20/09/2022 15:44

What is money laundering? What are penalties for money laundering in Vietnam?

What is money laundering? What are penalties for money laundering in Vietnam?

Hi Lawnet, I have the following questions: What is money laundering? What are penalties for money laundering in Vietnam? I also want to know some judgment regarding this matter. (Ngoc Thien – Hai Phong, Vietnam)

1. What is money laundering?

According to the Law on Prevention of money laundering 2012, money laundering is the acts of the individuals and organizations in order to legalize the origin of the property created by the crimes.

"Property" includes things, money, valuable papers and property rights under the provisions of the Civil Code, may exist in the form of material or immaterial; movable and immovable property, tangible or intangible property; the documents or legal instruments evidencing the ownership or the interests of such property.

Activities that are considered money laundering include:

- Directly or indirectly participating in finance transactions, banking transactions or other transactions to conceal the illegal origin of the money or property obtained through his/her commission of a crime or obtained through another person's commission of a crime to his/her knowledge;

- Using money or property obtained through his/her commission of a crime or obtained through another person's commission of a crime to his/her knowledge for doing business or other activities;

- Concealing information about the true origin, nature, location, movement or ownership of money or property obtained through his/her or commission of a crime or obtained through another person's commission of a crime to his/her knowledge or obstructing the verification of such information;

- Committing any of the offences specified in Point a through c of this Clause in the knowledge that the money or property is obtained through transfer, conversion of money or property obtained through another person's commission of a crime.

- Supporting the organizations and individuals related to the crime in order to avoid the legal liability by the legalization of the property origin generated by the crime;

- Possessing the property if at the time of receipt of the property being aware of that property due to criminal activity to legalize the origin of property.

There are many forms of money laundering, but generally they are done in 3 steps:

- Step 1: Placement: This is the stage of arranging a place to put illicit money into the financial system. This phase is intended to help criminals reduce large amounts of cash holdings and convert illicit funds into legal status.

- Step 2: Layering: The purpose of this step is to create a distance as far as possible between the money and the money source, creating a complex audit trail. This is a complicated stage and is often the process of transferring money back and forth between bank accounts or buying tradable assets such as real estate, cars, etc.

- Step 3: Consolidation: This is the final step, bringing the previously illegal coins (making them look legal) back into the mainstream economy for use, profit .

2. What are penalties for money laundering?

A commercial individual or legal entity that commits one of the above acts shall be examined for penal liability for the crime of "Money Laundering" according to the provisions of Article 324 of the Criminal Code (amended in 2017).

2.1. For individuals who commit crimes

- Those who commit one of the acts considered to be money laundering shall be sentenced to between 01 and 05 years of imprisonment

- This offence committed in any of the following circumstances carries a penalty of 05 - 10 years' imprisonment:

+ The offence is committed by an organized group;

+ The offender misuses his/her position or power to commit the offence;

+ The offence has been committed more than once;

+ The offence is committed in a professional manner;

+ The offence involves deceitful methods;

+ The illegal money or property is assessed at from VND 200,000,000 to under VND 500,000,000;

+ The illegal profit earned is from VND 50,000,000 to under VND 100,000,000;

+ Dangerous recidivism.

- This offence committed in any of the following circumstances carries a penalty of 10 - 15 years' imprisonment:

+ The illegal money or property is assessed at ≥ VND 500,000,000;

+ The illegal profit earned is ≥ VND 100,000,000;

+ The offence has a negative impact on security of the national currency or finance system.

- A person that prepares for the commission of this offence shall face a penalty of 06 – 36 months’ imprisonment.

- The offender might also be liable to a fine of from VND 20,000,000 to VND 100,000,000 or prohibited from holding certain positions or doing certain jobs for 01 - 05 years or have part or all of his/her property confiscated.

2.2. For corporate legal entity committing crimes

- A corporate legal entity that commits this offence in any of the circumstances specified in Clause 1 of Article 324 of Criminal Code shall be liable to a fine of from VND 1,000,000,000 to VND 5,000,000,000;

- A corporate legal entity that commits this offence in any of the circumstances specified in Point a, c, d, dd, e, g, h Clause 2 of Article 324 of Criminal Code shall be liable to fine of from VND 5,000,000,000 to VND 10,000,000,000;

- A corporate legal entity that commits this offence in any of the circumstances specified in Clause 3 of Article 324 of Criminal Code shall be liable to a fine of from VND 10,000,000,000 to VND 20,000,000,000 or has its operation suspended for 01 - 03 years;

- A corporate legal entity that commits this offence in the circumstance specified in Article 79 hereof shall be permanently shut down;

- The violating corporate legal entity might also be liable to a fine of from VND 1,000,000,000 to VND 5,000,000,000, be banned from operating in certain fields or raising capital for 01 - 03 years.”.

Currently, the number of cases prosecuted for money laundering in Vietnam is quite small. Lawnet has only updated one judgment on this crime that has been tried in practice. Please refer to the judgment below.

Judgment on money laundering No. 09/2022/HS-PT

Chang Chao C is a Taiwanese who was asked by a person named Kuo Tai M (Cambodian, unknown background) to come to Vietnam to find and buy bank accounts to receive money from gamblers. Then use that account to withdraw cash delivered to M to receive a monthly salary of US$3,000 (USD) and 08% of the withdrawn amount. Chun agreed with Le Minh T to buy a bank account in Vietnam with a price of 3,000,000 VND to 3,500,000 VND. After buying a bank account, because C could not withdraw money because he was not the account holder, M suggested Le Minh T withdraw money from the bank account and hand it over to Chang Chao C to receive 08% of the withdrawal amount. After listening, T agreed. In order to withdraw money as required, T asked his younger brother Le Minh H, Le Minh C and his employee Tran Manh H to open bank accounts and then give them to T to be managed by C. The operations of receiving, withdrawing, and delivering funds are exchanged via the Telegram social network.

Using similar tricks, the subjects claiming to be justice officers scammed 14 people in the provinces to transfer money to a bank account assigned by Le Minh T to Chang Chao C to manage. After that, Le Minh T withdrew the money and gave it to Chang Chao C to give it back to Kuo Tai M. The total amount the subjects received was 11,431,220,000 VND.

At the first-instance criminal judgment No. 103/2021/HS-ST dated April 13, 2021, the People's Court of T City, Binh Duong province, decided to punish defendant Chang Chao C 13 (thirteen) years in prison for the crime of "Money Laundering".

Defendant Chang Chao C filed an appeal to reduce the punishment.

The People's Court of Binh Duong province decided not to accept the appeal of defendant Chang Chao C, upholding the first-instance criminal judgment.

Phuong Uyen
158


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