Business
Money laundering crime grows
  • | dtinews.vn | October 12, 2011 03:07 PM

The popularity of cash transactions in Vietnam has created favourable conditions for money laundering crime.

Money laundering criminals abuse Vietnam’s lax regulations

The National Assembly (NA) Standing Committee discussed the draft law on Money Laundering Prevention on October 11.

At the discussion, the State Bank of Vietnam provided a six-year review of the implementation of Government\'s Decree 74 on money laundering prevention. Statistics revealed that tax evasion, smuggling and fake commodity production and trading and gold, real estate and securities speculation were all on the rise.

Criminals have used banks, securities, property investment and foreign bank accounts to launder the gains of their activities.

State and party officials have recently been required to enumerate their assets in line with anti-corruption legislation, which has also prompted increased incidents of laundering.

According to the United Nations Office on Drugs and Crime (UNODC), Vietnam faces a high risk of money laundering crimes being committed due to the habitual use of cash combined with increasing trade and investment activities.

UNODC warned that if the country did not take timely measures, corruption and money laundering crimes will rapidly multiply.

Large amount of cash of potentially dubious origin has already been poured into the stock and property market, with banks reticent to investigate customer deposits due to fears of losing their business.

The majority of illegal money in Vietnam comes from fraud, arms dealing, prostitution and drug trafficking.

Chairman of the NA Committee for National Defence and Security Nguyen Kim Khoa said the draft Law on Money Laundering Prevention should focus on preventive measures rather than ways to deal with the consequences, suggesting that curtailed use of cash in the economy should be increased.

Money laundering and terrorism

Governor of the State Bank of Vietnam Nguyen Van Binh said money laundering and terrorist financing could bring illegal money into Vietnam. Therefore, they should be combined into one law.

According to the Financial Action Task Force (FATF), Vietnam is regarded as one of the most lax countries in terms of money laundering and prevention of terrorist financing. The country has pledged to complete the necessary regulations before December 2012. If anti-terrorism finance-related clauses are not included into the Money Laundering Prevention Law, the nation will be in breach of its international commitments and could be added to the list of countries facing stringent financial controls, Binh explained.

However, many delegates on the NA Standing Committee disagreed with Binh, saying that laws must take Vietnamese standards as the main foundation, no matter their international commitments.

Chairman of the Council of Ethnic Affairs Ksor Phuoc said money laundering was for a range of purposes and not isolated to the financing of terrorism, so there should be different legislation.

Leave your comment on this story