The National Assembly amended the 2015 Penal Code and introduced corporate criminal liability for certain violations and commercial bribery.
The National Assembly adopted Resolution No. 41/2017/QH14 dated 20 June 2017 on the implementation of Penal Code No. 100/2015/QH13 dated 27 November 2015, amended and supplemented by Law No. No. 12/2017/QH14 1 ("Amended 2015 Penal Code") and other relevant codes and laws. Accordingly, the Amended 2015 Penal Code shall take effect on 1 January 2018. We set out notable amendments below:
1. Corporate liability shall be applicable for certain crimes
Commercial legal entities with the primary purpose of seeking profit may be subject to criminal liability for certain crimes. The Amended 2015 Penal Code sets out 32 offenses which commercial legal entities may be subject to criminal liable for. Some key offenses include: (i) tax evasion; (ii) fraud in insurance business; (iii) evasion of statutory insurance payment for employees; (iv) competitive regulatory violations; (v) infringement of intellectual property rights; (vi) money laundering; and (vii) terrorism financing.
Under the new code, a commercial legal entity shall be subject to criminal liability for such offenses only if the following conditions are satisfied:
a) The criminal offense is committed in the name of the commercial legal entity;
b) The criminal offense is committed in the interests of the commercial legal entity;
c) The criminal offense is committed under the instruction or approval of the commercial legal entity; and
d) The criminal offense is committed within the statute of limitation for prosecution.2
Nonetheless, the fact that a commercial legal entity is subject to criminal liability does not preclude the criminal liability of the individual committing the offense.
Penalties applicable to commercial legal entities include monetary fines, forcible termination or suspension of business operations and bans from conducting certain business activities and/or raising capital, for one (1) to three (3) years.
2. Corruption-related offenses shall be extended to the private sector
The Amended 2015 Penal Code officially extends the application of corruption-related offences, including (i) embezzlement, (ii) receiving bribes, (iii) giving bribes and (iv) bribery brokerage to those working in the private sector. As such the act of directly giving bribes or acting as an intermediary in giving bribes to either public or private officials shall be subject to criminal liability. The general threshold for the amount constituting a bribe remains VND2 million (approx. US$95).
With regard to giving bribes, the giver may be subject to a penalty of up to 20 years imprisonment, plus a monetary fine from VND10 million to VND50 million (approx. US$445 to US$2,222).
Commercial legal entities are not subject to criminal liability for corruption-related crimes, such as commercial bribery. Only individuals (natural persons) who are found to be responsible may be held culpable for corruption-related crimes committed by an entity.
3. Abolishment of offenses related to the provision of illegal services via computer or telecommunication networks (Article 292)
The removal of Article 292 is consistent with the abolishment of the crime of "Conducting Business Illegally" under the Amended 2015 Penal Code. The removal of this Article further promotes the development of business activities via computer and telecommunications networks, particularly as pertaining to the growth of Vietnam's emerging technology start-up sector.
4. Supplementation of offense against the regulations of business in multi-level marketing practices (Article 217A)
The Amended 2015 Penal Code criminalizes business activities in multi-level marketing arrangements that are (i) conducted without registration certificates for such multi-level sale activities or (ii) not in line with the content of such registration certificates. The penalty for non-compliance shall be a fine of up to VND5 billion or one (1) to five (5) years of imprisonment, plus additional fines of from VND100 million to 500 million (approx. US$4,450 to US$22,222) or a ban from doing certain jobs for one (1) to five (5) years. Only individuals (natural persons) may be criminally liable for such offense.
1 Law No. 12/2017/QH14 dated 20 June 2017 on amending and supplementing some articles of 2015 Penal Code.
2 Statute of limitation for criminal prosecution: 05 years for less serious crimes, 10 years for serious crimes, 20 years for very and extremely serious crimes.
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