Hoang Tu
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| A talk on identification and prevention of money laundering risks in the digital era held in Ho Chi Minh City on Sep. 22__Photo: Hua Chung/VNA |
The 2022 Anti-Money Laundering Law was passed on November 15, 2022, by the National Assembly to replace the 2012 Anti-Money Laundering Law. It took effect on March 1, 2023, with important amendments to meet the requirements of the new situation. Especially, the Law’s new regulations exert significant effects on relevant legal documents, including the 2013 Counter-Terrorism Law.
New provisions related to the 2013 Counter-Terrorism Law
It can be realized that anti-money laundering and counter-terrorist activities are always inter-related and mutually supported. Thereby, terrorism and terrorist financing are sources of money-laundering crimes. Hence, the effective prevention and control of money laundering will greatly enhance the control of terrorist threats.
The 2013 Counter-Terrorism Law specifies in Article 34 the prevention and control of money laundering activities for terrorist purposes. It provides the identification and updating of information on customers, the application of provisional measures when raising doubts that customers or their transactions are involved in terrorist financing or the customers are on the “black lists”, and the control of cross-border transportation of cash, precious metals, gems and negotiable instruments. However, with the enactment of the 2022 Anti-Money Laundering Law, such provisions are no longer suitable, causing inconsistencies. Therefore, the 2022 Anti-Money Laundering Law has concretized the amendments of the 2013 Counter-Terrorism Law in conformity with the Anti-Money Laundering Law. Concretely as follows:
First, setting broader responsibilities
The new provisions have detailed and expanded the scope of responsibility of financial institutions; relevant non-financial business organizations and individuals. Accordingly, these organizations and individuals are liable not only to identify and update information on customers as currently required, but also to gather, update and verify information on customers, and to issue internal regulations and report on, supply and archive information, files, documents and reports on prevention and combat of terrorist financing[1].
With regard to identifying customers, collecting, updating and verifying information on identification of customers, financial institutions as well as relevant non-financial business organizations and individuals must apply the provisions of Section 1, Chapter II of the 2022 Anti-Money Laundering Law (corresponding Articles from 9 thru 23). Such provisions aim to prevent and detect in time terrorist dangers and terrorist financing from customers and transactions with signs of money laundering.
The provisions on identification of customers, updating, verification and assessment of risks and oversight of special transactions have been revised in conformity with the request of the Financial Action Task Force (FATF) on combating money laundering.[2]
In addition, financial institutions as well as relevant non-financial business organizations and individuals must also work out internal regulations and report on, supply, archive information, files, documents and reports on terrorist financing prevention and combat. This is a totally new content added to Article 34 of the 2013 Counter-Terrorism Law. With this regulation, financial institutions as well as relevant non-financial business organizations and individuals must themselves issue internal regulations on terrorist-financing prevention and combat suitable to their respective operation scope, scale and organization in order to promptly detect and ward off terrorist dangers from within their own organizations. The internal regulations on terrorist financing prevention and combat cover such principal contents as policy on acceptance of customers; customer-identifying order and procedures; risk management policies and process; procedures for reporting the must be-reported transactions; process of scrutinizing, detecting, handling and reporting doubtful transactions, etc.[3] For large-value transactions, doubtful transactions (basic doubtful transactions, domain-based doubtful transactions), upon detecting doubtful signs and electronic money transactions beyond the set value, financial institutions as well as relevant non-financial business organizations and individuals are obliged to report them as per the law.[4]
Regarding forms, time limits and modes of archiving information, files, reporting documents and liability of reporting subjects are also specifically and clearly defined in Articles 36 thru 39 of the 2022 Anti-Money Laundering Law. These provisions are totally compatible with international practices, especially the request of the FATF, of which Vietnam is the Asia-Pacific Group (APG) member.
Second, supplementing regulations on national risk assessment on terrorist-financing prevention and combat
A noteworthy new regulation is that “once every five years, the Ministry of Public Security shall assume the prime responsibility for, and coordinate with relevant ministries and ministerial-level agencies in, assessing the national risks on terrorist financing in Vietnam and submit to the Government for approval the assessment results and the post-assessment implementation plans”. The periodical assessment of national risks on terrorist financing is an extremely practical and significant activity. According to FATF’s recommendation, nations should determine, assess and understand their own risks of money laundering and terrorist financing. They need to apply various measures, including the appointment of competent body or establish mechanism for coordination of actions to assess the risks and use resources in order to ensure risks are effectively controlled.
So, it can be seen that the amended provisions of Article 34 of the 2013 Counter-Terrorism Law have met the requirements in the FATF’s spirit in appointing sponsoring and coordinating agencies among relevant bodies for the assessment of national risks on terrorist financing. The five-year period for risk assessment is long enough for competent agencies to review and evaluate a plan implementation period, aiming to redress limitations and risks from the previous period and identify possible risks in subsequent years, being able to work out directions and specific and appropriate plans to handle potential risks.
Third, amending provisions on control of cross-border transport of cash, precious metals, gemstones and negotiable instruments
If only looking at the contents of provisions of Article 35 of the 2013 Counter-Terrorism Law before and after the revision, it can be easily realized that these are only the alteration in document-making techniques and forms due to the alteration of the order of cited provisions of the Anti-Money Laundering Law. Yet, when studying the new points of the 2022 Anti-Money Laundering Law, we can see big changes in contents of matters. This stems from the difference between Article 24 of the 2012 Anti-Money Laundering Law and Article 35 of the 2022 Anti-Money Laundering Law. The previous Anti-Money Laundering Law only provided that individuals who carry along, upon their entry or exit, foreign currency in cash, VND in cash, precious metals, gemstones and negotiable instruments above the levels prescribed by competent state agencies must declare them to customs offices.
Yet, in fact, customs offices are not available in many border localities, thus leading to relaxed control of such individuals upon their entry and exit. Hence, the content: “or declare to border-guards at places where customs offices are not available” has been added to the new law. The alteration is suitable to reality and has sealed off a loophole of the previous law.
Besides, the 2022 Anti-Money Laundering Law also specifically defines the responsibilities of customs offices and border guard stations. Accordingly, these two agencies are liable to collect and archive the declared information and supply them to the State Bank of Vietnam upon request or emergence of doubts about money laundering, terrorist financing or mass-destruction weapon proliferation financing[5].
Remarks
Through analyzing the new points of the 2013 Counter-Terrorism Law after the promulgation of the 2022 Anti-Money Laundering Law, some following remarks can be drawn:
First, the new provisions of the 2022 Anti-Money Laundering Law have contributed to completing the system of law on money-laundering prevention and fighting and constitute a prerequisite for improving legal provisions on terrorist-financing prevention and combat in particular and terrorism prevention and fighting in general. In addition, such provisions have taken into account various recommendations of FATF, ensuring the conformity with international standards and requirements as well as meeting the practical requirements of money-laundering prevention and fighting and terrorist financing in the country in the new situation.
Second, the new provisions have clearly, specifically, comprehensively and transparently dwelt on responsibilities of financial institutions and relevant non-financial business organizations and individuals. However, guiding documents should be promptly issued so that related organizations and individuals can easily apply the law.
Third, the addition of provisions on assessment of national risks on terrorist-financing prevention and combat will help the State better control matters related to money laundering for the purpose of terrorist financing, with specific roadmaps and plans to effectively handle risks confronted by the country in each specific period.
Fourth, the addition of the provisions that the border guards acting as bodies receiving information of individuals bringing along upon their entry or exit foreign cash or negotiable instruments has redressed the limitations in the control and management at border areas or border gates without customs offices. This makes the state management of terrorist financing prevention and combat more effective and contributing to eliminating terrorist dangers and terrorist financing from export and import activities of individuals who carry cash, foreign currencies or other negotiable instruments.
However, in order to comprehensively, synchronously and uniformly improve the legal system on terrorism prevention and fighting in Vietnam, related bodies should further study and scrutinize legal provisions and review the enforcement of the 2013 Counter-Terrorism Law, proposing the examination and revision of the law and other relevant laws in a bid to raise the efficiency of counter-terrorism activities in Vietnam, meeting the national security requirements in the new situation.-
[1] Article 34.1 of the (revised) 2013 Counter-Terrorism Law.
[2] Petition No.5 of the FATA on updating and monitoring the information on customers.
[3] Article 34 of the 2022 Anti-Money Laundering Law.
[4] Articles from 25 thru 34 of the 2022 Anti-Money Laundering Law.
[5] Article 35 of the 2022 Anti-Money Laundering Law.
