Vietnam’s anti-money laundering efforts have entered a decisive phase as the government works to close gaps identified by the Financial Action Task Force. After its inclusion on the FATF grey list in 2023, the country has been under intense international scrutiny, with financial institutions, crypto exchanges, and regulators all expected to prove that reforms are more than cosmetic. The State Bank of Vietnam and its Department of Anti-Money Laundering are now tightening compliance across the banking and digital asset sectors to avoid reputational and economic fallout.

Vietnam anti-money laundering reforms under pressure

Being placed under “increased monitoring” means that Vietnam must demonstrate real progress in implementing the 17 FATF action points. These cover key areas such as beneficial ownership transparency, customer due diligence, virtual asset regulation, and the supervision of politically exposed persons. The challenge lies in converting commitments into enforcement outcomes, especially in sectors that have grown faster than regulators can track.

The country’s digital transformation has created fertile ground for innovation and financial crime alike. Blockchain projects, digital wallets, and trading platforms have multiplied across Ho Chi Minh City and Hanoi, attracting young investors and cross-border players. Yet they also pose acute risks, as unregulated intermediaries and offshore structures can easily facilitate laundering schemes involving crypto-to-fiat conversion. FATF’s evaluation found that the Vietnamese framework lacked sufficient monitoring of virtual asset service providers and that suspicious transaction reporting was inconsistent. These findings now shape the agenda for Vietnam’s AML overhaul.

Strengthening compliance to exit FATF’s grey list

The government has responded with an updated legal package led by amendments to the 2022 Law on Anti-Money Laundering and new guidance under Circular 09. The revisions are designed to align national rules with FATF’s Recommendation 15, which deals with virtual assets and service providers. The State Bank’s draft circular aims to standardize the treatment of digital asset exchanges, wallet providers, and token issuers as reporting entities subject to customer identification, transaction monitoring, and record retention obligations.

Regulatory coordination has also intensified. The State Securities Commission and the Vietnam Blockchain and Digital Assets Association now collaborate on risk assessment for crypto assets. This partnership reflects the government’s recognition that financial integrity must evolve alongside market innovation. Under the current plan, five domestic digital trading platforms are expected to operate under a licensed regime by 2030, but each must demonstrate compliance with AML and counter-terrorist financing controls.

The National Assembly has passed resolutions assigning specific mandates to ministries for implementing the AML/CFT action plan. Among these, the Ministry of Public Security is enhancing financial intelligence capabilities, while customs and tax authorities are tightening monitoring of cross-border fund transfers. The reforms are broad in scope, covering everything from real estate and precious metals to online gaming, each identified as a channel for illicit proceeds.

The reforms are not purely technical. Vietnam’s grey list status directly affects its access to international finance. Global banks conduct enhanced due diligence on transactions involving grey-listed jurisdictions, which increases costs and delays. Correspondent banking relationships may weaken, reducing liquidity and international payment efficiency. The private sector feels these pressures first, particularly exporters and investors whose transactions attract added scrutiny from compliance teams abroad. Removing Vietnam from the grey list is therefore both a regulatory and economic priority.

Money laundering risks in Vietnam’s digital asset market

Digital assets are reshaping how funds move within and beyond Vietnamese borders, and they represent one of the most complex challenges for law enforcement. FATF’s primary concern lies in the anonymity and velocity of transactions facilitated by crypto exchanges. Vietnam’s youthful, tech-savvy population has embraced cryptocurrencies as investment tools, yet many platforms operate without licenses or effective identity verification.

Investigations have revealed patterns of layering using crypto wallets, offshore exchanges, and peer-to-peer transfers that evade conventional AML monitoring. Vietnamese law enforcement has traced multiple cases where local exchanges acted as conversion points between fiat currency and stablecoins such as Tether, then moved assets through decentralized networks beyond detection. These mechanisms mirror classic money laundering structures but with a digital twist—instantaneous movement, encrypted trails, and cross-border complexity.

The intersection between cybercrime and AML compliance is particularly acute. Fraudulent token offerings, rug-pull schemes, and online investment scams have proliferated. When illicit gains are converted into crypto assets, they often pass through Vietnam’s expanding fintech infrastructure before being cashed out. The State Bank’s financial intelligence unit has flagged these flows as high-risk, emphasizing the need for improved suspicious transaction reporting and analytics.

Another persistent problem involves beneficial ownership transparency. Corporate registries often lack granular information about shareholders behind fintech startups or offshore-backed investment platforms. Without accessible UBO data, regulators face blind spots in identifying control structures behind seemingly legitimate businesses. FATF evaluators noted that while Vietnam has laws mandating ownership disclosure, the implementation remains fragmented, particularly for entities linked to foreign investors.

To mitigate this, Vietnam plans to centralize its beneficial ownership database and integrate it with the forthcoming National AML Data Center. The initiative will enable automatic screening of entities against sanctions and watchlists, marking a step toward digital supervision similar to that seen in more mature financial systems. However, building such infrastructure requires not only technical capacity but also consistent data sharing between ministries, a known weakness in Vietnam’s administrative structure.

Political will and enforcement challenges

Reforming a national AML regime involves more than passing new laws. Enforcement must demonstrate that breaches lead to tangible penalties. Historically, Vietnam’s enforcement record on financial crime has been uneven. While several major corruption cases have been prosecuted under domestic criminal law, AML-specific enforcement actions remain limited. Suspicious transaction reports have increased in volume, but few lead to convictions, a gap that FATF highlighted during its last review.

Vietnam’s financial institutions often approach AML compliance as a checklist exercise rather than a risk-based process. Many smaller banks still rely on manual monitoring and static risk scoring. Training and awareness across frontline staff remain inconsistent, particularly in rural areas where financial literacy is low. These operational weaknesses translate into poor-quality reporting and limited detection of complex laundering networks.

The government has attempted to address this through regulatory inspections and on-site examinations. The State Bank now requires all reporting entities to perform enterprise-wide risk assessments and to maintain records demonstrating how those risks are mitigated. Yet resource constraints persist. The FIU’s staffing and technical resources are modest compared to the scale of Vietnam’s financial system. Cooperation with foreign FIUs has improved but still depends on case-by-case agreements rather than automated information exchange.

Political will is the decisive factor. The leadership recognizes that removal from the grey list carries geopolitical implications. Remaining under enhanced monitoring undermines investor confidence and complicates trade negotiations. It also leaves the country vulnerable to the perception of weak governance at a time when regional competitors, such as Malaysia and Thailand, have strengthened their AML credentials.

The focus on digital assets reflects both a threat and an opportunity. Vietnam aspires to become a digital finance hub, but that ambition requires international trust. To achieve this, policymakers are promoting a “clean innovation” narrative, one that combines blockchain development with strict compliance controls. By embedding AML expectations into the emerging digital asset framework, Vietnam aims to demonstrate to FATF that it can balance innovation with integrity.

Still, challenges remain. Independent monitoring of implementation progress is limited. Transparency groups have called for clearer reporting on enforcement outcomes and public access to statistics on investigations and prosecutions. FATF evaluators will look for evidence that the reforms produce measurable change, not just legislative promises. If Vietnam fails to show progress in the next review cycle, it risks prolonged grey listing, or worse, a slide toward the high-risk category.

Toward a credible exit from enhanced monitoring

The path to exiting the FATF grey list is long but achievable if Vietnam can sustain its current momentum. The national AML/CFT strategy sets out milestones aligned with FATF’s evaluation process, including deadlines for legislative amendments, risk assessments, and inter-agency coordination. Authorities plan to submit a progress report highlighting the implementation of beneficial ownership registers, risk-based supervision, and digital asset regulation.

For financial institutions, the shift demands a cultural transformation. Compliance must move beyond procedural formality and embrace data-driven analytics. Banks are expected to integrate AI-powered transaction monitoring and to automate suspicious activity reporting. The new circular encourages institutions to build internal compliance units with independence from business divisions, reinforcing accountability at the board level.

The broader challenge lies in synchronizing national efforts. Vietnam’s AML ecosystem includes banks, securities firms, insurers, and payment providers, all regulated by different bodies. Without centralized oversight, discrepancies in enforcement may persist. The creation of a national coordination council under the Prime Minister’s office is a step toward coherence. This body will review progress quarterly and ensure that FATF commitments are met before the next evaluation round.

International cooperation will also be decisive. Vietnam’s grey list removal depends on validation by FATF’s International Cooperation Review Group, which will assess technical compliance and effectiveness. Successful examples from other jurisdictions, such as the Philippines and Morocco, show that political alignment and operational transparency can accelerate delisting. Vietnam appears to be following that model by engaging international partners in capacity-building programs and technical assistance projects.

Ultimately, the success of Vietnam’s AML reforms will be judged not by the number of laws passed but by the resilience of its financial system against abuse. The expansion of the digital asset market presents both risk and proof of progress. If Vietnam can demonstrate that its controls deter laundering while supporting innovation, it may transform its current challenge into a credibility milestone.

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Related Links

• State Bank of Vietnam – Anti-Money Laundering Department
• FATF – Jurisdictions under Increased Monitoring
• Vietnam Ministry of Justice – Law on Anti-Money Laundering 2022
• State Securities Commission of Vietnam
• Vietnam Blockchain and Digital Assets Association

Other FinCrime Central Articles About Vietnam

• Vietnam Reforms its Beneficial Ownership
• Vietnam Dismantles $80 Million Transnational Money Laundering Network
• Massive US$1.2 Billion Money Laundering Case Uncovered in Vietnam

Source: Tuoi Tre News

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