Joint Circular No. 07-BTN/LB guiding the implementation of Decree-Law No. 001-SLT dated April 19, 1957, prohibiting economic speculation

JOINT CIRCULAR

Guidance on the implementation of Decree Law No. 001-SLT dated April 19, 1957, prohibiting economic speculation

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In order to contribute to ensuring price stability, promoting production, implementing state plans, restoring and developing the national economy, protecting and encouraging honest traders, improving people's living standards, the Government issued Decree Law No. 001-SLT dated April 19, 1957, prohibiting all acts of economic speculation. This decree was approved by the National Assembly at its seventh session after supplementing Article 3 (Resolution No. 104-SL/L6 dated October 14, 1957). The Prime Minister issued Decision No. 163-TTg dated April 19, 1957, detailing the implementation of the above law.

The Joint Ministries issue this Circular to guide sectors and levels in the implementation of the aforementioned documents. This Circular replaces Circular No. 313-BTN/LB dated May 17, 1957.

1. DEFINITION:

Article 2 of the law defines what constitutes economic speculation. Economic speculation manifests in various forms, but under current circumstances, the Government has defined five common and primary cases as follows, which are considered speculation:

Case 1:

Taking advantage of opportunities or creating difficult conditions for production, distribution, and consumption to profit through:

- Hoarding, hiding, accumulating goods, or refusing, limiting sales of goods, causing market scarcity, raising prices of goods, disrupting the market;

Some examples of speculative actions:

- Taking advantage of scarcity or price differences between regions, a trader himself or through agents goes around to hoard goods from private individuals (other traders, producers) or state trading enterprises, bringing them back to store and causing prices to rise or raise prices unreasonably.

- A trader with goods in storage or shop sees many people wanting to buy and refuses, limits sales, or sets a high price, causing market scarcity or further scarcity.

- A producer or processor raises prices of their products when market conditions have not changed the cost of production.

- A rural producer takes advantage of poor production or bad harvests to hoard additional agricultural products or raw materials to process into goods and store, pushing prices up.

Case 2:

Selling above the state-set price also constitutes speculative action.

The state price here is the price set and announced by the Prime Minister, the Ministry of Industry and Trade, or local administrative committees. Anyone selling goods with state-set prices must sell according to the set price regardless of origin or cost.

Case 3:

Using or forging introductions from agencies or organizations to purchase goods from state trading enterprises or government agencies such as bicycle parts, electrical appliances, pharmaceuticals, etc., and reselling for profit is considered speculative action.

Case 4:

A producer falsely reports to obtain distribution of raw materials or processing work, then steals, reduces, or substitutes inferior materials provided by government agencies for sale at higher prices or to produce goods for themselves.

Case 5:

"Using propaganda, deception, spreading rumors to cause public panic with the aim of hoarding goods for profit" is considered speculative action. Some unintentional, irresponsible statements that are not aimed at profit are not considered speculative action.

Additionally, in any case, individuals, whether private citizens or officials, employees of government agencies, or military personnel who take advantage of circumstances, positions, or authority to collude with those mentioned above for profit are considered accomplices in economic speculation.

Generally, any actions that exploit or create difficult conditions to disrupt the market for unjust profit, harming consumers and the national economy, are considered speculative actions.

Some examples of non-speculative actions:

- Under certain distribution conditions, a trader may reserve a necessary amount of goods for continuous business operations within their capital turnover, depending on the usual level of trade for each type of goods. When the market is scarce, they do not refuse, limit sales, or raise prices when consumers inquire about purchasing.

- Or a producer can reserve a certain amount of raw materials according to the plan to ensure continuous production for a certain period and be recognized by the commerce agency.

- A farmer can process their agricultural products themselves or have them processed and keep the finished products at home without selling.

- A family can reserve a certain amount of goods for consumption over a certain period.

2. - ISSUANCE AND DISPLAY OF PRICES:

To prevent traders from arbitrarily raising prices on essential goods for people's livelihood, causing market disruption, the state will gradually set and announce prices for certain goods and require traders to display prices and sell according to the displayed prices regardless of cost.

The list of goods and prices will be published in the Official Gazette and disseminated through regular communication methods.

3. - INSPECTION AND RECORDING:

Whenever it is necessary to inspect persons, objects, residences, and record cases of economic speculation, the designated officials in Article 4 of the decree must personally conduct the inspection to avoid mistakes that could have negative impacts.

Delegation of inspection and recording should be strictly limited and only delegated on a case-by-case basis to the following responsible officers:

- For judicial organs: District Court Judges.

- For public security organs: Heads and Deputy Heads of Departments; Heads and Deputy Heads of Districts; Heads and Deputy Heads of Bureaus; County, District, and Post Public Security Chiefs.

- For tax authorities: Heads and Deputy Heads of Departments, Branches, Sub-Branches; Heads and Deputy Heads of District and County Departments, and specialized management officers.

- For commerce and industry authorities: Heads and Deputy Heads of Departments, Zones, Bureaus, Commissariats.

When inspecting private residences or homes of business operators, it must be conducted according to current procedures, which means that an administrative village representative or neighborhood authority representative, the homeowner or their representative, and a neighbor must be present. After the inspection, a record must be established by the enforcement officer and those present must sign it. If the homeowner or their representative refuses to sign, the reason must be clearly noted in the record.

It should be clearly stated that all the above procedures only apply to inspections for speculation, while when tax officials conduct inspections related to taxation, they only need to follow their own existing procedures. On the other hand, during inspections of traders, shops, warehouses, production workshops, and all commercial and industrial facilities under the regular supervision of tax authorities, and while tax officials perform their regular management, control, and anti-smuggling duties, if they discover acts of speculative violation, they do not need to obtain additional special authorization and can immediately establish a record without needing the presence of an administrative village representative or neighborhood representative and a neighbor as mentioned above. The record must clearly state:

- Tax violations will be handled by the tax authority according to tax regulations.

- Speculative storage violations will be transferred to the provincial or municipal administrative committee for determination according to anti-speculation laws.

In this case, the handling of economic speculative violations does not affect the handling of tax regulation violations.

Attention should be paid to the fact that in both rural and urban areas at present, inspections for speculation must be conducted carefully with thorough investigation and research, and must not be carried out on a whim.

Those executing inspection orders must strictly follow inspection procedures; failure to do so will result in punishment according to current laws.

The record is made in four copies:

- One retained by the inspecting agency.

- One sent to the local administrative committee (province or city).

- One given to the party involved.

- One sent to the court (as necessary).

In cases of serious offenses requiring arrest, the offender must be brought to the police station or People's Court at the district level or higher within 24 hours.

After completing the record, all contraband must be handed over to the local administrative committee for temporary custody and preservation (Article 6 of the Decree). The administrative committee may designate the trade agency to be responsible for custody and preservation because this agency has relatively adequate conditions.

If it is determined that the contraband consists of easily perishable items such as foodstuffs, then within 24 hours, the inspecting agency must request the local administrative committee or the provincial or municipal People's Court to issue an immediate order to sell or transfer the goods to state agencies for use, and the proceeds from the sale will be deposited in the bank pending the decision of the administrative committee or the court handling the violation case.

4. - THE ISSUE OF PENALTIES:

Article 3 of the Law stipulates that violators of this Law and their accomplices, depending on the severity of the offense, shall be warned; their business registration licenses may be temporarily or permanently revoked, fined, or prosecuted before the court. Additionally, illegal goods may be confiscated partially or entirely, or purchased compulsorily.

a) The authority of the Provincial or Municipal Administrative Committee.

- In handling a violation, the Provincial or Municipal Administrative Committee may apply one or all three of the following penalties:

- Warning.

- Temporary or permanent revocation of the business registration license for commerce and industry.

- A fine up to one million dong.

In addition to these three penalties, the Administrative Committee may purchase compulsorily or confiscate partially or entirely the illegal goods.

For violations of the pricing regulations specified in Article 3 of the Decree, the Administrative Committee may only apply administrative penalties such as warning, revoking the business registration license for commerce and industry, and fining.

Furthermore, whenever necessary, the Administrative Committee may also request prosecution of the offender before the People's Court of the province or city.

The decision of the Administrative Committee to impose warnings, revoke business registration licenses for commerce and industry, and purchase compulsorily is final, and the violator must comply immediately without the right to appeal.

For violations where it is deemed sufficient to impose fines and confiscate goods without the need for trial, before the Provincial or Municipal Administrative Committee makes a decision to fine, they should explain clearly to the offender. If the offender accepts the punishment from the Committee, they will not be retried. After being heard, if the offender does not accept the punishment from the Committee, the Committee will transfer the case to the People's Court of the province or city. This measure is only applied to resolve speculative economic offenses.

b) The authority of the People's Court of the province or city.

The Public Prosecutor will prosecute upon the recommendation of the Provincial or Municipal Administrative Committee. When the People's Court handles a speculative economic offense, it may apply the following penalties recorded in Decree 001-SL:

- A fine from 100,000 to 10,000,000 dong.

- Imprisonment from one month to five years.

- Confiscation partially or entirely or compulsory purchase of the illegal goods.

The Court may apply one or all three of these penalties.

In all cases, regardless of whether administrative or judicial penalties are applied, illegal goods will be confiscated or compulsorily purchased. If only partial confiscation occurs, the remaining portion will be compulsorily purchased.

The People's Court of the province or city conducts the first instance trial, and if there is an appeal, the People's Court of the Appeals Region or City will conduct the final trial.

c) Article 4 provides that: "Those who voluntarily report will be granted leniency appropriately."

Appropriate leniency means that depending on the circumstances, they may be exempted from warning, revocation of business registration, or prosecution before the court. Or the violator may have their sentence mitigated: severe imprisonment reduced to light imprisonment, light imprisonment reduced to a fine, light imprisonment and fine reduced to confiscation or compulsory purchase of illegal goods, with suspended sentence.

5. - THE ISSUE OF SELLING ILLEGAL GOODS

All illegal goods must be handed over to the Trading Company of the province or city for distribution to the market, except those prone to spoilage which must be handled immediately as mentioned above.

The price for the compulsory purchase of illegal goods, or the price that the Trading Company must base its payment on for confiscated goods is:

- For goods under state management, the regulated price minus the trading fees of state trading.

- For goods under the trading company's procurement, the procurement price of the trading company.

- For products mainly produced and consumed locally, the price is determined by the Provincial or Municipal Administrative Committee.

- For goods without a regulated price, the opinion of the Ministry of Commerce must be sought.

Upon receiving the decision of the Committee or the judgment of the Court declaring compulsory purchase or confiscation, the Trading Companies that have received the illegal goods must pay the purchasing price immediately to the agency authorized by the Provincial or Municipal Administrative Committee to settle the violations.

6. - THE ISSUE OF REWARD

Regarding the reward provision in Article 9 of the Decree, note the following points:

a) Those eligible for rewards are individuals who have contributed to helping the competent authorities discover or apprehend violations.

Police officers, tax officials, trade officials, and judicial personnel performing duties such as inspection, record-keeping, or investigation are not entitled to monetary rewards. However, if police, tax, trade, and judicial officials make significant contributions to discovering violations through surveillance and investigation, they may be recommended for commendation (including monetary rewards) by their superiors.

b) Determining the level of reward is based on the magnitude of the contribution, distinguishing between cases that encounter many difficulties versus those that are random.

c) The amount of reward for each violation is limited to 25% of the total fine value of confiscated goods after deducting taxes and expenses. In cases where multiple people share a reward, each person's reward cannot exceed three million dong.

d) Those who have made contributions will receive their rewards at the commercial agency authorized by the Provincial or Municipal Administrative Committee.

Payment of rewards must be done as quickly as possible.

It is hoped that all levels will carefully study this circular and implement it thoroughly. Any difficulties encountered during implementation should be reported promptly to the relevant ministry.