ON THE ISSUE OF MONEY LAUNDERING CRIMES IN VIETNAMESE LAW

ABSTRACT

The article presents some theories on money laundering and the characteristics of this crime. The current situation of the fight against money laundering in the context of globalization and international integration, common difficulties and limitations, the causes of those limitations, difficulties and obstacles. From there, propose solutions to improve legal regulations related to money laundering and other practical solutions.

АННОТАЦИЯ

В статье представлены некоторые теории об отмывании денег и характеристиках этого преступления. Текущая ситуация в борьбе с отмыванием денег в контексте глобализации и международной интеграции, общие трудности и ограничения, причины этих ограничений, трудностей и препятствий. Исходя из этого, предложены решения по улучшению правовых норм, связанных с отмыванием денег, и другие практические решения.

Keywords: money laundering; prevention and combat of money laundering; current situation; source crime.

Ключевые слова: отмывание денег; предотвращение и борьба с отмыванием денег; текущая ситуация; источник преступления.

In an effort to combat money laundering, Vietnam has built a legal system with many specific regulations, such as the Penal Code (CPC) 2015, the Law on Anti-Money Laundering 2022, and other relevant regulations. These regulations have been adjusted to comply with international standards. Vietnam is also a member of many international organizations related to anti-money laundering.

The International Criminal Police Organization (INTERPOL) also briefly defines: “money laundering is any act or attempt to conceal or disguise the identity of illegally obtained assets so that they appear to originate from legitimate sources”. In Vietnam, the legal framework for anti-money laundering has been built from the current Penal Code, which stipulates the crime of money laundering in Article 324, defining acts related to the legalization of assets obtained from criminal activities, and providing strict penalties for these acts. In addition, guiding decrees and circulars such as Decree No. 19/2023/ND-CP of the Government detailing a number of articles of the Law on Anti-Money Laundering also provide detailed regulations on anti-money laundering, including guidance on reporting and monitoring.

First, money laundering is a type of crime that always accompanies previous criminal activities. Predicate crimes are understood as the first criminal acts that generate illegal assets, leading to subsequent money laundering acts. According to the recommendations of the Financial Action Task Force on Money Laundering (FATF), there are 21 types of crimes identified as sources of money laundering, including crimes such as terrorism, human trafficking, corruption, illegal trading of drugs and other psychotropic substances. Money laundering methods often include the purchase of high-end real estate or valuable assets such as diamonds, branded watches, etc., thereby making it difficult for criminals to be detected when transferring these assets many times through many different locations. In addition, currently in Vietnam, some modern methods such as virtual currency are also becoming new money laundering channels due to loose state management. Cryptocurrencies such as Bitcoin, or transactions through "money mules" are all methods that make it difficult to trace source assets. The necessity of money laundering for source crimes is demonstrated by the need to legalize illegal money and assets to avoid being pursued by authorities. In short, predicate crime and money laundering are closely linked, where illegal assets are legalized through various forms.

Second, money laundering is a form of economic crime, mainly expressed in two aspects: it takes place through transactions related to money and assets, and money laundering is also a separate service, existing in an independent market with clear supply and demand, bringing criminals large profits.

In fact, money laundering crimes are not only carried out through financial transactions but can also be carried out through a number of other tricks such as: they can use shell companies or front companies to legalize money, or transfer cash across borders to countries with looser anti-money laundering mechanisms. In addition, money laundering can also be carried out through commercial transactions, or in casino or entertainment activities with prizes. However, the reality is that hundreds of billions of dollars from criminal activities are still successfully laundered through the financial system every year. The nature of the services such as management, control and custody of money or assets that the financial industry provides, makes this sector easy to exploit for money laundering purposes.

On the second aspect, as money laundering has spread globally, it has become a true reflection of the world's underground economy. According to statistics from the WTO, WB, and UNODC, the value of global money laundering transactions is estimated to account for about 2-5% of global GDP. Moreover, less than 1% of illegal financial flows in the world are controlled and detected by authorities, while more than 80% of illegal financial flows from developing countries are successfully carried out through commercial transactions (Trade-Based Money Laundering). Thus, since its inception, money laundering has laid the foundations for an economy that threatens to destroy the global financial system.

Third, money laundering is a transnational crime that can occur in any country, especially in countries with complex financial systems. Complex international financial transactions are often used to commit money laundering and terrorist financing, resulting in different stages of the process occurring in different countries. In contrast, money laundering within a country is often more difficult; cross-border money laundering is easier, helping to conceal the illegal origin of money and assets. For example, one common method of money laundering is through the international trade system, where underground services transfer illicit funds abroad at a fee based on the total amount transferred, often by falsifying transactions for goods and services. Another form is foreign investment, in which money is brought into countries to buy real estate, take over bankrupt businesses, or establish foreign-invested enterprises, from which profits are transferred to the investors' desired addresses with a legitimate appearance. The fight against money laundering cannot be achieved without international cooperation. Countries around the world have taken many bilateral and multilateral cooperation actions to deal with this type of crime. This is a major challenge, especially for developing countries. In response to this situation, many international treaties have been adopted, including the United Nations conventions on the prevention and control of narcotic drugs, which have strict regulations on preventing money laundering.

Practice shows that the determination of crimes against individuals and legal entities related to money laundering still has certain limitations and difficulties, such as: 1) in determining crimes. In related cases, competent authorities such as the Investigation Agency, the Procuracy and the Court often have different views on determining crimes. Crimes that are often confused with money laundering under Article 324 of the 2015 Penal Code include the Crime of Fraudulent Appropriation of Property and the Crime of Receiving or Consuming Property Obtained by Another Person's Crime (Article 323 of the 2015 Penal Code); 2) in determining the aggravating framework of money laundering. Determining the framework of penalties plays an extremely important role, because it is the basis for assessing the dangerous nature of the crime. In particular, determining the correct framework of penalties for subjects committing money laundering is very necessary. This includes correctly identifying the points, provisions of the crime and the penalty framework, in order to correctly assess the nature of the crime, thereby ensuring objectivity, fairness, along with the deterrent and educational nature of criminal sanctions against money laundering. Although the 2015 Penal Code has been amended and supplemented more positively than the 1999 Penal Code, practical application still shows that the determination of penalty frameworks for violations of the law, especially money laundering, still faces many difficulties and problems that need to be resolved. Article 324 on money laundering in the 2015 Penal Code does not clearly stipulate the acts of transferring or converting assets of illegal origin, as well as the corresponding penalty framework. This leads to some subjects taking advantage of these loopholes to commit money laundering, causing difficulties in determining the origin of assets; 3) in determining the subject of crime. The 2015 Penal Code stipulates that the subjects of the crime of Money Laundering are individuals and commercial legal entities, but does not mention non-commercial legal entities. However, in practice, many criminals take advantage of non-commercial legal entities to commit crimes. According to Article 76 of the Civil Code, non-commercial legal entities are organizations whose main goal is not to seek profits and if there are profits, they are not distributed to members. Non-commercial legal entities include: State agencies, armed forces units, socio-political organizations, socio-political-professional organizations, social organizations, social funds, charity funds, social enterprises, and other non-commercial organizations. Although before the 2015 Penal Code was issued, a number of Decrees such as Decree No. 12/2012/ND-CP (Article 15), Decree No. 30/2012/ND-CP (Article 37-38) and Decree No. 45/2010/ND-CP (Article 29) had stipulated and applied sanctions to domestic and international non-profit organizations if they committed money laundering, there were still no specific legal regulations to regulate other non-commercial legal entities such as charity funds, religious organizations, social funds, etc.; 4) the regulations on the level of punishment were not commensurate with the crime. The current fine for money laundering is still not high enough to create deterrence. According to Clause 1, Article 324, individuals committing money laundering can be sentenced to a maximum of 10 to 15 years in prison, while commercial legal entities can be fined a maximum of 1 billion to 5 billion VND. Although these penalties are considered quite severe, they are still not strong enough to prevent violations, because the amount of money laundered in the cases is often very large, making the subjects willing to accept risks, including imprisonment, to carry out money laundering.

The above limitations also stem from many causes such as the incompleteness of the Vietnamese legal system on money laundering. The 2015 Criminal Procedure Code has added special investigative measures, but they are only applied after the case is prosecuted, leading to low efficiency. Criminals often disperse assets immediately after the violation, making it difficult to detect and collect evidence. Therefore, early application of investigative measures is necessary to improve the effectiveness of the fight against money laundering and related source crimes. In addition, there are a number of causes such as: The coordination relationship between competent authorities conducting proceedings in the process of detecting and handling monetary crimes; limitations in capacity, professional qualifications, law application skills and low evidence assessment of the agencies conducting proceedings in handling money laundering crimes. The quality of the prosecution team in money laundering cases is one of the main factors causing problems in the application of the provisions of the Penal Code on this crime. Due to the complex nature of money laundering, originating from many different sources of crime, the prosecution team including investigators, investigating officers, prosecutors, and the trial panel not only need to have a firm grasp of procedural law but also need to have financial and economic knowledge and effective case handling skills.

To improve the effectiveness of the fight against money laundering, the author believes that in the coming time, the following measures should be taken:

First, perfect the legal regulations related to money laundering. Regarding the determination of the crime: it is difficult to distinguish between the means of consuming assets obtained by others from the act of money laundering as analyzed above; The crime of money laundering and the crime of harboring or consuming assets obtained by others (Article 323 of the 2015 Penal Code) have many similarities, leading to confusion in law enforcement by competent authorities. The article recommends that sub-law documents be developed to explain and distinguish more clearly the signs of these crimes. These documents should specifically define the crime, indicating the criminal composition of the crime of money laundering, the crime of harboring and consuming assets obtained by others, as well as the crime of concealing crimes.

Second, build and promote a cooperative relationship in the fight against money laundering. Coordination plays an important role in solving money laundering cases, the relationship between prosecution agencies, the relationship with other organizations and prosecution agencies. ...

Third, promote the role of banks and financial agencies. Financial agencies play an extremely important role in the fight against money laundering. They are not only units capable of detecting and reporting suspicious transactions but also forces that directly coordinate with authorities in the process of investigating and handling crimes.

These steps ensure that monitoring and investigating suspicious transactions are carried out effectively, while strictly complying with regulations on information security in the process of preventing and combating money laundering.

References:

1. National Assembly (2015), Criminal Procedure Code 2015, amended and supplemented in 2021, Hanoi.
2. National Assembly (2015), Penal Code 2015, amended and supplemented in 2017, Hanoi;
3. Nguyen Duc Viet, Crime of money laundering - Comparing the provisions of the Vietnamese Penal Code with international standards and provisions of the Criminal Law of some other countries, Master's thesis in Law, Hanoi Law University, 2014;
4. Nguyen Viet Tang (2019), Internalizing the provisions of the Convention on the Prevention and Combat of Transnational Organized Crime on money laundering, Journal of Law No. 1/2019;
5. Vu Thi Phuong Thao, Existing issues in Vietnamese legal regulations on the prevention and combat of money laundering and some recommendations and proposals. Journal of Economics and Forecasting - 2021 - no.02 - pp.7-10 - ISSN.0866-7120