(Luận văn) money laundering awareness and preventing at commercial banking system in ho chi minh city

MINISTRY OF EDUCATION AND TRAINING t to UNIVERSITY OF ECONOMICS HO CHI MINH CITY ng hi ep w n lo ad ju y th yi pl CHUNG PHỐI DIỆU n ua al n va ll fu MONEY LAUNDERING – AWARENESS AND m oi PREVENTING AT COMMERCIAL BANKING nh at SYSTEM IN HO CHI MINH CITY z z k jm ht vb MASTER THESIS om l.c gm an Lu n va Faculty of Banking Ho Chi Minh City – 2011 ey t re 2011 MINISTRY OF EDUCATION AND TRAINING t to UNIVERSITY OF ECONOMICS HO CHI MINH CITY ng hi ep w n lo ad ju y th yi pl n ua al CHUNG PHỐI DIỆU va n MONEY LAUNDERING – AWARENESS AND fu ll PREVENTING AT COMMERCIAL BANKING oi m at nh SYSTEM IN HO CHI MINH CITY z z MAJOR: BANKING AND FINANCE k jm ht vb MAJOR CODE: 60.31.12 an Lu n va ey t re Faculty of Banking Ho Chi Minh City om HỒ VIẾT TIẾN Ph.D l.c SUPERVISOR gm MASTER THESIS 2011 CERTIFICATE t to ng hi ep I assure that the contents and figures in this research are from my study and w performance and have been properly quoting n lo ad y th ju The writer yi pl n ua al va n Chung Phoi Dieu ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re TABLE OF CONTENT t to ng hi ep ABSTRACT ACKNOWLEDGE w ABBREVIATION n lo LIST OF TABLES ad y th Chapter Introduction to the study Rationale of the study: 1.2 Statement of the problem: 1.3 Research questions: .2 1.4 Research objectives: 1.5 Scope and limitation of the study: ju 1.1 yi pl n ua al n va Scope: 1.5.2 Limitation: ll fu 1.5.1 oi m Methodology of the study: 1.7 Structure of the study: at nh 1.6 z z Chapter Overview of Money laundering (ML) and Anti Money laundering vb jm 2.1 ht (AML) Basic information about ML: k Definition of ML: 2.1.2 The cycle of ML .8 2.1.3 The impact of ML and the importance of AML: 10 2.1.4 Examples of suspicious transactions: 12 om l.c an Lu 2.2 gm 2.1.1 The worldwide experience on enforcement of AML: 13 The AML enforcement in some countries: 19 3.1 Research design: 23 ey Chapter Research Methodology 23 t re 2.2.2 n Some typical organizations set up and promote standards on AML: 13 va 2.2.1 3.2 Data sources and collection 25 t to ng 3.2.1 The secondary data: 25 3.2.2 The primary data: 26 hi ep 3.3 Data analysis and presentation: 29 Chapter The current awareness and preventing on ML at commercial banks in n 33 4.1 Overview of ML and AML in Vietnam banking system: 33 w HCMC lo ad Overview of legal framework of ML and AML on Vietnam banking y th 4.1.1 ju system: .33 yi Overview of commercial banking system in HCMC: 37 4.1.3 ML & AML in Vietnam banking system in general: .39 pl 4.1.2 ua al The necessary of AML in Vietnam: 41 4.3 The achievement of AML in banking sector: 43 n 4.2 n va Legal system: 43 4.3.2 Government management and monitoring of ML and AML: .43 4.3.3 Methods of AML: 43 4.3.4 AML international cooperation: 44 ll fu 4.3.1 oi m at nh z The main constraints of ML and AML in Vietnam banking sector: 44 z 4.4 vb Largely cash-based economy: 44 4.4.2 Deficiency of ML and AML law and regulations: 45 4.4.3 ML and AML - new concept to Vietnam: 45 4.4.4 The competition between banks: 46 4.4.5 The inconsistence implementation of ML and AML procedures between k jm ht 4.4.1 om l.c gm 4.4.6 Lack of the on site inspection undertaken to date by financial an Lu banks: .47 HCMC: 49 ey The evaluation of awareness and preventing ML at commercial banks in t re 4.5 Lack of the information exchanging with international departments: 49 n 4.4.7 va supervisors: 48 t to ng 4.5.1 Hypothesis testing results: 49 4.5.2 The AML policy and AML department in each sector: 54 4.5.3 The current training in each sector: .55 hi ep Chapter The implications for the banking systems on ML & AML 58 5.1 Macro implications: 58 Popularizing and promoting the knowledge of ML and AML to the n Improving the legal framework on ML and AML in Vietnam: .58 lo w 5.1.1 ad 5.1.2 Establishing the closely and prudently monitoring: 60 ju 5.1.3 y th public: .59 yi Enhancing international relationship to corporate to international AML: 62 ua al Micro implications: 62 n 5.2 pl 5.1.4 va Learning and sharing experience between commercial banks lead by SBV: 62 5.2.2 Establishing and strengthening the missions of AML department: 63 5.2.3 Popularizing and enforcing the AML policies and procedures in each bank: 63 5.2.4 Conducting on-going training to staffs: .68 n 5.2.1 ll fu oi m at nh z z vb jm ht CONCLUSION 70 REFERENCE 71 k om l.c gm APPENDIX an Lu n va ey t re ABSTRACT t to WÕX ng hi ep Nowadays, people in the world gradually recognize that there is serious risks w n exist when the criminal activity that involves crime money is transferred or lo ad “laundered” successfully to become the legitimate fund It could bring to large ju y th threat to the economy as such huge “legitimate” fund which in turn could control yi again the economy Especially, banking system may be one of the place for these pl money laundering activities to be happened easily incase there are loose of al ua controlling and vigilance for this risk The need for enhancing the anti money n laundering regime and made the international financial systems transparency and va n integrity is more important than ever to ensure and limit the public funds mobilized fu ll will not be the laundered or criminal funds or the banks will not be used for money oi m laundering nh at As a part in the global economy integration and global financial systems, z z Vietnam is also under the trend to build the fence to prevent for the money vb ht laundering We are here to assess for the current situation of the money laundering k jm and anti money laundering regime in Vietnam commercial banking sector in order gm to find out for any implications to improve the current regime to be as strong as we l.c could Of course, the effective way is to give rise to banks and personal om responsibility To detect, prevent ML and protect the financial community, every an Lu financial institution and every employee in the financial sector has a role to play n va ey t re ACKNOWLEDGE t to WÕX ng hi ep Firstly, I would like to express my deep and sincere appreciation to my w n research Supervisor, Dr Ho Viet Tien for his valuable guidance and comments as lo ad well as his experience sharing and encouragements throughout my research course ju y th I would like to thank to the banking experts from commercial banks in Ho Chi Minh yi City who are enthusiasm and helpful to share their knowledgeable opinions and pl experience Moreover, the gratitude is also addressed to all of the banking staffs, al ua banking friends and classmates who fervently participated in the survey Last but n not least, my special appreciation is extended to all instructors at Faculty of va n Banking and Postgraduate Faculty, University of Economics Ho Chi Minh City for fu ll their precious coaching and supporting during my study oi m at complete this research nh Once again, thanks for all my beloveds for your ceaseless support to z z k jm ht vb om l.c gm an Lu n va ey t re ABBREVIATION t to ng hi ep Anti – Money Laundering AMLIC Anti-Money Laundering Information Center APG Asia Pacific Group AML w n Customer Due Diligence lo CDD ad CFATF ju y th EAG Caribbean Financial Action Task Force Eurasian Group on Combating Money Laundering and yi Financing of Terrorism pl Eastern and South African Anti Money Laundering Group al ESAAMLG Financial Crimes Enforcement Network FIUs Financial Intelligent Units FSRBS FATF-style regional bodies GAFISUD Financial Action Task Force on Money Laundering in South n ua FinCEN n va ll fu nh Inter-Governmental Action Group against Money Laundering at GIABA oi m America z z in West Africa Ho Chi Minh City KYC Know Your Customer MENAFATF Middle East and North Africa Financial Action Task Force ML Money laundering ODCCP Office for Drug Control and Crime Prevention PEPs Politically Exposed Persons SBV State bank of Viet Nam UN United Nations UNODC United Nations Office on Drugs and Crime k jm ht vb HCMC om l.c gm an Lu n va ey t re t to LIST OF TABLES ng Table 3-1 – Formula of measurement 31 hi ep Table 4-1 – Network of commercial banks in HCMC 38 Table 4-2 – The suspicious transactions report 41 w n Table 4-3 – The statistical data of question 51 lo ad Table 4-4 – Frequency thinking of ML and AML of staffs 53 ju y th Table 4-5 – AML policy and department in each sector 54 yi Table 4-6 – The sources of ML and AML knowledge 55 pl Table 4-7 – Actions taken by staffs 56 n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re