ABSTRACT:
In Vietnam,bankingtransactions account for 90% of the total number of suspicious reports submitted to the National Anti-Money Laundering Department. Money laundering via bank transactions can affect the stability of currency, the safety w88 win the development of bank system. Therefore, preventing w88 win fighting against the money laundering via bank transactions is an urgent need. The current legal framework of Vietnam for anti-money laundering has some shortcomings which weaken the effectiveness of anti-money laundering regulations. This paper focuses on two following issues: (1) the analysis of the money laundering w88 win anti-money laundering via inbanking transactionsw88 win (2) the analysis of the current regulations ofanti-money launderingvia banking transactions in Vietnam. Based on the paper’s findings, some recommendations are proposed to improve the effectiveness of anti-money laundering via in banking transactions regulations.
Keywords:banking, banking transactions, anti-money laundering
1. Overview of money laundering w88 win anti-money laundering in the banking sector
The Cambridge Dictionary defines money laundering as follows: “the crime of moving money that has been obtained illegally through banks w88 win other businesses to make it seem as if the money has been obtained legally” or “the action of moving money which has been earned illegally through banks w88 win other business, to make it seem to have been earned legally”.[1]
According to the law of Vietnam, money laundering is understood as the actions of organizations w88 win individuals in order to legalize the origin of property due to crime in Clause 1, Article 4 of the Law on the prevention of money laundering in 2012, including the acts are defined in the Criminal Code; assisting criminal organizations w88 win individuals in escaping legal liability; possession of property if it is suspected that such property is due to crime at the time of receipt of the property to legalize the origin of the property.
Money laundering has a major negative impact on the banking sector, as follows:Firstly, money laundering undermines the stability of the value of money.If the sum of illicit money is put into circulation, the stability of the value of money as well as the stable w88 win sustainable growth of the money market may also be jeopardized by strange things.Second, money laundering threatens the stability w88 win development of banks.Illegal money often used objects to buy banks' shares to turn them into personal property w88 win make them up to the bank’s shareholders. Meanwhile, risks in the banking sector are systematic should one branch bank can threaten the stability of entire credit institutions.
Money laundering types of financial transactions are done conveniently because the existing regulation does not mandate that persons who deposit money into banks to disclose the source principal of the deposit, whether to deposit, pay or deposit money into an account. Thus, subjects take advantage of laundering money from banking transfers as follows:Firstly, in the deposit receipt transactions. Treasury bills, bonds, illicit money will be deposited in banks in deposit transactions by deposits w88 win kept responsible for a certain period of time between months w88 win years. The illegal money w88 win the interest resulting from it will be removed at the end of this time w88 win become legal money.Secondly, in bank loan transactions. The owner of the illegal money can use this to pay for the borrowed money at the banks. In addition, there are also types of peer-to-peer loans, peer-to-peer (P2P) loans to individuals to receive loans directly from other individuals through the influence of science w88 win technology, cutting out the financial institution as the middleman[2]. With this type, this money will be passed by the illegal money holder to the person who wants to borrow, or the illegal money will be used to fund the loan.Thirdly, in the casual communication mode of payment. Illicit money is deposited in the accounts, then holder can use card, payment order, collection order, credit mail. In particular, payment of the card is the second simply with a sweeping motion code, scan the card...; Even with the type of payment necessary documents incubated medical liability, expenses, collection mandate or letter of credit, documents may be false documents. It is also not difficult for individuals to use payment transfers for money laundering purposes. In addition, with the effects of the 4.0 revolution, the advent of virtual money w88 win the use of virtual money in payment transactions, money laundering is simpler w88 win more difficult to detect since virtual money transactions are highly anonymous.
Measures to prevent money laundering in banking transactions:Firstly, perfecting the legal system on prevention w88 win combating money laundering.The making law procedure should ensure: Recommendations of the Financial Action Task Force on Anti-Money Laundering (FATF) should be considered as the standard for the development of a regulatory structure to deter money laundering; Money Laundering offenses should be fully identified; Defining customer standards for banks; Setting transaction reporting quotas; Pre-Laundering offenses should be fully identified[3]. Secondly, establishment of specialized agencies for the prevention w88 win control of money laundering with the purpose of monitoring the enforcement of the Law on the prevention w88 win combating money laundering.The specialized agency in charge of the prevention of money laundering is structured with two models: a central bank model w88 win an autonomous body with the government.Thirdly, Banks should set up procedures to deter w88 win fight money laundering on their own. In the process of prevention of money laundering by banks, they should ensure following contents:First, monitoring customers' data on the basis of the evaluation w88 win classification of customers, towards the level of examination equal to the level of risk of the customer;Second, regulating the identification of suspicious transactions in order to take effective handling steps in case a suspicious transaction[4]. Third, record keeping, w88 win customer information must be completely enforced.
2. Preventing w88 win fighting against money laundering via banking transactions in Vietnam
2.1. Successes in the prevention of money laundering in banking transactions in Vietnam
- First, Vietnam has built a comprehensive legal system for the prevention of money laundering.This is accepted by the Financial Task Force on Anti-Money Laundering (FATF) at the FATF plenary meeting in February 2014 [8]. This is expressed in a series of texts which are as follows: The 2015 Criminal Code amended w88 win supplemented in 2017, money laundering is recorded in Art. 324. By 2012, the National Assembly XIII adopted the Law on Anti-Money Laundering, marking a significant improvement in the legal system of money laundering prevention w88 win combat. Based on this law, the Government issued Decree No. 116/2013/ND-CP detailing the implementation of a number of articles of the Law on prevention of money laundering on October 4, 2013. In the banking sector, the State Bank of Vietnam has issued three Circulars: Circular No. 35/2013/TT-NHNN dated December 31, 2013 of the State Bank of Vietnam implemented regulations on prevention of money laundering; Circular No. 31/2014/TTNHNN dated November 18, 2014 of the State Bank amending w88 win supplementing a number of articles of Circular No. 35/2013/TT-NHNN w88 win Circular No. 20/2019/TT-NHNN dated 11/14/2019 of the State Bank of Vietnam amending w88 win supplementing a number of articles of Circular No. 35/2013/TT-NHNN. Besides, the Government also provides sanctions for violations of regulations on the prevention w88 win combating of money laundering in Article 39, paragraph 3, Article 46 of Decree No. 96/2014 / ND-CP treated himself administrative violations in the monetary w88 win banking sector. In addition, in view of the high risk of money laundering, which is difficult to control due to the advent of electronic money, on 21 August 2017, the Prime Minister also signed Decision No 1255/QDTTg on the approval of the completed project. These above provisions are making a legal framework for the prevention w88 win combating money laundering in Vietnam's banking transactions.
- Second, the agency in charge of prevention of money laundering was established.The Department of Anti- Money Laundering was established under Decision No. 1003/2005/QD-NHNN dated July 8, 2005 of the State Bank of Vietnam, is a unit under the structure of the Banking Inspection w88 win Supervision Department of the State Bank. Department of prevention w88 win combating money laundering functions to help chief inspector, bank supervisor, Governor of State Bank; perform duties of agencies, prevention of money laundering under the provisions of the law on prevention of money laundering, the task of preventing w88 win combating terrorist financing prescribed in law on the prevention of terrorism w88 win other the assignment issue, authorized by the Governor of the State Bank[5]. With a position in the State Bank of Vietnam-State Management Agency for Currency w88 win Banking, the Anti-Money Laundering Department will actively cooperate in the reporting w88 win processing of information. In comparison to the organizational structure of the banking inspection w88 win supervision agency, the Anti-Money Laundering Department would be more conductive to the sharing of information w88 win take higher responsibility with w88 win convenience of the inspection w88 win supervision agency.
- Third, engaging in international cooperation on anti-money laundering.Vietnam was recognized as the 33rd member of the Asia-Pacific Community on the Prevention of Money Laundering on 4 May 2007. Money laundering (APG) continues to strictly enforce international standards for the prevention w88 win control of money laundering while fully participating w88 win receiving APG's multilateral evaluations of Vietnam. Vietnam is also an observer of the Financial Intelligence Units (FIUs) -the Egmont Group w88 win is working on the application process for membership of the Group. The sharing of information on anti-money laundering with FIUs or international agencies to deter money laundering has also been improved, as can be seen by 9 Records Remember (MOU) to exchange information on money laundering w88 win terrorist funding with countries w88 win are in the process of negotiating the signing of MOUs with other countries in the region w88 win around the world. In addition, Vietnam has also signed w88 win acceded to a variety of international w88 win regional anti-corruption w88 win anti-money laundering treaties, such as the 2000 Transnational Organized Crime Convention (Palermo Convention).
2.2. Drawbacks of anti-money laundering in Vietnamese banking transactions
- Firstly, insufficiencies in the legal framework on anti-money laundering in banking transactions,namely:
i, There are still deficiencies in the framework of the law on prevention laundering, leading to the negligence of infringements w88 win crimes which can be referred to as the guidance on indications of suspicious transactions in the banking sector listed in Clause 3, Article 22, Law on prevention of money laundering 2012. As the above provisions refer mainly to the typical banking transactions of banks in accepting deposits, loans, opening accounts w88 win payment accounts, not to mention transactions such as issuing valuable papers for capital mobilization, credit extension, card issuance. There is also a legal void for virtual currencies, genetics, w88 win fiat money or genetics. This creates a wide field of money laundering, since cyberspace transactions, in particular virtual currency transactions, have a high degree of privacy, making it difficult to classify violators to handle;
ii, Improper regulations on the blockade of money laundering, creating difficulties in the prevention of money laundering. Since the State Bank of Vietnam Inspection w88 win Supervision Agency is not permitted to block w88 win keep money laundering items temporarily under the current rules, this makes it complicated w88 win limits involvement in anti-money laundering activities of the State Bank of Vietnam.
- Second, the organization w88 win activity of the Department for the Prevention w88 win Control of Money Laundering is not quite reasonable.This is seen in detail as follows:
i,The operations: according to the existing legislation, the Anti-Money Laundering Department has no role of investigating w88 win blocking accounts, which leads to delays w88 win difficulties to prevent w88 win fight against money laundering in general w88 win the activities of the Department of Money Laundering in particular.
ii,The position: with the tasks w88 win powers of obtaining, synthesizing, analysing, processing, storing, providing information, documentation w88 win records of questionable transactions; alert or suggests to relevant individuals, organizations w88 win state agencies on issues arising from the transactions reported; (Paragraph a, Clause 2, Article 2 of Decision No. 1654/QD- The State Bank stipulates the functions, duties, powers w88 win organizational structure of the Anti-Money Laundering Department), the Anti-Money Laundering Department is considered as a Financial Intelligence Unit. However, the operation of the Department of Anti-Money Laundering is not independent enough because the Department is currently a unit in the Bank Supervision w88 win Inspection Agency of the State Bank of Vietnam.
Inadequacies in the organization w88 win operation of the Anti-Money Laundering Department as mentioned above lead to a series of difficulties such as being the national center w88 win the assisting the Permanent Board of money laundering prevention Committee, but being placed as a unit of the banking supervision w88 win inspection agency, has led to the difficulties in cooperation in prevention w88 win combating money laundry, terrorism financing in accordance with the law. In addition, as a Financial Intelligence Unit (FIU), the Anti-Money Laundering Department is also recommended to sign a Memorandum of Understanding (MOU) to exchange information on money laundering prevention w88 win combat terrorist aid. Accordingly, information exchange activities will be carried out based on the signed MOU. The Head of FIU has authority to sign MOU. However, since Anti-Money Laundering Department is an administrative unit under the control of the State Bank, so it has no authority to sign MOUs with FIUs. This poses many problems for the Department of Anti-Money Laundering in the negotiation w88 win signing of the MOU with partners, as well as directly influencing the sharing of information with international partners due to lack of authority. Many FIUs around the world only recognize information sharing after the MOU has been signed. Vietnam's responsibilities in the APG are also not yet fulfilled. In addition, despite the application to join, FIU Vietnam has not been accepted as a member of the Egmont Group w88 win has been recognized as an observer of the Egmont Group since 2010 on the grounds that the Anti-Money Laundering Department does not comply with the international requirements of the FIU which is "independence w88 win autonomy".
3. Some solutions to improve the effectiveness of anti-money laundering in the banking sector
3.1. The legal remedy
As mentioned above, there are still some shortcomings in the existing regulations on the prevention of money laundering in banking transactions. Therefore, to avoid money laundering in banking transactions, it is important to minimize w88 win remove these deficiencies as follows:
- Completion of the legislation on the prevention of money laundering, it’s necessary to revise w88 win supplement new legal rules in compliance with the guidelines of the FATF w88 win the specifications of the Basel Committee on Risk Management w88 win Prevention of Money Laundering in Banking Operations. Among these above, the bank needs to focus on transactions of issuing bonds, supporting payment mechanisms, w88 win financial leasing to reduce suspicious transactions;
- Completion of legal framework for virtual money w88 win Fintechs.As mentioned in Section 2, due to the specific anonymity in virtual currency transactions w88 win peer-to-peer lending transactions via Fintechs, subjects take advantage of virtual currencies w88 win peer-to-peer lending transactions via Fintechs to launder money. Moreover, the legal framework is in the process of experimenting to build money laundering prevention w88 win combat in transactions with virtual money, Fintech becomes even more worrying. Currently, transactions using electronic money with a value of VND 500 million or more (or in other foreign currencies of equivalent value) for domestic electronic money transfers ; US $ 1,000 or more (or other foreign currency equivalent value) for money transfers International Electronic place in Vietnam , the banks have the responsibility to report the State Bank of Vietnam[6]. Therefore, the trading of virtual money w88 win lending to peer through Fintechs also need to be controlled in order to prevent money laundering in the direction of having to report to the Anti-Laundering Department on suspicious transactions with value similar to transactions that use cryptocurrencies.
3.2. Enhancing the performance of the Anti-Money Laundering Department's operations
The Department of Anti-Money Laundering can only encourage productivity in compliance with international standards if it operates independently w88 win through more than one owner. To do this the Department's independent authority must be formed w88 win empowered to investigate a range of actions related to money laundering crimes in the banking sector. In addition, the Department needs to have its own budget w88 win operate independently without intervention. The Department also needs to be complemented by study w88 win training functions of the law w88 win the prevention of money laundering in the banking sector in order to establish a coordination of the professional qualifications w88 win skills of workers in the banking sector when suspicious transactions are identified. In addition, the Department of Money Laundering Prevention w88 win Fight should collaborate with the police, the Department of Anti-Money Laundering, to periodically update the Ministry of Public Security's blacklist w88 win provide information to banks. At the same time, suspicious transactions transferred to the Ministry of Public Security for investigation by the Anti-Money Laundering Department require input on the findings of the investigation. More significantly, towards a genuinely autonomous Money Laundering Prevention Department, the Department of Anti-Money Laundering itself, the Police Investigation Agency of the Ministry of Public Security, needs to work together to research on different types of money laundering, thereby strengthening w88 win sharing the investigation process.
3.3. Strengthen the propaganda on prevention of money laundering
The State Bank of Vietnam needs to promote propaganda on the prevention of money laundering for banks, since it is only when they understand the prevention of money laundering that every person can feel safe w88 win the banks can fulfil their obligations. The goal of its report is to identify suspicious transactions, thereby enhancing the effectiveness of the prevention w88 win control of money laundering. The State Bank of Vietnam will do this by conducting seminars on the prevention of money laundering. Since the seminars will create opportunities for the Department of Anti-Money Laundering to collect information on the implementation of anti-money laundering initiatives by banks; at the same time, it will create opportunities for banks to share experiences in order to restrict the use of the banking system to money laundering.
3.4. Strengthen international cooperation
In addition to the advancement of trade relations, the pattern of international economic integration, money laundering activities are now being carried out on an international scale, from one country to another in the region w88 win around the world. The prevention of money laundering can therefore only be more successful if there is cooperation from countries not only in the sharing of expertise w88 win intelligence, but also on cooperation to identify, prevent w88 win combat money laundering in banking transactions.
3.5. Other solutions:
- Improve the efficacy of prevention w88 win monitoring of source crimes.It is important to prevent w88 win tackle the source of crimes such as cocaine, smuggling, tax evasion... corruption, in particular. Since of course, when there is no illicit money, there is no involvement or nature of money laundering;
- Develop a national system of information.It is therefore important to establish a public open, up-to-date w88 win convenient national information system to search for legislation, understand the related rights w88 win obligations of banks w88 win individuals relating to money transfers w88 win banking transactions to prevent money laundering.
To put in a nutshell, as the legal structure is reasonably completed, with the emphasis on anti-money laundering as the achievements in prevention, anti-money laundering in banking services in Vietnam has reached an all-encompassing level. However, the inadequacy of the organization w88 win activity of the Anti-Money Laundering Department w88 win the regulatory discrepancies in cryptocurrencies w88 win Fintech about suspicious banking transactions are points that need to be added. In order to facilitate these achievements w88 win address the above deficiencies, efforts must be made by state agencies w88 win in particular, by the State Bank of Vietnam to enhance work performance of preventing w88 win combating money laundering in Vietnamese banking transactions.
BIBLIOGRAPHY:
[1] Cambridge Dictionary, <https://dictionary.cambridge.org/dictionary/english/money-laundering, accessed 25 October 2020
[2] Julia Kagan, Peer-to-Peer (P2P) Lending (2020),https://www.investopedia.com/terms/p/peer-to-peer-lending.asp, accessed 21 October 2020
[3] Le Xuan Hien, Preventing w88 win combating money laundery through banking system (2010), Master dissertation, University of Economics Ho Chi Minh City.
[4] Para 6, Art. 5, Law of preventing w88 win combating money laundery 2012.
[5] Article 1 of the Governor's Decision No. 1367 / QD-NHNN dated June 26, 2019 defining the functions, tasks, authority w88 win organizational structure of the Department of Anti-Money Laundering under the Banking Inspection w88 win Supervision Agency
[6] Clause 3 Article 1 of Circular No. 31/2014 / TT-NHNN amending w88 win supplementing a number of articles of Circular No. 35/2013/TT-NHNN guiding the implementation of a number of regulations on prevention of money laundering.
REFERENCES:
- National Assembly, Law on prevention of money laundering 2012.
- Lam Giang, Anti-money laundering w88 win terrorism financing: 90% of suspicious transactions go through banks (2019),
<https://vneconomy.vn/chong-rua-tien-va-tai-tro-khung-bo-90-giao-dich-dang-ngo-di-qua-ngan-hang-20190816053313864.htm
- Le Xuan Hien, Prevention w88 win control of money laundering through the Vietnamese banking system (2010), Master's thesis in economics at University of Economics, Ho Chi Minh City.
- Phuong Lan, Vietnam actively cooperates with other countries in the "war" against money laundering w88 win terrorism financing (2019), <http://tapchitaichinh.vn/viet-nam-chong-rua-tien-va-tai-tro-khung-bo/viet-nam-chu-dong-hop-tac-quoc-te-trong-cuoc-chien-chong-rua-tien-tai-tro-khung-bo-317161.html ;
- State Bank of Vietnam, Circular No. 31/2014 / TT-NHNN amending w88 win supplementing a number of articles of Circular No. 35/2013 / TT-NHNN guiding the implementation of some regulations on prevention of money laundering;
- The State Bank of Vietnam, Decision No. 1367 / QD-NHNN dated June 26, 2019 of the Governor regulating the functions, tasks, powers w88 win organizational structure of the Department of Anti-Money Laundering under Thanh banking inspection w88 win supervision.
Pháp luật về phòng, chống rửa tiền trong các giao dịch ngân hàng ở Việt Nam: Thực trạng và một số giải pháp
Phạm Thị Hồng Nghĩa
Giảng viên, Khoa Luật - Học viện An ninh Nhân dân
Nghiên cứu sinh, Khoa Luật - Đại học Quốc gia Hà Nội
Đỗ Thị Hà
Giảng viên, Thạc sỹ, Khoa Luật - Học viện An ninh Nhân dân
TÓM TẮT:
Thực tế ở Việt Nam cho thấy, các giao dịch ngân hàng chiếm 90% tổng số báo cáo giao dịch đáng ngờ gửi đến Cục Phòng, chống rửa tiền. Hoạt động rửa tiền trong các giao dịch ngân hàng có thể ảnh hưởng đến sự ổn định của đồng tiền quốc gia, sự an toàn và phát triển của hệ thống ngân hàng, do đó, phòng, chống rửa tiền trong các giao dịch ngân hàng là yêu cầu bức thiết. Khung pháp lý về phòng, chống rửa tiền ở Việt Nam vẫn còn một số bất cập nên hoạt động phòng, chống rửa tiền chưa thực sự đạt được hiệu quả như mong đợi. Vì vậy bài viết sẽ tập trung vào 2 nội dung: phân tích chung về rửa tiền, và phòng, chống rửa tiền; Phân tích thực trạng công tác phòng, chống rửa tiền trong các giao dịch ngân hàng ở Việt Nam. Từ đó, đưa ra một số đề xuất nhằm nâng cao hiệu quả công tác phòng, chống rửa tiền trong các giao dịch ngân hàng ở Việt Nam.
Từ khóa:ngân hàng; giao dịch ngân hàng; phòng, chống rửa tiền
[Tạp chí Công Thương - Các kết quả nghiên cứu khoa học và ứng dụng công nghệ, Số 11, tháng 5 năm 2021]
