Decree No. 202/2004/ND-CP On Administrative Sanctions for Violations in the Field of Currency and Banking Activities

DECREE OF THE GOVERNMENT

On administrative penalties for violations in the field of currency and banking activities

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

WHEREAS, the Law on the State Bank of Vietnam dated December 12, 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam dated June 17, 2003;

Pursuant to the Law on Credit Institutions dated December 12, 1997 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions dated June 15, 2004;

Based on the Administrative Violation Handling Ordinance dated July 2, 2002;

At the proposal of the Governor of the State Bank of Vietnam,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree stipulates the provisions on administrative penalties for violations in the field of currency and banking activities.

2. Administrative violations in the field of currency and banking activities as prescribed in this Decree include violations:

Regarding establishment permits and operations, business operation permits, organizational structure of credit institutions;

Regarding management, operation, auditing;

Regarding capital raising;

Regarding lending, bank guarantees, discounting and financial leasing;

Regarding foreign exchange management, gold trading management;

Regarding payment, purchase, investment in fixed assets and real estate trading;

Regarding ensuring the safe operation of credit institutions;

Regarding accounting, statistics, information, reporting, confidentiality of banking activities;

Regarding infringing upon the business autonomy of credit institutions; obstructing inspection and supervision, failing to comply with the requirements of competent authorities for administrative penalty; illegal competition.

Article 2. Applicability

1. Individuals, agencies, organizations within Vietnam and abroad (hereinafter referred to collectively as individuals, organizations) who intentionally or negligently violate the provisions of laws on state management in the field of currency and banking activities that do not constitute crimes shall be subject to administrative penalties as prescribed in this Decree, except where international treaties to which the Socialist Republic of Vietnam is a party or has acceded provide otherwise.

2. Organizations shall be subject to administrative penalties for all administrative violations caused by themselves. After implementing the administrative penalty decision, the organization subject to the penalty shall identify the individual responsible for causing the administrative violation to determine their legal liability according to the provisions of the law.

Article 3. Principles of Administrative Penalties

The principles of administrative penalties in the field of currency and banking activities shall be implemented in accordance with the provisions of Article 3 of the Law on Handling Administrative Violations.

Article 4. Time Limit for Administrative Sanctions

1. The statute of limitations for administrative penalties in the field of currency and banking activities is two years, counted from the date the administrative violation was committed.

If the period mentioned above has expired, no penalty shall be imposed, but measures prescribed in Clause 3, Article 7 of this Decree shall be applied.

2. For individuals who have been indicted, prosecuted, or had a decision made to bring them to trial under criminal proceedings, but subsequently have a decision to terminate the investigation or terminate the case while the act has signs of administrative violation, they shall be subject to administrative penalties; within three working days from the date of issuing the decision to terminate the investigation or terminate the case, the person issuing the decision must send the decision to the authority competent to impose penalties; in this case, the statute of limitations for administrative penalties is three months, counted from the date the authority competent to impose penalties receives the decision to terminate the investigation and the case file of the violation.

3. Within the time limit prescribed in Clauses 1 and 2 of this Article, if individuals or organizations again commit new administrative violations in the same field as previously violated or deliberately evade or obstruct the imposition of penalties, the statute of limitations prescribed in Clauses 1 and 2 of this Article shall not apply; the statute of limitations for administrative penalties shall be recalculated from the date of committing the new administrative violation or the date of ceasing the act of evading or obstructing the imposition of penalties.

Article 5. Period Considered as Not Having Been Administered Administrative Sanctions

An individual or organization that has been administered administrative sanctions shall be considered as not having been administered such sanctions if they have not committed the same violation again within one year from the date of completing the execution of the sanction decision or from the date when the time limit for enforcing the sanction decision expires.

Article 6. Mitigating Circumstances and Aggravating Circumstances

When administering administrative sanctions in the field of currency and banking activities, only the following circumstances shall be considered mitigating or aggravating circumstances:

1. Mitigating circumstances:

a) The violator has taken measures to prevent or reduce the harmful effects of the violation or voluntarily remedied the consequences and compensated for losses.

b) The violator has voluntarily reported the violation and sincerely expressed remorse.

c) The violation was committed under duress or dependency, either material or spiritual.

d) The violation was committed due to outdated competence.

2. Aggravating circumstances:

a) Organized violation;

b) Committing multiple violations in the same field or committing repeated violations in the same field.

c) Forcing a person who is materially or spiritually dependent on them to commit a violation.

d) Taking advantage of positions or powers to violate;

d) Taking advantage of wartime conditions, natural disasters, or other special difficulties of society to commit a violation.

e) Committing a violation during the period of serving a criminal sentence or during the period of executing a decision on administrative violation handling.;

g) Continuing to carry out the administrative violation despite being required by the competent authority to stop the violation.

h) After committing the violation, taking actions to evade or conceal the administrative violation.

Article 7. Forms of Administrative Sanctions and Measures to Remedy Consequences

1. For each administrative violation in the field of currency and banking activities, the violator must bear one of the following main forms of administrative sanctions:

a) To issue warnings;

b) Fine.

2. Depending on the nature and degree of the violation, the violator may also be subject to one or more of the following supplementary forms of administrative sanctions:

a) Confiscation of property or means used to commit the administrative violation.

b) Requesting the competent authority to suspend temporarily or indefinitely the conduct of one or several related business operations in accordance with the provisions of the Law on the State Bank of Vietnam and the Law on Credit Institutions.

3. In addition to the forms of administrative sanctions prescribed in Clauses 1 and 2 of this Article, the violator may also be subject to measures to remedy consequences:

Compelling compliance with legal regulations concerning the administrative violation.

Chapter II

ADMINISTRATIVE VIOLATIONS IN THE FIELD OF CURRENCY AND BANKING ACTIVITIES, FORMS OF SANCTIONS AND PENALTIES

VIOLATIONS CONCERNING LICENSES FOR ESTABLISHMENT AND OPERATIONS

Section 1

AND OPERATIONS OF CREDIT INSTITUTIONS

VIOLATIONS CONCERNING LICENSES FOR ESTABLISHMENT AND OPERATIONS

Article 8. Violations Concerning Licenses for Establishment and Operations, Business Operation Licenses (referred to collectively as licenses)

1. A fine of VND 5,000,000 to VND 12,000,000 for one of the following acts:

a) Operating contrary to the provisions stated in the license.

b) Operating without prior approval of the competent authority for the charter, except where otherwise provided by law.

2. A fine of VND 10,000,000 to VND 20,000,000 for one of the following acts:

a) Lending, leasing, or transferring the license to another organization or individual.

b) Altering or tampering with the license.

3. A fine of VND 45,000,000 to VND 70,000,000 for one of the following acts:

a) Conducting banking activities without a license.

b) Continuing to conduct banking activities after being suspended, having the license revoked, or the license having expired.

4. Applying supplementary forms of administrative sanctions:

Requesting the competent authority to suspend temporarily or indefinitely the conduct of one or several business operations for the administrative violation stipulated in Clause 2 of this Article.

Section 2

VIOLATIONS CONCERNING MANAGEMENT, OPERATION, AND AUDIT

Article 9. Violations concerning management and operation

1. A fine of VND 2,000,000 to VND 6,000,000 shall be imposed for any of the following acts:

a) The Chairman of the Board of Directors concurrently holding the position of General Director (Director), Deputy General Director (Deputy Director) of a credit organization, except where otherwise provided by law;

b) The Chairman or other members of the Board of Directors delegating tasks and powers to persons who are not members of the Board of Directors;

c) The Chairman of the Board of Directors participating in another credit organization's Board of Directors or management, except where such organization is a subsidiary of the credit organization or the Chairman of the People's Credit Fund Board of Directors participates in the Central People's Credit Fund Board of Directors;

d) The General Director (Director) or Deputy General Director (Deputy Director) not residing in Vietnam during their term of office; the General Director (Director) of a credit organization concurrently serving as the General Director (Director) of another credit organization, except where such organization is a subsidiary of the credit organization.

2. A fine of VND 3,000,000 to VND 9,000,000 shall be imposed on a credit organization that elects or appoints individuals who are the father, mother, wife, husband, son, daughter, brother, sister, or half-sibling of a member of the Board of Directors or General Director (Director) as members of the Supervisory Board or Chief Accountant of the same credit organization; electing or appointing individuals with the following characteristics as members of the Board of Directors, Supervisory Board, General Director (Director), Deputy General Director (Deputy Director), or Chief Accountant:

a) Currently being pursued for criminal responsibility;

b) Having been convicted of serious crimes against national security, serious crimes against socialist property, citizens' property, or serious economic crimes without having had their record expunged;

c) Having been convicted of other crimes without having had their record expunged;

d) Having previously been a member of the Board of Directors or General Director (Director), Deputy General Director (Deputy Director) of a company that has gone bankrupt, as stipulated in Article 94 of the Bankruptcy Law 2004, except in cases of bankruptcy due to force majeure;

đ) Having previously been the legal representative of a company whose operations were suspended due to serious violations of the law.

3. A fine of VND 10,000,000 to VND 20,000,000 shall be imposed for the act of the Chairman of the Board of Directors or General Director (Director) issuing guiding documents containing provisions contrary to the law.

4. Measures to remedy consequences shall be applied:

Compelling compliance with the provisions of the law within two months for violations stipulated in Clauses 1, 2, and 3 of this Article.

Article 10. Violations concerning changes that must be approved

1. A fine of VND 2,000,000 to VND 6,000,000 shall be imposed for changing any of the following contents without prior written approval from the competent authority:

a) The name of the credit organization;

b) Members of the Board of Directors, General Director (Director), members of the Supervisory Board.

2. A fine of VND 5,000,000 to VND 12,000,000 shall be imposed for changing any of the following contents without prior written approval from the competent authority:

a) The charter capital amount, authorized capital amount;

b) Transferring registered shares in violation of the law;

c) The proportion of large shareholders' shares.

3. A fine of VND 10,000,000 to VND 20,000,000 shall be imposed for changing the location of the main office, branch, sub-branch, or representative office without prior written approval from the competent authority.

4. A fine of VND 20,000,000 to VND 40,000,000 shall be imposed for any of the following acts without prior written approval from the competent authority: a) Splitting, dividing, merging, consolidating, acquiring, liquidating a credit organization;

b) Opening branches, subsidiaries, affiliated companies, public service units,

representative offices in domestic and foreign areas, including the location of the main office., representative offices in domestic and foreign areas, including the location of the main headquarters.

5. Measures to remedy consequences shall be applied:

Compelling compliance with the provisions of the law within one month for violations stipulated in Clauses 1, 2, 3, and 4 of this Article.

Article 11. Violations concerning internal control and independent audit

1. Warning shall be imposed for any of the following acts:

a) Organizing the internal control structure not in accordance with the provisions of the law; internal activities not in accordance with the provisions of the law;

b) Not establishing an internal control program as prescribed by the law. internal activities in accordance with the provisions of the law.

2. A fine of from three million to nine million dong shall be imposed for the act of failing to conduct an independent audit of the business operations of credit organizations as prescribed by the law.

3. Apply remedial measures:

The violator shall be compelled to comply with the provisions of the law within three months for violations stipulated in Clauses 1 and 2 of this Article.

Section 3

ADMINISTRATIVE VIOLATIONS CONCERNING FUNDS RAISING

Article 12. Violations concerning receipt of deposits

A fine of from fifteen million to thirty million dong shall be imposed on non-bank credit organizations that fail to comply with the provisions of the law regarding the receipt of deposits from organizations and individuals.

Article 13. Violations concerning issuance of securities

1. A fine of from fifteen million to thirty million dong shall be imposed on credit organizations that issue securities exceeding the total face value approved in writing by the competent authority.

2. A fine of from forty-five million to seventy million dong shall be imposed on credit organizations that issue securities denominated in Vietnamese dong, foreign currency, or gold to raise funds from domestic or foreign individuals or organizations without written approval from the competent authority. or by gold to mobilize capital from individuals or organizations within the country or abroad without prior written approval from the competent authority.

Supplementary penalties shall be applied.

It is recommended that the competent authority suspend the issuance of securities for a period of from three to six months for credit organizations that repeatedly violate Clause 1 of this Article.

Section 4

ADMINISTRATIVE VIOLATIONS CONCERNING LOANS, BANK GUARANTEES, DISCOUNTS AND FINANCIAL LEASING

DISCOUNTS AND FINANCIAL LEASING

Article 14. Violations concerning loans

1. A fine of from two hundred thousand to five hundred thousand dong shall be imposed for the act of not publicly disclosing loan interest rates to customers.

2. A fine of VND 1,000,000 2. A fine of from one million to three million dong shall be imposed for any of the following acts:

a) Not retaining sufficient credit files in accordance with the provisions of the law;

b) Establishing a credit contract (or another document replacing the credit contract permitted by the competent authority) not in accordance with the provisions of the law.

3. A fine of VND 2,000,000 3. A fine of from two million to six million dong shall be imposed for any of the following acts:

a) Not developing a lending process;

b) Not monitoring the borrowing process, use of borrowed funds, and repayment according to the provisions of the law.

4. A fine of VND 3,000,000 to VND 9,000,000 for one of the following acts:

4. A fine of from three million to nine million dong shall be imposed for any of the following acts:

a) Not establishing a credit contract;

b) Not transferring overdue debt as prescribed by the law;

c) Reducing interest rates, extending principal or interest payment terms, adjusting repayment periods for principal and interest, or restructuring debt not in accordance with the provisions of the law.

a) Providing loans to organizations or individuals who do not meet the borrowing conditions stipulated by law;

5. A fine of from five million to twelve million dong shall be imposed for any of the following acts:

a) Granting loans to organizations or individuals who do not meet the conditions for borrowing as prescribed by the law;

b) Granting syndicated loans, entrusted loans, or accepting entrusted loans not in accordance with the provisions of the law.

6. A fine of from ten million to twenty million dong shall be imposed for granting loans based on collateral consisting of shares of the credit organization itself.

Article 15. Violations concerning discounting, rediscounting of commercial bills and other negotiable instruments

A fine of from five million dong to twelve million dong shall be imposed on the act of providing credit in the form of discounting, rediscounting of commercial bills and other negotiable instruments not in accordance with the provisions of the law.

Article 16. Violations concerning loan guarantees, payment guarantees, performance guarantees, tender guarantees, and other forms of bank guarantees (collectively referred to as guarantee)

1\. A fine of from one million dong to three million dong shall be imposed on the act of failing to retain sufficient guarantee files as prescribed by law.

2\. A fine of from five million dong to twelve million dong shall be imposed on one of the following acts:

a\. Guaranteeing for individuals or organizations that do not meet the conditions stipulated by law;

b\. Accepting collateral for guarantees or failing to comply with other legal regulations regarding guarantees.

3\. A fine of from thirty million dong to fifty million dong shall be imposed on credit institutions that have not been permitted by competent authorities to conduct international transactions and engage in loan guarantees, payment guarantees, and other forms of bank guarantees for guarantors who are foreign individuals or organizations.

4\. Additional sanctions shall be applied:

The competent authority shall propose suspending the guarantee business operation for a period of three months for organizations that violate the provisions of Clause 2 of this Article from the date of discovery of the violation.

Article 17. Violations concerning financial leasing activities

1\. A fine of from one million dong to three million dong shall be imposed on one of the following acts:

a\. Failing to retain sufficient leasing files as prescribed by law;

b\. Establishing a financial leasing contract not in accordance with the provisions of the law.

2\. A fine of from two million dong to six million dong shall be imposed on one of the following acts:

a\. Failing to establish a financial leasing process;

b\. Failing to monitor and supervise the financial leasing process, the use of leased assets, and customer debt repayment.

3\. A fine of from three million dong to nine million dong shall be imposed on one of the following acts:

a\. Failing to establish a financial leasing contract;

b\. Failing to transfer overdue debts in accordance with the provisions of the law;

c\. Reducing interest rates; extending principal or interest repayment periods, or adjusting repayment terms for principal and interest not in accordance with the provisions of the law.

4\. A fine of from five million dong to twelve million dong shall be imposed on one of the following acts:

a\. Financial leasing for organizations or individuals that do not meet the conditions stipulated by law;

b\. Financial leasing of pooled funds, agency leasing, and accepting agency leasing not in accordance with the provisions of the law.

5. Measures to remedy consequences shall be applied:

Compel compliance with financial leasing regulations for violations stipulated in Clauses 1, 2, 3, and 4 of this Article.

Section 5

ADMINISTRATIVE VIOLATIONS CONCERNING FOREIGN EXCHANGE MANAGEMENT AND GOLD TRADING

MANAGEMENT OF GOLD AND FIXED ASSETS AND REAL ESTATE BUSINESS

Article 18. Violations concerning foreign exchange management and gold trading operations

1\. A fine of from two hundred thousand dong to five hundred thousand dong shall be imposed on the act of failing to publicly display the buying and selling exchange rates at the transaction location as prescribed by the competent authority.

2\. A fine of from one million dong to three million dong shall be imposed on the act of buying, selling, or settling foreign currency transactions with customers or paying foreign currency deposits from abroad to Vietnam not in accordance with the State Bank's prescribed transaction rate.

3\. A fine of from five million dong to twelve million dong shall be imposed on one of the following acts:

a\. Providing loans, financial leasing, or repaying domestic debts in foreign currency not in accordance with the law;

b\. Transferring or carrying foreign currency out of or into Vietnam not in accordance with the law, except as provided for in Clause 6 of this Article;

c\. Settling goods and service payments in foreign currency with foreigners not in accordance with the law;

d\. Buying, selling, lending, or publicly displaying prices of goods and services in foreign currency not in accordance with the law.

4\. A fine of from ten million dong to twenty million dong shall be imposed on one of the following acts:

a\. Individuals, organization opening or using foreign currency accounts abroad without permission or not in accordance with the provisions of the competent authority's permit;

b\. Credit institutions failing to comply with legal regulations on foreign currency status or Vietnamese dong status;

c\. Organizations with foreign currency income failing to comply with legal regulations on selling obtained foreign currency to credit institutions;

d\. Organizations failing to comply with legal regulations on foreign borrowing and repayment, guarantees, and re-guarantees for foreign loans;

đ\. Individuals or organizations buying, selling, or using standard international gold not in accordance with the law;

e\. Individuals or organizations concealing or colluding with illegal foreign exchange activities;

g\. Individuals or organizations with foreign currency income abroad failing to comply with legal regulations on transferring foreign currency back home.

5\. A fine of from forty-five million dong to seventy million dong shall be imposed on one of the following acts:

a\. Individuals or organizations engaging in foreign exchange activities without a permit from the competent authority or with expired or suspended foreign exchange activity permits;

b\. Individuals or organizations that are not credit institutions conducting remittance services without a permit from the competent authority;

c) Individuals or organizations engaging in foreign currency export, import, or gold trade without a State Bank permit.

6\. Individuals or organizations exiting or entering the country with foreign currency or gold not in accordance with customs declaration regulations shall be subject to administrative penalties in the customs domain.

7\. Additional sanctions shall be applied:

Confiscate the amount of foreign currency or gold for violations stipulated in point b Clause 3 and point đ Clause 4 of this Article.

Chapter 6

ADMINISTRATIVE VIOLATIONS CONCERNING PAYMENTS; INVESTING IN FIXED ASSETS AND REAL ESTATE BUSINESS

INVESTMENT IN FIXED ASSETS AND REAL ESTATE BUSINESS

Article 19. Violations related to cash payment

1. A fine of VND 1,000,000 to VND 3,000,000 shall be imposed on the act of violating the fixed cash reserve limit.

2\. A fine of from two million dong to six million dong shall be imposed on one of the following acts:

a) Violating the provisions on cash payments for certain expenditures;

b) Exceeding the cash payment limit.

Article 20. Violations related to the issuance and use of cheques, and payment through service-providing organizations

1. A fine of VND 3,000,000 to VND 9,000,000 shall be imposed on the intentional issuance of cheques without sufficient funds and failure to fulfill the obligation to repay the full amount demanded to the beneficiary or the person who paid the beneficiary.

2\. A fine of from five million dong to twelve million dong shall be imposed on one of the following acts:

a) Possessing, circulating, transferring, using counterfeit payment instruments;

b) Intruding or attempting to intrude, damaging, or illegally altering programs or databases in computer networks used for payment transactions.

Article 21. Violations related to security of vaults and funds

1. A fine of VND 1,000,000 to VND 3,000,000 shall be imposed on any violation of the safety regulations for vaults and funds as prescribed by the State Bank.

2. A fine of VND 5,000,000 to VND 12,000,000 shall be imposed on the act of destroying Vietnamese currency without reaching the level of criminal prosecution.

Article 22. Violations related to purchasing and investing in fixed assets

A fine of VND 10,000,000 to VND 20,000,000 shall be imposed on credit institutions that purchase or invest in their own fixed assets exceeding the permissible ratio as stipulated by law.

Article 23. Violations related to real estate business

A fine of VND 30,000,000 to VND 50,000,000 shall be imposed on credit institutions directly engaging in real estate business.

Section 7

ADMINISTRATIVE VIOLATIONS RELATED TO ENSURING THE SAFETY OF OPERATIONS

OF CREDIT ORGANIZATIONS

OF CREDIT INSTITUTIONS

Article 24. Violations related to opening accounts and maintaining mandatory reserves

2. Measures to address consequences:

1. A warning shall be issued for failing to open a deposit account for mandatory reserves at the State Bank or for maintaining a balance lower than the mandatory reserve ratio as prescribed by law.

Compel immediate compliance with the mandatory reserve ratio as prescribed by law.

1. Article 25. Violations related to safety in lending, guaranteeing, discounting commercial bills and other negotiable instruments, and financial leasing

A fine of VND 2,000,000 to VND 6,000,000 shall be imposed on the act of lending or leasing without collateral; lending or leasing under preferential conditions not in accordance with the law; total outstanding loans or leases from credit institutions to the following entities exceed 5% of the institution's own capital:

a) Auditing organizations, responsible auditors at credit institutions, chief accountants of credit institutions, inspectors performing inspection tasks at credit institutions;

b) Large shareholders of credit institutions;

c) Enterprises where one of the entities specified in points a, b, and c of Clause 2 of this Article owns more than 10% of the enterprise's charter capital, except as otherwise provided by law. 2. A fine of VND 5,000,000 to VND 12,000,000

shall be imposed on credit institutions for any of the following acts:;

a) Lending or leasing to members of the Board of Directors, members of the Supervisory Board, General Manager (Director), Deputy General Manager (Deputy Director) of the credit institution, except as otherwise provided by law;

b) Lending or leasing to persons assessing and approving loans or leasing, except as otherwise provided by law; c) Lending or leasing to parents, spouses, children of members of the Board of Directors, members of the Supervisory Board, General Manager (Director), Deputy General Manager (Deputy Director) of the credit institution, except as otherwise provided by law;

d) Accepting guarantees from the entities specified in points a, b, and c of Clause 2 of this Article as a basis for lending or leasing to customers.

3. A fine of VND 10,000,000 to twenty million dong shall be imposed on one of the following acts:

a) Lending or leasing to a customer where the total outstanding exceeds the ratio stipulated by law compared to the credit institution's own capital, except for the following cases:

Loans as prescribed by the Government; lending or leasing from entrusted funds of the Government, organizations, or individuals, or when the borrower is another credit institution;

Collateral loans secured by savings certificates issued by the same credit union;

b) Providing guarantees for a customer, discounting commercial bills and other negotiable instruments exceeding the ratio stipulated by law compared to the credit institution's own capital;

c) Lending for prohibited capital needs as stipulated by law.

4. Measures to address consequences:

Depending on the nature of the violation, credit institutions may also be subject to one of the following remedial measures:

a) Compel recovery of the loan principal within six months from the date of discovery of the violation for violations under Clause 2 of this Article;

b) Compel recovery of the excess loan principal within six months for violations under Clauses 1 and 3 of this Article.

Article 26. Violations concerning safety ratios in the operation of credit organizations

1. A fine of from five million to twelve million Vietnamese dong shall be imposed on credit organizations that fail to comply with legal provisions regarding maintaining one of the following safety ratios:

Liquidity ratio;

Minimum capital adequacy ratio;

Maximum proportion of short-term funds used for medium- and long-term loans;

Other safety ratios as prescribed by law.

2. Measures to rectify consequences shall be applied:

Compel compliance with the safety ratios prescribed by the State Bank within one month from the date of discovery of the violation stipulated in this Article.

Article 27. Violations concerning limits on capital contribution and share purchases

1. A fine of from fifteen million to thirty million Vietnamese dong shall be imposed on one of the following acts:

a) Credit organization engaging in capital contribution or share purchase in a business or exceeding the maximum limit for total capital contribution or share purchase in all businesses as prescribed by law;

b) Joint-stock credit organization using charter capital and funds to purchase shares or contribute capital to shareholders of the same joint-stock credit organization.

2. Measures to rectify consequences shall be applied:

Compel rectification of the violation stipulated in this Article within twelve months from the date of discovery of the violation.

Article 28. Violations concerning risk reserves

1. A fine of from two million to six million Vietnamese dong shall be imposed on credit organizations that improperly classify "loan" assets in banking activities and establish risk reserves as prescribed by law.

2. A fine of from three million to nine million Vietnamese dong shall be imposed on credit organizations that fail to establish risk reserves as prescribed by law.

3. A fine of from five million to twelve million Vietnamese dong shall be imposed on credit organizations that improperly use risk reserves as prescribed by law.

4. Measures to address consequences:

Compel compliance with regulations on risk reserves within one month from the date of discovery of the violation stipulated in this Article.

Article 29. Violations concerning the establishment and use of funds

1. A fine of from five million to twelve million Vietnamese dong shall be imposed on one of the following acts: a) Failure to establish funds as prescribed by law;

b) Improper establishment and use of funds as prescribed by law.

a) Compel proper establishment of funds;

2. Measures to rectify consequences shall be applied:

b) Compel restoration to the original state due to improper use of funds as prescribed by law.

Article 30. Violations concerning deposit insurance

a) Organizations participating in mandatory deposit insurance but failing to pay deposit insurance premiums as prescribed by law;

1. Warning shall be imposed for any of the following acts:

b) Organizations participating in deposit insurance not publicly displaying their participation in deposit insurance at their headquarters and transaction locations.

2. Late payment of deposit insurance premiums shall be penalized according to the Government Decree on deposit insurance.

ADMINISTRATIVE VIOLATIONS CONCERNING ACCOUNTING AND STATISTICS; INFORMATION AND REPORTING SYSTEMS; SECRECY OF BANKING ACTIVITIES

Section 8

ADMINISTRATIVE VIOLATIONS REGARDING ACCOUNTING AND STATISTICS;

INFORMATION AND REPORTING SYSTEM; SECRECY OF BANKING ACTIVITIES

Article 31. Violations concerning accounting and statistics

Violations concerning accounting and statistics in monetary matters and banking activities shall be penalized according to the Government Decree on administrative penalties for violations in the field of accounting and statistics.

Article 32. Violations concerning information management and banking activities

1. A warning shall be issued for the act of submitting reports late as prescribed by the competent authority.

2. A fine of from five hundred thousand to two million Vietnamese dong shall be imposed for the act of failing to submit complete reports or submitting reports not in accordance with the regulations of the competent authority.

3. A fine of from two million to six million Vietnamese dong shall be imposed for the act of failing to comply with reporting systems as prescribed by law, except as provided for in Article 31.

4. A fine of VND 3,000,000 to VND 9,000,000 for one of the following acts:

a) Submitting false reports on the activities of credit organizations;

b) Providing organizations or individuals with information related to the activities of the State Bank and credit organizations without authorization from the competent authority as prescribed by law or without customer consent, except as provided for in Articles 102, 103, and Clause 2 of Article 104 of the Law on Credit Organizations.

5. A fine of from five million to twelve million Vietnamese dong shall be imposed on credit organizations that fail to immediately report to the competent authority about the risk of losing liquidity for customers that may seriously affect the business operations of the credit organization.

Article 33. Violations concerning the confidentiality of banking activities

A fine shall be imposed for unintentionally disclosing secrets or losing documents, data listed in the State Secrets Catalogue of the Banking Sector, but not reaching the level of criminal prosecution, including:

1. From 1,000,000 VND to 3,000,000 VND for the act of leaking secrets or losing documents, data listed in the State Secrets Catalogue of the Banking Sector at the "Confidential" level.

2. From 3,000,000 VND to 9,000,000 VND for the act of leaking secrets or losing documents, data listed in the State Secrets Catalogue of the Banking Sector at the "Top Secret" level.

3. From 5,000,000 VND to 12,000,000 VND for the act of leaking secrets or losing documents, data listed in the State Secrets Catalogue of the Banking Sector at the "Absolutely Top Secret" level.

Section 9

ADMINISTRATIVE VIOLATIONS CONCERNING INFRINGEMENT OF AUTONOMOUS BUSINESS RIGHTS OF CREDIT ORGANIZATIONS; OBSTRUCTING INSPECTION; FAILURE TO COMPLY WITH REQUIREMENTS OF AUTHORITIES WITH POWER TO IMPOSE ADMINISTRATIVE SANCTIONS; UNLAWFUL COMPETITION

Section VI PHẠM HÀNH CHÍNH VỀ XÂM PHẠM QUYỀN TỰ CHỦ KINH DOANH CỦA TỔ CHỨC TÍN DỤNG; CẢN TRỞ VIỆC THANH TRA, KHÔNG THỰC HIỆN YÊU CẦU CỦA CẤP CÓ THẨM QUYỀN XỬ PHẠT VI PHẠM HÀNH CHÍNH; CẠNH TRANH BẤT HỢP PHÁP

INSPECTION, FAILURE TO COMPLY WITH THE REQUIREMENTS OF THE AUTHORITY

WITH THE POWER TO IMPOSE ADMINISTRATIVE SANCTIONS FOR VIOLATIONS;

UNFAIR COMPETITION

Article 34. Acts infringing on the autonomous business rights of credit organizations and other entities engaged in banking activities

A warning shall be imposed for any of the following acts:

1. Coercing or using one's influence to request credit organizations to grant loans, invest capital, purchase shares, or engage in foreign exchange operations contrary to regulations.

2. Concealing or colluding with acts violating the provisions of Clause 1 of this Article.

Article 35. Acts obstructing inspection and failing to comply with requirements of authorities with power to impose administrative sanctions

1\. A fine of from one million dong to three million dong shall be imposed on one of the following acts:

a) Delaying, evading, or failing to provide complete documents, vouchers, data as required by the inspection organization or inspection team; providing false documents or data;

b) Concealing, altering vouchers, ledgers, or changing evidence while under inspection;

c) Arbitrarily removing, moving, or engaging in other acts that alter the sealed state of warehouses, vaults, safes, ledgers, accounting vouchers, loan files, guarantee files, financial leasing files, or other sealed evidence.

2\. A fine of from two million dong to six million dong shall be imposed on one of the following acts:

a) Failing to comply with the requirements of the State Bank Inspectorate and other competent authorities;

b) Illegally interfering with the handling process of the State Bank Inspectorate.

Article 36. Acts of unlawful competition

1. A fine of VND 2,000,000 to VND 6,000,000 shall be imposed for any of the following acts:

a) Spreading false information damaging the interests of credit organizations and the legitimate interests of other organizations and individuals;

b) Engaging in illegal promotional activities;

c) Engaging in other acts of unlawful competition as prescribed by law.

2. A fine from 5,000,000 VND to 12,000,000 VND shall be imposed for speculative acts disrupting the money market, foreign exchange market, or gold market without reaching the level of criminal prosecution.

Chapter III

AUTHORITY AND PROCEDURES FOR IMPOSING ADMINISTRATIVE PENALTIES FOR VIOLATIONS

Article 37. Authority to impose administrative sanctions

1. A State Bank inspector performing official duties has the right:

a) To issue warnings;

b) To impose a fine up to two hundred thousand dong;

c) Confiscate objects and means used in violation up to a value of 2,000,000 VND;

d) To apply measures to remedy consequences as provided for in Clause 3 of Article 7 of this Decree.

2. The Chief Inspector of the State Bank Branch in provinces and centrally-administered cities has the right:

a) To issue warnings;

b) To impose fines up to 20,000,000 VND;

c) To apply additional forms of administrative sanction and measures to remedy consequences as provided for in point a of Clause 2 and Clause 3 of Article 7 of this Decree;

d) To propose the Governor of the State Bank Branch in provinces and centrally-administered cities to suspend temporarily or indefinitely the performance of one or more related business activities according to the provisions of the Law on the State Bank of Vietnam and the Law on Credit Organizations.

3. The Chief Inspector of the State Bank has the right:

a) To issue warnings;

b) To impose fines up to 70,000,000 VND;

c) To apply additional forms of administrative sanction and measures to remedy consequences as provided for in point a of Clause 2 and Clause 3 of Article 7 of this Decree;

d) To propose the Governor of the State Bank of Vietnam to suspend temporarily or indefinitely the performance of one or more related business activities according to the provisions of the Law on the State Bank of Vietnam and the Law on Credit Organizations.

4. The Chairman of the People's Committee of the province; the Director of the Economic Police Bureau, the Director of the Criminal Investigation Bureau, the Director of the Drug Crime Prevention Bureau, the Director of the Exit and Entry Administration Bureau as stipulated in Article 30 and Clause 7 of Article 31 of the Administrative Sanctions Enforcement Ordinance, when discovering individuals or organizations that are not credit organizations committing violations of foreign exchange management regulations as specified in points b, d of Clause 3, points a, c, d, đ, e, g of Clause 4 and Clause 5 of Article 18 of this Decree, have the authority to issue decisions on administrative sanctions according to this Decree, and must simultaneously inform the State Bank of Vietnam.

Article 38. Delegation of authority to impose administrative sanctions

In cases where the person authorized to impose administrative sanctions as stipulated in Clauses 2, 3, and 4 of Article 37 of this Decree is absent, the deputy authorized to impose administrative sanctions shall have such authority and shall bear responsibility for their decision.

Article 39. Suspension of administrative violation acts

Upon discovery of an administrative violation, the person authorized to impose sanctions must immediately issue an order to suspend the administrative violation act.

Article 40. Establishment of Administrative Violation Records

1. When discovering acts of administrative violations, the authorized authority enforcing public duties must promptly establish an administrative violation record and report to the competent authority as prescribed in the Government's Decree on the organization and operation of Banking Inspection.

2. The establishment of administrative violation records shall be applied to all cases of administrative violations in the monetary and banking activities sector, except for cases where the violation act is identified from criminal cases transferred for administrative violation handling.

3. The administrative violation penalty record must be established in at least two copies according to the prescribed form; the record must be signed by the person establishing the record, the violator or the representative of the violating organization; if there are witnesses, victims or representatives of the victim organizations, they must also sign the record. If the record consists of multiple pages, those persons specified in this clause must sign each page of the record. In case the violator, the representative of the violating organization, witness, victim or representative of the victim organization refuse to sign, the person establishing the record must clearly state the reason in the record.

4. After completion, the record must be handed over to the individual or organization that violated one copy; if the violation exceeds the penalty authority of the person establishing the record, the person establishing the record must send the original administrative violation record and all related documents and files discovered to the competent authority with penalty authority within three working days from the date of the administrative violation record.

Article 41. Decision on Penalty

1. The penalty decision must be established according to the prescribed form. The deadline for issuing an administrative violation penalty decision is ten working days from the date of the administrative violation record; for cases with many complex circumstances, the deadline for issuing the penalty decision is thirty days. If additional time is needed to verify and collect evidence, the authorized authority must report in writing to their direct supervisor to request an extension; the extension period does not exceed thirty days. The supervisor must provide comments in writing. Beyond the aforementioned deadline, the authorized authority may not issue a penalty decision; in cases where no penalty decision is issued, the measures to mitigate consequences as stipulated in Clause 3, Article 7 of this Decree can still be applied.

2. The implementation of administrative violation penalties shall be carried out as follows:

a) When penalizing a person who commits multiple acts of administrative violations, the authorized authority shall issue only one penalty decision, specifying clearly the form and level of penalty for each act of violation; if the forms of punishment are fines, they are combined into a total fine. The authorized authority shall not divide one act of violation into several minor acts to impose multiple penalties;

b) For a case involving multiple individuals or organizations committing similar acts of administrative violations but without mutual involvement during the commission of the violation, each individual or organization shall be penalized with separate penalty decisions. Based on the nature and degree of violation of each individual or organization, the authorized authority shall determine specific penalties for each individual or organization committing the violation;

c) If the form or level of punishment prescribed for one of the acts exceeds the authority of the person imposing the penalty, then that person must transfer the violation case to the authority with the appropriate penalty authority.

3. In cases where administrative violations fall under the penalty authority of multiple people, the penalty shall be carried out by the first person to handle the case.

4. The penalty decision takes effect from the date of signature, except when another effective date is specified in the decision.

5. The penalty decision must be sent to the individual or organization being penalized and the revenue collection agency within three working days from the date of issuance of the penalty decision.

Article 42. Procedure for Imposing Fines

1. The imposition of fines shall be carried out according to the procedures stipulated in Articles 40 and 41 of this Decree. Within ten days from the date of receiving the decision on administrative penalty, individuals and organizations subject to fines must pay the fine into the State Treasury as specified in the administrative penalty decision and obtain a receipt for the fine payment.

2. When imposing a fine, the specific amount of the fine for a particular administrative violation is the average level within the prescribed fine range for that violation; if there are mitigating circumstances, the fine may be reduced but not below the minimum level of the fine range; if there are aggravating circumstances, the fine may be increased but not above the maximum level of the fine range.

Article 43. Procedure for Suspending One or Several Business Activities or Revoking Licenses Already Issued to Credit Organizations

1. For administrative violations requiring supplementary penalties in the form of suspending one or several business activities of credit organizations, the Head of the State Bank of Vietnam Inspectorate or the Head of the State Bank of Vietnam Inspectorate branch in provincial-level cities directly under the central government shall propose to the competent authority specified in point d, Clause 2 and point d, Clause 3, Article 37 of this Decree to consider and decide.

The suspension of one or several business activities of credit organizations shall be implemented in accordance with the provisions of the Law on the State Bank of Vietnam and the Law on Credit Organizations.

2. When discovering that a license was issued beyond authority or contains content contrary to the law, the authorized person imposing the penalty must immediately report to the authority that issued the license to revoke it in accordance with the law.

Article 44. Procedure for Confiscation of Evidence and Handling of Administrative Violation Evidence and Means

1. When confiscating evidence and means of administrative violations recorded in the administrative penalty decision, the authorized person imposing the penalty must prepare a confiscation record in accordance with the prescribed model. The record must have the signatures of the confiscator, the person being penalized, a representative of the organization being penalized, or a witness.

2. In cases where it is necessary to seal evidence and means of administrative violations, it must be done immediately in the presence of the person being penalized or a representative of the organization being penalized and a witness; if the person being penalized or a representative of the organization being penalized is absent, there must be two witnesses present.

3. The procedure for handling evidence and means of administrative violations shall be carried out in accordance with Article 61 of the Ordinance on Handling Administrative Violations.

Article 45. Transfer of Case Files of Violations Indicative of Criminal Offenses for Criminal Prosecution

The procedure for transferring case files of violations indicative of criminal offenses for criminal prosecution shall be carried out in accordance with Article 62 of the Ordinance on Handling Administrative Violations.

Article 46. Transfer of Case Files of Violations for Administrative Penalties and Enforcement of Administrative Penalty Decisions

The procedure for transferring case files of violations for administrative penalties and enforcement of administrative penalty decisions shall be carried out in accordance with Articles 63 and 64 of the Ordinance on Handling Administrative Violations.

Article 47. Compulsory Enforcement of Administrative Penalty Decisions

1. Individuals and organizations subject to administrative penalties who do not voluntarily comply with the administrative penalty decision shall be subject to compulsory enforcement through the following measures:

a) Deducting part of the salary or income, deducting money from a bank account;

b) Seizing assets of equivalent value to the fine amount for auction;

c) Applying other compulsory measures to enforce the confiscation of evidence and means used in the administrative violation, compelling restoration to the original state altered due to the administrative violation.

2. The authorized person imposing the penalty as stipulated in Clauses 2, 3, and 4, Article 37 of this Decree has the right to issue a compulsory enforcement decision and the duty to organize the enforcement.

3. Individuals and organizations receiving a compulsory enforcement decision must strictly comply with the compulsory enforcement decision.

4. State agencies, People's Police forces, and people's committees at all levels have the responsibility to cooperate in organizing the enforcement of compulsory measures when requested by the authorized person imposing the penalty as stipulated in Clause 2 of this Article.

5. Individuals and organizations subject to compulsory enforcement must bear all costs related to organizing the implementation of compulsory measures.

Article 48. Transfer of Administrative Offense Penalty Decisions for Enforcement

The transfer of administrative offense penalty decisions for enforcement shall be carried out in accordance with Article 68 of the Administrative Violation Handling Ordinance.

Article 49. Statute of Limitations for Enforcing Administrative Offense Penalty Decisions

The statute of limitations for enforcing administrative offense penalty decisions shall be carried out in accordance with Article 69 of the Administrative Violation Handling Ordinance.

Chapter IV

SUPERVISION AND INSPECTION IN THE HANDLING OF ADMINISTRATIVE VIOLATIONS;

SETTLEMENT OF COMPLAINTS, PROSECUTIONS, AND HANDLING OF VIOLATIONS AGAINST PERSONS WITH AUTHORITY TO IMPOSE ADMINISTRATIVE PENALTIES

IN THE FIELD OF CURRENCY AND BANKING ACTIVITIES

Article 50. Supervision and Inspection in Handling Administrative Violations

The head of state agencies has the responsibility to regularly inspect the imposition of administrative penalties by persons with authority to impose administrative penalties within their jurisdiction; promptly settle complaints and prosecutions related to administrative penalties involving persons with authority to impose penalties as stipulated in Article 37 of this Decree; handle persons who commit errors in imposing administrative penalties within their jurisdiction; and implement reporting systems on administrative violations within their areas of responsibility according to the requirements of competent authorities.

Article 51. Settlement of Complaints, Initiating Lawsuits Regarding Administrative Offense Penalty Decisions and Prosecutions Against Illegal Acts of Persons With Authority to Impose Administrative Penalties

1. Organizations and individuals subject to administrative penalties in the field of currency and banking activities have the right to complain about administrative offense penalty decisions to competent state agencies or initiate lawsuits before the Court. The complaint and lawsuit procedures shall be carried out in accordance with the provisions of the law.

During the period of complaint or lawsuit, organizations and individuals subject to administrative penalties must still comply with the administrative penalty decision. When there is a decision resolving the complaint from a competent state agency or a judgment, decision of the Court that has taken legal effect, then it shall be enforced according to the complaint resolution decision of the competent state agency or according to the judgment, decision of the Court.

2. Reporting and handling reports regarding illegal acts of persons with authority to impose administrative penalties in the field of currency and banking activities shall be implemented in accordance with the provisions of the Law on Complaints and Reports and other relevant legal regulations.

Article 52. Handling of violations against persons authorized to impose administrative penalties

Handling violations against persons with authority to impose administrative penalties in the field of currency and banking activities shall be carried out in accordance with Article 121 of the Administrative Violation Handling Ordinance.

Chapter V

IMPLEMENTING PROVISIONS

Article 53. Effective Date

This Decree takes effect 15 days after its publication in the Official Gazette and replaces Decree No. 20/2000/NĐ-CP dated June 15, 2000 of the Government on administrative penalties in the field of currency and banking activities. Previous provisions contrary to this Decree are hereby abolished.

Article 54. Implementation guidance

The Governor of the State Bank of Vietnam is responsible for guiding the implementation of this Decree and, if necessary, may coordinate with relevant ministries and sectors to guide its implementation.

Article 55. Responsibility for Implementation

The Ministers, Heads of Ministries equivalent to ministries, Heads of government agencies, and Chairmen of provincial people's committees directly under the central government shall be responsible for implementing this Decree./.