering risk from each domestic and transnational predicate crime to be assessed;

b) Criteria on money laundering risk applicable to sectors and fields including criteria on money laundering risk of each domestic and transnational sector or field to be assessed.

3. Criteria on the appropriateness of anti-money laundering policies and measures including the comprehensiveness of legal framework and the effectiveness of the observance of law, to be specific:

a) Criteria on the comprehensiveness of legal framework including the adequacy of law provisions relating to anti-money laundering of the country and of sectors and fields;

b) Criteria on the effectiveness of the observance of law including the effectiveness of the observance of law of the country; of sectors and fields and the appropriateness of anti-money laundering policies and measures associated with a number of key products and services of sectors and fields.

4. Criteria on consequences of money laundering include:

a) Criteria on negative impacts of money laundering on the economy;

b) Criteria on negative impacts of money laundering on the financial system;

c) Criteria on negative impacts of money laundering on sectors, fields;

d) Criteria on negative impacts of money laundering on the society.

Article 5. Method of national risk assessment of money laundering

1. The scoring method shall be used to carry out national risk assessment of money laundering.

2. The scoring method shall be implemented by using scoring toolkits for the criteria defined in Article 4 of this Decree to rank risks on a scale from 1 to 5, to be specific:

a) For criteria on money laundering risk: score 5 - high risk of money laundering; score 4 - medium-high risk of money laundering; score 3 - medium risk of money laundering; score 2 - medium-low risk of money laundering; score 1 - low risk of money laundering;

b) For criteria on the appropriateness of anti-money laundering policies and measures: score 5 - low appropriateness of anti-money laundering policies and measures; score 4 - medium-low appropriateness of anti-money laundering policies and measures; score 3 - medium appropriateness of anti-money laundering policies and measures; score 2 - medium-high appropriateness of anti-money laundering policies and measures; score 1 - high appropriateness of anti-money laundering policies and measures;

c) For criteria on consequences of money laundering: score 5 - high consequences of money laundering; score 4 - medium-high consequences of money laundering; score 3 - medium consequences of money laundering; score 2 - medium-low consequences of money laundering; score 1 - low consequences of money laundering;

d) For criteria for national risk assessment of money laundering: score 5 - high national risk assessment of money laundering; score 4 - medium-high national risk assessment of money laundering; score 3 - medium national risk assessment of money laundering; score 2 - medium-low national risk assessment of money laundering; score 1 - low national risk assessment of money laundering.

3. Information, figures and data for national risk assessment of money laundering are specified in the Appendix issued together with this Decree.

4. The State Bank of Vietnam shall provide scoring toolkits in conformity with international standards for anti-money laundering.

Chapter III
ANTI-MONEY LAUNDERING MEASURES

Section 1

KNOW-YOUR-CUSTOMER; CRITERIA FOR IDENTIFICATION OF BENEFICIAL OWNERS; TRANSACTIONS WITH ABNORMALLY HIGH VALUES OR COMPLICATED TRANSACTIONS; RECEIPT OF INFORMATION, DOSSIERS, DOCUMENTS AND REPORTS

Article 6. Know-your-customer

1. A financial institution shall conduct know-your-customer activities in the following cases:

a) A customer opens an account (payment account, e-wallet or another account) at the financial institution for the first time or establishes a relationship with the financial institution for the first time in order to use the products or services provided by such financial institution;

b) A customer having no account or having an account that has not conducted any transaction for 6 previous consecutive months conducts deposit, withdrawal or transfer transactions with the total value of VND 400,000,000 or more, or with equivalent value or more in a foreign currency within a day; except for transactions of closing or withdrawal of interests of deposits, repayment of credit card debt, repayment of credit extension to the financial institution, periodic payments registered with the financial institution, transactions of withdrawal of interests from the securities or bond investment activity;

c) A customer or his/her/its transaction or transaction of the parties relating to a transaction with one or more signs specified in Articles 27, 28, 29, 30 and 31 of the Anti-Money Laundering Law or other suspicious signs identified by the reporting entities;

d) A customer provides additional information or documents that do not match the previously provided information or documents, or the information and documents collected and identified by the reporting entities.

2. An organization or individual dealing in prize-winning games, including prize-winning video games; games on telecommunications networks or the Internet; casino; lottery; or betting shall conduct know-your-customer activities when a customer conducts a transaction with the total value of VND 70,000,000 or more, or with equivalent value or more in a foreign currency within a day.

3. Organizations and individuals conducting real estate business, except lease or sub-lease of real estate and provision of real estate consultancy services shall carry out know-your-customer activities for purchasers and sellers in brokerage of sale, purchase of real estate; for property owners in provision of real estate management service.

4. An organization or individual trading in precious metals and gems shall carry out know-your-customer activities when a customer conducts a cash transaction of purchase or sale of precious metals or gems of VND 400,000,000 or more, or with equivalent value or more in a foreign currency within a day.

5. An organization or individual providing legal arrangement services shall carry out know-your-customer activities when conducting transactions for his/her/its customers relating to establishment, operation or management of legal arrangements.

6. An organization or individual providing enterprise establishment, management and operation services shall carry out know-your-customer activities when a customer use or request to use his/her/its services.

7. An organization or individual providing corporate directorship and secretarial services to third parties shall carry out know-your-customer activities for the third parties and such provided directors and secretaries.

Article 7. Criteria for identification of beneficial owners

1. Reporting entities shall carry out the identification of beneficial owners for their personal customers as follows:

a) In case a customer open an account, the reporting entity shall identify the individual who actually owns or dominates activities of such account;

b) In case a customer establishes a relationship with the reporting entity, the reporting entity shall identify the individual who establishes and actually dominates such relationship.

2. Reporting entities shall carry out the identification of beneficial owners for institutional customers as follows:

a) The reporting entity shall identify the individual who actually holds directly or indirectly at least 25% of the charter capital of such organization or the last individual who has the right to dominate the institutional customer;

b) In case the individual cannot be identified as prescribed at Point a of this Clause, the reporting entity shall identify at least an at-law representative of such organization, except for cases where an individual represents the state capital amount invested in the organization;

c) In case the organization being an enterprise having listed on the domestic and foreign securities markets, and the information about beneficial owner of the organization has been announced, the reporting entity shall identify the beneficial owner being the announced individual.

3. Reporting entities shall identify beneficial owners of legal arrangements in accordance with Point a Clause 1 Article 22 of the Anti-Money Laundering Law.

4. Reporting entities shall identify beneficial owners of life insurance contracts being the individuals that actually receive benefits of the insured stated in the life insurance contracts.

Article 8. Transactions with abnormally high values or complicated transactions

1. Transaction with abnormally high values means a transaction that is obviously not proportional with income or inconsistent with the value of regular transactions between the customer and the reporting entity.

2. Complicated transaction means a transaction not suitable for the scale, type and areas of operation of the customer or inconsistent with the frequency, methods and scale of equivalent transactions in the same sector, field.

Article 9. State agencies competent to receive information, dossiers, documents and reports

Reporting entities shall promptly provide the information, dossiers, documents and reports specified in Clause 1 Article 38 of the Anti-Money Laundering Law at the request of the following competent state agencies:

1. Agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam.

2. Investigation bodies, bodies assigned to carry out a number of investigation activities or People’s procuracies, while performing their tasks under decisions on initiation of criminal cases, decisions on initiation of criminal proceedings against the accused; the national security protection specialized agencies of the People’s Public Security Forces, at the request of provision of information, dossiers, documents and reports relating to money laundering prevention and combat.

3. State inspection agencies, agencies assigned to perform the specialized inspection function of reporting entities.

Section 2

COLLECTION, PROCESSING, ANALYSIS, EXCHANGE, PROVISION AND TRANSFER OF INFORMATION ON MONEY LAUNDERING PREVENTION AND COMBAT

Article 10. Collection, processing and analysis of information on money laundering prevention and combat

1. The agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam may request relevant organizations and individuals to provide information, dossiers, documents and reports preserved at the organizations and individuals in accordance with law and information, dossiers, documents they receive or collect within their functions, tasks and powers to serve the analysis, exchange, provision and transfer of information on money laundering prevention and combat.

2. Relevant organizations and individuals shall provide information, dossiers and documents to the agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam according to the required time limit.

3. The agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam shall carry out settlement and analysis of the received information and reports, including:

a) Analysis and settlement of information on the basis of available information and collection of additional information in order to determine anti-money laundering strategies and objectives in sectors and fields, and of the country in each period;

b) Analysis and settlement of information on the basis of available information and collection of additional information in order to trace transactions, determine connections, suspected activities related to money laundering or other criminal activities.

Article 11. Exchange, provision and transfer of information on money laundering prevention and combat with/to domestic competent agencies

1. The agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam shall exchange, provide and transfer information on money laundering prevention and combat in the following cases:

a) Exchange and provision of information at the request of bodies competent to conduct the proceedings specified by the Criminal Procedure Code;

b) Exchange and provision of information with competent agencies to serve the requirements of money laundering prevention and combat work, including bodies competent to conduct the proceedings defined by the Criminal Procedure Code and ministries and sectors relating to the money laundering prevention and combat work;

c) Transfer of information or the case files to investigation bodies, bodies assigned to carry out a number of investigation activities if there are reasonable grounds to suspect that the transactions mentioned in the information or reports concern money laundering.

2. Exchanged and provided information specified at Point a, Point b Clause 1 of this Article consists of:

a) Information on transactions, organizations, individuals suspected of committing law violations for the anti-money laundering purposes;

b) Information on irrationalities in mechanisms, policies and state management for the anti-money laundering purposes.

3. Grounds to suspect that transactions mentioned in information or reports are related to money laundering as specified at Point c Clause 1 of this Article include:

a) Transactions relating to organizations and individuals on the blacklist;

b) Transactions relating to organizations and individuals against which offense denunciations are made or who are held in case of emergency according to notices by competent agencies, persons against whom criminal case initiation proposals are made, arrestees, persons held in custody, the accused, defendants or convicts under Vietnam’s criminal procedure law in connection with money laundering;

c) Transactions relating to organizations and individuals that are being investigated, prosecuted or tried by competent agencies in other countries or territories;

d) Other transactions where the agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam realizes, based on results of suspicious transaction information analysis, that such transactions may be related to money laundering or other criminal activities.

4. Competent agencies specified at Point a, Point b Clause 1 of this Article shall be responsible for preserve and use the received information, reports and documents as defined by law and notifying the settlement results of provided and transfered information as prescribed by relevant provisions to the agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam in accordance with law.

5. When receiving the information or case files specified at Point c Clause 1 of this Article, investigation bodies, bodies assigned to carry out a number of investigation activities shall classify and settle them in accordance with criminal procedure law and preserve the received information, reports and documents under the confidential regime and send response on results and efficiency of information settlement to the agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam.

6. The agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam shall be responsible for exchanging and providing the information from its database to competent agencies in accordance with Point a Clause 1 of this Article within 07 working days from the date of receipt of a request of information provision.

7. The agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam and agencies specified in this Article may conclude coordination regulations for prompt and efficient exchange, provision and transfer of information.

Section 3
APPLICATION OF TRANSACTION DELAY MEASURE

Article 12. Application of transaction delay measure

1. The transaction delay measure shall be taken based on one of the following grounds for suspecting or detecting that the parties involved in a transaction are on the blacklist:

a) An individual or organization involved in a transaction with the information fully matching the information of an individual or organization on the blacklist;

b) An individual involved in a transaction with the group of information of full name, date, month and year of birth, or full name, year of birth, nationality, or full name, address, or name and address, or name and passport number, or name and people’s identity card number, citizen’s identity card number or personal identification number that matches the information of an individual on the blacklist and on the basis of the information collected, it is believed that the individual is involved in terrorism or terrorism financing, proliferation of or proliferation financing for weapons of mass destruction;

c) An organization involved in a transaction having transaction name, establishment license number, identification number of enterprise or tax identification number matching the information of an organization on the blacklist and on the basis of the information collected, it is believed that the organization is involved in terrorism or terrorism financing, proliferation of or proliferation financing for weapons of mass destruction.

2. When taking the measure of transaction delay, a reporting entity shall immediately report it to competent state agencies as follows:

a) Competent agencies in charge of terrorism prevention and combat, agencies or units acting as the focal point for prevention and combat of proliferation of weapons of mass destruction in case there are grounds for suspecting or detecting the parties involved in transactions being on the blacklist;

b) Criminal judgment execution management agencies of the Ministry of Public Security or units assigned by the Minister of Public Security in case there are reasons to believe that the transaction requested to be conducted is related to criminal activities, which may be a transaction requested by a convict in accordance with the criminal procedure law to be conducted while assets in the transaction come under the ownership or have the origin under the ownership or the right to control of such convict; or a transaction related to organizations and individuals that commit acts related to the terrorism financing crime;

c) The competent state agency that has requested the reporting entity to take the measure of transaction delay at the request of competent state agency in accordance with relevant laws;

d) When taking the measure of transaction delay under Point a, b or c of this Clause, the reporting entity must immediately report to the agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam.

Chapter IV
IMPLEMENTATION PROVISIONS

Article 13. Effect

1. This Decree takes effect on the signing date, except for cases prescribed in Clause 2 of this Article.

2. The regulations on transaction value specified at Point b Clause 1, Clause 2 and Clause 4 Article 6 of this Decree take effect on December 01, 2023.

During the duration in which Point b Clause 1, Clause 2 and Clause 4 Article 6 of this Decree have not entered into force, reporting entities shall continue to comply with regulations on transaction value defined in Clauses 1, 2 and 4, Article 3 of the Government’s Decree No. 116/2013/ND-CP dated October 04, 2013, detailing a number of articles of the Anti-Money Laundering Law until November 30, 2023.

3. From the effective date of this Decree specified in Clause 1 of this Article, the following decrees shall cease to be effective:

a) The Government’s Decree No. 116/2013/ND-CP dated October 04, 2013, detailing a number of articles of the Anti-Money Laundering Law, except for regulations on transaction value defined in Clauses 1, 2 and 4, Article 3 that shall cease to be effective from December 01, 2023;

b) The Government’s Decree No. 87/2019/ND-CP dated November 14, 2019 amending and supplementing a number of articles of the Government’s Decree No. 116/2013/ND-CP dated October 04, 2013, detailing a number of articles of the Anti-Money Laundering Law.

Article 14. Implementation responsibility

Ministers, Heads of ministerial-level agencies, Heads of government-attached agencies, Chairpersons of People’s Committees of provinces and centrally-run cities and relevant organizations, individuals shall take responsibility for the implementation of this Decree./.

* All Appendices are not translated herein.