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

DECREE

Detailing a number of articles of the Anti-Money Laundering Law^[1]

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

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

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

The Government promulgates the Decree 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 principles, criteria and methods for the national risk assessment of money laundering; know-your-customer activities; 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 to suspect or detect that the parties involved in a transaction are on the Blacklist and state agencies competent to receive reports on transaction delay.

Article 2. Subjects of application

1. Financial institutions.

2. Organizations and 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 competent state agencies according to the law-specified criteria and methods 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 used as a basis for formulating post-assessment plans and updating anti-money laundering policies and strategies in each period.

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

Article 4. Criteria for the national risk assessment of money laundering

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

2. Criteria on money laundering risks include criteria on money laundering risks from predicate crimes of the money laundering crime and criteria on money laundering risks for sectors and fields, specifically as follows:

a/ Money laundering risks from predicate crimes of the money laundering crime include to-be-assessed money laundering risks from each domestic or transnational predicate crime;

b/ Money laundering risks for sectors and fields include to-be-assessed money laundering risks for each domestic or transnational sector or field.

3. Criteria on appropriateness of anti-money laundering policies and measures include the comprehensiveness of the legal framework and the effectiveness of law implementation, specifically as follows:

a/ The comprehensiveness of the legal framework covers the adequacy of regulations on anti-money laundering of the country, sectors and fields;

b/ The effectiveness of law implementation covers the effectiveness of law implementation by the country, sectors and fields, and the level of appropriateness of anti-money laundering policies and measures in association with a number of main products and services of sectors and fields.

4. Criteria on consequences of money laundering include:

a/ Criterion on negative effects of money laundering on the economy;

b/ Criterion on negative effects of money laundering on the financial system;

c/ Criterion on negative effects of money laundering on sectors and fields;

d/ Criterion on negative effects of money laundering on the society.

Article 5. Method of the national risk assessment of money laundering

1. The national risk assessment of money laundering shall be carried out by the scoring method.

2. The scoring method shall be implemented by using a scoring toolkit for each criterion specified in Article 4 of this Decree to rank risks on a 1 to 5 rating scale, specifically as follows:

a/ For criteria on money laundering risks: The score of 5 indicates high risk of money laundering; score of 4, medium-high risk of money laundering; score of 3, medium risk of money laundering; score of 2, medium-low risk of money laundering; and score of 1, low risk of money laundering;

b/ For criteria on levels of appropriateness of anti-money laundering policies and measures: The score of 5 indicates low appropriateness of anti-money laundering policies and measures; score of 4, medium-low appropriateness of anti-money laundering policies and measures; score of 3, medium appropriateness of anti-money laundering policies and measures; score of 2, medium-high appropriateness of anti-money laundering policies and measures; and score of 1, high appropriateness of anti-money laundering policies and measures;

c/ For criteria on consequences of money laundering: The score of 5 indicates high consequences of money laundering; score of 4, medium-high consequences of money laundering; score of 3, medium consequences of money laundering; score of 2, medium-low consequences of money laundering; and score of 1, low consequences of money laundering;

d/ For criteria on national risk assessment of money laundering: The score of 5 indicates high level of national money-laundering risks; score of 4, medium-high level of national money-laundering risks; score of 3, medium level of national money-laundering risks; score of 2, medium-low level of national money-laundering risks; and score of 1, low level of national money-laundering risks.

3. Information, figures and data for the national risk assessment of money laundering are provided in the Appendix to this Decree.

4. The State Bank of Vietnam shall provide a scoring toolkit in conformity with international standards on money laundering prevention and combat.

Chapter III

ANTI-MONEY LAUNDERING MEASURES

Section 1

KNOW-YOUR-CUSTOMER ACTIVITIES; 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 activities

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

a/ A customer opens for the first time an account, which may be payment account, e-wallet or account of another type, or a customer establishes for the first time a relationship with a financial institution in order to use products or services provided by such financial institution;

b/ A customer that has no bank account or has a bank account but has conducted no transaction for the previous 6 consecutive months conducts deposit, withdrawal or transfer transactions with the total value of VND 400,000,000 or an equivalent amount in foreign currency within a day, except transactions of savings book closing or withdrawal of savings interests, credit card debt pay-off, payment of the credit extension amount to, or making of the periodical payment registered with, the financial institution, and withdrawal of interests from securities or bond investment;

c/ A customer or its/his/her transaction or transaction of the related parties shows one or more of the signs specified in Articles 27, 28, 29, 30 and 31 of the Anti-Money Laundering Law or other suspicious signs as identified by the reporting entity;

d/ A customer provides additional information or documents that does/do not match the previously provided information or documents or the information or documents collected or identified by the reporting entity.

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 transactions with the total value of VND 70,000,000 or more or an equivalent amount in 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 conduct know-your-customer activities for purchasers and sellers in real estate purchase and sale brokerage; and for property owners in provision of real estate management services.

4. An organization or individual trading in precious metals and gems shall conduct know-your-customer activities when a customer carries out cash transactions for purchase or sale of precious metals or gems valued at VND 400,000,000 or more or an equivalent cash amount in foreign currency within a day.

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

6. An organization or individual providing enterprise establishment, management and operation services shall conduct know-your-customer activities when a customer uses, or requests the use of, services.

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

Article 7. Criteria for identification of beneficial owners

1. A reporting entity shall identify the beneficial owner for its/his/her customer being an individual as follows:

a/ In case the customer opens a bank account, the reporting entity shall identify the individual who actually owns a bank account or dominates the operation of such account;

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

2. A reporting entity shall identify the beneficial owner for its/his/her customer being an organization as follows:

a/ The reporting entity shall identify the individual who actually holds, directly or indirectly, 25% or more of the charter capital of such organization or the last individual who has the right to domination with regard to the customer being an institution;

b/ In case it is impossible to identify the individual under Point a of this Clause, the reporting entity shall identify at least one legal representative of such organization, except the case in which the individual represents the state capital amount invested in such organization;

c/ In case the organization is an enterprise already listed on the domestic and foreign securities markets while the information on its beneficial owner has been disclosed, the reporting entity shall identify the beneficial owner who is the individual with disclosed information.

3. Reporting entities shall identify beneficial owners for 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 who are the individuals actually receiving benefits of the insured under life insurance contracts.

Article 8. Transactions with abnormally high values or complicated transactions

1. Transaction with an abnormally high value means a transaction that is noticeably disproportionate to the income or inconsistent with the value of regular transactions between the customer and the reporting entity.

2. Complicated transaction means a transaction not suitable to the customer’s scale, type and field of operation or inconsistent with the frequency, mode and scale of equivalent transactions in the same sector or 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:

1. The 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 when performing their tasks under decisions on initiation of criminal cases and decisions on initiation of criminal proceedings against the accused; specialized agencies in charge of national security protection of the People’s Public Security Forces when requesting the provision of information, dossiers, documents and reports on money laundering prevention and combat.

3. State inspection agencies, and agencies assigned to perform the specialized inspection 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 related organizations and individuals to provide information, dossiers, documents and reports stored by the latter in accordance with law and information, dossiers and documents received or collected by the latter within the ambit of their functions and tasks to serve the analysis, exchange, provision and transfer of information on money laundering prevention and combat.

2. Related 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 within the required time limit.

3. The agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam shall process and analyze the received information and reports, specifically as follows:

a/ Analyzing and processing information based on available information and collecting additional information in order to determine money laundering trends and models serving as a basis for formulation of anti-money laundering strategies and objectives in sectors, fields and the country in each period;

b/ Analyzing and processing information based on available information and collecting additional information in order to trace transactions, and determine suspicious relationships and 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/ Exchanging and providing information at the request of bodies competent to conduct the proceedings specified by the Criminal Procedure Code;

b/ Exchanging and providing information with/to competent agencies to serve requirements of the anti-money laundering work, including bodies competent to conduct the proceedings specified by the Criminal Procedure Code and ministries and sectors involved in the anti-money laundering work;

c/ Transferring information or case files to investigation bodies or bodies assigned to carry out a number of investigation activities when having reasonable grounds to suspect that the transactions indicated in information and reports are related to money laundering.

2. Information exchanged and provided under Points a and b, Clause 1 of this Article includes:

a/ Information on transactions, organizations and individuals suspected to have committed illegal acts for the purpose of money laundering prevention and combat;

b/ Information on inadequacies in mechanisms, policies and state management activities for the purpose of money laundering prevention and combat.

3. Reasonable grounds for suspecting that the transactions indicated in information and reports are related to money laundering specified at Point c, Clause 1 of this Article include:

a/ Transactions related to organizations or individuals on the Blacklist;

b/ Transactions related to organizations or individuals which/who are subject to offense denunciation or held in custody in case of emergency under a competent agency’s notice, persons subject to proposal of initiation of lawsuits, arrestees, persons held in custody, the accused, defendants or convicts in accordance with Vietnam’s criminal procedure law that are related to money laundering;

c/ Transactions related to organizations or individuals currently subject to investigation, prosecution or trial by authorities of other countries or territories in the world;

d/ Other transactions likely to be related to money laundering or other criminal activities as identified by the agency performing the anti-money laundering functions and tasks under the State Bank of Vietnam based on the results of analysis of information on suspicious transactions.

4. The competent agencies specified at Points a and b, Clause 1 of this Article shall store and use the received information, reports and documents in accordance with law, and notify the results of processing the provided and transferred information under relevant regulations 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 under Point c, Clause 1 of this Article, investigation bodies or bodies assigned to carry out a number of investigation activities shall classify and process such information and case files in accordance with the criminal procedure law, store the received information, reports and documents under the confidentiality regime, and send reports on results and efficiency of information processing 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 exchange and provide the information from its database with/to competent agencies in accordance with Point a, Clause 1 of this Article within 7 working days after receiving a request for information provision.

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

Section 3

APPLICATION OF TRANSACTION DELAY MEASURES

Article 12. Application of transaction delay measures

1. The transaction delay shall be applied when there are grounds for suspecting or detecting that the parties involved in a transaction are on the Blacklist in one of the following cases:

a/ The individual or organization involved in the transaction has its/his/her information fully matching the information of an individual or organization on the Blacklist;

b/ The individual involved in the transaction has one of the following groups of information matching the information on the individual on the Blacklist: full name and date of birth, or full name, year of birth and citizenship, or full name and address, or name and address, or name and passport number, or name and people’s identity card number, citizen identity card number or personal identification number, and based on the collected information, is believed to be related to terrorism, terrorism financing, or proliferation of or proliferation financing for weapons of mass destruction.

c/ The organization involved in a transaction has one of the following information matching the information on the organization on the Blacklist: transaction name, establishment license number, or enterprise identification number or tax identification number, and based on the collected information, is believed to be related to terrorism, terrorism financing, or proliferation of or proliferation financing for weapons of mass destruction.

2. When applying a transaction delay measure, a reporting entity shall immediately report such measure to:

a/ A competent agency in charge of terrorism prevention and combat, agency or unit acting as the focal point for prevention and combat of proliferation of weapons of mass destruction, when there are grounds for suspecting or detecting that the parties involved in a transaction are on the Blacklist;

b/ The Criminal Judgment Execution Management Agency under the Ministry of Public Security or the unit assigned by the Minister of Public Security, when there are reasons to believe that the transaction requested to be conducted is related to criminal activities; such transaction may be a transaction requested by the convict in accordance with the criminal procedure law to be conducted and assets in the transaction come under the ownership or are of the origin under the ownership or the control right 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 apply transaction delay at the request of a competent state agency in accordance with relevant laws;

d/ When applying the transaction delay measure specified at Point a, b or c of this Clause, the reporting entity shall immediately report such 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 date of its signing, except the cases specified in Clause 2 of this Article.

2. The provisions on levels of values of transactions of Point b, Clause 1, and Clause 2 and Clause 4, Article 6 of this Decree take effect on December 1, 2023.

Pending the effective date of Point b, Clause 1, and Clauses 2 and 4, Article 6 of this Decree, reporting entities shall continue to comply with the provisions on levels of values of transactions of Clauses 1, 2 and 4, Article 3 of the Government’s Decree No. 116/2013/ND-CP of October 4, 2013, detailing a number of articles of the Anti-Money Laundering Law, through November 30, 2023.

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

a/ The Government’s Decree No. 116/2013/ND-CP of October 4, 2013, detailing a number of articles of the Anti-Money Laundering Law, except the provisions on the levels of values of transactions of Clauses 1, 2 and 4, Article 3 that cease to be effective on December 1, 2023;

b/ The Government’s Decree No. 87/2019/ND-CP of November 14, 2019, amending and supplementing a number of articles of the Government’s Decree No. 116/2013/ND-CP of October 4, 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 provincial-level People’s Committees, and related organizations and individuals shall implement this Decree.-

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
LE MINH KHAI

       * The Appendix to this Decree is not translated.