8 September 2016
1. Domestic bribery (private to public)
1.1 Legal framework
The subject of anti-corruption or anti-bribery is governed mainly by the Anti-Corruption Law1 and the Penal Code.2
The Anti-Corruption Law is considered as a “code of conduct” for persons who hold positions of responsibility and power, including state officials, public employees and other persons entrusted with state power in performing their official state duties. The Anti-Corruption Law forms the basis for the application of the Penal Code with respect to bribery offenses. It does not address the act of giving bribes nor does it provide specific sanctions for non-compliance. For non-compliant acts, the Anti-Corruption Law refers to the Penal Code, the Law on Cadres and State Officials3 and the Law on Public Employees4 for sanctions, depending on the seriousness of the violation.
The Penal Code addresses both (i) the persons holding “public” positions of responsibility and power; and (ii) those giving bribes or acting as intermediaries for bribery. The Penal Code sets out elements of corruption-related crimes and relevant criminal liabilities and punishments. Specifically, the corruption-related crimes are mainly regulated under the Penal Code, Chapter XXI (Articles 277-291). From 1 July 2016 onwards, the Penal Code will be replaced by the 2015 Penal Code,5 which extends its application to private bribery and bribery to foreign public officials and officials of public international organizations.
1.2 Definition of bribery
The Penal Code distinguishes between giving bribes from receiving bribes in relation to persons holding positions of responsibility and power.
(a) Receiving bribes
Under Article 279 of the Penal Code, those who abuse their positions and/or powers, and have accepted or will accept directly or through intermediaries money, property or other material interests in any form worth VND2 million (approximately USD95) or more in order to perform or not to perform certain jobs for the benefit, or at the request of the bribe givers, shall be subject to criminal liability for the crime of “receiving a bribe.” They may also be considered to have received a bribe even if the value in question is less than VND2 million if any of the following aggravating circumstances is present:
- Serious consequences are caused.
- The offender has been previously disciplined for similar acts.
- The offender has been previously sentenced for corruption crimes contained in Section A of Chapter XXI of the Penal Code.
Under Article 354 of the 2015 Penal Code, which will be effective on 1 July 2016, those who abuse their positions and/or powers, and have accepted or will accept directly or through intermediaries any of following interests for themselves or other organizations in order to perform or not to perform certain jobs for the benefit, or at the request of the bribe givers, shall be subject to criminal liability for the crime of “receiving a bribe”:
Money, property or other material interests worth VND2 million (approximately USD95) or more, or even less than VND2 million, but wherein other conditions are met, including where (i) the offender has been previously disciplined for similar acts; or (ii) the offender has been previously sentenced for corruption crimes contained in Section 1 of Chapter XXIII of the 2015 Penal Code
Any non-material interest
(b) Giving bribes
Under Article 289 of the Penal Code, those who give a bribe worth VND2 million or more, or give a bribe worth less than VND2 million but in doing so (i) causes serious consequences; or (ii) the offense is committed more than once, are criminally liable for “giving a bribe” under the provisions of the Penal Code.
The four elements of giving a bribe that must be proven are:
(i) The receiver of the bribe has official state powers.
(ii) The money, property or material interest must be given to the recipient (the act of giving a bribe).
(iii) The material interest must have been given to induce the bribe receiver to do or not do some official task for the benefit, or at the request, of the bribe giver.
(iv) As previously stated, the value of the bribe (if any) must meet the threshold for criminal liability (VND2 million). Otherwise, the Penal Code requires proof that either serious consequence will result, or that the act has been repeated.
Under Article 364 of the 2015 Penal Code which will be effective on 1 July 2016, those who, directly or through intermediaries, have given or will give money, property or other material interests worth VND2 million or more, or any nonmaterial interest in order to induce the bribe receiver to do or not do some official task for the benefit, or at the request, of the bribe giver are criminally liable for “giving a bribe.”
Under the Penal Code, a bribe may be in the form of “money, property or other material interests in any form.” Please note that, from 1 July 2016 onwards, a bribe may also include “any non-material interest.”
1.3 Definition of public official
Under Article 1.3 of the Anti-Corruption Law, officials (or persons holding positions and powers) are broadly defined to include the following:
- Cadres, state officials, public employees
- Officers, professional soldiers, defense workers in agencies or units of the People’s Army; officers and non-commissioned officers, professional-technical officers and non-commissioned officers in agencies or units of the Public Security
- Leading, managerial officers in state-owned enterprises (SOEs); leading, managerial officers being representatives of the state’s contributed capital portions at enterprises
- Persons assigned tasks or official duties who, through the completion of such tasks or the fulfillment of such duties, have certain authoritative powers
The two main types of officials are: (i) state officials; and (ii) public employees. The relevant definitions of state officials and public employees are as follows:
- State officials are defined as Vietnamese citizens who are recruited; appointed to a rank, a post, or a title in public bodies; under the payroll of these public bodies; and receive salary from the state budget or from the salary fund of the public non-business unit if a state official is in the leading and managerial apparatuses of the non-business unit (Article 4, Law on Cadres and State Officials).
- Public employees are defined as Vietnamese citizens who are recruited through examination or through selection in a public non-business unit, working under a labor contract signed with the head of the public non-business unit, and receive salary from the salary fund of the public non-business unit (Article 2, Law on Public Employees).
1.4 Consequences of bribery
The Penal Code only provides for individual, not corporate, criminal liability. Therefore, only natural persons who have committed an offense or are found responsible may be held culpable for crimes involving a company.
An official who commits a corrupt act, depending on the nature and seriousness of the breach, shall be subject to disciplinary action, or prosecution for criminal liability, in accordance with the Penal Code. In cases where he or she is sentenced for a corrupt act and the decision is legally enforceable, he or she will be dismissed. Those who receive bribes may be subject to criminal liability, up to and including the death penalty. Any properties, funds or other valuables used for corruption or bribery may be expropriated, in accordance with the applicable laws.
Those who give bribes or act as intermediaries for bribery under the Vietnam Penal Code will be subject to criminal liability, including fines and/or prison terms ranging from one year to 20 years or even life imprisonment. However, those who are coerced into giving bribes, but who take the initiative to report their actions before being detected, will be regarded as not guilty and are entitled to receive back any property they were coerced into giving as bribes. Bribe givers who, although not coerced, take the initiative to report their actions before being detected, may be exempted from criminal liability and may receive back at least some of the property they have given as bribes.
Under the 2015 Penal Code, a commercial legal entity is subject to criminal liability for committing certain crimes, which does not include corruption-related crimes, such as receiving bribes, giving bribes and acting as intermediaries for bribery. Individuals who receive bribes may be subject to criminal liability, up to and including the death penalty, and those who give bribes may be subject to criminal liability, including fines and/or prison terms ranging from six months to 20 years.
1.5 Political contributions
Contributions to political parties are not specifically regulated by Vietnamese law. The Constitution of the Socialist Republic of Vietnam provides for just one political party – the Communist Party of Vietnam, but independent candidates can and do run for elected positions.
1.6 Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)
The Anti-Corruption Law establishes the following limitations on the giving and receipt of gifts:
Agencies, organizations and units must not use state budget funds or properties as gifts, except in certain exceptional cases provided under the law.
Cadres, state officials and public employees must not receive money, properties or other material interests of agencies, organizations, units and/or individuals involved in affairs that they are responsible for settling, or ones that fall under their respective management.
It is strictly forbidden to give or receive gifts as bribes, or to perform other acts meant to serve self-seeking interests.6
Please note that Decision No. 647 allows individuals who exercise state power or hold positions of public responsibility to accept gifts under certain limited circumstances.8 Specifically, they may receive gifts:
- from relatives who themselves, in return, receive no benefits related to the public duties of the gift recipient (no
- specific limit on the value of the gift);
- from individuals or entities unrelated to the public duties/activities of the gift recipient (no specific limit on the value of the gift); and
- from individuals or entities if such recipient is ill or suffering from an accident, in mourning or celebrating a marriage, or if the gift is in connection with traditional festivals or the lunar new year (Tet). In these situations, please note that the gift value must be less than VND500,000 (approximately USD24) and not given in connection with an official duty of the gift recipient, any benefits, purposes, or acts of corruption prohibited under the Anti-Corruption Law or the Penal Code.
Other than in the abovementioned circumstances, a public official must report all gifts that he or she may receive to his or her immediate supervisor(s), and give the gifts to the supervisor(s) within five working days from the date of receipt.9 Because this reporting obligation is an internal one, there is no publicly available means of verifying the degree to which public officials comply with this requirement.
2. Domestic bribery (private to private)
2.1 Legal framework
Private bribery is currently not regulated under the Penal Code. As discussed in Section 1.3, leading officers and managers of SOEs, who are referred to as “persons holding positions and power,” are subject to the Anti-Corruption Law and the Penal Code in relation to corruption-related crimes. Furthermore, if an employee of an SOE is individually assigned official tasks or duties and has certain authoritative powers through the completion of such tasks or the fulfillment of such duties, such employee is also subject to the Anti-Corruption Law and the Penal Code, similarly to state officials.
However, from 1 July 2016 onwards, private bribery will be subject to criminal liability under the provisions of the 2015 Penal Code (Articles 354 and 364).
2.2 Definition of private bribery
Before 1 July 2016, private bribery was not addressed by the Penal Code. From 1 July 2016 onwards, the definition of bribery under the provisions of the 2015 Penal Code (Articles 354 and 364) will also apply for private bribery. (See Section 1.2 above.)
2.3 Consequences of private bribery
From 1 July 2016 onwards, persons holding position in non-state-owned companies and organizations who receive bribes may be subject to criminal liability, up to and including the death penalty. Those who give bribes to persons holding positions in non-state-owned companies and organizations may be subject to criminal liability, including fines and/or prison terms ranging from six months to 20 years.
2.4 Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)
N/A
3. Corruption of foreign public officials
3.1 Legal framework
Bribery of foreign public officials is currently not specifically regulated under the Penal Code. However, foreign individuals, Vietnamese nationals or companies overseas bribing Vietnamese officials, regardless of where the act is committed, may be subject to criminal liability under the Penal Code.
From 1 July 2016 onwards, giving bribes to foreign public officials and officials of public international organizations will be subject to criminal liability under the provisions of the 2015 Penal Code.
3.2 Definition of corruption of foreign public officials
Before 1 July 2016, corruption of foreign public officials was not addressed under the Vietnamese Penal Code. From 1 July 2016 onwards, the definition of bribery under the provisions of the 2015 Penal Code (Article 364) will also apply to bribery to foreign public officials and officials of public international organizations.
3.3 Definition of foreign public official
The 2015 Penal Code does not provide a definition of foreign public official or official of public international organizations.
3.4 Consequences of corruption of foreign public officials
From 1 July 2016 onwards, individuals who give bribes to foreign public officials and officials of public international organizations may be subject to criminal liability, including fines and/or prison terms ranging from six months to 20 years.
3.5 Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)
N/A
4. Facilitation payments
Vietnamese law does not recognize facilitation payments. However, such payments could qualify as bribes if
meeting the definition of bribery under the Penal Code, and thus, are prohibited by law.
5. Compliance programs
5.1 Value of a compliance program to mitigate/eliminate the criminal liability for legal entities
Commercial legal entities are not subject to criminal liability for corruption-related offenses under Vietnamese law. However, companies are encouraged to implement anti-corruption measures for compliance purposes.
5.2 Absence of a compliance program as a crime
The absence of a compliance program would not be considered a crime under the Penal Code.
5.3 Elements of compliance program
(a) Legal framework
Vietnamese law does not provide for requirements or criteria of a compliance program.
(b) Recommended practice
Although there is no explicit legal requirement for compliance programs, the adoption of a compliance program is a recommended measure to limit a company’s exposure to bribery.
6. Regulator with jurisdiction to prosecute corruption
Public prosecutors are eligible to prosecute all criminal cases, including corruption cases.
1 Law No. 55/2005/QH11 on Anti-Corruption, passed by the National Assembly on 29 November 2005, effective on 1 June 2006 as amended in 2007 and 2012 (“Anti-Corruption Law”). 2 Penal Code (the Law No. 15/1999/QH10), passed by the National Assembly on 21 December 1999, effective on 1 July 2000 as amended in 2009 (“Penal Code”). 3 Law No. 22/2008/QH12 on Cadres and Civil Servants, passed by the National Assembly on 13 November 2008, effective on 1 January 2010 (“Law on Cadres and State Officials”). 4Law No. 58/2010/QH12 on Public Employees, passed by the National Assembly on 29 November 2010, effective on 1 January 2012 (“Law on Public Employees”). 5 Penal Code (the Law No. 100/2015/QH13), passed by the National Assembly on 27 November 2015, effective on 1 July 2016 (“2015 Penal Code”). 6 Article 40, Anti-Corruption Law. 7 Decision No. 64/2007/QD-TT dated 10 May 2007 of the Prime Minister promulgating the regulation on giving, receipt and hand-over of gifts by state budget-funded agencies, state officers (“Decision No. 64”). 8 Article 11 and Article 12.4 of the Regulations on Gifts attached to Decision No. 64. 9Article 12 of the Regulations on Gifts attached to Decision No. 64.
For further information, please contact:
Frederick Burke, Partner, Baker & McKenzie
frederick.burke@bakermckenzie.com
