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 strong emphasis from CPV General Secretary Nguyen Phu Trong, who has prioritized anti-corruption efforts and regularly publishes lists of disciplined officials. Despite these measures, corruption persists due to low transparency, inadequate accountability, and poor remuneration for officials, compounded by bureaucratic competition that creates opportunities for corrupt practices. Various government agencies are tasked with addressing corruption, but enforcement remains weak, and the business environment is particularly affected by bribery and political interference.

Vietnam's economy is significantly driven by foreign direct investment (FDI), which reached a stock of $297 billion by the end of 2023. The government has implemented favorable policies to attract FDI, particularly in export-oriented manufacturing, supported by political stability, a young workforce, and competitive labor costs. However, challenges such as corruption, regulatory uncertainty, and a reliance on imports from China pose risks to the investment climate.

Vietnam's investment climate is significantly bolstered by its political stability, strong economic growth, and a young, educated workforce, making it an attractive destination for foreign direct investment (FDI). The government actively promotes FDI through favorable policies, including recent reforms to remove foreign ownership limits in many sectors and the establishment of free trade agreements that enhance market access. However, challenges such as corruption, regulatory uncertainty, and a lack of skilled labor persist, impacting the overall investment environment.