What is Anti-Money Laundering? AML Regulations in Vietnam

Financial integrity underpins the stability of global markets. Yet money laundering continues to pose a significant challenge, enabling organized crime, corruption, and even terrorism to thrive. According to the United Nations Office on Drugs and Crime (UNODC), between 2% and 5% of the global GDP(1) is laundered every year, but only a fraction is ever detected.

The stakes are especially high for emerging economies. Rapidly growing markets not only attract investment but also face heightened exposure to illicit financial flows. Establishing strict anti-money laundering (AML) regulations is therefore critical.

With strong economic growth and increasing integration into global trade, Vietnam has recognized the urgency of building a modern AML framework to safeguard its financial system. To better understand this effort, let us first examine what anti money laundering is and why Vietnam is increasingly focused on it.

What is Anti-Money Laundering: Key AML Regulations in Vietnam

AML is no longer a niche requirement for banks only. It is now foundational for maintaining integrity and for assuring both domestic and international stakeholders that the country is serious about preventing misuse of its financial, fintech, and other sectors. Let’s get into the anti-money laundering meaning.

What is Anti-Money Laundering (AML)?

The definition of Anti-Money Laundering (AML) covers all the legal and regulatory tools that governments and financial institutions use to prevent, detect, and punish money laundering and related financial crimes.

On a global scale, the purpose is to ensure that financial infrastructures are not exploited by those involved in drug trafficking, corruption, terrorism financing, or other criminal activity.

The Vietnam 2022 AML Law (Law No. 14/2022/QH15)(2), effective from March 1, 2023, broadened the regulatory scope to align more closely with international AML standards for this rising jurisdiction.

What is Money Laundering?

Money laundering is the structured process by which funds obtained through illegal means are “cleaned” so they appear legitimate. It traditionally occurs in three stages:

1. Placement: Introducing “dirty” money into the financial system (e.g., making cash deposits or using intermediaries that accept cash).
2. Layering: Performing complex or opaque transactions to obscure the origin of the funds. This may include transfers across accounts or across jurisdictions, using shell companies, or breaking payments into smaller amounts.
3. Integration: Reintroducing the money back into the economy so that it appears as lawful income, such as through real estate purchases, business investments, or other assets.

What is the AML like in Vietnam? To answer this question, Vietnam’s 2022 AML Law explicitly defines money laundering as “an act of an individual or organization to legitimize the origin of property obtained from crime,” and also includes income or profit generated from such property.

What is Know Your Customer (KYC)?

Know Your Customer (KYC) is a core part of AML compliance. Before establishing a business relationship, a reporting entity must verify the identity of its customer. The main elements of the KYC process include:

• Identity verification: confirming who the customer is (natural person or legal entity), often with government-issued documentation.
• Understanding the business relationship: knowing the purpose of the customer’s relationship with the reporting entity (for example, investment, remittance, trade finance).
• Risk assessment: evaluating how risky the customer is based on their activity, financial history, location, nature of business, and whether they are politically exposed persons (PEPs).

KYC and AML are tightly connected with Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD). CDD refers to the basic process of gathering customer information and verifying identity. Meanwhile, EDD refers to stricter checks for high-risk customers, such as foreign PEPs, or when dealing with jurisdictions known for weak AML enforcement.

What is driving Vietnam’s interest in AML?

In Vietnam’s evolving AML regime, these definitions are not academic. The 2022 AML Law and its implementing regulations have expanded KYC, CDD, and reporting obligations well beyond traditional banks. In the next section, we will be looking at these requirements in detail.

Consequently, more entities must develop appropriate internal compliance functions, adopt policies to classify customer risk, monitor identity verification, beneficial owner disclosure, and suspicious transactions. In the following section, we will delve into these requirements in greater detail.

The evolution of Vietnam’s AML regulatory framework

Prior to 2012, Vietnam’s AML laws were limited and fragmented. While banking law and the criminal code addressed certain financial and criminal offences, there was no unified law dedicated to preventing and combating money laundering and related financial crimes. Following this, international bodies such as the Asia/Pacific Group (APG) and FATF motivated Vietnam to create a comprehensive, modern framework to meet emerging global threats.

The 2012 Law on Anti-Money Laundering

Vietnam’s first comprehensive AML law was passed in 2012. It established reporting obligations for some financial institutions, required suspicious transaction reporting, and set penalties for money laundering offences. However, several weaknesses became clear over time. The law did not cover many non-financial entities, and customer due diligence (CDD) was not well defined.

As the risk-based approach was only implicit, Vietnam was found to be partially or non-compliant with many FATF recommendations in its Mutual Evaluation (2019-21)(3).

The 2022 AML Law (Law No. 14/2022/QH15)

To address these gaps, the National Assembly passed an updated AML Law on November 15, 2022(2), which came into force on March 1, 2023. Significant changes included:

• Formalizing the risk-based approach: entities must assess money laundering and terrorist financing risks, classify customers by risk, update risk assessments annually, and report those assessments per legal requirements.
• Expanding the number of reporting entities: beyond banks and traditional financial institutions, now including insurance, securities, real estate, casinos, and payment intermediary services, among others.
• Clarifying and widening transparency obligations, including beneficial ownership, customer classification, and criteria for high-risk customers and enhanced due diligence (EDD)

Supporting the implementation of regulations

The 2022 AML Law is implemented through several subordinate regulations, notably:

• Decree 19/2023/ND-CP(4), issued on April 28, 2023, which provides detailed provisions for several articles of the 2022 Law. It assigns responsibilities to reporting entities in non-financial sectors; clarifies obligations around the detection of suspicious signs; sets rules for handling large, complex, or cross-border transactions.
• Circular 09/2023/TT-NHNN(5), issued on July 28, 2023, by the State Bank of Vietnam, guides the implementation for financial reporting entities. It defines criteria and procedures for risk assessments, customer classification, internal controls, and reporting timelines.

International alignment and recent developments

Vietnam’s reforms are directly tied to its desire to improve compliance with FATF standards and APG mutual evaluations. According to the APG Mutual Evaluation Report finalized in July 2022, Vietnam previously failed or partially met many of the FATF 40 Recommendations. Additionally, it also had weaknesses in the effective implementation of AML obligations(3).

In 2025, the State Bank drafted amendments to Circular 09/2023, aiming to strengthen requirements for risk assessment, reporting of large and suspicious transactions, internal AML controls, and standardization of reporting formats. These changes are part of Vietnam’s strategy to address deficiencies, demonstrate effective implementation, and work toward removal from the FATF “Grey List”(6).

Current key compliance requirements for AML in Vietnam

Simply put, Vietnam is sending a clear message to domestic and foreign businesses: AML compliance is a non-negotiable part of operating in the market. In particular, here are the details to keep in mind.

Risk-based approach (RBA)

Reporting entities are required to perform enterprise-level risk assessments, considering all lines of business, customer types, products, services, delivery channels, and geographic exposures. Under Vietnam’s 2022 AML Law, institutions must classify customers and transactions into risk categories: low, medium, or high risk. Moreover, controls, monitoring, and due diligence must be adjusted proportionally to the assessed level of risk.

For example, a customer who is a Politically Exposed Person (PEP), from a high-risk jurisdiction, or conducting high volume cross-border transactions would be classified as high risk, therefore subject to enhanced due diligence, stricter monitoring, and possibly more stringent governance oversight. In contrast, a low-risk customer may be subject to standard due diligence, with fewer or simpler verification requirements.

Customer Due Diligence (CDD)

Customer Due Diligence under Vietnam’s AML law encompasses Know Your Customer (KYC) and Enhanced Due Diligence (EDD) frameworks.

• KYC (Know Your Customer) requires identity verification before or at the time of establishing a business relationship. The 2022 AML Law expands KYC requirements to cover Vietnamese nationals, foreign residents, non-residents, dual citizenship holders, and stateless individuals. Reporting entities must collect not only basic identifying information, but also understand the nature and purpose of the business relationship and the customer’s beneficial ownership.
• Enhanced Due Diligence (EDD) applies to high-risk clients like PEPs, customers from jurisdictions flagged for weak AML controls, clients with complex legal structures, or customers using new or innovative products. EDD demands deeper verification of identity, source of funds, and ongoing monitoring.
• Ongoing monitoring: Even after onboarding, reporting entities must continuously monitor transactions and customer behaviour to detect red flags, unusual patterns, or changes in risk profile. If suspicious signs appear, reporting entities must escalate and report in accordance with the law.

Transaction reporting obligations

Vietnam’s regulatory framework mandates several forms of reporting:

• Threshold reporting: As of December 1, 2023, transactions of VND 400,000,000 or more (or foreign-currency equivalent) must be reported(7). This threshold applies to financial institutions and certain non-financial reporting entities.
• Suspicious Transaction Reports (STRs): Regardless of amount, reporting entities are required to file reports when they detect suspicious behaviour or activity according to criteria set in law. These may encompass unusual transaction patterns, inconsistent or false customer information, or transactions involving persons on watch lists.
• Record-keeping: Entities must retain customer identification, transaction history, reporting forms, and related documentation for at least five years. The records serve as audit trails in case regulators or law enforcement request them.

Expanded scope of reporting entities

Under the 2022 AML Law, Vietnam has broadened the types of businesses subject to AML requirements. It is no longer only banks and traditional financial institutions. Others now covered include:

• Real estate agents and some real property businesses (excluding leasing, sub-leasing, and real estate consulting in some cases)
• Casinos, prize gaming, betting, and lottery businesses (prize games on tele-network or internet, etc.)
• Securities companies, investment fund managers, securities brokerage, and underwriters
• Fintech firms, including payment intermediary services, digital wallets, and non-bank entities that handle payments or transfers

These entities must adopt AML structuring at similar levels of governance, controls, and reporting obligations as banks do.

How Vietnam enforces AML regulations

Vietnam has built a multi-layered enforcement structure, with the State Bank of Vietnam at its center and other ministries and agencies playing complementary roles.

The State Bank of Vietnam (SBV)

The State Bank of Vietnam is the primary regulator of financial institutions and the lead authority for AML supervision. Within the SBV, the Anti-Money Laundering Department (AMLD) functions as the national Financial Intelligence Unit (FIU). Its mandate is to receive, process, and analyze reports on large-value and suspicious transactions, and to issue compliance guidance to reporting entities.

Through inspections and supervisory circulars, the SBV sets expectations and enforces standards across banks and other financial institutions.

Multi-agency involvement

AML enforcement extends beyond the banking system. The Ministry of Public Security investigates and prosecutes money laundering offences, often based on intelligence shared by the SBV. The Ministry of Finance supervises securities, insurance, and other non-bank financial sectors.

Other sector regulators, such as the Ministry of Construction for real estate and the Ministry of Justice for legal and notarial services, oversee compliance within their industries. Tax and customs authorities also play important roles in monitoring cross-border flows and detecting unusual financial activity.

Enforcement mechanisms

Vietnam’s AML Law (No. 14/2022/QH15) and Decree 19/2023/ND-CP provide for a spectrum of sanctions. Administrative penalties apply when reporting entities fail to submit transaction reports, conduct CDD, or maintain records. Under current regulations, administrative fines can reach VND 500 million for individuals and up to VND 1 billion for organizations, although exact amounts depend on the violation and are set out in implementing decrees.

For intentional money laundering or complicity in financial crime, the 2015 Criminal Code (as amended) prescribes severe penalties, including imprisonment of up to 15 years in serious cases, confiscation of assets, and bans on business activity. In addition, repeated or serious breaches can lead to suspension or revocation of licenses for banks, securities firms, and other reporting entities.

What are anti-money laundering regulations helping the jurisdiction? Strong enforcement serves two purposes: it protects the integrity of Vietnam’s financial system and it demonstrates commitment to international standards. Effective supervision and prosecution are key factors in FATF and Asia/Pacific Group evaluations, and they directly influence whether Vietnam remains on the FATF grey list.

Challenges and future outlook

Vietnam’s anti-money laundering framework has advanced, but several challenges remain that will determine its long-term effectiveness.

Emerging risks

The rapid rise of fintech and digital payments has transformed the financial landscape. E-wallets and peer-to-peer platforms are now common, yet many operators face unclear regulatory expectations and limited compliance capacity. This creates opportunities for illicit actors to exploit oversight gaps.

Cryptocurrencies and virtual assets present another challenge. The Law on Digital Technology Industry, effective January 2026, formally recognizes crypto assets and extends AML obligations to service providers(8). While this aligns Vietnam with global norms, consistent supervision and technical capacity will be critical in such a fast-moving sector.

Cross-border transactions also raise risks. As Vietnam deepens international trade, criminals may exploit differences in regulatory standards across jurisdictions, reinforcing the need for stronger cooperation.

Capacity and awareness

Non-financial businesses such as real estate companies, legal practices, and smaller fintech firms often lack AML expertise. Limited resources and compliance culture mean training and awareness remain essential for both regulators and reporting entities.

International cooperation

Vietnam’s participation in the Asia/Pacific Group on Money Laundering (APG) and engagement with the FATF reflect its intent to align with worldwide standards. Therefore, continued information sharing with foreign FIUs and collaboration in cross-border investigations are vital.

Remaining gaps 

Transparency of beneficial ownership is improving under the Amended Law on Enterprises 2025 and Decree 168/2025, which require disclosure of natural persons holding 25% or more of ownership or control(9). Yet enforcing this in complex structures remains difficult.

Finally, Vietnam must also expand the use of advanced monitoring technologies, such as real-time analytics and an artificial intelligence system, to keep pace with increasingly sophisticated laundering methods.

To conclude

Vietnam has made significant progress in developing its anti-money laundering framework, with the 2022 Law marking a major step toward international alignment. A strong AML system is crucial for protecting domestic financial stability, building investor trust, and supporting Vietnam’s continued integration into global trade and finance. Thus, you must understand what anti-money laundering, its importance, and how AML regulations apply to your business. The future of AML in Vietnam will depend on how well the country balances financial innovation with enforcement, strengthens compliance across all sectors, and facilitates cooperation with professional partners.

If you are looking for timely updates and expert guidance on Vietnam’s evolving regulatory landscape, please visit BBCIncorp’s resource site or email service@bbcincorp.com. We are available to assist you with your business needs.

References:

(1) https://www.unodc.org/unodc/en/money-laundering/overview.html#:~:text=The%20estimated%20amount%20of%20money%20laundered%20globally,money%20that%20goes%20through%20the%20laundering%20cycle.

(2) https://chinhphu.vn/?pageid=27160&docid=207710&classid=1&typegroupid=3

(3) https://www.fatf-gafi.org/content/dam/fatf-gafi/fsrb-mer/APG-Mutual-Evalutaion-Report-Vietnam-2022.pdf.coredownload.inline.pdf

(4) https://chinhphu.vn/?pageid=27160&docid=207830

(5) https://vanban.chinhphu.vn/?pageid=27160&docid=208451&classid=1&orggroupid=4

(6) https://tapchinganhang.gov.vn/hoan-thien-khuon-kho-phap-ly-som-dua-viet-nam-ra-khoi-danh-sach-xam-16027.html

(7) https://vanban.chinhphu.vn/?pageid=27160&docid=207824

(8) https://en.baochinhphu.vn/law-on-digital-technology-industry-approved-111250614143640329.htm

(9) https://vanban.chinhphu.vn/?pageid=27160&docid=214334

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