Regulations on crime of usury in civil transactions in Vietnam

Regulations on crime of usury in civil transactions in Vietnam (Internet image)

1. What is usury?

According to Clause 1, Article 2 of Resolution 01/2021/NQ-HDTP, usury is a case where the lender lends money to the borrower at an interest rate of 5 times or more than the highest interest rate specified in Clause 1 of this Article 468 of Civil Code 2015.

In case of lending with other assets (other than money), the value of that property must be converted into cash at the time of transferring the borrowed property.

Thus, the interest rate under Clause 1, Article 468 of the Civil Code 2015 is as follows:

- The rate of interest for a loan agreed by the parties may not exceed 20% per year, unless otherwise prescribed by law. A

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 as prescribed, the agreed interest shall become invalid.

2. Crime of usury in civil transactions under Article 201 of the Criminal Code 2015 in Vietnam

Crime of usury in civil transactions under Article 201 of Criminal Code 2015 (amended in 2017) is as follows:

- Any person who offers loans at an interest rate that is five times higher than the maximum interest rate specified in the Civil Code 2015 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.

- 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.

- 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.

3. Principles of handling the offenders of usury in civil transactions in Vietnam

According to Article 3 of Resolution 01/2021/NQ-HDTP stipulating the principles of handling the offenders of usury in civil transactions as follows:

- Comply with the basic principles of criminal law and criminal procedure.

- Consider strict application of fine as the main punishment for offenders. In case of committing a crime of a professional nature, operating in the form of gangs or groups, the application of the imprisonment penalty shall be considered as the main penalty.

- In case the main penalty applied is not a fine, the additional penalty must be considered strictly.

4. Determination of the amount of illicit profits for criminal use in Vietnam

Determine the amount of illicit profits for criminal handling according to Article 6 of Resolution 01/2021/NQ-HDTP as follows:

- In case the loan term has expired as agreed, the amount of illicit profits used to determine criminal liability includes:

Interest and other illegal revenues that the borrower must pay to the lender after deducting the interest corresponding to the highest interest rate as prescribed by the Civil Code 2015 for the entire loan term.

- In case the loan with heavy interest has not yet expired, the loan term as agreed upon and is discovered, the illicit profits for determination of criminal liability include:

Interest and other illegal income that the borrower must pay to the lender after deducting the interest corresponding to the highest interest rate as prescribed by the Civil Code 2015 up to the time the agency has authority to detect and prevent.

Where the borrower has paid interest before the due date and other illegal revenues, the amount of illicit profit for criminal liability determination includes:

Interest and other illegal income that the borrower actually paid to the lender after deducting the interest amount corresponding to the highest interest rate as prescribed by the Civil Code 2015.

5. Criminal prosecution in certain instances of usury in Vietnam

According to Article 7 of Resolution 01/2021/NQ-HDTP on criminal prosecution in some cases of usury as follows:

(1) In the case where the person commits the act of lending heavy interest many times but the illicit profit from each crime is VND 30,000,000 or more, if each offense has not been prosecuted for penal liability and the statute of limitations for criminal prosecution has not expired, in addition to being subject to a penalty frame corresponding to the total amount of illicit profits, they are also subject to the aggravating circumstances of penal liability "committing the crime twice or more" specified at Point g, Clause 1, Article 52 of the Criminal Code 2015.

(2) If a person commits the act of lending high interest multiple times but the illegal profits are less than VND 30,000,000 each time but the total amount of illicit profits is VND 30,000,000 or more, and these acts have never been administratively sanctioned, and the statute of limitations for sanctioning administrative violations has not yet expired:

- Being examined for penal liability with a penalty frame corresponding to the total amount of illicit profits from times of high interest loans;

- The aggravating circumstances of penal liability for "committing the crime twice or more" specified at Point g, Clause 1, Article 52 of the Criminal Code 2015.

(3) If a person commits the act of lending heavy interest many times, including one time lending heavy interest, earning illicit profits of 30,000,000 VND or more, and this act of lending heavy interest has not yet expired, the statute of limitations for criminal prosecution; and other acts of lending heavy interest for illegal profits of less than VND 30,000,000, these acts have not been administratively sanctioned, and the statute of limitations for sanctioning administrative actions has not yet expired.

- Being examined for criminal liability with a penalty frame corresponding to the total amount of illicit profits from times of high interest loans;

- The aggravating circumstances of penal liability for "committing the crime twice or more" specified at Point g, Clause 1, Article 52 of the Criminal Code 2015.

(4) In the case where the lender of high interest commits many different acts related to debt collection (such as: using force, threatening to use force, mentally threatening, causing injury, causing harm to health, etc.) or committing other acts to obtain property: Depending on each case, they will also be penalized for the corresponding crime if there are enough elements to constitute the crime.

(5) In the event that the lender of heavy interest aims to gain illicit profits of 30,000,000 VND or more, but due to unintended reasons, the lender has not obtained any illicit profits or has obtained illicit profits of less than 30,000,000 VND, they will be prosecuted for criminal liability according to the penalty frame corresponding to the total amount of illicit profits they aim to achieve.

The determination of the amount of illicit profits is made according to section (2).

When deciding penalties, the Court applies Articles 15 and 3 and Article 57 of the Criminal Code 2015 to unsatisfactory crimes.

Quoc Dat

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