The Financial Action Task Force (FATF) has disclosed that Vietnam has been added to its watchlist of countries on the grey list, primarily due to concerns regarding weapons proliferation.
Despite acknowledging Vietnam's commitment to preventing the financing of weapons of mass destruction, the FATF decided to downgrade the country's financial status. Vietnam's close relationship with North Korea, a country actively pursuing a nuclear weapons program, has raised international concerns. While Hanoi implemented anti-money laundering and counter-terrorism financing rules in March, the FATF deemed the efforts insufficient to avoid grey-listing.
Vietnam now joins a group of two dozen countries, including Panama, the Cayman Islands, the United Arab Emirates, and Syria, subjected to increased scrutiny. Myanmar, Iran, and North Korea are the only countries on the FATF's "black list." The FATF expects Vietnam to demonstrate effective monitoring of banks, accountants, and lawyers to prevent the funding of arms proliferation, specifically nuclear, chemical, or biological weapons. Additionally, Vietnam must demonstrate its ability to prevent the evasion of sanctions against individuals or entities involved in weapons proliferation.
Vietnam has committed to implementing further reforms to address its deficiencies. It aims to ensure the independence of authorities responsible for investigating financial crime, regulate virtual assets, enhance international cooperation against money laundering, and take steps to address its shortcomings. The FATF's decision does not entail specific recommendations for enhanced controls, but it typically leads foreign financial institutions to closely monitor their dealings with grey-listed jurisdictions, potentially resulting in obstacles to financial flows.
The Ministry of Foreign Affairs in Vietnam has not provided an immediate comment on the matter. Furthermore, during a summit with South Korea, Vietnam expressed its willingness to participate in the denuclearization of the Korean peninsula.
By fLEXI tEAM