CIRCULAR

ELABORATION OF CLAUSE 2 ARTICLE 91 OF GOVERNMENT’S DECREE NO. 98/2020/ND-CP DATED AUGUST 26, 2020 ON PENALTIES FOR ADMINISTRATIVE VIOLATIONS AGAINST REGULATIONS ON COMMERCE, PRODUCTION AND TRADE IN COUNTERFEIT AND PROHIBITED GOODS, AND PROTECTION OF CONSUMER RIGHTS

Pursuant to the Law on Penalties for Administrative Violations dated June 20, 2012;

Pursuant to the Law on amendments to the Law on Penalties for Administrative Violations dated November 13, 2020

Pursuant to the Law on Commerce dated June 14, 2005;

Pursuant to the Civil Code dated November 24, 2015;

Pursuant to the 2017 Law on Foreign Trade Management;

Pursuant to the Government’s Decree No. 98/2020/ND-CP dated August 26, 2020 on penalties for administrative violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights;

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Pursuant to the Government’s Decree No. 118/2021/ND-CP dated December 23, 2021 providing guidelines for implementation of the Law on penalties for administrative violations;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance of Vietnam;

At the request of the Director of the Legal Department;

The Minister of Finance of Vietnam promulgates a Circular elaborating on Clause 2 Article 91 of the Government’s Decree No. 98/2020/ND-CP dated August 26, 2020 on penalties for administrative violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights.

Article 1. Scope

This Circular elaborates on Clause 2 Article 91 of the Decree No. 98/2020/ND-CP regarding determination of illegal benefits obtained from administrative violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights in case of imposition of the remedial measure which is enforced transfer to state budget of money, financial instruments, objects and other assets obtained from administrative violations or amounts equivalent to the value of the exhibits and instrumentalities sold, liquidated, hidden or destroyed inconsistently with the law.

Article 2. Regulated entities

1. Vietnamese or foreign organizations and individuals that commit administrative violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights in the territory of Vietnam as prescribed in Article 2 of the Decree No. 98/2020/ND-CP and are liable to the remedial measure which is enforced transfer to state budget of money, financial instruments, objects and other assets obtained from administrative violations or amounts equivalent to the value of the exhibits and instrumentalities sold, liquidated, hidden or destroyed inconsistently with the law.

2. Officers competent to record administrative violations and officers competent to impose penalties as prescribed in Chapter III of the Decree No. 98/2020/ND-CP and Clauses 43 through 52 Article 3 of the Decree No. 17/2022/ND-CP.

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1. The illegal benefits shall be determined by the officer competent to impose penalties and specified in the decision to impose penalties or the decision to impose remedial measures.

2. The illegal benefits obtained from a violation include all benefits obtained by the violating entity from the time of commission of the violation until the violation ends or the issue date of the decision to impose penalties or the decision to impose remedial measures.

3. If an entity commits multiple violations, the illegal benefits obtained from each violation shall be determined.

If an entity repeats a violation, the illegal benefits obtained from each commission of the violation shall be determined.

Article 4. Illegal benefits

The illegal benefits obtained from administrative violations as prescribed in Article 37 of the Law on penalties for administrative violations, Point e Clause 3 Article 4 of the Decree No. 98/2020/ND-CP, and Clause 2 Article 3 of the Decree No. 17/2022/ND-CP are objects, money, financial instruments or other assets that violating entities obtain from the violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights.

Article 5. Determination of illegal monetary benefits

1. The amount of illegal monetary benefits obtained from a violation is total amount of money obtained by the violating entity from that violation and equals the proceeds earned from the illegal transfer, sale or provision of goods or services after deducting direct costs of such goods or services which are determined according to documents and records provided by the violating entity to prove the legitimacy and validity of such costs.

2. The amount of money obtained by the violating entity from the violation equals (=) the quantity of goods or volume of services illegally transferred, sold or provided multiplied by (x) the unit price minus (-) direct costs of such goods or services (if the violating entity has provided adequate documents and records to prove the legitimacy and validity of such costs). To be specific:

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b) The unit price of goods or services shall be determined on the basis of documents and records provided by the violating entity. If such documents and records are not available, the unit price shall be determined according to the market price of similar goods or services applied at the time of detection of the violation.

In case the quantity, volume and unit price cannot be determined, the amount of illegal benefits is total amount of money earned by the violating entity from the illegal transfer, sale, destroy or provision of goods or services.

3. In case an entity that commits a violation against regulations on origin of imported/exported goods when processing goods for a foreign trader is required to return all illegal benefits obtained from the violation to state budget, the amount of illegal benefits obtained from the goods processing is total amount of money earned by the violating entity from its provision of processing services (service charges, processing fees) minus (-) direct costs of such processing services (if the violating entity has provided adequate documents and records to prove the legitimacy and validity of such costs).

In case the violating entity has illegally transferred, sold or destroyed processed goods, the amount of illegal benefits to be transferred to state budget is total amount mentioned above plus (+) the amount equivalent to the value of the exhibits of the violation illegally transferred, sold or destroyed.

4. In case of transfer or selling of prohibited, counterfeit or smuggled goods or provision of services classified as conditional business lines, the amount of illegal benefits is total amount earned by the violating entity from such transfer, selling or provision of such goods or services.

Article 6. Determination of illegal benefits being financial instruments

1. The obtained illegal benefits being financial instruments are all types of financial instruments obtained by the violating entity from the violation.

2. The financial instruments specified in Clause 1 of this Article are those defined in the Civil Code and other types of financial instruments as prescribed in specialized laws.

3. If the financial instruments have been transferred, the amount of illegal benefits obtained shall be total proceeds actually received at the time of transfer.

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Article 7. Determination of illegal benefits being objects or other assets

1. The illegal benefits being objects or other assets obtained from the violation are other assets defined in the Civil Code.

2. The objects specified in Clause 1 of this Article shall be determined according to Articles 110 through 114 of the Civil Code.

3. Other assets specified in Clause 1 of this Article shall be determined according to Articles 105, 107, 109 and 115 of the Civil Code.

4. If the objects or other assets which are not prohibited, counterfeit or smuggled goods have been illegally transferred, sold or destroyed, the illegal benefits shall be determined according to the market value of similar assets or the book value of assets (if the market value is not available) or the total amount of assets specified in import/export declarations (if assets are imported/exported goods) after deducting direct costs of such goods whose legitimacy and validity must be proved by adequate documents and records.

If the objects or other assets which are prohibited, counterfeit or smuggled goods have been illegally transferred, sold or destroyed, the amount of illegal benefits shall be total amount earned by the violating entity from such transfer.

Article 8. Determination of amounts payable in case of illegally sold, liquidated or destroyed exhibits and instrumentalities

In case the exhibits/instrumentalities of an administrative violation have been sold, liquidated or destroyed against regulations of law, the violating entity shall be required to transfer to state budget an amount equivalent to the value of such exhibits/instrumentalities.

Article 9. Effect

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2. If any legislative documents referred to in this Circular are amended, supplemented or superseded, the new ones shall apply.

Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Finance of Vietnam for consideration./.

PP. MINISTER
DEPUTY MINISTER




Vo Thanh Hung