On 28 December 2021, the Government issued Decree No. 122/2021/ND-CP (Decree 122) on administrative violations in the planning and investment field, which replaces Decree No. 50/2016/ND-CP (Decree 50).
In general, Decree 122 provides a larger scope of application and imposes higher monetary fines for several penalties than in the previous Decree 50.
1. Adjustment in applicable types of violation and monetary fine threshold
There is an additional type of violation covered in Decree 122 (violation in zoning). In addition, the monetary fine threshold for all types of violation have been increased
2. Applicable subjects
Decree 122 provides guidance for the determination of applicable subjects for administrative violations.
For organizations, the applicable subjects include:
• Joint-stock companies, limited liability companies, partnerships and sole proprietorships which are incorporated and operating in accordance with the Law on Enterprises, Law on Investment, Law on Investment under the mode of public-private partnership and other legislative documents;
• Foreign organizations and enterprises, operating offices of foreign investors of business cooperation contract, operating offices of foreign contractors in Vietnam;
• Organizations established and operating under the Law on Cooperatives;
• Other organizations committing administrative violations.
Additionally, for a branch, representative office or business location of enterprises mentioned above, the applicable subject is:
• the enterprise – if the branch/representative office/business location commits the violation while performing the business within the scope of work authorized by the enterprise;
• the head of the branch/representative office/business location – if the branch/representative office/business location commits the violation while performing the business beyond the scope of work authorized by the enterprise.
3. Statute of limitations
Decree 122 provides a clear statute of limitations of two years for administrative violations in the planning and investment field. More importantly, Decree 122 provides guidance for the determination of a starting point in the calculation of the statute of limitations:
• For ongoing violations, the starting point is when the violation is discovered;
• For completed violations, the starting point is when the violation is completed.
Decree 122 also specifies ongoing violations and completed violations.
4. New administrative penalties
a. For over-declaration of charter capital
The maximum monetary penalty for over-declaration of charter capital is VND 100 million. Depending on the specific amount of over-declared capital, different corresponding penalties will be applied, specifically:
Also, the violating party shall register to amend the charter capital to correctly reflect the actual contributed charter capital.
b. For investment projects using land
Decree 122 also provides for new violations related to projects using land:
For further information, please contact:
Kent Wong, Partner, VCI Legal
kentwong@vci-legal.com
