Month: September 2023

Vietnam is rich in mineral resources but only a fraction of these have been discovered to date due to lack of modern technologies and methods. With the increasing flow of FDI under the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), Vietnam can enjoy many advantages to modernize the mining sector. However, some challenges hinder Vietnam from seeking the benefits under the two agreements, such as lack of coordination and communication among Vietnamese authorities, shortcomings in the Vietnam Mineral Law itself and excessively high taxes and royalties compared to other countries.
1. VIETNAM’S COMMITMENTS IN THE MINING SECTOR UNDER CPTPP AND EVFTA
Vietnam has opened its mining investment regime under both CPTPP and EVFTA. The CPTPP outlines several conditions for foreign investment in the mining sector in Vietnam. In particular, approval for foreign investment will only be granted if the investment project is proved to bring net benefits to Vietnam. In making this evaluation, the competent authority may take into account various factors, including the project’s impact on economic activity, job creation, equipment and services made in and exported from Vietnam, competition, and the compatibility of the project with other national policies, etc. Meanwhile, the EVFTA offers a great opportunity for market access in the mining sector as it allows for the establishment of joint ventures with maximum 51% of foreign capital contribution or 100% foreign-owned enterprises.
With regard to tariff, the CPTPP targets to remove custom duties for all mining-related goods imported from member states and the EVFTA shall reduce almost all tariffs by up to 99%, which can attract the FDI flows to the mining industry in Vietnam, especially mining equipment services and technologies and oilfield service providers.
The EVFTA, which adopts core labor standard of the International Labor Organization, also provides better working conditions for workers, which is a key aspect for laborers working on mining projects.
With the above commitments of Vietnam under the CPTPP and EVFTA, it is expected that new mining methods and better technologies will be introduced to the mining sector in Vietnam, which will later bring benefits in the exploration, mining, and processing of minerals.
2. BENEFITS OF TECHNOLOGICALLY MODERN EXPLORATION AND MINING IN VIETNAM
By using modern technology, Vietnam can discover and develop many minerals in deeper surface deposits. Having these metals sourced and available instead of importing them can help Vietnam develop downstream high-tech manufacturing industries and establish itself as a dominant regional and global hub. This is in line with the MPI Foreign Investment Agency’s emphasis on capacity building of manufacturing and supporting industries in Vietnam and partnership with Vietnamese enterprises where possible.
Modern technological exploration and mining can also help Vietnam meet the Vietnamese Government’s commitments under COP26, aiming for environmental sustainability in the mining sector, as state-of-the-art technologies in process, cycling, and refining base metal resources will reduce carbon dioxide emissions. It also contributes to meeting the challenges of the Government’s strategy for its Socio-Economic Development Goals (SDGs), particularly in mountainous areas with dominantly ethnic minorities, where the mining projects are mostly located. Responsible mining can help alleviate poverty in these remote areas by creating strong employment opportunities and enhancing local goods and services. In addition, it can also improve physical infrastructure since mining has long been recognized to be one of the most effective drivers of physical infrastructure improvement around the world.
Modern sustainable mining in Vietnam would therefore also meet two of the World Bank’s stated key objectives of its Country Partnership Framework in Vietnam, which are to (a) deliver infrastructure and (b) broaden the economic participation of ethnic minorities.
3. CHALLENGES AND ISSUES
• Consultation and clarification
Foreign investors require Vietnamese authorities seek detailed industry consultation on the key components of the draft amended Vietnam Mineral Law, together with its guiding documents. For example, key mining taxes require transparency on how minerals are valued. Since mineral grade is not an acceptable methodology, a revenue-based system is recommended. In addition, since the last annual VBF in February 2022, the MOIT has issued a draft nickel sulfide concentrate standard. However, consultation before the draft standard was limited to Vietnamese nickel producers only, which led to limited exposure to the international commercial realities, input from international experts, and evaluation of other countries regulating nickel mining and processing. Foreign investors have also been confused about the purpose of the adopted standard, i.e., whether the standard is used to restrict import or export, to be a part of a review of royalties or duties, related to future approval, or any other specific purposes.
• Mining industry long term investment and risk
Investment in the mining sector takes time and significant upfront investment in exploration and development. Therefore, in order to attract quality direct foreign investment in the sector, the Government should: (i) benchmark Vietnam’s fiscal regime against peer countries and provide a competitive fiscal regime with those offered by other jurisdictions; (ii) simplify the current fiscal regime for ease of explanation to investors; (iii) provide fiscal stability and reduce frequency of policy changes; and (iv) continue improving internal standards and consider recognizing and adopting international mineral resource standards (e.g. JORC).
Because there are many risks in mining exploration, the Government must ensure that exploration and mine planning, the formulation of investment projects, and the development of mechanisms and policies will encourage exploitation rationally and with best efficacy. Companies that have a proven track record of conducting technically advanced and environmentally responsible exploration programs should be granted with priority in their future applications.
• Scientific research and technological development
In October 2021 at a series of ASEAN Ministerial Meetings on Minerals, it was suggested that the minerals industry must take the lead in digital transformation, scientific research, technology development, and investment in all stages of the mineral value chain.
However, foreign investors and foreign-invested mining companies have been hindered from testing and applying new technologies due to restrictions on temporary import into Vietnam of research piloting equipment. Furthermore, detailed studies of various ores at world-class research facilities are limited due to the inability to export samples out of Vietnam for study purposes.
To address this issue, the Government should increase funding for Vietnam research facilities and ease the import-export restrictions.
• Amending the Vietnam Mineral Law and reducing mineral taxes
High natural resource tax and the fee for granting mining rights prevent large mining companies from operating in Vietnam. Therefore, Vietnam needs to introduce a more competitive fiscal regime.
4. CONCLUSION
The review and revision of Vietnam’s 2010 Mineral Law must be open and consultative, allowing the opportunity for input from Vietnamese and FDI mining companies and experts. This is to ensure a clean and environmentally sustainable mining and to take advantage of the EVFTA as well as the CPTPP, and to further contribute to Vietnam’s impressive economic growth in the upcoming years.
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Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

On 18 September 2023, the Government issued Decree No. 70/2023/ND-CP on amendments and supplementations to Decree No. 152/2020/ND-CP on foreign workers working in Vietnam, and recruitment and management of Vietnamese workers working for foreign employers in Vietnam (“Decree 70”). At a glance, the key points to note of Decree 70 are as follows:

1. Adjustments to relax the conditions and requirements of Expert, CEO and Technical labor (i.e. more relaxed conditions for the mentioned positions, clearer definition for the job position of “business managers”, etc.) to match the common practice of these positions;

2. Removal of the exemption of Work Permit’s waiver application to foreign employees with Vietnamese spouses. In other words, expats with Vietnamese spouse, after the effective date of Decree 70, will have to implement the waiver application to be allowed to work in Vietnam;

3. From 1 January 2024, employers will be required to, at least 15 days before submitting the application for the approval of foreign labor use, publish notice on job application for Vietnamese employees with regard to positions of which foreign employees are expected to take. Such notice will be published on the electronic portal of the Occupational Department of the Ministry of Labor, Invalids and Social Affairs (MOLISA) or a qualified job service center.

4. Amendments to the forms for the application for Work Permit (i.e. working location(s));

5. Clearer guidance of authority for issuance of Work Permit between the MOLISA and the Department of Labor, Invalids and Social Affairs (DOLISA) whereby the MOLIA will issue the Work Permit for foreign employees who work for organizations permitted to be established by the Government, Prime Minister, Ministries, Ministry-level agencies or agencies of the Government while the DOLISA will handle the Work Permit in other cases not falling into the governing authority of the MOLISA. Further, the industrial zone authority, according to Decree 70, no longer has the authority to issue Work Permit/Work Permit exemption certificate to foreign employee working in such industrial zone.

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Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) has opened up many opportunities for Vietnam in the agriculture sector as it creates favorable conditions for local enterprises to access international markets. While the global economy is still recovering after the COVID-19 pandemic, the agriculture sector in Vietnam has been benefiting a lot from these two FTAs.

The tariff reduction in the CPTPP and the EVFTA has increased demand and boosted exports from Vietnam to the international market. With the CPTPP, most of Vietnam’s key agricultural exports will enjoy a tax rate of 0% immediately after the CPTPP takes effect or after 3-5 years, for example, some types of seafood (fish, shrimp), fresh and processed vegetables, rice,… when exported to large markets such as Canada, Japan and Mexico. With the EVFTA, tax rates on a series of agricultural products exported to the EU will gradually decrease to 0% after a short period from the effective date of the EVFTA. Tax rate on many Vietnamese products will fall to 0-4% such as pepper (currently 0-11%); rice and grain products. For fisheries, about 50% of tariff lines will be eliminated, and the remaining 50% will be eliminated within a 3-7 year roadmap. This is a potential opportunity for Vietnamese businesses to grow exports in potential markets as well as contribute to diversifying exports of agricultural, forestry and fishery products, which are the strength of Vietnam. In 2022, the sector’s export turnover reached 53 billion USD with a trade surplus of 8.5 billion USD, up 30% from 2021. The export of agricultural, forestry and fishery products also achieved new records. In particular, the domestic fishery industry exports to the CPTPP markets expanded by 30% to 27% of the country’s total fishery export value. In 2022, rice exports in Vietnam hit a record 7 million tons, up 13.8 percent in volume and 5.1 percent in turnover in 2021. In 2023, Vietnam expects further opportunities for export growth of agricultural products by diversifying markets and target production to satisfy export market requirements on food safety, and effectively complete post-harvest activities.

Vietnam’s participation in the CPTPP and in the EVFTA also increases connectivity between businesses through participating in regional and global supply chains. Through these two FTAs, Vietnamese agricultural products have the opportunity to access 37 large markets including Japan, Canada, and Australia. The participation will help raise the level of development of the economy in general and Vietnam’s agriculture in particular, at the same time increasing competitiveness compared to other competitors who do not have FTAs with the EU or other CPTPP member states, for example, India and Thailand. With regard to production, businesses can participate in production stages with higher value added by investing in domestic production and chain development while reducing export of raw materials and preliminary processing. This creates motivation for domestic enterprises and income opportunities for workers in rural areas. Vietnam’s commitments on import- export related rules and procedures create conditions to attract more domestic and foreign investment to improve the business environment in general and in agriculture sector in particular. Overall, this is a great opportunity to upgrade Vietnam’s agriculture in the next 5 – 10 years.

As the growth in Vietnam’s agricultural sector continues to flourish with new opportunities for trade, so are the need for further clarity in Vietnam’s regulations or stricter requirements from each partner’s market. There are challenges coming from regulations on animal and plant quarantine and safety (SPS), regulations on product labeling (TBT) or related regulations on social responsibility, labor standards and high requirements on intellectual property protection and environmental protection, especially for markets with strict standards such as the EU and Canada. For instance, Vietnamese businesses might fail to meet the regulations on traceability, rules of origin and maximum residue levels (MRLs) for pesticides in foods, which are prerequisites for access to the EU market. Although there are many shortcomings regarding management, quality control and production process, Vietnam’s agriculture sector is shifting to adapt to growing diversity, especially which of highly demanding markets. This drives the requirements for improved product quality and enhances food safety with an emphasis on environmental responsibility and management. Under competition pressure, Vietnamese agriculture will need to absorb new science and technology through transnational investment activities accompanied by science and technology and improving labor skills, thereby changing the traditional agriculture and improving production efficiency and product quality. With stricter requirements of the export markets, the agriculture sector needs to be more innovative and adaptable, which requires building a sustainable agricultural industry and focusing on automation and digital transformation in the sector.

As part of aiming for sustainable development, Vietnam has made specific actions such as committing at the 26th United Nations Climate Change Conference (COP 26) and endorsing the UN Sustainable Development Goals (SDGs), which can help build sustainable agriculture, join the global value and food chains and improve living conditions. In 2023, Vietnam will focus on the rural economy with activities of cooperatives, OCOP (One Commune One Product) development, and agriculture-based tourism. Vietnam also set some priorities to focus on the development of circular agriculture:

• Efficient water use and wastewater management;
• Minimisation of waterway and wetlands salination (notably Mekong delta);
• Monitoring of Climate Change and its effect on weather patterns;
• Development of smart agriculture systems through digital transformation;
• Tracking and traceability of clean and hygienic food;
• Development of opportunities to join the global agriculture supply chain, and;
• The need for FDI companies to be more environmentally and socially responsible and concentrate on sustainable agricultural operations.

Agriculture is one of the priority sectors of Vietnam’s plan for digital transformation. One of Vietnam’s development orientations for 2021-2030 is to develop agriculture based on digital transformation and linkage of domestic and international markets. The application of technology and digital in production and business in the agriculture sector will create a turning point in agricultural production, moving from a traditional agrarian economy to an agricultural economy. Therefore, Vietnam needs to re-invent the agriculture sector with new ideas and concepts, new farming models, innovation, digitization, more efficient logistics, and a greater focus on circular agriculture and environmental responsibility.

Vietnam is in the direction of restructuring the agricultural sector, reorganizing production, and piloting a number of models for advanced production, promoting the application of science and technology, supporting businesses and farmers in agricultural production and business activities to improve productivity and quality of agricultural products, thereby being able to compete at home and reach the world market. The arrival of 4.0 smart agriculture in Vietnam signals the end of an exclusive dependence on water, fertilizers, and pesticides. Instead, farmers will acess data, GPS technology and moisture sensors to break down traditional challenges into crop selection, market access, and innovation. New applications in agriculture such as advanced breeding techniques, robotization and precision farming using satellite data and drones will play a big role in the farms as it helps to produce more with fewer resources.

Although the technological level of agriculture in Vietnam is low, there are still good prospects for the application of technology 4.0 in this sector. This is evident by the increasing, although modest, number of enterprises providing digital and technical solutions for farming. Currently, many large Vietnamese corporations are interested in investing in the agricultural sector with advanced production and management technologies, such as Nextfarm and AgriConnect. In addition, agriculture enterprises remain active in applying innovative solutions for leading farmers toward digitalization. From the demand side, there is a new wave of private investment in agriculture for medium and large-scale farms.

CONCLUSION

The ongoing transformation of the agriculture sector to a sustainable and innovative way is important for Vietnam to maximize the benefits of CPTPP and EVFTA. We do hope that Vietnamese agricultural, forestry and aquaculture products from local and foreign-invested companies will be more competitive in the international market and be able to satisfy stringent phyto-sanitary and other quality standards, including traceability and packaging.

To achieve this, we have some recommendations as follow: (i) there is a need for further movement to larger-scale farming operations away from smallholdings and also to improve quality management, minimal pollution, energy savings and effective disease control; (ii) it is also necessary to accelerate digital transformation process by bringing with it Smart Agriculture which allows for better water, feed, fertilizer, traceability and waste management; and (iii) logistics and supply chain management needs to be improved, which will allow Vietnam to join global supply chains and have efficient movement of goods within the country between provinces and distribution hubs and centers.

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Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Member of Financial Action Task Force (FATF)? No, Vietnam is currently not a member of FATF.
Vietnam is a member of the Asia/Pacific Group on Money Laundering (APG).
For more information about the assessment of the implementation of anti-money laundering and counter-terrorist financing (AML/CFT) measures in Vietnam, please consult the APG website.
On FATF Blacklist? No.
Member of Egmont? No.
ML background in region
Overview of country risks
Vietnam’s deeper integration into the regional and world’s economy for the past few years has been a great opportunity for international money laundering crimes. However, money laundering activities only become clearly visible recently though bank accounts opening, securities trading, gambling, illegal transfer of foreign currencies out of the country, use of credit cards, etc.
Combating money laundering becomes one of the top concerns, not only for the State Bank of Vietnam, but also other relevant authorities in Vietnam. According to a report of the State Bank of Vietnam, in 2012, suspicious transactions had a total value of VND51,000 billion, while in 2013 it was VND79,000 billion and in 2014, the value went up to VND119,000 billion. This shows an increasing and alarming number of transactions suspicious of money laundering. We note that the Law on Anti-money Laundering took effect on January 1, 2013.
However, it seems that the anti-money laundering legal framework is still not sufficient, guiding implementation remains unclear, awareness of credit institutions of money laundering is low, ability to detect money laundering activities is weak, information technology in anti-money laundering activities is not sufficient, and especially punishment regime for violating acts of the AML is only formalistic. The government, especially the State Bank of Vietnam, is strongly recommended to tighten their regulations in this sector.
Key directives/Legislative framework
Law on Prevention of and Anti Money Laundering No. 14/2022/QH15, issued by the National Assembly on November 15, 2022 (AML);
• Decree No. 19/2023/ND-CP dated April 28, 2023 issued by the Government on detailing the implementation of certain provisions of the AML (Decree 19);
• Decree No. 88/2019/ND-CP dated November 14, 2019 issued by the Government on sanctions for administrative violations against currency and banking legal regulations (Decree 88), amended by Decree 143/2021/NĐ-CP;
• Decision No. 20/2013/QD-TTg dated April 18, 2013 of the Prime Minister on determination of high value transactions subject to report obligation (Decision 20);
• Circular No. 09/2023/TT-NHNN on guiding the implementation of certain regulations on anti- money laundering, issued by the State Bank of Vietnam on July 28, 2023; and
• Penal Code No. 100/2015/QH13 issued by the National Assembly on November 27, 2015, as amended by Law No. 12/2017/QH14 dated June 20, 2017 (Penal Code 2017). Penal Code 2017 became effective January 1, 2018.

Who are the regulators/monitoring authorities
Who are affected/reporting entities?
The following state authorities are responsible for reporting, preventing, and fighting against money laundering activities:
• SBV is mainly responsible to the Government for state administering the implementation of AML regulations;
• Ministry of Public Security is responsible for collecting, receiving and investigating information of money laundering related crimes;
• Ministry of National Defence is responsible for exchanging information and documents on money laundering activities aimed at financing for proliferation of weapons of mass destruction in Vietnam and foreign countries with the State Bank of Vietnam.
• Ministry of Finance is responsible for implementing AML measures in insurance business, securities sector, accounting service, prize-winning games and casinos, lottery, betting and other service sectors under the state management of the Ministry of Finance;
• Ministry of Construction is responsible for implementing AML measures in real estate business sector, except real estate leasing, subleasing and real estate consulting services;
• Ministry of Justice is responsible for implementing AML measures applicable to the notary public and law practising sectors;
• Ministry of Industry and Trade is responsible for implementing AML measures applicable to trading in precious metals and gems sectors, except for trading in gold bars and gold jewellery and fine arts.
• Ministry of Planning and Investment is responsible for implementing AML measures applicable to the sectors under its management.
• Ministry of Home Affairs is responsible for implementing AML measures applicable to associations, social funds, charity funds and religious institutions.
• Ministry of Foreign Affairs is responsible for implementing AML measures applicable to foreign non-governmental organizations.
• Ministry of Information and Communications is responsible for implementing AML measures applicable to telecommunications or Internet network-based game business sector.
• The People’s Procuracy and the People’s Court coordinate with other agencies in the investigation, prosecution, and resolution of money laundering crimes;
• People’s Committees at all levels are responsible for conducting legal training on anti-money laundering in the province, co-ordinating with state authorities to implement policies, strategies, and plans to prevent and fight money laundering; and
• The Anti-Money Laundering Steering Committee is responsible for assisting the Prime Minister in preparing strategy, plans, policies and programs in the process of preventing and fighting against money laundering:
o Client acceptance policy;
o Processes and procedures to identify clients, verify and update client information;
o Transactions which must be reported;
o The process of review, detection, handling and reporting of suspicious transactions; the way to communicate with the clients who make suspicious transaction;
o Information keeping and security;
o Applying temporary measures and principles of handling the cases of transaction delay;
o Reporting and information supply regime to the State Bank of Vietnam and the competent state agencies;
o Professional training on the prevention of and combating money laundering;
o Internally controlling and auditing the compliance with the policies, regulations, processes and procedures related to the prevention of and combating money laundering, responsibilities of each individual and division in the implementation of internal rules in the prevention of and combating money laundering.

For financial institutions
• The clients open accounts or set up transactions with the financial institutions for the first time;
• The clients do not have a bank account or make no transactions for the past 6 months or deposit, withdraw or make a bank transfer of at least VND 400,000,000, or a foreign-currency amount of equal or greater value per day, except for final settlements or withdrawals of savings interest, credit card debt repayments, repayments of loans to financial institutions, instalment payments registered with financial institutions, withdrawals of profits from securities or bond investment portfolios ;
• There are doubts about transaction or the parties concerned in transactions are related to the money laundering;
• There are doubts about the accuracy or completeness of the clients identification information previously collected.
• For relevant non-financial institutions or individuals:
• Doing business in prize-winning games, including prize-awarding electronic games; telecommunications network-based games, Internet-based games; casinos; lottery tickets: clients implementing high value transactions (i.e.¸ over VND70 million per day);
• Doing real estate business and management services, except for real property leasing, subleasing, and consulting services: when providing these services to the buyer, purchaser and asset owner;
• Trading in precious metals and stones: when clients performing the sale and purchase transaction in cash of precious metals and stones with value of over VND400 million per day;
• Providing legal agreement services: when acting on behalf of the customer to perform a transaction related to establishment, administration or management of legal agreements;
• Providing services of establishment, management and executive of enterprise; supplying registration office, address or place of business; supplying services of company representative : clients requesting such services;
• Providing services of director and secretary provision of the enterprise to a third party: third party and director / secretary to such director;
Legal requirements for KYC
Customer due diligence
Application of measures to identify clients are required depend on the results of money-laundering risk assessment. Procedures for management of money laundering risks cover classification of customers by low, medium and high level of risk. In particular, the abovementioned services providers/entities must update the client identification information on a regular basis during the period of having relations with the clients.
In addition, clients must also be classified into different groups, product and services used, their place of residence or headquarter based on different risk exposure levels.
Reporting requirements/obligations
Recordkeeping
Information, documents, records relating to customer identification, results of the reporting entity’s analysis and assessment of customers and/or reporting transactions and other related documents must be kept for at least five years from closing date of the transaction or the date of account closure or the reporting date. Reports of high value transactions (i.e., from VND400 million), suspicious transactions and transactions of electronic money transfer exceeding VND500 million or equivalent amount in foreign currency (for domestic transfer) or $1,000 (for inbound or outbound transfer) and information, documents and records of the transactions, must be kept for at least five years from the date of the transaction.
Tipping off
The reporting entity/ individual, management or employees of reporting entity/individual is not allowed to inform a person involved in a suspicious transaction that it has reported or will report the transaction to the State Bank of Vietnam.
Whistle-blowing
The AML only sets out regulations on reporting to the following state agencies instead of whistle-blowing.
• State Bank of Vietnam;
• Investigating agencies, agencies assigned to conduct a number of investigative activities, or People’s Procuracies, national security protection agencies under the People’s Public Security;
• State inspection agencies, agencies assigned to perform the function of conducting the specialized inspection of reporting entities.
Offences
Enforcements
If the parties related to the transactions are included in the blacklist or there are grounds to believe that the transaction required to be performed is related to the criminal activities or requested by competent state authorities, the reporting entity/ individual must apply measures to delay the transaction within maximum three working days and must immediately report in writing and notify via phone to the competent State agencies and the SBV for cooperation. If the reporting entity/individual does not receive any feedback from the competent state agencies after three working days, it can proceed the transaction.
In addition, the reporting entity/individual must block the accounts or seal or temporarily seize assets of the individuals/organizations upon having decision of competent state agencies under the law and make report on the implementation to the State Bank of Vietnam.
Penalties
Persons violating the AML are subject to administrative sanctions of up to VND500 million, discipline or criminal penalty depending on the nature and seriousness of such violations. The criminal sanctions varies from one year to maximum 15 year imprisonment, together with partly or wholly confiscation of assets, monetary fine of up to three times of the violated amount, abandonment of holding certain positions or titles from one to five years.
The criminal sanctions against corporate legal entities include monetary fine of VND1 billion up to VND20 billion, together with business operation suspension of one to three years, banning from particular business field operations of one to three years, or forced termination and liquidation.
Internal procedures and training
Pursuant to Article 24 of the AML, reporting entities/ individuals must establish internal procedures on prevention and combating money laundering with the following contents:
• Customer acceptance policy;
• Customer identification procedures and processes;
• Risk management policies and procedures;
• Procedures for reporting of should-be-reported transactions;
• Steps in examining, detecting, handling and reporting suspicious transactions; methods of contact with customers performing suspicious transactions;
• Storage, security and confidentiality of information;
• Apply provisional measures, principles for handling postponement of transactions;
• Regimes for reporting or providing information to the State Bank of Vietnam and other competent state authorities;
• Recruitment and training of personnel specializing in AML activities;
• Internal control, audit of compliance with policies, regulations, regulatory processes and procedures relating to AML activities; responsibilities of each natural person or department for implementation of internal rules and regulations on AML.
Sanctions
International conventions
International cooperation in the field of prevention of and combating money laundering includes: (i) exchange and provide information on prevention of and combating money laundering; (ii) determining and blocking assets of the violating persons; (iii) performing judicial assistance; (iv) research, training, information support, technical assistance, financial aid and AML experience exchange and (v) other aspects. The process, procedures and cooperation methods are in accordance with international agreements to which Vietnam is a party.
CTF – Countering terrorist finance
The Ministry of Public Security is tasked with the preparation of a list of organizations and individuals related to terrorism and terrorist finance (blacklist). The reporting entity/ individual must promptly report to the competent anti-terrorism authorities, and at the same time send reports to the State Bank of Vietnam upon detecting organizations and individuals to conduct transactions included in the blacklist or when there is evidence that other organizations and individuals commit acts related to the money laundering crime for terrorism financing.
At the same time, the reporting entity/individual must apply measures to delay the transaction and block the accounts or seal or temporarily seize assets of the individuals/ organizations.
Anti bribery and corruption laws
Corruption is widespread throughout Vietnam. For information, Vietnam ranks 77/180 according to the 2022 Corruption Perception Index, a significant increase compared with its rank in 2021 (87th). Sectors most affected by corruption are police; public administration; health sector, judiciary; and land management. The Vietnamese government acknowledges the negative impact of corruption on both Vietnam’s future prosperity and the party’s own legitimacy, thus has adopted one of the most comprehensive and ambitious anti-corruption laws in Asia. The anti-corruption legal framework has seen some improvements after the adoption of the Anti-corruption Law by the National Assembly in 2005 (as amended in 2007, 2012 and 2018) and the National Strategy on Anti-corruption to 2030.
However, in the last 10 years of implementation, considering the increasing level of complexity of corruption cases, the current legal framework has been proved to be inadequate to combat corruption in Vietnam. This prompted the Vietnamese government to refine the current regime to make the policies fully effective and operational in practice.
There is no definition of “bribery” under Vietnam laws. However, in essence, it could be defined as an act of offering, promising, making or receiving money or anything of value (minimum threshold: VND 2 million (approx. $90) or intangible benefit: no clear guidance but sex, job positions, and education acceptance offerings may be considered) to induce or influence an act/omission or decision. The current laws only target people with positions and power (i.e., state officials). Please note the receipt of minimum VND 1 billion is subject to death penalty.

This country profile was kindly provided by Dr. Oliver Massmann, general director of Duane Morris Vietnam LLC

On 31 August 2023, the Deputy Prime Minister Tran Hong Ha passed the Decision No. 1009/QD-TTg on the Approval for the Implementation Plan of the Political Declaration on establishing the Just Energy Transition Partnership (Decision 1009). The main goals of the implementation plan under Decision 1009 are to implement the Just Energy Transition Partnership (JETP Declaration), to promote the development of renewable energy to achieve net zero greenhouse gas emissions by 2050, and to ensure the efficient use of energy. With regard to a more detailed set of goals and relevant tasks to be carried out of the Implementation Plan, Decision 1009 also highlights the following:
(i) The reception and efficient use of partnership with international partners in terms of technology transfer, governance, training for officer-in charge and financial provision for the implementation of the JETP Declaration;
(ii) By 2030, a suitable legal framework to attract investors and businesses to engage in the transition of the JETP Declaration is expected. A resource mobilization plan to implement the JETP Declaration with pilot projects related to the JETP Declaration is also projected to be developed by relevant units. The mentioned resource mobilization plan is expected to cover international financial support and technology transfer to promote the conversion from coal-fired power and fossil energy to clean energy, and develop renewable and new energy forms;
(iii) The development of the smart grid and advanced and modern infrastructure facilities for production, transmission, storage, distribution and management of electricity is also mentioned as an important part for the implementation of JETP Declaration. From January 2024 to January 2026, it is a priority to involve the investments of private entities to contribute to the development of the grid, the tasks to carry out this goal include (iii1) determining the scope and structure for investment of private entities into the grid; (iii2) promoting the development of the legal framework to facilitate the investment into the gird; and (iii3) promoting the development of cross-border transmission and offshore transmission.
(iv) One of the main tasks outlined in the plan is switching from coal-fired power plants to clean energy sources, along with creating an ecosystem for renewable energy businesses and services, encouraging the production of electricity from biomass, garbage, and solid waste to utilize by-products from agriculture and forestry, creating and implementing regulations on the rate of renewable energy for electricity distribution companies, and creating a market for renewable energy credits.

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Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.