Essential Watchlists For Compliance With Anti-Money Laundering Regulations In Vietnam

Under anti-money laundering (AML) regulations, reporting entities (e.g., credit institutions) are required to be aware of several key watchlists, maintained by relevant Vietnamese authorities, to ensure compliance with their AML obligations. This blog will introduce those watchlists and discuss specific requirements related to them.

Essential watchlists under AML regulations

Under AML regulations, the Vietnamese Government maintains the following watchlists:

(1)             A Blacklist (danh sách đen in Vietnamese): including (a) list of organizations and individuals involved in terrorism and terrorism financing compiled by the Ministry of Public Security (MPS), and (b) a list of organizations and individuals designated as being involved in the proliferation and financing of the proliferation of weapons of mass destruction, compiled by the Ministry of National Defense (MND);

(2)             A warning list/Grey list (danh sách cảnh báo in Vietnamese): A list of organizations and individuals compiled by the State Bank of Vietnam (SBV) to warn about those with a high risk of money laundering; and

(3)             A list of Foreign politically exposed person (PEP List) (danh sách cá nhân nước ngoài có ảnh hưởng chính trị in Vietnamese): A list of foreigners who hold a senior position in foreign agencies, organizations, and international organizations, notified by the SBV.

There are no specific guidelines on how to access these watchlists or the procedure for screening data against them. However, except for the Grey List, which has not yet been published by the SBV, the Blacklist ((1)(a) and (1)(b)) and PEP List can be found via the national portals of the MPS, MND, and SBV (see embedded links).

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Written by Nguyen Quang Vu On In

Issues Relating To Private Bonds Marked As “Cancelled” On Hanoi Stock Exchange Website

Since 2019, Hanoi Stock Exchange (HNX) has operated a website to publish information on private corporate bonds (Private Bond Information Website). Currently, on the Private Bond Information Website, several outstanding private bonds issued under Decree 153/2020, which have reached maturity but have not been repaid by the relevant issuers, are marked as “cancelled” (bị hủy) by HNX (the Cancelled Bonds). This classification by HNX raises several issues as discussed below.

Legal status of the Cancelled Bonds

One may argue that HNX’s announcement of the Cancelled Bonds implies that the Cancelled Bonds are invalid and that bondholders can no longer claim outstanding payment from the issuer. However, Vietnamese law also contains several provisions suggesting that the Cancelled Bonds remain valid and the issuer must fulfill outstanding payments to the bondholders:

  • Under Decree 153/2020, the bondholder is entitled to “be paid on time by the issuer the full amount of principal and interest when they become due […] under the terms and conditions of the bond and the agreements with the issuer”. This suggests that even when the Cancelled Bonds have matured, the issuer must still fully pay the outstanding amount to the bondholders under the Bond terms & conditions (Bond T&C) and bond subscription agreement;

  • Under Decree 153/2020, as a condition for the new issuance of private bonds, the issuer must “have fully paid the principal and interest on the issued bonds (if any) or having fully paid out debts on maturity within three (3) years immediately preceding the issue tranche […]”. This provision suggests that the issuer must pay in full all of the debts, including outstanding bonds that have matured (e.g., Cancelled Bonds), to be eligible to issue new private bonds; and

  • Under Decree 65/2022, if the Cancelled Bonds have matured but the issuer has not paid the principal and interest of the Cancelled Bonds in full, the issuer is only allowed to negotiate with bondholders regarding changes of plan to pay the principal and interest of the Cancelled Bonds. If bondholders disagree with the proposed plan by the issuer, the issuer must fully comply with the Bond T&C and bond subscription agreement. At law, there is no provision allowing the issuer to terminate the validity of the Cancelled Bonds purely because they have matured.

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Written by Nguyen Quang Vu On In , ,

Authorisation In Opening And Using Bank Account Of Representative Office

While it is common in practice for the Chief Representative of a Representative Office (RO) to act on behalf of the RO in opening and using the RO's bank account, there are instances where the parent company may wish to authorize another person (Authorized Person) to handle these matters. The key question is the validity of such authorization and whether the Chief Representative's acknowledgment of such Power of Attorney (POA) should be sought.

Short answer: The authorization for the Authorized Person should originate from the RO, not the parent company. If the authorization is granted by the parent company, it should be recognized by the Chief Representative as the "legal representative" of the RO. This acknowledgment would then serve as a concurrent authorization by the RO.

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Written by Nguyen Quang Vu On In