Nghị định 202/2004/ND-CP

DECREE

ON THE PUNISHMENT OF ADMINISTRATIVE VIOLATIONS IN THE MONETARY AREA AND BANKING ACTIVITY

THE GOVERNMENT

- Pursuant to the Law on the Organization of the Government dated 25 December 2001;
- Pursuant to the Law on the State Bank of Vietnam dated 12 December 1997 and the Law on the amendment, supplement of several Articles of the Law on the State Bank of Vietnam dated 17 June 2003;
- Pursuant to the Law on Credit Institutions dated 12 December 1997 and the on the amendment, supplement of several Articles of the Law on Credit Institutions dated 15 June 2004;
- Pursuant to the Ordinance on the settlement of the administrative violations dated 02 July 2002;
- Upon the proposal of the State Bank Governor,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1. Governing scope

1. This Decree shall govern the administrative punishment for violations in the monetary area and banking activity.

2. Administrative violations in the monetary area and banking activity provided for in this Decree shall include following violation acts:

- Violation of the establishment and operation license, operational license, organizational structure of credit institutions;

- Violation of the administration, management and audit;

- Violation of funds mobilization;

- Violation of the lending, banking guarantee, discount and finance leasing;

- Violation of the foreign exchange control, gold business control;

- Violation of payment, acquisition, investment in fixed assets and immovable assets business;

- Violation of prudence in the credit institutions activities;

- Violation of the accounting, statistics, information, reporting, banking secrecy;

- Administrative violation of the right of business autonomy of credit institutions, hindrance of the inspection activity, non-compliance with requests by the competent authority in handling administrative violations, illegal competition

Article 2. Subjects of application

1. Domestic and foreign individuals, agencies, organizations (hereinafter referred to as individuals, organizations) that commit, whether intentionally or unintentionally, acts of violation of provisions on the State management in the monetary area and banking activity, which are not a crime, shall be all subject to the administrative punishment in accordance with provisions in this Decree, unless otherwise provided for by the International Treaties, which the Socialist Republic of Vietnam is a signatory or accedes to.

2. Organizations shall be subject to the administrative punishment for all acts of administrative violations committed by them. After complying with the punishment decision, punished organizations shall determine individuals who have committed such administrative violations to determine their legal liability in accordance with provisions of applicable laws.

Article 3. Principles for the punishment of administrative violations

The principles for the punishment of administrative violations in the monetary area and banking activity shall comply with the provisions in Article 3 of the Ordinance on the settlement of administrative violations.

Article 4. The time limit of the punishment of administrative violations

1. The time limit of the punishment of the administrative violations in the monetary area and banking activity shall be 2 years, from the date of committing the act of administrative violation.

If the above-mentioned time limit has elapsed, the punishment cannot be imposed but measures as provided for in paragraph 3 Article 7 of this Decree shall be applied.

2. For individuals who have been prosecuted or subject to the decision on the judgment under the criminal action procedures, which are then suspended from any investigation or court judgment, but the violation acts indicate signs of administrative violation, they shall be subject to the administrative punishment; within the period of 3 working days from the date where the investigation, the court case is suspended, the person who makes this decision must serve the decision to the person who is competent for the punishment; in this case, the time limit of the administrative punishment shall be 3 months from the date where the competent person receives the suspension decision and the file of the violation case.

3. If, within the period as provided for in paragraphs 1, 2 of this Article, individuals, organizations commit a new administrative violation in the same area of the previous violation or intentionally avoid, obstruct the punishment, the time limit of punishment stipulated in paragraphs 1, 2 of this Article shall not be applicable, and it shall be counted from the time where the new administrative violation act is committed or the time where the avoidance, obstruction of the punishment terminates.

Article 5. The term considered as not being punished for administrative violation

Organizations, individuals shall be considered as not being punished for administrative violation if they do not recommit any administrative violation one year from the date of the decision on the punishment or from the date where the time limit for the enforcement of the punishment decision terminates.

Article 6. Elements of alleviation and elements of severity

For the enforcement of the punishment of administrative violation in the monetary area and banking activity, following elements shall be considered as elements of alleviation and elements of severity:

1. Elements of alleviation:

a. The administrative violator has prevented, mitigated the adverse affect of the violation act or voluntarily restored the consequences and compensated for damages;

b. The administrative violator has voluntarily confessed and sincerely repented of his violation act;

c. The violation act is committed due to being forced or materially or mentally dependent;

d. The violation act is committed due to the backward level of knowledge.

2. Elements of severity

a. Violation is committed in an organized manner;

b. Many violation acts are committed in the same area or the violation act is repeated in the same area;

c. Forcing people, who is materially or mentally dependent to commit violation act;

d. Abuse of position, authority to commit violation;

dd. Abuse of warfare situation, natural calamity or other special social difficulties to commit violation;

e. Violation is committed during the period of performing the criminal penalty or the decision on the punishment of administrative violation;

g. The administrative violation act is committed despite demand by the competent person to terminate such act;

h. There are acts of hiding, covering up violations after they have been committed.

Article 7. Punishment forms and measures for overcoming the consequences

1. For each act of the administrative violation in the monetary area and banking activity, individuals, organizations committing violation shall be subject to one of following main punishment forms:

a. Warnings;

b. Fine.

2. Individuals, organizations, which have committed the administrative violations, may be, depending on the nature, the seriousness of violation, subject to one or several forms of additional punishment as follows:

a. Confiscating the material evidence, means, which have been used for committing the administrative violation;

b. Being suspended by the competent authorities, for a time limit or without time limit, from performance of one or several operational activities relating to the administrative violation act in the monetary area and banking activity in accordance with provisions of the Law on the State Bank of Vietnam and the law on Credit institutions.

3. In addition to the forms of punishment stipulated in paragraphs 1, 2 of this Article, individuals, who and organizations, which have committed the administrative violation, may be subject to the settlement of consequences; shall be required to correctly comply with provisions of applicable laws for administrative violation acts

Chapter II

ACT OF THE ADMINISTRATIVE VIOLATION IN THE MONETARY AREA AND BANKING ACTIVITY, FORMS OF PUNISHMENT AND FINE LEVEL

Section I. ADMINISTRATIVE VIOLATION OF THE ESTABLISHMENT AND OPERATION LICENSE OF CREDIT INSTITUTIONS

Article 8. Violation of the establishment and operation license, the operational license (hereinafter referred to as license)

1. A fine of VND 5,000,000 to VND 12,000,000 shall be imposed on one of following acts:

a. To fail to operate in accordance with provisions stated in the license;

b. To operate without the approval by the competent authority of the Charter, unless otherwise provided for by applicable laws;

2. A fine of VND 10,000,000 to VND 20,000,000 shall be imposed on one of following acts:

a. To lend, lease or transfer the license to other organizations, individuals;

b. To erase, or change the license.

3. A fine of VND 45,000,000 to VND 70,000,000 shall be imposed on one of following acts:

a. To engage in the banking activity without the license;

b. To continue the banking activity after the license has been suspended, revoked or expired;

4. Application of the supplementary punishment:

Requesting the competent authority to suspend, for a time limit or without a time limit from the performance of one or several operational activities in respect of administrative violation acts stated in paragraph 2 of this Article.

Section 2. ADMINISTRATIVE VIOLATION OF THE ADMINISTRATION, MANAGEMENT AND AUDIT

Article 9. Violation of the administration, management

1. A fine of VND 2,000,000 to VND 6,000,000 shall be imposed on one of following acts:

a. The Chairman of the Board of Directors holds concurrently the post of the General Director (Director) or Deputy General Director (Deputy Director) of the credit institution, unless otherwise provided for by applicable laws.

b. The Chairman or other members of the Board of Directors authorize a person who is not a member of the Board of Directors to perform their duties;

c. The Chairman of the Board of Directors participates in the Board of Directors or the Board of management of another credit institution, unless the latter is a company of the former credit institution or the Chairman of the Board of Directors of the local peoples credit Fund participates in the Board of Directors of the central peoples credit Fund;

d. The General Director (Director), the Deputy General Director (Deputy Director) does not reside in Vietnam during their term of business; The General Director (Director) of a credit institution is concurrently the General Director (Director) of another credit institution unless the latter is a company of the former.

2. A fine of VND 3,000,000 to VND 9,000,000 shall be imposed on credit institutions which commit acts of assignment or appointment of persons who are parents, spouse, children, siblings of members of the Board of Directors, General Director (Director) as member of the Controller Committee, the Chief Accountant of the same credit institution; acts of assignment or appointment as members of the Board of Directors, the Controller Committee, the General Director (Director), Deputy General Director (Deputy Director), the Chief Accountant following persons:

a. Those who are prosecuted for a criminal liability;

b. Those who are sentenced for severe violation of national security, socialist ownership, ownership of citizens, severe economic offences and the sentence has not been removed;

c. Those who have been sentenced for other criminal but the sentence has not been removed

d. Those who have been a member of the Board of Directors or the General Director (Director) of a bankrupt company in accordance with provisions stated in Article 94 of the Law on bankruptcy in 2004, except for cases of bankruptcy due to reasons of force-majeure;

dd. Those who have been the lawful representative of a company, which was suspended from operation due to committing severe law violations.

3. A fine of VND 10,000,000 to VND 20,000,000 shall be imposed on the act where the Chairman of the Board of Directors, General Director (Director) issues a document of operational guidance, the content of which is inconsistent with applicable laws.

4. Application of measures for settlement of consequences:

Any violation act stipulated in paragraphs 1, 2, 3 of this Article shall be required to correct for compliance with provisions of applicable laws within a period of 2 months.

Article 10. Violations of changes, which require approval

1. Any act of changing one of the following contents without a written approval by the competent authority shall be subject to a fine of VND 2,000,000 to VND 6,000,000:

a. Name of the credit institution;

b. Members of the Board of Directors, the General Director (Director), members of the Controller Committee.

2. Any act of changing one of the following contents without a written approval by the competent authority shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

a. The Charter capital, the appropriated capital;

b. Transfer of non-bearer shares not in compliance with provisions of applicable laws;

c. The share ratio of major shareholders

3. Act of changing the location of the Head-office, the operation center, branches, representative offices without a written approval by the competent authority shall be subject to a fine of VND 10,000,000 to VND 20,000,000.

4. A fine of VND 20,000,000 to VND 40,000,000 shall be imposed on one of following acts, which have been committed without a written approval of the competent authority:

a. Split, separation, merge, integration, acquisition, dissolution of credit institutions;

b. Opening of the operation center, branches, subsidiary companies, non-productive units, and representative offices in any location inside, outside the country, including the location of the Head-office;

5. Application of measures for settlement of the consequences

Any violation act as stipulated in paragraphs 1, 2, 3, 4 of this Article shall be required to correct for compliance with provisions of applicable laws within a period of 1 month.

Article 11. Violation of the internal control and independent audit

1. Warnings shall be given to following acts:

a. The internal control organization is not structured in conformity with provisions of applicable laws;

b. The internal control program is not made in conformity with provisions of applicable laws;

2. The act of failure to carry out the independent audit for the operational activity of the credit institution in accordance with provisions of applicable laws shall be subject to a fine of VND 3,000,000 to VND 9,000,000;

3. Application of measures to overcome the consequences

Any violation act stipulated in paragraphs 1, 2 of this Article shall be required to correct for compliance with provisions of applicable laws within a period of 3 month.

Section 3. ADMINISTRATIVE VIOLATION OF FUNDS MOBILIZATION

Article 12. Violation of the receipt of deposits

Any non-bank credit institution, which fails to correctly comply with provisions on deposits taking from organizations, individuals in accordance with provisions of applicable laws, shall be subject to a fine of VND 15,000,000 to VND 30,000,000.

Article 13. Violation of the issuance of valuable paper

1. Any credit institution, which commits an act of issuing valuable paper exceeding the total face value approved in writing by the competent authority, shall be subject to a fine of VND 15,000,000 to VND 30,000,000.

2. Any credit institution, which commits an act of issuing valuable paper in VND, in foreign currency or in gold to mobilize funds from domestic or foreign organizations and individuals without a written approval by the competent authority, shall be subject to a fine of VND 45,000,000 to VND 70,000,000.

3. Application of supplementary punishment.

Requesting the competent authority to suspend the activity of valuable paper issuance within a period of 3 months to 6 months for credit institutions, which have repeated the violation act as stipulated in paragraph 1 of this Article.

Section 4. ADMINISTRATIVE VIOLATION OF LENDING, BANK GUARANTEE, DISCOUNT AND FINANCE LEASING

Article 14. Violation of lending

1. The act of failure to publicly announce levels of lending interest rates to customers shall be subject to a fine of VND 200,000 to VND 500,000:

2. A fine of VND 1,000,000 to VND 3,000,000 shall be imposed on one of following acts:

a. Failure to keep in record credit files in accordance with provisions of applicable laws;

b. Credit contracts (or other substitute documents for the credit contract permitted by the competent authority) are not made in conformity with provisions of applicable laws.

3. One of the following acts shall be subject to a fine of VND 2,000,000 to VND 6,000,000:

a. Failure to set up the lending procedure;

b. Failure to perform the examination, supervision of the lending process, the use of loan funds and the repayment of customers under the provisions of applicable laws.

4. One of the following acts shall be subject to a fine of VND 3,000,000 to VND 9,000,000:

a. Failure to make credit contracts;

b. Failure to classify the overdue debts in accordance with provisions of applicable laws;

c. Failure to apply interest rate exemption, reduction; reschedule principal or interest debts; adjust the repayment periods of principals and interests; refinance the loans in accordance with provisions of applicable laws.

5. One of following acts shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

a. Lending to organizations, which, individuals, who are not qualified for funds borrowing in accordance with provisions of applicable laws.

b. Making loan syndication, lending under entrustment and taking entrustment for lending not in compliance with provisions of applicable laws.

6. The act of lending against the mortgage of share certificates of the lending credit institutions shall be subject to a fine of VND 10,000,000 to VND 20,000,000.

7. Application of measures to overcome the consequences

Any violation act as stipulated in paragraphs 1, 2,3, 4, 5,6 of this Article shall be required to correct for compliance with provisions of applicable laws on lending.

Article 15. Violation of the discount, rediscount of commercial paper and other valuable papers

Acts of failure to extend credit in form of discount, rediscount of commercial paper and other valuable papers in accordance with provisions of applicable laws shall be subject to a fine of VND 5,000,000 to VND 12,000,000.

Article 16. Violation of borrowing guarantee, payment guarantee, performance guarantee, tender guarantee and other forms of bank guarantee (generally referred to as guarantee)

1. Failure to keep in record guarantee files in accordance with provisions of applicable laws shall be subject to a fine of VND 1,000,000 to VND 3,000,000;

2. One of the following acts shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

a. Provision of guarantee to organizations which, individuals who do not fully satisfy conditions in accordance with provisions of applicable laws;

b. Receipt of security assets for the guarantee or failure to correctly comply with other provisions of applicable laws on guarantee.

3. Credit institutions which commit acts of issuing a borrowing guarantee, payment guarantee and other forms of bank guarantee to guarantee receiver, who is a foreign organization, individual without any permit of the competent authority to carry out the international payment shall be subject to a fine of VND 30,000,000 to VND 50,000,000.

5. Application of additional punishments:

Requesting the competent authority to suspend the implementation of the guarantee operation for a period of 3 months for the credit institutions, which have committed the violation acts as stipulated in paragraph 2 of this Article from the date where the violation acts are detected.

Article 17. Violation of finance leasing activity

1. One of following acts shall be subject to a fine of VND 1,000,000 to VND 3,000,000:

a. Failure to keep in record finance leasing files in accordance with provisions of applicable laws;

b. Failure to make finance leasing contracts in accordance with provisions of applicable laws.

2. One of the following acts shall be subject to a fine of VND 2,000,000 to VND 6,000,000:

a. Failure to prepare finance leasing procedures;

b. Failure to perform the examination, supervision for the finance leasing process, the use of finance lease assets and repayment of customers;

3. One of following acts shall be subject to a fine of VND 3,000,000 to VND 9,000,000:

a. Failure to prepare the finance leasing contract;

b. Failure to classify the overdue debts in accordance with provisions of applicable laws;

c. Failure to perform the interest rate exemption, reduction, reschedule of principals or interests, to adjust the repayment period of principals and interests in accordance with provisions of applicable laws;

4. One of following acts shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

a. Provision of finance leasing to organizations which, individuals who do not fully satisfy conditions in accordance with provisions of applicable laws;

c. Provision of syndication finance leasing, entrusting and taking entrustment for the finance leasing not in compliance with provisions of applicable laws.

5. Application of measures to overcome the consequences

Any violation act as stipulated in paragraphs 1, 2,3, 4 of this Article shall be required to correct for compliance with provisions on financial leasing.

Section 5. ADMINISTRATIVE VIOLATION OF FOREIGN EXCHANGE CONTROL AND GOLD BUSINESS CONTROL

Article 18. Violation of provisions on foreign exchange control, gold business control

1. A fine of VND 200,000 to VND 500,000 shall be imposed on the act of failure to publicly list the buying/selling exchange rate of foreign currencies at the transaction location in accordance with provisions of the competent authority;

2. A fine of VND 1,000,000 to VND 3,000,000 shall be imposed on the acts of buying from/selling, making payment in foreign currency to customers or making payment of foreign currency remitted to Vietnam by customers from foreign country not in consistence with the transaction exchange rates as provided for by the State Bank.

3. One of the following acts shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

a. Lending, providing the finance leasing or making debt repayment domestically in foreign currency not in consistence with provisions of applicable laws;

b. Remitting, carrying foreign currency out of and into Vietnam in contrary to provisions of applicable laws, except for cases stipulated in paragraph 6 of this Article;

c. Making payment for goods and services in foreign currency with foreigners not in compliance with provisions of applicable laws;

d. Buying, selling, making payment or lending foreign currency with each other or listing the prices of goods, services in foreign currency not in compliance with provisions of applicable laws.

4. One of the following acts shall be subject to a fine of VND 10,000,000 to VND 20,000,000:

a. Opening or use of a foreign currency account abroad by individuals, organizations without any permit or not in accordance with the provisions stated in the license issued by the competent authority;

b. Failure by credit institutions to comply with provisions of applicable laws on foreign currency position or Vietnam Dong position;

c. Failure by organizations, which have foreign currency earnings, to comply with provisions of applicable laws on the sale of the foreign currency receipts to credit institutions;

d. Failure by organizations to comply with provisions of applicable laws on foreign borrowing and repayment, guarantee and re-guarantee for the foreign borrowing;

dd. Failure by organizations, individuals to buy, sell, use gold of international standard in accordance with provisions of applicable laws;

e. Hiding or conspiracy of organizations, individuals in respect of violation of applicable laws on foreign exchange activity;

g. Failure by individuals, who, organizations, which have foreign currency earnings from abroad, to comply with provisions of applicable laws on foreign currency remittance into the country.

5. One of the following acts shall be subject to a fine of VND 45,000,000 to VND 70,000,000:

a. Individuals, organizations engaging in foreign exchange activity without any license of the competent authority or after the license for foreign exchange activity has expired or been suspended;

b. Performance of foreign currency remittance by individuals, organizations, which are not a credit institution, without any license of the competent authority;

c. Engagement by individuals, organizations in the export, import activity of foreign currency, gold without any permit from the State Bank

6. The carrying of foreign currency or gold abroad or into Vietnam through border checkpoints by individuals, organizations, which exit, enter Vietnam, not in compliance with provisions of applicable laws on Customs, shall be subject to the administrative punishment in the customs area.

7. Application of additional punishments

To confiscate the foreign currency or gold for the violation acts as provided for in point b, paragraph 3 and point dd paragraph 4 of this Article;

Section 6. ADMINISTRATIVE VIOLATION OF PAYMENT, PURCHASE, INVESTMENT IN FIXED ASSETS AND IMMOVABLE ASSETS BUSINESS

Article 19. Violation of cash payment

1. A fine of VND 1,000,000 to VND 3,000,000 shall be imposed on the act of violation of the limit on the cash balance in the vault.

2. A fine of VND 2,000,000 to VND 6,000,000 shall be imposed on one of following acts:

a. Violation of provisions on expenditures, for which cash is permitted to use for payment;

b. Violation of the limit on cash payment.

Article 20. Violation of provision and use of cheques, payment through payment services suppliers

1. A fine of VND 3,000,000 to VND 9,000,000 shall be imposed on the act of intentionally issuing cheques, which are not qualified for payment and failure to comply with the repayment obligation for the entire amount, which is claimed to the beneficiary or to the person who has paid to the beneficiary.

2. One of following acts shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

a. Keeping, circulating, transferring, using the counterfeit means of payment;

b. Accessing or trying to access to, destroying, illegally changing program or database in the computer network which is used for the payment.

Article 21. Violation of vault safety

1. A fine of VND 1,000,000 to VND 3,000,000 shall be imposed on any act of violation of the regime on the vault safety provided for by the State Bank.

2. A fine of VND 5,000,000 to VND 12,000,000 shall be imposed on any act of destroying Vietnamese currency, which does not reach to the extent where a criminal liability may be prosecuted.

Article 22. Violation of the purchase of, investment in fixed assets

Credit Institutions that commit an act of purchasing, investing in fixed assets that exceed the permitted ratio in accordance with provisions of applicable laws shall be subject to a fine of VND 10,000,000 to VND 20,000,000.

Article 23. Violation of immovable assets business

Any act of directly engaging in the immovable assets business by credit institutions shall be subject to a fine of VND 30,000,000 to VND 50,000,000.

Section 7. ADMINISTRATIVE VIOLATION OF PRUDENCE IN THE CREDIT INSTITUTIONS ACTIVITIES

Article 24. Violation of the opening of account and maintenance of required reserve

1. Warnings shall be given to any act of failure to open the account required reserve deposit at the State Bank or the maintenance of an average balance on this account at a level, which is lower than the required reserve in accordance with the provisions of applicable laws.

2. Application of measures to overcome consequences:

To be forced to immediately establish the level of required reserve in accordance with provisions of applicable laws.

Article 25. Violation of the prudence in the activity of lending, guarantee, discount of commercial paper and other valuable papers, finance leasing

1. A fine of VND 2,000,000 to VND 6,000,000 shall be imposed on any act of lending, finance leasing without security; lending, finance leasing with preferential conditions in contrary to the provisions of applicable laws; any act of lending, finance leasing, which results in the outstanding credit of any credit institution to following persons exceeding 5% of its own capital

a. Auditing firms which, auditors who are performing the audit at the credit institution; the Chief Accountant of the credit institution, inspectors who are performing the inspection at the credit institution;

b. Major shareholders of the credit institution;

c. Any enterprise which has one of the subjects provided for in points a, b, c paragraph 2 of this Article owning more than 10% of the charter capital of that enterprise, unless otherwise provided for by applicable laws;

2. One of the following acts shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

a. Lending, providing the finance lease to members of the Board of Directors, members of the Controller Committee, the General Director (Director), Deputy General Directors (Deputy Directors) of the credit institution, unless otherwise provided for by applicable laws;

b. Lending, providing the finance lease to the person who appraises or the person who approves the lending, finance leasing, unless otherwise provided for by applicable laws;

c. Lending, providing finance lease to parents, spouses, children of members of the Board of Directors, members of the Controller Committee, the General Director (Director), Deputy General Directors (Deputy Directors) of the credit institution, unless otherwise provided for by applicable laws;

d. Accepting guarantees issued by one of the subjects mentioned in points a, b, c paragraph 2 of this Article as security for the lending, finance leasing to customers;

3. A fine of VND 10,000,000 to VND 20,000,000 shall be imposed on one of the following acts:

a. Lending, providing finance lease to a customer whose total outstanding credit exceeds the ratio to the own capital of the credit institution provided for by provisions of applicable laws, except for following cases:

- Loans extended under the Governments regulations; lending, providing finance lease from funds entrusted by the Government, by organizations/individuals or for the case where the borrowing, finance lease customer is another credit institution;

- Lending against the mortgage of the deposits book issued by the lending credit fund;

b. Providing guarantee to a customer, discounting commercial papers and other valuable papers exceeding the ratio to the own capital of the credit institution provided for by provisions of applicable laws;

c. Lending by the funds which are banned from lending in accordance with provisions of applicable laws

4. Application of measures to overcome consequences

Credit institutions shall, depending on their violation acts, subject to one of following measures for the settlement of the consequences:

a. For violation acts stipulated in paragraph 2 of this Article: being forced to collect the lending debts within a period of 6 months from the date where the violation act is detected;

b. For the violation act stipulated in paragraphs 1, 3 of this Article: being forced to collect the lending debts that exceed the stipulated level within a period of 6 months.

Article 26. Violation of prudential ratios in the credit institutions activity

1. Any act of failure to comply with provisions of applicable laws on the maintenance of one of the following prudential ratios shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

- The liquidity ratio;

- The capital adequacy ratio;

- The maximum ratio of the short-term funds that are used for long, medium term lending;

- Other prudential ratios in accordance with provisions of applicable laws.

2. Application of measures to overcome the consequences

The prudential ratio is required to establish in accordance with provisions of the State Bank within a period of 1 month from the date where the violation act stipulated in this Article is detected.

Article 27. Violation of the limit of capital contribution, share purchase

1. One of the following acts shall be subject to a fine of VND 15,000,000 to VND 30,000,000:

a. Any act committed by credit institutions to make capital contribution to, purchase shares of an enterprise or where the total level of capital contribution, share purchase of a credit institution in all enterprises exceeds the maximum level provided for by applicable laws;

b. Joint stock credit institution, which uses its charter capital and funds to purchase shares from, make capital contribution with its shareholders.

2. Application of measures to overcome the consequences:

Violations stipulated in this Article are required to be overcome within a period of 12 months from the date where the violation act is detected.

Article 28. Violation of the risk provisioning

1. Credit institutions, which carry out the classification of assets and make risk provisions not in accordance with provisions of applicable laws shall be subject to a fine of VND 2,000,000 to VND 6,000,000.

2. Credit institutions, which fail to make provisions for risks in accordance with provisions of applicable laws, shall be subject to a fine of VND 3,000,000 to VND 9,000,000

3. Credit institutions, which fail to use risk provisions in accordance with provisions of applicable laws, shall be subject to a fine of VND 5,000,000 to VND 12,000,000

4. Application of measures to overcome the consequences:

Provisions on risk provisioning are required to be complied with within a period of 1 month from the date where the violation act provided for in this Article is detected.

Article 29. Violation of setting up and use of funds

1. One of the following acts shall be subject to a fine of VND 5,000,000 to VND 12,000,000:

a. Failure to set up funds in accordance with provisions of applicable laws;

b. Setting up and use of funds not in compliance with provisions of applicable laws;

2. Application of measures to overcome the consequences:

a. Funds are required to be set up in accordance with applicable provisions;

b. The initial status, which has been changed due to the use of funds not in accordance with provisions of applicable laws, is required to be restored.

Article 30. Violation of deposit insurance

1. Warnings shall be given to one of following acts:

a. Organizations, which participate in compulsory deposit insurance but do not pay the deposit insurance fee in accordance with provisions of applicable laws;

b. Organizations, which participate in the deposit insurance but do not publicly list their participation at their head office and transaction locations.

2. Any violation due to the late payment of the deposit insurance fee shall be subject to the punishment under provisions in the Decree of the Government on the deposit insurance.

Section 8. ADMINISTRATIVE VIOLATION OF ACCOUNTING, STATISTIC, INFORMATION AND REPORTING REGIME AND BANKING SECRECY

Article 31. Violation of accounting, statistics

Any act of violation of accounting, statistics in the monetary area and banking activity shall be subject to the punishment in accordance with provisions in the Governments Decree on punishment for administrative violations in the accounting, statistics area.

Article 32. Violation of the management of information, banking activity

1. Warnings shall be given to the act of failure to submit reports timely in accordance with provisions of the competent authority;

2. A fine of VND 500,000 to VND 2,000,000 shall be imposed on the act of failure to sufficiently submit reports or failure to submit reports in accordance with the provisions of the competent authority.

3. A fine of VND 2,000,000 to VND 6,000,000 shall be imposed on the act of failure to comply with the reporting regime in accordance with the provisions of applicable laws, except for the case stipulated in Article 31.

4. One of the following acts shall be subject to a fine of VND 3,000,000 to VND 9,000,000:

a. Untruthfully reporting on the activity of the credit institution;

b. Provision to organizations, individuals information relating to the activity of the State Bank, credit institutions without permission of competent authorities in accordance with provisions of applicable laws or without the acceptance by the customer, except for cases provided for in Article 102, Article 103, paragraph 2 Article 104 of the Law on the credit institutions.

5. A fine of VND 5,000,000 to VND 12,000,000 shall be imposed on the act of failure to immediately report to the competent authority by the credit institution on the risk to loose the payment capacity to its customers, which may seriously affect the business performance of the credit institution.

Article 33. VIOLATION OF BANKING SECRECY

Fines shall be imposed on acts of unintentional disclosure of secrecy or loss of documents, data, which are covered in the List of State confidentiality in the banking area but do not reach to the extent where a criminal liability may be prosecuted, including:

1. A fine of VND 1,000,000 to VND 3,000,000 shall be imposed on the act of disclosure of secrecy or loss of documents, data in the List of the State confidentiality in the banking area that are in the category of Secret.

2. A fine of VND 3,000,000 to VND 9,000,000 shall be imposed on the act of disclosure of secrecy or loss of documents, data in the List of the State confidentiality in the banking area that are in the category of Top secret.

3. A fine of VND 5,000,000 to VND 12,000,000 shall be imposed on the act of disclosure of secrecy or loss of documents, data in the List of the State confidentiality in the banking area that are in the category of Absolute secret.

Section 9. ADMINISTRATIVE VIOLATION OF THE RIGHT OF BUSINESS AUTONOMY OF CREDIT INSTITUTIONS, HINDRANCE OF THE INSPECTION ACTIVITY, NON-COMPLIANCE WITH REQUESTS BY THE COMPETENT AUTHORITY IN HANDLING ADMINISTRATIVE VIOLATIONS, ILLEGAL COMPETITION

Article 34. Act of violation of the right of the business autonomy of credit institutions and other organizations performing banking activity

Following acts shall be subject to warnings:

1. To force or use the own influence to request credit institutions to extend credits or to contribute capital, to purchase shares or perform foreign exchange activity in contrary to applicable provisions;

2. To hide or to connive with the act of violation provided for in paragraph 1 of this Article.

Article 35. Acts of hindrance of the inspection activity or non-compliance with requests of the competent authority in handling the administrative violations

1. One of the following acts shall be subject to a fine of VND 1,000,000 to VND 3,000,000:

a. Delay, avoidance or failure to provide fully materials, documents, data upon request by the Inspection, the inspection team or provision of false documents, data;

b. Hiding, changing documents, books or proofs during the inspection;

c. Automatic removal, move or any other acts in order to change the sealed status of: store, vault, safe, books, accounting documents, credit files, guarantee files, finance leasing files or proofs, which are sealed or temporarily seized;

2. One of the following acts shall be subject to a fine of VND 2,000,000 to VND 6,000,000:

a. Failure to comply with the requests by the State Bank Inspection and other competent agencies;

b. Illegal intervention in the treatment by the State Bank Inspection.

Article 36. Act of illegal competition

1. One of the following acts shall be subject to a fine of VND 2,000,000 to VND 6,000,000:

a. Giving false information to the detriment of the interest of credit institutions and legal interests of other organizations, individuals;

b. Giving illegal promotion;

c. Committing other acts of illegal competition in accordance with provisions of applicable laws.

2. A fine of VND 5,000,000 to VND 12,000,000 shall be imposed on the act of speculation to manipulate the monetary, foreign currency and gold market, which does not reach to the extent where a criminal liability may be prosecuted.

Chapter III

COMPETENCE AND PROCEDURES OF THE PUNISHMENT FOR THE ADMINISTRATIVE VIOLATIONS

Article 37. Competence to impose the punishment on the administrative violations

1. The Banking Inspectors during the performance of their duties shall have the right:

a. to give warnings;

b. to impose fines of up to VND 200,000;

c. to confiscate the proofs, tools used for administrative violation with the value of up to VND 2,000,000

d. to apply measures to overcome the consequences as provided for in point 3 Article 7 of this Decree;

2. The Chief Inspector of the State Banks branches in provinces, cities under the central Governments management shall have the right:

a. to give warnings;

b. to impose fines of up to VND 20,000,000;

c. to apply additional punishments and the measures to overcome the consequences as provided for in point a paragraph 2 and paragraph 3 Article 7 of this Decree;

d. to recommend to the General Manager of the State Banks branches in provinces, cities under the central Governments management to suspend the implementation of one or several operational activities relating to the act of administrative violation for a time limit or without time limit in accordance with provisions of the Law on the State Bank of Vietnam and the law on Credit institutions.

3. The Chief Inspector of the State Bank shall have the right:

a. to give warnings;

b. to impose fines of up to VND 70,000,000.

c. to apply additional punishments and the measures to overcome the consequences as provided for in point a paragraph 2 and paragraph 3 Article 7 of this Decree;

d. to recommend to the Governor of the State Bank to suspend the implementation of one or several operational activities relating to the act of administrative violation for a time limit or without time limit in accordance with provisions of the Law on the State Bank of Vietnam and the law on Credit institutions.

4. Chairman of provincial Peoples Committee, Director of the Economic Police Department, Director of the Criminal Police Department, Director of the Drugs and Criminals Prevention Police Department, Director of the Exit and Entry Management Department as stipulated in Article 30 and paragraph 7 Article 31 of the Ordinance on the settlement of the administrative violations shall have the competence to make decision on the punishment for the administrative violation in accordance with the provisions in this Decree and inform the State Bank for knowledge, in the event where they detect individuals, organizations not being credit institutions committing any act of violation of provisions on foreign exchange control in points b, d paragraph 3, points a, c, d, dd, e, g paragraph 4 and paragraph 5 Article 18 of this Decree.

Article 38. Authorization to impose punishment on administrative violation

In case where persons who are competent to impose punishments on administrative violations as provided for in paragraphs 2, 3, 4 Article 37 of this Decree are absent, their authorized deputies shall have the competence to impose punishments on the administrative violation and be responsible for their decision.

Article 39. Suspension of the act of administrative violation

Upon detecting any act of administrative violation, the persons who are competent to punish must issue an order on immediate suspension of that administrative violation act.

Article 40. Preparation of the minutes on the administrative violation

1. Upon detecting any act of administrative violation, persons who are competent to impose the punishment during the performance of their duties must timely draw a minutes on the administrative violation and report to the competent authority in accordance with provisions in the Governments Decree on the operation and organization of the Banking Inspectorate.

2. The preparation of the minutes on the administrative violation shall be applicable to every case of administrative violation in the monetary area and banking activity, except for the cases where the violation act is determined to be transferred from a criminal case for the settlement of the administrative violation.

3. The minutes on the administrative violation must be made at least in 2 sets under the stipulated pro-forma; the minutes must be signed by the drawer, violator or representative of the violating organization, in case where the witness, suffering person or representative of the suffering organization are present, they also must sign the minutes. If the minutes consists of several pages, persons provided for in this paragraph must sign each page of the minutes. In case where the violator or representative of the violating organization, the witness, suffering persons or representative of the suffering organization refuse to sign their name, the drawer must clearly state the reason thereof in the minutes.

4. After the complete preparation of the minutes, violating person(s), violating organization shall keep one copy. If the violation case exceeds the punishment competence of the drawer, he must send the minutes (the original) and the entire materials, files relating to the violation act to the competent authority within a period of 3 working days from the date where the minutes is prepared.

Article 41. Punishment decision

1. The punishment decision must be made under the stipulated pro-forma. The time limit for making the decision on the punishment of administrative violation shall be 10 working days from the date, where the minutes on the administrative violation is made. For cases with many complicated elements, the time limit for making punishment decision shall be 30 working days. In case where further time is needed for verification, collection of proofs, the persons who are competent to impose punishments must report to their direct superior in writing to ask for extension, the extended time shall not be in excess of 30 days. The superior must give his written opinion. When the above-mentioned duration elapses, the competent person shall no longer be entitled to make punishment decision; in case where the punishment decision is not made, measures to overcome the consequences stipulated in paragraph 3, Article 7 of this Decree may be applicable.

2. The punishment of administrative violation shall be carried out as follows:

a. Upon deciding on the punishment for a person who has committed many acts of administrative violation, the competent person shall make only one punishment decision which clearly stipulates the form, level of punishment for each violation act. If the form of punishment is the fine, they shall be added up to a common level of fine. The person who is competent to impose the punishment shall not be entitled to divide an act of administrative violation into several minor violation acts for punishment in many times;

b. For a case where several individuals, organizations commit the same administrative violation act, but they are not related to each other during the commitment of that violation act, they shall be subject to the punishment under the separate punishment decision. Based on the nature, seriousness of the violation of each individual, organization, the competent person shall decide on the specific level of punishment applicable to each of them;

c. If the form, level of punishment is provided for one of acts exceeding the competence of the punishing person, he shall transfer the violation case to the competent authority for punishment.

3. In case where an administrative violation act is subject to the punishment to be made by several competent persons, the punishment shall be performed by the person, who first handles the case.

4. The punishment decision shall be effective from the date of signing except for the case where the effective date is decided otherwise in the decision.

5. The punishment decision shall be sent to individuals, who organizations, which are punished and the fine collecting agency within a period of 3 working days from the date where the punishment decision is made.

Article 42. Procedures for the imposition of fine

1. Fines shall be carried out under the procedures stipulated in Articles 40, 41 of this Decision. Within a period of 10 working days from the date of receipt of the punishment decision, punished individuals, organizations shall pay fine to the State Treasury as stated in the punishment decision and get a fine receipt.

2. For the fines, the specific level of fine for an act of administrative violation shall be an average level of the range of fines provided for that act. The level of fine may be reduced but should not be lower than the minimum level of the fine in the range, in case of alleviation. The level of fine may also be increased but should not be higher than the maximum level of the fine in the range in case of severity.

Article 43. Procedures for suspending one or several operational activities or revoking the license that has been issued to the credit institution

1. In respect of administrative violation acts, which require the application of additional punishments by suspending one or several operational activities of the credit institution, the Chief Inspector of the State Bank or the Chief Inspector of the State Banks branches in provinces, cities under the central Governments management shall propose to the competent authorities as provided for in point d paragraph 2 and point d paragraph 3 Article 37 of this Decree for their consideration and decision.

The suspension of one or several operational activities of the credit institution shall be performed in accordance with provisions of the Law on the State Bank of Vietnam and the Law on Credit Institution.

2. Where a license is detected as being issued not in compliance with the competency or having contents contrary to the applicable laws, the person who is competent to impose the punishment shall immediately report to the competent person, who has issued the license for his revocation in accordance with the provisions of applicable laws.

Article 44. Procedures for confiscating proofs and dealing with the proofs, means of administrative violation

1. Upon confiscating the proofs, means of administrative violation stated in the punishment decision, the person who is competent to impose the punishment must draw a minutes on the confiscation of the proofs, means of administrative violation under the stipulated form. The minutes must contain the signatures of persons who carry out the confiscation, punished person, and representative of punished organization or the witness.

2. In case where the sealing of proofs, means of administrative violation is required, the sealing should be performed in the presence of the punished person or representative of punished organization and the witness; If the punished person or representative of the punished organization is absent, there must be the presence of two persons for witness.

3. Procedures for dealing with the proofs, means of administrative violation shall be performed according to the Article 61 of the Ordinance on the settlement of administrative violations.

Article 45. Transfer of the file of the violation case with the criminal signs for criminal liability prosecution

The procedures for transferring the file of the violation case with the criminal signs for criminal liability prosecution shall be carried out in accordance with the Article 62 of the Ordinance on the settlement of administrative violations.

Article 46. Transfer of the violation file for administrative punishment and execution of the decision on the punishment of the administrative violations.

Procedures for transferring the file of the violation case for the administrative punishment and execution of the decision on the punishment of the administrative violations shall be performed in accordance with Articles 63, 64 of the Ordinance on the settlement of administrative violations.

Article 47. Enforcement of the decision on the punishment of administrative violations

1. Organizations, which and individuals who are subject to the punishment for the administrative violation and do not volunteer to comply with the punishment decision shall be forced for the execution by following measures:

a. Part of their salary or one part of their income, their bank account shall be deducted;

b. Their assets, which have the value corresponding to that of the fine shall be seized for auction;

c. Other measures of enforcement can be taken to confiscate the proofs, means used for administrative violations, and they are forced to restore the initial status that has been changed due to their administrative violation.

2. Persons who are competent to impose the punishment as provided for in paragraphs 2, 3, 4 Article 37 of this Decree shall have the right to make decision on the enforcement and be obliged to organize the enforcement.

3. Organizations, individuals must seriously comply with the enforcement decision when they receive it.

4. The State agencies, the people police and the peoples Committees of different levels shall be responsible for the cooperation in the enforcement where they receive requests from the persons with the competence to impose the punishment as stipulated in paragraph 2 of this Article.

5. Enforced organizations, individuals shall bear all costs relating to the implementation of enforcement measures.

Article 48. Delivery of the decision on the punishment of administrative violation for implementation

The delivery of the decision on the punishment of administrative violation for implementation shall be carried out in accordance with Article 68 of the Ordinance on the settlement of administrative violations.

Article 49. The effectiveness of the decision on the punishment of administrative violations

The effectiveness of the decision on the punishment of administrative violations shall be in accordance with Article 69 of the Ordinance on the settlement of administrative violations.

Chapter IV

SUPERVISION, EXAMINATION OF THE SETTLEMENT OF ADMINISTRATIVE VIOLATIONS; SETTLEMENT OF COMPLAINTS, DENUNCIATION AND DEALING WITH VIOLATIONS COMMITTED BY PERSONS WHO ARE COMPETENT TO IMPOSE PUNISHMENT ON ADMINISTRATIVE VIOLATIONS IN THE MONETARY AREA AND BANKING ACTIVITY

Article 50. Supervision, examination of the settlement of administrative violations

Heads of the State agencies shall be responsible for regular examination for the settlement of the administrative violations by the persons who are competent to impose administrative punishment within their management scope; timely dealing with complaints, denunciation in the administrative punishment related to the persons who are competent to impose the punishment as provided for in Article 37 of this Decree; dealing with persons who commit violation relating to the administrative punishment within their management scope and carrying out the reporting regime on the administrative violation in the area they are in charge upon the requests of the competent agencies.

Article 51. Settlement of complaint, litigation against decision on punishment of administrative violations and denunciation of illegal acts committed by persons who are competent to impose the administrative punishment

1. Organizations, individuals subject to the punishment for administrative violations in the monetary area and banking activity shall have the right to lodge complaint to the State competent agency about the decision on the punishment of administrative violations or initiate a court suite. The complaint, litigation shall be performed in accordance with provisions of applicable laws

During the period of complaint or litigation, administratively punished organizations, individuals must continue the execution of the punishment decision. When the decision on the settlement of complaint from the state competent agency is available or when the judgment, decision of the Court has come into legal effect, the execution shall be performed in accordance with the decision on the settlement of complaint from the state competent agency or the judgment, decision of the Court.

2. The denunciation and the settlement of denunciation against illegal acts of persons who are competent to impose punishment of administrative violation in the monetary area and banking activity shall be carried out in accordance with the provisions in the Law on Complaint, denunciation and other provisions of applicable laws.

Article 52. The settlement of violations committed by persons who are competent to impose administrative punishment

Dealing with violation committed by persons who are competent to impose punishment of administrative violations in the monetary area and banking activity shall be carried out in accordance with Article 121 of the Ordinance on the settlement of administrative violations

Chapter V

IMPLEMENTING PROVISIONS

Article 53. Effectiveness of implementation

This Decree shall be effective after 15 days since the date of its publication in the Official Gazette and replace the Decree No. 20/2000/ND-CP dated 15 June 2000 of the Government on punishment for administrative violations in the monetary area and banking activity. Previous provisions in contrary to this Decree shall be repealed.

Article 54. Implementing guidance

The Governor of the State Bank of Vietnam shall be responsible to provide guidance on the implementation and to coordinate with related ministries, agencies to provide guidance on the implementation of this Decree in necessary case.

Article 55. Responsibility for implementation

Ministers, Heads of ministerial level agencies, Heads of Governments agencies, Chairman of Peoples Committees in provinces, cities under the central governments management shall be responsible to implement this Decree.