Lex Mundi Global Anti-Corruption Compliance Guide |
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Vietnam |
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(Asia Pacific)
Firm
Tilleke & Gibbins
Contributors Updated 01 Feb 2022 |
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| What is the key anti-bribery and corruption legislation in your jurisdiction? | The primary laws that cover corruption are:
Other laws also apply, such as the laws governing tendering and administrative violations. Both the Penal Code and the anti-corruption laws prohibit bribery and act facilitating bribery, such as intermediaries transferring funds for bribers. Vietnam has also passed legal instruments governing anti-money laundering activities:
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| Has there been a specific anti-bribery and corruption law enacted in your jurisdiction in the last ten years? | Vietnam’s Penal Code became effective on January 1, 2018, and is the most significant law enacted in the last ten years which addresses anti-bribery and corruption-related crime. Decrees and other issuances of notices continue to provide clarification on the larger law enactments as well. |
| Is a bribe payment to domestic government officials prohibited by the legislation? | The Penal Code criminalizes the giving and promise of bribes to any office-holder, person, or organization, whether public or private. The bribery may be committed directly or through an intermediary. The penalty for giving or promising to give a bribe largely depends on the value of the benefit given or promised. The minimum value of tangible benefits to trigger a violation of the law is VND 2 million. An offense is committed regardless of whether the bribe is received directly or via an intermediary. |
| Is a bribe payment to foreign government officials prohibited by the legislation? | The law introduces a prohibition on bribery involving foreign government officials and officials with public international organizations. This is relevant as Vietnam is a significant recipient of official development assistance from other countries, as well as loans from multilateral development banks and financial institutions. |
| Is requesting or accepting a bribe prohibited by the legislation? | Under the Penal Code, government officials as well as, individuals in the private sector are criminally liable for taking, requesting, or soliciting bribes. An offense is committed regardless of whether the bribe is received directly or via an intermediary. Additionally, an office-holder who is offered a gift must refuse to receive it. If he/she cannot refuse it, he/she must report to his/her management and hand over the gift to the appropriate department within five days of receiving it. |
| Who is subject to the legislation? | Government officials are subject to the legislation behind anti-bribery and corruption. Individuals working for corporations, charities, and other nongovernmental organizations can be criminally liable for bribery offenses under Article 352 of the Penal Code even when they do not involve government officials under the law’s recent changes. An intermediary, or broker, between a bribe giver and bribe taker, is criminally liable under the law, independent from the main transacting parties. Article 365 of the Penal Code punishes people who “broker” bribery. The term “brokering” is not defined in the law, but the plain meaning interpretation is the person who arranges the bribe/transaction between the bribe-giver and officer holder. |
| Is there criminal liability for corporate entities who have either paid or accepted a bribe payment? | The Penal Code introduces corporate criminal liability for a variety of crimes. Importantly, however, corporate criminal liability does not extend to corruption in the new law. For both private-sector and public-sector corruption offenses, only individuals can be punished. With that in mind, the law does provide corporate criminal liability for certain corruption-related offenses, such as money laundering, tax evasion, and terrorism financing. |
| What is the penalty for individuals violating the law? | Penalties range from relatively low fines of VND 20 million and six months’ imprisonment to 20 years’ imprisonment for bribery. This includes domestic and foreign officials or individuals. There is no death penalty or a life sentence for giving bribes. The severity of the punishment depends upon the bribe amount offered and what consideration would have been exchanged for the bribe; in other words, the amount of money involved in the bribe dictates the severity of the punishment. |
| Assuming corporate entities are liable for violating the legislation, what is the penalty for corporate entities violating the law? | Corporate entities are not liable for corruption under the new laws. Individuals within companies, however, can be held liable for their corrupt conduct, which includes bribery. The Penal Code sets out various punishments for companies convicted of other crimes, such as money laundering or embezzlement. For crimes other than corruption, the primary punishment is fine, which starts at VND 50 million. The amount of the fine depends on the nature of the offense and a company’s financial capacity. Other punishments include suspension of operations for a limited time period and a permanent shutdown for more egregious offenses. The law also allows banning the company from engaging in particular fields, as well as a prohibition from raising capital. In addition, property gained from crimes can be confiscated, including illegal profits. |
| Assuming corporate entities are liable for violating the legislation, does having a compliance program designed to prevent bribery constitute a defense? | The Penal Code does not prescribe corporate criminal liability for giving bribes. As such, the law does not provide for any internal compliance-related measures that may mitigate liability. However, the law does state that any person who voluntarily reports giving a bribe before being discovered might be exempt from criminal liability, and have all or part of the bribe money/property returned. Furthermore, if someone is “forced” to give a bribe, but voluntarily reports the bribe before being discovered, that person may be acquitted and have the bribe money returned. This situation could apply to an employee acting under a manager’s orders. Thus, theoretically, the company’s director or manager could raise the defense they did not order, assist, know of, or facilitate an employee’s bribe to another. Regarding individuals as brokers for bribery, if the bribery broker voluntarily reports the bribe before the crime is discovered, the broker may be exempt from criminal responsibility. The law, though, is ambiguous in regard to these types of defenses. Additionally, compliance programs for other aspects of business, such as taxes, are required by law. Additionally, under the newly enacted Decree 59, certain legal entities in the private sector, including public companies and credit institutions, are subject to requirements on openness and transparency and rules on handling conflicts of interest. In particular, these entities are required to:
Nevertheless, it is recommended for all foreign companies to maintain a strong compliance program designed to prevent bribery and corruption to meet legal requirements of other jurisdictions which may be applicable to a company, such as the Foreign Corrupt Practices Act in the United States and the U.K. Bribery Act. |
| Assuming corporate entities are liable for violating the anticorruption law, is it possible for a corporate entity to reach a deferred prosecution agreement or leniency agreement with the enforcement authorities? | Leniency is applied to companies that voluntarily disclose their offenses to authorities, and cooperate during criminal proceedings. Leniency is also granted when a company voluntarily compensates for any inflicted damage or takes action to alleviate the consequences of a crime. Interestingly, the law also describes making considerable contributions to social policies as a mitigating factor. A company may be exempt from punishment altogether after it repairs whatever damages the conduct caused and paid compensation. |
Lex Mundi Global Anti-Corruption Compliance Guide
The primary laws that cover corruption are:
- Penal Code No. 100/2015/QH13 (2015), as amended by Law No. 12/2017/QH14 in 2017 (“Penal Code”);
- Law on Anti-Corruption No. 36/2018/QH14 (2018) (“Anti-Corruption Law”); and
- Decree No. 59/2019/ND-CP of the Government (2019), guiding the implementation of the Anti-Corruption Law, as amended by Decree No. 134/2021/ND-CP of the Government (effective on February 15, 2022) (“Decree 59”).
Other laws also apply, such as the laws governing tendering and administrative violations. Both the Penal Code and the anti-corruption laws prohibit bribery and act facilitating bribery, such as intermediaries transferring funds for bribers.
Vietnam has also passed legal instruments governing anti-money laundering activities:
- Law on Prevention and Combating of Money Laundering No. 07/2012/QH13 (“AML”);
- Decree No. 116/2013/ND-CP of the Government (2013), detailing the implementation of a number of articles of the AML, as amended by Decree No. 87/2019/ND-CP of the Government (2019);
- Circular No. 35/2013/TT-NHNN of the State Bank of Vietnam (2013), guiding provisions on prevention and combating of money laundering (as amended by Circular No. 31/2014/TT-NHNN (2014) and Circular No. 20/2019/TT-NHNN (2019) of the State Bank of Vietnam);
- Decision No. 20/2013/QD-TTg of the Prime Minister (2013) on the threshold of transactions required to be reported to the State Bank of Vietnam; and
- The Penal Code cited above.
Vietnam’s Penal Code became effective on January 1, 2018, and is the most significant law enacted in the last ten years which addresses anti-bribery and corruption-related crime. Decrees and other issuances of notices continue to provide clarification on the larger law enactments as well.
The Penal Code criminalizes the giving and promise of bribes to any office-holder, person, or organization, whether public or private. The bribery may be committed directly or through an intermediary. The penalty for giving or promising to give a bribe largely depends on the value of the benefit given or promised. The minimum value of tangible benefits to trigger a violation of the law is VND 2 million. An offense is committed regardless of whether the bribe is received directly or via an intermediary.
The law introduces a prohibition on bribery involving foreign government officials and officials with public international organizations. This is relevant as Vietnam is a significant recipient of official development assistance from other countries, as well as loans from multilateral development banks and financial institutions.
Under the Penal Code, government officials as well as, individuals in the private sector are criminally liable for taking, requesting, or soliciting bribes. An offense is committed regardless of whether the bribe is received directly or via an intermediary.
Additionally, an office-holder who is offered a gift must refuse to receive it. If he/she cannot refuse it, he/she must report to his/her management and hand over the gift to the appropriate department within five days of receiving it.
Government officials are subject to the legislation behind anti-bribery and corruption. Individuals working for corporations, charities, and other nongovernmental organizations can be criminally liable for bribery offenses under Article 352 of the Penal Code even when they do not involve government officials under the law’s recent changes.
An intermediary, or broker, between a bribe giver and bribe taker, is criminally liable under the law, independent from the main transacting parties. Article 365 of the Penal Code punishes people who “broker” bribery. The term “brokering” is not defined in the law, but the plain meaning interpretation is the person who arranges the bribe/transaction between the bribe-giver and officer holder.
The Penal Code introduces corporate criminal liability for a variety of crimes. Importantly, however, corporate criminal liability does not extend to corruption in the new law. For both private-sector and public-sector corruption offenses, only individuals can be punished. With that in mind, the law does provide corporate criminal liability for certain corruption-related offenses, such as money laundering, tax evasion, and terrorism financing.
Penalties range from relatively low fines of VND 20 million and six months’ imprisonment to 20 years’ imprisonment for bribery. This includes domestic and foreign officials or individuals. There is no death penalty or a life sentence for giving bribes. The severity of the punishment depends upon the bribe amount offered and what consideration would have been exchanged for the bribe; in other words, the amount of money involved in the bribe dictates the severity of the punishment.
Corporate entities are not liable for corruption under the new laws. Individuals within companies, however, can be held liable for their corrupt conduct, which includes bribery.
The Penal Code sets out various punishments for companies convicted of other crimes, such as money laundering or embezzlement. For crimes other than corruption, the primary punishment is fine, which starts at VND 50 million. The amount of the fine depends on the nature of the offense and a company’s financial capacity.
Other punishments include suspension of operations for a limited time period and a permanent shutdown for more egregious offenses. The law also allows banning the company from engaging in particular fields, as well as a prohibition from raising capital. In addition, property gained from crimes can be confiscated, including illegal profits.
The Penal Code does not prescribe corporate criminal liability for giving bribes. As such, the law does not provide for any internal compliance-related measures that may mitigate liability. However, the law does state that any person who voluntarily reports giving a bribe before being discovered might be exempt from criminal liability, and have all or part of the bribe money/property returned.
Furthermore, if someone is “forced” to give a bribe, but voluntarily reports the bribe before being discovered, that person may be acquitted and have the bribe money returned. This situation could apply to an employee acting under a manager’s orders. Thus, theoretically, the company’s director or manager could raise the defense they did not order, assist, know of, or facilitate an employee’s bribe to another. Regarding individuals as brokers for bribery, if the bribery broker voluntarily reports the bribe before the crime is discovered, the broker may be exempt from criminal responsibility.
The law, though, is ambiguous in regard to these types of defenses. Additionally, compliance programs for other aspects of business, such as taxes, are required by law.
Additionally, under the newly enacted Decree 59, certain legal entities in the private sector, including public companies and credit institutions, are subject to requirements on openness and transparency and rules on handling conflicts of interest. In particular, these entities are required to:
- Issue specific regulations on the form of disclosure, the contents, and the responsibilities for assuring openness and transparency. Private-sector entities must disclose, among other things, their policies related to the rights and benefits of employees, code of conduct, charter, and staff organization.
- Specify cases of conflicts of interest, the reporting obligations in such cases, and the protection regime for employees who alert management to the conflicts of interest.
Nevertheless, it is recommended for all foreign companies to maintain a strong compliance program designed to prevent bribery and corruption to meet legal requirements of other jurisdictions which may be applicable to a company, such as the Foreign Corrupt Practices Act in the United States and the U.K. Bribery Act.
Leniency is applied to companies that voluntarily disclose their offenses to authorities, and cooperate during criminal proceedings. Leniency is also granted when a company voluntarily compensates for any inflicted damage or takes action to alleviate the consequences of a crime.
Interestingly, the law also describes making considerable contributions to social policies as a mitigating factor. A company may be exempt from punishment altogether after it repairs whatever damages the conduct caused and paid compensation.