One of the most effective channels for laundering money in Vietnam is through the real estate and securities markets, one official said.
Nguyen Duc Kien, Vice Chairman of the National Assembly’s Committee for Economics
Nguyen Duc Kien, Vice Chairman of the National Assembly’s Committee for Economics, made the statement during an interview on the issue with DTiNews outside the NA meeting on May 22.
How serious a problem is money laundering in Vietnam?
It is a growing problem, and one that is inevitable. But it hasn't reached the levels that can be seen in some other countries. One of the most obvious ways of money laundering in Vietnam is conducted through real estate and securities transactions.
How exactly do money launderers use these markets?
They put their money into shares of companies. After privatisation shareholders often collect dividends. They can then claim this as legal income.
And as for the real estate market?
Money launderers use real estate as a diversion instead of a valid means of investment. The key is to identify the origins of capital as well as the purposes of its use. In some cases bribery is involved. Many launderers are willing to take losses of up to 20%-30% in such transactions.
One indicator that an individual or organisation is involved in this kind of activity is to check if they have reported losses while continuing to receive money from overseas sources for further investment in real estate. Many of these companies then file for bankruptcy.
What role does the banking industry play?
As the world economy integrates money laundering is an inevitable trend.
It seems that we have yet to bust any case of money laundering. Does it really mean the lack of an effective legal framework on this issue?
Actually, we have successfully prosecuted some cases. In one in particular, a person laundered money by sending bribes to their children for investment in the country. In another case, a foreign travel firm operating in hotel management in Vietnam, maintained extremely low prices, even though there had been no investment money coming in from overseas for 5 years. This company had been trying to move their capital abroad.
Even though a number of suspicious cases have been found, our hands were tied because they had to be prosecuted in accordance with the Criminal Law. At the time the Law on Money Laundering Prevention and Control is not place. Another problem we still grapple with is that there hasn't been enough data collected on the issue.
According to Kien, the NA is expected to pass the Law on Money Laundering Prevention and Control this session. If adopted, the law will take effect beginning on January 1, 2013.
