Circular No. 149/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance on prescribing illicit profits earned through the commission of administrative violations for forfeiture into the state budget

CIRCULAR

On prescribing illicit profits earned through the commission of administrative violations for forfeiture into the state budget

Pursuant to the Law on Handling of Administrative Violations dated June 20, 2012;

Pursuant to the Commercial Law dated June 14, 2005;

Pursuant to the Government s Decree No. 81/2013/ND-CP dated July 19, 2013 detailing a number of articles of the Law on Handling of Administrative Violations;

Pursuant to the Government’s Decree No. 185/2013/ND-CP dated November 15, 2013 on providing the penalties on administrative violations in commercial activities, production of, trading in counterfeit or banned goods and protection of consumer rights;

Pursuant to the Government’s Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Legal Department,

The Minister of Finance hereby promulgates the Circular on prescribing illicit profits earned through the commission of administrative violations for forfeiture into the state budget.

Article 1. Scope of regulation

1. This Circular provides guidance on determine illicit profits earned through the commission of administrative violations for forfeiture into the state budget under Article 37 of the Law on Handling of Administrative Violations and Point dd, Clause 5, Article 4 of the Government’s Decree No. 185/2013/ND-CP on providing the penalties on administrative violations in commercial activities, production of, trading in counterfeit or banned goods and protection of consumer rights (hereinafter referred to as the Decree No. 185/2013/ND-CP); provides guidance on handling illicit profits earned through the commission of administrative violations for forfeiture into the state budget.

2. The determination of illicit profits with regard of administrative violations in the field of securities and securities market shall comply with Clause 2, Article 3 of the Ministry of Finance’s Circular No. 217/2013/TT-BTC dated December 31, 2013.

3. The determination of illicit profits with regard of administrative violations in the field of price management shall comply with the Ministry of Finance’s Circular No. 31/2014/TT-BTC dated March 07, 2014.

Article 2. Subjects of application

1. Organizations and individuals who commit administrative violations and are applied the remedial measure of forcible refund of illicit profits under Article 37 of the Law on Handling of Administrative Violations and Point dd, Clause 5, Article 4 of the Decree No. 185/2013/ND-CP.

2. Persons competent to sanction administrative violations in accordance with the Law on Handling of Administrative Violations.

3.Other organizations and individuals related to handling of administrative violation in accordance with law provisions.

Article 3. Principles of determining illicit profits earned through the commission of administrative violations

1. Persons competent to sanction administrative violations shall determine illicit profits and such shall be recorded in the decision on handling of administrative violation or decision on applying remedial measures.

2. Illicit profits shall be determined from the time that organizations and individuals commit administrative violations to the time of ending such violations or to the time when the decision handling of administrative violation or decision on applying remedial measures is issued.

3.If an organization or an individual commits many administrative violations, illicit profits earned in each act of administrative violation shall be determined.

If an organization or an individual commits an administrative violation for many time, illicit profits earned in each time of violating shall be determined.

Article 4. Illicit profits

Illicit profits earned through the commission of administrative violations under Article 37 of the Law on Handling of Administrative Violations and Point dd, Clause 5, Article 4 of the Decree No. 185/2013/ND-CP are profits that organizations and individuals earned through the commission of administrative violations, including:

1. Money.

2. Valuable papers.

3. Assets and valuables.

Article 5. Determining illicit monetary profits

1. Earned monetary illicit profits mean the entire amount of money that an organization or individual earned through the commission of administrative violations.

2. Grounds for determining the money amount earned by an organization or individual through the commission of administrative violations shall be equal to (=) the quantity of goods, the volume of services that have been transferred, consumed, dispersed or destroyed contrary to the regulation, multiply by (x) the unit price. To be specific:

a) The quantity of goods, the volume of services that have been implemented shall be determined on a basis of declaration of the violating organizations and individuals and the inspection, verification of persons competent to handling violations;

b) Unit price shall be determined on a basis of dossiers and documents of the violating organizations and individuals or the market price of similar goods and services;

If the quantity, volume, unit price is unable to determine, the earned illicit profits shall be the money amount earned by such organizations and individuals.

3. If illegally transferred, consumed, dispersed or destroyed goods are banned goods, smuggled goods, counterfeit goods or illegally provided services are conditional business services: The money amount earned by an organization or individual shall be equal to (=) the quantity of goods, the volume of services that have been transferred, consumed, dispersed or destroyed contrary to the regulation, multiply by (x) the unit price.

4. Apart from goods and services specified in Clause 3 herein, if other goods or services are illegally transferred, consumed, dispersed or destroyed: The money amount earned by an organization or individual shall be equal to (=) the quantity of goods, the volume of services that have been transferred, consumed, dispersed or destroyed contrary to the regulation, multiply by (x) the unit price minus (-) costs directly constituting the goods or services (if the violating organizations and individuals have sufficient dossiers and documents to prove the legality and validity of such costs).

Article 6. Determining the amount of illicit profits that are valuable papers

1. Earned illicit profit amounts that are valuable papers mean the whole valuable papers that an organization or individual earned through the commission of administrative violations.

2. Valuable papers specified in Clause 1 herein comprise:

a) Bond

b) Bill of exchange

c) Treasury bill

d) Promissory note

dd) Cheque

e) Government stock

g) Securities of other types in accordance with the Law on Securities

h) Other valuable papers in accordance with specialize laws.

3. The amount of illicit profits shall be determined by the total value at par value of each type of valuable papers with the same par value, according to the following formula:

Total value = value at par value₁x quantity₁+ value at par value₂x quantity₂+ ... + value at par value_nx quantity_n

In which:

a) Quantity₁means the quantity of valuable papers at the same par value of group 1;

b) Quantity₂means the quantity of valuable papers at the same par value of group 2;

c) Quantity_nmeans the quantity of valuable papers at the same par value of group n.

4. If the valuable papers are transferred, the amount of illicit profits shall be determined by the actual money amount collected at the time of transfer. If the valuable papers are destroyed, the amount of illicit profits shall be determined according to the book value of the organization issuing valuable papers at the time of destruction.

Article 7. Determining the amount of illicit profits that are assets and valuables

1. Earned illicit profit amounts that are assets and valuables are assets and valuables that an organization or individual collected from the commission of administrative violations.

2. Assets specified in Clause 1 of this Article shall be determined according to Articles 163, 174, 175 and 181 of the Civil Code.

3. Valuables specified in Clause 1 of this Article shall be determined according to Articles 176, 177, 178, 179 and 180 of the Civil Code.

4. If an asset or valuable is not banned goods, smuggled goods or counterfeit goods that have been transferred, consumed or destroyed before the time the competent persons issue decisions on handling such goods, the amount of illicit profits shall be determined by the amount of money with equivalent value to the market value of an asset or valuable of the same type or determined by the book value of such asset or valuables (if there is no market value) or determined by the monetary value of the asset, valuable recorded on the export or import declaration (for exported or imported goods) of the violating organization or individual after deducting the direct cost constituting the goods as prescribed in Clause 4, Article 5 of this Circular.

If an asset or valuable is banned goods, smuggled goods or counterfeit goods that have been transferred or consumed before the time the competent person issues a decision on handling such goods, the amount of illicit profits shall be determined by the total amount of money that an organization or individual receives when transferring.

Article 8. Handling illicit profits in case of forfeiture into the state budget

The handling of illicit profits earned through the commission of administrative violations that are money, valuable papers, assets and valuables prescribed in this Circular for forfeiture into the state budget shall comply with the Government s Decree No. 29/2014/ND-CP dated April 10, 2014 on prescribing the competence and procedures for establishment of state ownership over property and for management and handling of property over which state ownership is established and the Ministry of Finance’s Circulars on guiding this Decree.

Article 9. Effect

1. This Circular takes effect on November 25, 2014. If there is a decision on handling administrative violations or a decision on applying remedial measures from the effective date of this Circular, the determination of illicit profits earned through the commission of administrative violations for forfeiture into the state budget shall comply with this Circular.

2. If legal normative documents mentioned in this Circular are amended, supplemented or replaced, such amendments, supplements or replacements shall be applied.

Any problem arising in the course of implementation should be promptly reported to the Ministry of Finance for consideration and settlement./.