Vietnam: 03 criteria for determining beneficial ownership in anti-money laundering

According to Clause 3 Article 1 of Decree No. 87/2019/ND-CP of Vietnam’s Government amending Article 5 of Decree No. 116/2013/ND-CP, the reporting entity must ascertain the ultimate beneficial owner of its client and take measures to identify and update information on such beneficial owner i.e.

- The individual having the actual ownership of an account or a transaction such as the account holder, account co-holder or any person having control over the account or benefiting from the transaction;

- The individual having the control over a juridical person such as the individual directly or indirectly holding at least 25% of the charter capital of such juridical person; owner of a sole proprietorship or another individual having actual control over such juridical person;

- The individual having control over an investment trust or authorization agreement such as the trustor being an individual; or another individual having control over the trustor.

Identification of the beneficial owner and verification of information used to identify the beneficial owner shall comply with regulations in Article 4 of this Decree, excluding the cases where the beneficial owner is an individual representing state capital in an organization.

Besides, Decree No. 87/2019/ND-CP also supplements factors for classifying customers based on money laundering risk, specifically as follows:

Based on assessment of money laundering and terrorism financing (hereinafter referred to as “ML/TF”) risks prepared by the reporting entity, the reporting entity may implement simple client identification measures for the clients with low ML/TF risks, including one or all of the following measures:

- Information on purposes and nature of business relations is not required if such purposes and nature can be identified based on types of completed transactions or established business relations;  

- Verification of client and beneficial owner’s identities after establishment of business relations;

- Reduction of frequency of updates of client’s identity;

- Alleviation of transaction monitoring and control.

The reporting entity may not implement simple client identification measures for the cases suspected to be ML/TF-related. The State Bank of Vietnam shall take charge and cooperate with relevant Ministries and regulatory bodies in providing guidelines for the criteria used in ML/TF risk assessment for reporting entities.

View more details at Decree No. 87/2019/ND-CP of Vietnam’s Government.

Thu Ba

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