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Intermediary payment service and virtual asset service providers must report anti-money laundering measures

09:36 | 22/06/2022

VCN – The draft revised Law on Anti-Money Laundering dictates that intermediary payment service, virtual asset service and peer-to-peer lending service providers must report on anti-money laundering.

Prevent money laundering risks through virtual money, virtual assets Prevent money laundering risks through virtual money, virtual assets
Customs smashes Hong Kong money-laundering ring accused of smuggling HK$166 million over world’s longest sea crossing Customs smashes Hong Kong money-laundering ring accused of smuggling HK$166 million over world’s longest sea crossing
Intermediary payment service and virtual asset service providers must report anti-money laundering measures
Completing the legal system on money laundering prevention and combat. Photo: Internet

In addition, the draft Law on Anti-Money Laundering also states the responsibilities of customs authorities, border guards and coast guards in archiving and sharing customs declaration data and information to the competent agencies when there is a suspicion of money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.

The State Bank of Vietnam (SBV) is gathering feedback on the Draft revised Law on Anti-Money Laundering. The drafting agency proposes to supplement regulations on reporting on anti-money laundering applicable for operators in some new business activities with potential risks of money laundering.

These operators include the intermediary payment service and virtual asset service and peer-to-peer lending service providers.

Accordingly, the SBV abolished the report for pawn services.

According to the State Bank, the current Law on Anti-Money Laundering stipulates two groups; financial institutions and organizations and individuals engaged in non-financial businesses. However, a number of new business activities show risks of money laundering, such as activities related to virtual assets and providing peer-to-peer lending services.

The SBV said that the legal framework for virtual asset service provision and peer-to-peer lending has been studied. However, if the legal framework on licensing and management of operation is issued, the regulations in the Law on Anti-Money Laundering will not cover these new activities. These activities have money laundering risks, because they are mostly implemented online, so it is difficult to identify the parties involved.

Therefore, the supplementation of regulations on providing virtual asset service, intermediary service and peer-to-peer lending services will create a legal basis for the management of anti-money laundering for these organizations.

Moreover, the regulations in the draft law are consistent with the general trend of laws on anti-money laundering of countries around the world. For example, more than 90 countries stipulate that virtual asset service providers are subject to reporting on anti-money laundering, while the regulations on licensing and management are specified in a specialized document, said the SBV.

Regarding virtual asset service provision, the FATF’s Recommendation 15 requires that countries must identify and assess money laundering and terrorist financing risks arising from virtual asset activities and operation of virtual asset service providers. In addition, the virtual asset service providers must take appropriate steps to identify, assess, manage, and minimize their money laundering and terrorist financing risks.

According to the assessment of Asia-Pacific Group on Anti-Money Laundering (APG) in the multilateral assessment report, Vietnam has not yet met the requirements of Recommendation 15 as the country does not report on risk assessment for money laundering/terrorist financing related to virtual assets; virtual asset service providers are not obligated to identify, assess, manage and mitigate the risks.

According to the State Bank, after eight years of implementing the Law on Anti-Money Laundering, Vietnam has achieved positive results. The Vietnam’s anti-money laundering mechanism has been developed and improved.

However, a number of guiding documents and legal provisions on anti-money laundering show shortcomings, affecting the efficiency of anti-money laundering.

For example, the Financial Action Task Force (FATF) on Anti-Money Laundering has revised its recommendations 11 times, so that some provisions in the Law on Anti-Money Laundering and its guiding documents are not consistent with the current 40 recommendations of the FATF, affecting the implementation of Vietnam's commitment.

By Nu Bui/Ngoc Loan