26/07/2022 09:49

In Vietnam, can a lender be convicted of usury just because the loan has high interest rate?

In Vietnam, can a lender be convicted of usury just because the loan has high interest rate?

Black credit is a common name for various forms of loan sharking. This is prohibited by law and can be criminally prosecuted. So if the signs of high-interest rates are not enough, what else is needed to constitute this type of crime?

Specifically, Judgment 95/2019/HS-ST dated June 14, 2019 of the People's Court of Thai Binh city has the following content:

“From November 20, 2017 to June 6, 2018, Ta Quang T loaned Ms. L and Ms. Nguyen Hong N a total amount of VND 90,000,000 with the agreed interest rate of VND 20,000 / 1 million / 1 day, interest on the loan is 190,000,000 VND. The total of both principal and interest is 280,000,000 VND, and Ms. N and Ms. L each owe 140,000,000 VND.

Around October 2018, because Ms. L and Ms. N could not pay, defendant T continued to charge interest on the amount owed by Ms. L and Ms. N, at an interest rate of 5,000 VND / 1 million VND / 1 day, Ms. and Ms. N agrees. Therefore, Ms. L has to pay defendant T the amount of 20,100,000 VND in interest a month, and Ms. N has to pay defendant T the amount of 19,500,000 VND in interest a month (from October 8, 2018).

During a visit to Ms. N and L's house to ask for interest, the Investigation Police Agency of Thai Binh Province Police checked and made a record of the incident.

On December 4, 2018, the Investigation Police Agency of Thai Binh Province Police conducted an emergency search of defendant Ta Quang T's residence, seizing 47 money receipts that store information about customers receiving money from the defendant. Mr. Dang Duc L, born in 1976, residing at house number 205, K street, ward P, city B and 51 sheets of loan paper to store information about borrowers of Pham Van D, born in 1983, residing in the village N, L commune, B city.”

The People's Court of Thai Binh city has sentenced T defendant Ta Quang T  02  (two) years and  06  (six) months of non-custodial reform.

First of all, let's find out the legal provisions for the crime of "lending heavy interest in civil transactions ", this behaviour is specified in Article 201 of the 2015 Criminal Code of Vietnam as follows:

Article 201. Usury in civil transactions

1. Any person who offers loans at an interest rate that is five times higher than the maximum interest rate specified in the Civil Code and earns an illegal profit of from VND 30,000,000 to under VND 100,000,000 or recommits this offence despite the fact that he/she has incurred an administrative penalty or has an unspent conviction for the same offence shall be liable to a fine of from VND 50,000,000 to VND 200,000,000 or face a penalty of up to 03 years' community sentence.

2. If the illegal profit earned is ≥ VND 100,000,000, the offender shall be liable to a fine of from VND 200,000,000 to VND 1,000,000,000 or face a penalty of 06 - 36 months' imprisonment.

3. The offender might also be liable to a fine of from VND 30,000,000 to VND 100,000,000, be prohibited from holding certain positions or doing certain works for 01 - 05 years.

Currently, interest rates for civil transactions are specified in Article 468 of the Civil Code 2015 of Vietnam as follows:

Article 478. Interest rates

1. The rate of interest for a loan shall be as agreed by the parties.

The rate of interest for a loan agreed by the parties may not exceed 20% per year, unless otherwise prescribed by law. According to actual conditions and at the proposal of the Government, the Standing Committee of National Assembly shall adjust the above interest and send report to the National Assembly at the latest session.

If the agreed interest exceeds the maximum interest prescribed in this Clause, the agreed interest shall become invalid

Therefore, when lending with an interest rate of 5 times higher than the highest interest rate specified in the Civil Code, i.e. the interest rate is 100%/year or more, the lending has criminal signs.

In addition to the interest rate conditions, the above offence must also satisfy one of the following conditions: Firstly, to gain illicit profits from VND 30 million to under VND 100 million; secondly, has been administratively sanctioned for this act but within twelve months; thirdly, has been convicted of this crime, has not yet had his criminal record cleared, but still commits it.

As for the conditions "have been administratively sanctioned for this act or convicted for this crime, have not yet been expunged, but continue to violate", the provisions of the law are clear, and the interpretation is uniform. As for the conditions for obtaining illicit profits, the interpretation of illegal profits of 30 million VND or more has not been agreed upon.

On the other hand, the interpretation of the regulation of illegally profiting from VND 30 million has many different views:

The first point of view is that the amount of illegal profit of 30 million VND or more is the sum of all loan contracts combined to serve as a basis for prosecution, prosecution and trial. minus the profit from 20% of the loan value.

The second point of view is that the amount of illicit profit of 30 million VND or more is calculated on the basis of the profit from 20% of the value of the borrowed property and is calculated on each loan contract to determine criminality.

The third point of view,  for an illegal profit of VND 30 million or more, calculated on the basis of deducting the profit from 20% of the value of the loan property protected by law and calculated on each loan contract to determine crime, not on the sum of loan contracts to determine crime. Because while applying the law, the procedure-conducting person can be applied similar measures, such as determining the basic composition of the crime of Theft of property, and the crime of Fraud to appropriate property (in case there is no money yet) criminal record, previous convictions for the act of appropriating property) but the stolen property or deceptive property must have a value of 02 million VND or more. For the time of property theft, the time of fraudulent appropriation of property worth less than 02 million VND does not constitute a crime.

In fact, before the guidance of the Judicial Council of the People's Court or the guidance of the Standing Committee of the National Assembly of Vietnam, the application of handling this type of crime encountered many problems. In addition, it also causes difficulties and heterogeneity in the application of the law of the Special Court in the present time when there are more and more cases of loan sharking.

Judgment 95/2019/HS-ST heard by the People's Court of Thai Binh province on June 14, 2019 showed the judge's view on how to  calculate interest for illegal profits as follows:

For example:   is the interest earned,   is the interest earned on the loan,  is the number of days to borrow money, and  is the loan amount.

A= B - (20%÷365×C×D)

In which: 20% is the maximum loan percentage over 1 year of the agreed loan, 365 is the number of days in 1 year.

On September 13, 2019 the Supreme People's Court issued Official Dispatch No. 212/TANDTC-PC announcing the results of online answers to a number of problems in the trial. In it, there are instructions on the crime of lending heavy interest in civil transactions (defined in Article 201 of the Penal Code) as follows:

- Is the amount of illicit profit to determine criminal liability the total amount of interest earned from the loan or is it the interest earned after deducting interest as prescribed by the Civil Code?

According to the provisions of Clause 1, Article 468 of the Civil Code of Vietnam:  “The loan interest rate shall be agreed upon by the parties. In case the parties have an agreement on the interest rate, the agreed interest rate must not exceed 20%/year of the loan amount …”.  Therefore, the amount of illicit profit to determine criminal liability is the amount of interest earned after deducting the amount of interest corresponding to the interest rate prescribed by the Civil Code.

Therefore, the Court has applied the third point of view, in accordance with the guidance of the Supreme People's Court even though the case was adjudicated before the date of the official dispatch.

The crime of lending heavy interest in civil transactions is now appearing quite a lot, resulting in property damage for borrowers, infringing on the State's economic management order on credit. Moreover, almost all loan sharks behave in a "gangster" style, in addition to making many individuals and families bankrupt, there is also the risk of causing social disorder.

Therefore, the issuance of Official Dispatch No. 212/TANDTC-PC by the Supreme People's Court of the Supreme People's Court guiding some problems on the crime of "lending heavy interest in civil transactions" shows the court industry's interest in this type of crime. This crime, meeting the practical requirements of society, timely preventing usury behaviour and consistent in the application of the law, helps the locality to remove difficulties and obstacles in handling the behavior of criminals. usury.

Quang Chinh
622


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