Corruption-related offences concerning non-state enterprises under Penal code 2015 (Amended and Supplemented in 2017)
January 28, 2019 Dispute Resolution
Corruption is a problem that occurs in many countries throughout the world, regardless of whether it is a developed or developing country. As it is a global issue that has recently received a lot of attention, many countries are concentrating on developing solutions to prevent it. This is reflected in the issuance of the United Nations Convention Against Corruption (“UNCAC “). Vietnam is a member of this Convention.
At the request of UNCAC, Vietnam has gradually transformed the UNCAC regulations into domestic law, specifically the Anti – Corruption Law of 2005 amended and supplemented in 2012 (the “Amended Anti – Corruption Law 2005“), the Penal Code of 1999 amended and supplemented in 2009 (the “Amended Penal Code 1999“) and the Amended Penal Code of 2015 amended and supplemented in 2017 (the “Amended 2015 Penal Code“).
To confront corruption in Vietnam, the amended Penal Code 2015 stipulates some important policies concerning corruption-related offences as follows:
The definition of abuse of power-related offences has been broadened to handle not only the violations of abuse of power-related offences but also those which occur in non-state enterprises and organizations (the “Private Sector“), for example, infringements related to embezzlement, bribe taking, bribe giving, or bribery brokerage;
The definition of “Bribes” has been broadened to facilitate anti-crime enforcement;
Increasing the amount of money and the value of embezzled and dispossessed assets gained from bribery as a basis for determining the crime and the penalty framework;
Supplementing aggravating factors with regard to the penalty framework;
Increasing the amount of monetary penalties;
Criminal statute of limitations for corruption-related offences; and
Applying the death penalty for the corruption-related offences.
1. Expanding the application of corruption-related offences to the Private Sector
_The provisions of the Amended Penal Code 1999 were not applicable to the Private Sector but only to the corruption committed by public officials in state-owned enterprises or state-owned organizations (the “Public Sector“).
_In practice, the prosecution of corruption-related offences occurring in enterprises consisting of both the state’s capital and private capital, usually confronted many challenges. This was because it was impossible to determine whether the corruption-related offences occurred in the Public Sector or the Private Sector. Concurrently, the corruption-related offences were not only committed by persons in authority in state-owned enterprises or organizations but also by those in the non-state enterprises in many different forms such as: embezzling money or assets of the enterprise which were directly managed by them; illicit profits through agreements to raise prices of goods and services with business partners, and agreements for collusion in bidding activities.
_Because of the above reasons, the Amended Penal Code 2015 was amended and supplemented specifically as follows:
(i)First, expanding the definition of power-related offences (including corruption-related offences and other crimes based on position) to encompass power-related offences in the Private Sector. Particularly, expanding the definition to not only include the person in authority performing the public task (i.e., public officials in the system of the State’s agencies) but also those in non-state enterprises or organizations as the follows:
+Article 352. Definition of power-related offences.
+Abuse of power means acts of infringement upon rightful activities of an agency or organization committed by an office-holder in performance of his/her official duties.
+An office-holder means a person who is assigned with a specific mission and has a specific power through appointment, election, contract, or another method. An office-holder might or might not receive a salary.”
(ii)Second, Amended Penal Code 2015 limits the scope of power-related offences in the Private Sector including the following 04 crimes:
+Crimes of corruption include embezzlement and bribe receiving;
+Other crimes based on position include bribe giving and bribery brokerage.
_In this article, we do only discuss about 02 crimes of corruption in the Private Sector: embezzlement and bribe receiving.Article 353.6 of the Amended Penal Code 2015 (embezzlement) stipulates: “Persons in authority in non-state enterprises or organizations who embezzle assets shall be dealt with under this Article.”Article 354.6 of the Amended Penal Code 2015 (bribe receiving) stipulates: “Persons in authority in non-state enterprises or organizations who receive bribes shall be dealt with under this Article.”
2.Broadening the definition of “Bribes” for corruption-related offences
_Under Amended Penal Code 1999, the definition of “Bribes” in a “Bribe Receiving” crime only covers money, assets or other tangible benefits measured in monetary terms. However, under Article 354.1.b of Amended Penal Code 2015, “intangible benefits” were added to the definition of “Bribes“.
_Based on the realities of fighting against corruption, apart from using money or other tangible benefits for bribing persons in authority, intangible benefits are also used for the violators’ own purposes. Intangible benefits exist in many different forms and provide various values to the recipient, i.e. sex, promotion opportunities, etc.
_Moreover, according to UNCAC, the definition of “Bribes” or the damage caused by corruption are illegal benefits existing in many forms such as: physical or mental, tangible or intangible, and monetary or non-monetary. Therefore, the members of UNCAC must adjust and amend its domestic law to comply with the guidelines of UNCAC.
3.Increasing the amount of money and the value of embezzled, dispossessed and bribed assets as the basis for determining the crime and the penalty framework
_ In comparison to Amended Penal Code 1999, Amended Penal Code 2015 increases the value of money and assets as the basis for corruption-related offences. Particularly, the value of money and assets in “Bribe Receiving” is amended as follows:
+Increasing the value of money and assets as the basis for investigating criminal liability. Specifically, the range changes from “02 million Dong to under 10 million Dong” (Article 279.1 of the Amended Penal Code 1999) to “from 02 million Dong to under 100 million Dong (Article 354.1.a of the Amended Penal Code 2015);
+Increasing the value of money and assets as the basis for investigating criminal liability. Specifically, the range changes from “from 10 million Dong to under 50 million Dong” (Article 279.2 of the Amended Penal Code 1999) to “from 100 million Dong to under 500 million Dong” (Article 354.2.c of the Amended Penal Code 2015);
+Increasing the value of money and assets as the basis for investigating criminal liability. Specifically, the range changes from “from 50 million Dong to under 300 million Dong” to “from 500 million Dong to under 01 billion Dong” (Article 354.3.a of the Amended Penal Code 2015);
+Increasing the value of money and assets as the basis for investigating criminal liability. Specifically, the range changes from “300 million Dong or more” (Article 279.4 of the Amended Penal Code 1999) to “01 billion Dong or more” under Article 354.4.a of the Amended Penal Code 2015.
4.Supplementing the aggravating factors with regard to the penalty framework
_In comparison to Amended Penal Code 1999, Amended Penal Code 2015 contains greater detail on the definitions of “causing serious damage“, “causing very serious damage” and “causing special serious damage“. In particular, Amended Penal Code 2015 also amended and supplemented many aggravating factors with regard to the penalty framework of some corruption-related offences. The following is an example:
(i)Article 353.2, point dd, e, g, Amended Penal Code 2015 amended and supplemented the following aggravating factors with regard to the penalty framework for Embezzlement as:
+Embezzling money or assets used for poverty reduction, provision of benefits for wartime contributors, contributions to reserve funds, monetary contributions or assets for supporting the people in areas suffering from a natural disaster or epidemic or extremely disadvantaged areas
+Causing damage to assets valued from 01 billion Dong to under 03 billion Dong“; and
+Having a negative impact on the lives of public officials and employees of agencies and organizations.
5.Increasing the amount of monetary penalties for corruption-related offences
_Article 353.5 and Article 354.5 of Amended Penal Code 2015 increased the monetary penalties for embezzlement and bribe receiving “from 30 million Dong to 100 million Dong”.
6.Criminal statute of limitations for corruption-related offences
_Article 28 of the Amended Penal Code 2015 states that the criminal statute of limitations shall not be applied to embezzlement and bribe receiving as stipulated in Article 353.3, Article 353.4, Article 354.3 and Article 354.4 of Amended Penal Code 2015. In other words, there is no statute of limitations for those crimes and the relevant people can be prosecuted at any time when the offences are discovered.
7.Applying the death penalty for corruption-related offences
_Article 40 of Amended Penal Code 2015 stipulates that if “the person who was sentenced to the death penalty for embezzlement and bribe receiving, after being sentenced returns at least three quarters of the assets embezzled or bribes received, closely cooperates with the authorities in the process of investigation or trial or has made reparation in an effort to atone for the crime“, the death penalty will not be imposed and she/he will be sentenced to life imprisonment instead of death penalty. The law aims to reduce the number of death penalties, encourage the perpetrators of corruption to compensate for the damage caused and cooperate with the authorities to detect, investigate and handle crimes.
_Therefore, Amended Penal Code 2015 supplemented many provisions of the crime of corruption, especially in the Private Sector. Accordingly, if a person in authority, while performing tasks at enterprises or organizations which do not have state capital, commits corruption, she/he can be criminally prosecuted. The penalties for corruption may be imprisonment, life imprisonment or death. Ultimately, these provisions have significant beneficial impacts on enterprises as they (i) help to protect legal rights and benefits of enterprises, (ii) build trust, (iii) attract foreign investment and (iv) promote development of enterprises in Vietnam.
– Written by LE & TRAN | Vietnam’s Premier Business Litigation Firm