Regulations on suspicious transactions under the Law on Prevention of money laundering in Vietnam

Regulations on suspicious transactions under the Law on Prevention of money laundering in Vietnam (Internet image) 

1. What is suspicious transaction?

According to Clause 6, Article 4 of the Law on Prevention of money laundering 2012, suspicious transactions are the transactions with unusual signs or the reasonable grounds to suspect the property in transaction has derived from criminal activity or related to money laundering.

In particular, money laundering is the acts of the individuals and organizations in order to legalize the origin of the property created by the crimes including:

- The acts are regulated in the Penal Code;

- 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.

2. Report of suspicious transactions in Vietnam

- The basic suspicious signs in Vietnam including:

+ The client provides incorrect, incomplete and inconsistent client identification information;

+ The clients persuade the reporting subjects not to make report on the transactions to the competent State agencies;

+ Unable to identify clients by the information provided by the client or the transaction related to a party whose identity cannot be identified.

+ The individual or agency phone number provided by the client agencies can not be contacted or this phone number doesnot exist after opening the account or doing the transaction;

+ The transactions are done by the order or under the authorization of the organizations and individuals in the warning list;

+ The transactions that through the client identification information or through the consideration of economic and legal grounds of the transaction can be determined the relationship between the parties taking part in transaction with the criminal activities or in relation with the organizations and individuals in the warning list;

+ The organizations and individuals involved in transaction with a large amounts inconsistent with the income, business activities of these organizations and individuals;

+ Clients’ transactions done through the reporting subjects are not in proper process and procedures as prescribed by law.

- The suspicious signs in the banking area including:

+ There was a sudden change in the transaction turnover on the account; money deposited into and withdrawn quickly from accounts; high transactions turnover but account balance is very small or zero;

+ The transfer transaction of money of small value from many different accounts to an account or vice versa in a short time; money is transferred through multiple accounts; the parties concerned are not interested in trading fees; doing multiple transactions, each transaction is near the large value rate that must be reported;

+ Using letters of credit and other trade financing methods of great value, the discount rate with the higher value than normal;

+ Clients who open multiple accounts at foreign credit organization, bank branches in other geographical areas different from the place where clients are residing, working or doing business activities;

+ The client’s account is not traded over a year, and is traded back without plausible reasons; client’s account without any transaction suddenly gets a cash deposit or money transfer of great value;

+ Transfer of money from account of enterprise overseas after receiving a lot of small amounts of money transferred by electronic money transfer, checks or drafts;

+ Enterprises with foreign investment capital transfer money overseas immediately after receiving the investment capital or transfer money overseas not in accordance with the business activities; foreign enterprises transferring money overseas immediately after receiving money from abroad transferred into accounts opened at foreign credit organization, bank branches operating in Vietnam;

+ The clients often change money with small denominations into larger denominations;

+ Transaction of deposit, withdrawal or transfer of money made ​​by organizations or individuals associated with the crimes creating illegal property published on mass media;

+ The client requests to borrow the maximum amount allowed based on the contracts of single-premium right after the premium payment, except for the case required by the credit orgnization;

+ Information about the origin of property used for financing, investment, loan, financial leasing or investment trust of clients is not clear and transparent;

+ Information about the origin of the security property of the clients asking for capital loan is not clear and transparent.

- The suspicious signs in the area of insurance business including:

+ Client requires to purchase an insurance contract of great value or requires the package payment of the single premium for insurance products that donot apply the package payment, while the current insurance contracts of the client only have small value and periodic payments;

+ The client requires to sign insurance contracts with periodic premiums inconsistent with current income of the client or requires to purchase the insurance contracts related to the business outside the normal business activities of the client;

+ The buyer of insurance contract and makes payment from the account that is not his account or by the instrument of transfer without name recorded;

+ The client requests to change the beneficiary appointed or by the person who has unclear relationship with the buyer of insurance contracts;

+ The client accepts all unfavourable conditions not related to his age and health; client requires to buy insurance with no clear purpose and reluctantly provides the reason to participate in insurance; the conditions and value of insurance contracts are contrary to the client’s needs;

+ The client cancels the insurance contract right after and asks for a transfer of money to a third party; the client regularly participates in insurance and assign the insurance contract to a third party;

+ The client is an enterprise having a number of insurance contracts for employees or the premium of the single-premium contract abnormally increases;

+ The insurance enterprise often pays the premium with a large amount to the same customer.

- The suspicious signs in the areas of securities including:

+ Purchasing or selling securities with abnormal signs in one day or several days done by an organization or individual;

+ The client makes the transfer of securities outside the system without any plausible reasons;

+ The securities company transfer money not in accordance with the securities trading activities

+ The resident transfers a large amount from the securities trading account out of Vietnam;

+ The client often sells his portfolio and requires the securities company to make payment by cash or check;

+ The client invests abnormally in many types of securities in cash or checks in a short period or is willing to invest in the securities portfolio of no benefit;

+ The client’s securities account does not work in a long time but suddenly is invested by a huge investment not in accordance with the financial capacity of the client;

+ Purchase and sell securities with money from the investment funds opened in the territories that the international organizations classified as high risk for money laundering.

- Suspicious signs in games with prizes and casino include:

+ Customer has a sign of constant loss intentionally at the casino;

+ The client exchanges the number of conventional currency of great value in the casino and the prize-winning electronic game place but does not play or play with a very small amount and then converts back to cash or check, bank draft or transfers money to other accounts;

+ The client requests to transfer the game winning and prize winning to a third party that has no clear relationship with the customer or when the third party does not have permanent residence with the customer;

+ The client adds cash or check in the winning amount of game and prize and requires the casino and the prize-winning electronic game place to turn into the checks of great value;

+ The client many times a day requires the casino and the prize-winning electronic game place to exchange the number of conventional money into cash;

+ The client many times a day requires a third party on his behalf to exchange the number of conventional money with great value and asks the third party to play game for him.

+ The client many times a day purchases lottery tickets, bet tickets, and exchanges the conventional money near the limit of transaction with large value;

+ The client re-purchases the winning lottery ticket with great value from others.

- The suspicious signs in the area of real estate business include:

+ The real estate transactions are authorized transaction but there are no legal grounds;

+ The client does not pay attention to the price of real estate and the transaction fees to be paid.

+ The client can not provide information related to real estate or does not want to provide additional personal information;

+ The price agreed between the parties to the transaction does not match the market price.

(Article 22 of the Law on Prevention of money laundering 2012)

Diem My

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