Vietnam’s central bank has proposed placing three groups under separate monitoring in the fight against money laundering: senior bank executives, the largest foreign shareholders of banks, and VIP customers, according to a draft circular open for public comment.
The three groups are distinct. Executives and foreign shareholders are insiders who run or own banks, while VIP customers are clients who receive priority service.
Under the draft, board members, supervisory board members and managers at division director level and above must declare their names, nationalities and stakes in the bank’s charter capital. Banks must also report on their largest foreign shareholders. Separately, they must track and report on VIP and priority customers, as well as other special client groups.
Banks would also have to compile detailed figures on corporate clients in sectors seen as vulnerable to money laundering, including crypto asset services, real estate, precious metals, gems and jewellery, and casinos. Transactions through counters, online channels, ATMs, trade finance, wire transfers, currency exchange and investment would be monitored, along with dealings linked to high risk countries or territories.
Supervision would follow three steps: collecting and processing data, conducting compliance or risk based checks, and issuing reports with proposed measures. Entities would be rated low, medium or high risk, which would determine the focus, frequency and scale of inspections.
The move comes as Vietnam remains on the “grey list” of the Financial Action Task Force (FATF), the global money laundering watchdog, which places countries with weak safeguards under increased monitoring. Vietnam was added in June 2023 and must complete a 17 point action plan to be removed. The central bank said gaps include the lack of remote supervision and inspections that are not based on risk.
Being on the list can raise costs and slow transactions with foreign partners, and it may deter international investors.
The central bank said that from the start of the year to July 31 it had forwarded 426 documents covering 1,999 suspicious transaction reports to competent authorities for verification, investigation and prosecution.
