Law on Anti-bribery & Anti-corruption
Bribery
What is bribery?
Bribery usually refers to a situation where a person or organization gives benefits to a person holding State power to influence that person (e.g. making that person abuse the State power to bring benefits for the bribe giver). Under the law, both the act of giving bribe and receiving bribe are prohibited.
Bribery, sometimes, can be very straightforward, e.g. Company A gives money to State officer B so that officer B can ignore Company A’s violations. However, more often, bribery can be very complicated, e.g. Company A can offer an unreasonably good contract for Company X whose owner is Mrs. Y. Then, Mrs. Y is the wife of officer B and she influences officer B to ignore Company A’s violations.
Do persons holding State power mean State officers? Not exactly, persons holding State power can refer to State officers (i.e. persons working in State authorities), persons controlling the State’s shares in State-owned enterprises or any person that is granted special power and rights that are privileges of the State authorities (e.g. the right to sanction the citizen, the right to give order and direction to the citizen, the right to control the State budget, etc.). Basically, that phrase has a very broad meaning and may refer to anyone that is related to the State authorities including the government, the court, the national assembly, etc.
Does bribe need to be money? No. Bribe can be money or other material benefits such as real estate, cars, etc. or non-material benefits such as opportunity for promotion, etc.
Can a gift given to a State officer not be deemed as a bribe? Yes, that is possible because giving a gift without any intention to ask for anything in return will not be considered as bribery. However, there is a thin line between giving a gift and giving a bribe. The State officer who receives your gift may later attempt to help you, and it may create suspicion that you have aimed to influence that State officer.
What should be done when giving gifts to minimize the possibility of being considered as bribery? There are 02 things should be taken into account:
- Ensure that the value of the gift is appropriate: If you give a very high value gift (e.g. a car, a house, etc.) to a State officer, it will create suspicions and may even make you subject to an investigation.
- Consider giving the gift to a government agency instead of a single State officer: Giving a gift to the whole agency instead of an officer shows the transparency of your action and is less likely to raise suspicion.
Consequences of being involved in bribery
The person giving bribe, the person receiving bribe, the middleman or any person that directly or indirectly assists the bribery can be subject to criminal sanctions, including but not limited to monetary fine and imprisonment. Death penalty, however, is currently only imposed on the person receiving bribe (not the person giving bribe or the middleman) in very serious cases.
Criminal sanctions in relation to bribery are only imposed on individuals, not organizations (because the lawmakers think that it is impossible to imprison an organization). Thus, in case an organization is being involved in bribery (e.g. giving a bribe), the court will impose the criminal sanctions on the persons in such organization, depending on how they personally being involved in the bribery. Usually, the managers (e.g. director, chief accountant, chairman, etc.) will be the first ones being targeted by the investigation.
What will happen to the bribe in case of criminal prosecution? Will it be returned? Most likely not. Under the law, if you gave a bribe under duress and reported to the authorities before being found out, you will be immune from the liability and fully get back the bribe. However, that case is rare. In most cases, it will be:
- You gave a bribe under duress, but you did not report: In this case, you can be deemed as being consent with the bribery and as a result, subject to the criminal liability. The bribe will also be confiscated.
- You gave a bribe without being under duress, but you reported before being found out: You may or may not be immune from the liability and the bribe may or may not be returned to you. This is subject to the consideration of the court in a case by case basis.
Practical aspects of corruption and bribery in Vietnam
Under the Corruption Perceptions Index 2021 of the Transparency International, Vietnam got 39 scores and ranked at 87th out of 180 countries and territories (the score is from 0 to 100, the lower the score, the higher the corruption). Basically, this means that corruption happens quite commonly in Vietnam.
The anti-corruption and anti-bribery law is quite strict, so why does the corruption happen commonly? Yes, most of the problems do not come from the law, they come from the law enforcement. Basically, the law ensures that the authorities can easily sanction you in case you are involved in the bribery or corruption. However, whether the authorities take actions against you or not and when they will take the actions is another story, i.e. they may wait until you grow big enough so that they can catch you and make a high-profile case.
Many people, even the Vietnamese, see corruption happen everywhere and get the wrong impression that it is fine for them to follow the others and give bribes. However, you should understand that the law is very strict and questions like “many others also do so, why you only target me” is not a valid defense.
Below are some common cases relating to corruption you may encounter during your business operation in Vietnam.
Corruption is very common when working with the tax authorities in Vietnam. In most cases, the burden of proof falls on the businesses instead of the tax authorities, e.g. (i) if you want to add some expenses to the corporate income tax calculation, you will need sufficient and valid documentation to prove that you have spent such expenses and they are necessary for your business operation; (ii) if there are some amounts of money transferred to the company’s bank account, the tax authorities may automatically considered them as incomes and collect taxes on them unless you can prove otherwise.
Therefore, if you do not have a good tax consultant team and a good internal system for managing the taxation documents, it is likely that you will miss a lot of documents, notification to the authorities, etc. during the business operation. Then, the tax officers will come to inspect and threaten to impose a high amount of tax and penalty, unless you bribe them to ignore everything. Many businesses are tempted by the comparison between a small bribe and a high amount of tax and penalty and, as a result, they choose to pay the bribe.
However, what the tax officers can do after receiving your bribes is ignoring the violations, not rectifying them. Therefore, the violations still exist there and when the other tax officers come to inspect, you will have to bribe again. You will be put in a never-ending circle of bribery, until the violations become too serious or until you meet some tax officers that refuse to receive bribes; then, you may face very serious liability.
The customs procedures in Vietnam are quite complicated and may take you significant time to get the customs clearance and release of cargoes. Comparing between the high costs you may have to pay if your cargoes are stuck at the ports (e.g. storage expenses, delay in business activities, etc.) and the lower money to bribe the authorities to obtain a fast and no-inspection procedure; many businesses are tempted and choose the latter. However, bribery is not the solution to deal with the delay from the authorities; if you bribe once, the authorities will expect you to bribe the next time (or they will delay when working with you) and you will be gradually dragged deeper and deeper into the bribery. You may consider using a strong complaint to deal with the delay or unprofessional acts from the authorities; this may cost you significant time at the beginning but later, the authorities will be afraid of you and have to behave professionally.
Furthermore, similar to the tax authorities, the customs authorities may receive bribes to not inspect your cargoes and ignore all issues that you may have. However, under the law, they can still inspect you in the future and sanction you accordingly.
In Vietnam, there are many companies that provide the service of assisting you in applying for licenses such as investment registration certificate, enterprise registration certificate, work permit, visa, etc. However, many of them obtain the licenses by bribery and may cause many issues for you in the future.
Thus, if you want to avoid being involved in bribery and issues in the future, you should be careful with the service providers that:
- Are not law firms: There are many consultant companies in Vietnam that will assist you in obtaining the licenses even though they are not law firms and may not have sufficient knowledge about the law. Usually, they do not use the law to obtain the licenses but instead, use their connection with the authorities via bribery.
- Can obtain the license for you very fast and often faster than the timeline provided by the law: In Vietnam, if you apply for the license in a normal way, you will get the licenses exactly at the expiry of the time provided by the law or later (often later). If you obtain the licenses sooner, that may be the sign that there is bribery.
- Can obtain the license for you even though you do not have some documents that are required in the application file: Some professional law firms can legally challenge the authorities and obtain the license even in case of not having some minor documents in the application file. However, this should require significant time and argument with the authorities. If your service provider solves such issues too easily (i.e. no argument with the authorities and no clear explanation on how the issues are solved), they may use bribes.
When operating in Vietnam, you will meet some situations where the State officers may create many difficulties for you so that you will bribe them. In such cases, you should consider the follow ways:
Asking the State officers to communicate in writing
The officers may verbally say many things that are not good for you, e.g. your application is not sufficient; you need to do what they ask, or they may sanction you, etc.
If you find what the officers say to you is unreasonable, you should ask them to send you a written document instead. This may make the officers change their mind because if they put anything in the written document that is not compliance with the law; you may easily take legal actions against them.
Sending a letter to question and complain about the State officers
If the officers refuse to communicate in writing, or refuse to do their work to help you, you may record what happens in a letter and send to those officers and their supervisors to raise questions and complaints.
You may not have anything evidence to prove your story in the letter; but when the letter was sent, those officers will be questioned by their supervisors and they will be afraid of doing anything wrong with you.
Sometimes, the authorities will not do anything wrong, they will only delay your case so that you will bribe them.
In this case, you can send letters frequently to the relevant authorities and the higher authorities that are in charge of supervising them to follow up and question about the progress (e.g. if having problem with the tax authorities of the district, you may send letters to the tax authorities of both the district and the city/province). When receiving your letters many times, the authorities will feel annoyed and they will want to close your case as fast as possible.
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