On December 28, 2021, the Government issued Decree No. 122/2021/ND-CP, which regulates administrative penalties in the field of planning and investment. This Decree consists of 7 Chapters and 81 Articles and took effect on January 1, 2022, replacing Decree No. 50/2016/ND-CP.
Scope of Regulation
Decree No. 122/2021/ND-CP covers administrative violations, penalties, fines, remedial measures, authority to record administrative violations, and authority to impose administrative penalties in the field of planning and investment. Specifically, it governs violations in the following areas:
- Investment: including public investment, business investment in Vietnam, outbound business investment, and public-private partnership (PPP) investment.
- Bidding.
- Enterprise registration.
- Planning.
Administrative violations related to planning and investment not specified in this Decree will be handled in accordance with other relevant state administrative penalty regulations.
Forms of Penalties
The Decree outlines two primary forms of penalties:
- Warnings.
- Fines: Depending on the nature and severity of the violation, additional remedial measures may also be applied as specified in Chapters II to V of the Decree.
Maximum Fine Levels
The Decree stipulates the maximum fines for different sectors as follows:
- Investment: VND 300 million.
- Bidding: VND 300 million.
- Enterprise registration: VND 100 million.
- Planning: VND 500 million.
For individuals who commit the same violations as organizations, the fine will be half of the amount imposed on organizations.
Time Limits for Penalties
- Investment, bidding, and enterprise registration sectors: The time limit for imposing penalties is 1 year.
- Planning sector: The time limit for imposing penalties is 2 years.
Violations in the Field of Business Investment in Vietnam
The Decree also clearly defines specific penalties and remedial measures for violations in business investment in Vietnam, which are detailed in Section 2 of Chapter II, including:
- Article 15: Violations related to information and reporting requirements for investment activities in Vietnam.
- Article 16: Violations related to business investment conditions in Vietnam.
- Article 17: Violations related to the issuance, amendment of Investment Registration Certificates, the registration of operation offices for foreign investors in business cooperation contracts (BCC), approval of investment policies, and approval of investment policies along with investor approvals.
- Article 18: Violations related to investment incentives.
- Article 19: Violations related to the implementation of investment projects in Vietnam.
This Decree provides a legal framework to enforce and manage investment, bidding, and enterprise activities, ensuring transparency and discipline in Vietnam’s economic governance.
To compare Decree 122/2021/NĐ-CP with Decree 50/2016/NĐ-CP, we can analyze the following key differences and updates:
Scope and Coverage:
- Decree 50/2016/NĐ-CP focused on administrative violations related to investment, business registration, and planning. It covered fines, penalties, and procedures for addressing non-compliance in these areas.
- Decree 122/2021/NĐ-CP expands the scope, covering more detailed violations and penalties, specifically including investment areas like PPP (public-private partnerships), overseas investments, and government-supported projects. It also includes updates on administrative handling across a broader scope within the planning and investment sectors.
Penalties and Fines:
- The maximum fines have been increased in Decree 122/2021/NĐ-CP:
- Investment violations: Up to 300 million VND (same as in Decree 50).
- Business registration violations: Up to 100 million VND (unchanged).
- Planning violations: Raised to 500 million VND, indicating stricter enforcement in planning-related activities, a significant increase compared to the earlier decree.
- Individual fines are still 50% of organizational fines in both decrees.
Time Limits for Handling Violations:
- Decree 50/2016/NĐ-CP had a general time limit of 1 year for administrative violations in business registration and investment.
- Decree 122/2021/NĐ-CP maintains a 1-year time limit for business registration and investment violations but extends the period to 2 years for violations related to planning, which underscores the government’s emphasis on stricter compliance in national and regional planning projects.
New Categories of Violations:
- Decree 122/2021/NĐ-CP introduces specific provisions for violations in public-private partnership (PPP) investments and clearer distinctions for penalties related to foreign investment certificates and adjustments to investment projects. These updates are in response to evolving forms of investment in Vietnam, especially with the increased participation of foreign businesses in government-supported projects.
Violation Handling Procedures:
- Both decrees outline procedures for dealing with violations, but Decree 122/2021/NĐ-CP offers more specific guidance on how organizations and individuals can remedy violations, including clearer definitions on documentation and evidence required for rectification.
