PREVENTING AND COUNTERING CORRUPTION IN VIET NAM BY
ANTI-MONEY-LAUNDERING MEASURES
Ms. HOANG Hai Yen*
Ms. LE Hong Phuong†

In recent years, the international economy has provided great opportunities fordevelopment in all aspects of Vietnamese society, but it has also raised the gravity ofinternational money-laundering crimes. Money-laundering activities have only become clearlyvisible recently though the opening of bank accounts, securities trading, gambling, illegaltransfer of foreign currencies out of the country, use of credit cards etc. According to reportsof the State Bank of Viet Nam, the number of suspicious transactions has been increasing
annually, which shows an alarming situation of money-laundering.
Currently, combating corruption and money-laundering has become one of the top concerns
not only for the government but also the citizens in Viet Nam. The Vietnamese governmenthas been expressing a strong determination to prevent and eliminate corruption and moneylaundering through guidelines, policies and legislation. The Law on Anti-money Laundering
took effect on 1 January 2013 and the New Anti-Corruption Law took effect on 1 July 2019.
However, the situation of preventing corruption and money-laundering in Viet Nam has faced
numerous difficulties, for instance, the insufficient legal framework of anti-money-laundering
efforts; debatable guidelines for implementation of the law; limited capacity of authorities indetecting and dealing with the offence, as well as finite scientific and technological capacity.
This means that the Vietnamese government must constantly make efforts to combat this typeof crime.
I. VIET NAM’S LEGAL FRAMEWORK ON ANTI-CORRUPTION AND MONEYLAUNDERINGThe amended 2015 Penal Code has some major policies for corruption crimes, as follows:i) Expanding the concept of corruption crime in the private sector, like property embezzlement,
taking bribes etc.; (ii) Expanding the content of “bribery” to include “non-material benefits”;(iii) Modifying and supplementing some criminal elements; (iv) Specifying details of offencesand determining penalty frameworks. The Anti-Corruption Law in 2018 mainly focuses on thepublic sector and partly extends to non-State enterprises. Such entities are now required toestablish and implement specific anti-corruption policies and are subject to investigation bygovernment inspectorates to ensure compliance. In addition, the law provides details on thecircumstances in which former public officials can join non-State enterprises following theirresignation or retirement from public office. Every year, Vietnamese officials have to declare
assets and income truthfully and take responsibility for such declaration.

Head of Criminal Law Division of the Criminal Law and Criminal Supervision Faculty of Hanoi Procuratorate
University, SPP.
†Legal Officer of the Department of International Cooperation and Mutual Legal Assistance in Criminal Matters,SPP.
*- 152 -In addition, the Anti-money-laundering Law of 2012 stipulates the measures to prevent,detect, stop and handle the organizations and individuals who commit acts of moneylaundering, the responsibilities of agencies, organizations and individuals in the prevention ofmoney-laundering and international cooperation against money-laundering.
According to article 324 of the Penal Code 2015 (amended 2017), the following acts will
be punished as money-laundering crimes:a) Directly or indirectly participating in financial transactions, banking transactions, orother transactions to conceal the illegal origin of the money or property obtained
through [the offender’s] commission of a crime, or obtained through another person'scommission of a crime with [the offender’s] knowledge;b) Using money or property obtained through [the offender’s] commission of a crime orobtained through another person's commission of a crime with [the offender’s]knowledge of doing business or other activities;c) Concealing information about the true origin, nature, location, movement, or ownershipof money or property obtained through [the offender] or commission of a crime orobtained through another person's commission of a crime with [the offender’s]knowledge, or obstructing the verification of such information;d) Committing any of the offences specified in points a through c of this clause whileknowing that the money or property is obtained through transfer or conversion.
Also, Resolution No. 03/2019/NQ-HDTP dated May 24, 2019, of the Supreme People'sCourt (on providing guidelines for Article 324 of the Criminal Code on money-laundering)
explains some terms, crime determination circumstances, penalty determination circumstanceswith regard to money-laundering crime. Accordingly, “money-laundering” subject to penalty
under this clause consists of Viet Nam Dong, any foreign currency; cash or money in account.
The term “original crimes/ source crimes” (the same meaning as the term “predicate offence”
in UNCAC) are the crimes prescribed in the Criminal Code, and the property acquired fromsuch crimes is subject to money-laundering charges (e.g. murder; intentionally inflicting injury
or harm to the health of other persons; human trafficking, property, corruption etc.). Originalcrimes can be committed by Vietnamese citizens, Vietnamese commercial entities, statelesspeople who are permanently residing in Viet Nam within or outside the territory of the Socialist
Republic of Viet Nam. The prosecution of criminal liability for money-laundering can becarried out simultaneously with the criminal prosecution of the original crimes.
It can be seen that Viet Nam’s legal framework in general, and Viet Nam’s Penal Code inparticular, has implemented the UNCAC recommendations about anti-corruption and moneylaundering. However, there are many loopholes that create difficulties for law enforcement indealing with corruption and money-laundering cases.
Firstly, one of the difficulties in countering money-laundering is that the Vietnamese Penal
Code does not establish illicit enrichment as a criminal offence. In order to identify, trace,freeze, seize, confiscate and repatriate the proceeds of corruption, the investigation andprosecution offices have to prosecute a corruption case and sentence the offenders. Recovering
the proceeds of corruption has been considered as a measure that follows sentencing in- 153 -corruption cases. Although Vietnamese laws require officials to declare their assets and income,we do not have a strong mechanism to charge acts that lead to illicit enrichment.
Secondly, before convicting money-laundering crimes, Vietnamese law enforcement has
to deal with “source crimes/original crimes” in advance, including corruption crimes. Thismeans that, if law enforcement fails to prove the source crime/original crimes, they cannot
obtain a conviction for money-laundering.
II. PREVALENT METHODOLOGIES OF CONCEALING THE PROCEEDS OF
CORRUPTION IN VIET NAM
Nowadays, there are many methodologies of concealing the proceeds of corruption in Viet
Nam such as:- Use of structured transactions- Use of non-bank financial services- Trade-based money-laundering- Use of gatekeepers (e.g. accountants, lawyers, notaries)- Use of third parties- Use of casinos
Among those methodologies, trade-based money-laundering and using third parties are themost popular ones in Viet Nam. In order to conceal and launder the money, offenders often
invest corrupt proceeds into other enterprises or buy expensive properties that will be declared
as belonging to the criminals’ family members.
However, there are no trends of new methodologies for concealing the proceeds ofcorruption in Viet Nam such as using of New Payment Products and Services (NPPS) or virtual
currencies (virtual assets). The reasons are as follows:Firstly, the cash payment habits of Vietnamese people. Although the government has beenpromoting the use of mobile and other convenient payment methods, such as QRpay, mobilewallets etc., many Vietnamese people do not want to use them. As a result, in some cases, law
enforcement cannot trace corrupt transactions.
Secondly, the Vietnamese government does not accept virtual currencies or virtual assets
as legal property or legal payment methods. Thus, corruption offenders also do not choose
those assets to hide their dirty money.
Below is an actual corruption and money-laundering case in Viet Nam that faces thoseissues: According to the indictment, in 2014 and in early 2015, Phan N (Chairman of the VTC
Online Company’s Board of Directors) met Nguyen D (Chairman of the Members Council ofthe High-tech Security Development and Investment Company (CNC)) to discuss thedevelopment of an online gambling system. After that, N and D decided to launch an online
casino without the government’s permission. After that, they embezzled form VTC online
Company and CNC capital by making false contracts and invoices. All of that money had been
invested in an online casino called Rik on the portal Rikvip.com. The main server of Rik casino
was located in Phutho province.

- 154 -In order to cover their organized gambling crime, N and D also gave bribes to Phan V(Former General Director of the Ministry of Public Security) and Nguyen H (Former Directorof the High-tech Crime Police Department). According to D’s testimony, D gave V and H about
8 billion VND in cash and Rolex watches to help them shield the country-wide gambling ringfrom investigation.
With the illicit money from the online casino, Phan N transferred money to relatives andfriends to deposit into bank accounts, invest in other companies and buy real estate. Over 236
billion VND was transferred to N’s aunt who used the money to buy houses in District 7, Ho
Chi Minh City. Phan N also sent money to a friend to store nearly 150 billion VND. Moreover,N invested 50 billion VND in Ha Long Green Bay Company, a Hanoi Fintech Company. Inaddition, N deposited 3.5 million USD at a bank and bought four apartments worth nearly 39billion VND.
In July 2016, the Ministry of Public Security directed the investigation offices in Hanoi andPhutho to trace the large-scale gambling organizations in cyberspace including Rikvip. After
collecting enough evidence, the Security Investigation Agency in Phutho province arrested
Phan N, Nguyen D, Phan V and Nguyen H in March 2018. Those arrest warrants were approvedby the procuracy office. Because this case was particularly serious and complicated, it wasinvestigated by the Ministry of Public Security and the Supreme People’s Procuracy of Viet
Nam. Both Phan N and Nguyen D were convicted of “embezzlement”, “organized gambling”
and “money-laundering”. In order to reduce the sentence, Phan N returned the embezzled andlaundered property (over 90 percent) and closely cooperated with the authorities in the processof investigation, prosecution and jurisdiction.
Unfortunately, although the investigators gathered sufficient evidence to pin charges oftaking bribes on Phan V and Nguyen H, we were not successful in proving their crimes. Nguyen
D’s testimony was not enough to prosecute them, so they were sentenced to 10 years’
imprisonment for “abusing position and power while performing duties”. We also could notrecover the corrupt proceeds from Phan V and Nguyen D.
Thirdly, in recent years, the results of corrupt property recovery in Viet Nam are still limited
due to the following difficulties: (1) offenders often do not declare assets, or they disperse orhide assets; (2) Corruption acts are often committed by many offenders so the investigation
process often requires assessment to determine the damage consequences, but the assessmentof economic losses, including the value of land, is quite complicated.
III. ANTI-MONEY-LAUNDERING MEASURES BY INTER-AGENCY
COOPERATIONWith regard to the emerging threats as mentioned above, Viet Nam also pays high attention
to anti-money-laundering measures with new technologies implemented. Actually, Viet Nam
is not a member of the FATF but a member of the Asia/Pacific Group on Money Laundering(APG). In 2007, the State Bank of Viet Nam established an FIU organization which is underthe Banking Supervision Agency. The Vietnamese FIU has duties to receive, process andprovide information on the prevention of money-laundering. In our opinion, the Vietnamese
FIU organization is not an independent agency, which also makes it difficult to improve theeffectiveness of cooperation among authorities to fight money-laundering.

- 155 -It can be said that cooperation among domestic agencies is one of the most effective ways
to collect and protect evidence in corruption and money-laundering cases. Offenders often use
technology to conceal their crimes. After being detected, offenders hide, falsify or destroy
documents, making it difficult to collect evidence. After charging suspects, prosecutors must
continue to handle evidence in such a way that it is admissible and persuasive in court. Thus,
if cooperation between investigators and prosecutors is insufficient, the case might fail.
IV. INTERNATIONAL COOPERATION IN ASSET RECOVERY
Viet Nam officially joined the United Nations Convention against Corruption (UNCAC)
on 18 September 2009. This is the only global legally binding document providing
comprehensive solutions to prevent corruption. The Vietnamese government has signed 22
bilateral treaties on mutual legal assistance in criminal matters, in which confiscation ofproceeds of crimes is specified as the content of the MLA request. Currently, the Supreme
People’s Procuracy of Viet Nam is carrying out domestic procedures to propose to thegovernment to join in the Asset Recovery Interagency Network – Asia Pacific (ARIN-AP).
In 2011, implementing the recommendations of the UNCAC Member States Conference,
the Vietnamese government appointed the Ministry of Justice to be the focal point of Viet Nam
for the recovery of corrupt assets within the framework of UNCAC. However, due to perceived
difficulties of the MOJ in the process of practicing the functions of focal point, the Governmentof Viet Nam decided to transfer the role of the focal point to the Supreme People's Procuracy.
On 7 January 2019, the 2018 Anti-Corruption Law of Viet Nam came into effect. Article 91of the Law stipulated that:The Supreme People’s Procuracy is the Central Authority of Viet Nam forinternational cooperation in corrupt property recovery in criminal procedure;
responsible for receiving, executing foreign states’ MLA requests related tocorrupt property recovery and sending foreign states MLA requests of Viet Namrelated to corrupt property recovery.
This provision is basically consistent with the role of the SPP as the Central Authority inmutual legal assistance in criminal matters, stipulated in the 2007 Law on mutual legal
assistance, the 2015 Criminal Procedure Code and treaties that Viet Nam has concluded in thefield of MLA.
The Vietnamese SPP has received, and has been executing, five incoming MLA requests
related to asset recovery and four outgoing MLA requests related to the confiscation ofproceeds of crimes. There are not any clear instructions about how to process the confiscationof proceeds of crimes in Viet Nam, so it is very challenging for us to deal with MLA requests
relating to confiscation.
Finally, fighting against corruption is not a short-term and easy battle. It requires strategic
measures including anti-money-laundering measures. It is hoped that these measures willreverse the latest trends of concealing the proceeds of corruption in Viet Nam in the near future.

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