Circular No. 20/2019/TT-NHNN amending and supplementing certain articles of Circular No. 35/2013/TT-NHNN dated December 31, 2013 guiding the implementation of certain provisions on anti-money laundering.

CIRCULAR

Amending and supplementing certain Articles of Circular No. 35/2013/TT-NHNN dated December 31, 2013 guiding the implementation of certain provisions on anti-money laundering

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Based on the Anti-Money Laundering Law dated June 18, 2012;

Pursuant to the Law on Counter-Terrorism dated June 12, 2013;

Pursuant to the Customs Law dated June 23, 2014;

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

Pursuant to Decree No. 122/2013/NĐ-CP dated October 11, 2013 of the Government stipulating temporary suspension of circulation, freezing, sealing, temporary detention, and handling of money and assets related to terrorism and terrorist financing; establishing lists of organizations and individuals related to terrorism and terrorist financing;

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Inspectorate and Supervision Department,

The Governor of the State Bank of Vietnam promulgates this Circular amending and supplementing certain Articles of Circular No. 35/2013/TT-NHNN dated December 31, 2013 guiding the implementation of certain provisions on anti-money laundering.

Article 1. Amending and supplementing certain Articles of Circular No. 35/2013/TT-NHNN dated December 31, 2013 guiding the implementation of certain provisions on anti-money laundering

1. Economic organizations conducting foreign exchange trading agency activities; economic organizations conducting foreign currency receipt and payment service provision activities; economic organizations conducting border country currency exchange agency activities.

"Article 1. Scope of Regulation

This Circular provides for enhanced measures for customers with high risk; updating customer information; reporting the list of foreign individuals with political influence; preventing and combating terrorist financing; contents and forms of reports: large-value transactions, suspicious transactions, electronic fund transfers, acts of money laundering aimed at terrorist financing; the value of foreign currency cash, Vietnamese dong in cash, precious metals, gemstones, transferable instruments that must be declared to customs and documents that must be presented to the customs office when individuals carry them across borders.

means projects, works, designs for developing, applying, implementing technology or other tasks within the scope of technical fields managed by technical staff, classified according to types and levels (groups) as stipulated by specialized laws."

"Article 3a. Risk assessment for money laundering and terrorist financing

Reporting entities shall be responsible for:

1. Based on the results of their national, sectoral, and industry risk assessments for money laundering and terrorist financing, reporting entities must conduct risk assessments for money laundering and terrorist financing to understand their own risks of money laundering and terrorist financing (for customers, countries or geographic regions, products, services, transactions, or distribution channels); the results of the assessment must be approved and issued by the Board of Directors or General Director.

2. Based on the results of their risk assessments for money laundering and terrorist financing, reporting entities must develop risk management policies and procedures identified from the risk assessment report and must be approved and issued by the Board of Directors or General Director.

3. Annually, reporting entities must update, amend, and supplement their risk assessments for money laundering and terrorist financing and previously issued risk management policies and procedures.

4. The results of risk assessments or updates for money laundering and terrorist financing and risk management policies and procedures must be submitted to the State Bank (Anti-Money Laundering Department) and the competent state agency directly managing the reporting entity within thirty days from the date of issuance or amendment; they must also be disseminated and made public throughout the system of the reporting entity.

5. Risk management policies and procedures must include enhanced control measures for high-risk money laundering and terrorist financing and simplified control measures for low-risk money laundering and terrorist financing.

6. For international electronic fund transfers, based on the results of their risk assessments for money laundering and terrorist financing, reporting entities serving beneficiaries and intermediary organizations must have risk-based policies and procedures to determine:

a) Transactions eligible for execution;

b) Appropriate measures including refusal or suspension of transactions or post-transaction monitoring measures when transactions lack required information about the remitter and beneficiary as stipulated in Point c Clause 2 Article 7 of this Circular.

3. Supplementing Article 3b as follows:

"Article 3b. Responsibility for updating customer information

Based on customer identification measures, the reporting entity must regularly update customer information, data, risks, and business relationships collected into the database system.

4. Amend the name and point c of Clause 2, Article 7 as follows:

"Article 7. Electronic fund transfer transactions

"c) Individuals and organizations that are the remitter or beneficiary:

(i) Individual: Full name; citizen identification number or public service card number or valid passport number; account number (if available); transaction code; amount and type of transaction; contact address; place of permanent residence; temporary residence address; country;

(ii) Organization: Name; tax code; business registration certificate number; account number; transaction code; amount and type of transaction; contact address; headquarters location; country;

(iii) For domestic electronic fund transfers: If the remitter or beneficiary is a foreigner, in addition to the information specified in points c(i) and c(ii) of this clause, there must be information about the entry visa number (if applicable), residence address abroad, and address in Vietnam;

(iv) For fund transfers from Vietnam to foreign countries: Information for individuals (citizen identification number or public service card number or valid passport number) and organizations (tax code, business registration certificate number) of the beneficiary is not mandatory;

(v) For fund transfers from foreign countries to Vietnam: Information for individuals (citizen identification number or public service card number or valid passport number); for organizations (tax code, business registration certificate number) of the remitter is not mandatory."

5. Add Clause 5, Clause 6, and Clause 7 to Article 7 as follows:

"5. For international electronic fund transfer transactions with a value equivalent to or greater than one thousand US dollars, the reporting entity serving the beneficiary must verify and identify the beneficiary according to the provisions of Article 11 of the Anti-Money Laundering Law and retain such information as required.

6. During and after the transaction, the reporting entity serving the beneficiary must implement monitoring measures to detect international electronic fund transfer transactions lacking the information of the person initiating the transfer order or the beneficiary as stipulated in point c of Clause 2 of this Article and apply the handling measures prescribed in point b of Clause 6 of Article 3a.

7. The reporting entity must apply measures to suspend circulation, freeze accounts, seal, temporarily detain money and assets, and comply with prohibitions on conducting transactions with organizations and individuals listed in the resolutions of the United Nations Security Council related to terrorism and terrorist financing and the blacklist established by the Ministry of Public Security as provided by law."

6. Clause 1 of Article 8 shall be amended and supplemented as follows:

"1. When discovering or having grounds to believe that organizations and individuals listed in the resolutions of the United Nations Security Council or in the blacklist established by the Ministry of Public Security as provided by law, or other individuals and organizations involved in acts of financing terrorism and money laundering for the purpose of financing terrorism, the reporting entity has the responsibility to report to the Counter-Terrorism Force of the Ministry of Public Security, and simultaneously report to the Anti-Money Laundering Department in accordance with the provisions of Article 10 of this Circular."

7. Point c of Clause 2 of Article 8 shall be amended and supplemented as follows:

"c) Organizations and individuals implementing acts related to financing terrorism and money laundering for the purpose of financing terrorism: Name; nationality; other information such as citizen identification number or public service card number or valid passport number, business registration certificate number or business registration certificate number, tax code, address, account number, transaction code;"

8. Amend the name of Article 9 and add Clause 4 to Article 9 as follows:

"Article 9. The value threshold for foreign currency cash, Vietnamese dong in cash, precious metals, and gemstones that must be declared to customs and the documents to be presented to border gate customs when individuals carry foreign currency cash, Vietnamese dong in cash, precious metals, and gemstones out of or into the country."

"4. Documents to be presented to border gate customs when individuals, including residents and non-residents, carry foreign currency cash, Vietnamese dong in cash, precious metals, and gemstones out of or into the country include:
a) For carrying precious metals and gemstones (excluding gold) out of or into the country:

(i) Invoice issued by enterprises or organizations permitted to trade in precious metals and gemstones; other documents proving the legitimate origin of precious metals and gemstones in cases where there is no invoice from enterprises or organizations permitted to trade in precious metals and gemstones;

(ii) Documents to be presented to border gate customs must be original or certified copies in accordance with the provisions of the law;
b) In cases where individuals carry foreign currency cash, Vietnamese dong in cash, and gold out of or into the country, related documents to be presented to customs shall be implemented in accordance with the regulations of the State Bank regarding the carrying of foreign currency cash, Vietnamese dong in cash, and gold by individuals when exiting or entering the country;
c) If the invoice or documents proving the origin are in a foreign language:

(i) For individuals exiting the country: a Vietnamese translation certified in accordance with the provisions of the law, except in cases where the individual has previously presented the original or certified copy upon entry;

(ii) For individuals entering the country: the original or certified copy."

9. Article 10b is amended and supplemented as follows:

"Article 10b. Prevention and Combating of Terrorist Financing
1. Reporting entities must regularly update in a timely manner the list of designated items under United Nations Security Council Resolutions and the blacklist established by the Ministry of Public Security in accordance with the provisions of the law published on the Ministry of Public Security's electronic portal, and conduct customer reviews, related parties, and transactions according to these lists.
2. Reporting entities must apply the measures prescribed in Articles 3 to 14 and Articles 16 to 18 of Decree No. 116/2013/NĐ-CP dated October 4, 2013 of the Government detailing the implementation of certain provisions of the Law on Anti-Money Laundering (which has been amended and supplemented) to identify customers and apply preventive measures related to terrorist financing and money laundering aimed at financing terrorism.
3. When suspecting that a customer or their transaction is related to terrorist financing or money laundering aimed at financing terrorism, reporting entities must implement transaction delays in accordance with the law on anti-money laundering or temporarily suspend circulation, freeze accounts, seal, or temporarily detain funds and assets in accordance with the law on counter-terrorism; report suspicious transactions related to terrorist financing and money laundering aimed at financing terrorism to the Anti-Money Laundering Bureau; report transaction delays or temporary suspension of circulation, account freezing, sealing, or temporary detention of funds and assets to the Ministry of Public Security and the Anti-Money Laundering Bureau in accordance with Clause 2 and Clause 3 of Article 8 of this Circular.

10. Add Article 10c as follows:

"Article 10c. Updating customer information participating in legal agreements
1. Legal agreements include agreements established in writing between organizations and individuals within and outside the country regarding entrustment and authorization for managing and using money and assets.

2. In addition to the customer information that must be collected and updated according to the provisions of Article 9 and Article 10 of the Law on Anti-Money Laundering and Combating Terrorist Financing, the reporting entity shall require customers when opening an account or establishing a business relationship or conducting large-value transactions to report and provide information to determine participation in legal agreements, including:

a) The name of the organization or individual being entrusted or authorized (if applicable);

b) The date, month, and year of the entrustment or authorization document;

c) The content of entrustment or authorization including the value of money and assets being entrusted or authorized to conduct transactions;

d) The country where the entrusting or authorizing organization or individual is established and subject to regulation by the law;

đ) The identification number of the entrustment or authorization issued by the competent state agency (if applicable);

e) Identification information of the beneficiary and information of related individuals or organizations (if applicable).

3. The reporting entity is responsible for identifying, verifying, and retaining records related to entrustment and authorization, including the minimum information referred to in Clause 2 of this Article.

11. Article 12 is amended and supplemented as follows:

"Article 12. Responsibility for Implementation

The Banking Inspection and Supervision Authority (Anti-Money Laundering Department) shall be responsible for:

1. Submitting to the Governor for the dissemination of the results of national risk assessment and the national action plan to address risks of money laundering and terrorist financing to the Ministries of Public Security, Finance, Construction, Natural Resources and Environment, Planning and Investment, Justice, Industry and Trade, Information and Communications, Home Affairs, Foreign Affairs, Defense, Transport, Science and Technology; the Government Inspectorate; the Committee for Non-Governmental Organizations from Foreign Countries; and reporting entities under the State Bank of Vietnam's management, and posting the results of national risk assessment and the national action plan to address risks of money laundering and terrorist financing on the State Bank of Vietnam’s electronic portal.

2. Taking the lead in coordinating with relevant units to study and develop guidelines for risk assessment criteria for money laundering and terrorist financing for reporting entities to implement.

3. Submitting to the Governor for the issuance of regulations on applying enhanced due diligence measures appropriate to the level of money laundering risk for business relationships and transactions with customers who are organizations or individuals from countries or regions identified as high-risk for money laundering and terrorist financing by the Financial Action Task Force (FATF) for reporting entities to implement.

4. Submitting a document to the agencies specified in Clause 1 of this Article and reporting entities about the list of countries and regions identified as high-risk for money laundering and terrorist financing by FATF within seven days of FATF's establishment and publication for the application of appropriate enhanced due diligence measures.

5. Based on the level of national risk, sector, and reporting entities concerning money laundering and terrorist financing, advising the Governor to establish inspection, examination, supervision plans, and implementing inspections, examinations, supervision, and handling violations against reporting entities within their authority.

Article 2. Responsibility for Implementation

The Director of the Office, the Director of Banking Inspection and Supervision, the Heads of relevant units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam in provinces and centrally governed cities, and reporting entities as stipulated in Clause 1 of Article 2 of Circular No. 35/2013/TT-NHNN are responsible for organizing the implementation of this Circular.

Article 3. Effective Provisions

1. This Circular takes effect from November 14, 2019.

2. Abolish Clause 5 of Article 1 of Circular No. 31/2014/TT-NHNN dated November 11, 2014 issued by the Governor of the State Bank of Vietnam amending and supplementing certain provisions of Circular No. 35/2013/TT-NHNN dated December 31, 2013 guiding the implementation of certain regulations on anti-money laundering.