On 18th August, 2022, at the Legal Session, the National Assembly Standing Committee reviewed and commented on the project of Law on Anti-Money Laundering (amended)
Drafting the Law on Anti-Money Laundering in line with international requirements and standards
The Law on Anti-Money Laundering was passed by the XIII National Assembly on 18th June, 2012 and took effect from 1st January, 2013. This is a comprehensive legal document which regulates and creates a legal basis to gradually improve the effectiveness of the anti-money laundering work in Vietnam towards complying with international practices and standards in this field.
The Law (2012) on Anti-Money Laundering was built on the basis of 40 recommendations of the Financial Action Task Force (FATF). To date, the FATF has revised its recommendations 11 times, leading to several provisions of the Law 2012 being no longer consistent with 40 current recommendations of the FATF and affecting the implementation of Vietnam's commitments to those recommendations. Therefore, the amendment of the Law on Anti-money Laundering demonstrates Vietnam's efforts to overcome shortcomings in the legal basis in comparison to the recommendations of the FATF.
The draft Law on amendment of the supplement of several articles on Anti-Money Laundering is structured into 4 Chapters with 54 Articles. In which, 09 new Articles are added; 43 Articles are amended; 07 Articles are repealed and 02 Articles remain from the Law 2012.
Basically, the draft inherits from the Law (2012) on Anti-Money Laundering Law. The scope of the Law prescribes measures to protect, detect and prevent organizations and individuals from committing money laundering, as well as responsibilities of agencies, organizations and individuals in the prevention of money laundering and international cooperation in this field.
The draft Law also regulates the aim of anti-money laundering to finance terrorism and proliferation of weapons of mass destruction, which has to comply with the provisions of the Law, the provisions of the Criminal Law and the Legislation on prevention and combat of terrorism, the proliferation of weapons of mass destruction.
The draft Law inherits the provisions on the body of reporting which includes financial institutions and related non-financial businesses and individuals. In addition, the draft Law amends and supplements the names of a number of reporting activities in line with the concept of the FATF and in accordance with current legal regulations by not narrowing the reporting bodies regulated in the Law 2012 and adding reporting bodies that are payment intermediary service providers, etc.
In response to the draft Law being widely consulted, many experts suggested that this amendment has to fully legislate the FATF's recommendations, overcome inside limitations and meet practical requirements in the new situation while ensuring compliance with international requirements and standards.
According to Dr. Can Van Luc - a member of the National Financial and Monetary Policy Advisory Council, the Law on Anti-Money Laundering 2012 has leveraged Vietnam's financial system to achieve a number of positive results and established a legal basis to gradually improve the effectiveness of anti-money laundering. However, since the FATF’s revised recommendations from 2012 (11 times), Vietnam has fully complied with 13/40 recommendations; 27/40 recommendations are rated partially compliant or non-compliant.
Meanwhile, money laundering manners in Vietnam have varied from real estate investment activities, shell companies, capital contribution, etc., to other new forms of activities using modern technology such as taking advantage of the stock market, online business or investing in virtual money, digital money, etc. The red flags are mostly qualitative and difficult to manage the providers of services related to virtual assets, digital currency, who has servers abroad or is being hired to run. On this note, Dr. Can Van Luc said it is necessary for the draft Law on Anti-money Laundering to be submitted by the Government to the National Assembly for comments and expectedly passed at the 4th session of the XV National Assembly./.