Decree No. 19/2023/ND-CP detailing some provisions of the Law on Anti-Money Laundering

DECREE

DETAILING CERTAIN PROVISIONS OF THE LAW ON PREVENTION AND COMBATING MONEY LAUNDERING

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Law on Prevention and Combating Money Laundering dated November 15, 2022;

At the proposal of the Governor of the State Bank of Vietnam;

The Government issues this Decree detailing certain provisions of the Law on Prevention and Combating Money Laundering.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree details certain Articles and Clauses of the Law on Prevention and Combating Money Laundering regarding principles, criteria, and methods for assessing national money laundering risks; customer due diligence; criteria for identifying beneficial owners; large or complex transactions; authorities with jurisdiction to receive information, files, documents, and reports; collection, processing, and analysis of information for prevention and combating money laundering; exchange, provision, and transfer of information for prevention and combating money laundering with competent authorities within the country; grounds for suspicion or detection of parties involved in transactions listed in the blacklist and authorities with jurisdiction to receive delayed transaction reports.

Article 2. Applicability

1. Financial organizations.

2. Non-financial business sectors related enterprises and individuals.

3. Vietnamese organizations and individuals, foreign organizations, foreigners, and international organizations conducting transactions with financial organizations and non-financial business sectors related enterprises and individuals.

4. Other organizations, individuals, and agencies related to prevention and combating money laundering.

Chapter II

NATIONAL MONEY LAUNDERING RISK ASSESSMENT

Article 3. Principles for National Money Laundering Risk Assessment

1. National money laundering risk assessment shall be conducted by competent state agencies according to criteria and methods prescribed by law, consistent with international standards and practical conditions in Vietnam.

2. National money laundering risk assessment must determine the level of money laundering risk of the country.

3. National money laundering risk assessment serves as the basis for developing post-assessment implementation plans and updating policies and strategies for prevention and combating money laundering corresponding to each period.

4. Information, documents, and data serving national money laundering risk assessment shall be collected from databases of competent agencies, reporting entities, research materials both domestically and internationally based on principles of transparency and ensuring compliance with regulations on protecting state secrets.

Article 4. Criteria for National Money Laundering Risk Assessment

1. Criteria for national money laundering risk assessment include money laundering risk criteria; criteria for the appropriateness of anti-money laundering policies and measures; and consequences of money laundering at the national and sectoral levels.

2. Money laundering risk criteria include criteria for money laundering risk from predicate offenses of money laundering and criteria for money laundering risk in sectors and industries, specifically as follows:

a) Criteria for money laundering risk from predicate offenses of money laundering include money laundering risk from each predicate offense within the country and across borders that are assessed;

b) Criteria for money laundering risk in sectors and industries include money laundering risk from each sector and industry within the country and across borders that are assessed.

3. Criteria for the appropriateness of anti-money laundering policies and measures include the comprehensiveness of the legal framework and the effectiveness of implementing legal provisions, specifically as follows:

a) Criteria for the comprehensiveness of the legal framework include the completeness of laws and regulations related to prevention and combating money laundering at the national and sectoral levels;

b) Criteria for the effectiveness of implementing legal provisions include the effectiveness of implementing legal provisions at the national and sectoral levels and the appropriateness of anti-money laundering policies and measures linked to key products and services in sectors and industries.

4. Consequences of money laundering criteria include:

a) Criteria for negative impacts caused by money laundering on the economy;

b) Criteria for negative impacts caused by money laundering on the financial system;

c) Criteria for negative impacts caused by money laundering on sectors and industries;

d) Criteria for negative impacts caused by money laundering on society.

Article 5. National money laundering risk assessment method

1. The national money laundering risk assessment method is a scoring method.

2. The scoring method is implemented based on using a set of scoring tools for each criterion specified in Article 4 of this Decree to rank on a scale from 1 to 5, specifically as follows:

a) For the money laundering risk criterion: a score of 5 indicates high money laundering risk; a score of 4 indicates high medium money laundering risk; a score of 3 indicates medium money laundering risk; a score of 2 indicates low medium money laundering risk; a score of 1 indicates low money laundering risk;

b) For the level of appropriateness of anti-money laundering policies and measures criterion: a score of 5 indicates low level of appropriateness of anti-money laundering policies and measures; a score of 4 indicates low medium level of appropriateness of anti-money laundering policies and measures; a score of 3 indicates medium level of appropriateness of anti-money laundering policies and measures; a score of 2 indicates high medium level of appropriateness of anti-money laundering policies and measures; a score of 1 indicates high level of appropriateness of anti-money laundering policies and measures;

c) For the consequence of money laundering criterion: a score of 5 indicates high consequence of money laundering; a score of 4 indicates high medium consequence of money laundering; a score of 3 indicates medium consequence of money laundering; a score of 2 indicates low medium consequence of money laundering; a score of 1 indicates low consequence of money laundering;

d) For the national money laundering risk assessment criterion: a score of 5 indicates high national money laundering risk; a score of 4 indicates high medium national money laundering risk; a score of 3 indicates medium national money laundering risk; a score of 2 indicates low medium national money laundering risk; a score of 1 indicates low national money laundering risk.

3. Information, data, and figures for assessing the national money laundering risk as stipulated in the Appendix attached to this Decree.

4. The State Bank of Vietnam provides a set of scoring tools consistent with international standards for preventing and combating money laundering.

Chapter III

MEASURES TO PREVENT AND COMBAT MONEY LAUNDERING

Section 1. CUSTOMER IDENTIFICATION; CRITERIA FOR DETERMINING BENEFICIAL OWNERSHIP; LARGE OR COMPLEX UNUSUAL TRANSACTIONS; RECEIVING INFORMATION, DOCUMENTS, REPORTS

Article 6. Customer Identification

1. Financial organizations must identify customers in the following cases:

a) When a customer opens an account for the first time, including a transaction account, e-wallet, or other types of accounts, or when a customer establishes a relationship with a financial organization for the first time to use products or services provided by the financial organization;

b) When a customer does not have an account or has an account but did not conduct transactions for six consecutive months before carrying out a deposit, withdrawal, or transfer transaction with a total value of VND 400,000,000 or equivalent foreign currency in one day, excluding settlement transactions or withdrawal of savings interest, repayment of credit card debt, repayment of credit granted by financial organizations, regular payments registered with financial organizations, withdrawal of interest from securities investment activities, or bond investment;

c) When a customer or a customer's transaction or a related party's transaction exhibits one or more signs prescribed in Articles 27, 28, 29, 30, and 31 of the Law on Preventing and Combating Money Laundering or other suspicious signs identified by the reporting entity;

d) When a customer supplements information or documents that do not match previously provided information or documents or information and documents collected and determined by the reporting entity.

2. Organizations and individuals engaged in prize games, including electronic games with prizes, telecommunications network games, internet games, casinos, lotteries, and betting must identify customers when a customer conducts a transaction with a total value of VND 70,000,000 or equivalent foreign currency in one day.

3. Organizations and individuals engaged in real estate business, except for leasing, subleasing real estate, and real estate advisory services, must identify customers for the buyer or seller in brokerage activities for buying or selling real estate; for the owner of the property in management service activities for real estate.

4. Organizations and individuals engaged in precious metals and gemstone business must identify customers when a customer conducts a cash transaction to buy or sell precious metals or gems with a value of VND 400,000,000 or equivalent foreign currency in one day.

5. Organizations and individuals providing legal agreement services must identify customers when conducting transactions for customers related to establishing, operating, or managing legal agreements.

6. Organizations and individuals providing services for establishing, managing, or operating businesses must identify customers when a customer uses or requests to use such services.

7. Organizations and individuals providing company director or secretary services for third parties must identify customers for the third party and the director or secretary involved.

Article 7. Criteria for Determining Beneficial Owners

1. The reporting entity shall determine the beneficial owner for individual customers as follows:

a) In cases where a customer opens an account, the reporting entity shall identify the individual who actually owns or controls the operation of that account;

b) In cases where a customer establishes a relationship with the reporting entity, the reporting entity shall identify the individual who establishes the relationship and actually controls it.

2. The reporting entity shall determine the beneficial owner for organizational customers as follows:

a) The reporting entity shall identify the individual who directly or indirectly holds at least 25% of the charter capital of the organization or the ultimate individual who has control over the organizational customer;

b) In cases where an individual cannot be identified according to point a of this clause, the reporting entity shall identify at least one legal representative of the organization, except for individuals representing state capital in the organization;

c) In cases where the organization is a listed company on domestic and foreign stock markets and information about the beneficial owner of the organization has been disclosed, the reporting entity shall determine the beneficial owner as the disclosed individual.

3. The reporting entity shall determine the beneficial owner for legal agreements as stipulated in point a, Clause 1, Article 22 of the Anti-Money Laundering Law.

4. The reporting entity shall determine the beneficial owner of a life insurance contract as the individual who actually benefits from the rights of the insured person under the life insurance contract.

Article 8. Large or Complex Unusual Transactions

1. A large unusual transaction is a transaction that is clearly disproportionate to the income or does not conform to the usual transaction value of the customer with the reporting entity.

2. A complex transaction is a transaction that does not conform to the scale, type, and field of activity of the customer or does not conform to the frequency, method, and scale of similar transactions within the same industry or field.

Article 9. State Authorities Authorized to Receive Information, Documents, and Reports

The reporting entity must provide information, documents, materials, and reports in accordance with Clause 1, Article 38 of the Anti-Money Laundering Law when requested by the following authorized state authorities:

1. The authority performing anti-money laundering functions under the State Bank of Vietnam.

2. Investigative agencies, agencies assigned tasks to conduct certain investigative activities, or People's Procuratorates when implementing tasks pursuant to decisions to initiate criminal investigations or indictments; specialized national security protection agencies of the Public Security Organs when requesting information, documents, materials, and reports on anti-money laundering.

3. State inspection agencies, agencies assigned to perform specialized inspection functions for reporting entities.

Section 2. COLLECTION, PROCESSING, ANALYSIS, EXCHANGE, PROVISION, AND TRANSFER OF INFORMATION ON ANTI-MONEY LAUNDERING

Article 10. Collection, Processing, and Analysis of Anti-Money Laundering Information

1. The authority performing anti-money laundering functions under the State Bank of Vietnam has the right to request organizations and individuals related to provide stored information, documents, materials, and reports in accordance with the law and information, documents, and materials received and collected within their functional scope to serve the work of analyzing, exchanging, providing, and transferring anti-money laundering information.

2. Organizations and individuals related shall provide information, documents, and materials to the authority performing anti-money laundering functions under the State Bank of Vietnam within the required time limit.

3. The authority performing anti-money laundering functions under the State Bank of Vietnam shall process and analyze the received information and reports, including:

a) Analyzing and processing information based on existing sources and additional collection to identify money laundering trends and patterns to develop strategies and goals for anti-money laundering efforts in industries, fields, and the country during specific periods;

b) Analyzing and processing information based on existing sources and additional collection to trace transactions, identify connections, and activities suspected of being related to money laundering or other criminal activities.

Article 11. Exchange, provision, transfer of information for anti-money laundering with competent authorities within the country

1. The agency performing functions and tasks for anti-money laundering under the State Bank of Vietnam shall exchange, provide, and transfer information in the following cases:

a) Exchange and provide information at the request of the competent authority conducting criminal proceedings as prescribed by the Criminal Procedure Code;

b) Exchange and provide information to the competent authority serving the needs of anti-money laundering work, including the competent authority conducting criminal proceedings as prescribed by the Criminal Procedure Code and relevant ministries and sectors involved in anti-money laundering work;

c) Transfer information or case files to the investigation agency or the agency assigned to carry out certain investigative activities when there is reasonable grounds to suspect transactions mentioned in related information and reports involving money laundering.

2. Information exchanged and provided according to point a and point b, Clause 1, Article 11 includes:

a) Information about transactions, organizations, and individuals suspected of violating laws with the purpose of preventing and combating money laundering;

b) Information about deficiencies in mechanisms, policies, and state management activities aimed at preventing and combating money laundering.

3. Reasonable grounds for suspecting transactions mentioned in information and reports related to money laundering as prescribed in point c, Clause 1, Article 11 include:

a) Transactions related to organizations and individuals listed on the Blacklist;

b) Transactions related to organizations and individuals who are subjects of accusation, held in urgent circumstances according to notifications from the competent authority, recommended for prosecution, arrested, detained, suspects, defendants, or convicted persons under Vietnamese criminal procedure laws related to money laundering;

c) Transactions related to organizations and individuals currently being investigated, prosecuted, or tried by competent agencies in other countries or territories around the world;

d) Other transactions that the agency performing functions and tasks for anti-money laundering under the State Bank of Vietnam identifies through suspicious transaction analysis as potentially related to money laundering or other criminal activities.

4. The competent authority as prescribed in point a and point b, Clause 1, Article 11 shall be responsible for retaining and using received information, reports, and documents in accordance with the law and reporting the results of handling provided and transferred information to the agency performing functions and tasks for anti-money laundering under the State Bank of Vietnam as prescribed by law.

5. The investigation agency or the agency assigned to carry out certain investigative activities upon receiving information or case files as prescribed in point c, Clause 1, Article 11 shall be responsible for classifying and resolving them in accordance with the criminal procedure law, retaining received information, reports, and documents under confidentiality regulations, and providing feedback on the results and effectiveness of handling information to the agency performing functions and tasks for anti-money laundering under the State Bank of Vietnam.

6. The agency performing functions and tasks for anti-money laundering under the State Bank of Vietnam shall be responsible for exchanging and providing information from its database to the competent authorities as prescribed in point a, Clause 1, Article 11 within seven working days from the date of receipt of the information provision request.

7. The agency performing functions and tasks for anti-money laundering under the State Bank of Vietnam and the agencies as prescribed in this Article may conclude cooperation protocols to facilitate rapid and effective exchange, provision, and transfer of information.

Section 3. APPLICATION OF TRANSACTION SUSPENSION MEASURES

Article 12. Application of transaction suspension measures

1. Grounds for suspecting or discovering parties involved in transactions listed on the Blacklist to suspend transactions when they fall under any of the following circumstances:

a) Individuals or organizations related to the transaction have information that fully matches the information of individuals or organizations listed on the Blacklist;

b) An individual related to the transaction has one of the following groups of information: full name, date of birth, nationality, address, passport number, identification card number, citizen identification number, personal identification number matching the information of an individual listed on the Blacklist, and based on the collected information, it is believed that such individual is associated with terrorism, terrorist financing, proliferation and financing of weapons of mass destruction;

c) An organization related to the transaction has one of the following pieces of information: transaction name, establishment license number, business code, tax code matching the information of an organization listed on the Blacklist, and based on the collected information, it is believed that such organization is associated with terrorism, terrorist financing, proliferation and financing of weapons of mass destruction.

2. When applying transaction suspension measures, the reporting entity must immediately report to competent state agencies as follows:

a) The competent anti-terrorism agency, the lead agency, or unit responsible for preventing the proliferation of weapons of mass destruction when there is a basis to suspect or discover parties involved in the transaction listed on the Blacklist;

b) The criminal enforcement agency of the Ministry of Public Security or units assigned by the Minister of Public Security when there is reason to believe that the requested transaction is related to criminal activities, including: transactions requested by a person convicted according to criminal procedure laws and assets in the transaction belonging to or having a source belonging to the ownership or control of such convicted person; transactions involving organizations or individuals committing acts related to the crime of terrorist financing;

c) Competent state agencies that have requested the reporting entity to implement transaction suspension measures when there is a request from competent state agencies as provided for in relevant laws;

d) When applying transaction suspension measures as stipulated in points a, b, and c of this clause, the reporting entity must immediately report to the agency performing functions and tasks related to anti-money laundering under the State Bank of Vietnam.

Chapter IV

IMPLEMENTING PROVISIONS

Article 13. Effective Date

1. This Decree takes effect from the date of signature, except as provided for in Clause 2 of this Article.

2. The provisions regarding the value threshold of transactions at point b of Clause 1, Clause 2, and Clause 4 of Article 6 of this Decree take effect from December 1, 2023. During the period when the provisions at point b of Clause 1, Clause 2, and Clause 4 of Article 6 of this Decree are not yet effective, the reporting entity shall continue to implement the provisions regarding the value threshold of transactions at Clause 1, Clause 2, and Clause 4 of Article 3 of Decree No. 116/2013/NĐ-CP dated October 4, 2013 of the Government detailing certain provisions of the Law on Anti-Money Laundering until November 30, 2023.

3. From the date this Decree takes effect as provided for in Clause 1 of this Article, the following Decrees cease to be effective:

a) Decree No. 116/2013/NĐ-CP dated October 4, 2013 of the Government detailing certain provisions of the Law on Anti-Money Laundering, except for the provisions regarding the value threshold of transactions at Clause 1, Clause 2, and Clause 4 of Article 3 which cease to be effective from December 1, 2023;

b) Decree No. 87/2019/NĐ-CP dated November 14, 2019 of the Government amending and supplementing certain provisions of Decree No. 116/2013/NĐ-CP dated October 4, 2013 of the Government detailing certain provisions of the Law on Anti-Money Laundering.

1. The Minister, Heads of Ministries equivalent to ministries, Heads of government agencies, Chairmen of provincial People's Committees under the central government, and related agencies, units, and individuals are responsible for implementing this Circular.

Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Committees directly under the central government, and related organizations and individuals are responsible for implementing this Decree./.