Circular No. 148/2010/TT-BTC guiding the implementation of measures to prevent and combat money laundering in the insurance, securities, and gaming industries with rewards.

CIRCULAR

Guidelines for implementing anti-money laundering measures in the insurance, securities, and gaming industries with rewards.

insurance, securities, and gambling entertainment games

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Pursuant to the Insurance Business Law dated December 9, 2000; 

Pursuant to the Securities Law dated June 29, 2006;

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

Pursuant to Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Insurance Business Law;                     

Pursuant to Decree No. 14/2007/NĐ-CP dated January 19, 2007 of the Government detailing the implementation of certain provisions of the Securities Law and Decree No. 84/2010/NĐ-CP dated August 2, 2010 of the Government amending and supplementing certain provisions of Decree No. 14/2007/NĐ-CP dated January 19, 2007 of the Government detailing the implementation of certain provisions of the Securities Law;

Pursuant to Decree No. 30/2007/NĐ-CP dated March 1, 2007 of the Government on lottery business;

Pursuant to Decision No. 32/2003/QĐ-TTg dated February 27, 2003 of the Prime Minister promulgating regulations on the operation of electronic games with rewards for foreigners;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Finance;

The Ministry of Finance issues guidelines for implementing anti-money laundering measures as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

These Circulars guide the implementation of anti-money laundering measures in the following areas: insurance, securities, and gambling entertainment games within the territory of the Socialist Republic of Vietnam.

Article 2. Applicability

These Circulars apply to individuals, agencies, organizations of Vietnam, and foreign individuals, agencies, organizations issue participating in activities in the following areas insurance, securities, and gaming with rewards in Vietnamincluding:

1. Insurance enterprises and insurance brokers established and operating in Vietnam in accordance with the Insurance Business Law.

2. Individuals and organizations participating in issuing, listing, trading, dealing in securities, depositary services, settlement, and payment of securities in accordance with the Securities Law.

3. Enterprises permitted to operate lotteries, betting, and casinos (casinos) and electronic games with rewards in accordance with the law.

Article 3. Explanation of Terms

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

1. “Suspicious transaction" means transactions defined in Article 9 of this Circular and in Article 10 of Decree No. 74/2005/NĐ-CP dated June 7, 2005 of the Government on anti-money laundering (hereinafter referred to as Decree No. 74/2005/NĐ-CP).

2. “Reporting entity" means entities specified in Article 2 of this Circular that have the responsibility to report according to their authority and scope of operations approved by competent state agencies.

3. Suspicious transaction report" means reports prepared by reporting entities to submit to competent state agencies regarding suspicious transactions. 

4. “Large-value transaction"means cash transactions with amounts subject to reporting as stipulated in Article 8 of this Circular.

5. “Updating customer informationmeans modifying and supplementing information already obtained about customers to ensure that the information remains complete and accurate throughout the establishment and maintenance of relationships and transactions with customers.

6. “Beneficiarymeans the ultimate owner or controller of a monetary transaction or other asset.

7. “Not conducting a transactionmeans the reporting entity maintaining the status of an account or transaction unchanged from the time the decision to implement temporary measures as prescribed in Article 11 of this Circular is made.

8. "Gaming with rewards"means the business activities of operating lotteries, betting, casinos, and electronic games with rewards. 

9. "Prescribed currency"means chips, tokens, cards used instead of money to participate in reward games and only have value at casino business premises and electronic game business premises with rewards.

10. “Competent State Agency"is a state agency responsible for managing, collecting, processing, and storing information related to transactions carried out by entities specified in Article 2 of this Circular, including: The Anti-Money Laundering Department under the State Bank of Vietnam's Inspectorate and Supervision Agency, and specialized state management agencies. Specific specialized state management agencies include:

a) For the insurance sector, it is the Insurance Management and Supervision Department - Ministry of Finance;

b) For the securities sector, it is the State Securities Commission - Ministry of Finance;

c) For the gaming with rewards sector, it is the Financial Affairs Department of Banks and Financial Organizations - Ministry of Finance.  

Chapter II

ANTI-MONEY LAUNDERING MEASURES

Article 4. Internal Regulations on Anti-Money Laundering

1. Based on the provisions of Decree No. 74/2005/NĐ-CP, this Circular, and related legal documents, reporting organizations must establish and promulgate internal regulations on anti-money laundering, which define the responsibilities and obligations of the reporting organization in ensuring the ability to detect and limit organizations and individuals using the reporting organization to carry out money laundering activities. The contents of the internal regulations include basic provisions, procedures, and processes as follows:

a) Procedures and processes for identifying and updating information about customers and beneficiaries, measures to verify customer and beneficiary information in cases where suspicious transactions occur;

b) Review, detection, handling, and reporting procedures for suspicious transactions to competent state agencies;

c) Provisions on temporary measures applied in anti-money laundering and principles for handling cases of delay or non-execution of transactions;

d) Procedures for accepting and managing customers in the insurance, securities, and gaming industries;

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

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

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

h) Provisions on retaining and securing information.

2. Internal regulations on anti-money laundering must be disseminated to each individual and department responsible for anti-money laundering within the reporting organization, including those hired by the reporting organization to work for six months or more who are involved in financial and monetary transactions at the headquarters, branch offices, and representative offices both domestically and abroad.

3. Reporting organizations must submit their internal regulations on anti-money laundering to the Anti-Money Laundering Department under the State Bank of Vietnam's Inspectorate and Supervision Agency and relevant specialized state management agencies. Reporting organizations decide on their own whether to provide internal regulations on anti-money laundering to domestic and foreign financial institutions when requested in agency relationships.

Article 5. Staff Members or Departments Responsible for Anti-Money Laundering

1. Based on their scale, scope, and specific characteristics of operations, reporting organizations determine the arrangement of staff members or the establishment of specialized departments responsible for anti-money laundering. Reporting organizations must register with competent state agencies, including the Anti-Money Laundering Department under the State Bank of Vietnam's Inspectorate and Supervision Agency and relevant specialized state management agencies, information related to the name, address of staff members or departments responsible for anti-money laundering, and contact information such as address, telephone number, and fax number of the organization. When there are any changes in the aforementioned information, the reporting organization must notify the competent state agencies in writing.  

2. Staff members or departments responsible for anti-money laundering have the following main functions and tasks:

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

b) Preparing and being responsible for the content of reports on suspicious transactions to be submitted to competent state agencies;

c) Being responsible for retaining records and updating information on suspicious transaction reports to provide to competent state agencies;

d) Being responsible for preparing and storing monthly large-value transaction reports and providing them to competent state agencies upon request;

đ) Preparing reports on anti-money laundering activities within the organization according to the requirements of competent state agencies;

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

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

h) Being responsible for promoting, disseminating, guiding, and organizing training on anti-money laundering content and measures for employees and individuals or organizations related to the organization's business activities.

Article 6. Customer Identification Process

1. Cases for customer identification:

a) Customers opening an account for the first time with the reporting entity;

b) Customers conducting transactions as specified in Article 8 of this Circular;

c) Customers conducting transactions as specified in Article 9 of this Circular.

2. Content of customer identification information:

The reporting entity designs its own customer identification form but must ensure the following minimum information:

a) Customer information:

- For individual customers: surname, given name; date of birth; nationality; occupation; position; passport number, entry visa, identity card number; address (for Vietnamese citizens, it is the registered domicile and current residence address, for foreigners, it is the registered address abroad and temporary residence registration address in Vietnam), telephone number. In case the account is opened by multiple customers, full information as mentioned above must be provided for each customer.

- For corporate customers: full trading name and abbreviation; headquarters address; telephone number, fax number; license number, issuance date, investment certificate, business registration certificate; establishment authority; information on business activities; summary information on organizational structure and management staff; information on the legal representative of the organization (including the information as mentioned above for individual customers).

- For insurance contract holders: must provide information as for individual customers, including authorized signatory or beneficiary information.

b) Date, month, year of account opening or transaction execution;

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, information about the beneficiary;

đ) For electronic fund transfer transactions, include information about the name, address, account number of the first person issuing the transfer order (if applicable);

e) Name and signature of the reporting entity's employee responsible for approving account opening or processing transactions with the customer.

3. Measures for customer identification:

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

- For individual customers: valid national identity cards, passports still within their validity period, or other legitimate personal identification documents containing the customer's photograph and stamped over the photograph issued by the competent authority.

- For corporate customers: establishment permit or decision, name change decision, division, merger decision, business registration certificate, tax registration certificate, appointment decision for General Director (Director), Chief Accountant.

- For insurance contract holders: documents verifying individual or corporate customer identity, health records of the insurance contract holder, beneficiaries, income verification documents.

b) The reporting entity may use third parties to verify customer identity as follows:

- Through individuals or organizations (including other reporting entities) that have or are currently in a relationship with the customer and cross-referencing the obtained information with the information provided by the customer.

- Through regulatory authorities or other competent state agencies.

- The reporting entity may hire or cooperate with other organizations to verify customer identity.

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

d) The reporting entity supplements other customer identification measures based on the nature of the reporting entity's operations and business, and based on  the money laundering risk level associated with each type of customer. However, the ultimate responsibility for identifying and updating customer information lies with the reporting entity.

Article 7. Reviewing customer information and transactions

1. Reporting organizations must carefully check documents and materials related to large and unusual transactions to identify suspicious transactions.

2. Reporting organizations must regularly review customer information, particularly customers who have been suspected of conducting money laundering activities or those listed in the warning list of the Ministry of Public Security and other competent state agencies as stipulated in this Circular.

3. Reporting organizations must regularly update information on customers reported in previous suspicious transactions.

Article 8. Large Value Transactions

1. The threshold for large value transactions:

a) In the insurance sector: A customer pays one or more times in a day in cash for a personal insurance contract with a total value of VND 200,000,000 (two hundred million dong) or more in Vietnamese currency or foreign currency converted to Vietnamese currency at the interbank average exchange rate at the time of transaction occurrence;

b) In the securities sector:

- An individual customer performs one or more cash transactions to buy or sell securities in a day with a total value of VND 200,000,000 (two hundred million dong) or more;

- An organizational customer performs one or more cash transactions to buy or sell securities in a day with a total value of VND 500,000,000 (five hundred million dong) or more.

c) In the entertainment gambling sector:

- An individual customer performs one or more cash transactions to purchase lottery tickets, betting slips, or agreed-upon tokens in a day with a total value of VND 200,000,000 (two hundred million dong) or more in Vietnamese currency or foreign currency converted to Vietnamese currency at the interbank average exchange rate at the time of transaction occurrence.  

- If a representative acts on behalf of one or more individual customers to perform transactions to purchase lottery tickets, betting slips, or agreed-upon tokens, then the large value transaction is calculated based on the average per individual customer with a total value of VND 200,000,000 (two hundred million dong) or more per individual customer in cash transactions in a day, converted from foreign currency to Vietnamese currency at the interbank average exchange rate at the time of transaction occurrence.  

2. Monthly reporting organizations must prepare and store (in written form or electronic file) reports on large value transactions according to Form No. 01 attached to this Circular.

Reporting organizations must submit reports on large value transactions to competent state authorities upon request.

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

Article 9. Suspicious Transactions

In addition to the signs of suspicious transactions specified in Clause 1, Article 10 of Decree No. 74/2005/NĐ-CP, the Ministry of Finance supplements the following signs of suspicious transactions:

1. Unable to verify the customer based on the provided customer information or a transaction involving a party whose identity cannot be determined.

2. Transaction volume on an account does not match the customer's usual business information or there is a sudden change in transaction volume on the customer's account.

3. A customer's account has not had any transactions for over a year, and then resumes transactions without a reasonable explanation.

4. A transaction conducted by a customer associated with illegal activities published in the media that the reporting organization knows about or included in the warning list provided by competent state authorities.

5. Other signs of suspicious transactions in the insurance sector:

a) A customer requests to purchase a large-value insurance contract or to make a full payment (paying the entire insurance premium in one go) for products that do not allow such payments, while the current insurance contracts held by the customer only have small values and are paid periodically;

b) A customer requests to sign an insurance contract with periodic premiums that do not correspond to their current income, or to purchase an insurance contract related to a business outside the customer's usual business activities;

c) A customer proposes to pay for an insurance contract using a check issued from an account that is not the customer's personal account, or pays through banking instruments but it is an anonymous transaction or uses and pays foreign bonds;

d) A customer requests to change beneficiaries already designated or to designate a beneficiary with no clear relationship to the policyholder;

đ) A customer requests to borrow the maximum cash value of a single-premium insurance contract immediately after paying the insurance premium or to use the insurance policy as collateral (except when requested by a credit institution);

e) The customer's company experiences unusual changes in employee or agent activity (for example, a significant or unusual increase in the number of insurance contracts handled by employees) or the level of activity of single-premium contracts exceeds the company's average;

g) A customer is represented by an overseas agent, branch, or company headquartered in a country or territory designated by the Financial Action Task Force (FATF) as non-cooperative or where corruption or illegal drug production and trafficking may be prevalent.

6. Other signs of suspicious transactions in the securities sector.

a) A customer provides false or refuses to provide necessary information when asked about the value and source of assets at the securities company;

b) Securities buying and selling transactions show unusual patterns in a day or several days performed by an individual or organization;

c) A customer transfers securities outside the system without a reasonable explanation.

d) Securities trading accounts of non-residents in Vietnam with large value being withdrawn from Vietnam and transferred to financial centers abroad;

đ) Securities transactions involving funds from investment funds opened in regions or territories classified by international organizations as having high money laundering risks;

7. Other suspicious transaction indicators for the gaming and entertainment sector with rewards:

a) Customers showing persistent signs of deliberately losing when participating in reward games at casino business locations and electronic game business locations with rewards;

b) Customers purchasing large amounts of standardized currency at casino business locations and electronic game business locations with rewards but not participating in the games or playing very little afterwards exchanging it back for cash and requesting the enterprise to pay by check, bank draft, or transfer to another account;

c) Customers requesting to transfer winnings or prizes to third parties who have no clear relationship with the customers, especially when the third parties are not located in the same place of residence as the customers;

d) Customers adding cash or checks to their winnings or prizes and requesting the enterprise to issue a single large-value check;

đ) Customers repeatedly within a day requesting the enterprise to exchange large amounts of standardized currency into cash without a clear source;

e) Customers repeatedly within a day requesting third parties to purchase on their behalf large amounts of standardized currency and asking the third parties to play on their behalf;

g) Customers repeatedly within a day purchasing lottery tickets, betting slips, standardized currency close to the transaction value limit;

8. Reporting entities may supplement suspicious transaction indicators based on the nature of their operations and business activities;

Article 10. Suspicious Transaction Handling Process

1. An entity shall be deemed to have identified a suspicious transaction and must report if an employee reports such identification or has reasonable grounds to believe that a suspicious transaction is occurring or information in the records or documents held or obtained by the reporting entity indicates that a customer or transaction conducted by the customer clearly shows unusual or suspicious signs, and those suspicious customers and transactions have been reported to the anti-money laundering officer or department of the reporting entity or reported to the authorized person of the reporting entity;

2. Upon identifying suspicious transactions, the reporting entity must report in writing to the competent state agency according to Form No. 02 attached hereto. In case of necessity, the reporting entity may report to the competent state agency via fax or telephone but must subsequently submit a written report;

3. The reporting entity is responsible for monitoring the development of reported transactions and updating new relevant information;

4. Reporting deadline:

a) Except for cases stipulated in Article 11 of this Circular, within 48 working hours from the time the reporting entity identifies or has reasonable grounds to believe that a suspicious transaction has occurred or is ongoing, the reporting entity must report to the competent state agency;

b) In cases where public service units engage in joint venture and cooperation the reporting entity identifies or has reasonable grounds to believe that the related transaction involves money laundering or terrorist financing activities that have occurred or are ongoing, the reporting entity must report to the competent state agency within 24 working hours from the time of identifying the transaction;

c) Before November 30 each year, the reporting entity prepares a consolidated report on anti-money laundering activities carried out during the year and submits it to the competent state management agency for compilation and reporting to the Government;

5. Information confidentiality:

a) The reporting entity shall not inform customers and related parties about the suspicious transaction report, its contents, or the information provided to the competent authorities;

b) Documents and records related to transactions reported under this Circular are classified as "Confidential" and the reporting entity may only provide them to the competent state agencies as prescribed by law;

c) Individuals and organizations performing reporting responsibilities or providing information about customers related to transactions required to be reported under Decree No. 74/2005/NĐ-CP and this Circular shall not be considered to violate laws concerning the confidentiality of customer information related to customer activities.

Article 11. Application of provisional measures

1. Organizations applying provisional measures must comply with their authority and the provisions of the law.

2. Reporting organizations have the right not to execute transactions in the following cases and simultaneously notify the competent state agency:

a) Transactions related to individuals or organizations listed in the list of individuals and organizations involved in criminal activities provided by the Ministry of Public Security or other competent state agencies.

b) There is a reason to believe that the transaction requested to be executed is related to criminal activity.

c) Transfers of funds into or out of customer accounts for purposes outside the scope of operations and services provided by the reporting organization.

d) Opening and maintaining anonymous accounts or numbered accounts or accounts of customers hiding their identity or clearly using false names.

đ) Opening and maintaining accounts for customers whom the organization has not directly met and verified customer information at least once.

3. Reporting organizations are not liable for damages arising from non-execution of transactions as prescribed by law.

4. Sealing, temporary detention of assets, and freezing of transaction accounts shall be carried out in accordance with current laws.

Article 12. Retention Period for Records

Reporting organizations are responsible for retaining customer identification information, information, and documents related to suspicious transaction reports and large-value transaction reports as stipulated in Decree No. 74/2005/NĐ-CP and this Circular for at least five years from the date of closing the account or the end of the transaction.

Article 13. Training

1. Annually, reporting organizations develop and implement training programs and enhance awareness of anti-money laundering measures for all staff members involved in monetary and asset transactions of the reporting organization. The reporting organization prioritizes training for employees directly interacting with customers and staff members responsible for anti-money laundering.

2. Reporting organizations select appropriate training formats based on their organizational characteristics and activities, proactively coordinating with competent state agencies to organize specialized and vocational training for staff on anti-money laundering.

3. Training content for staff must be relevant to their job duties and the level of money laundering risk associated with their responsibilities, consistent with their internal regulations on anti-money laundering, and include the following basic elements:

a) Legal provisions and internal regulations on anti-money laundering focusing on customer identification measures, methods of detecting and reporting suspicious transactions, and legal liabilities for failing to comply with anti-money laundering laws.

b) Updates on trends, measures, and techniques of money laundering.

c) Updates on internal procedures and anti-money laundering measures currently applied by the organization.

Article 14. Internal Control

1. Reporting organizations must establish an internal control system to ensure compliance with legal regulations and internal rules on preventing and combating money laundering.

2. Annually, reporting organizations must conduct internal control over anti-money laundering activities, assess compliance with established internal rules, and propose measures to enhance the effectiveness and efficiency of such activities.

3. Any violations discovered during the internal control process must be reported to the person responsible for preventing and combating money laundering and the head of the reporting organization for handling.

Article 15. Handling Violations

Acts violating laws on preventing and combating money laundering in insurance, securities, and gambling industries, if not reaching the level of criminal prosecution, shall be administratively handled according to the Administrative Violations Handling Ordinance, Decree No. 74/2005/NĐ-CP dated June 7, 2005 of the Government on preventing and combating money laundering, and other relevant regulatory legal documents.

Chapter III

IMPLEMENTING PROVISIONS

Article 16. Effective Date

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

During implementation, if there are difficulties or obstacles, they should be reflected to the Ministry of Finance for Method and location.

Article 17. Implementation Organization

Director Department of Banking and Financial Organization Finance, Chairman of the State Securities Commission, Director of the Insurance Management and Supervision Department, Chief of the Office of the Ministry of Finance, Heads of related units, Chairmen of the Board of Directors, Members of the Board of Members, General Directors (Directors) of reporting organizations are responsible for implementing this Circular./.