Signs of suspicious activity of money laundering in securities sector in Vietnam

Signs of suspicious activity of money laundering in securities sector in Vietnam (Internet image)

Regarding this issue, LawNet responded as follows:

1. What are the common signs of suspicious activity of money laundering in Vietnam?

According to Article 27 of the Anti-Money Laundering Law 2022, the common signs of suspicious activity of money laundering include:

- The customer refuses to provide information or provide inaccurate, inadequate and inconsistent identities.

- The customer induces the reporting entity not to report the transaction to the competent state authority.

- It is unlikely to identify a customer based on the information provided by the customer or a transaction relating to an anonymous party.

- The phone number provided by a customer does not work or exist after an account is created or a transaction is performed.

- The transaction is performed by order or according to the authorization obtained from entities and persons defined in the Greylist.

- The transaction can, based on the customer’s identification information or through examination of economic and legal concepts thereof, determine the connection between the parties involved and criminal activities or the association with the entities or persons appearing on the Greylist.

- The natural or legal person participates in a transaction at great expense, which is deemed as incommensurate with their business situation and income.

- The customer requests the reporting entity to carry out a transaction without conforming to the procedures and processes required by law.

2. Signs of suspicious activity of money laundering in securities sector in Vietnam

Signs of suspicious activity in securities sector related to money laundering are regulated as follows:

- Suspicious transactions involving unusual purchase and sale of securities that occur within one or several days are performed by an entity or person.

- A securities company conducts money transfers unfit for securities business activities.

- A nonresident transfers a large amount of money from a securities trading account or discharges an investment entrustment agreement to move funds out of Vietnam.

- A customer regularly sells all stocks on the portfolio and requests a securities company to sign a payment order to enable its/his/her cash withdrawals from a commercial bank.

- A customer makes unusual investments in various types of securities that are not favorable in a short while.

- A customer's securities trading account unexpectedly is credited with a large amount of money unfit for the customer’s financial capability.

- A transaction involving the purchase or sale of securities is funded by an investment fund set up in a country or territory at high risk of money laundering.

- A foreign investor residing in a country or territory (or jurisdiction) at high risk of money laundering contributes capital to set up an investment fund or investment company in Vietnam.

(Article 31 of the Anti-Money Laundering Law 2022)

3. Prohibited acts in Anti-Money Laundering in Vietnam 

Pursuant to Article 8 of the Anti-Money Laundering Law 2022, the prohibited acts in anti-Money Laundering include:

- Organize, participate in or facilitate, assist in the conduct of money laundering.

- Create and maintain anonymous or pseudonymous accounts (or accounts in obviously fictitious names).

- Create and maintain business relationships with shell banks.

- Illegally provide services that involve the acceptance of cash, cheques, other monetary instruments and other stores of value and the payment to a beneficiary.

- Abuse public positions and power over AML activities to prejudice the legitimate rights and interests of a natural or legal person.

- Hinder the provision of information necessary for AML purposes.

- Intimidate and take revenge on the persons detecting and reporting money laundering offences.

Nguyen Thi Hoai Thuong

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