Law on Anti-Money Laundering 2022: 7 remarkable new points

In order to ensure money security, and national financial safety, and contribute to the improvement in anti-money laundering and anti-corruption, the National Assembly has approved the Law on Anti-Money Laundering 2022 which takes effect on March 2023. Here are the remarkable new points of Law on Anti-Money Laundering 2022:

1. Add more potential risks for the making reports

* Current regulations: No

* From March 01, 2023:

Apart from the financial institutions which have operations in deposit and loan, financial lease as in accordance with previous regulations, Law on Anti-Money Laundering 2022 supplements the organization of payment intermediary services which are the subject matter of reporting.

It is timely and necessary to supplement the organization of payment intermediary services which are the subject matter of reporting because e-wallet is now becoming the popular form of payment of clients which are considered to have potential risks for money laundering.

Besides, Law on Anti-Money Laundering 2022 also amends and supplements the name of some subject matter of reporting to be suitable with the law provisions and international institution’s recommendations as follows:

• Stockbroking;
• Securities investment consulting, securities issuance underwriting;
• Managing securities investment funds; managing securities portfolios
• Doing life insurance business...

2. Supplement the principles of exchange, provision, and transfer of information

* Current regulations: No

* From February 01, 2023:

Law on Anti-Money Laundering 2022 supplement the principles as follows:

In case there is no treaty or agreement between Vietnam and a foreign country, the exchange, provision, and transfer of information in international cooperation on the prevention and combat of money laundering shall be carried out on the reciprocity principle that is not contrary to the laws of Vietnam and is in accordance with international law and practices.

Therefore, the reciprocity principle that is not contrary to the exchange, provision, and transfer of international information on anti-money laundering to the laws of Vietnam

3. Supplement the national risk assessment on money laundering

* Current regulations: No

* From March 01, 2023:

Law on Anti-Money Laundering 2022 supplements the regulations on national risk assessment on money laundering with the purpose to cover all the arising activities in the future and restrict the risks of money laundering.

In particulars, the national risk assessment on money laundering is implemented as follows:

• Implementation duration: Every 05 years:
• Responsibilities of risk assessment: The State Bank of Vietnam shall take the prime responsibility and coordinate with the relevant Ministries and industries:
  • National risk assessment on money laundering
  • Submit to the Government for approval the updated national risks on money laundering and the action plan after the update.
• Subjects of risk assessment: Involve also emerging activities that may have any money laundering risk

Within that, the Government shall provide for the principles, criteria, and methods of national risk assessment on money laundering. Ministries and sectors have the following responsibilities shall disseminate the results of the national risk assessment on money laundering within their ministries and sectors; update money laundering risks based on the implementation of the post-assessment action plan or arising risks...

4. Add more verification of client identification information

* Current regulations:

Law on Anti-Money Laundering 2012 prescribes the identification information method for clients such as:

- By data or documents of individuals or organizations;

- By organizations or individuals who are having relationships with clients;

- By managing agencies or other competent state agencies;

- By hiring other organizations.

* From March 01, 2023: 

Law on Anti-Money Laundering 2022 supplements the identification information method for clients in national databases under the law.

Besides, supplementing the regulations on the subject matter of reporting in relation to the foreign individual with political influence, the responsibilities of the subject matter of reporting to deploy appropriate measures to verify the origin of property of clients and beneficial owners who are foreign individuals with political influence and those.

The Law on Anti-Money Laundering 2022 points out clearly that the subject matter of reporting must issue policies and procedures to identify and assess money laundering risks before providing new products and services or applying the measure to minimize the risks of anti-money laundering.

5. Intramural regulations for the subject matter of reporting who is the micro-enterprise

* Current regulations:

Law on Anti-Money Laundering 2012 has general responsibility for developing intramural regulations for organizations without any requirements for intramural regulations on the contents as follows: Client acceptance policy, recruitment of anti-money laundering staff, training and retraining of anti-money laundering skills;

* From March 01, 2023:

Law on Anti-Money Laundering 2022 has particular regulations on intramural regulations on the subject matter of reporting who is the organization (except for the micro-enterprise and the subject matter of reporting which are individual and micro enterprises.

Accordingly, the subject matter of reporting which is individual and micro enterprises reduces some contents as follows:

• The process of reporting transactions that must be reported
• The process of reviewing, detecting, handling, and reporting suspicious transactions;
• Application of transitional measures and the principles of handling cases of transaction delay;

Besides, the Law on Anti-Money Laundering 2022 also supplements a number of compulsory contents in the intramural regulations on anti-money laundering for other organizations such as:

- Client acceptance policy, which covers the refusal to open an account, establish a business relationship, and perform a transaction or the termination of the business relationship;

- Recruitment of anti-money laundering staff, training, and retraining of anti-money laundering skills;

At the same time, supplement the regulations that the intramural regulations must apply and disseminate to the whole system and agents of the subject matter of reporting.

6. Add more regulations on suspicious signs in the pay intermediary services

* Current regulations: No

* From March 01, 2023:

Law on Anti-Money Laundering 2022 supplements the regulations on suspicious signs in the pay intermediary services, accordingly, the suspicious signs include:

• There is a surge in the transaction turnover on an electronic wallet; money is deposited into and withdrawn quickly from an electronic wallet; transaction turnover is high in a day, but the electronic wallet’s balance is very small or zero.
• A client often deposits many small sums of money into an electronic wallet, then makes a large-value money transfer to another electronic wallet or makes a large-value withdrawal to a current account or debit card of such client at a bank, or vice versa.
• Small sums of money are regularly transferred from many different electronic wallets to a single electronic wallet or vice versa within a short time; money is transferred through multiple electronic wallets; the relevant parties do not care about transaction fees; multiple transactions are conducted, each involving a value close to the large value level that must be reported; electronic wallets generate many money transfers to other electronic wallets with abnormally fast transaction initiation times.
• The client's electronic wallet suddenly receives an abnormally large deposit.

Moreover, Law on Anti-Money Laundering 2022 also amends a number of suspicious signs in securities, and life insurance.

For example:

• A non-resident transfers a large sum of money from its securities trading account out of Vietnam (new regulations);
• A client regularly sells all securities in his/her investment portfolio and requests the securities company to sign a payment order for the such client to withdraw cash from commercial banks (In current regulations, the client regularly sells the investment portfolio and suggests the securities trading company to pay by cash or cheque);
• Foreign investors residing in countries or territories with a high risk of money laundering contribute capital to establish securities investment funds or securities investment companies in Vietnam (new regulations)

7. Amend the term of reporting of suspicious transactions

* Current regulations:

Law on Anti-Money Laundering 2012 prescribes the term of reporting suspicious transactions as follows:

• With the transaction with report large-value transactions and wire transfers, the time limit for reporting:
  • For electronic data: Daily report.
  • In the case of paper reports or other forms: 02 working days from the date on which the transactions arise.
• Suspicious transactions: Within the time limit of 48 hours from the date on which the transactions arise

* From March 01, 2023:

Law on Anti-Money Laundering 2022 amends a number of relevant contents to the term of the report, in particulars:

• With the transaction with report large-value transactions and wire transfers, the time limit for reporting:
  • Within 01 working day from the date on which transactions arise in the case of electronic data;
  • Within 02 working day from the date on which transactions arise in the case of paper reports;
• Suspicious transactions:
  • Within 03 working days from the date on which the transactions arise; or
  • Within 01 working day from the date on which the subject matter of reporting detects the suspicious transactions.

Here are 7 remarkable new points of Law on Anti-Money Laundering 2022.