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Cablegate: Vietnam's Anti-Money Laundering Law

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HANOI 003383

SIPDIS

STATE FOR INL AND EAP/MLS AND EB/TPP/BTA/ANA GOODMAN AND
WICKMAN AND EB/ESC/TFS
STATE PASS USTR ELENA BRYAN AND GREG HICKS
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO
TREASURY FOR FINCEN AND OASIA

SENSITIVE

E.O. 12958: N/A
TAGS: EFIN KCRM KTFN PTER SNAR VM ECON PREL PINR CTERR FINREF BTA
SUBJECT: VIETNAM'S ANTI-MONEY LAUNDERING LAW

SENSITIVE - DO NOT POST ON THE INTERNET

REF: A) HANOI 987 B) HANOI 988 C) HANOI 1372 D)HANOI 3358

1. (SBU) Summary: Throughout this year, formal meetings and
informal exchanges with officials from the State Bank of
Vietnam (SBV), the State Securities Commission, the World
Bank, the Australian Transaction Reports and Analysis Center
(AUSTRAC), and other international agencies in Hanoi have
made clear the GVN is not interested in USG analysis of its
Anti-Money Laundering (AML) Decree, which was issued on June
8, 2005 and went into effect on August 1, 2005. Despite the
Bilateral Trade Agreement's provisions and a professed
interest in obtaining a banking license to allow a
Vietnamese bank to set up shop in the United States, the GVN
has steadfastly refused to request formal USG review of the
Decree. End Summary.

2. (U) Formally known as "Decree 74/2005/ND-CP on Prevention
and Combat of Money Laundering," the AML Decree covers acts
committed by individuals or organizations to legitimize
money or property acquired from criminal activities, and
covers the activities of banks and non-banking financial
institutions. The SBV and the Ministry of Public Security
(MPS) take primary responsibility for both preventing and
combating money laundering. The Decree also provides for
the establishment of an Anti-Money Laundering Information
Center under the SBV. This is the most recent form of AML
legislation that the Government of Vietnam (GVN) has issued.
It does not cover counterterrorist finance. The GVN has no
counterterrorist financing legislation in place, but plans
to draft it "at some point in the future," according to Mr.
Nguyen Dang Hong, the SBV Deputy Chief Inspector.

3. (SBU) Several conversations with officials from the SBV,
the State Securities Commission, the World Bank, the
Australian Transaction Reports and Analysis Center
(AUSTRAC), and other international agencies in Hanoi have
confirmed that the SBV consulted with only one donor, the
Asian Development Bank (ADB), when drafting the new AML
Decree. ADB paid for a consultant, an Australian named John
Broome who previously worked for AUSTRAC, the Australian
equivalent of FINCEN, to advise the SBV in its AML efforts.
Broome is currently an employee of the National Crime
Authority of Australia.

4. (SBU) Despite our many interventions (reftels), the SBV
did not heed our advice to also consult with the USG in
drafting the AML decree as obligated under our Bilateral
Trade Agreement (BTA). Neither did they respond to the
point that banking sector liberalization, including the
passage of AML legislation that meets international
standards, is an important part of integrating with the
global economy. The SBV explained their refusal by noting
that sharing the draft was contrary to usual practice in
Vietnam and that they lacked the authority to do so.

5. (SBU) After the decree went into effect, the SBV did
share with FINCEN, and through them the U.S. Treasury
Department, a document which, by U.S. standards, is an
unofficial English translation. The SBV considers this
their "official" translation and says they have no other to
provide.

6. (SBU) When Econoff asked SBV Deputy Chief Inspector Hong
if the United States could be invited to comment on the
Decree's implementing regulations, in draft form, to ensure
they are in compliance with the BTA, Hong replied that the
GVN "does not need anymore reviews or advice on the AML
Decree."

7. (SBU) Despite these exchanges and the fact that the SBV
is aware that before any Vietnamese bank can be established
in the United States, Vietnam's AML regulations must be
reviewed by the Justice and Treasury Departments, the SBV
has still not asked the USG to begin this review process.
The GVN has, however, raised its interest in having
Vietcombank establish a presence in the United States in
several high-level meetings between U.S. and Vietnamese
officials.

8. (SBU) While the quality of its AML Decree is still
unclear, the weakness of Vietnam's AML law enforcement is
very apparent. In addition to Vietnam's underdeveloped
financial sector, its large black market economy, weak
customs controls and substantial remittances make it an easy
place to launder money. Ref D describes the GVN's
enforcement problems and the efforts of Post's Drug
Enforcement Agency (DEA) in Hanoi to assist them.

9. (SBU) Comment: We are not alone in our frustrating
experiences with the SBV. AUSTRAC reports that the SBV is
as uncooperative with them as they are with us. Vietnam,
said an AUSTRAC official, "is behind Burma in terms of its
engagement on AML." AUSTRAC runs a technical assistance
program on AML issues for ASEAN member countries. Recent
AUSTRAC meetings with AML officers at the SBV have produced
few results and little interest in speeding up Vietnam's AML
efforts. End comment.

MARINE

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