Regulations on penalties for commercial activities of foreign traders in Vietnam according to Vietnamese law

What are the administrative penalties for late renewal of representative office operating licenses?

1. What are the regulations on penalty levels for foreign traders’ commercial activities in Vietnam?

Pursuant to Point b, Clause 1, Article 3 of Decree 17/2022/ND-CP stipulating the penalty levels for foreign traders’ commercial activities in Vietnam as follows:

“a) The maximum fine level in the commercial sector is 100,000,000 VND for individuals and 200,000,000 VND for organizations; the maximum fine in the field of producing and trading counterfeit and banned goods and protecting consumer rights is 200,000,000 VND for individuals and 400,000,000 VND for organizations;

b) The prescribed fine level in Chapter II of this Decree is the fine level applicable to administrative violations committed by individuals, except for administrative violations specified in Article 33, Article 34, Article 35, Article 68, Article 70, Clauses 6, 7, 8, 9, Article 73 and Clauses 6, 7, 8, Article 77 of this Decree. In case the administrative violation is committed by an organization, the fine is twice the level prescribed fines for individuals.”.

2. How are the regulations on handling violations for representative offices?

Pursuant to Article 43 of Decree 07/2016/ND-CP stipulations on handling violations as follows:

“Foreign traders, representative offices, and branches that violate the provisions of this Decree will be handled depending on the nature and severity of the violation. handled according to the provisions of law on handling of administrative violations.”

3. How are administrative penalties for late renewal of representative office operating licenses regulated?

Pursuant to Article 67 of Decree 98/2020/ND-CP stipulates as follows:

Violations regarding the establishment and operation of representative offices of foreign traders in Vietnam (hereinafter referred to as representative offices for short). representative)

– Fine from 5,000,000 VND to 10,000,000 VND for one of the following violations:

+ Untruthfully declaring the contents in the application dossier for issuance, re-issuance, adjustment or extension of a license to establish a representative office;

+ Failure to carry out the work publicly listed according to regulations when terminating the operation of a representative office.

– Fine from 10,000,000 VND to 20,000,000 VND for one of the following violations:

+ Not having a location for the representative office headquarters or subleasing the representative office headquarters or operating at the wrong address stated in the establishment license establishing a representative office;

+ Failing to make periodic reports or reporting dishonestly on the representative office’s operations to the competent state management agency that has issued the license according to regulations;

+ Failing to report, provide documents or explain issues related to the representative office’s operations at the request of the competent state management agency according to regulations;

+ Failure to carry out procedures to adjust or re-issue the license to establish a representative office in cases prescribed by law;

+ Writing, erasing, or making corrections that change the content recorded in the license to establish a representative office is granted.

– Fine from 20,000,000 VND to 30,000,000 VND for one of the following violations:

+ Forging papers and documents in the application for issuance, re-issuance, adjustment, or extension of the license to establish a representative office in case of not being prosecuted for criminal liability;

+ Operating inconsistently with the content stated in the license of the representative office;

+ The head of the representative office cum appoint the head of a branch of the same foreign trader or of another foreign trader in Vietnam;

+ The head of a representative office concurrently serves as the legal representative of a foreign trader;

+ The head of a representative office concurrently serves as the legal representative of an economic organization established in accordance with Vietnamese law;

+ Rent, borrow or lease or lend a license to establish a representative office.

– Fine from 30,000,000 VND to 50,000,000 VND for one of the following violations:

+ Continuing to operate after the foreign trader has stopped operating;

+ Continuing to operate after the competent state management agency revokes the license to establish a representative office representative or expired license, cannot be renewed.

– Additional sanctions:

+ Stripping of the right to use the license to establish a representative office from 01 month to 03 months for violations specified in Points b, c, d, dd and e, Clause 3 of this Article.

– Remedial measures:

+ Forced to return the license to establish a representative office with additions, erasures, or corrections that change the content to the competent agency or person that issued the license for violations specified in Point dd, Clause 2 of this Article;

+ Forced to return illegal profits obtained from committing violations specified in Point e, Clause 3 of this Article.

Thus, based on Point b Clause 4 Article 67 of Decree 98/2020/ND-CP, an organization that is a representative office of a foreign trader that is late in renewing its office operating license will be fined from 60,000,000 VND to 100,000,000 VND (Pursuant to Point b Clause 1 Article 3 of the Decree). 17/2022/ND-CP).