Author: Phạm Huyền

Currently, according to the Labor Code 2019 (“LC 2019”), dismissal is the heaviest measure of disciplinary action, directly affecting the existence of the labor relationship. Therefore, this measure also arises many labor contract disputes. The Labor Code 2019 specifically sets forth the cases in which the Employer is entitled to apply the dismissal to the Employee. In this week’s article, TNTP will analyze one of these cases in detail, as well as give some suggestions for enterprises to apply the dismissal discipline in accordance with law.

1. What is the dismissal?

Dismissal discipline is the highest measure of labor discipline that the law allows employers to apply to employees who commit disciplinary violations. The legal consequences of dismissal are the termination of the labor contract of the employee and the termination of the labor relationship accordingly.

 2. Cases in which employers are allowed to apply the dismissal labor disciplinary measure

2.1. Employees commit acts of theft, embezzlement, gambling, deliberate infliction of injuries, using drugs at work

When there is evidence that the employee performs one of the above acts at the workplace (workplace is any place where the employee works as agreed or assigned by the employer), the employer only needs to based on the employee’s behavior enough to dismiss the employee, it is not necessary to base on the damage consequences caused by such behavior because these are acts that seriously affect the order of the enterprise.

Considering theft behavior:

Theft is understood as the act of sneaking, secretly evading the detection of the property manager to appropriate property. The stealthy, concealed element of this behavior is only required of the property owner or manager. The person who steals the property is also stealthy, hiding it from others, however, this is not required for the theft behavior.

Due to the Labor Code 2019 and its guiding documents have not yet described the property theft in detail, the employer should describe this behavior in detail in the Labor Regulations. Specifically, the employer can set forth that i) As long as the employee commits an act of stealing property at the workplace, there is no need to cause damage to be subject to the dismissal; ii) The subject of theft can be the property of the employer, the property of another employee, the property of the client or anyone else, as long as the act is committed at the workplace, then Employers can apply dismissal to employees.

Considering embezzlement behavior:

According to Article 353 of the Penal Code 2015, amended and supplemented in 2017 (“PC 2015”), embezzlement is understood as an act performed by a person with a position of power in the action of abusing his position, the right to appropriate property that they are responsible for managing. Similarly, embezzlement in the Labor Code 2019  is understood as an act performed by a person with a position and authority in the action of abusing his position and power to appropriate the employer’s property for which the employee is responsible for management duties.

Persons responsible for assets may be persons assigned to directly manage assets such as cashiers, storekeepers, accountants, persons assigned to transport assets, etc, moreover, those who are not directly assigned to manage assets but are responsible for deciding on revenue and expenditure, import and export, purchase, sale and exchange of assets such as company directors, deputy heads, etc. For embezzlement cases with accomplices, accomplices may be people without positions and powers. Employers should specify this issue in the labor regulations.

Currently, the law does not specify the value of property appropriated due to the act of “theft”, or “embezzlement” which the employer can base on to apply dismissal. Therefore, the employer can stipulate this issue in the labor regulation in the direction that, as long as the employee commits the act of “theft”, “embezzlement” is enough grounds to apply the dismissal, no need to consider property value.

Considering gambling behavior:

Gambling is understood as the act of participating in an illegally organized game in which the win (or loss) is paid in cash or things without the permission of the competent state agency or the state authority. authorized country but does not comply with the provisions of the license granted.

The traditional measures of gambling are often seen as playing cards, playing the lottery, betting on football, betting on horse racing, car racing, etc. In addition, nowadays, online gambling behavior appears as much as online football betting, online gambling in which the winner can exchange rewards from virtual money to real money and vice versa,…

Currently, the law does not specify the value each time gambling, the employee will be disciplined and fired. Therefore, the employer can set forth this issue in the labor regulations in the direction that, as long as the employee has a “gambling” behavior, it is enough grounds to apply the dismissal labor disciplinary measure, regardless of the value each time gambling, regardless of traditional or online gambling.

Considering deliberate infliction of injuries behavior and using drugs behavior:

Deliberate infliction of injuries is an act of intentionally infringing upon the body and health of others within the workplace or while the employee works at the labor organization.

Using drugs in the workplace is the act of using narcotic substances by actions such as injecting, smoking, injecting, etc. within the workplace. Prohibited drugs are Opium, Morphine, Heroine, Cannabis, and cannabis products,… which are specified in Decree No. 73/2018/ND-CP of the Government that lists narcotic substances and precursors, as amended and supplemented by Decree No. 60/2020/ND-CP.

There are cases in which employees do not use drugs at work but have limited cognitive ability and behavior control during work due to drug use. Considering the consequences for the employer when the employee uses drugs at work and the behavior of the employee who does not use drugs at work but has limited cognitive ability and behavior control, it is the same. So can the employer handle the dismissal of employees who use drugs before working time but have limited awareness and behavior control during working time and in the workplace? We think that this is something that can be done if the employer foresees and stipulates it in the Labor Regulations, as a basis for handling dismissal, if any violations occur.

The above is the first case that the employer can base to handle dismissal for the employer. In addition to legal consulting activities, we will continue to analyze the next dismissal cases in the next week’s articles. We kindly invite your attention to the following articles.

Best regards.

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TNTP and Associates International Law Firm

Lawyer: Nguyen Thanh Ha

Phone: 0931 798 818

Email: ha.nguyen@tntplaw.com

The relationship between the State and Enterprise is always close. The State issues regulations and management policies, and Enterprises comply with those management policies by implementing administrative formalities. In this article, we will discuss the issue of “The relationship between the State – Enterprises and administrative formalities“.

1. Difficulties encountered by Enterprises when collaborating with and communicating with State agencies

First, regulations on the jurisdiction of agencies are still complicated and overlapping. Enterprises will typically have to collaborate with many agencies to resolve a dispute. Meanwhile, with only one agency, the Enterprise has to work many times with them. This amount of time is multiplied many times if Enterprises must work with many agencies. Besides, when the legal regulations are not consistent, Enterprises have difficulty in finding the right competent agency to deal with. When the Enterprise carries out administrative formalities, the provisions of the law determine that a specific State agency has the authority to deal with it. However, when the Enterprise communicates with this agency, they respond that the responsibility falls under another authority. Thus, only by determining the competent agency, the Enterprise has encountered many difficulties.

Second, some regulations on formalities are not clear, sometimes the settlement of the case will depend on the views of each state agency. This makes Enterprises quite confused when working with the State agency.

For example, in the same case, there were differences of opinion between the subordinate agency and the direct managing agency, or the views of people in charge of settlement in the same agency are not unified. This is due in part to the emergence of alternative interpretations in a provision of a legal text, and in part to a lack of internal consistency across state entities.

Third, the situation of “interference” when working with the State agency still exists. In the process of working with the State agency, Enterprises sometimes have to pay for informal payments to ensure the time to carry out administrative formalities.

2. Solutions to solve the relationship between the state agency and the enterprise during the implementation of administrative formalities

First, when receiving the Enterprise’s dossier, the state agency needs to have written confirmation, clearly stating the time of receiving the enterprise’s dossier. This will help Enterprises coordinate with many competent state agencies in the same case.

Second, the state agency should respond in writing with the Enterprise’s records. This will create transparency and clarity in the process of handling dossiers, as well as ensure the relevant superior and subordinate state agencies fully understand the process of handling the Enterprise’s records.

Third, the state agency timely updates and publicizes administrative formalities, and shortens the time to handle administrative formalities. Along with that, the state agency needs to strengthen administrative discipline, re-evaluate the quality of the contingent of civil servants performing public administrative services; organize and set up a variety of information channels to access the reflections and recommendations of Enterprises on administrative regulations.

Fourth, the state agency needs to perfect and thoroughly apply technology and digital transformation in handling administrative formalities. In 2021, the strong impact of the Covid-19 pandemic made economic, social, and other development activities difficult. Many provinces and cities have used technology and digital transformation to solve administrative requirements for individuals and companies to overcome problems in pandemic situations. However, the use of technology and digital transformation in the process of managing administrative formalities continues to face numerous challenges, and there is no precise direction, leaving organizations perplexed when adopting. As a result, the State agency must have explicit and clear instructions on the application of technology and digital transformation and create favorable conditions for Enterprises in handling administrative formalities.

Fifth, the state agency needs to cooperate more synchronously and seamlessly across all levels and sectors to assist harmonize the relationship between firms and the State, allowing Enterprises to be more efficient while performing administrative formalities.

Above are a few issues related to the close relationship between the State and Enterprises and administrative formalities. Hope our article is useful for you and your work.

Best regards.

You may not have read the The necessity of debt collection for enterprises

TNTP and Associates International Law Firm

Lawyer: Nguyen Thanh Ha

Email: ha.nguyen@tntplaw.com

Many businesses have asked their employees to sign a non-compete agreement (“NCA”) at the same time assigning a labor contract. However, due to the lack of regulation, NCA still has many different views on NCA. The following article will provide some ideas about NCA so that businesses and employees can understand and use it in accordance with the law.

1. Definition of Non-Competition Agreement

Businesses will invest a lot of money and manpower to collect, develop and secure information such as knowledge, technological know-how, business strategy, and customer list,… with the aim of serving commercial activities (collectively referred to as confidential information). Employees may know certain types of confidential information depending on their job position. Then, they may use this information to benefit by disclosing confidential information to business competitors, or establishing or working for businesses in the same industry that they previously worked.

Therefore, to protect confidential information, and business advantages, as well as prevent acts that cause damage to enterprises, most businesses require employees to sign NCA before working. Accordingly, the employees commit not to establish or work for enterprises in the same industry as the enterprise for which the employees previously worked, either during the implementation of labor relations or after the termination of the labor relationship.

2. Legal validity of Non-Competition Agreement

In terms of labor code, NCA has restricted the right to work of employees, and violated the principle of “freedom of labor”. In the 2013 Constitution, Clause 1 of Article 35 stipulates that “Citizens have the right to work and to choose their occupations, employment and workplaces.” In the Labor Code 2019, Article 5.1 stipulates the right of employees to “work; freely choose an occupation, workplace or occupation”; Article 10.1 stipulates the employee’s right to “choose the employment, employer in any location that is not prohibited by law” and Article 19.1 allows “An employee may enter into employment contracts with more than one employer, provided that he/she fully performs all terms and conditions contained in the concluded contracts.” In the Law on Employment 2013, Article 4.1 stipulates the principles of employment “Ensuring the right to work and freely choose jobs and workplaces” and Article 9.6 stipulates Prohibited acts as “Obstructing, or causing difficulties or damage to, the lawful rights and interests of workers or employers.”

In case NCA is included in a labor contract (in the form of a term or an annex to the labor contract), NCA violates principles for the conclusion of an employment contract specified in Article 15.2 of Labor Code 2019, “Freedom to enter into an employment contract which is not contrary to the law, the collective bargaining agreement and social ethics“. Is it regarded as a civil agreement if the NCA is not contained in the labor contract or the contract appendix but is signed in a separate document, independent of the labor contract? To answer this question, we need to consider the nature of NCA. NCA emerges from labor relations, only when the labor relations arise, the employees can access confidential information. Then, the enterprise requires employees to sign NCA to preserve benefits and competitive advantage. If the employees sign the NCA without obtaining any advantages to compensate for the duties originating from the NCA during and after working for the enterprise, there is more basis to confirm the NCA’s dependence on labor relations. Therefore, NCA is not considered a civil relationship but is considered a labor relationship, regulated by the labor law, with a high chance of being declared invalid by the Court due to violation of the law.

In Judgment No. 420/2019/LD-PT dated May 15, 2019, the Ho Chi Minh City People’s Court based on the right of employees to “work; freely choose an occupation, workplace or occupation” to decide “Do not accept the petition of Enterprise U for forcing Mr. Phan Thanh B not to continue working for Enterprise P, a direct competitor of Enterprise U”. Contrary to this point of view, on June 12, 2018, the Ho Chi Minh City People’s Court issued Decision No. 755/2018/QD-PQTT to recognize the validity of the decision of arbitral tribunal of Vietnam International Arbitration Centre (VIAC). The court judged that the employee gave up her rights by voluntarily entering into the NCA, so she must comply with this agreement and suffer legal consequences when working for a competitor in the commitment period. It can be seen that Judgment No. 420/2019/LD-PT and Decision No. 755/2018/QD-PQTT were both issued by the Ho Chi Minh City People’s Court, but the Court gave two different views on the same problem which is determining the legitimacy of the NCA. Thus, the NCA’s validity determination will depend entirely on the internal beliefs and legal views of each judge when resolving the dispute.

3. How do protect confidential information?

Because the purpose of the Non-Disclosure Agreement (“NDA”) or NCA is to prevent acts of disclosing confidential information and causing damage to the business, the enterprise may sign NDA instead of signing the NCA. This is a safe solution for businesses as Article 21.2 of the Labor Code 2019 has specified “If the employee’s job is directly related to the business secret, technological know-how as prescribed by law, the employer has the rights to sign a written agreement with the employee on the content and duration of the protection of the business secret, technology know-how, and on the benefit and the compensation obligation in case of violation by the employee.” NDA must include at least the following contents: i) A list of trade secrets and technical know-how; ii) Scope of using trade secrets and technical know-how; iii) Duration of protection of trade secrets and technical know-how; iv) Methods of protection of trade secrets and technical know-how; v) Rights, obligations, liabilities of the employer, employee during the duration of protection of trade secrets and technical know-how; vi) Actions against breaches of the arrangement for protection of the trade secret and technical know-how.

In case of enterprises still wants to sign the NCA with the employees, enterprises should pay attention to the following contents so that this agreement can be accepted by the Court:

First, enterprises should specify the NCA in a document separate from the labor contract; in other words, the NCA should not be specified as a provision in the labor contract or the labor contract annex. Because if NCA is regulated in a labor contract, the Court will likely consider it from the perspective of labor law instead of a civil agreement from the perspective of civil law.

Second, enterprises should set a reasonable validity period and scope’s application of NCA.

Third, enterprises should specify that employees will be compensated or get advantages for completing NCA. This confirms the voluntary will of employees when they agree to receive compensation to give up their rights rather than being compelled to sign an NCA.

Fourth, enterprises should not completely prohibit employees from working for a third party. Because the right to freedom of work is a human constitution, it is illegal to prohibit employees from working for a third party. Instead, enterprises may prescribe the legal responsibilities that employees must suffer when they violate the agreements in the NCA. Thus, enterprises can both require the employees to pay fines or compensation and confirm that the NCA is a civil agreement.

Above is an article about “Non-compete agreement – How to perform it in accordance with the law?” sent by TNTP to readers. Hope this article will help you.

You may need Issues need to be noted when signing a Labor Contract

TNTP and Associates International Law Firm

Attorney: Nguyen Thanh Ha

Email: ha.nguyen@tntplaw.com

When it comes to corruption, many people think this is an illegal act that only occurs in the state sector. However, corruption can occur in private enterprises and the non-state sector. Corruption is a cause of impediment to development and a challenge for enterprises, but after that, is a great impact on the development of the economic – social of the country. In the article below, TNTP will examine how the crime of corruption in businesses and the non-state sector is understood.

1. The notion of corruption in private enterprises and the non-state sector (in the private sector)

Organizations in the non-state sector can be understood as social organizations, non-public non-business units, companies, and enterprises invested, managed, and operated by private individuals. Hereinafter referred to as Private Sector Organizations/Enterprises.

Corruption is acts performed in the non-state sector (private sector) by people whose positions and powers in organizations/enterprises in the private sector, including (i) Embezzlement of funds or property; (ii) Accepting bribes; (iii) Giving bribes or brokering bribes to settle the affairs of their enterprises or organizations for self-seeking purposes.

The characteristic of corruption in organizations/enterprises in the private sector is that people whose positions and powers in enterprises, take advantage of their positions, powers, and assigned tasks to take personal interests, cause damage and threaten the rights and interests of their enterprises and organizations.

2. How is corruption in private sector organizations/enterprises usually performed?

Corruption in the private sector can exist in many fields and is performed by different acts, but usually concentrates mainly in the following fields:

• Economic – financial management: Those who hold positions and powers in private enterprises such as Directors, Accountants, Storekeepers, Treasurers, etc. can all be corrupt by cheating in declaring costs of consumables and purchasing input material; making goods declaration documents with higher prices when buying raw materials to “eat” the price difference; claim commissions; accept bribes to settle business affairs;…
• Investment: This is a field where corruption in the private sector is common, causing serious consequences for businesses because corruption can occur at any stage from starting project formulation, and design,… until acceptance of works and settlement. Corruption can be the substitution of expensive and good quality construction materials with cheaper and inferior quality materials to build buildings, measurement fraud, “eating less” of the construction stage, and not following the correct construction process,…
• Education: Not only in public educational institutions but also in private educational institutions, there is a pressing problem that education is gradually being commercialized. The school sets unreasonable fees and forces parents to pay for their children, teachers receive money and gifts from students to increase scores,…

Corrupt acts in the private sector cause serious consequences not only for the business activities of organizations and private enterprises in particular but also for the economic stability of society in general. Thus, the Government has established regulations on criminal prosecution for corrupt acts in the private sector to strictly deter and prevent this corrupt practice from continuing.

3. Are corrupt acts in the private sector subject to criminal prosecution?

Previously, in the 1999 Criminal Code, there were only provisions on corruption crimes within the state by cadres, civil servants, and public employees of state-owned organizations and enterprises. However, corrupt acts can be performed by any individual holding a position of authority in a public or private organization or enterprise. Therefore, the criminal law has been amended to expand the scope of criminal prosecution for corrupt acts carried out in the private sector.

The 2015 Criminal Code has limited the scope of corruption crimes to 02 crimes as Crime of property embezzlement; and the Crime of accepting property bribes. The common point of these two crimes is that the acts of committing these crimes are performed by individuals with positions and rights and they take advantage of their positions and powers to appropriate assets of organizations/enterprises, harass, and use cunning tricks to force other people or organizations to bribe them.

Thus, the issue of corruption in organizations/enterprises in the private sector needs to be strictly prevented, controlled, and complied with the law. The Government needs to continuously update, amend and supplement criminal law provisions to contribute to perfecting the legal framework for corrupt crimes to minimize the occurrence of corrupt acts like today in Vietnam.

Above is an article about “Crime of corruption in enterprises and the non-state sector” sent by TNTP to readers. Hope this article will help you.

You may need The employee appropriates company’s money – Is it a crime?

TNTP and Associates International Law Firm

Attorney: Nguyen Thanh Ha

Email: ha.nguyen@tntplaw.com

Before making a decision to buy real estate, buyers have to consider many factors such as money, area, and location of real estate,… However, many people forget an extremely important matter which is to check the legal status of real estate. The legal check of real estate will help buyers avoid buying disputed land, under planning, or have been mortgaged to borrow money. In this article, TNTP will instruct ways to help buyers check the legal status of real estate before deciding to trade.

1. Buyers need to check the original certificates of land use rights, ownership of houses, and other assets attached to the land (if any).

 When buying and selling real estate, certificates of land use rights (“CLUR”) will help the house and land have a higher price, giving buyers peace of mind when transacting. However, the seller has CLUR which is not enough to prove the safe legal status of the property because the method of forging documents is very sophisticated and requires professional expertise and equipment to detect it. Therefore, the buyer should ask the notary to check.

Note that the buyer never accepts a deposit when he only sees a notarized copy of the original of the CLUR. Most likely that real estate is being mortgaged at a bank or somewhere else so the seller does not keep the original CLUR.

2. The buyers find out whether the land is in the planning area or not?

The land planning in each locality is not the same and can also change over time, in addition, this plan may be public or not, so the buyer can find out by different methods as follow:

• Check the planning based on the CLUR. In case the land already has a CLUR, usually planning information will still be recorded directly on the CLUR. Information about the planning will be in the notes section, which also indicates what planning this lot is in.
• Check on the official website of the district People’s Committee.
• Learn about land planning at competent state agencies. The local competent state agency that grasps information about land use plans and master plans is the local Land Registration Office (or district-level Department of Natural Resources and Environment).

3. Check real estate information about the dispute

According to Clause 1, Article 188 of the 2013 Land Law, land users are allowed to exercise the rights to exchange, transfer, lease, sublease, inherit, donate, mortgage land use rights, and contribute capital by land use rights when all 4 conditions are met, in which the second condition is that the land is not disputed. This means that if the land is in dispute, the land user will not be entitled to the mentioned rights above.

To check whether the land is in the dispute or not, the buyer can use the following methods:

• Contact the People’s Committee of the commune, ward, or township where the land is located or directly contact the cadastral official of the commune, ward, or township where the land is located to ask if anyone is submitting a dispute settlement application or actual land dispute (disputed but not yet submitted).
• Ask for land information at the Office/Branch of the land registration office where the land plot is located. (The application form prescribed in Articles 11 and 12 of Circular 34/2014/TT-BTNMT stipulates documents and procedures for applying for land information).
• Ask the people who live around or the adjacent land user.
• Contact the civil enforcement agency to find out if the parcel of land is involved in the enforcement of a land dispute settlement judgment.

4. Check the information on real estate that has a loan, mortgage, or not

In principle, when the owner mortgages his property, it will not be sold to others during the mortgage period. However, in case the mortgagee agrees, the owner will be able to exercise the right to transfer (the collateral is the land use right).

For cases where it is necessary to check to see if the land is being mortgaged, it can be checked:

• Checking the information on the CLUR, for real estate mortgaged by a lawful bank, the mortgagee keeps the original with the seal of the competent authority and the words: “Land use right mortgaged to the bank… under contract number…” face number three or number four of the Certificate. If the seller wants to hide the information, they will give a photo or remove the sheet. However, if the paper has a half-mark or a staple in the corners, the property may be mortgaged.
• Check the information at the Land Registry Office or a Branch of the Land Registry Office. However, this method is only effective when the seller mortgages the house to the bank. If the mortgage is for individuals or organizations with hot loans and high-interest rates, you will not be able to check the information.
• Find out information at the notary office: With this method, the buyer must ask the seller to provide a copy of the CLUR. After that, the buyer brings this copy to the notary office to look up information on whether the house or land is mortgaged to the bank or not.

Above are the legal analysis of TNTP and the instructions for legal examination of real estate. Based on the above notes and their needs, buyers can consider making the right decision before the transaction. Hope this article was useful to you.

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6th floor, 200 Nguyen Luong Bang Street, Quang Trung Ward, Dong Da District, Hanoi

Lawyer: Nguyen Thanh Ha

Email: ha.nguyen@tntplaw.com

In the past few years, a series of fraud acts by foreign entities and organizations have occurred to

Vietnamese enterprises when trading in all markets, from Africa, India to developed countries such as the US, the Netherlands, and the most recently thing is that Vietnamese enterprises were defrauded 100 containers of cashew nuts in Italy has seriously affected the economic recovery process after Covid-19 of our country and at the same time is a blood lesson for Vietnamese enterprises when doing business with foreign partners. Therefore, in this article, we will analyze swindled acts in international transactions through the D/P payment method (Document against Payment).

1. What is D/P payment method?

Document against Payment (D/P) is a method of purchase and sale with the following characteristics:

• After the Buyer and the Seller sign the Contract, the Seller will deliver the goods to the Buyer through an intermediary carrier, however, the goods will only be delivered to the port in the Buyer’s country and there is no set of goods documents, so the Buyer cannot get the goods until the payment has been made.
• The Seller will hand over the set of goods documents to the Seller’s Bank, then the Seller’s Bank will transfer the set of goods documents from the Seller to the Buyer’s Bank.
• After the Buyer has fully paid the Contract value, the Buyer’s Bank will deliver to the Buyer a set of goods documents for the Buyer to use to carry out procedures for importing goods from the port.

It can be seen that the D/P method has high security when the payment process and delivery process of the goods documents are done through reputable intermediary banks, however, the D/P payment method also has certain risks, and the recent frauds of 100 containers of cashew nuts is a typical example.

2. The 100-container swindled case of Vietnamese enterprises in Italy

For this case, the parties have made the purchase and sale and payment of D/P method. The Buyer’s form of fraud is done as follows:

Regarding the principle of D/P payment method, after the Buyer’s Bank receives the set of goods documents from the Seller’s Bank, but if they cannot contact the Buyer, or when the Buyer fails to make the payment for goods on time as specified in the Contract, the Seller’s Bank will have to return the set of goods documents to the Seller’s Bank. After that, the Seller will use the set of goods documents to bring the goods back to Vietnam.

However, for this case, the Buyer’s Bank, after receiving the set of goods documents from the Seller’s Bank but could not contact the Buyer in Italy to request payment for the value of the shipment. Therefore, the Buyer’s Bank contacted the Seller in Vietnam to return the set of goods documents. However, after receiving the set of goods documents from the Seller’s Bank, the Buyer determined that a lot of the set of goods documents they received were only copies or even blank paper, and the set of goods documents have disappeared. After realizing that there was a fraudulent behavior from the Buyer, enterprises in Vietnam immediately stopped exporting goods to Italy, however, 36 out of 100 containers were successfully delivered to Genoa and Napoli port by transport units.

It can be determined that the Buyer has successfully implemented tricks to defraud the Buyer’s Bank and successfully appropriate the set of goods documents even if they have not yet paid for the goods. The fraud is most likely related to the delivery department and internal employees of the Buyer’s Bank.

Therefore, all the goods of the Seller are at risk of being appropriated by the Buyer, because when having the set of goods documents, the Buyer can completely withdraw the goods from the port.

Realizing the seriousness of the case, the Ministry of Industry and Trade quickly directed the Vietnam Trade Office in Italy to ask the Italian Police and the competent authorities in Italy to support the blockade, preventing any party from taking 36 shipments out of the port. Currently, the authorities of Vietnam and Italy are still coordinating to investigate the case.

3. Lessons for Vietnamese enterprises

Although this fraud has been prevented in time, it can be seen how the “naive” of Vietnamese enterprises in the global business environment can lead to serious and unpredictable consequences.

With experience in the working process, we believe that the things Vietnamese enterprises need to do to minimize risks in trading activities with foreign partners through the D/P method include:

• Verify the exact capacity of the brokers, and at the same time need to verify the exact foreign partner information provided by the broker. And most importantly, Vietnamese businesses must verify the correct information of the Buyer before entering the Contract to avoid falling into frauds like the case of 100 containers above.
• Vietnamese enterprises need to send staff to directly deliver the set of payment documents to the Buyer’s country and carry out the procedures at the Buyer’s bank to limit the risk of losing the set of payment documents.
• Finally, when there are signs such as: the Buyer’s Bank is unable to contact the Buyer, the Buyer fails to pay on time, or the Seller determines that there is a possibility of fraud, the Seller need to directly use the set of payment documents to withdraw the shipment at a foreign port to Vietnam as soon as possible to avoid the fraudulent Buyer having the opportunity to appropriate the shipment.

Above is an analysis and warning about fraud through D/P payment method. Hope this article is useful for business activities of enterprises.

Best regards.

You may need Legal service of debt collection when debtors are foreign enterprises

TNTP and Associates International Law Firm

Attorney: Nguyen Thanh Ha

Email: ha.nguyen@tntplaw.com

On April 3^rd, 2022, the State Securities Commission (“SSC“) issued Decision 181/QD-UBCK canceling 09 bond offerings from July 2021 to March 2022 of Viet Star Company, Winter Palace Joint Stock Company, Soleil investment and hotel services join stock company of Tan Hoang Minh Group (“Tan Hoang Minh“) because there are actions of disclosing false information, concealing information in individual bond issuance activities. Accordingly, the cancellation of 9 bond offerings of Tan Hoang Minh shows the potential risks of corporate bonds in the current market. In order for bonds not to become bitter fruit, in this article, TNTP will show the risks when buying corporate bonds for the investors to consider and sober when investing.

Before looking at the risks of investing in corporate bonds, let’s reiterate what a corporate bond is? A corporate bond is a bond issued by enterprises, in the form of certificates or debit entry. The enterprise is obliged to pay both interest and principal to the bondholder when the maturity is due. When the investor buys a company’s bonds, the investor is their creditor.

1. Investors are at risk when bond issuers publish false information and hide information.

From the case of Tan Hoang Minh, we need to find out whether 03 companies under the Group are eligible to issue individual bonds. Pursuant to the provisions of the Law on Securities, the subjects are allowed to issue individual bonds including Public companies and securities companies; a securities investment fund management company is not a public company.

In the case of 03 companies of Tan Hoang Minh Group, according to Decision 181, SSC has said that at the time of issuing individual bonds issuance, these companies are not yet public. Thus, it can be seen that these 03 companies did not meet the conditions of the company as a public company when offering individual bonds.

However, the main reason leading to the cancellation of 09 bond issuances by 03 companies of Tan Hoang Minh Group is because these 03 companies have published false information, and concealed information in individual bond issuance activities.

2. Warning investors of risks when they do not know the information about the security assets of the bond issuer

Bonds of Soleil Company of Tan Hoang Minh Group, at the first issuance, An Binh Securities plays the role of consulting organization, registering for bond depository; SHB is a security asset management agent, an account management organization. In the next two phases, Agribank Securities is the consulting organization of documents for sale, Vietinbank West Thang Long branch is the asset management bank account security and management. It can be seen that the case of Soleil Company belongs to the case of issuing security bonds and the asset management unit is SHB and Vietinbank.

Pursuant to Clause 2, Article 17 of Decree 153/2020/ND-CP provides for domestic corporate bond offerings. Accordingly, for bonds secured by assets, when the issuing enterprise fails to pay the bond’s interest and principal debt, the security assets will be handled to fulfill the secured obligations of the bonds in accordance with regulations of the law on secured transactions.

In case, Soleil Company fails to pay the debt or bond principal to the investor, the security assets will be handled to perform their guaranteed obligations. There are two possible scenarios:

• Scenario 1, security assets are owned by Soleil Company, at that time, normally the security assets will be handled by the asset management unit to pay interest and principal to investors;
• Scenario 2, the collateral may not be owned by the Soleil Company but is mortgaged or secured by a third party or the property may be secured for a transaction other than the security for the private placement of bonds by the Soleil Company. In this case, the handling of collateral will be more difficult because then, the security asset management unit will have to consider the order of priority for payment as prescribed in the Civil Code before making payment. payment of interest and principal to investors.

3. Investors are risky when buying bonds through the invitation of service providers without carefully understanding the financial situation of the issuer

Besides the attractive interest rates, investors are often affected by the offers of service providers such as securities companies or credit institutions. Credit institutions and securities companies only provide services and receive service fees from the issuer but are not responsible for the appraisal/assessment of the issuer’s financial position and debt repayment ability. The operation, therefore, is not responsible for whether the enterprise will repay the principal and interest of the bond at maturity.

Therefore, to minimize risks, investors must carefully evaluate risks before deciding to buy bonds; should not buy bonds through invitations from service-providing organizations without carefully understanding the financial situation of the issuer and the terms and conditions of the bonds. In addition, after buying bonds, investors need to regularly update on the financial situation, debt repayment capacity of the issuing enterprise, and whether the use of capital raised from bonds is suitable for the purpose of the issuance of bonds. At the same time, investors should carefully study their rights and responsibilities in accordance with the law when participating in securities trading.

The above are legal shares of the potential risks of investing in corporate bonds. We hope this article is useful to you.

Best regard,

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TNTP & Associates International Law Firm

Lawyer: Nguyen Thanh Ha

Email: ha.nguyen@tntplaw.com