ASSET RECOVERY IN CORRUPTION CASES HANDLED BY THE
PEOPLE’S PROCURACIES OF VIET NAM
Nguyen Duc Bang* and Hoang Chi Kien†

I. INTRODUCTION
In recent years, the number of corruption cases that have been initiated, prosecuted, andbrought to trial tends to increase, in which the illicitly acquired assets is mind boggling. In manycases, public funds and people’s property as well were misappropriated resulting in damages up to
thousands of billions of VN dong whereas success in asset recovery is limited.
The impediments to asset recovery may vary, but they, inter alia, can be identified asfollows:-

Most of the money and property that are misappropriated by corrupters is spent or used forvarious purposes; therefore, these assets often cannot be recovered or returned;
The corrupters used all methods and tricks to disperse or hide the money and/or property
acquired by the crime before being discovered, seized or identified by criminal justiceauthorities;
the process of tracing proceeds and conducting forensic work is time consuming andinadequate.

As a result, it is important to learn good practices and share information among ASEAN
public prosecutors to enhance the success of asset recovery in prosecuting corrupt criminals.
II.

THE CONCEPT OF PROCEEDS OF CORRUPTION

Articles 2 (d) and (e) of UNCAC, which became effective in Viet Nam from 18 September
2009, contain the following definitions:“Property” shall mean assets of every kind, whether corporeal or incorporeal, movable or
immovable, tangible or intangible, and legal documents or instruments evidencing title to orinterest in such assets; and“Proceeds of crime” shall mean any property derived from or obtained, directly or
indirectly, through the commission of an offence;

Senior Prosecutor, Vice Head of Division, Department of Exercising Public Prosecution Power and Supervision over
Investigation of Corruption, Position-related Cases, Supreme People’s Procuracy, Viet Nam.
†
Senior Prosecutor, Chief of Division, Department of International Cooperation and Mutual Legal Assistance in
Criminal Matters, Supreme People’s Procuracy, Viet Nam.
*

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(2015):

Under Vietnamese law, the definition of property is set out in Article 105 of the Civil Code

1. "Property” shall be things, money, valuable papers or property rights. 2. Property shall
include immovable or movable property. Immovable or movable property can be existing orformed in the future.
According to Article 1(2) of the Anti–Corruption Law 2005:“Proceeds of corruption” are property obtained or derived from corrupt acts.
The definition of corrupt acts in Article 3 of the Anti-Corruption Law 2005 contains the 12
different acts specified below:
1.
2.
3.
4.

Embezzling property;
Taking bribes;
Abusing positions or powers to appropriate property;
Taking advantage of positions or powers while performing tasks or official duties for
self-seeking interests;
5. Abusing powers while performing tasks or official duties for self-seeking interests;
6. Taking advantage of positions or powers to influence other persons for self-seeking
interests;
7. Committing forgeries in work for self-seeking interests;
8. Offering bribes, bribe brokerage by persons with positions and/or powers to settle
affairs of agencies, organizations, units or localities for self-seeking interests;
9. Taking advantage of positions or powers to illegally use state property for self-seeking
interests;
10. Harassment for self-seeking interests;
11. Failure to perform tasks or official duties for self-seeking interests;
12. Taking advantage of positions or powers to cover up law violators for self-seeking
interests; illegally hindering or intervening in the examination, inspection, audit,
investigation, prosecution, adjudication or execution of judgements for self-seeking
interests.

However, the corrupt acts under the current criminal code only consist of the 7 types
specified below:
1.
2.
3.
4.
5.
6.

Embezzling property;
Taking bribes;
Abusing positions or powers to appropriate property;
Taking advantage of positions or powers while performing tasks or official duties;
Abusing powers while performing tasks or official duties;
Taking advantage of positions, powers to influence other persons for self-seeking
interests; and7. Committing forgeries in work.

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The concept of "corrupt proceeds" in Viet Nam still has two different interpretations asmentioned above, so it may cause hindrance to the recovery of corrupt proceeds.
III. LEGAL FRAMEWORK FOR RECOVERY OF PROCEEDS OF CORRUPTION
The recovery of corrupt proceeds is enforced during the process of detecting, handling,
investigating, prosecuting, adjudicating and executing judgements in corruption cases. Thereby,
the competent authorities may use measures in accordance with the law to recover proceeds ofcorruption, such as search, seizure, inventory search, freezing, confiscation of the proceeds
obtained or deprived from corrupt acts.
As to the recovery of corrupt proceeds involving foreign elements, Article 71 of the Anti–
Corruption Law 2005 stipulates that:On the basis of treaties to which the Socialist Republic of Vietnam is a party andunder the basic principles of Vietnamese laws, the Vietnamese government shallcooperate with foreign governments in recovering Vietnamese or foreign
corruption-related properties and returning such properties to their lawful owners.
To date, Viet Nam has not adopted specific laws on confiscation and recovery of corrupt
proceeds; however, under the current law, there are two main groups of measures to confiscate andrecover proceeds of corruption as below:•

Group of criminal measures provided in the Criminal Code 1999, the current Criminal
Procedure Code 2003 and the Criminal Procedure Code 2015 (effective in January 2018).

•

Group of administrative and civil measures provided in the Civil Code 2015 and Civil
Procedure Code 2015

A.

Group of Criminal Measures
Under the provisions of Article 28 of the Criminal Code, the recovery of proceeds acquiredby criminal offences shall first be enforced by the imposition of penalties, namely:-

Fine (principle penalty),
Confiscation of property (as an additional penalty) and fine (as additional penalties
when not applied as the principle penalty).

Pursuant to Article 30 of the Criminal Code, fines shall be applied as an additional penalty
but not as a principle one.
Property confiscation is an additional penalty applied to a person convicted of corruption
crimes for only two offences, including: Embezzling property (Article 278) and Receiving bribes(Article 279).

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Article 42 of the 1999 Penal Code states: "The offender must return the property that has
been appropriated to the owner or his lawful manager and must compensate for material damage
which is determined to have been caused by the offense".
According to Article 41 of the Criminal Code, confiscation of objects and money that is
directly related to crimes is enforced as below:
1. The property confiscation for State funds shall apply to:a) Tools and means used for the commission of crimes;b) Objects or money acquired through the commission of crime or the trading or exchangeof such things;c) Objects banned from circulation by the State.
2. Things and/or money illegally seized or used by offenders shall not be confiscated but
returned to their lawful owners or managers.
Article 65 of the Criminal Procedure Code 2003 (corresponding to Art. 88 CPC 2015)
stipulates that investigating bodies, procuracies and courts must proceed in accordance with theprocedures by law to establish the offences and criminal proceeds in order to take measures torecover proceeds misappropriated by corrupt criminals.
However, the current provisions of law still have a number of shortcomings, such as: thedifficulty in determining which of the defendant’s assets are the corrupt assets due to lenientregulations on the asset declaration; the time-consuming process of identification of proceeds may
allow the offender to disperse or hide the proceeds, making them very difficult to recover; lack of
specific provisions creating powers, orders and procedures for the asset recovery.
Articles: 140, 142, 143, 144, 145 and 146 of the CPC 2003 (corresponding to Articles 128,
129, 192, 194, 195, 196, 197 and 198 of the CPC 2015) regulate the search, seizure, temporary
seizure, distraint of property, documents and objects, and freezing bank accounts, which can beconsidered as the most powerful and effective measures in the asset recovery in general and forcorrupt proceeds in particular.
Article 140 of the CPC 2003 (Article 192 of the CPC 2015) stipulates the grounds forsearch of persons, places of residence, workplaces, means, documents, articles, letters, telegrams,
postal parcels and electronic data.
Difficulty: the process takes a long time, and great efforts are required to establish legal
grounds that the corrupt proceeds could be hidden or spent by offenders through different means
and tricks.
According to Article 146 (1) of the CPC 2003 and Article 128 (1) and Article 129 (1) of
the CPC 2015, property distraint and bank account freezing shall only be enforced against theaccused or defendant for the crimes for which the Criminal Code authorizes the imposition of fines
or confiscation of property to secure compensation for damages.

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Difficulties: In a number of cases, the corruption crime or other crimes do not provide forthe immediate imposition of fines or compensation for damages. Instead, other crimes must beprosecuted, such as: negligence of responsibility, causing serious consequence (Article 285);
deliberately disclosing work secrets; appropriating, trading in or destroying documents containing
work secrets (Article 286); etc. These crimes do not permit distraint of assets until the corruption
crime is initiated. Therefore, this is also one of the reasons for prolonging the time of tracking
corrupt proceeds.
The property distrained or the freezing of a bank account shall be enforced in a value or an
amount that is equivalent to the proceeds confiscated, the fine penalty, or in the amount ofcompensation for damages (Article 146 (2) of the CPC 2003, Articles 128 (3) and 129 (3) of the
CPC 2015).
In numerous cases, while the entire suspicious property should be distrained as soon as
possible, only a small portion of the property can be established as corrupt proceeds at an earlystage. Such property distraint cannot guarantee the successful recovery of corrupt proceeds.
B.

Group of Administrative, Civil Measures
The Civil Code 2005 provides for the protection of property rights (Article 164), the rightto reclaim property (Article 166), and the right to claim damages (Article 170).
Article 114 of the Civil Procedure Code 2015 stipulates 11 measures related to asset
recovery as specified below:
1.
2.
3.
4.
5.

Distraining disputed properties.
Prohibiting the transfer of property rights over disputed properties.
Prohibiting the change of the status quo of disputed properties.
Permitting to harvest and sell subsidiary food crops or other products or commodities
Freezing accounts at banks, other credit institutions, state treasury; freezing assets at
depositories.
6. Freezing the obligors’ properties.
7. Prohibiting or forcing the performance of certain acts.
8. Banning obligors from leaving the country.
9. Suspending tender closing and other activities related to tendering.
10. Arresting aircraft or ships to secure the settlement of the cases.
11. Applying other provisional emergency measures in accordance with the law.
Procedures for the application of measures to recover property are also set out timely in
Article 133 (3) of the Civil Procedure Code 2015 as follows: Within 48 hours after receiving thewritten request, the judge must consider and issue a decision to apply provisional emergency
measures. In contrast, the application of compelled measures such as distraining assets and/or
freezing bank accounts in criminal proceedings is only enforced when the defendant has been
officially charged for his crime.

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ASSET RECOVERY ENFORCED BY THE VIETNAMESE PEOPLE'S
PROCURACIESA.

Achievements
In recent years, procurators have strictly supervised the investigation process that started
right from the receipt of tips and reports of the crime to the conclusion of the investigation in every
serious corruption case. In addition, procurators have requested the investigating body to take allnecessary measures to recover proceeds obtained through or related to corrupt acts.
According to statistics on the results of detecting, investigating and dealing with corruption
cases from 1 December 2012 to 31 May 2016 by the procuracies of all levels (except the
procuracies of Lao Cai Province), the procuracies at all levels handled a total number of 1,091
cases with 2,296 accused persons; the number of cases to be resolved at the prosecution stage is:1,037 cases with 1,843 accused persons; the number of cases prosecuted was 868 cases with 1,868
accused persons. The total damaged property in corruption cases is over 5,335 billion VN dong,of which, the total amount of assets misappropriated is more than 4,346 billion VN dong and only
about 1.757 billion dong has been recovered.
In a number of corruption cases, a large portion of the proceeds has been detected, traced
and successfully recovered. In particular, all the corrupt proceeds have been recovered in somecases as specified below:-

The case of Huynh Ngoc Si, 58, former director of the ODA-funded East-West
Highway Project in Ho Chi Minh City, who was prosecuted for bribery, and his family
has paid the full amount of 5,109,200,000 VN dong for his own criminal acts;-

The case of Nguyen Ngoc Thanh Tung, who was prosecuted for abusing positions andpowers to misappropriate properties in Vietinbank, Bac Giang Province, the fullmisappropriated amount of 5.650 billion VN dong has been recovered;-

The case of Nguyen The Ngoc and his accomplices, who were prosecuted for
embezzling properties, occurred at Petrovietnam Transportation Corporation, and thedamages estimated at 3,774,302,109 VN dong have been retrieved; and-Particularly, the recent case of Giang Kim Dat and his accomplices, who wereprosecuted for embezzling property, occurred at the Vinashin Group, Ministry ofTransport; the investigating agencies have investigated, traced and distrained his
suspicious assets with the value greater than the alleged sum of money misappropriatedby him (his distrained properties are worth 300 billion VN dong, exceeding the 260
billion VN dong that were allegedly misappropriated at the time the crime wascommitted).

B.

Shortcomings and Limitations
According to the statistics mentioned above, the total damaged assets in corruption cases
is more than 5,335 billion VN dong, the assets recovered were over 1,913 billion VN dong,accounting for only 35.9%. Although the percentage of assets recovered out of the misappropriated－ 209 －

assets was significantly higher than in the recovery of damaged assets, it still remained low at
40.4 % (1,757 billion VN dong recovered out of the total amount of 4,346 billion misappropriated).
Asset recovery that is enforced by the procuracies at all levels has also indicatedshortcomings and limitations. In particular, in the following grand corruption cases, almost nothinghas been recovered because the offenders have dispersed all property or cannot afford to pay
damages:
The case of Pham Thanh Binh, former Chairman of VinaShin Group, and his 8 accomplices,
who were prosecuted for intentionally violating state regulations on economic management,
causing serious consequences; the compensation for damages must be over 1,100 billion VN dong,but by early 2016, the recovered amount was only 2.4 billion VN dong;
The case of Vu Quoc Hao and his accomplices, who were prosecuted for embezzling
properties and intentionally violating state regulations on economic management, causing serious
consequences. The embezzlement occurred at the Financial Leasing Company II, Agribank ofVietnam; damages to the state were more than 531.8 billion VN dong, but the recovered assets
included only 5.8 billion dong, 4 houses and 1 land plot; andThe case of Huynh Thi Huyen Nhu, who was prosecuted for embezzling property anddeliberately violating regulations on lending in the operation of credit institutions, with thecompensation amount of nearly 14,000 billion VN dong; however, the distrained properties were
estimated at about 500 billion VN dong.
C.

Reasons for the Shortcomings(i) In the course of conducting criminal proceedings, the criminal justice authorities failed
to promptly detect and take necessary measures to distrain and block the property, so the offenders
and their relatives had enough time to conceal or seek to legitimize the illegal income and property
by tricks, such as:
●

●

●
●

Hiding their ownership by using their relatives’ names for the illegal properties, ortransferring money continuously many times through many persons to create a closed
process to transfer those proceeds overseas to buy assets there; this is one of the main
tactics that corrupters have implemented to date to disseminate corrupt property;
Using shell companies that had been legally established for the purpose of laundering
illicit money. These companies may be legally established in one country, but theirmain activity is carried out in another country or territory;Through casinos or recreational entertainment centers to launder corrupt money;
Transferring money out to foreign bank accounts or bringing corrupt proceeds to flee
abroad.

(ii) A number of investigators and procurators still lack professional capacity to recovercorrupt proceeds, especially the general knowledge of budget management, finance, banking,－ 210 －

investment and construction. It is also one of the major impediments to the proper tracing andtracking of corrupt assets.
(iii) Some investigators and procurators, while investigating and prosecuting, have not been
fully aware of their responsibilities and roles, lack of expertise and have inadequate qualifications
to take all necessary measures to ensure the recovery of the damaged or appropriated property incorruption cases.
(iv) Limitations of the current legal system: Although Viet Nam has been a member of
UNCAC since 2003 and enacted the Anti-Corruption Law 2005, which recognized and set out the
principles and legal basis for taking necessary measures to recover corrupt proceeds, theseprovisions are too general, showing the objectives and principles of asset recovery, and not
regulating the authority, order and procedures for recovery of corrupt assets as well as forcible
measures to recover corrupt proceeds. In addition, the Criminal Procedure Codes 2003 and 2015
have not specifically provided for the order, procedures and competence to recover criminal assets
in general and corrupt assets in particular. As a result, the responsibilities and roles of competentauthorities in asset recovery and detecting proceeds have not been enhanced adequately.
The Law on Judicial Examinations 2012 stipulates issues related to financial, banking,construction and land evaluation too broadly and vaguely and provides no sanctions imposed on
agencies, organizations or individuals that have declined or evaded their responsibilities for
examinations or deliberately prolonged the process of examinations.
In addition, the current legislation has not set out the mechanism of coordination in therecovery of corrupt assets involving foreign elements. In particular, the Law on Mutual Legal
Assistance 2007 lacks provisions on asset recovery and has not clearly defined the recovery of
criminal proceeds as an issue that falls under the scope of criminal legal assistance.
(v) Obstacles in economic management, administration and judgement enforcement
include:
●

●

●

●

The mechanism controlling individuals’ assets and income, the use of cash and thesupervision over large transactions is still inadequate and loose;
The identification of property damaged by corrupt acts in many cases is complex andtime-consuming because corrupt assets often take many forms, are hidden separately
in many different locations, and data in legal documents and records are incorrect;
The offender, who is usually a person holding a high position with professional andlegal knowledge, has set planning and uses sophisticated tricks to commit offences andhide corrupt proceeds;
The handling of assets related to grand corruption cases is very difficult due to the factthat the value of the distrained property is often much less than the total amount of theillicit proceeds misappropriated by the corrupt offender;－ 211 －

● The offenders misappropriate properties with the intention of accepting
imprisonment penalties to keep the property obtained though corruption for theiroffspring.

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