Categorizing Customers by Levels of Money Laundering Risk in Vietnam

Categorizing Customers by Levels of Money Laundering Risk in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Categorizing Customers by Levels of Money Laundering Risk in Vietnam

Categorizing Customers by Levels of Money Laundering Risk in Vietnam according to Article 16 of the Law on Anti-Money Laundering 2022 as follows:

- Based on the results of money-laundering risk assessment and update defined in Article 15 herein, reporting entities shall develop the procedures for management of money laundering risk. Procedures for management of money laundering risks shall cover classification of customers by low, medium and high level of risk, and risk management methodologies in response to specific levels of money laundering risk from customers.

- Each reporting entity may apply measures according to the level of risk of money laundering represented by any customer subject to the following regulations:

+ For the customer representing a low risk of money laundering, the reporting entity may collect, update and verify customer identification data to a mitigated degree after starting a relationship with that customer;

+ For the customer representing a medium level of money laundering risk, the reporting entity may apply CDD measures specified in Article 9 herein to that customer;

+ For the customer representing a high level of money laundering risk, in addition to the CDD measures applied as specified in point b of this clause, the reporting entity shall apply enhanced CDD measures, including the intensified collection, updating and verification of customer identification data and close monitoring of that customer’s transactions.

2. Regulations on International Cooperation in Anti-Money Laundering in Vietnam

Regulations on International Cooperation in Anti-Money Laundering (AML) in Vietnam according to Article 6 of the Law on Anti-Money Laundering 2022 are as follows:

- International cooperation in the prevention and combat of money laundering shall be carried out according to the principle of respecting independence, sovereignty and territorial integrity, national security, mutual benefits, and compliance with Vietnamese laws and international treaties to which the Socialist Republic of Vietnam is a contracting party, and international agreements between the Vietnamese contracting party and the foreign contracting party.

In case where there is no international treaty or agreement between Vietnam and a foreign country, the exchange, provision and transfer of information in international cooperation in AML shall be conducted subject to the principle of reciprocity without being in contravention of Vietnam’s domestic law, and conforming to international law and practices.

- Competent regulatory authorities shall, based on their range of functions and duties, conduct international cooperation regarding AML in:

+ Identification and freezing of property or assets of money-laundering criminals;

+ Execution of mutual legal assistance requests;

+ Communication, provision and transfer of AML information with foreign competent authorities;

+ Research, training, information support, technical assistance, financial aid and AML experience exchange;

+ Other AML cooperation activities prescribed by law.

- During the process of international cooperation in AML, competent state authorities may refuse to communicate, provide and transfer AML information if:

+ the requested information may prejudice national independence or autonomy, sovereignty, territorial integrity, national security and other essential interests of Vietnam;

+ the requested information are inconsistent with international treaties of which the Socialist Republic of Vietnam is a member state; international agreements between the Vietnam signatory and the other foreign signatories; or regulatory provisions of national law of Vietnam;

+ the request for communication, provision or transfer of information is not fully complete as required by law;

+ the requesting competent authority in foreign jurisdictions fails to either undertake or protect the confidentiality of the information requested to be communicated, provided or transferred by the competent authority in Vietnam under the secrecy or confidentiality mechanism or regime in line with Vietnam’s regulatory provisions on protection of state secrets.

- Processes, procedures and methods of international cooperation in AML shall comply with international treaties of which the Socialist Republic of Vietnam is a member state, international agreements between the Vietnam signatory and other signatories in foreign jurisdictions, and other regulatory provisions of relevant law.

- On an annual basis, or at the request of the State Bank of Vietnam, competent state authorities of Vietnam shall be responsible for administering international cooperation in AML with foreign competent authorities to the State Bank of Vietnam.

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