Vietnam improves its government anti-corruption and anti-money laundering supervision

By Christine Duhaime | June 22nd, 2014

Slowing Addressing Money Laundering Issues

The Government of Vietnam, through its State Bank, announced late last week that it was improving its anti-money laundering and anti-corruption supervisory regime by implementing changes to the functions, responsibilities and structure of the Banking Supervision Agency (“BSA“).

Effective August 1, 2014, a separate higher division of the BSA will be responsible for banking supervision and for the supervision and monitoring of all reporting entities that are required to undertake and report suspected money laundering or terrorist financing. It will also be responsible for training banks on detecting and reporting incidents of corruption.

The government intends to improve its compliance with international anti-money laundering standards and to prosecute underlying predicate offences and their corresponding money laundering offences.

There are many long-standing issues with Vietnam’s financial crime regime which the government has been attempting to resolve. Chief among them are as follows:

  • Vietnam’s FIU, the Anti-Money Laundering Information Centre (“AMLIC“) is part of the State Bank of Vietnam and lacks independence.
  • The AMLIC is under-staffed. It has 23 employees in a country of 95 million people.
  • Not enough sectors report under anti-money laundering laws to the AMLIC.
  • Significant predicate offences occur in Vietnam at alarmingly high rates – according to its law enforcement agency, they are prostitution, drug trafficking, corruption, gambling, human trafficking of children, weapons trading and manufacturing of counterfeit goods.
  • Legal persons (e.g., companies, firms, organizations, foundations, etc.) are not subject to criminal liability under Vietnam’s Napoleonic Code based penal law.
  • Vietnam lacks laws for the freezing of assets that have teeth.
  • Vietnam lacks the resources to investigate and prosecute financial crimes.
  • Vietnam does not have an economic sanctions regime tied to its anti-money laundering laws.
  • Vietnam does not a politically exposed persons regime.
  • For a three year period ended 2008, Vietnam’s FIU received only 58 suspicious transaction reports.

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