Vietnam’s new regulations on assessment of money laundering and terrorism financing risks

Assessment of money laundering (ML) and terrorism financing (TF) risks is one of the measures of enhanced assessment for highly potential risk customers specified in Clause 2 Article 1 of Circular No. 20/2019/TT-NHNN of the State Bank of Vietnam, which adds Article 3a after Article 3 of Circular No. 35/2013/TT-NHNN. Specifically, the reporting entity specified in Clause 1, 2 Article 2 of the Law on anti-money laundering of Vietnam shall have the following responsibilities:

- Based on results of ML/TF risk assessments of its country, sector and area, the reporting entity must conduct an ML/TF risk assessment to grasp its ML/TF risks (to its clients, country or region, products, services, transactions or distribution channels); the assessment result must be approved, signed and promulgated by its Board of Directors or General Director.

- Based on the result of its ML/TF risk assessment, the reporting entity must formulate policies and procedures for management of the detected risks. Such policies and procedures must be approved, signed and promulgated by its Board of Directors or General Director.

- Annually, the reporting entity must update and revise the result of its ML/TF risk assessment and promulgated risk management policies and procedures.

- The reporting entity must send the result of its assessment or update of ML/TF risks and risk management policies and procedures to the State Bank (Anti-Money Laundering Department (“AML Department”)) and to its supervisory authority within 30 days starting from the date of promulgation, update or revision; and, concurrently, announce such result, policies and procedures in the whole system of the reporting entity.

- The risk management policies and procedures must include enhanced control measures for high ML/TF risks and simple control measures for low ML/TF risks.

For international electronic money transactions, based on the result of the ML/TF risk assessment, the reporting entity serving beneficiaries and intermediary organizations must formulate risk-based policies and procedures to identify:

+ Transactions that have met the requirements for conduction;

+ Suitable handling measures, including transaction refusal or transaction suspension, or post-transaction monitoring measures for the transactions lacking information on the remitter and/or beneficiary as prescribed in Point c Clause 2 Article 7 of this Circular.

Moreover, based on client identification measures, the reporting entities must regularly update client’s information, data, risks and business relations collected to their databases.

View more details at Circular No. 20/2019/TT-NHNN of the State Bank of Vietnam, effective from November 14, 2019.

Thu Ba

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