VIET NAM

NEW AND EMERGING FORMS OF CORRUPTION IN VIET NAM
Dr. Nguyen Trung Kien *The practice of solving corruption cases in recent years in Viet Nam shows that corruption
is the most complicated and difficult to prove as compared with other crimes. This crime iscommitted by individuals with powers, positions and professional qualifications in the field ofwork, having wide social relations, and the ability to influence other people under theirauthority, and they commit criminal acts in a sophisticated way and are capable of concealing
their criminal acts.
Among the types of corruption that have been detected and handled, emerging corruption
cases are related to state assets, finance and banking. Most of these cases are very serious orparticularly serious; the value of appropriated or damaged property is huge with a large numberof defendants, and each defendant/accused has a different role and position, performs a
different function, task or stage of work with close, well-organized connections. The criminal
acts take place for a long time, infringing upon many laws.
I. THE CHARACTERISTICS AND MODUS OPERANDI OF CORRUPTIONCASESCorruption cases generally have similar characteristics, such as the subject of the crime, theself-interested mental state of the accused and the criminal conduct.
A. The Characteristics of Corruption Cases
Regarding the subject of crime: Like other corruption cases, in the corruption cases related
to state assets, finance and banks, the subject of the crime is a person holding position of
authority, powers by appointment, election or assignment in an agency, organization or
economic unit. However, in these cases, there are many defendants/accused holding positions
and powers in many agencies, organizations and units inside and outside the State colluding tocommit crime. Position and authority are not only the specific personal characteristics of theoffender, but also a means used by the offender to perform self-seeking motives throughappropriating or causing damage or loss of property of agencies, organizations or economic
units. Common positions and powers of offenders in these cases are heads of ministries, sectors
and local authorities, chairpersons of the management board, directors, deputy directors,
accountants, treasurers and bank officials. For example, in case of offender Pham Cong Danh,he and his accomplices were convicted of the crimes of “Deliberately violating the State's
regulations on economic management, causing serious consequences” 1 and “Violating
regulations on lending in business activities". activities of credit institutions”, 2 “Lack of
responsibility causing serious consequences”, 3 the Procuracy prosecuted all 46 defendants,
including the accused who is the Deputy Governor of the State Bank, the Chairman of the StateBank of Viet Nam. Director General of Management Board of Dai Tin Commercial Joint Stock
Department of Exercise of Public Prosecution and Supervision over Investigation of Corruption Cases,
Supreme People’s Procuracy of the S.R. of Viet Nam.
1
Article 165 of the revised 2009 Penal Code.
2
Article 179 of the revised 2009 Penal Code (Article 206 of the revised 2017 Penal Code).
3
Article 360 of the revised 2017 Penal Code.
*

185 --- 185

SIXTEENTH REGIONAL SEMINAR ON GOOD GOVERNANCE

Bank (TrustBank) and many other companies. Or the case of offender Vu Huy Hoang and his
accomplices were convicted crime of “Violating regulations on the management and use ofstate assets, causing loss and waste” 4 and the crime of “Violating regulations on land
management”, 5 which occurred at the Ministry of Industry and Trade and in Ho Chi Minh City
in relation to the land No. 2-4-6 Hai Ba Trung, District 1, Ho Chi Minh City, the Procuracy hasprosecuted the accused, who are the Minister, Deputy Minister of Industry and Trade, Vice
Chairman of the People's Committee of Ho Chi Minh City and leaders of relevant departments.
For corruption related to state assets, finance, and banking, in the past 10 years, Viet Nam's
criminal justice agencies have prosecuted 6 ministers and former ministers, 13 general officers
in the armed forces, a number of deputy ministers, former deputy ministers, provincial
chairmen, provincial vice-chairmen; many leaders of banks and companies.
Regarding the subjective consciousness: the main purpose of the accused and defendants
is self-interest expressed in receiving material benefits (taking bribes, embezzlement ofproperty) or causing losses, damage of property of the State, the bank to benefit themselves orother defendants. For example, in the case of Phan Van Anh Vu committing the crime of“abusing positions and powers while performing official duties”, 6 the defendants took
advantage of their assigned positions and powers to transfer the ownership and the use of land
owned by the State to companies established and operated by the defendant at a cheap priceand then sold the land to third parties for profit and causing damage to State assets.
Regarding objective behaviour: in these cases, the accused and defendants performed manydifferent acts, not only infringing upon many relationships protected by law such as: the proper
functioning of state agencies, organizations and units; ownership relationship; order of
economic management and in some cases even infringed upon administrative management
order. For example, in the case of Pham Cong Danh, the defendants violated the administrative
management order (regulations on state management of economic management), infringed on
economic management relations (regulations on lending activities of credit institutions) tocause damage to the bank. Objective acts that the accused and defendants perform are often
interlaced and consecutive, in which there are acts performed with the nature of the preceding
acts, creating conditions for the performance of specific acts specified in the composition ofthat type of crime. In the case of offender Nguyen Bac Son, he and his accomplices wereconvicted of the crimes of “Violating regulations on management and use of public investment
capital, causing serious consequences”, 7 “Giving bribes”, 8 “Bribery”, 9 which occurred at
Mobifone Telecommunications Corporation, Global Audiovisual Joint Stock Company (AVG),
Ministry of Information and Communications, defendants Nguyen Bac Son, Truong Minh
Tuan, Le Nam Tra has taken bribes to decide and direct Mobiphone company to buy AVG
company at a price many times higher than the real value, causing loss of state property.
B. Modus Operandi
Corruption cases typically involve similar tactics. The accused and defendants establish
many legal entities to use as tools to commit crimes. In order to establish these legal entities,
the accused and defendants ask or direct their relatives and/or subordinates to provide
Article 219 of the revised 2017 Penal Code.
Article 229 of the revised 2017 Penal Code.
6
Article 356 of the revised 2017 Penal Code.
7
Article 220 of the revised 2017 Penal Code.
8
Article 364 of the revised 2017 Penal Code.
9
Article 354 of the revised 2017 Penal Code.
4
5- 186 - 186 -VIET NAM
identification documents to complete the dossier and act as their legal representative. In fact,
these companies have no business activities, are only used to sign their names in economic
contracts, open bank accounts, carry out procedures to legalize loans, act as intermediaries infinancial transactions, disbursing, receiving money from the bank and then transferring it backto the defendants or opening securities accounts in order to perform acts of manipulating thestock market and earning illicit profits.
1. False Identity Documents
In the case of offender Pham Cong Danh and his accomplices, Pham Cong Danh directed
his subordinates to use 12 legal entities belonging to Thien Thanh Group Company, owned byDanh, to sign fake lease contracts with his own companies; Prepare documents for purchaseand sale of building materials, develop a debt repayment plan to borrow money from VNCB
Construction Bank. After being disbursed, Danh continued to direct the transfer of more than
644 billion VND (29,272,000 USD) to personal accounts and then withdrew money to pay
debts for six companies of Thien Thanh Group with Danh as Chairman of the Management
Board in the name of customer care money but actually transferred money to Danh. Or the caseof stock market manipulation related to the FLC Group Joint Stock Company, which theVietnamese legal proceedings agencies are currently dealing with. According to the initialinvestigation results, it was determined that Trinh Van Quyet directed his younger sister Trinh
Thi Minh Hue to borrow the citizen identity cards of 26 individuals who are relatives of Quyet'sfamily to establish 20 enterprises, and she then opened 450 securities accounts at 41 securities
companies to perform acts of manipulating stock prices in order to create fake supply anddemand with six securities codes of companies established or directed by Quyet, to gain illicit
profits of initially estimated at VND 975 billion (44.3 million USD), causing especially great
losses to investors.
2. Using Established Legal Entities, Subordinates and Relatives to Sign Economic Contracts,
Buy and Sell a Property to Inflate the Value and Then Collude with the Bank to Mortgage
or Resell that Property to the Bank, Earning an Amount Many Times Higher Than the Real
Value of the Property
In the case of Hua Thi Phan and her accomplices, convicted of “Abusing trust to appropriate
property” and “Deliberately violating state regulations on economic management, causing
serious consequences”, after buying house No. 5 Pham Ngoc Thach, Ward 6, District 3, Ho
Chi Minh City, Hua Thi Phan instructed her subordinates to buy and resell many times toincrease the value of the house to 8 times higher and then sell the house to Dai Tin Joint Stock
Commercial Bank for 1,256 billion VND (57,000,000 USD), appropriated from the Bank 1,105
billion VND (50,200,000 USD).
3. Colluding with the Bank's Leaders, Using an Asset, Then Overstating its Value,
Mortgaging It at Different Banks to Borrow Money, and Then Legally Appropriating It,
Leading to the Inability to Repay the Debt, Causing Damage to the Bank
In the case of Pham Cong Danh who used some real estate in Ho Chi Minh City and Da
Nang City to mortgage at many banks to appropriate 2,095 billion VND (US$ 95,227,000).
4. Making False Documents, Validating the Investment, Payment to Withdraw Money fromEnterprises and Banks
For example, in the case of offender Ha Van Tham, he and his accomplice were convictedof “intentionally violating State regulations on economic management, causing serious
consequences”, “embezzlement of property”, “abuse of positions and powers to appropriate
assets”. Ha Van Tham, as Chairman of Ocean Commercial Joint Stock Bank (Ocean Bank),

187 --- 187

SIXTEENTH REGIONAL SEMINAR ON GOOD GOVERNANCE

and his accomplices made 45 false contracts to withdraw money for personal use, causing
damage to the bank in the amount of 118 billion dong (US$ 5,336,000). In Dinh La Thang’scase, defendant Trinh Xuan Thanh, as Chairman of the Vietnam Oil and Gas Construction
Corporation (PVC), set out a policy and colluded with a number of other defendants by making
false documents to withdraw 13 billion dong (about US$ 59,000) from the Vung Ang - Quang
Trach Project Management Board for personal use.
5. Intentionally Violating the State's Regulations on Economic Management to Appropriate
Property or Cause Damage to the Bank or the Company in which the Offender Holds a
Leadership and Management Position
For example, in the case of offender Ha Van Tham, with the position of Chairman of
OceanBank, Ha Van Tham directed to pay bank deposit interest rates exceeding the ceiling rateprescribed by the State Bank, to pay extra interest, collect other fees in contravention ofregulations. In order to legalize and withdraw the differences of amount (interest rate exceeding
the ceiling rate and illegal fees) out of the bank, Tham and his accomplices required customers
who borrowed capital or bought foreign currency to sign a service contract with BSC Vietnam
Joint Stock Company (founded by Tham) and transferred the differences to this company. In
the case of offender Dinh La Thang, former Chairman of the Membership Board of the Vietnam
Oil and Gas Group (PVN), despite knowing that the Vietnam Oil and Gas Construction Joint
Stock Corporation (PVC) is incompetent and has a financial imbalance but still set out
guidelines and decided to appoint contractors, allowing PVC Corporation to perform many
bidding packages in the Construction Project of Thai Binh 2 Thermal Power Plant incontravention of regulations, and at the same time directed subordinates to advance more than
66.2 million USD for PVC, causing damage to the State of nearly 120 billion VND (5.4 million
USD).
6. The Consequences of Crime
The appropriated amount of money, the value of damaged property caused by the criminal
acts of the accused and defendants in these cases are very huge. In the case that happened at
Mobifone Telecommunications Corporation, Audiovisual Global Joint Stock Company (AVG),
the Ministry of Information and Communications, defendant Nguyen Bac Son received a bribeof 3 million USD, and the defendants caused damage to state property of 6,500 billion VND(more than 300 million USD). In the case of offenders Ha Van Tham and Nguyen Xuan Son,the defendants embezzled state assets with an amount of more than 2.5 million USD, and at thesame time caused damage to Ocean Bank of more than 1,300 billion VND (more than 72
million USD). In Vu Huy Hoang’s case related to the land at No. 2-4-6 Hai Ba Trung Street,the defendants caused damage to the State amounting to VND 2,700 billion (more than USD
130 million).
II. EXPERIENCES IN THE PROCESS OF EXERCISING THE PUBLICPROSECUTION AND SUPERVISING INSTITUTIONS: INVESTIGATION,PROSECUTION AND ADJUDICATION OF CORRUPTION CASES RELATED TO
STATE ASSETS, FINANCE AND BANKING
The Procuracy plays an important position and role in the process of solving criminal cases.
It is the agency that exercises the public prosecution and supervises judicial activities, and theProcuracy has taken many measures to ensure the resolution of criminal cases in general, andcorruption cases in particular, to which the offender shall be charged, investigated, prosecutedand adjudicated in a prompt, strict, accurate, fair and lawful manner. The Procuracy must

- 188 - 188 -VIET NAM
neither let injustice be done against the innocent nor omit offences and offenders. As discussed
further below, the Procuracy pursues the maximum recovery of corrupt assets.
The Procuracy has the following roles and responsibilities in handling criminal cases:
Supervising 100 per cent of crime information and denunciations, petitions for institution ofproceedings, ensuring that the institution of the case is grounded, and the case is handledaccording to its competence; strictly supervise the receipt and preparation of casefiles to handle
crime information; proactively set out requirements of inspection and verification to clarify thefacts, orient the inspection and verification by the investigating agency; resolutely request or
directly issue decisions to annul the unlawful decisions to open or refrain from opening
criminal cases by the investigating bodies; directly inspect and verify when detecting serious
violations of the law or signs of omission of crimes which the Procuracy has requested inwriting but the investigating agency does not correct accordingly etc; ensure 100 per cent ofcorruption-, position- and economics-related cases must be instituted and investigatedaccording to law as soon as there are sufficient grounds.
The Prosecutor General of the Procuracy at all levels directly directs the exercise of publicprosecution, supervision of the investigation, prosecution and adjudication of corruption andposition cases. Prosecutors firmly grasp the progress of the investigation of the case,proactively make investigation requirements to orient and support investigators in collecting
evidence and documents to clarify circumstances in the case, accurately identify the offenderand appropriated or lost properties; being cautious in considering and approving procedural
orders and decisions submitted by the investigating agencies; directly interrogate the defendant
before approval in cases where the arrested person, the defendant does not admit or has aconflict between documents and evidence; strictly and fully perform direct supervision wheninvestigators conduct investigative activities such as: search, confrontation, voice recognition
etc; implement and strictly supervise the interrogation of the accused, taking testimonies withaudio or video recording; strictly supervise the transfer of investigation documents; closely
supervise the decision to suspend the investigation, especially the suspension of exemption
from criminal liability or because of acts that do not constitute a crime; strictly manage the casefile and the defendant in temporarily suspension in order to request recovery of the case when
there are sufficient grounds, to avoid omitting criminals, offenders etc.
During the prosecution stage, the prosecutor carefully studies the case file, obtains thedefendants' testimony to examine and assess their prior statements, documents, incriminating
evidence and exculpatory evidence in a comprehensive and objective manner before deciding
to prosecute, ensuring that the prosecution is performed in an accurate, fair and lawful manner.
In the process of adjudicating corruption-, position- and economic-related cases, theProsecutor collects both incriminating and exculpatory evidence, fully anticipates issues to bequestioned, develops a plan for arguments and response at the trial, and drafts accusation rightfrom the trial preparation stage. At the trial, the Prosecutor actively interrogates and argues toclarify the circumstances of the case, present documentary evidence and arguments to fully
respond to the opinions of the accused, defence counsels and participants in the proceedings,
and closely supervises the adjudication activities of the Trial Panel.
Regarding recovery of corrupt assets, the Procuracy proactively sets out investigation
requirements, requests for inspection and verification of assets; closely coordinates with theinvestigating agency to apply measures to seize or distrain assets, freeze bank accounts of thosesuspected of crimes relating to corruption and position right from the stage of denunciation,

189 --- 189

SIXTEENTH REGIONAL SEMINAR ON GOOD GOVERNANCE

crime information; promptly applies measures to prevent the suspected from transferring,
dispersing, concealing or legalizing assets; encourages offenders to voluntarily hand over theappropriated property, to voluntarily recover the damage caused. Prosecutors directly
participate in interrogation activities of the defendant, request agencies and organizations toprovide documents related to the assets of the defendant in the case in order to promptly detect
the assets coming from the criminal, assets owned by the defendant, assets of the defendant but
transferred to his/her relative's name with signs of property dispersal, and on that basis, request
the investigating agency to apply measures to distrain assets and freeze bank accounts.
III. DIFFICULTIES FACED BY VIETNAMESE CRIMINAL JUSTICE AGENCIESIN DEALING WITH CORRUPTION CASES
Viet Nam’s legal system is constantly being improved, creating a legal basis to detect andhandle corruption and abuse of position cases quickly and promptly. However, someregulations related to land, state property management, economy, finance and banking are still
unclear and unspecific. A number of regulations are still inconsistent with the provisions of the
Criminal Procedure Code, causing difficulties for criminal justice agencies in the process ofresolving corruption and abuse of position cases.
To determine the amount of appropriated money and the value of damaged property causedby the criminal acts of the accused or defendants in cases related to state property, finance,banks, criminal justice agencies must have the ability to assess and value cases like a
specialized agency. However, many cases happened many years ago in which books anddocuments were lost and destroyed; construction works were damaged or still in the process ofconstruction, leading to incomplete collection of documents, difficulties in assessment andvaluation, and even some cases could not be assessed and valued.
Corruption and position-related crimes are often accompanied with money-laundering andtransnational crimes. Therefore, to solve and clarify the whole case and ensure that no offenders
are omitted requires mutual legal assistance and international cooperation. However, thecooperation in the fight against crime between countries still does not meet the requirements.
In some cases, the defendant flees to other countries, and Viet Nam's investigative agency has
made an international arrest but to no avail.
Because the assets appropriated by defendants are typically quite large, especially in cases
related to state assets, bank and finance, the assets are often transferred abroad for dispersal or
money-laundering. Therefore, verification and recovery of these assets are often difficult,depending on the cooperation of the country where the assets are located:
https://lsvn.vn/tuong-tro-tu-phap-hinh-su-asean-va-thuc-tien-thuc-hien-cua-viet-nam.html
IV. NEW AND EMERGING TRENDS OF CORRUPTION IN VIET NAM
The recent practice of dealing with corruption and position cases related to State property,
finance and banks has shown that corruption and position-related crimes related to State assets,finance, and banks tend to be increasingly serious. A large number of defendants and theaccused participate in sophisticated schemes infringing upon many social relations and, at thesame time, appropriate property and its damage is serious and involves close collusion between
the defendants, the accused, holding positions and powers in State agencies. The defendants
and the accused also work in banks and private companies, and many cases involve foreign
elements. Along with the development of the economy and the policies promoting development,- 190 - 190 -VIET NAM
creating favourable conditions and business environment for enterprises, corrupt acts are
expected to increase in number and in the seriousness of their nature in the near future.
The speed of urbanization and the rapid development of the real estate and financial
markets is the driving force for economic and social development, but these markets also
become the targets of corruption. Besides new and innovative forms of investment and business
to optimize profits, increase quality and efficiency, corruption related to State assets, financeand banks are also planned. Corruption will appear in more forms, employing sophisticatedschemes. The stricter degree of collusion requires criminal justice agencies to continuously
update knowledge and information, have an accurate and appropriate approach to identify all
criminals, but not criminalize business relationships to ensure a stable business environment,
protect legitimate businessmen.
Corruption involving position-related crimes involving state property, finance, and banks
are not only limited to the territory of Viet Nam but are gradually expanding to many foreign
individuals and organizations.
The development of science and technology also creates conditions to commit corruption,
conceal their criminal acts, organize, connect with accomplices, launder money, disperse
corrupt assets and flee when discovered.
V. SOLUTIONS AND RECOMMENDATIONS
A. Legislative Activities
Amending and perfecting the law on state asset management, finance and banks, ensuring
to fill legal gaps in accordance with international treaties that Viet Nam has signed andinternational practices while minimizing violations and crimes; create a clear and transparent
legal corridor in the management and handling of crimes. Administrative reform, improving
the efficiency of public service performance, limiting and ending the "ask-give" mechanism ofadministrative agencies and state management.
B. International Cooperation
Strengthening the negotiation and signing of mutual legal assistance agreements;
strengthening cooperation between law enforcement agencies in different countries, first of allin the ASEAN region, regularly exchange practical experiences, closely coordinate in crime
prevention and control, especially in corruption, position-related crimes and moneylaundering; quickly and promptly providing mutual legal assistance, extradition and recovery
of criminal assets.
C. Activities of Exercising of Public Prosecution and Supervising Institutions:
Investigation, Prosecution and Adjudication of Corruption and Position-related
Cases
Leaders of procuracies at all levels must uphold their responsibilities, especially the heads;
regularly direct, guide and inspect the professional activities of the prosecutor, directing thesettlement of problems in the process of exercising public prosecution and supervising
investigation and adjudication. For cases of corruption and position-related crime, the Chief
Prosecutor must direct and assign experienced and capable prosecutors to perform the task of
exercising public prosecution, supervising investigation and adjudication; must directly
examine documents and evidence in order to promptly detect violations and shortcomings in
the process of handling crimes information and denunciations, petitions for institution and

191 --- 191

SIXTEENTH REGIONAL SEMINAR ON GOOD GOVERNANCE

investigation. Leaders need to promote collective wisdom through roundtable meetings among
members of the Procuracy Committee at the provincial level, internal meetings at the districtlevel to assess evidence for complicated cases and to discuss solutions; to establish expert
working groups to assist the Prosecutor in the process of settling the case.
Focusing on the evaluation, arrangement, use and appointment of Prosecutors in order toselect the prosecutors with sufficient qualities, capabilities and qualifications to meet therequirements of performing their assigned responsibilities and tasks on the basis of
responsibility, quantity and efficiency, sense of professional discipline; ability to research,grasp, propose and handle situations arising in practice.
D. Innovating and Improving Training
Training institutions of the Procuracy need to invest in building curriculum and invite
experienced and qualified lecturers to train in-depth skills in receiving and handling crimes
information, denunciation and proposing to institute cases of corruption and position-related
crimes; make investigation requirements, request collection of evidence and documents,
develop expertise in solicitation and interrogation of the accused; interrogation skills at court;
argumentative and debating skills. Focusing on summarizing practice, developing topics todraw experience to organize specialized training courses or in-depth training to equip
Prosecutors and legal officials with knowledge and skills; organize annual intensive training
courses to draw experience, exchange and update knowledge and skills in dealing withcorruption, positions, and economics related to position cases.

- 192 - 192 -