DECREE

ON SANCTIONING OF ADMINISTRATIVE VIOLATIONS IN THE ACCOUNTING DOMAIN

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the June 17, 2003 Law on Accounting;
Pursuant to the July 2, 2002 Ordinance on Handling of Administrative Violations;
At the proposal of the Finance Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Scope and subjects of application

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2. Administrative violations in the accounting domain include:

a/ Violations of regulations on accounting vouchers;

b/ Violations of regulations on accounting books;

c/ Violations of regulations on accounting accounts;

d/ Violations of regulations on financial statements and disclosure of financial statements;

e/ Violations of regulations on accounting examination;

f/ Violations of regulations on preservation and archival of accounting records;

g/ Violations of regulations on asset inventory;

h/ Violations of regulations on organization of accounting apparatuses, arrangement of accountants or hiring of accountants;

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j/ Violations of regulations on application of accounting standards, accounting regime and other regulations.

Article 2.- Principles for sanctioning of administrative violations in the accounting domain

The principles for sanctioning of administrative violations in the accounting domain shall comply with the provisions of Article 3 of the July 2, 2002 Ordinance on Handling of Administrative Violations (hereinafter referred to as the Ordinance on Handling of Administrative Violations for short).

Article 3.- Statute of limitations for sanctioning administrative violations

1. The statute of limitations for sanctioning administrative violations in the accounting domain is two years, counting from the date of commission of administrative violations.

2. Individuals against whom criminal cases have been instituted, who have been prosecuted or got decisions to bring them to trial according to criminal procedures but later got decisions to stop investigation or criminal cases where  their violation acts show signs of administrative violation shall be administratively sanctioned under the provisions of this Decree. In this case, the statute of limitations for sanctioning is three months, counting from the date the persons with sanctioning competence receive the decisions to stop the investigation or the institution of the criminal cases together with their dossiers.   

3. Within the time limits prescribed in Clause 1 and Clause 2 of this Article, if individuals or organizations commit new administrative violations in the accounting domain, or deliberately shirk or obstruct the sanctioning, the statute of limitations prescribed in Clause 1 and Clause 2 of this Article shall not apply; the statute of limitations for sanctioning administrative violations shall be re-counted, starting from the date when new administrative violations are committed or the time when acts of shirking or obstructing the sanctioning terminate.

4. If persons with sanctioning competence fail to impose sanctions within the statute of limitations for sanctioning administrative violations they shall be handled under the provisions of Article 121 of the Ordinance on Handling of Administrative Violations

Article 4.- Time limit for being considered not having been administratively sanctioned

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Article 5.- Forms of sanction of administrative violations in the accounting domain

1. For each act of administrative violation in the accounting domain, individuals or organizations must be subject to one of the following principal sanctioning forms:

a/ Caution;

b/ A fine of between VND 200,000 and VND 20,000,000.

2. Depending on the nature and seriousness of their violations, violating individuals or organizations may be also subject to the application of additional sanctioning forms specified in Clause 4 of Article 7, Clause 5 of Article 8, and Clause 2 of Article 15 of this Decree.

3. In addition to the sanctioning forms prescribed in Clause 1 and Clause 2 of this Article, violating individuals or organizations may be also subject to the application of one or more than one of remedial measures specified in Clause 5 of Article 7, Clause 6 of Article 8, Clause 3 of Article 9, Clause 3 of Article 10, Clause 3 of Article 14, Clause 3 of Article 15 and Clause 3 of Article 16 of this Decree. 

4. When fines are imposed, the specific fine level for an act of administrative violation shall be the average level of the fine bracket prescribed in Chapter II of this Decree for such act; if extenuating circumstances are involved, the fine level may be reduced but must not be lower than the minimum level of the fine bracket; if aggravating circumstances are involved, the fine level may be increased but must not be higher than the maximum level of the fine bracket.

Article 6.- Extenuating and aggravating circumstances when sanctioning administrative violations in the accounting domain

1. Extenuating circumstances:

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b/ Administrative violators voluntarily report on their violations, showing honest remorse;

c/ Committing violations under constraint or material or spiritual dependence;

d/ Unintentional violations;

e/ First-time violations;

f/ Committing violations due to specially difficult situations not caused by violators themselves;

2. Aggravating circumstances:

a/ Committing violations in an organized manner;

b/ Committing violations time and again or recidivism;

c/ Inciting, dragging or compelling those who are materially or spiritually dependent to commit violations;

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e/ Taking advantages of war, natural calamities or other special social difficulties to commit violations;

f/ Committing violations while serving administrative sanctioning decisions or criminal sentences;

g/ Committing acts of shirking or hiding administrative violations after committing such administrative violations.

Chapter II

ACTS OF VIOLATION, SANCTIONING FORMS AND FINE LEVELS

Article 7.- Violations of regulations on accounting vouchers

1. A fine of between VND 200,000 and VND 1,000,000 shall be imposed for one of the following acts:

a/ Making accounting vouchers with insufficient principal details as prescribed by the accounting legislation (hereinafter referred to as according to regulations for short);

b/ Erasing, modifying accounting vouchers.

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a/ Making accounting vouchers without the sufficient number of duplicate copies according to regulations on each type of accounting document;

b/ Signing accounting vouchers which are not fully filled in the contents falling under the signatories’ responsibility;

c/ Signing accounting vouchers when having no competence or authorization to sign;

d/ Making sale invoices but failing to hand them to customers according to regulations.

3. A fine of between VND 5,000,000 and VND 20,000,000 shall be imposed for one of the following acts:

a/ Forging, or making false statements in, accounting vouchers;

b/ Reaching agreement with or compelling other persons to forge, or make false statements in, accounting vouchers;

c/ Making accounting vouchers with duplicate copies containing different contents, for cases of making vouchers with more than one duplicate copy for one arisen economic or financial operation;

d/ Selling goods or providing services without making sale invoices according to regulations;

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f/ Deliberately making more than once accounting vouchers for one arisen economic or financial operation;

g/ Destroying or deliberately damaging accounting vouchers.

4. Additional sanctioning forms:

a/ Confiscation of accounting vouchers, for violations prescribed at Point a or b, Clause 3 of this Article;

b/ Deprivation of the right to use accountancy practice certificates, for accountants committing violations prescribed in Clauses a, b, c, e, f and g, Clause 3 of this Article.

5. Application of remedial measures:

a/ Forcible making of accounting vouchers for arisen economic or financial operations, for violations prescribed at Point e, Clause 3 of this Article;

b/ Forcible restoration of accounting vouchers true to reality and according to regulations, for violations prescribed at Points a and b of Clause 1, Points a, b and c of Clause 2, and Points c, d and g of Clause 3 of this Article;

c/ Forcible destruction of accounting vouchers made excessively for one operation, for violations prescribed at Point f, Clause 3 of this Article.

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1. A fine of between VND 200,000 and VND 2,000,000 shall be imposed for one of the following acts:

a/ Making accounting books with insufficient contents according to regulations, such as no name of the accounting unit, no title and opening date of book; closing date of book; no signature according to regulations; no page number, no overlapping stamps on accounting book pages;

b/ Making entries in accounting books with insufficient principal contents according to regulations;

c/ Violating regulations on making entries in accounting books, such as making superimposed entries, making entries on every other line; failing to cross out the blank space of a page; failing to sum up figures at the end of a page; failing to transfer the sum in the previous page onto the top of the following page;

d/ Failing to bind up separate books for each accounting period and complete legal formalities after printing out books on paper in case of computerized accounting.

2. A fine of between VND 2,000,000 and VND 5,000,000 for one of the following acts:

a/ Opening accounting books not in accordance with general principles applicable to one of accounting book forms according to regulations;

b/ Making entries in accounting books without using the method prescribed in the accounting standards and accounting regime;

c/ Making entries in or closing accounting books not in time according to regulations;

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3. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed for one of the following acts:

a/ Failing to open accounting books at the beginning of the annual accounting period or from the date of establishment of the accounting unit;

b/ Failing to keep accounting vouchers evidencing information and figures recorded in accounting books or figures recorded in accounting books failing to match accounting vouchers;

c/ Information, figures recorded in accounting books of the accounting year failing to succeed information and figures recorded in accounting books of the preceding year or failing to make continuous entries in accounting books from the time of opening to the time of closing;

d/ Failing to close accounting books in cases where accounting books must be closed according to the accounting legislation;

e/ Failing to print out accounting books on paper after closing computerized books.

4. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed for one of the following acts:

a/ Opening accounting books outside the system of official accounting books of the unit;

b/ Forging accounting books;

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d/ Deliberately leaving out of accounting books property of, or related to, the unit;

e/ Destroying accounting books ahead of time or deliberately damaging them.

5. Additional sanctioning forms:

a/ Confiscation of accounting books, for violations prescribed at Points a, b and c of Clause 4 of this Article;

b/ Deprivation of the right to use accountancy practice certificates, for accountants committing violations prescribed at Points a, b, c, d and e, Clause 4 of this Article.

6. Application of remedial measures:

a/ Forcible completion of the contents of accounting books, for violations prescribed at Points a, b and c, Clause 1 of this Article;

b/ Forcible restoration or compliance with law provisions, for violations prescribed at Point d of Clause 1, Clause 2, Clause 3, and Points b, c, d and e of Clause 4 of this Article.

Article 9.- Violations of regulations on bookkeeping accounts

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a/ Keeping accounts not according to the prescribed contents of bookkeeping accounts;

b/ Modifying accounting contents and methods of bookkeeping accounts promulgated by the Finance Ministry or opening additional bookkeeping accounts within the system of grade-I bookkeeping accounts without the approval of the Finance Ministry.

2. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed for one of the following acts:

a/ Failing to correctly apply the system of bookkeeping accounts prescribed for the unit’s branch or domain of activity;

b/ Failing to adhere to the system of accounts already approved by the Finance Ministry.

3. Application of remedial measures:

a/ Forcible keeping of accounts with the right contents, method and system of bookkeeping accounts, for violations prescribed at Point a of Clause 1, and Clause 2 of this Article;

b/ Stoppage of the use of bookkeeping accounts, for violations prescribed at Point b of Clause 1 of this Article.

Article 10.- Violations of regulations on financial statements and disclosure thereof

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a/ Making financial statements with insufficient contents according to regulations;

b/ Making and presenting financial statements without observing the prescribed method; with unclear or contradictory contents according to regulations;

c/ Submitting financial statements to competent State bodies between one and three months later than the set deadline;

d/ Disclosing financial statements with insufficient contents according to regulations;

e/ Disclosing financial statements between one and three months later than the set deadline.

2. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed for one of the following acts:

a/ Submitting financial statements to competent State bodies more than three months later than the set deadline;

b/ Making financial statements at variance with the figures on accounting books and accounting vouchers;

c/ Forging financial statements, falsifying figures in financial statements;

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e/ Deliberately providing or certifying untrue information, accounting figures; reaching agreement with or compelling other persons to provide or certify untrue information, accounting figures;

f/ Disclosing financial statements more than three months later than the set deadline;

g/ Using untrue information and figures in the disclosed financial statements.

3. Application of remedial measures: Forcible compliance with the accounting law provisions, for violations prescribed in Clause 1 and Clause 2 of this Article.

Article 11.- Violations of regulations on accounting examination

A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed for one of the following acts:

a/ Failing to observe the accounting examination decisions of competent bodies;

b/ Obstructing the examination by the accounting examination teams;

c/ Failing to supply or supplying insufficiently to the examination teams accounting records related to the examination contents;

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e/ Failing to conduct accounting examinations of subordinate accounting units for three consecutive years.

Article 12.- Violations of regulations on preservation and archival of accounting records

1. A fine of between VND 2,000,000 and VND 5,000,000 shall be imposed for one of the following acts:

a/ Putting accounting records into archives more than 12 months later than the set deadline;

b/ Archiving insufficient accounting records according to regulations;

c/ Insecurely preserving accounting records, causing damage or loss to accounting records during the archival duration.

2. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed for one of the following acts:

a/ Using accounting records in the archival duration not according to regulations;

b/ Failing to carry out procedures to restore lost or damaged accounting records.

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a/ Destroying accounting records before the expiry of the prescribed archival duration;

b/ Destroying accounting records without setting up a destruction council, without strictly observing the method of destruction and without making destruction reports according to regulations.

Article 13.- Violations of regulations on property inventory

1. A fine of between VND 1,000,000 and VND 3,000,000 shall be imposed for one of the following acts:

a/ Failing to make reports summing up the inventory results according to regulations;

b/ Failing to identify the cause of discrepancies; failing to reflect in accounting books discrepancies between figures obtained from actual inventory and those of accounting books and the results of handling such discrepancies.

2. A fine of between VND 3,000,000 and VND 5,000,000 shall be imposed for acts of failing to inventory property at the end of the annual accounting period or failing to inventory property in other cases according to regulations.

3. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed for acts of forging, or making false statements on, property inventory results.

Article 14.- Violations of regulations on organization of accounting apparatuses, arrangement of accountants or hire of accountants

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a/ Failing to organize an accounting apparatus; failing to arrange accountants or hire accounting service-providing organizations or individuals to perform the  accounting work according to regulations;

b/ Arranging accountants who are banned by law from working as accountants;

c/ Arranging accountants who fail to satisfy the prescribed criteria, conditions;

d/ Hiring organizations or individuals that fail to meet the criteria, conditions for practicing accountancy or fail to register business according to regulations to provide accounting services for the units.

2. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed for one of the following acts:

a/ Persons who are responsible for managing the accounting units concurrently working as accountants, storekeepers, cashiers or purchasing or selling property, except for private enterprises and individual business households;

b/ Arranging chief accountants who fail to meet the prescribed criteria or conditions;

c/ Hiring chief accountants who fail to meet the prescribed criteria or conditions.

3. Application of remedial measures:

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b/ Forcible transfer and arrangement or hiring of substitute accountants or chief accountants, for violations prescribed at Points b, c and d of Clause 1 and Points a, b and c of Clause 2 of this Article.

Article 15.- Violations of regulations on practicing accountancy

1. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed for one of the following acts:

a/ Organizations or individuals practicing accountancy without registering the accounting service business;

b/ Representatives at law of the accounting service-providing enterprises having no accountancy practice certificates;

c/ Accountancy-practicing enterprises or individuals failing to ensure operation conditions according to regulations but still providing accounting services;

d/ Individuals practicing accountancy without accountancy practice certificates;

e/ Hiring persons having no accountancy practice certificates to work as accountants or persons having no chief accountant-training certificates to work as chief accountants;

f/ Parents, spouses, children or siblings of the persons responsible for management of the accounting units, including chief accountants, accepting to work as hired accountants for such accounting units, or persons having economic, financial relations or inadequate professional capability accepting to work as hired accountants, or accepting to work as hired accountants when the accounting units have requests running counter to the accountancy ethics or against the accounting operations;

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2. Additional sanctioning forms:

Deprivation of the right to use accountancy practice certificates, for violations prescribed at Points f and g of Clause 1 of this Article if being intentionally committed.

3. Application of remedial measures:

a/ Forcible registration of accounting service business, for violations prescribed at Point a of Clause 1 of this Article;

b/ Forcible suspension from practicing accountancy, for violations prescribed at Points b, c, d, f and g of Clause 1 of this Article;

c/ Forcible termination of the contracts on the hire of accountants or chief accountants, for violations prescribed at Point e of Clause 1 of this Article.

Article 16.- Violations of regulations on application of accounting standards, accounting regime and of other regulations

1. A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed for one of the following acts:

a/ Failing to register or notify the accounting regime applied in the unit within the prescribed time limit, for cases subject to registration or notification to competent State bodies;

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2. A fine of between VND 10,000,000 and VND 20,000,000 shall be imposed for acts of letting other subjects use the bank deposit accounts or State treasury deposit accounts of the units for receipt and transfer of money for monetary activities in violation of the regulations on financial, budget and capital use management.

3. Application of remedial measures:

a/ Forcible registration of the applied accounting regime, for violations prescribed at Point a, Clause 1 of this Article;

b/ Forcible compliance with regulations, for violations prescribed at Point b of Clause 1, and Clause 2 of this Article.

Article 17.- Violation acts in the accounting domain resulting in tax evasion and fraudulence

1. Administrative violation acts in the accounting domain prescribed from Article 7 thru Article 16 of this Decree shall, apart from being subject to sanctions prescribed in Article 7 thru Article 16 above, shall be also sanctioned under the Government’s decree on sanctioning of administrative violations in the tax domain if they have resulted in tax evasion or fraudulence.

2. When deeming that administrative violation acts in the accounting domain have resulted in tax evasion or fraudulence, persons with competence to sanction administrative violations must, after having sanctioned such administrative violations, immediately transfer the dossiers to the tax offices of the same level for handling administrative violations in the tax domain.   

Chapter III

SANCTIONING COMPETENCE, PROCEDURES

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1. Financial inspectors of all levels on duty shall have the powers:

a/ To serve a caution;

b/ To impose fines of VND 200,000;

c/ To apply remedial measures prescribed in Clause 3, Article 5 of this Decree.

2. The chief inspectors of the provincial/municipal Finance Services shall have the powers:

a/ To serve a caution;

b/ To impose fines of up to VND 20,000,000;

c/ To impose additional sanctioning forms and apply remedial measures prescribed in Clause 2 and Clause 3, Article 5 of this Decree.

3. The chief inspector of the Finance Ministry shall have the powers:

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b/ To impose fines of up to VND 20,000,000;

c/ To impose additional sanctioning forms and apply remedial measures prescribed in Clause 2 and Clause 3, Article 5 of this Decree.

Article 19.- Sanctioning competence of the People’s Committees of all levels:

1. The presidents of the commune, ward and township People’s Committees (referred collectively to as the commune-level People’s Committees) shall have the powers:

a/ To serve a caution;

b/ To impose fines of VND 500,000;

c/ To apply remedial measures prescribed in Clause 3, Article 5 of this Decree.

2. The presidents of the People’s Committees of rural districts, urban districts and  provincial towns and cities (referred collectively to as the district-level People’s Committees) shall have the powers:

a/ To serve a caution;

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c/ To impose additional sanctioning forms and apply remedial measures prescribed in Clause 2 and Clause 3, Article 5 of this Decree.

3. The presidents of the People’s Committees of provinces and centrally-run cities (referred collectively to as the provincial-level People’s Committees) shall have the powers:

a/ To serve a caution;

b/ To impose fines of up to VND 20,000,000;

c/ To impose additional sanctioning forms and apply remedial measures prescribed in Clause 2 and Clause 3, Article 5 of this Decree.

Article 20.- Authorization of the sanctioning of administrative violations in the accounting domain

In cases where the persons with administrative violation-sanctioning competence prescribed in Clause 2 and Clause 3 of Article 18, Clause 1, Clause 2 and Clause 3 of Article 19 of this Decree are absent, their authorized deputies shall have competence to sanction administrative violations corresponding to the competence of the authorizers and must be responsible for their decisions.

Article 21.- Division of competence to sanction administrative violations in the accounting domain

1. The commune-level, district-level and provincial-level People’s Committees shall have competence to sanction administrative violations in the accounting domain in their respective localities.

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Where an administrative violation in the accounting domain falls under the sanctioning competence of many persons, the person that is the first to receive the case shall sanction such violation.

2. The sanctioning competence of persons prescribed in Article 18 and Article 19 of this Decree is the competence applied to one act of administrative violation in the accounting domain.

3. Where a person or an organization commits many acts of administrative violation, the sanctioning competence shall comply with the provisions of Clause 3, Article 42 of the Ordinance on Handling of Administrative Violations.

Article 22.- Statute of limitations for execution of administrative violation-sanctioning decisions

The statute of limitations for execution of administrative violation-sanctioning decisions is one year, counting from the date of issuance of sanctioning decisions; past this time limit, if such decisions have not yet been executed, they shall not be executed but the remedial measures stated therein must still be applied. Where the sanctioned individuals or organizations deliberately shirk or delay the execution, the aforesaid statute of limitations shall be recounted, starting from the time of termination of the shirking or delaying acts.

Article 23.- Procedures for sanctioning administrative violations in the accounting domain

1. Upon detecting acts of administrative violation in the accounting domain, the persons with sanctioning competence must issue decisions to immediately stop such acts.

2. The procedures for sanctioning administrative violations in the accounting domain shall comply with the provisions in Chapter IV of the Government’s Decree No. 134/2003/ND-CP of November 14, 2003 detailing a number of articles of the Ordinance on Handling of Administrative Violations.

Article 24.- Coercion of execution of administrative violation-sanctioning decisions

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Article 25.- Transfer of dossiers of administrative violations in the accounting domain for penal liability examination

When deeming that acts of administrative violation in the accounting domain show criminal signs, the persons with administrative violation-sanctioning competence must immediately transfer the dossiers to State bodies with crime- handling competence for settlement.

Chapter IV

COMPLAINTS, DENUNCIATIONS AND HANDLING OF VIOLATIONS

Article 26.- Complaints, denunciations

1. Individuals or organizations that are sanctioned for administrative violations in the accounting domain or their lawful representatives have the right to complain about the administrative violation-sanctioning decisions or decisions on the application of measures to prevent and secure the handling of, administrative violations.

2. Citizens shall have the right to denounce illegal acts committed in the handling of administrative violations.

3. The competence, procedures and time limit for the settlement of complaints and denunciations shall comply with the law provisions on complaints and denunciations.

Article 27.- Initiation of administrative lawsuits

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Article 28.- Commendation

Individuals and organizations that make achievements in the prevention and fighting of administrative violations in the accounting domain shall be commended and/or rewarded according to law provisions.

Article 29.- Handling of violations

1. If persons handled for administrative violations commit acts of resisting people on duty, delaying or shirking the execution of the decisions issued by the persons with sanctioning competence, they shall, depending on the nature and seriousness of their violations, be administratively handled or examined for penal liability; and pay compensation if causing damage. 

2. If persons with competence to handle administrative violations commit acts of hassling, tolerating, covering up violations, fail to handle or handle violations belatedly, improperly or ultra vires; fail to handle violations within the statute of limitations or time limits for handling administrative violations in the accounting domain due to their faults, they shall, depending on the nature and seriousness of their violations, be disciplined or examined for penal liability, and pay compensation according to law provisions if causing damage.

Chapter V

IMPLEMENTATION PROVISIONS

Article 30.- Implementation provisions

1. This Decree takes effect 15 days after its publication in the Official Gazette and replaces the Government’s Decree No. 49/1999/ND-CP of July 6, 1999 on sanctioning of administrative violations in the accounting domain.

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3. The Finance Minister shall have to guide the implementation of this Decree.

ON BEHALF OF THE GOVERNMENT
PRIME MINISTER




Phan Van Khai