FATF Status

Vietnam is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement  -  23 February 2024

In June 2023, Vietnam made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in November 2021, Vietnam has made progress on some of the MER’s recommended actions by joining the Asset Recovery Interagency Network Asia Pacific (ARIN-AP) and adopting a national action plan on AML/CFT/CPF. Vietnam will work to implement its FATF action plan by: (1) Increasing risk understanding, domestic co-ordination and co-operation to combat ML/TF; (2) Enhancing international co-operation; (3) Implementing effective risk-based supervision for FIs and DNFBPs; (4) Taking action to regulate virtual assets and virtual asset service providers; (5) Addressing technical compliance deficiencies, including with respect to the ML offence, targeted financial sanctions, customer due diligence and suspicious transaction reporting; (6) Conducing outreach activities with the private sector; (7) Establishing a regime that provides competent authorities with adequate, accurate and up-to-date information on beneficial ownership; (8) Ensuring the independence of the FIU and enhancing the quality and quantity of financial intelligence analysis and disseminations; (9) Prioritizing parallel financial investigations and demonstrating an increase in the number of ML investigations and prosecutions undertaken; (10) demonstrating that there is monitoring of FIs and DNFBPs for compliance with PF TFS obligations and that there is co-operation and co-ordination between authorities to prevent PF TFS from being evaded.

US Department of State Money Laundering assessment (INCSR)

Vietnam is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           41

World Governance Indicator – Control of Corruption             46

Corruption continues to be pervasive in Vietnam's business environment. Companies are likely to experience bribery, political interference and facilitation payments in all sectors. The land administration, construction sector, and public administration are especially prone to corruption. The Vietnamese Penal Code and the Law on Anti-Corruption criminalizes public sector corruption, in the form of attempted corruption, facilitation payments, extortion, abuse of office, fraud, money laundering, and active and passive bribery. Punitive measures range from fines to capital punishment, depending on the severity of the corruption case. Enforcement of the anti-corruption framework is lacking. Gifts are criminalized by law, but there are exceptions for special occasions gifts with a value below VND 500,000. Facilitation payments are illegal but common in practice. For further information - GAN Integrity Business Anti-Corruption Portal

Foreign direct investment (FDI) continues to be of vital importance to Vietnam as an economic growth driver. The government has policies in place that are broadly conducive to FDI, particularly for enterprises engaged in export-oriented manufacturing. Factors that attract the interest of foreign investors include political stability, strong economic growth, a young and increasingly urbanized and educated population, competitive labor costs, a growing number of trade agreements, and an affordable, stable power supply.

According to the Ministry of Planning and Investment (MPI), which oversees investment activities, Vietnam’s FDI stock stood at $274 billion at the end of 2022. At the 26th United Nations Climate Change Conference (COP26), Prime Minister Pham Minh Chinh made an ambitious pledge for Vietnam to reach net zero emissions by 2050. In December 2022, Vietnam entered the Just Energy Transition Partnership (JET-P) with a coalition of international partners, including the United States, Japan, United Kingdom, and European Union that will mobilize at least an initial $15.5 billion for Vietnam’s energy transition efforts. In May, the government approved Power Development Plan 8 (PDP-8), Vietnam’s national master plan for the development of the power sector, but it does not describe how to implement this commitment. Implementation plans are being developed – a process likely to take two years.

Vietnam’s recent moves forward on free trade agreements (FTA) make it easier to attract FDI by providing better market access for Vietnamese exports and encouraging investor-friendly reforms. The EU-Vietnam Free Trade Agreement (EVFTA) entered into force August 1, 2020. The UK-Vietnam Free Trade Agreement entered into force May 1, 2021. The Regional Comprehensive Economic Partnership (RCEP) entered into force January 1, 2022, for 10 countries, including Vietnam. These agreements may benefit U.S. companies operating in Vietnam by reducing barriers to inputs from and exports to participating countries, but also make it more challenging for U.S. exports to Vietnam to compete against contenders benefiting from preferential treatment. Vietnam is a founding member and active participant in ongoing Indo-Pacific Economic Framework for Prosperity (IPEF) negotiations involving the United States and 13 regional partners.

In February 2021, the 13th Party Congress of the Communist Party of Vietnam (CPV) approved a 10-year economic strategy that calls for shifting foreign investment to high-tech industries and ensuring such investment meets higher standards relating to environmental protection. At the beginning of 2021, Vietnam’s new Securities Law and Labor Code, which the National Assembly originally approved in 2019, came into force. The new Securities Law formally states the government’s intention to remove foreign ownership limits for investment in most industries. The new Labor Code includes several updated provisions that support greater contract flexibility, grant formal recognition to a greater part of the workforce, and allow workers to join independent workers’ rights organizations, though key implementing decrees remain pending. In June 2020, Vietnam passed a revised Law on Investment and a new Public-Private Partnership Law, both of which are designed to encourage foreign investment in large infrastructure projects, reduce the burden on the government to finance such projects, and increase linkages between foreign investors and the Vietnamese private sector.

Despite having a relatively high level of FDI net inflows as a percentage of GDP compared to regional peers, Vietnam faces some significant challenges with its investment climate. These include widespread corruption, the entrenched position of state-owned enterprises (SOEs) in certain sectors, regulatory uncertainty in key sectors, a weak and opaque legal regime, poor enforcement of intellectual property rights, a shortage of skilled labor, restrictive labor practices, and slow government decision-making processes. With high reliance on inputs from the People’s Republic of China, Vietnamese manufacturing is vulnerable to forced labor risks in supply chains, though the government and industry are actively working to address these concerns. Although Russia’s war of aggression against Ukraine has had minimal impacts on Vietnam’s economy to date, fertilizer shortages caused by extended hostilities may pose food security challenges.

Country Links

State Bank of Vietnam​