On 24 September 2010, the Ministry of Finance (MOF) issued Circular No. 148/2010/TT-BTC providing guidance on the implementation of anti-money laundering measures in the sectors of insurance, securities and prize-winning games (Circular 148).
Money laundering means an act committed by an individual or organisation to legitimise money or property acquired from criminal activities. Money laundering is conducted via the following specific activities:
- Directly or indirectly participating in a transaction related to money or property acquired from criminal activities
- Receiving, appropriating, moving, converting, transferring, transporting, using or transporting across borders money or property acquired from criminal activities
- Investing in a project or work, contributing capital to an enterprise or otherwise concealing or disguising, or obstructing the verification of the origin, the truth or the location, movement process or ownership of, money or property acquired from criminal activities
The salient provisions of Circular 148 are discussed below.
Scope of regulation
Circular 148 guides the application of anti-money laundering measures in insurance, securities and prize-winning gaming sectors in the territory of Vietnam. The prize-winning gaming sector is the sector of lottery, betting, casino and prize-winning electronic game business activities.
Subjects of application
Circular 148 applies to Vietnamese and foreign individuals, agencies and organisations that are engaged in the above sectors, including:
- Insurance and insurance brokerage businesses which are established and operate in Vietnam under the Law on Insurance Business
- Individuals and organisations engaged in securities issuance, listing, trading, trading organisation, depository, clearing settlement and payment under the Law on Securities
- Businesses licensed to conduct lottery, betting, casino and prize-winning electronic gaming business lines
Circular 148 defines the above organisations as reporting organisations and requires them to make reports on suspicious transactions and transactions of large value to competent State agencies.
Signs of suspicious transactions
Among other things, Circular 148 regards the following as signs of a suspicious transaction:
- It is impossible to identify a customer based on information provided by such customer or the transaction involves an unidentifiable party
- The transaction turnover on an account is unsuitable to information and normal business operations of a customer or there is a sudden change in the transaction turnover on the customer's account
- A customer's account is left dormant for more than one year or resumes for transactions without any justifiable reason
- A transaction is conducted by a customer involved in illegal activities already published in the mass media to the knowledge of the reporting organisation or on a warning list provided by a competent State agency
- A customer is designated by an overseas agent, subsidiary or company based in a country or territory which is non-cooperative with the Financial Action Task Force on Money Laundering or from a country in which corruption or illegal drug production or trafficking is possibly rampant
- Securities purchase and sale transactions are paid for with money from investment funds opened in regions or territories classified by international organisations as having high risks of money laundering
- A customer constantly shows signs of intentionally losing games at a casino or a place providing prize-winning electronic games
Transactions of large value
A transaction is deemed to be of large value if in which:
- An individual customer conducts one or more than one transaction of purchasing or selling securities within a day with a total cash amount of VND 200 million (USD10,000) or more
- An institutional customer conducts one or more than one transaction of purchasing or selling securities within a day with a total cash amount of VND 500 million (USD25,000) or more
- A customer pays insurance premium in cash in lump sum or instalments within a day for a personal insurance policy totalling VND 200 million or more
- An individual customer conducts one or more than one transaction of buying lottery tickets, betting tickets or tokens within a day with a total cash amount of VND 200 million or more
Reporting organisations must send reports on transactions of large value to competent State agencies upon request.
Competent State agencies
Competent State agencies are State agencies with the function of managing, collecting, processing and storing information relating to the transactions conducted by the subjects of application, comprising the Anti-Money Laundering Administration under the Banking Inspection and Supervision Authority of the State Bank of Vietnam and specialised State management agencies.
The specialised State management agencies comprise:
- The Insurance Supervisory Authority of the MOF, for the insurance sector
- The State Securities Commission of the MOF, for the securities sector
- The Department of Banking and Financial Institutions of the MOF, for prize-winning gaming
Anti-money laundering measures
Under Circular 148, reporting organisations must take the following anti-money laundering measures:
- Draft and publish internal rules on anti-money laundering measures
- Implement procedures to recognise and handle suspicious clients and transactions
- Appoint staff members or establish a department to be in charge of anti-money laundering measures
- Monitor client and transaction information
- Apply temporary handling measures
- Keep relevant records for at least five years from the date of account closure or transaction conclusion
- Set up and implement staff training programs on anti-money laundering
- Implement internal controls
Handling of violations
Violations of the regulations on anti-money laundering in the insurance, securities and prize-winning gaming sectors which are not serious enough to be criminally prosecuted will be administratively handled under the Ordinance on Handling of Administrative Violations, the Government's Decree No. 74/2005/ND-CP, and relevant legal documents.
Circular 148 took effect on 27 November 2010.
For inquiries related to this Legal Update, please contact:
Dao Nguyen (firstname.lastname@example.org)