Circular No. 05/TM-QLTT guiding the organization and implementation of Decree No. 01/CP dated January 3, 1996 of the Government on administrative penalties in the field of commerce.

 

CIRCULAR

On Administrative Sanctions for Violations in the Field of Commerce

On January 3, 1996, the Government issued Decree No. 01/CP on handling administrative violations in the field of commerce pursuant to the Administrative Violation Handling Ordinance dated July 6, 1995. The Ministry of Trade guides the organization and implementation of Decree No. 01/CP as follows:

I. ON THE SCOPE AND SUBJECTS OF APPLICATION

Based on the nature, content, and subjects of administrative sanctions prescribed by the Administrative Violation Handling Ordinance, Article 1 of Decree No. 01/CP has specifically defined the scope and subjects of administrative sanctions in the field of commerce. Points to note when applying:

1. The administrative offense must be an act violating state management regulations concerning commercial activities and commercial services. These regulations have been established in relevant legal documents issued by competent state agencies. Organizations or individuals who violate these regulations will be subject to administrative sanctions under Decree No. 01/CP.

2. If acts of violation exhibit signs of criminal offenses, they shall not be subject to administrative sanctions under this Decree but must be documented and transferred to the competent authority for criminal investigation to consider and resolve. Authorities responsible for administrative sanctions should refer to Circular No. 11-TT/LB dated November 20, 1990, jointly issued by the Supreme People's Procuracy, the Supreme People's Court, and the Ministry of Interior regarding guidance on handling certain types of crimes, and Circular No. 01-TT/LB dated January 25, 1996, jointly issued by the Supreme People's Procuracy, the Supreme People's Court, and the Ministry of Interior regarding criminal handling of violations under Directive 406-TTg to examine whether the violation should be pursued for criminal responsibility or administrative sanction. When inspecting and discovering violations with any of the following signs: large value of money or goods, complex nature, repeated offenses, serious consequences, the sanctioning agency must consult with the same-level People's Procuracy to decide on the appropriate handling of the violation.

Cases of violations in the field of commerce that have been decided to suspend investigation or exempt from criminal prosecution by the competent authority for criminal handling shall be subject to administrative sanctions under Decree No. 01/CP.

3. Administrative offenses subject to sanctions under Decree No. 01/CP include four types of administrative offenses specified in Clause 2, Article 1 of the Decree. Other administrative offenses in the field of commerce or related to commercial activities not covered by Decree No. 01/CP, such as violations concerning the production or sale of counterfeit goods, violations concerning standards, quality, and measurement of goods, violations concerning hygiene and disease prevention, violations concerning trade signs and advertising, violations concerning accounting books and invoices in buying and selling goods, violations concerning customs procedures for importing and exporting goods, acts of tax evasion or smuggling... shall be subject to administrative sanctions according to other Decrees or provisions of the Government.

4. In cases where laws provide otherwise, administrative sanctions shall be applied according to the provisions of the Law, not according to this Decree.

5. The subjects of administrative sanctions in the field of commerce under Clause 3, Article 1 of Decree No. 01/CP are organizations or individuals committing violations, regardless of whether they are traders or non-traders, and regardless of whether they are Vietnamese or foreigners. Specifically, it includes:

- Vietnamese organizations and individuals, including enterprises established under the Investment Law in Vietnam.

- Representative offices and branch representative offices of foreign enterprises in Vietnam (if there are violations concerning the establishment and operation of representative offices and branch representative offices, they shall be sanctioned according to the provisions of Decree No. 82/CP dated August 2, 1994, of the Government; if there are other violations in the field of commerce, they shall be sanctioned according to Decree No. 01/CP).

- Foreign organizations and individuals: branches of foreign enterprises in Vietnam, diplomatic missions, non-governmental organizations, staff members of the aforementioned organizations, foreigners entering Vietnam for residence, work, or tourism. In cases where the Diplomatic Privileges and Immunities Ordinance provides otherwise, they shall not be subject to administrative sanctions under Decree No. 01/CP.

II. ON PRINCIPLES OF SANCTIONING

Administrative sanctions in the field of commerce must comply with the principles stipulated in the Administrative Violation Handling Ordinance and Article 2 of Decree No. 01/CP. When applying these principles, attention should be paid.

1. Only those granted the authority to impose administrative sanctions in the field of commerce may decide on administrative sanctions under Decree No. 01/CP. State agencies that discover administrative violations in the field of commerce outside their jurisdiction must transfer them to the competent authority for administrative sanctions in the field of commerce to proceed with handling the violations.

2. Upon discovery, all acts of violation must be immediately stopped, recorded in a protocol according to the correct procedure, and promptly sanctioned within fifteen days from the date of recording. If the violation involves many complex circumstances requiring more time for investigation and verification, the processing period shall not exceed thirty days, but must be reported to the immediate superior authority and notified to the party concerned.

3. The sanctioning as provided in Clause 3, Article 2 of Decree No. 01/CP is as follows:

- A single administrative offense shall be sanctioned only once by a single decision.

- An individual simultaneously committing multiple administrative offenses in the field of commerce shall be sanctioned separately for each offense according to the form and level of penalty prescribed for each offense. If all these offenses fall within the jurisdiction of one authorized person to sanction, only one sanctioning decision shall be issued. If one of these offenses (in the same field of commerce), upon examination, is found not to fall within the jurisdiction of the current level, the person imposing the sanction must transfer all these offenses to the higher-level competent authority for handling.

The decision to impose administrative penalties on individuals who commit multiple violations must clearly specify each violation being penalized, the form and level of penalty for each violation. If fines are imposed, the total fine amount for all violations will be combined into a single fine amount in the penalty decision for the violator to execute. This combined fine amount does not serve as the basis for determining the authority to impose fines at each level, but rather the authority is determined based on the fine amount for each individual violation.

- When multiple organizations and individuals jointly carry out a single administrative violation, each organization and individual violating the law shall be subject to penalties as follows:

+ In cases where multiple organizations and individuals jointly carry out a single violation with close interrelations among them, each organization and individual violating the law shall be subject to penalties for that violation. The person authorized to impose penalties shall issue a single penalty decision, but must clearly record the name and address of each entity being penalized. If a fine is imposed, the total fine amount shall not exceed the fine range prescribed in Article 01/CP for that violation.

+ In cases where multiple organizations and individuals jointly commit a single administrative violation in a case but there is no interrelation among them in carrying out the violation, each organization and individual shall be subject to penalties through separate penalty decisions. Depending on the nature and severity of the violation by each violator, the form and level of penalty shall be determined according to the provisions of Article 01/CP for that violation.

- The person imposing penalties may not divide a single violation into several minor violations to impose penalties multiple times to suit their own authority to impose penalties.

4. Mitigating and aggravating circumstances as stipulated in Articles 7 and 8 of the Administrative Violation Handling Ordinance shall be applied in the field of commerce as follows:

a. Regarding mitigating circumstances:

- The violator voluntarily takes measures to reduce the harmful effects, voluntarily reports, surrenders goods, evidence, and means of violation, and voluntarily remedies the consequences of the violation.

- The violation occurs when the violator is coerced, bribed to work, or exploited due to illegal acts committed by others.

- Violation due to backwardness in knowledge.

b. Regarding aggravating circumstances:

- Organized violation: gathering many people to participate, colluding with each other, organizing a chain... to jointly violate.

- Repeated violation or recidivism.

- Inciting, coercing minors to violate, forcing those dependent on them materially or spiritually to violate.

- Violation while under the influence of alcohol, beer, or other stimulants.

- Exploiting official positions or powers to violate.

- Exploiting wartime conditions, natural disasters, or other extraordinary difficulties in society to violate.

- Violation during the period of serving a criminal sentence or an administrative penalty decision.

- After the violation, the violator engages in actions to evade or conceal the violation.

5. In cases where administrative penalties are not imposed on violators as stipulated in Clause 5, Article 2 of Decree No. 01/CP, it must be confirmed by a health agency that the violator suffers from mental illness or other diseases that impair their ability to recognize or control their behavior.

III. ON THE APPLICATION OF PENALTY FORMS

Decree No. 01/CP has specifically defined the forms, levels of penalties, and other measures for each violation. Those authorized to impose administrative penalties in the field of commerce must apply the correct penalty forms and administrative measures as prescribed for each specific violation. Attention should be paid when applying administrative penalties.

1. Forms of administrative penalties:

- Warning: Only a warning shall be imposed for violations that prescribe a warning penalty and only if it is the first offense, a procedural violation, with mitigating circumstances, without causing consequences, and not requiring a fine.

- Fine: Decree No. 01/CP prescribes fine ranges for each violation. When applying a fine, it must be based on the nature and severity of the violation (type of goods, industry, value of the goods involved in the violation, kinship, motive, attitude of the violator, resulting consequences...) to determine the specific fine within the prescribed fine range for each violation.

If the violation has mitigating or aggravating circumstances, the reduction or increase in the fine shall be carried out according to Clause 3, Article 3 of Decree No. 01/CP.

For violations with multiple aggravating circumstances (two or more), penalties shall be imposed according to the fine range for violations with multiple aggravating circumstances as prescribed in Decree No. 01/CP.

2. In addition to the main penalty form, depending on the nature and severity of the specific violation, supplementary penalty forms or other administrative measures prescribed in the relevant articles of Decree No. 01/CP may also be imposed.

- Seizure of goods, evidence, and means of violation shall only be imposed for violations where Decree No. 01/CP prescribes seizure penalties and only for types of goods, evidence, and means of violation that the law permits to be seized. Tangible evidence and means of violation belonging to others that have been misappropriated or used illegally by the violator shall not be seized.

- Revocation of business registration certificates, business licenses, and other commercial operation permits of businesses violating the law shall only be imposed when Decree No. 01/CP prescribes such a penalty form. Based on the severity of the violation, the specific duration of revocation within the prescribed time frame in Decree No. 01/CP shall be decided. During the period of revocation, the business shall not conduct operations according to the revoked permit.

For permits issued beyond authority or containing illegal content, the authority to impose penalties must immediately revoke them and simultaneously inform the state agency that issued the permit.

IV. ON THE IDENTIFICATION OF ADMINISTRATIVE VIOLATIONS IN THE FIELD OF COMMERCE

Decree No. 01/CP from Article 4 to Article 23 stipulates 20 groups of administrative violations in the field of commerce, each group containing specific violations. When imposing penalties, it is necessary to base on relevant current legal documents to accurately determine the violation being penalized. Specifically:

1. Violations related to business registration for enterprises (Article 4): Based on the Law on State-Owned Enterprises, the Law on Joint Stock Companies, the Law on Private Enterprises, the Law on Foreign Investment in Vietnam, the Law on Enterprise Bankruptcy... Decrees No. 221/HĐBT dated July 23, 1991, No. 222/HĐBT dated July 23, 1991, No. 361/HĐBT dated October 1, 1992 of the Government and guiding documents of Ministries and sectors.

2. Violations concerning individual and group business licenses (Article 5): Based on Decree No. 66/HĐBT dated March 2, 1992, Circular No. 07/TMDL-QLTT dated May 18, 1992 of the Ministry of Trade and implementing documents of Ministries and sectors regarding Decree No. 66/HĐBT.

3. Violations concerning prohibited goods and services (Article 6) and conditional goods and services (Article 7): Based on Decree No. 02/CP dated January 5, 1995, Decree No. 17/CP dated December 23, 1992, Decree No. 87/CP dated December 12, 1995, Circular No. 13/TM-CSTTTN dated June 21, 1995 of the Ministry of Trade and guiding documents of Ministries and sectors regarding prohibited goods and services and conditional goods and services.

4. Violations concerning goods and services (Article 8): Based on Decision No. 137/HĐBT dated April 27, 1992 on price management and guiding documents of Ministries and sectors.

5. Violations concerning enterprise headquarters, representative offices, stores, and commercial establishments (Article 9): Based on provisions in the legal documents mentioned in points 1 and 2 above.

6. Violations concerning agency purchase and sale of goods (Articles 11 and 12): Based on Decision No. 30/NT-QĐ1 dated May 31, 1989 of the Ministry of Internal Trade (now the Ministry of Trade) and regulations on agency purchase and sale of specific goods such as gasoline, cement... issued by Ministries and sectors.

7. Violations concerning the establishment and operation of foreign enterprises' representative offices in Vietnam (Article 13): Based on Decree No. 82/CP dated April 2, 1994, Circular No. 03/TM-PC dated February 10, 1995 of the Ministry of Trade.

8. Violations concerning import and export of goods (Article 14): Based on Decree No. 33/CP dated April 19, 1994, Decree No. 89/CP dated December 15, 1995, Decision No. 864/TTg dated December 30, 1995 of the Prime Minister on commodity policy and export management in 1996, guiding documents of Ministries and sectors related.

9. Violations concerning consignment import and export of goods (Article 15): Based on Decision No. 1172/TM-NXK dated September 22, 1994 of the Ministry of Trade.

10. Violations concerning transshipment and temporary import for re-export of goods (Articles 16 and 17): Based on Decision No. 1064/TM-CP dated August 18, 1994 of the Ministry of Trade.

11. Violations concerning consumption of goods by foreign-invested enterprises (Article 18): Based on the Law on Foreign Investment in Vietnam, Decree No. 18/CP dated April 16, 1993, Decree No. 29/CP dated May 27, 1993, Circular No. 1621/UB-LXT dated August 5, 1993 of the State Committee for Cooperation and Investment (now the Ministry of Planning and Investment), Circular No. 03/TM-ĐT dated July 2, 1993 of the Ministry of Trade, other guiding documents, and investment permits granted to foreign-invested enterprises.

12. Violations concerning duty-free goods trading (Article 19): Based on Circular No. 12/TT-LB dated November 13, 1990 of the Ministry of Trade and General Customs Department on the organization and operation of duty-free shops, Circular No. 107/CT-TCT dated December 30, 1993 of the Ministry of Finance.

13. Violations concerning trade exhibitions (Article 20): Based on Decision No. 390/TTg dated August 1, 1994 of the Prime Minister on exhibition regulations, Circular No. 05/TM-XNK dated February 25, 1995 of the Ministry of Trade.

14. Other violations against foreign organizations and individuals (Article 22) concerning the import and re-export of automobiles and necessary items for the work and living needs of foreign diplomatic missions and foreigners in Vietnam, guiding circulars of the General Customs Department implementing the aforementioned decree.

V. ON THE AUTHORITY AND PROCEDURES FOR ADMINISTRATIVE PENALTY IN THE FIELD OF COMMERCE

1. Decree No. 01/CP stipulates the authorities with the power to impose administrative penalties in the field of commerce at Articles 24, 25, and 26 including:

- People's Committees at all levels.

- Market Management Authorities at all levels.

- Police, Customs, Border Guard, and specialized State Inspection agencies have the authority to impose administrative penalties in the field of commerce according to Articles 29, 30, and 34 of the Administrative Violation Handling Ordinance within their specialized state management functions.

When imposing administrative penalties, those authorized persons of the aforementioned agencies can only impose penalties within the scope of their defined authority. If the violation requires a form and level of penalty exceeding their authority, the person imposing the penalty must transfer the case to a higher-level agency with the appropriate authority to handle it, and shall not retain it for imposition.

2. For market management authorities, Article 25 of Decree No. 01/CP specifically defines those authorized to impose administrative penalties in the field of commerce as: Market Inspectors at all levels, Heads of Market Management Branches, and Heads of Market Management Departments.

Market Inspectors at all levels have the authority to impose administrative penalties under Decree No. 01/CP, including Senior Market Inspectors, Principal Market Inspectors, Market Inspectors, and Intermediate Market Inspectors who are issued market inspection cards by the Ministry of Trade to perform market inspection and supervision duties.

In cases where the Team Leader, Branch Head, or Department Head is absent or has delegated authority, the deputy of these individuals may exercise the authority to impose penalties as if they were the head.

3. When imposing administrative penalties in the field of commerce, the authorized person imposing the penalty must strictly follow the procedures and steps for imposing penalties as stipulated in Articles 46, 47, 48, 49, 50, 51, 52, 53, 54, and 56 of the Administrative Violation Handling Ordinance.

4. Market management agencies at all levels must use the correct types of seals issued by the Ministry of Commerce pursuant to Decision No. 05/TM-QLTT dated January 5, 1996 when performing their tasks of market inspection, supervision, and administrative penalty for violations.

5. The person imposing the penalty shall not directly collect the fine and must guide the violator to pay the fine at the designated location specified in the penalty decision.

To ensure the enforcement of the penalty decision, the person issuing the penalty decision has the right to temporarily detain documents, evidence, and means of violation according to the provisions of the Ordinance on Handling Administrative Violations until the violator fully complies with the penalty decision.

6. The destruction of goods harmful to human health and harmful cultural products must be carried out in accordance with the provisions of Clause 2, Article 52 of the Ordinance on Handling Administrative Violations and must not cause environmental pollution.

7. The authority, procedures for applying preventive measures against administrative violations and ensuring the enforcement of administrative penalties must comply with the provisions of Article 29 of Decree No. 01/CP and Articles 38, 39, 40, 41, 42, 43, and 44 of the Ordinance on Handling Administrative Violations.

8. Complaints, appeals, and the resolution of complaints and appeals regarding administrative penalties in the field of commerce shall be implemented in accordance with Article 30 of Decree No. 01/CP and Articles 87, 88, and 90 of the Ordinance on Handling Administrative Violations.

VI. ON ORGANIZATION AND IMPLEMENTATION

1. Based on Decree No. 01/CP and the guidance provided in this Circular, ministries and sectors responsible for imposing administrative penalties in the field of commerce need to organize and direct their staff to thoroughly understand and strictly implement the relevant regulations during the process of imposing administrative penalties; regularly coordinate with the Ministry of Commerce and other relevant ministries and sectors in organizing the implementation of Decree No. 01/CP.

2. The Director of the Market Management Agency under the Ministry of Commerce is responsible for assisting the Ministry in directing, guiding, and inspecting provincial and municipal trade departments and market management agencies in organizing the implementation of market inspection, supervision, and administrative penalty tasks in accordance with Decree No. 01/CP and current laws on administrative penalties; compiling the situation to report to the Ministry as prescribed.

3. The Director of the Provincial Trade Department, the Director of the Provincial Market Management Agency have the responsibility to assist the People's Committee of the province or city in organizing the implementation of Decree No. 01/CP within the market management forces in the locality; monitoring and compiling the situation of inspections and administrative penalties imposed by the market management forces and other competent sectors in the locality according to Decree No. 01/CP to report to the People's Committee and the Ministry of Commerce; promptly proposing to the Ministry any difficulties encountered during the implementation process.