The State Bank of Vietnam is gathering public comments on a circular to guide measures to prevent and combat money laundering in monetary and other property transactions.
The 18-article draft circular, which, together with Decree No. 74/2005/ND-CP of June 7, 2005, would create a complete legal foundation for anti-money laundering activities in Vietnam, targets all organizations set up and operating under the Law on Credit Institutions and other entities engaged in banking operations, including state-owned, joint-stock, cooperative and joint-venture credit institutions, Vietnam-based branches of foreign banks, non-bank credit institutions, the postal savings service company, foreign exchange agents and other payment service organizations.
According to the draft paper, all cash transfers and saving transactions totaling VND 200 million and 500 million, respectively, conducted in a day by an individual or organization must be reported to competent authorities. However, commercial banks are not required to report on clients’ credit balance.
The draft paper asks commercial banks, before establishing the relationship with or providing banking services to a client, to refer to lists of suspicious organizations and individuals issued by competent authorities.
Commercial banks are also requested to work out 10 processes and regulations on money laundering prevention and combat, including those on the review, detection and handling of and reporting on dubious transactions; communications with clients showing suspicious signs; and information storage and confidentiality.
Under the draft circular, transactions would be considered suspicious in cases a client uses different addresses, periodically conducts cash deposit or withdrawal involving a certain group of persons or suddenly repays loans ahead of schedule but cannot explain about the origin of the amount used for loan repayment. Transactions would be also regarded doubtful if clients make capital contributions or entrust investment in excess of their financial capacity or business demands or there are grounds to believe that the mortgaged or pledged assets are of unclear origin.-