Circular No. 12/2011/TT-BXD guiding the implementation of certain contents of Decree No. 74/2005/NĐ-CP dated June 7, 2005 of the Government on anti-money laundering in real estate business activities.

CIRCULAR

Guidelines for implementing certain contents of Decree No. 74/2005/NĐ-CP dated June 7, 2005 of the Government on anti-money laundering in real estate business activities.

Anti-Money Laundering Measures in the Field of Real Estate Business Activities.

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Pursuant to the Law on Real Estate Business No. 63/2006/QH11 dated June 29, 2006;

Pursuant to the Law on Housing No. 56/2005/QH11 dated November 29, 2005;

Based on the Law Amending and Supplementing Article 126 of the Housing Law and Article 121 of the Land Law;

Based on Decree No. 74/2005/NĐ-CP dated June 7, 2005 of the Government on anti-money laundering (Decree No. 74/2005/NĐ-CP);

Based on Decree No. 153/2007/NĐ-CP dated October 15, 2007 of the Government detailing and guiding the implementation of the Law on Real Estate Business;

Based on Decree No. 71/2010/NĐ-CP dated June 23, 2010 of the Government detailing and guiding the implementation of the Housing Law;

WHEREAS, Decree No. 17/2008/NĐ-CP dated February 4, 2008 of the Government stipulates the functions, tasks, powers, and organizational structure of the Ministry of Construction;

The Ministry of Construction guides the implementation of anti-money laundering measures in real estate business activities as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the implementation of anti-money laundering measures in the field of real estate business activities.

Article 2. Applicability

This Circular applies to individuals and organizations in Vietnam; foreign individuals and organizations participating in real estate business activities, including:

1. Organizations and individuals engaged in real estate business and real estate service business;

2. Organizations and individuals related to real estate business and real estate service business.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. “Suspicious Transaction means unusual transactions that do not comply with legal provisions as stipulated in Article 9 of this Circular and Article 10 of Decree No. 74/2005/NĐ-CP.

2. “Reporting Organization includes real estate trading floors; organizations and individuals engaged in real estate brokerage services; organizations and individuals engaged in real estate management services.

3. Suspicious Transaction Report is a report prepared by reporting organizations to submit to competent state authorities regarding suspicious transactions.

4. “Large Value Transaction Reportrefers to cash transactions (or in foreign currency, gold equivalent) with a value requiring reporting as specified in Clause 1, Article 9 of Decree No. 74/2005/NĐ-CP.

5. “Beneficiaryrefers to organizations and individuals actually having control or ownership over real estate; organizations and individuals participating in buying, selling, transferring, or investing in real estate projects; developers of real estate projects.

6Competent State Authority is the Anti-Money Laundering Department under the Banking Inspection and Supervision Agency - State Bank of Vietnam; the Department of Housing and Real Estate Market Management - Ministry of Construction; Construction Departments of provinces and centrally-administered cities.

Chapter II

ANTI-MONEY LAUNDERING MEASURES

Article 4. Internal Regulations on Anti-Money Laundering

In accordance with the provisions of Decree No. 74/2005/NĐ-CP, this Circular, and relevant legal documents, reporting organizations must establish and promulgate internal regulations on anti-money laundering aimed at detecting and limiting organizations and individuals from using reporting organizations to commit money laundering acts.

1. The content of internal regulations includes:

a) Procedures and processes for identifying and updating information about customers and beneficiaries, measures for verifying customer and beneficiary information in cases of suspicious transactions;

b) Procedures for reviewing, detecting, handling, and reporting suspicious transactions to competent state authorities;

c) Provisions on temporary measures for anti-money laundering and principles for handling situations where transactions are delayed or not executed;

d) Provisions on internal control and audit of compliance with regulations, procedures, and processes related to anti-money laundering activities;

e) Provisions on the functions, powers, and responsibilities of persons or departments responsible for anti-money laundering;

g) Provisions on training to enhance awareness and skills in anti-money laundering;

h) Provisions on record keeping and information security.

2. Internal regulations on anti-money laundering must be disseminated to each individual and department responsible for anti-money laundering within reporting organizations, including relevant collaborators involved in real estate transactions.

3. Reporting organizations must submit their internal regulations on anti-money laundering to the Anti-Money Laundering Department under the Banking Inspection and Supervision Agency - State Bank of Vietnam; the Department of Housing and Real Estate Market Management - Ministry of Construction; the Construction Department of the locality where the main office is located.

Article 5. Organization of Reporting on Staff Arrangement or Department Responsible for Anti-Money Laundering

1. Based on its scale, scope, and specific characteristics of operations, the organization of reporting decides to arrange staff (or leaders of the organization) or establish a specialized department responsible for anti-money laundering. The organization of reporting must register with the competent state agency regarding information related to the name, address, position of staff or department responsible for anti-money laundering and information about the organization's address, phone number, fax number for contact when necessary. When there are any changes in the aforementioned information, the organization of reporting must notify in writing to the competent state agency.

2. The staff or department responsible for anti-money laundering of the organization of reporting have the following main functions and tasks:

a) Receiving and reviewing information about suspicious transactions reported by employees, departments, or relevant units;

b) Preparing, signing, and being responsible for the content of reports on suspicious transactions;

c) Preparing, signing reports on the organization's anti-money laundering activities as required by law and competent state agencies;

d) Developing, implementing programs, policies, and strategies for anti-money laundering within the organization;

e) Regularly reviewing, evaluating, and adjusting internal regulations on anti-money laundering to ensure compliance with legal provisions, changes, and developments in business activities.

Article 6. Customer Identification and Updating Customer Information

1. Cases of customer identification:

a) Customers establishing a transaction relationship for the first time with the organization of reporting;

b) Customers conducting real estate transactions in cash with large value as stipulated in Clause 1, Article 8 of this Circular;

c) Customers conducting suspicious transactions as stipulated in Clause 1, Article 9 of this Circular;

d) Customers conducting two or more real estate transactions in one day; customers buying or selling two or more real estates at once (including both buyers and sellers of real estate);

e) Cases where the organization of reporting reviews real estate files, project files, customer files and finds doubts about the authenticity of the files.

2. Content of customer identification information:

The organization of reporting designs customer identification forms but must ensure the following minimum information:

a) Customer information:

- For individual Vietnamese customers: surname, given name; date, month, year of birth; ID card number or passport number; registered permanent residence address; current place of residence; occupation, position; telephone number; workplace, workplace address;

- For foreign individual customers (foreign nationals, Vietnamese residing abroad who still hold Vietnamese nationality): surname, given name; nationality; date, month, year of birth; passport number; entry visa, reason for entry; temporary residence address in Vietnam; residence address outside Vietnam within six months before entering Vietnam and permanent residence address outside Vietnam; occupation, position; telephone number; workplace, workplace address;

In cases where accounts or real estate are owned by multiple customers, full information as mentioned above must be provided for each customer.

- For corporate customers: full trading unit name and abbreviation; headquarters address; phone number, fax number; registration license number, investment certificate number (if applicable), business registration certificate number; establishment authority; information on business fields and investment areas; summary information on organizational structure and leadership; information on the legal representative of the organization (including information as for individual customers mentioned above).

b) Date, month, year of account opening (if applicable); date, month, year of transaction;

c) Initial amount of the account or transaction value in domestic currency or foreign currency and exchange rate (if necessary);

d) Purpose and value of the account or transaction;

đ) Information about the beneficiary:

- For individual beneficiaries from Vietnam: surname, given name; date, month, year of birth; ID card number or passport number; registered permanent residence address; current place of residence; occupation, position; telephone number; workplace, workplace address;

- For foreign individual beneficiaries (foreign nationals, Vietnamese residing abroad who still hold Vietnamese nationality): surname, given name; nationality; date, month, year of birth; passport number; entry visa, reason for entry; temporary residence address in Vietnam; residence address outside Vietnam within six months before entering Vietnam and permanent residence address outside Vietnam; occupation, position; telephone number; workplace, workplace address;

- For corporate beneficiaries: full trading unit name and abbreviation; headquarters address; phone number, fax number; registration license number, investment certificate number (if applicable), business registration certificate number; establishment authority; information on business fields and investment areas; summary information on organizational structure and leadership; information on the legal representative of the organization (including information as for individual beneficiaries mentioned above).

e) Information about real estate project investors, information about real estate projects;

f) Name and signature of the organization of reporting employee responsible for approving account opening or processing transactions with customers.

3. Measures for customer identification:

a) Using reliable original documents and data to identify and verify customer identity such as:

- For individual customers: ID card, most recent valid travel document, valid passport or other legitimate identification documents containing the customer's photograph and stamped over the photo issued by authorized authorities.

- For organizational customers: license or establishment decision, name change decision, division, merger decision, business registration certificate, tax registration certificate, audited financial reports; appointment decision for General Director (Director), Chief Accountant.

b) Reporting organizations may use third parties to verify customer identity as follows:

- Through individuals or organizations (including other reporting organizations) that have or are currently in relation with the customer and compare the obtained information with the information provided by the customer.

- Through management agencies or competent state authorities (such as land registry offices, local tax agencies, state management agencies on land...).

- Reporting organizations may hire or cooperate with other organizations to verify customer identity.

c) In cases where there are multiple related customers, the reporting organization must apply verification measures for each customer.

d) Reporting organizations may supplement other customer identification measures based on the nature of their operations and business activities and the level of money laundering risk associated with each type of customer. However, the ultimate responsibility for identifying and updating customer information lies with the reporting organization.

Article 7. Reviewing Customer Information and Transactions

1. Reporting organizations must regularly review customer information, especially those customers suspected of conducting money laundering activities or listed in the warning list of the Ministry of Public Security and other competent state authorities as stipulated in this Circular.

2. Reporting organizations need to carefully check files and documents related to suspicious real estate transactions with large values (origin of real estate creation, number of ownership changes, status of legal documents...).

3. Reporting organizations must regularly update information about customers reported in previous suspicious transactions (by the reporting organization).

Article 8. Large Cash Transactions

1. Large cash transactions (or foreign currency, gold transactions of equivalent value) are transactions as defined in Clause 1, Article 9 of Decree No. 74/2005/ND-CP.

2. Monthly reporting organizations must prepare and store (in both paper and electronic file formats) large-value transaction reports as prescribed in Article 12 of Decree No. 74/2005/ND-CP (according to Model 1a and 1b of this Circular).

Reporting organizations must submit large-value transaction reports to competent state authorities upon written request from such authorities.

3. Reporting organizations must review and screen large-value transactions to detect suspicious transactions.

Article 9. Suspicious Transactions and Reporting of Suspicious Transactions

1. Signs of suspicious transactions:

In addition to the signs of suspicious transactions specified in Clause 1, Article 10 of Decree No. 74/2005/ND-CP, additional signs of suspicious transactions in the real estate sector are as follows:

a) Unable to identify the customer based on the information provided by the customer or a transaction involving a party whose identity cannot be determined.

b) Transaction volume on the account does not match the customer's financial status or usual business activities and information, or there is a sudden change in transaction volume on the customer's account.

c) The transaction is conducted by a customer involved in illegal activities published in the media that the reporting organization is aware of or included in the warning list provided by the Ministry of Public Security and other competent state authorities.

d) Transaction records or real estate records show signs of forgery (for example: fake seals, fake signatures, fake ID cards, fake passports, incorrect real estate addresses...).

e) Real estate transactions conducted through power of attorney but without legal basis.

f) The address of the parties involved in the transaction is inaccurate (for example: recorded at District B, Province A but in reality, Province A does not have District B...) and has changed compared to previous transactions. Information about the same customer differs in different transactions.

g) The customer shows no concern about the price of real estate or transaction fees.

h) The customer conducts a transaction without authorization and cannot provide relevant real estate information or does not want to provide additional personal information.

i) The agreed price between the parties in the transaction does not match market prices.

Reporting organizations may supplement other signs of suspicious transactions in real estate transactions.

2. Reporting of Suspicious Transactions:

When detecting suspicious transactions, reporting organizations must report in writing (according to Model 2 of this Circular) to the Anti-Money Laundering Department under the State Bank of Vietnam's Banking Inspection and Supervision Authority; the Department of Housing Management and Real Estate Market under the Ministry of Construction. In case of necessity, reporting organizations can report to the above authorities via fax or telephone but must subsequently send a written report.

Reporting organizations are responsible for monitoring the development of reported transactions and updating new related information.

3. Reporting deadlines:

Reporting organizations must report to the Anti-Money Laundering Department under the State Bank of Vietnam's Banking Inspection and Supervision Authority; the Department of Housing Management and Real Estate Market under the Ministry of Construction within 48 hours from the time the suspicious signs are detected.

In case of discovering transactions related to criminal activities, reporting organizations must report to competent state authorities within 24 hours from the time of detection.

Article 10. Application of provisional measures

1. Principles for applying provisional measures: provisional measures must be implemented within the scope of authority, in accordance with the provisions of the law, and shall not affect the business operations of enterprises or the implementation of real estate projects.

2. Provisional measure: refrain from conducting transactions.

3. Reporting organizations have the right to apply provisional measures of refraining from conducting real estate transactions and reporting to competent state agencies in the following cases:

a) Transactions related to organizations (including organizations with functions in real estate business) and individuals listed in the warning list related to criminal activities provided by the Ministry of Public Security for the purpose of preventing and combating money laundering as stipulated in point b, Clause 1, Article 10 of Decree No. 74/2005/NĐ-CP;

b) When there is reason to believe that the transaction requested to be carried out is related to criminal activity;

c) Transactions related to money laundering activities as required by competent state agencies;

4. Reporting organizations are not liable for any damages arising from the failure to conduct transactions in accordance with the law.

5. Other provisional measures shall be implemented in accordance with the provisions of the law.

Article 11. Retention of records and confidentiality of information

1. Reporting organizations are responsible for retaining customer identification information and information related to transactions that must be reported in accordance with Decree No. 74/2005/NĐ-CP and this Circular for at least five years from the date of account closure or the end of the transaction;

2. Reporting organizations may not inform customers and other relevant parties about the completion of suspicious transaction reports and the contents thereof, as well as the information provided to competent authorities;

3. Documents and records related to transactions reported under this Circular are classified as "Confidential" materials. Reporting organizations may only provide such materials to competent state agencies in accordance with the law. State agencies manage these documents and records according to the confidential material management system;

4. Individuals and organizations performing the responsibility of reporting or providing information about customers related to transactions that must be reported in accordance with Decree No. 74/2005/NĐ-CP and this Circular shall not be considered to violate the provisions of the law on ensuring the confidentiality of customer information and related activities.

Article 12. Training on anti-money laundering in the real estate business sector

1. Annually, reporting organizations must develop and implement training programs and enhance awareness of anti-money laundering measures for all staff involved in real estate transactions. At the same time, they should prioritize training and supplement knowledge for employees directly dealing with customers and staff responsible for anti-money laundering as stipulated in Clause 3 of this Article.

2. Reporting organizations may choose appropriate training forms based on their organizational structure and activities; actively coordinate with competent state agencies and related units to organize training and enhance knowledge on anti-money laundering for staff in terms of professional and vocational skills in the real estate sector.

3. Within six months from the recruitment of employees to perform tasks related to real estate transactions, reporting organizations must train new employees on basic knowledge to serve anti-money laundering work in the real estate sector.

4. Real estate brokerage training institutions, real estate valuation institutions, management and operation of real estate trading floors must include a special topic on "anti-money laundering in the real estate sector" in the basic knowledge part of their training programs, with a duration of four class hours covering the following main contents:

a) Legal regulations and internal rules on anti-money laundering; responsibilities for implementing legal regulations on anti-money laundering in the real estate business sector;

b) Common methods and tricks of money laundering in the real estate business sector and future trends in money laundering;

c) Anti-money laundering measures in the real estate sector;

d) Suspicious transactions and how to identify suspicious transactions in the real estate sector;

e) Guidance on updating information, preparing reports, and measures to handle suspicious transactions.

Training institutions must submit the content of the special topic on "anti-money laundering in the real estate sector" and the list of lecturers to the Department of Housing Management and Real Estate Market - Ministry of Construction for inspection. If the requirements are met, the Department of Housing Management and Real Estate Market will issue a response letter, then the training institution can use it as teaching materials.

5. Individuals who have been issued certificates for real estate brokerage, real estate valuation, and management and operation of real estate trading floors before the effective date of this Circular do not need to retake the special topic on "anti-money laundering in the real estate sector" at previously trained institutions. Reporting organizations must coordinate with training institutions or competent state agencies to organize training and enhance knowledge on anti-money laundering for staff who already hold certificates for real estate brokerage, real estate valuation, and management and operation of real estate trading floors but have not yet taken the special topic on "anti-money laundering in the real estate sector" at their own units within three months from the date this Circular takes effect..

Article 13. Supervision and Reporting on Anti-Money Laundering Activities

1. Reporting organizations must regularly conduct internal supervision to ensure compliance with laws and internal regulations on anti-money laundering throughout their real estate business operations. Any violations discovered must be promptly reported to the person responsible for anti-money laundering for handling.

2. Any violations detected during the supervision process must be reported to the person responsible for anti-money laundering and the head of the reporting organization for handling.

3. Annually, the reporting organization must carry out internal supervision of anti-money laundering activities, assess compliance with established internal regulations, and propose measures to enhance the effectiveness and efficiency of anti-money laundering activities.

4. By November 30 each year, the reporting organization shall prepare a consolidated report on anti-money laundering activities conducted during the year (in accordance with Appendix 3 of this Circular) and submit it to the local Construction Department and the Department of Housing and Real Estate Market Management under the Ministry of Construction for consolidation.

Article 14. Responsibilities of the Construction Departments of Provinces and Central Cities Directly Under the Central Government

1. Organize guidance and inspection of real estate businesses, real estate service providers, and reporting organizations to strictly implement the contents of this Circular;

2. The Construction Departments of localities shall be responsible for implementing the provisions of Article 18 of Decree No. 74/2005/ND-CP and coordinate with competent state agencies in the process of handling suspicious transaction reports;

3. Urge and inspect training institutions related to brokerage, valuation, management, and operation of real estate trading floors to effectively implement the addition of training programs on anti-money laundering in the real estate sector;

4. By December 31 each year, the Construction Departments shall be responsible for preparing a consolidated report on anti-money laundering activities implemented in the locality during the year (in accordance with Appendix 4 of this Circular) and submit it to the Department of Housing and Real Estate Market Management under the Ministry of Construction for consolidation and reporting to the Government.

Article 15. International Cooperation on Anti-Money Laundering in the Real Estate Sector

Reporting organizations have the responsibility to cooperate internationally on anti-money laundering in the real estate sector when requested by competent state agencies.

Article 16. Handling Violations

Organizations and individuals responsible for anti-money laundering in real estate activities that violate the provisions of Decree No. 74/2005/ND-CP and this Circular but not reaching the level of criminal prosecution shall be subject to administrative penalties in accordance with Clause 2 and Clause 3 of Article 24 of Decree No. 74/2005/ND-CP dated June 7, 2005 of the Government on anti-money laundering and other relevant regulatory legal documents.

Chapter III

IMPLEMENTING PROVISIONS

Article 17. Effective Date

This Circular shall take effect forty-five days from the date of signature.

In the course of implementation, if there are difficulties or obstacles, they are advised to reflect them to the Ministry of Construction for resolution.

Article 18. Implementation Organization

Provincial People's Committees directly under the Central Government shall be responsible for directing the Construction Departments to implement this Circular within their jurisdiction.

The Department of Housing and Real Estate Market Management, the Inspectorate of the Ministry of Construction, and the reporting organizations shall be responsible for enforcing this Circular./.