Key Developments in Vietnam’s New Anti-Corruption Law
Michael K. Lee, Partner
17 July 2019
On 20 November 2018, the National Assembly of Vietnam updated its primary anti-corruption legislation with the passage of Law No. 36/2018/QH14 ("2018 Anti-Corruption Law"), replacing an earlier version of the law which had been effective since 2005. The 2018 Anti-Corruption Law will take effect on 01 July 2019. This article will provide an overview of key developments.
Private Sector Bribery
The 2018 Anti-Corruption Law has extended its governing scope to the private sector, though the public sector remains its primary focus. It did this by broadly defining the term "officeholder" as "a person that is designated, elected or employed [by an organization] under a contract or another form of employment, receiving or not receiving salaries...including...holders of managerial positions in organizations...[and] other persons assigned certain duties and authority to perform certain duties." 1. This broad definition of the term "officeholders" covers anyone who has some measure of authority within an organization, even if they are unpaid and/or are independent contractors. Organizations that seemingly fall under the law would include both for-profit and non-profit organizations, including charities, foreign non-profit organizations, volunteer groups, associations, and NGOs.2 In particular, officeholders in the private sector are explicitly prohibited from (i) embezzling, (ii) taking bribes, and (iii) bribing or brokering bribery by taking advantage of one’s influence over the operation of the enterprise or organization, or for personal gain3. The application of bribery rules to the private sector in the 2018 Anti-Corruption Law is in line with the 2015 Penal Code which also made bribery applicable to the private sector4. In addition, 2015 Penal Code has criminalized the bribing of "a foreign official [and] an official of a public international organization."5Code of Conduct
The 2018 Anti-Corruption Law requires all "non-state enterprises and organizations" in Vietnam to have some type of anti-corruption compliance program. As of 01 July 2019, they are obliged to develop, issue, and implement a code of conduct and an internal control mechanism addressing conflicts of interests and acts of corruption, as well as promoting an anti-corruption corporate culture6. Additionally, they are required to carry out an internal inspection to discover and report acts of corruption to the competent authorities7. Last, they are encouraged to issue regulations on business ethics and professional ethics applicable to their employees and members.8Conflict of Interest
2018 Anti-Corruption Law includes a provision on "conflict of interest" which is defined as "a situation where the interests of an officeholder or his/her relative have or are likely to have an improper influence on the performance of his/her duties"9. The 2018 Anti-Corruption Law sets out certain obligations applicable to both public companies10 and special non-state organizations11:- The obligation of officeholders who know or should know about a conflict of interest to report the conflict of interest to a competent person;
- The obligation of third parties who have discovered a conflict of interest of an officeholder to inform the latter’s line manager or employer;
- The obligation of line managers and employers to, among other things, supervise the performance of duties of officeholders, suspend officeholders from the performance of their duties, or temporarily reassign officeholders if they find that the integrity, objectivity or truthfulness of the said officeholders might be affected by such conflict12.
