Administrative violation sanctions in monetary and banking areas
VGP – Decree 96 supplements some new violations including those related to the regulations on shares and stocks; fees for provision of services; trustee, fiduciary and interbank activities; payments, cash management and treasury; deposit insurance and the prevention and tackling monetary laundering.
Question: What are the new regulations on administrative violation sanctions in monetary and banking areas?
Answer: The Government on October 17, 2014 issued Decree 96/2014/ND-CP (Decree 96) on the punishment of administrative violations in the monetary and banking areas.
The new decree replaces Decree 202/2004/ND-CP (Decree 202), dated December 2004 and Decree 95/2011/ND-CP dated December 20, 2011.
Decree 96 issues some additional sanctions in comparison to those of Decree 202. Organizations sanctioned for administrative violations may be subject to additional sanctions such as revocation of licenses and certificates issued by the competent authority in connection with one or several activities, banking services and a number of other business activities in the monetary and banking areas.
The maximum fine level for violations in the monetary and banking areas may amounts to VND 2 billion with regard to organizations and VND 1 billion with regard to individuals while the maximum fine level under the previous regulations stood at VND 500 million.
Decree 96 stipulates some high fine levels including:
· Unlicensed operation (except in some define cases) and division, split, consolidation, merger or conversion of the legal form of credit institutions and branches of foreign banks that have to yet be approved in writing by the competent authority can be fined up to VND 500 million.
· Acts of foreign exchange by credit institutions and branches of foreign banks, organizations rendering services receiving and paying foreign currency foreign currency exchange agencies and other organizations that have not been permitted by the competent authorities or have their foreign exchange operation license expired or suspended, or have been in noncompliance with the specified contents in the license shall be subject to fines from VND 500-600 million;
· Acts of foreign exchange by credit institutions and branches of foreign banks, organizations rendering services receiving and paying foreign currency foreign currency exchange agencies and other organizations that have not been permitted by the competent authorities or have their foreign exchange operation license expired or suspended, or have been in noncompliance with the specified contents in the license shall be subject to fines from VND 500 – 600 million;
· Acts of violating the minimum capital adequacy ratio as prescribed by law may be subject to administrative penalties of up to VND 400-450 million;
· For violations of the regulations on deposit insurance: VND 150 million penalty imposed on acts of nonpayment or incomplete payment of premium; abuse of the positions and powers to act in contravention of the law on deposit insurance;
· Act regarding organizing or facilitating money laundering may be subject to a fine of up to VND 250 million.
Decree 96 shall take effect from December 12, 2014./.
