1. Regulatory Challenges Arising from Novel Capital Inflows in the Integration Era

The establishment of the International Financial Center (IFC) in Vietnam is anticipated to serve as a pivotal catalyst for attracting substantial capital from global financial institutions. However, this opportunity is inherently accompanied by non-traditional security risks. In the context of Vietnam’s extensive international integration, the risk of financial crimes exploiting the liberalization of capital flows to perpetrate cross-border money laundering is escalating. Addressing the urgent imperative for institutional refinement, the Government and the State Bank of Vietnam have promulgated a comprehensive legal framework, comprising Decree No. 329/2025/ND-CP, Resolution No. 05/2025/NQ-CP, and Circular No. 27/2025/TT-NHNN.

This legislative action not only bridges existing legal lacunae but also demonstrates a proactive risk governance approach: shifting from reactive measures to the establishment of stringent technical barriers at the initial point of capital entry.

2. Decree 329/2025/ND-CP: The “Gatekeeping” Function of the Banking System

Decree 329/2025/ND-CP redefines the role of commercial banks operating within the IFC. Transcending their function as mere payment intermediaries, these institutions are legally empowered and designated as the primary line of defense against money laundering activities.

2.1. Scrutiny of Transactional Economic Substance

Banks are under a statutory obligation to require clients to explicitly disclose the specific purpose of transactions. The bank’s responsibility extends beyond formal verification to a profound assessment of the economic substance.

Example: A fund transfer designated for real estate investment must be substantiated by a sale and purchase agreement, construction permits, and documentation evidencing the source of funds. Should the dossier fail to accurately reflect the economic reality, the bank is mandated to request supplementary documentation or decline the transaction.

2.2. Authority to Decline Transactions

The Decree vests banks with the authority to refuse transactions exhibiting suspicious indicators. This constitutes a “filtration mechanism” designed to interdict illicit funds at the inception.

Example: A cross-border transaction with an ambiguous purpose, lacking supporting documentation, or exhibiting signs of asset layering shall be refused.

2.3. Fiduciary Duties and Liability of Senior Management

A critical development is the attribution of personal liability. Managers and executives of banks shall bear direct responsibility before the supervisory authority.

They are obligated to direct the remediation of risk warnings, implement inspection conclusions, and ensure transparent accountability. This provision precludes the “systemic failure” defense and enforces strict personal liability.

3. Circular 27/2025/TT-NHNN: Codification of Technical Barriers

Circular 27/2025/TT-NHNN prescribes specific quantitative metrics, compelling financial institutions to strictly adhere to transaction reporting protocols.

3.1. Stringent Thresholds for Electronic Fund Transfer Reporting

• Domestic transactions: Transactions valued at 500 million VND or more shall be reported.
• International transactions: Transactions valued at 1,000 USD or more shall be reported.

This regulation facilitates rigorous oversight of capital flows entering and exiting Vietnamese territory, a matter of particular sensitivity at the IFC—a hub for high-volume cross-border transactions.

3.2. Oversight of Non-Account Holder and Cash Transactions

Previously, “walk-in” transactions (involving clients without accounts or “dormant” accounts) constituted a significant regulatory vulnerability. Under the new regime, if a non-account holder executes transactions totaling 400 million VND/day or more, the bank is mandated to conduct Know Your Customer (KYC) procedures and update client data.

This regulation encompasses cash transactions via Automated Teller Machines (ATMs) and Cash Deposit Machines (CDMs), aiming to eliminate “structuring” (or smurfing) techniques used to evade detection by bank personnel.

3.3. Internal Compliance Protocols

The statutory deadline for submitting internal Anti-Money Laundering (AML) regulations has been abbreviated from 30 days to 10 days. The risk management framework must be ratified by senior management, rather than at the departmental level. This enhances accountability and corporate responsiveness to legislative amendments.

4. Resolution 05/2025/NQ-CP: Elimination of Anonymity in Digital Asset Transactions

Whereas Decree 329 and Circular 27 focus on fiat currency flows, Resolution 05/2025/NQ-CP directly addresses the “regulatory grey area” of digital assets—perceived as a haven for anonymity exploited by money laundering syndicates.

4.1. Mandatory Identity Verification

Investors engaging in digital asset trading are legally required to open accounts with service providers licensed by the Ministry of Finance. This necessitates that every movement of digital assets be attributed to a verified legal identity, thereby terminating the anonymity associated with digital wallets.

4.2. The Statutory Transitional Period

The legislation establishes a strict transition timeline. Within 06 months from the date the first digital asset service provider is licensed, investors must effectuate the transfer of assets into the official regulatory system. This constitutes a rigid deadline, compelling rapid market adaptation.

4.3. Criminal Liability and Sanctions

Upon the expiration of the aforementioned 6-month period, all trading activities conducted outside of licensed entities shall be deemed illicit and may be subject to criminal prosecution. This represents the most formidable deterrent measure applied to the digital asset “black market” to date.

5. Empirical Context and Regulatory Urgency

According to data from the Anti-Money Laundering Department, the volume of Suspicious Transaction Reports (STRs) is increasing at a rate of approximately 30% per annum.

Specifically, from 2023 to the present, there have been over 5,000 reports related to virtual currencies and digital assets, of which nearly 600 cases have been referred to the Department of Economic Security for investigation.

These statistics indicate that:

• Money laundering typologies are becoming increasingly sophisticated.
• Digital assets have evolved into a prevalent instrument for obfuscating illicit financial flows.
• Vietnam faces the risk of becoming a transit point for illicit funds absent rigorous control mechanisms.

6. Compliance Imperatives and Strategic Recommendations

The new legal framework imposes substantial compliance pressure while simultaneously presenting an opportunity for market standardization.

6.1. Transition Timeline

Reporting entities must adhere to critical milestones: Continue implementing current regulations until December 31, 2025, and complete the overhaul of internal protocols for full implementation effective January 1, 2026.

6.2. Investment in Compliance Technology (RegTech)

Given the requirement for electronic reporting, banks and financial enterprises are compelled to invest heavily in automated compliance infrastructure. Manual processing is rendered obsolete by the requirement to submit reports prior to 4:00 PM on the subsequent working day.

6.3. Advisory for Individual Investors

Investors must be cognizant of legal risks. The era of ambiguity regarding the provenance of digital assets has concluded. Asset transparency and participation in licensed platforms serve as the sole safeguard against legal and criminal liability.

7. Conclusion

The integration of Decree 329/2025/ND-CP, Circular 27/2025/TT-NHNN, and Resolution 05/2025/NQ-CP has established a multi-layered control architecture, spanning from commercial banks to digital asset service providers.

The legislative intent is unequivocal: compliance is no longer discretionary but a prerequisite for survival and sustainable development within the International Financial Center.

Vietnam stands before a significant opportunity to emerge as a regional financial hub; however, market transparency, stability, and reputation can only be sustained through effective mitigation of money laundering risks. Enterprises, banks, and investors must coordinate closely and proactively adapt to new regulations, viewing anti-money laundering as a collective responsibility to construct a robust and secure financial ecosystem.

Legal Compliance Advisory Services

Harley Miller Law Firm specializes in providing legal compliance advisory services for businesses, banks, and investors. With a team of experienced lawyers in finance, banking, and international law, we are committed to delivering comprehensive solutions that help clients fully comply with current legal regulations, minimize risks, and enhance credibility in the market.

Our Services:

• Developing and reviewing compliance procedures: Designing and updating internal systems in line with the latest Decrees, Circulars, and Resolutions.
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• Legal representation: Supporting clients in dealings with regulatory authorities, negotiations, or litigation in case of disputes.
• Monitoring and record-keeping: Assisting in establishing secure systems for document storage, electronic reporting, and data protection.

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