SBV proposes reporting for international transfers over $1,000

SBV proposes reporting for international transfers over $1,000

The State Bank of Vietnam (SBV) has proposed new rules requiring reporting of international transfers of $1,000 or more, aiming to curb illicit flows and money laundering.

The SBV is drafting a decree regulating the licensing for establishment and operations of banks, foreign exchange management, anti-money laundering (AML), counter-terrorism financing, and prevention of financing the proliferation of weapons of mass destruction in international financial centres (IFCs) in Vietnam.

The draft decree specifically outlines responsibilities for implementing anti-money laundering measures by reporting entities in IFCs, as well as related organisations and individuals. It also defines the roles of supervisory authorities of the IFCs, including the SBV, the Ministry of Public Security, the Ministry of National Defence, and other relevant ministries and agencies, to ensure compliance with Law on AML.

The draft introduces several preferential and exceptional policies for reporting entities at IFCs, including allowing them to apply AML measures already in use by their owners or parent banks, even if such measures are not yet regulated under Vietnamese law, provided they do not violate existing laws. It also imposes a requirement to report international electronic fund transfers exceeding a threshold of $1,000.

According to the SBV’s proposal, Vietnam’s Law on AML requires all AML efforts to be in accordance with legal regulations while safeguarding national sovereignty, territorial integrity, national security, and interests. It also aims to ensure normal economic and investment activities, protect legal rights and interests of individuals and organisations, and prevent abuse of AML policies to infringe on legitimate rights.

Given the higher degree of financial openness within IFCs, especially in terms of capital flow and cross-border transactions, and the presence of major international financial institutions across various sectors, there must be stringent mechanisms in place. This is to prevent entities from exploiting the IFC or its special policies to launder or legitimise questionable funds.

The draft decree also outlines the use of foreign currencies by members of the IFC, including commercial banks, branches of the SBV, and other participants. To mitigate policy misuse risks and ensure a clear distinction between foreign currency transactions within the IFC and those with the rest of Vietnam, it mandates that all such payments and transfers must go through foreign currency payment accounts held at member commercial banks or branches of the SBV.

VIR