Crime of usury in civil transactions in Vietnam under Article 201 of the Penal Code

Crime of usury in civil transactions in Vietnam under Article 201 of the Penal Code (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Crime of usury in civil transactions in Vietnam under Article 201 of the Penal Code

The crime of usury in civil transactions in Vietnam is specified in Article 201 of the Penal Code 2015 (amended in 2017) 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 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.

2. Instruction on determining the amount of illegal profit to handle criminal liability for the crime of usury in civil transactions in Vietnam

According to Article 6 of Resolution 01/2021/NQ-HDTP, instruction on determining the amount of illegal profit to handle criminal liability for the crime of usury in civil transactions in Vietnam is as follows

- In case the loan term has expired as agreed, the amount of illicit gain to determine criminal liability includes interest and other illegal revenues payable by the borrower to the lender after deducting the interest amount corresponding to the highest interest rate prescribed by the Civil Code during the entire loan term.

- In case a loan with heavy interest has not yet expired as agreed but is discovered, the amount of illicit gain is used to determine criminal liability, including interest and other illegal revenues payable by the borrower to the lender after deducting the interest amount corresponding to the highest interest rate according to the provisions of the Civil Code up to the time of detection and prevention by the competent authority.

In cases where the borrower has paid interest before maturity and other illegal revenues, the amount of illicit gain to determine criminal liability includes interest and other illegal revenues actually paid by the borrower to the lender after deducting the interest corresponding to the highest interest rate as prescribed by the Civil Code.

3. Pursuing criminal liability in some specific cases of the crime of lending heavy interest in civil transactions in Vietnam

Criminal liability examination in some specific cases is specified in Article 7 of Resolution 01/2021/NQ-HDTP as follows:

If the person commits the act of lending heavy interest many times, but the illicit profit from each offense is VND 30,000,000 or more if each offense has not been prosecuted for Criminal 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 Criminal liability for "committing the crime twice or more," specified at Point g, Clause 1, Article 52 of the Penal Code.

- In case the person performs the act of lending heavy interest many times but the illegal profits are all under VND 30,000,000 but the total amount of illicit profit is VND 30,000,000 or more and these acts have never been administratively sanctioned, the statute of limitations for sanctioning administrative violations has not expired, and the person shall be examined for Criminal liability with a penalty frame corresponding to the total amount of illicit profits earned from high interest loans, without applying the aggravating circumstances of criminal liability "committing the crime twice or more" specified at Point g, Clause 1, Article 52 of the Penal Code.

- In case the person commits many times the act of lending heavy interest, 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 to gain illicit profits of less than VND 30,000,000, these acts have not been administratively sanctioned and the statute of limitations for sanctioning administrative violations has not expired, shall be examined for Criminal liability with a penalty frame corresponding to the total amount of illicit profits earned from high interest loans, without applying the aggravating circumstances of criminal liability "committing the crime twice or more" specified at Point g, Clause 1, Article 52 of the Penal Code.

- In case the lender of heavy interest performs many different acts related to debt collection (such as: using force, threatening to use force, mentally threatening, causing injury, harming health, committing other acts to take property, etc.), then, depending on each case, they will also be penalized for the corresponding crime, if there are enough elements to constitute the crime.

- In case a lender of heavy interest aims to gain illicit profits of VND 30,000,000 or more, but due to unintended reasons, the lender has not yet obtained illicit profits or has obtained an illegal profit of less than VND 30,000,000; then they will be prosecuted for Criminal liability according to the penalty frame corresponding to the total amount of illicit profits that they aim to gain.

The determination of the amount of illicit profits is made according to the guidance in Article 6 of Resolution 01/2021/NQ-HDTP. When deciding penalties, the Court applies Articles 15 and Clause 3 of Article 57 of the Penal Code, to unsatisfactory crimes.

Ho Quoc Tuan

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