Vietnam: Vietnam Issues New Regulations Implementing Its Anti-Corruption Law, Effective 15 August 2019

Last Updated: 9 August 2019
Article by Vi Vu, Maurice Burke, Ngan Tran and Jeff Olson

On 1 July 2019 the Vietnamese government issued new regulations pursuant to Decree No. 59/2019/ND-CP (the New Regulations), which will take effect on 15 August 2019. The New Regulations (1) provide implementation details for Vietnam's new Anti-Corruption Law (Law No. 36/2018/QH14), which took effect on the same day (the Anti-Corruption Law); and (2) replaced the regulations on receiving and giving of gifts that apply to certain government and state-owned or funded entities and individuals (the Gift Regulations) that have been in place since 2007 (Decision No. 64/2007/QD-TTg).

The New Regulations, although somewhat dialled back from prior drafts, are in line with the Vietnamese government's pronouncements to "clean up" corruption. Our analysis of the key provisions that impact the private sector is set out below. Although the Anti-Corruption Law's main focus continues to be on the public sector, its reach has extended to nonstate enterprises that rely on public capital on a large scale - namely, publicly held companies and credit institutions.1 Such entities are now required to establish and implement specific anti-corruption policies and are subject to investigation by government inspectorates to ensure compliance. In addition, the New Regulations provide details on the circumstances in which former public officials can join nonstate enterprises following their resignation or retirement from public office.

Although specific fines and penalties against individuals were contemplated in prior drafts, the New Regulations leave it to the company's discretion to determine appropriate discipline and sanctions for heads and deputies who allow corruption to occur within their organizations. Covered entities that fail to implement appropriate policies are subject to administrative penalties under the New Regulations. Criminal liability for bribery and corruption, however, is still limited to individuals. There is still no corporate liability under Vietnamese law, even though this has been a topic of discussion amongst lawmakers and might change in the future.

The New Regulations governing the giving and receiving of gifts, although not imposing affirmative obligations on companies in the private sector, are still important for corporates to keep in view, as the New Regulations impose requirements on public officials to disclose improper gifts received.

Vietnamese lawmakers are expected to continue to issue guidance on implementing the Anti- Corruption Law and we will continue to provide updates on important changes that affect the private sector.

New Anti-Corruption Law guidance

With respect to publicly traded companies and credit institutions, the New Regulations set out two main categories of requirements:

1. Such companies are required to establish specific policies designed to guard against corruption, including policies to ensure openness and transparency in their operations (such as those requiring disclosure of employees' legal rights, salaries and benefits, and the company's internal organizational structure), policies governing conflicts of interest, and policies that require heads of organizations and their deputies to detect and prevent corruption.

2. Such companies are now subject to investigation by government inspectorates from time to time to ensure compliance with the Anti-Corruption Law. If shortcomings are discovered, the company will be required to take remedial action. If violations of law are discovered, such violations are to be reported to the appropriate government ministries and agencies. Violations that may be criminal in nature are to be transferred to the appropriate investigative agencies to handle, with written notification to the Supreme People's Procuracy of Vietnam which has prosecution authority.

Separately, the New Regulations also set out specific restrictions on former government officials joining certain nonstate enterprises after they resign or retire from office. The Anti-Corruption Law provides that office holders in state organizations are prohibited from holding managerial or executive positions in a certain nonstate enterprises operating in the field that was under his or her management. The New Regulations set out specific parameters to implement this restriction, including the time limits that apply to persons in specific fields. For example, a former officer from the Ministry of Industry and Trade would be prohibited from holding an executive position in a private trading company from 12 to 24 months after his or her retirement or resignation from the government position. This restriction is presumably meant to help prevent the practice of former government officials setting up businesses to obtain favorable contracts or projects from their government contacts through corrupt means. These businesses are dubbed "doanh nghiệp sân sau," literally translated to "backyard businesses". Corporates will need to be more vigilant when hiring former government officials into their organizations.

Gift Regulations replaced

Although the provisions in the New Regulations pertaining to gifts do not impose affirmative obligations on gift givers in the private sector, such regulations are important to keep in view because a gift given to a public official will have to be disclosed by the official if it was given for an unlawful purpose.

The existing Gift Regulations set out the parameters for the giving and receiving of gifts by state officials, public servants, state officials holding managerial positions and representing state ownership in state-owned enterprises, and persons holding managerial positions in other government funded or owned enterprises (collectively, Public Officials). The New Regulations continue to apply to the foregoing categories of persons and entities and do not extend coverage to non-managerial employees, either in the public or private sector.

Under the New Regulations, Public Officials continue to be prohibited from receiving gifts that are given to them in connection with their public duties or for an unclear or corrupt purpose. The New Regulations, however, specify that such gifts must not be received either directly or indirectly from entities or individuals that relate to the recipient's work or matters under the recipient's management.

Like the existing Gift Regulations, the New Regulations also set out procedures for Public Officials to report and return inappropriate gifts received but with slight modifications, such as a requirement that such a report now disclose the receiver's relationship with the gift giver. This requirement replaces the requirement that the purpose of the gift, if known, be disclosed. The report must be made to the government official's direct manager within prescribed time periods.

Finally, the exception to the reporting requirement (which applies to gifts with a value of less than VN₫500,000 that are given on certain special occasions such as weddings and holidays, such as Tết) is no longer available. As a result, Public Officials must always disclose gifts received regardless of the value of the gift if it was given for an unlawful purpose.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions