Circular No. 22/2009/TT-NHNN guiding the implementation of measures to prevent and combat money laundering

CIRCULAR

Guidelines for Implementing Anti-Money Laundering Measures

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Pursuant to Article 27 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), the State Bank of Vietnam guides the implementation of anti-money laundering measures as follows:

PART I. GENERAL PROVISIONS

Article 1. Scope of Regulation

These guidelines provide guidance on anti-money laundering measures in Vietnam in monetary transactions or other assets.

Article 2. Applicability

These guidelines apply to organizations established and operating under the Law on Credit Institutions and other organizations engaged in banking activities, including:

a) State-owned credit institutions;

b) Joint-stock credit institutions;

c) Cooperative credit institutions (including cooperative banks, people's credit funds, and other forms);

d) Joint venture credit institutions;

e) Foreign-funded credit institutions;

f) Branches of foreign banks in Vietnam;

g) Postal Savings Service Company;

h) Currency exchange agents;

i) Organizations providing payment services (excluding those organizations mentioned in this Article that have been permitted to perform payment services).

Article 3. Explanation of Terms

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

1. Updating customer information means modifying and supplementing the information already known about customers to ensure that the information remains complete and accurate throughout the establishment and maintenance of relationships and transactions with customers.

2. Suspicious transaction is defined in Article 9 of these guidelines.

3. Reporting entity refers to the entities specified in Article 2 of these guidelines.

4. Watchlist is a list of individuals and organizations:

a) Involved in criminal activities established by the Ministry of Public Security to prevent and combat money laundering and the use of money or assets to facilitate or finance criminal activities within or outside the territory of Vietnam;

b) Potentially involved in money laundering established by the Anti-Money Laundering Department of the Banking Supervisory Authority or reporting entities.

5. Beneficial owner is the ultimate owner or controller of a monetary transaction or other asset.

6. Large cash transaction refers to cash transactions with a value requiring reporting as stipulated in Article 9 of Decree No. 74.

7. Not conducting a transaction means that the reporting entity maintains the account status or transaction unchanged from the time the temporary measure is applied.

8. In case of necessity refers to situations where the reporting entity discovers that the customer or parties related to the transaction required to be performed are listed on the watchlist or there is reason to believe they are involved in criminal activities.

SECTION 2. MEASURES FOR PREVENTING AND COMBATING MONEY LAUNDERING

Article 4. Internal Regulations on Preventing and Combating Money Laundering

1. Based on the provisions of these guidelines and relevant legal documents, reporting entities must establish and promulgate internal regulations on preventing and combating money laundering comprising the following basic policies, rules, procedures, and processes:

a) Customer acceptance policy;

b) Procedures and processes for identifying and updating customer information;

c) Rules regarding transactions that must be reported;

d) Procedures for reviewing, detecting, handling, and reporting suspicious transactions;

e) Rules concerning communication with customers showing suspicious signs;

f) Rules on retaining and securing information;

g) Rules on applying temporary measures in preventing and combating money laundering and principles for handling delays or non-execution of transactions;

h) Rules on cooperation with law enforcement agencies in anti-money laundering efforts and the responsibility to report and provide information to the Anti-Money Laundering Department of the Banking Supervisory Authority and other competent state agencies;

i) Rules on training to enhance awareness and skills in preventing and combating money laundering;

j) Rules on internal control and audit of compliance with policies, rules, procedures, and processes related to anti-money laundering activities; responsibilities of the person in charge of anti-money laundering and each individual and department in implementing the internal regulations on preventing and combating money laundering.

2. The content of the internal regulations must ensure compatibility with the organizational structure, scale of operations, and risk level of money laundering in the activities of the reporting entity.

3. Within three months from the date these guidelines take effect, reporting entities are responsible for reviewing, amending, supplementing, or issuing new documents related to internal regulations on preventing and combating money laundering in accordance with these guidelines and submitting implementation reports along with relevant documents to the Anti-Money Laundering Department of the Banking Supervisory Authority.

4. Reporting entities must regularly review and evaluate internal regulations on preventing and combating money laundering to ensure compliance with legal provisions and changes and developments in banking products and services.

5. Internal regulations on preventing and combating money laundering must be disseminated to every individual and department responsible for anti-money laundering within the reporting entity, including those hired by the reporting entity for six months or more who are involved in financial and monetary transactions at headquarters, branches, and offices operating in Vietnam and abroad.

6. Reporting entities may independently decide whether to provide internal regulations on preventing and combating money laundering to foreign financial institutions in correspondent banking relationships upon request.

Article 5. Allocation of staff responsible for anti-money laundering

1. Each reporting entity must allocate a member of the Management Board to be responsible for organizing, directing, and supervising compliance with laws on anti-money laundering within the entity (hereinafter referred to as the anti-money laundering officer) and register with the Anti-Money Laundering Department under the Banking Inspection and Supervision Authority along with detailed information such as name, office address, phone number, fax number, email address for communication when necessary. When changing the anti-money laundering officer or related information about this person, the reporting entity must promptly notify in writing the Anti-Money Laundering Department under the Banking Inspection and Supervision Authority.

2. Depending on its scale, scope, and specific nature of operations, each reporting entity shall examine and decide to establish a specialized department (division, board) or designate a department at the main office to be responsible for anti-money laundering; at branch offices, the reporting entity shall allocate one or more staff members to be responsible for anti-money laundering.

Article 6. Customer Identification and Information Update

1. Situations requiring customer identification:

a) Customers establishing a transaction relationship or opening an account for the first time with a reporting entity;

b) Customers conducting large cash transactions or electronic fund transfers;

c) When transactions exhibit suspicious signs;

d) When a reporting entity suspects the truthfulness or completeness of previously collected customer identification information.

2. Content of customer identification information:

Reporting entities shall design their own customer identification forms 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; address (Vietnamese citizens: registered domicile and current residence; foreigners: registered address abroad and temporary residence registration in Vietnam), telephone number; customer history (if known);

- For corporate customers: full trading name and abbreviation; headquarters address, telephone number, fax number; establishment authority; business field.

Information about representatives of organizations includes the information listed above for individual customers.

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

c) Information about beneficial owners.

d) Information about individuals or organizations having significant relationships with customers (such as suppliers and consumers of the customer's products).

đ) Purpose, value of the transaction.

e) For electronic fund transfer transactions, it also includes information such as name, address, account number... of the initial remitter (if applicable).

3. Measures for customer identification:

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

- For individual customers: valid identity cards, passports; household registration books and other documents issued by authorized authorities (driver's license, health insurance card...);

- For corporate customers: business licenses or establishment decisions; name change, division, merger decisions; business registration certificates, tax registration certificates; appointment decisions for General Directors (Directors), Chief Accountants.

b) Reporting entities 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 comparing obtained information with the provided customer information;

- Through management agencies or other competent state authorities;

- Reporting entities may hire or cooperate with other organizations to verify customer identity. However, the ultimate responsibility for customer identification and information update lies with the reporting entity.

4. Reporting entities must regularly update customer information to ensure comprehensive understanding of customers throughout the duration of the relationship.

5. Reporting entities shall classify customers according to money laundering risk levels (high, medium, low). For high-risk money laundering customers, reporting entities must provide additional detailed information about the customer and obtain approval from the specialized anti-money laundering department before establishing a relationship.

Article 7. Customer Due Diligence and Transactions

1. Before establishing a relationship or providing banking services to customers, especially when executing payment orders to transfer funds abroad, reporting organizations must conduct customer due diligence and review related parties according to the warning list.

2. Reporting organizations need to pay special attention to large, complex, and unusual transactions, carefully examining relevant documents and materials concerning the basis and purpose of the transaction to identify suspicious transactions.

Article 8. Cash Transactions and Reporting of Cash Transactions

1. The threshold value for cash transactions that must be reported:

a) Ordinary cash transactions: one or more cash deposits or withdrawals in a day with a total value of VND 200,000,000 (two hundred million dong) or more, conducted by an individual or organization using Vietnamese dong, foreign currency, or gold convertible at the exchange rate or gold price at the time of the transaction. Reporting organizations are not required to report the balance on the customer's deposit account.

b) Savings cash transactions: one or more savings deposits or withdrawals in cash in a day with a total value of VND 500,000,000 (five hundred million dong) or more, conducted by an individual using Vietnamese dong, foreign currency, or gold convertible at the exchange rate or gold price at the time of the transaction. Reporting organizations are not required to report the balance on the customer's savings deposit account.

2. Reporting organizations must prepare reports on large cash transactions based on Form No. 01, 02, and 03 attached to this Circular, summarizing the entire system.

3. In cases where a customer deposits foreign currency cash to buy Vietnamese dong in cash or deposits Vietnamese dong cash to buy foreign currency cash, only the deposit or withdrawal of cash transactions should be reported.

4. In cases where a customer deposits cash into another person's account or deposits cash for a money transfer (when the customer does not have an account), the reporting organization must request the customer to present a valid identification card or passport or other photo-bearing documents issued by authorized authorities, and retain their name, address, phone number, and copies of these documents.

5. Reporting organizations must screen and filter large cash transactions to detect suspicious transactions.

Article 9. Suspicious Transactions and Reporting of Suspicious Transactions

1. In addition to the signs of suspicious transactions specified in Clause 1 of Article 10 of Decree No. 74, the State Bank of Vietnam supplements the following signs of suspicious transactions:

a) The personal or office phone number of the customer cannot be connected or there is no such number after opening an account or conducting a transaction.

b) A customer frequently exchanges small denomination currency for larger denominations with a total value of VND 200,000,000 (two hundred million dong) or more in a single exchange.

c) Deposit, withdrawal, or transfer transactions carried out by an individual or organization involved in illegal activities as reported by the media.

d) Information about capital contributions in financing, investment, lending, financial leasing, or entrusted investment operations of the customer is unclear and lacks transparency regarding the source.

đ) Information about collateral or pledge assets of the customer seeking a loan is unclear and lacks transparency regarding the source.

2. Based on the nature of business activities, reporting organizations may supplement the signs of suspicious transactions specified in Clause 1 of this Article according to each business unit or sector.

3. The authorized signatory for reports sent to the Anti-Money Laundering Department under the Banking Supervisory Authority and other competent state agencies is the person responsible for anti-money laundering or the head of the reporting organization.

For branches or subsidiaries of reporting organizations, the authorized signatory for reports is the unit head. These units are responsible for reporting to the Anti-Money Laundering Department under the Banking Supervisory Authority and other competent state agencies through the main office; if necessary, these units may directly report to the Anti-Money Laundering Department under the Banking Supervisory Authority and other competent state agencies and simultaneously report to the main office.

4. Upon discovering suspicious transactions, reporting organizations must report in writing to the Anti-Money Laundering Department under the Banking Supervisory Authority according to Form No. 04 attached to this Circular. In urgent cases, reporting organizations may report via fax or telephone, but must immediately follow up with a written report.

5. Reporting organizations are responsible for monitoring the development of reported transactions, updating new information, and reporting to the Anti-Money Laundering Department under the Banking Supervisory Authority and other competent state agencies.

Article 10. International Payment Transfer Transactions

1. Reporting entities must prepare statistical reports on international payment transfer transactions entering and exiting Vietnam for each transaction and retain them at their units. Statistical reports on international payment transfer transactions shall be submitted to the Anti-Money Laundering Department under the Banking Inspection and Supervision Authority in accordance with guidelines issued by the State Bank of Vietnam.

2. Reporting entities that have been granted permission by the State Bank of Vietnam and provide international payment transfer services must establish information technology systems to support anti-money laundering efforts.

Article 11. Reporting Period

1. Reporting entities must report to the Anti-Money Laundering Department under the Banking Inspection and Supervision Authority within 48 hours from the time suspicious signs are detected regarding suspicious transactions.

2. Temporary cash transaction reports of large value shall be kept by reporting entities in both written form and electronic files. Written reports shall be submitted to the Anti-Money Laundering Department under the Banking Inspection and Supervision Authority upon request. Electronic reports of large-value cash transactions shall be submitted to the Anti-Money Laundering Department under the Banking Inspection and Supervision Authority in accordance with guidelines issued by the State Bank of Vietnam.

3. In cases where suspicious transactions related to criminal activities are discovered, reporting entities must report to competent state authorities within 24 hours from the time of discovery.

Article 12. Information Confidentiality

1. Documents and records related to reported transactions under this Circular are classified as "Confidential" state secrets in the banking sector. Reporting entities may only provide such documents and records to the Anti-Money Laundering Department under the Banking Inspection and Supervision Authority and other competent state authorities as prescribed by law.

2. Individuals and organizations fulfilling reporting obligations or providing customer information related to reported transactions in accordance with Decree No. 74 and guidelines in this Circular shall not be considered to violate laws concerning the confidentiality of customer deposits and assets or other provisions on customer information confidentiality.

3. When identifying customers or reviewing transactions with suspicious signs, reporting entities operating in Vietnam may exchange customer information among themselves but must ensure proper use of the information solely for internal purposes.

4. Overseas branches of foreign banks and wholly foreign-owned banks operating in Vietnam may provide customer identification information to their headquarters abroad or other branches and subsidiaries for anti-money laundering purposes. Receiving entities must maintain confidentiality of the information and may not disclose it to any third party without written approval from the competent authority in Vietnam.

5. Information related to customer deposits and assets is classified as "Confidential" state secrets in the banking sector. Reporting entities may only provide such information to foreign financial institutions with correspondent banking relationships for anti-money laundering purposes upon approval by the Governor of the State Bank of Vietnam. The receiving entity must use the information for its intended purpose and may not disclose it to a third party.

Article 13. Application of provisional measures

1. The reporting organization must apply provisional measures within its authority, in accordance with the provisions of the law, and without affecting the safety of the financial and monetary system.

2. The reporting organization may exercise the right not to conduct transactions when:

a) Transactions involve individuals or organizations listed in point a, Clause 4, Article 3 of this Circular.

b) There is reasonable cause to believe that the transaction requested is related to criminal activity.

3. The reporting organization shall not be held legally responsible for damages arising from non-execution of transactions as prescribed by law.

4. Account freezing shall be carried out in accordance with current legal regulations.

Article 14. Supervision and Internal Audit

1. The reporting organization must establish an internal control system to ensure compliance with legal and internal regulations on anti-money laundering.

2. Annually, the reporting organization must conduct an independent and objective internal audit of anti-money laundering activities, reviewing, examining, and evaluating the internal control system, compliance with established internal regulations, and recommending measures to enhance the effectiveness and efficiency of anti-money laundering efforts.

3. Any violations discovered during internal supervision and auditing must be reported to the person responsible for anti-money laundering and the head of the reporting organization for handling.

4. Within sixty days from the end of the fiscal year, the reporting organization must submit an internal audit report on anti-money laundering to the Anti-Money Laundering Department under the Banking Inspection and Supervision Authority.

Article 15. Record Keeping

The reporting organization is responsible for retaining customer identification information and information related to transactions that must be reported according to Decree No. 74 and this Circular for at least five years from the date of account closure or the end of the transaction.

Article 16. Training

1. Annually, the reporting organization must develop and implement a training program to raise awareness about anti-money laundering measures for all staff involved in monetary and other asset transactions. The reporting organization must prioritize training for employees directly interacting with customers and those responsible for anti-money laundering.

2. The reporting organization may choose appropriate training methods based on its organizational structure and operations; actively coordinate with the Banking Inspection and Supervision Authority and relevant units to organize training for staff on specialized knowledge and skills in anti-money laundering.

3. The content of staff training must be relevant to their job duties and the money laundering risks associated with them; consistent with their responsibilities in implementing internal regulations on anti-money laundering and include the following basic elements:

a) Legal and internal regulations on anti-money laundering; legal liabilities for failing to comply with anti-money laundering laws.

b) Money laundering methods and trends.

c) Money laundering risks related to products, services, and tasks they are responsible for.

4. Within six months of hiring staff for tasks related to monetary and other asset transactions, the reporting organization must train new employees on basic knowledge for anti-money laundering work.

PART 3. IMPLEMENTATION ORGANIZATION

Article 17. Effective Date

This Circular shall take effect forty-five days from the date of signature. During the implementation process, if any issues arise or difficulties occur, organizations shall report and reflect them to the State Bank of Vietnam (through the Banking Inspection and Supervision Department) for prompt resolution.

Article 18. Implementation Organization

The Director of the Office, the Head of the Banking Inspection and Supervision Department, the Heads of units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces and centrally governed cities, the Chairmen of the Management Boards, and the General Directors (Directors) of organizations responsible for implementing this Circular shall be held accountable for its enforcement.