Confiscation of proceeds of crime in Vietnam: improving the legal framework
| Date | 26 February 2021 |
| DOI | https://doi.org/10.1108/JMLC-11-2020-0123 |
| Pages | 213-231 |
| Published date | 26 February 2021 |
| Author | Thu Thi Hoai Tran,Louis De Koker |
Confiscation of proceeds of crime
in Vietnam: improving the legal
framework
Thu Thi Hoai Tran
Senior Analyst, Anti-Money Laundering Department, State Bank of Vietnam,
Hanoi, Vietnam, and
Louis De Koker
La Trobe Law School, La Trobe University, Melbourne, Australia
Abstract
Purpose –The purpose of this paper is to analyze the Vietnamese laws and practices concerning the
confiscation of proceeds of crime, especially in view of Vietnam’s obligations to meet the international
standards on money launderingand terrorist financing, set by the Financial Action Task Force and relevant
international conventionsthat Vietnam ratified. To limit the scope of this paper, the analysis focuses on the
confiscation of proceeds of domestic crimes that do not require international legal assistance. This paper
concludeswith recommendations for improving the legal framework on criminalasset recovery in Vietnam.
Design/methodology/approach –This is a doctrinal study that considers the applicable legal
framework. This study is supported by brief case studies of major cases involving the confiscation of
proceedsof crime.
Findings –Vietnam has a functioning asset confiscation regime but gaps in the law, lack of financial
investigation expertiseand lack of focused investigative attention on asset preservation and confiscation are
hampering its effectiveness. The key gaps can easily be closed with appropriate amendments to the law.
These reforms should be combined with a dedicated skills development program to produce sufficient
number of financialinvestigation experts and criminal asset management experts to supportthe regime. The
training should extend to judicial officers to ensure anappropriate understanding of the asset confiscation
law. Reforms such as these should followon a comprehensive review of Vietnam’s law and practices relating
to the confiscation and forfeiture of criminal assets. This review should extend to assets linked to the
financing of terrorism and proliferation to ensure that Vietnam has a comprehensive regime to deal with
criminalassets.
Research limitations/implications –This paper draws on publicly available information regarding
the confiscation of proceeds of crime in Vietnam. Little data is available on asset confiscation and that
preventsan in-depth assessment of the regime.
Originality/value –This paper highlights gaps in the current asset confiscation regime and proposes
reformsand approaches that will ensure a more effectiveasset confiscation regime for Vietnam.
Keywords Vietnam, FATF, AML/CFT, Forfeiture, Asset confiscation, Proceeds of crime
Paper type Research paper
1. Introduction
Over the past decade, Vietnam has made great strides to improve its capacity to combat
money laundering and terrorist financing. In that process,it also strengthened its ability to
seize and confiscate proceedsof crime. Vietnam’s asset recovery framework is, however, still
not fully compliant with internationalstandards or with Vietnam’s obligations under United
Nations treaties. The statutoryconfiscation powers have been grafted onto systems that are
Confiscation of
proceeds of
crime in
Vietnam
213
Journalof Money Laundering
Control
Vol.24 No. 2, 2021
pp. 213-231
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-11-2020-0123
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
primarily designed to collect evidence to inform the sentencing of convicted persons.
Limitations in asset-freezing provisions, for example, allow criminals to dissipate and hide
assets before the start of formal, publicinvestigations. The absence of a sufficient number of
dedicated asset confiscation specialists in investigative and prosecutorial services further
hampers the effectivenessof the system.
This paper analyses the Vietnamese laws and practices relating to the confiscation of
proceeds of crime, especially in view of Vietnam’s obligations to meet the international
standards on money laundering and terrorist financing, set by the Financial Action Task
Force (FATF) and relevant international conventions that Vietnam ratified. To limit the
scope of this paper, the analysis focuses on the confiscation of proceeds of domestic crimes
that do not require international legal assistance. This paper concludes with
recommendationsfor improving the legal framework on criminal assetrecovery in Vietnam.
2. Overview of criminal asset confiscation
2.1 Key concepts
The 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances (Vienna Convention), was the first major international instrument
to introduce asset confiscation obligations in relation to proceeds of crime. Article 1 of the
Convention defines “confiscation”as the permanent deprivation of property by order of a
court or other competent authority,and includes forfeiture, where applicable. Importantly,it
also defines “freezing”or “seizure”as meaning to temporarily prohibit the transfer,
conversion, disposition or movement of property or temporarily assuming custody or
control of propertyon the basis of an order issued by a court or a competent authority.
Article 5 of the Convention requires State Parties to adopt the necessary measures to
enable the confiscation of proceeds of offenses established in accordance with the
Convention, or property the value of which corresponds to that of such proceeds; and of
narcotic drugs and psychotropic substances, materials and equipment or other
instrumentalities usedin or intended for use in any manner in such offenses. It also requires
State Parties to adopt such measures as may be necessary to enable its competent
authorities to identify, trace, and freezeor seize proceeds, property, instrumentality etc., for
eventual confiscation.
In practice, the Convention providesfor a framework that would allow the stateto freeze
and then confiscate proceedsand instrumentalities of crime. This paper focuses on measures
relating to proceedsof crime, and will only reference instrumentalities, whererelevant.
The confiscation measures envisaged by the Convention are conducted in terms of a
judicial or administrative process to convert ownership of property from an individual or
organization to the state. As a result, such individual or organization loses all their rights
and interests in property(FATF, 2012/2020, p. 114).
Globally, two forms of confiscation are encountered: Conviction-based confiscation and
non-conviction-based confiscation (also called civil forfeiture) (Murray, 2015, p. 462).
Conviction-based confiscationfollows upon criminal conviction of a perpetrator. In contrast,
non-conviction-basedforfeiture is a legal measure taken by the State either before conviction
or even in the absence of a conviction (FATF, 2012/2020, p. 122). While conviction-based
powers are encountered widely, many countries did not adopt non-conviction-based
forfeiture as it is not necessarily reconcilable with the basic principles of their law. A
particular form of non-conviction-basedforfeiture is in rem forfeiture, as applied in the USA
(Casella, 2015, p. 499). The underlying principle is that ownership of property tainted by
crime shifts to the State and all that is required for the State is to claim its assets, applying
civil law as any owner would. With in rem forfeiture, the action is brought against the
JMLC
24,2
214
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