Decree 120/2005/ND-CP on dealing with breaches of the Competition Law

On September 30, 2005 the Vietnamese Goverment issued Decree 120/2005/ND-CP (Decree 120) on dealing with breaches of the Law on Competition and providing remedies for offences in the field of competition which came into force as of October 25, 2005. Decree 120 followed closely Decree 116 dated September 15, 2005 on the implementation of a number of articles of the Competition Law.

Decree 120 provides remedies for both practices in restraint of competition and unfair competitive practices. According to it, breaches of the Law on Competition should be penalized by way of warning or fine. Some additional penalties may be imposed, for example revocation of business permissions and confiscation of things used in the act of violation. In addition to penalties and depending on circumstances, several compulsory measures such as corporate restructure, break-down, etc… can be imposed on enterprises participating in competition offences.

Remarkably, Decree 120 provides in details amounts of fine to be imposed for breaches of the Law on Competition. In respect to practices in restrain of competition, fines are calculated basing on percentage of total turnover in the financial year preceding the year in which the offence is committed. Generally, a fine up to 5% of the turnover will be imposed on each offender; fine up to 10% will be applied in some specific cases. In respect to unfair competitive practices and other violations, fines are not calculated basing on turnover, but on the type of violation and the corresponding fixed band of monetary amounts to a maximum of VND 100 million (US$ 6,400.00).

A Special Feature on Decree 120 by D&N International will be published in the near future on its website.