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October 13, 2020

Vietnam Issues New Administrative Penalties for Violations in Commercial Activities

On August 26, 2020, the government of Vietnam issued Decree No. 98/2020/ND-CP on the penalties for administrative violations in commercial activities, production and trade of counterfeit and banned goods, and consumer rights protection (Decree 98). Decree 98 will come into effect on October 15, 2020, replacing Decree No. 185/2013/ND-CP as amended in 2015 and 2018 (Decree 185).

The administrative penalties and remedial measures under Article 4 of Decree 98 are restructured and more well-organized than in Decree 185, with increased monetary fines for a number of violations.

Some notable changes in Decree 98 in comparison to Decree 185 include:

  • Acts of trading in goods/services for which business is restricted or conditional, and acts of violation in commercial intermediary activities are no longer listed as administrative violations subject to the governing scope of the decree.
  • The definition of “counterfeit goods” no longer includes “intellectual property counterfeit goods” as found in Decree 185, which now leaves two separate definitions of counterfeit goods under the Vietnamese laws:
  1. Counterfeit goods covered under Decree 98, referring to goods not meeting expected use or quality standards; counterfeit drugs (for humans and animals); goods with forged information such as the name or address of the manufacturer, importer or distributor; and goods with counterfeit stamps, labels, or packages; and
  2. Intellectual property counterfeit goods as defined under the Law on Intellectual Property, referring to goods bearing counterfeit trademarks and counterfeit geographical indications.
  • The grounds for determining the manufacturer or origin of goods are clarified.
  • Violations in business activities in relation to business registration certificates are no longer sanctioned.
  • Penalties for violations against regulations on trade in alcoholic beverages include liquor and beer, instead of liquor only.
  • Several new regulations on penalties for administrative violations in e-commerce activities have been added. For example, for an online shopping website or mobile shopping application, a fine ranging from VND 1 million to VND 5 million (approximately USD 43 to USD 216) will be imposed for the failure to adequately and accurately publish information on the owner of such website or application, the goods or services sold and their prices, transport and delivery, general transaction terms and conditions, and payment methods. A fine ranging from VND 10 million to VND 20 million approximately (USD 430 to USD 860) will be imposed for providing information, trading in, or selling counterfeit goods, IP-infringing goods or services, or other goods or services banned from trade on the internet.

Although the changes in Decree 98 are not large, such amendments are necessary and in accordance with other relevant laws and regulations, and will provide the authorities with sufficient grounds to deal with violations as they arise.

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