What are penalties for gold shops transferring money abroad according to the law of Vietnam?

Recently, the case of Nhat Cuong smuggling and money laundering is a matter of public concern, especially the gold shop transferring thousands of billions of VND abroad. So, what are penalties for gold shops transferring money abroad according to the law of Vietnam?

1. Does the gold shop have the function of transferring money abroad?

According to the investigation conclusion, general director Bui Quang Huy of Nhat Cuong company and his accomplices have transferred money for goods and freight for contraband goods to the accounts of goods owners and overseas shipping lines through 2 gold shops in Hanoi which are Loc Phat (Ha Trung Street, owned by Nguyen Thi Thanh Loan) and Thuan Phat (Hang Dau Street, run by Bui Thanh Phuong).

In fact, at present, some gold shops have been performing foreign currency exchange and transferring to foreign accounts. This act is called "banking operation" under Clause Article 6 of the Law on the State Bank of Vietnam 2010 and Clause 12 Article 4 of the Law on Credit Institutions 2010. However, according to Article 4 of Law on Credit Institutions 2010 of Vietnam, only the following credit institutions are allowed to conduct "banking operations":

- Banks;

- Non-bank credit institutions (finance companies, financial leasing companies and other non-bank credit institutions);

- Microfinance institutions;

- People's credit funds;

- Cooperative banks;

- Foreign credit institutions.

Moreover, pursuant to Article 8 of the Law on Credit Institutions 2010 of Vietnam, individuals and organizations other than credit institutions are prohibited from conducting banking operations.

Thus, the gold shop is not a credit institution in accordance with the law, so it cannot carry out banking operations, that is, cannot provide payment services through accounts.

2. What are penalties for gold shops transferring money abroad?

In accordance with the current law of Vietnam, the gold shop transferring money abroad as a payment intermediary as a bank will be handled as follows:

- The act of carrying out foreign exchange operations without a license shall be administratively handled according to Point c Clause 8 Article 23 of the Decree No. 88/2019/NĐ-CP, specifically:

8. A fine ranging from VND 200,000,000 to VND 250,000,000 shall be imposed for committing one of the following violations:

c) carrying out foreign exchange operations without a license granted by a competent authority, or with an expired or revoked license, or against the license, except for the cases prescribed in Points d, o Clause 4, Points a, d Clause 5 of this Article.

- The act of providing payment intermediary services without the license shall be administratively handled according to Clause 5 Article 27 of the Decree No. 88/2019/NĐ-CP, specifically as follows:

5. A fine ranging from VND 150,000,000 to VND 250,000,000 shall be imposed for providing payment intermediary services without the license.

Moreover, individuals or organizations who commit the violation are also subjected to remedial measures: Enforced transfer of benefits illegally obtained from any of the administrative violations.

- The act of illegally transferring currency abroad shall be administratively handled according to Point h Clause 4 Article 23 of the Decree No. 88/2019/NĐ-CP, specifically as follows:

4. A fine ranging from VND 30,000,000 to VND 50,000,000 shall be imposed for committing one of the following violations:

h) transferring or carrying foreign currency or VND abroad or into Vietnam against law regulations, except for administrative violations in customs sector;

In particular, depending on the level of behavior, depending on the value of illegally transporting money abroad, violating individuals and organizations may be prosecuted for criminal liability for the crime of illegal transport of goods or money across the border under Article 189 of the Criminal Code 2015 of Vietnam with the highest fines as follows:

+ Individual: a fine of from VND 1,000,000,000 to VND 3,000,000,000 or face a penalty of 05 - 10 years' imprisonment.

The offender might also be liable to a fine of from VND 10,000,000 to VND 50,000,000, be prohibited from holding certain positions or doing certain works for 01 - 05 years.

+ corporate legal entity: a fine of from VND 2,000,000,000 to VND 5,000,000,000 or has its operation suspended for 06 - 36 months or permanently shut down.

Moreover, the violating entity might also be liable to a fine of from VND 50,000,000 to VND 200,000,000, be banned from operating in certain fields or raising capital for 01 - 03 years.

Currently, not only gold shops in the above case have committed these violations, but also a number of other gold shops have been silently doing so as long as people have needs. In order to prevent and stop crimes in the field of currency, banking etc., as Vietnamese citizens, we need to equip ourselves with certain legal knowledge, not for immediate convenience or our small gain that we abet criminals.

Hai Thanh

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