FATF Status

Vietnam is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 25 October 2024

Since June 2023, when Vietnam made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime, Vietnam has made limited progress. The FATF strongly encourages Vietnam to coordinate internally to demonstrate progress on its action plan to address its strategic deficiencies, including by: (1) increasing risk understanding, domestic co-ordination and co-operation to combat ML/TF; (2) enhancing international co-operation; (3) implementing effective risk-based supervision for FIs and DNFBPs; (4) taking action to regulate virtual assets and virtual asset service providers; (5) addressing technical compliance deficiencies, including with respect to the ML offence, targeted financial sanctions, customer due diligence and suspicious transaction reporting; (6) conducing outreach activities with the private sector; (7) establishing a regime that provides competent authorities with adequate, accurate and up-to-date information on beneficial ownership; (8) ensuring the independence of the FIU and enhancing the quality and quantity of financial intelligence analysis and disseminations; (9) prioritizing parallel financial investigations and demonstrating an increase in the number of ML investigations and prosecutions undertaken; and (10) demonstrating that there is monitoring of FIs and DNFBPs for compliance with PF TFS obligations and that there is co-operation and co-ordination between authorities to prevent PF TFS from being evaded.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Vietnam was undertaken in 2024. According to that Evaluation, Vietnam was deemed Compliant for 2 and Largely Compliant for 12 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 2 of the Effectiveness ratings.

Vietnam has established laws to combat corruption, with a significant focus from CPV General Secretary Nguyen Phu Trong, who has prioritized anti-corruption efforts and initiated campaigns against public officials' misconduct. Despite these efforts, corruption persists due to low transparency, inadequate accountability mechanisms, and poor compensation for officials, leading to bureaucratic inefficiencies that foster corrupt practices. Various agencies are tasked with addressing corruption, but enforcement remains weak, and businesses frequently encounter bribery and political interference, particularly in sectors like land administration and construction.

Vietnam's economy is significantly driven by foreign direct investment (FDI), which reached a stock of $297 billion by the end of 2023, supported by favorable government policies and a young, educated workforce. The country has made strides in establishing free trade agreements that enhance market access and attract FDI, while also facing challenges such as corruption and regulatory uncertainty that impact the investment climate.

Vietnam's investment climate is significantly bolstered by its foreign direct investment (FDI) policies, which are designed to attract capital, particularly in export-oriented manufacturing. The country benefits from political stability, a young and educated workforce, and a series of free trade agreements that enhance market access. However, challenges such as corruption, regulatory uncertainty, and a weak legal framework continue to pose risks for foreign investors.