Circular No. 15/2008/TT-BCT guiding the implementation of certain provisions of Decree No. 06/2008/NĐ-CP dated January 16, 2008 of the Government on administrative penalties for violations in commercial activities.

CIRCULAR

Guidelines for Implementing Certain Provisions of Decree No. 06/2008/NĐ-CP dated January 16, 2008 of the Government on Administrative Penalties for Violations in Commercial Activities

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Pursuant to Decree No. 189/2007/ND-CP dated December 27, 2007, issued by the Government, detailing the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Pursuant to Decree No. 06/2008/NĐ-CP dated January 16, 2008 of the Government on Administrative Penalties for Violations in Commercial Activities;

Pursuant to Decree No. 107/2008/NĐ-CP dated September 22, 2008 of the Government on Administrative Penalties for Speculative Practices, Hoarding, Excessive Price Increases, Spreading False Information, Smuggling, and Commercial Fraud.

The Ministry of Industry and Trade issues guidelines for implementing certain provisions of Decree No. 06/2008/NĐ-CP dated January 16, 2008 of the Government on Administrative Penalties for Violations in Commercial Activities (hereinafter referred to as Decree No. 06), as follows:

I. APPLICATION OF CERTAIN PROVISIONS ON ADMINISTRATIVE PENALTIES

1. Violations concerning business registration certificates of traders stipulated in Article 10 and Article 11 of Decree No. 06

a) The act of conducting business under the form of a company without a Business Registration Certificate as provided for in Clause 2, Article 10 of Decree No. 06 is considered to be operating a regular business household employing ten or more workers without registering to establish a company as required by Clause 4, Article 170 of the Enterprise Law 2005;

b) The administrative penalty provisions regarding the Business Registration Certificate of economic organizations stipulated in Article 10 of Decree No. 06 also apply to penalties for violations concerning Investment Licenses, Investment Certificates, and Business Operation Registration Certificates of branches and representative offices of economic organizations in provinces and cities. Economic organizations subject to this provision are those defined in Clause 4, Article 3 of Decree No. 06;

c) The provisions at Clause 2, Article 11 of Decree No. 06 only apply to objects that are business households as defined in Clause 1, Article 36 of Decree No. 88/2006/NĐ-CP dated August 29, 2006 of the Government on Business Registration. Cases not requiring business registration as provided for in Clause 2, Article 36 of Decree No. 88 and Clause 1, Article 3 of Decree No. 39/2007/NĐ-CP dated March 16, 2007 of the Government on Independent and Regular Commercial Activities of Individuals shall not be subject to administrative penalties under Clause 2, Article 11 of Decree No. 06.

2. Violations concerning prohibited goods stipulated in Article 18 of Decree No. 06

a) Administrative violations subject to penalties as provided for in Article 18 of Decree No. 06 include acts of trading in goods listed in the Catalogue of Prohibited Goods and intentional transportation, storage, concealment, receipt, and delivery of such goods. The provisions at Clause 9, Article 18 of Decree No. 06 only apply to objects specified in this clause and not to traders dealing in prohibited goods. If the objects specified in Clause 9, Article 18 of Decree No. 06 are traders dealing in prohibited goods (the consignor), they shall be subject to administrative penalties according to Clauses 1 through 8 of Article 18 of Decree No. 06, and not subject to administrative penalties under Clause 9 of Article 18 of Decree No. 06;

b) Prohibited goods subject to Article 18 of Decree No. 06 are goods listed in the Catalogue of Prohibited Goods and Services issued together with Decree No. 59/2006/NĐ-CP dated June 12, 2006 of the Government detailing the implementation of the Commercial Law 2005 on prohibited goods and services, restricted goods and services, and conditional commercial activities;

c) Among the goods listed in the Catalogue of Prohibited Goods and Services mentioned above, there are certain types of goods such as narcotics, military weapons, military technical equipment, toxic chemicals, and obscene cultural products which are regulated by the Criminal Code 1999 with criminal sanctions, therefore these cases must transfer the case files to competent criminal investigation authorities for consideration of criminal responsibility according to Article 62 of the Administrative Sanctions Enforcement Ordinance 2002;

d) Other violations concerning prohibited goods (other than those mentioned above) with a value of VND 100,000,000 or more shall be handled according to the provisions of Clause 1, Article 12 of Decree No. 107/2008/NĐ-CP dated September 22, 2008 of the Government on Administrative Penalties for Speculative Practices, Hoarding, Excessive Price Increases, Spreading False Information, Smuggling, and Commercial Fraud (hereinafter referred to as Decree No. 107). The maximum fine of the highest fine range prescribed in Clause 1, Article 12 of Decree No. 107 shall be applied for administrative penalties for violations concerning prohibited goods with a value of VND 100,000,000 or more that are not subject to criminal prosecution, which is the maximum fine of the fine range prescribed in Clause 7, Article 18 of Decree No. 06. If the violation falls within one of the circumstances prescribed in Clause 8, Article 18 of Decree No. 06, it shall be penalized twice the maximum fine of the highest fine range prescribed in Clause 7, Article 18 of Decree No. 06. In addition to the main penalty of a fine, the violation shall also be subject to supplementary penalties and measures to remedy consequences as prescribed in Clause 10, Article 18 of Decree No. 06;

e) The valuation of prohibited goods to determine the amount of fines and the authority to impose administrative penalties shall be carried out according to the provisions of Article 63 of Decree No. 06 and the guidance provided in Clause 8, Section I of this Circular.

3. Violations concerning goods circulating domestically subject to emergency measures stipulated in Article 19 of Decree No. 06

Article 19 of Decree No. 06 shall only be applied to impose administrative penalties on goods that are sources or means of transmission of diseases or when an emergency situation arises as announced by competent state authorities for the application of measures such as recall, prohibition of circulation, temporary suspension of circulation, conditional circulation, or the requirement for permits as provided for in the Law on Health Protection, the Law on Animal Health, and the Law on Plant Quarantine as stipulated in Article 26 of the Commercial Law 2005.

4. Acts of violation concerning smuggled goods as stipulated in Article 22 of Decree No. 06.

a) Administrative violations subject to administrative penalties under Article 22 of Decree No. 06 include acts of trading in smuggled goods and intentional acts of transporting, harboring, concealing, receiving, and delivering smuggled goods. Clause 9 of Article 22 of Decree No. 06 only applies to entities specified in this clause that are not traders of smuggled goods. If the entities specified in Clause 9 of Article 22 of Decree No. 06 are traders of smuggled goods (the consignor), they shall be subject to administrative penalties according to Clauses 1 through 8 of Article 22 of Decree No. 06, and not subject to administrative penalties under Clause 9 of Article 22 of Decree No. 06;

b) For smuggled goods listed in the prohibited trade catalog, Article 18 of Decree No. 06 and the guidance provided in Clause 2, Section I of this Circular shall be applied to impose administrative penalties;

c) In cases where a consignment of smuggled goods includes both ordinary goods and goods listed in the prohibited import catalog, only one act of violation will be penalized, but when determining the amount of fine, the value of the prohibited import goods must be separately identified and fined at double the rate prescribed in Point a, Clause 8 of Article 22 of Decree No. 06. The total fine for the ordinary smuggled goods and the prohibited import goods will then be combined into a single fine for the act of violation. If the violator directly commits the act of smuggling goods listed in the prohibited import catalog or temporarily suspends border imports, the provisions of Article 33 of Decree No. 06 shall be applied to impose administrative penalties;

d) The valuation of smuggled goods to determine the fine amount and the authority to impose administrative penalties shall be carried out according to the provisions of Article 63 of Decree No. 06 and the guidance provided in Clause 8, Section I of this Circular;

đ) Acts of violation concerning smuggled goods with a value of VND 100,000,000 or more shall be handled according to the provisions of Clause 1, Article 12 of Decree No. 107. The maximum fine amount within the highest fine range prescribed in Clause 1, Article 12 of Decree No. 107 for administrative penalties against acts of violation concerning smuggled goods with a value of VND 100,000,000 or more, which are not subject to criminal prosecution, is the maximum fine amount within the fine range prescribed in Point 7, Clause 22 of Decree No. 06. If the act of violation falls under one of the circumstances specified in Clause 8 of Article 22 of Decree No. 06, it shall be fined twice the maximum fine amount within the highest fine range prescribed in Point 7, Clause 22 of Decree No. 06. In addition to the main penalty in the form of a fine, the act of violation shall also be subject to supplementary penalties and measures to remedy consequences as prescribed in Clause 10 of Article 22 of Decree No. 06.

5. Acts of violation concerning product labels as stipulated in Article 23 of Decree No. 06.

a) Administrative violations subject to administrative penalties under Article 23 of Decree No. 06 include acts of trading in goods that violate product labeling regulations. Each violation concerning product labeling shall be subject to administrative penalties according to Article 23 of Decree No. 06. In cases where a single item or consignment has multiple violations concerning product labeling, each violation shall be subject to administrative penalties according to Article 23 of Decree No. 06;

b) The value of goods violating the labeling regulations as stipulated in Article 23 of Decree No. 06 is the value of the goods that violate the labeling regulations. In cases where there are multiple units of goods with the same labeling violations, the value of the goods violating the labeling regulations is the value of the quantity of goods with the same labeling violations;

c) The valuation of goods violating the labeling regulations to determine the fine amount and the authority to impose administrative penalties shall be carried out according to the provisions of Article 63 of Decree No. 06 and the guidance provided in Clause 8, Section I of this Circular;

d) Violations concerning product labeling with a value of over VND 100,000,000 shall be subject to administrative penalties according to Clause 2, Article 12 of Decree No. 107. The maximum fine amount within the highest fine range prescribed in Clause 2, Article 12 of Decree No. 107 for administrative penalties against violations concerning product labeling with a value of over VND 100,000,000 is the maximum fine amounts within the fine ranges prescribed in Points g, Clause 1, Points g, Clause 2, Points g, Clause 3, and Points g, Clause 4 of Article 23 of Decree No. 06. If the act of violation falls under one of the circumstances specified in Clause 5 of Article 23 of Decree No. 06, it shall be fined twice the maximum fine amounts within the highest fine range mentioned above. In addition to the main penalty in the form of a fine, the act of violation shall also be subject to supplementary penalties and measures to remedy consequences as prescribed in Clause 9 of Article 23 of Decree No. 06;

đ) For acts of trading in goods that require product labeling but lack such labeling, the fine ranges prescribed in Points a, b, c, d, e, and g, Clause 4 of Article 23 of Decree No. 06 shall be applied to impose administrative penalties as stipulated in Clause 3, Article 12 of Decree No. 107;

e) When imposing administrative penalties on violations concerning product labeling, in addition to the fine, the authority imposing the penalty must apply supplementary penalties and measures to remedy consequences as prescribed in Clause 9 of Article 23 of Decree No. 06 to thoroughly address the violation, eliminate the causes and conditions for recurrence, and mitigate all consequences caused by the administrative violation as prescribed in Clause 4, Article 8 of Decree No. 06.

6. Acts of violation concerning counterfeit goods and counterfeit labels, packaging of goods as stipulated in Articles 24 and 25 of Decree No. 06.

a) Administrative violations subject to penalties under Article 24 and Article 25 of Decree No. 06 are acts of trading counterfeit goods and acts of trading counterfeit labels, packaging, and trademarks. Counterfeit goods within the scope of application of Article 24 and Article 25 of Decree No. 06 are those goods specified in Clause 8, Article 3 of Decree No. 06. If the counterfeit goods involve quality, utility, and counterfeit labels and packaging as provided in Point a and Point b, Clause 8, Article 3 of Decree No. 06, administrative penalties shall be imposed according to Article 24 of Decree No. 06. If the counterfeit labels, packaging, and trademarks are as provided in Point d, Clause 8, Article 3 of Decree No. 06, administrative penalties shall be imposed according to Article 25 of Decree No. 06. If the violation involves counterfeiting intellectual property rights as provided in Point c, Clause 8, Article 3 of Decree No. 06, provisions on administrative penalties for violations in the field of industrial property, copyright protection, or plant variety protection shall be applied to impose administrative penalties.

b) For administrative violations involving counterfeit goods with a value of VND 30,000,000 or more, they shall be handled according to the provisions of Clause 1, Article 12 of Decree No. 107. The maximum fine amount of the highest fine range prescribed in Clause 1, Article 12 of Decree No. 107 shall be applied to impose administrative penalties for administrative violations involving counterfeit goods with a value of VND 30,000,000 or more that are not prosecuted criminally, which is the maximum fine amount of the fine range prescribed in Clause 6, Article 24 of Decree No. 06. If the violation falls under any of the cases prescribed in Clause 7, Article 24 of Decree No. 06, the administrative penalty shall be twice the maximum fine amount of the highest fine range prescribed in Clause 6, Article 24 of Decree No. 06. In addition to the main fine, the violator shall also be subject to supplementary penalties and measures to remedy consequences as prescribed in Clause 9, Article 24 of Decree No. 06.

c) The valuation of counterfeit goods to determine the fine range and the authority to impose administrative penalties shall be carried out according to the provisions of Article 63 of Decree No. 06 and the guidance provided in Point 8, Section I of this Circular.

7. Applying double, triple, and quadruple fine ranges prescribed in some articles of Decree No. 06.

a) Double, triple, or quadruple fine ranges shall only be applied to impose administrative penalties for cases prescribed in Clause 4, Article 10, Clause 4, Article 11, Clause 8, Article 18, Clause 9, Article 19, Clause 5, Article 20, Clause 5, Article 21, Clause 8, Article 22, Clause 5, Article 23, Clause 7, Article 24, Clause 2, Article 25, Clause 8, Article 26, Clause 4, Clause 5, Clause 6, Article 27, Clause 9, Article 29, Clause 5, Article 30, and Clause 5, Article 45 of Decree No. 06. When applying these provisions, the number of times the fine is increased must be multiplied by the minimum and maximum fine amounts of the original fine range to form a new higher fine range.

b) Only a single double fine shall be applied for any of the cases prescribed in Clause 8, Article 18, Clause 9, Article 19, Clause 8, Article 22, Clause 5, Article 23, Clause 7, Article 24, Clause 2, Article 25, and Clause 8, Article 26 of Decree No. 06. If the administrative violation simultaneously falls under both cases prescribed for a double fine, only a single double fine shall be applied.

c) When applying double, triple, or quadruple fine ranges, the new fine range will have a higher maximum fine amount, so in these cases, the authority to impose administrative penalties is determined based on the maximum fine amount of the new fine range.

8. Valuation of goods, evidence, and means of transportation involved in administrative violations as prescribed in Article 63 of Decree No. 06.

a) Article 63 of Decree No. 06 shall only be applied to cases where the fine is determined based on the value of the goods involved in the violation or where the penalty includes confiscation of goods, evidence, and means of transportation involved in the violation.

b) The person responsible for valuing goods, evidence, and means of transportation involved in the violation as prescribed in Clause 3, Article 63 of Decree No. 06 is the head of the inspection, supervision, and administrative penalty enforcement agencies as prescribed in Articles 58, 59, and 60 of Decree No. 06 who have discovered the administrative violation or are handling the administrative violation case. For market management agencies at all levels, the Director of the Market Management Department under the Ministry of Industry and Trade, the Head of the Provincial Market Management Sub-department, and the Head of the Market Management Team are responsible and authorized to value goods, evidence, and means of transportation involved in administrative violations according to Article 63 of Decree No. 06.

c) Since the valuation of goods, evidence, and means of transportation involved in the violation is to determine the fine amount and the authority to impose administrative penalties, the person responsible for valuation does not necessarily need to be the person authorized to impose administrative penalties for the violation at that level. If the Market Management Team directly inspects and discovers the administrative violation, the Head of the Market Management Team has the responsibility to organize the valuation of goods, evidence, and means of transportation involved in the violation to determine the fine amount and the authority to impose penalties for that case. After completing the valuation, if it is found that the case does not fall within their authority to impose penalties, the Head of the Market Management Team must transfer the case file to the higher authority with the appropriate penalty authority according to regulations. If the higher authority accepts and handles the administrative violation case transferred by the Market Management Team and finds that the valuation by the Head of the Market Management Team is incorrect, they may request the Market Management Team to revalue or directly revalue according to their own authority.

d) Depending on the type of goods, evidence, and means of transportation involved in the violation and the actual circumstances of the inspection and handling, the basis for valuation shall be applied in priority order as prescribed in Clause 2, Article 63 of Decree No. 06.

The valuation shall first be based on the listed price, and if there is no listed price, it shall be based on the price recorded in the sales contract or purchase invoice or import declaration of the goods as prescribed in Point a, Clause 2, Article 63 of Decree No. 06, including all types of taxes.

In the absence of both the listed price, the price recorded on the sales contract or purchase invoice, or the import declaration form, the valuation shall be based on the market price at the time and place where the administrative violation was discovered, as stipulated in Point b, Clause 2, Article 63 of Decree No. 06. If the valuation is based on the market price at the time and place where the administrative violation was discovered, a market survey must be conducted and a record of such survey must be established.

The basis for valuation according to the cost price of goods as stipulated in Point c, Clause 2, Article 63 of Decree No. 06 only applies to goods that are still in the manufacturer's warehouse and have not been sold onto the market even once. If the goods have previously been sold, the valuation shall be based on the provisions set out in Point a, Clause 2, Article 63 of Decree No. 06.

The basis for valuation as provided in Point d, Clause 2, Article 63 of Decree No. 06 only applies to counterfeit goods. Goods with similar features, technical specifications, and functions as specified in Point d, Clause 2, Article 63 of Decree No. 06 are types of goods that can be substituted for consumption purposes and are only applicable when there is no genuine product available for valuation.

Valuation based on the residual value of the evidence and means of violation as stipulated in Point đ, Clause 2, Article 63 of Decree No. 06 only applies to the valuation of evidence and means of violation and requires an appraisal of the evidence and means of violation to serve as the basis for valuation.

Where the bases for valuation prescribed in Clause 2, Article 63 of Decree No. 06 and the guidance provided in this Circular are not appropriate or the goods, evidence, and means of violation are difficult to determine their value, the head of the competent state management agency shall establish a valuation committee to conduct the valuation.

đ) The person authorized by law to conduct valuation shall be responsible for the accuracy, fairness, and objectivity of the valuation they perform. Any negotiation, exchange of opinions with experts, specialized agencies, or establishment of a valuation committee shall be decided by the person authorized by law to conduct valuation, but they remain ultimately responsible for the valuation.

e) Valuation is a mandatory administrative procedure when imposing administrative penalties, therefore, the bases for valuation and related documents must be reflected in the case file of the administrative violation.

When valuing goods according to the provisions of Point a, Clause 2, Article 63 of Decree No. 06, the value of the goods and the basis for valuation shall be recorded directly in inspection reports, search reports, temporary detention reports, administrative violation reports, along with copies of contracts, purchase invoices, and import declarations kept in the case file.

When valuing goods according to the provisions of Points b, c, and d, Clause 2, Article 63 of Decree No. 06, a record of market survey or determination of price must be established and kept in the case file.

If valuation is conducted according to the provisions of Point đ, Clause 2, Article 63 of Decree No. 06, there must be an appraisal document of the evidence and means of violation and a record of valuation of the evidence and means of violation kept in the case file.

If a valuation committee must be established to conduct the valuation of goods, evidence, and means of violation according to the provisions of Clause 4, Article 63 of Decree No. 06, there must be a decision to establish the committee and a record of the committee's valuation, in accordance with the authority and procedures, kept in the case file.

II. IMPLEMENTATION PROVISIONS

1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

2. During the implementation of Decree No. 06 and the guidance provided in this Circular, if there are any difficulties, the relevant ministries, sectors, and localities are requested to promptly report them to the Ministry of Industry and Trade for timely guidance.