Decree No. 49/1999/ND-CP dated July 08, 1999 of the Government on sanctions against administrative violations in the domain of accountancy

DECREE

ON SANCTIONS AGAINST ADMINISTRATIVE VIOLATIONS IN THE DOMAIN OF ACCOUNTANCY

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Ordinance on Accountancy and Statistics of May 20, 1988;

Pursuant to the Ordinance on Handling Administrative Violations of July 6, 1995;

At the proposal of the Minister of Finance,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Objects and scope of regulation

1. Administrative violations in the domain of accountancy are acts of individuals or organizations which intentionally or unconsciously violate the rules of State management of accountancy but which are not serious enough to be examined for penal liability and must be sanctioned administratively according to law.

2. The regulations on administrative sanctions in the domain of accountancy in this Decree shall apply to:

a/ Individuals and organizations that commit acts of administrative violation in the domain of accountancy stipulated in Chapter II of this Decree;

b/ Foreign individuals and organizations operating in Vietnam that commit acts of administrative violation in the domain of accountancy stipulated in Chapter II of this Decree, except otherwise stipulated in international agreements which Vietnam has signed or acceded to.

Article 2.- Principles and statute of limitations of sanctions

1. The principle on sanctions against administrative violations in the domain of accountancy is based on Clauses 1, 3, 4, 5 and 6 of Article 3 of the Ordinance on Handling Administrative Violations.

2. The statute of limitations of sanctions against administrative violations in the domain of accountancy is two years after the violation is committed.

Individuals, who have been subjected to primary prosecution or prosecution or whose case has been decided to be brought to trial according to the procedures of criminal proceedings but now a decision of the competent level has been taken to stop the investigation or stop the trial, shall be sanctioned administratively for those acts showing signs of administrative violation; the statute of limitations of administrative sanction is 3 months after the decision to stop the investigation is issued.

In case the individual or organization continues to commit administrative violations, or deliberately evades or obstructs the sanction, the statute of limitations of sanctions mentioned in this Clause shall not apply.

Article 3.- Forms of sanction against administrative violations in the domain of accountancy

1. For each administrative violation in the domain of accountancy, the individual or organization shall be subjected to one of the following forms of administrative sanction:

a/ Warning;

b/ Fine.

2. Besides the main form of sanction, the individual or organization that commits acts of administrative violation in the domain of accountancy may be subjected to one or several forms of additional sanction and other measures stipulated in Clauses 2 and 3, Article 11 of the Ordinance on Handling Administrative Violations.

Article 4.- Extenuating and aggravating circumstances in sanctions against administrative violations in the domain of accountancy

1. Extenuating circumstances:

a/ Individuals or organizations that commit administrative violations but that have on their own prevented or reduced the damage of the violation or that have voluntarily overcome the consequences and paid damages; or

b/ The violation is committed under duress;

2. Aggravating circumstances:

a/ Organized violation;

b/ Repeated violations or recidivism;

c/ Instigating, drawing or forcing their dependents by material incentives or spiritual influence to commit the violation;

d/ Misusing their positions and power to commit the violations;

e/ Taking advantage of the war situation or natural disasters or other special difficulties of society to commit violations;

f/ Taking acts of evasion or concealment after their administrative violation;

Chapter II

ACTS OF VIOLATION, FORMS AND LEVELS OF SANCTION

Article 5.- Violation of the competence of issuing and applying the regime of accountancy

1. Fine of 1,000,000 - 5,000,000 VND and up to 10,000,000 VND in aggravating circumstances for one of the following acts:

a/ Not correctly observing the State regulations concerning the competence of issuing the regimes of accountancy papers, accountancy books, and financial reports.

b/ Asking, urging or guiding the subaltern level to carry out the regime of accountancy papers, accountancy books and forms of financial reports at variance with the legislation on accountancy.

c/ Failing to register the regime of accountancy applied during the time limit in force.

d/ Tampering the accountancy papers, the accountancy book or the financial report or changing the method of accounting before acceptance in writing by the competent level as prescribed.

2. Supplementary sanction: confiscation of evidences of the administrative violation in case of violation stipulated in Points a, b and d, Clause 1 of this Article.

Article 6.- Violating the principle of using accountancy papers and accountancy accounts

1. Fine of 500,000 - 3,000,000 VND and up to 5,000,000 VND in aggravating circumstances for one of the following acts:

a/ Recording arising economic and financial activities in accountancy papers without abiding by the principle of recording accountancy papers, including electronic accountancy papers.

b/ Using accountancy receipts and accountancy papers not in keeping with the provisions of the Ministry of Finance or without permission from the competent agency.

c/ Selling unsigned and unsealed financial receipts but without causing serious consequences.

d/ Buying financial receipts not in keeping with prescriptions.

e/ Losing financial receipts or accountancy papers without notification

2. Fine of 2,000,000 - 10,000,000 VND and up to 15,000,000 VND in aggravating circumstances for allowing others to use the accounts of the unit to receive and transfer money for monetary activities in violation of the financial discipline and discipline in using capital.

3. Supplementary sanction: confiscation of evidences of administrative violation for the acts men-tioned in Points a, b, c and d, Clause 1 of this Article.

Article 7.- Faking accountancy papers, accountancy book, false declaration and untruthful reporting of accountancy data

1. Fine of 2,000,000 - 10,000,000 VND and up to 15,000,000 VND in aggravating circumstances for one of the following acts:

a/ Faking accountancy papers and accountancy book.

b/ False declaration of data and making untruthful reports.

c/ Forcing others to fake papers, books or to make false declaration of data or making untruthful reports on accountancy data.

2. Supplementary sanction: confiscation of evidences of administrative violation with regard to acts stipulated in Points a and b, Clause 1 of this Article.

Article 8.- Violation of the principle of accountancy on timeliness and adequacy

1. Warning or fine of 300,000 - 2,000,000 VND and up to 4,000,000 VND in aggravating circumstances for one of the following acts:

a/ Untimely recording of accountancy papers as prescribed by the regime of accountancy;

b/ Untimely recording in accountancy book as prescribed by the regime of accountancy;

c/ Untimely making or submission of financial reports as prescribed by the regime of accountancy.

2. Fine of 500,000 - 4,000,000 VND and up to 7,000,000 VND in case of aggravating circumstances for one of the following acts:

a/ Inadequate recording of accountancy papers as prescribed by the regime of accountancy;

b/ Inadequate recording in accountancy books as prescribed by the regime of accountancy;

c/ Inadequate making of financial reports as prescribed by the regime of accountancy.

Article 9.- Violation of prescriptions on book opening, book recording, book closing in accountancy and in inventory

1. Warning or fine of 200,000 - 1,000,000 VND and up to 2,000,000 VND in aggravating circumstances for one of the following acts:

a/ Opening or closing accountancy books not in conformity with the method or with the annual accountancy calendar;

b/ Unclear recording in accountancy books;

c/ Tampering or erasing accountancy books not as prescribed.

2. Fine of 2,000,000 - 10,000,000 VND and up to 15,000,000 VND in aggravating circumstances for recording or calculating figures in the accountancy book not in conformity with the content and method prescribed for the accountancy regime.

3. Fine of 1,000,000 - 8,000,000 VND and up to 15,000,000 VND in aggravating circumstances for one of the following acts:

a/ Selling goods without writing financial receipt and without making entry in the sale book;

b/ Leaving aside part of the turnover or making phony increase of turnover in the annual reporting calendar.

4, Fine of 500,000 - 4,000,000 VND and up to 7,000,000 VND in aggravating circumstances for one of the following acts:

a/ Failing to carry out or carrying out incorrectly the State regulations on property inventory.

b/ Failing to handle or handling erroneously property inventory before making the financial report of the operating year.

5. Fine of 3,000,000 - 15,000,000 VND and up to 20,000,000 VND in aggravating circumstances for leaving outside the accountancy book various kinds of property and capital.

Article 10.- Violation of the regime of reporting and supplying accountancy documents

Fine of 1,000,000 - 8,000,000 VND and up to 15,000,000 VND in aggravating circumstances for one of the following acts:

1. Making financial reports at variance with the forms prescribed by the competent agencies.

2. Failing to carry out or carrying out not in accordance with the regulations on the supply of accountancy documents related to the carrying out of economic contracts already signed with foreign countries and other economic relations with regard to the specialized agencies that are allowed to request the supply according to provisions of law.

3. Failing to report or mistakenly report or making inadequate report on the prescribed contents as requested by the State or the competent agency on the borrowing and use of loans from foreign countries without going through the State and the financing and banking system in the country as prescribed by law.

4. Failing to submit the periodical financial report as prescribed by the financial and banking agency on the economic operations of the unit in foreign countries.

5. The financial report is not audited as prescribed by law.

Article 11.- Violation of the regime of accountancy inspection

1. Fine of 1,000,000 - 8,000,000 VND and up to 15,000,000 VND in aggravating circumstances for one of the following acts:

a/ Obstructing the inspection or failing to carry out the proposal of the inspecting organization on accountancy inspection without legitimate reason.

b/ Delaying or evading or intentionally not supplying documents, papers and accountancy books or financial reports as requested by the inspection organization.

c/ Tampering or changing accountancy papers and accountancy books during the supervision and inspection on finance and accountancy.

d/ Failing to carry out the order on sealing of dossiers and documents, papers and books on accountancy and treasure safes and other properties of the competent agency as prescribed by law.

e/ Removing without authorization or moving or taking other acts to change the state of sealing of the stores, treasure safes, gold, silver and gems, papers and books of accountancy and dossiers on borrowings and repayments, mortgages, guarantees or evidences under seal or temporary detention without causing notable consequences.

2. Applying measures of forcible restoration to the original state for the violations stipulated in Points c and e, Clause 1 of this Article.

Article 12.- Violating the regime of maintenance and storing of accountancy papers and books and financial reports

1. Warning or fines of 200,000 - 2,000,000 VND and up to 4,000,000 VND in aggravating circumstances for one of the following acts:

a/ Keeping and storing accountancy dossiers and documents not as prescribed.

b/ Using accountancy dossiers and documents on file not as prescribed.

2. Fine of 500,000 - 4,000,000 VND and up to 7,000,000 VND in aggravating circumstances for acts of damaging or losing accountancy papers or books or financial reports within the maintenance and storing year period due to irresponsibility.

3. Fine of 1,000,000 - 8,000,000 VND and up to 15,000,000 VND in aggravating circumstances for one of the following acts:

a/ Abolishing accountancy papers and books or financial reports before expiry of the prescribed time for storing;

b/ Abolishing accountancy papers and books and financial reports not as prescribed by procedures;

c/ Abolishing accountancy papers and books and financial reports not in keeping with or beyond the prescribed power.

Article 13.- Violation of principle of organization of accountancy

1. Fine of 2,000,000 - 10,000,000 VND and up to 15,000,000 VND in aggravating circumstances for one of the following acts:

a/ To assign an accountant to act also as store keeper, cashier or material supplier;

b/ To assign a person to act as accountant, store keeper or cashier not allowed by law on accountancy.

c/ Failing to assign persons or failing to organize a section to look after the accountancy work as prescribed by law.

2. Fine of 3,000,000 - 15,000,000 VND and up to 20,000,000 VND in aggravating circumstances for one of the following acts:

a/ To appoint head accountants with earlier convictions or criminal records who have not completed the period when they are forbidden by law to assume these posts or who are being disciplined for violating the accountancy and financial profession;

b/ To appoint a head accountant not up to the criteria in skill or experience in actual work as prescribed by the criteria .

3. To apply the measure of forcible transfer from the appointed post for violations of Points a, b, Clause 1 and Clause 2 of this Article.

Article 14.- Transferring the dossier of administrative violation in the accountancy domain for examination of criminal liability

When detecting signs of criminality in the administrative violation in the domain of accountancy, the competent person must send immediately the dossier to the competent crime handling agency for settlement.

It is strictly forbidden to retain the cases of violation in the domain of accountancy with signs of criminality for administrative handling.

Chapter III

SANCTIONING COMPETENCE, SANCTIONED ORGANIZATIONS AND INDIVIDUALS, PROCEDURES OF SANCTIONING AND COMPLAINING

Article 15.- Sanctioning competence of specialized financial inspector

1. The specialized financial inspector of various levels on mission has the right:

a/ To issue a warning;

b/ To fine up to 200,000 VND;

c/ To confiscate evidences and means used in the administrative violation and other measures stipulated in Point c, Clause 1, Article 34 of the Ordinance on Handling Administrative Violations.

2. The chief specialized financial inspector of provincial or city level has the right:

a/ To issue a warning;

b/ To fine up to 10,000,000 VND;

c/ To apply supplementary sanctions and other measures stipulated in Clause 2, Article 3 of this Decree.

3. The chief specialized financial inspector under the Ministry of Finance has the right:

a/ To issue a warning;

b/ To fine up to 20,000,000 VND;

c/ To apply supplementary sanctions and other measures stipulated in Clause 2, Article 3 of this Decree.

Article 16.- Sanctioning competence of the People’s Committee of district and provincial level

1. The president of the People’s Committee of district level has the right:

a/ To issue a warning;

b/ To fine up to 10,000,000 VND;

c/ To apply supplementary sanctions and other measures stipulated in Clause 2, Article 3 of this Decree.

2. The president of the People’s Committee of provincial level has the right:

a/ To issue a warning;

b/ To fine up to 100,000,000 VND;

c/ To apply supplementary sanctions and other measures stipulated in Clause 2, Article 3 of this Decree.

Article 17.- Authorization to sanction administrative violations

In the absence of the person with competence to hand sanctions of administrative violations stipulated in Clauses 2 and 3, Article 15, Clauses 1 and 2, Article 16 of this Decree or with their delegation of power, their deputies have the right to hand the sanction according to their competence.

Article 18.- Determination of competence to hand sanctions against administrative violations

1. The People’s Committee of district and provincial levels has the competence to hand sanctions against administrative violations in the domain of accountancy in the locality.

2. The specialized financial inspectorate of various levels has the competence to hand sanctions against administrative violations in the domain of accountancy under its management.

3. In case the administrative violation in the domain of accountancy comes under the sanctioning competence of many agencies, the sanction shall be carried out by the agency which is the first to handle the case.

Article 19.- Procedures of sanctioning administrative violations in the domain of accountancy

The procedures of sanctioning administrative violations in the domain of accountancy shall comply with the stipulations in Chapter VI of the Ordinance on Handling Administrative Violations of July 6, 1995.

Article 20.- Forcible implementation of the decision on sanction against administrative violations in the domain of accountancy

The forcible implementation of a decision to sanction administrative violations in the domain of accountancy shall conform with the stipulations in Article 55 of the Ordinance on Handling Administrative Violations of July 6, 1995.

Article 21.- Sanction of administrative violations with regard to acts of opposing personnel on public mission in the domain of accountancy

The sanctioning of administrative violation regarding persons who take act of opposing the personnel on public mission in the domain of accountancy shall conform with the stipulations in Points a and b, Clause 2, Point c, Clause 3 of Article 5 of Decree No. 49/CP of August 15, 1996 of the Government on sanctions against administrative violations in the domain of security and order.

Article 22.- Commendations and discipline

1. Individuals and organizations that detect and denounce individuals or organizations with acts of administrative violation in the domain of accountancy shall be commended and awarded according to the common regulations of the State.

2. The person who has competence to handle administrative violations in the domain of accountancy but who hides violation or who fails to abide by the regulations on sanctions against administrative violations in the domain of accountancy stipulated in this Decree shall, depending on the nature and extent of the violation, be disciplined or examined for penal liabilities. If he/she causes damage, he/she shall have to pay compensations as stipulated by law.

Article 23.- Statute of limitation for execution of sanctioning decision

The sanctioning decision on administrative violation in the domain of accountancy shall lose its implementation effect after a year following the issue of the decision. In case the sanctioned individual or organization deliberately evades or delays the execution, the statute of limitations as stipulated in this Article shall no longer apply.

Article 24.- Complaints and denunciations

Complaints and denunciations against the decision of sanctioning in the domain of accountancy and their settlement shall comply with the legislation on complaints and denunciations.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 25.- Implementation provisions

1. This Decree takes effect 15 days after its signing. It replaces the regulations on sanctioning against administrative violations in the domain of accountancy stipulated in Decree No. 52/HDBT of February 19, 1992 of the Council of Ministers and replaces the stipulations in Point c, Clause 1; Points a, Clause 2; Points a, c, d and e, Clause 3, Article 2, and Points b and c, Clause 1, Article 3 of Decree No. 22/CP of April 17, 1996 of the Government on sanctions against administrative violations in the domain of taxes.

2. The ministers, the heads of ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People’s Committees of the provinces and centrally-run cities shall have to implement this Decree.

3. The Minister of Finance shall have to guide the implementation of this Decree.