Local banks urged to get tough on money laundering

Commercial banks should mitigate business risks and ensure their reputations by strictly implementing the Government's regulations on the prevention of money laundering and terrorist financing, heard a seminar held in HCM City yesterday.

Effective deployment of measures to fight money laundering and terrorist financing was essential to banks in international operation, Nguyen Van Ngoc, director of the State Bank of Viet Nam's Anti-Money Laundering (AML) Department, said.


The Vietnamese Government's laws to fight money laundering and financing for terrorists became effective in January and October last year, respectively, Ngoc said.

Most banks have issued internal regulations on anti-money laundering and terrorist financing in line with the Government's Decree 74 on AML released in 2005, he told the seminar, which was organised by the Viet Nam Banks Association and technology consulting firm Komtek.

However, banks should carefully study current regulations and international standards to help them map out appropriate internal regulations for the effective deployment of anti-money laundering methods, Ngoc said.

In addition, banks should improve training for their staff, especially those who work directly with customers, to raise their awareness of AML issues and enhance their ability to detect suspicious transactions involved in money laundering and terrorist financing.

In addition, updating customer information is an important step to detect behavior related to money laundering.

"Banks should select the appropriate information technology solutions to filter and analyse transactions in an aim to prevent and fight money laundering and other risks," he said.

Filtering software can help banks recognise those on black lists and AML risks, he added.

Moreover, he said banks must issue daily reports of large value transactions (equal to or greater than VND300 million or US$14,285) to the State Bank of Viet Nam, as required by law.

Jeremy Chan, regional business development director of Fircosoft, said that AML was an important requirement by global regulators.

The CEO of Aub Chapman Consulting Service Co, Aub Chapman, said that the sharing of information by peers across the industry would help regulators and contribute to the national interest.

"Document what you are doing so you can demonstrate what you have done," he said, adding that AML risk management should remain relevant to the bank's business and money laundering risks.