Wrong fines: Refunds of administrative fines must include interest in accordance with Vietnam’s regulations

According to Clause 2 Article 13 of the Law on handling administrative violations 2012 of Vietnam, the persons competent to handle the administrative violations, agencies, organizations, individuals related to the administrative violation handling if causing damages must compensate according to law provisions.

This provision is detailed in Point 6dd of Decree No. 81/2013/NĐ-CP of Vietnam’s Government (amended by Decree No. 97/2017/NĐ-CP), specifically as follows:

Point 6dd. Responsibilities and consideration and handling of responsibilities of persons with authority to issue decisions on handling administrative violations making mistake

1. The competent person who has issued the decision on handling administrative violations has errors and that person's agency must promptly apply measures to overcome the consequences caused by the promulgation and implementation of the decision.

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3. Responsibility consideration is carried out as follows:

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b) ...if causing damage, compensation must be made according to the provisions of law on state compensation liability; in case of serious consequences, the person may be asked to be considered and prosecuted for criminal liability according to the provisions of law.

When issuing decisions to handle administrative violations containing errors, it is necessary to apply regulations on state compensation liability. According to Clause 7 Article 3 and Article 60 of the Law on State Compensation Liability Law 2017 of Vietnam, if the person issuing the decision makes a mistake that causes damage to the people involved, the State shall allocate a state budget fund to fulfill the state's compensation liability. Concurrently, compensation body refers to the superior body directly managing the law enforcer who committed an illegal act causing damage or the court in charge of lawsuit settlement. The person who issues the erroneous decision does not have to pay compensation but can only be disciplined according to specific regulations on officials or according to the specific regulations of the agency where they work.

Moreover, the person who has implemented the decision to sanction administrative violations by paying money into the budget will receive the money back and an additional interest. Specifically, according to Clause 4 Article 23 of the Law on State Compensation Liability Law 2017 of Vietnam:

4. Amounts of money that have been already remitted into the state budget under decisions of competent authorities or confiscated or kept for judgment enforcement, or deposited as security shall be refunded to sufferers and interests thereof.

If such amounts are interest-bearing loans, interests thereof shall be considered legitimate interests as prescribed in the Civil Code.

If such amounts are not interest-bearing loans, interests thereof shall be considered interests accruing due to late payment in case of absence of an agreement as prescribed in the Civil Code at the time prescribed in Clause 2 Article 22 of this Law.

When the money paid into the budget to implement the penalty decision is returned, Article 357 of the Civil Code 2015 of Vietnam shall apply, accordingly, in case there is no agreement on interest rates, Clause 2 Article 468 of the Civil Code 2015 of Vietnam shall apply. To be specific:

Article 468. 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…

2. Where parties agree that interest will be payable but fail to specify the interest rate, or where there is a dispute as to the interest rate, the interest rate for the duration of the loan shall equal 50% of the maximum interest prescribed in Clause 1 of this Article at the repayment time.

Thus, when repaying fines for administrative violations due to incorrect sanctioning decisions, the interest rate calculated from the time of payment to the state budget is 10%/year, which is 0.0274%/day. It can be seen that this interest rate is quite low compared to the interest rate for late payment of fines of 0.05%/day currently applied to people sanctioned for administrative violations.

Hai Thanh

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