Document on anti-money laundering causes worries to securities investors

The Circular No 148 stipulating the measures to prevent and fight against money laundering, which was unexpectedly issued in late September has raised the opposition from securities investors, who believe that the legal document would badly affect the securities market. However, they have been told that there is nothing to worry about.

In fact, Vietnamese people first heard about the concept “money laundering” 20 years ago, when they saw a foreign film about mafia. The issue was mentioned in the 1997 Credit Institution Law which stipulates the responsibility of credit institutions over the sums of money will illegal origins. However, even then, the term “money laundering” was not used.

On June 7, 2005, the Government promulgated a decree on preventing and fighting against money laundering applied in the banking sector.

In early October 2008, the first inter-national money laundering case in Vietnam was discovered. Two individuals from Africa stole accounts in a foreign country and then withdrew money in Vietnam.

Prior to that, in 2006, the World Bank warned that Vietnam was now the target of money laundering activities because the country uses cash in making payment, while the supervision system was still not developed.

However, to date, the concept is still unfamiliar to the majority of people, who think that the money laundering only occurs in other countries, not in Vietnam

That explains why many securities investors feel nervous because from now, their transactions will be put under the supervision from the management agencies.

Under the new regulation, it is necessary to be extra cautious with the transactions involving large sums of money. This is the case when one individual makes one or many transactions of purchasing or selling securities which have the total value of 200 million dong and more a day, and when institutions make one or many transactions of purchasing or selling securities which have the total value of 500 million dong and more.

Securities investors believe that the regulation will be a nuisance tothem, because the number of investors making transactions with the total value of more than 200 million dong accounts for a big proportion. Many investors have revealed that in order to deal with the new regulation, they try to make transactions with the total value of 199 million dong only. Other investors say they try to make transactions with different accounts which bear different names.

Meanwhile, some securities companies said that some “vague” concepts have confused them as they tried to follow the new regulation. They also complained that with the new regulations, they will have more works to do, because many transactions will be listed as items for supervision.

Policy makers tried to reassure securities investors, explaining that since Vietnam has joined the WTO, it must join the fight against money laundering in the world. The new regulation comes in line with the laws in other fields. For example, in entry and exit, one person can bring with himself no more than $7000. If he carries more than $7000, he must get the certificate about the origin of the money from banks, and declare the sum of money at customs agencies. In developed countries, people have to prove the legal origin of money they put into banks.

Thoi bao Kinh te Saigon reporters have conducted a mini survey on securities companies and found out that in normal conditions, 50-60 percent of securities investors make transactions with the values above the 200 million dong level. Especially, a qualified broker now can manage the turnover of 700 billion dong a month of eight investors (4.5 billion dong per person per trading session). This makes clear that 200 million dong is really a low threshold.

When asked if securities companies will have more work to do when they follow the regulation, To Hai, General Director of Ban Viet Securities Company said all the tasks have been computerized, and the current information technology level is sufficient for that.- Thoi bao Kinh te Saigon

Tags: Circular No 148, vietnam stock, Vietnam stock market, Vietnam stock news