Keywords: anti-money laundering, SBV, customer procedures
On 11 November 2014 the State Bank of Vietnam (SBV) issued amendments to its anti-money laundering regulations. Circular No. 31/2014/TT-NHNN ("Circular 31"), which became effective on 26 December 2014, amends Circular 35/2013/TT-NHNN issued by the SBV on 31 December 2013 ("Circular 35"). Circular 31 streamlines the process for banks conducting "Know Your Customer" checks on individual and corporate customers. It also introduces reporting requirements for banks on electronic transactions, and ushers in new AML compliance procedures for banks.
Know Your Customer Procedures
Circular 31 reduces the information required to satisfy "know your customer" procedures for both individual and corporate clients. Under Circular 35, banks were required to collect information from their individual clients about their average income for the 6 month period prior to such person becoming a bank customer. Individual clients were also required to provide information about their family members. Circular 31 eliminates the requirement for individuals to supply information about their families, and reduces the disclosure of average income from 6 months to 3 months.
Under Circular 35, corporate clients were required to submit financial statements from the 2 years prior to becoming a bank customer. Circular 31 has removed this requirement. Instead, corporate entities must disclose revenues from the preceding 2 years.
Circular 31 also provides guidance on reporting electronic transactions. Banks must report domestic transactions with values of VND500 million (or equivalent foreign currencies) or above, and cross-border transactions with values from USD1,000 (or equivalent other foreign currencies) or above to the SBV's Department of AML ("AML Department"). Debit card, credit card, and interbank transactions are exempt from this reporting requirement.
Internal Compliance for Banks
Circular 31 sets out new internal requirements for banks. Particularly, all banks must:
- designate a particular staff member who will be responsible for anti-money laundering compliance ("Staff in Charge") and register the Staff in Charge with the AML Department;
- conduct an annual internal audit on anti-money laundering compliance and submit the result of the audit to the AML Department within 60 days after the end of each financial year; and
- provide regular training to their employees with respect to the anti-money laundering regulations.
Originally published 5 January 2015
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