Chapter I
GENERAL PROVISIONS
Article 1. Scope
1. This Law stipulates measures to prevent, detect, combat and punish natural or legal persons for money laundering acts; responsibilities of entities, natural or legal persons for money laundering prevention and control; international cooperation in AML.
2. Prevention and combat of money laundering acts committed by natural or legal persons for the purpose of financing of terrorism and financing of proliferation of weapons of mass destruction shall comply with the regulatory provisions of this Law, criminal law and law on prevention and combat of terrorism and proliferation of weapons of mass destruction.
Article 2. Subjects
1. Financial institutions.
2. Relevant non-financial businesses and professions.
3. Vietnamese natural or legal persons; foreign entities; aliens; international entities transacting with financial institutions, relevant non-financial businesses and professions.
4. Other natural or legal persons, and body or institutions related to money laundering prevention and control.
Article 3. Interpretation
For the purposes of this Law, terms used herein are construed as follows:
1. Money laundering refers to the act that a natural or legal person performs to legalize the origin of the property derived from any offence(s).
2. Property derived from any offence(s) refers to the property obtained directly or indirectly from criminal activity; part of the income, proceeds, gain or profits generated from the property obtained from any illegal act(s).
3. Must-be-reported high-value transaction refers to the transaction in domestic or foreign cash that is performed one or several times a day, and total value of which equals or exceeds the prescribed amount.
4. Originator refers to the account holder who allows the wire transfer from that account, or where there is no account, the natural or legal person that places the order with a financial institution to perform the wire transfer.
5. Wire transfer refers to any transaction carried out on behalf of an originator through a financial institution by electronic means with a view to making an amount of funds available to a beneficiary person at a beneficiary financial institution, irrespective of whether the originator and the beneficiary are the same person.
6. Customer refers to a natural or legal person that is using or intends to use any service or product supplied by a financial institution or a relevant non-financial business or profession.
7. Beneficial owner refers to the natural person(s) who ultimately owns one or several asset(s), or controls a customer on whose behalf a transaction relating to asset(s). It also includes those persons who exercise control over a legal person or arrangement.
8. Correspondent banking relationship refers to the relationship created by the provision of banking, payment and other services by one bank in a country or territory (correspondent bank) to another bank in other country or territory (respondent bank).
9. Blacklist comprises the list of natural or legal persons involved in acts of terrorism or terrorist financing that is compiled under the control of the Ministry of Public Security, and the list of natural or legal persons charged with being involved in proliferation and financing of proliferation of weapons of mass destruction that is compiled under the control of the Ministry of National Defence in accordance with law.
10. Greylist refers to the list of natural or legal persons compiled by the State Bank of Vietnam with a view to warn them of being exposed to high risk of money laundering.
11. Financial Action Task Force on Money Laundering (FATF) refers to an inter-governmental body serving the objectives of setting standards, promoting effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing, financing of proliferation of weapons of mass destruction and other related threats to the integrity of the global financial system.
12. Legal arrangement refers to a trust or any other similar legal arrangement recognized and established by foreign laws, under which the trustee is allowed to acquire the legal ownership and control of the property through the transfer process from the settlor/grantor to conduct the operation, management and supervision of such property for the benefit of the beneficiary or for the agreed purposes.
13. Shell bank refers to the bank that has no physical presence in the country or territory in which it is incorporated and licensed, and which is unaffiliated with any regulated financial institution that is subject to effective consolidated supervision.
14. Non-profit organization refers to a legal person or institution that engages in activities not because of profits, including social associations or funds; charitable funds; religious organizations; foreign non-governmental organizations incorporated, licensed and operated under national law of Vietnam.
15. Foreign politically exposed person (foreign PEP) refers to someone who holds a prominent public position or role in a foreign body or institution or international organization.
Article 4. Reporting Entities (or Entities Subject to Reporting Obligations or Requirements)
1. Reporting entities are financial institutions licensed to conduct one or more of the following activities or operations:
a) Acceptance of deposits;
b) Lending;
c) Financial leasing;
d) Payment services;
dd) Payment intermediary services;
e) Issuing negotiable instruments/transferable securities, bank cards, fund/money transfer/wire transfer orders;
g) Bank guarantees and financial commitments;
h) Providing foreign exchange services, money market instruments;
i) Securities brokerage; advice to security investment, provision of security for securities issues;
k) Investment fund and portfolio management;
l) Life insurance business;
m) Money and currency changing.
2. Reporting entities are relevant non-financial businesses and professions subject to law that conduct one or more of the following activities or operations:
a) Prize-awarding games, including electronic games; telecommunications network-based games, Internet-based games; casinos; lottery tickets; betting;
b) Real estate business, except leasing or subleasing of real property and real estate consulting;
c) Dealing in precious metals, jewels;
d) Supply of accounting services; provision of notarial services; provision of legal services rendered by lawyers, legal professional organizations;
dd) Providing business formation, management and administration services; services of acting as (or arranging for another person to act as) a director or secretary of a company to third parties; legal arrangement services.
3. The Government shall promulgate regulations on new activities at risk of money laundering conducted by reporting entities not referred to in clause 1 and 2 of this Article after receiving approval from the Standing Committee of the National Assembly of Vietnam.
Article 5. AML Principles
1. Prevention and combat of money laundering shall be conducted under the regulatory provisions of law on condition that sovereignty and territorial integrity, national security and interests are not prejudiced; the normal conduct of economic and investment activities is not interrupted; the legitimate rights and interests of legal or natural persons are protected; abusing public powers or AML activities to infringe upon the legitimate rights and interests of a natural or legal person concerned.
2. All acts of money laundering shall be legally sanctioned.
3. AML countermeasures shall be taken in a timely and consistent manner.
Article 6. International Cooperation in AML
1. International cooperation in the prevention and combat of money laundering shall be carried out according to the principle of respecting independence, sovereignty and territorial integrity, national security, mutual benefits, and compliance with Vietnamese laws and international treaties to which the Socialist Republic of Vietnam is a contracting party, and international agreements between the Vietnamese contracting party and the foreign contracting party.
In case where there is no international treaty or agreement between Vietnam and a foreign country, the exchange, provision and transfer of information in international cooperation in AML shall be conducted subject to the principle of reciprocity without being in contravention of Vietnam’s domestic law, and conforming to international law and practices.
2. Competent regulatory authorities shall, based on their range of functions and duties, conduct international cooperation regarding AML in:
a) Identification and freezing of property or assets of money-laundering criminals;
b) Execution of mutual legal assistance requests;
c) Communication, provision and transfer of AML information with foreign competent authorities;
d) Research, training, information support, technical assistance, financial aid and AML experience exchange;
dd) Other AML cooperation activities prescribed by law.
3. During the process of international cooperation in AML, competent state authorities may refuse to communicate, provide and transfer AML information if:
a) the requested information may prejudice national independence or autonomy, sovereignty, territorial integrity, national security and other essential interests of Vietnam;
b) the requested information are inconsistent with international treaties of which the Socialist Republic of Vietnam is a member state; international agreements between the Vietnam signatory and the other foreign signatories; or regulatory provisions of national law of Vietnam;
c) the request for communication, provision or transfer of information is not fully complete as required by law;
d) the requesting competent authority in foreign jurisdictions fails to either undertake or protect the confidentiality of the information requested to be communicated, provided or transferred by the competent authority in Vietnam under the secrecy or confidentiality mechanism or regime in line with Vietnam’s regulatory provisions on protection of state secrets.
4. Processes, procedures and methods of international cooperation in AML shall comply with international treaties of which the Socialist Republic of Vietnam is a member state, international agreements between the Vietnam signatory and other signatories in foreign jurisdictions, and other regulatory provisions of relevant law.
5. On an annual basis, or at the request of the State Bank of Vietnam, competent state authorities of Vietnam shall be responsible for administering international cooperation in AML with foreign competent authorities to the State Bank of Vietnam.
Article 7. National Assessment of Money Laundering Risks
1. Every 5 years, the State Bank of Vietnam shall lead and/or cooperate with Ministries and central authorities concerned in conducting the national assessment of money laundering and seeking the Government’s approval of assessment results and post-assessment action plans. The national assessment of money laundering shall cover all activities newly classified as sources of money laundering risk.
2. Ministries and central authorities shall assume the following responsibilities:
a) Widely disseminate the results of the national assessment of money laundering risks within their internal setting, and to the reporting entities placed under their jurisdiction, and also take measures to minimize the identified risks;
b) Provide the State Bank of Vietnam with update on money laundering risks based on execution of post-assessment action plans, or whenever any risk arises within their remit. On the basis of the risk update results informed by these Ministries or central authorities, the State Bank of Vietnam shall integrate them into reports submitted to the Government to seek its approval of national money-laundering risk updates and action plans in response to these updated risks.
3. The Government shall promulgate regulations regarding principles, criteria and methods of the national assessment of money laundering risks.
Article 8. Prohibited acts in AML
1. Organize, participate in or facilitate, assist in the conduct of money laundering.
2. Create, maintain anonymous accounts or accounts using fake names.
3. Create, maintain business relationships with shell banks.
4. Illegally provide services that involve the acceptance of cash, cheques, other monetary instruments and other stores of value and the payment to a beneficiary.
5. Abuse public positions and power over AML activities to prejudice the legitimate rights and interests of a natural or legal person.
6. Hinder the provision of information necessary for AML purposes.
7. Intimidate and take revenge on the persons detecting and reporting money laundering offences.
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