On July 01, 2019, the Vietnam Government promulgates Decree No. 59/2019/ND-CP elaborating on a number of Articles and the measures for implementation of the Law on Anti-corruption.

Cases of conflict of interest are identified According to Article 29, an office holder is considered to have conflict of interest when there is evidence indicating that he/she falls or will fall into any of the following cases:

- Receiving money, property or other benefits of the agencies, organizations, units or individuals involved in their work or under their management;

- Establishing, managing, operating sole proprietorship, limited liability companies, joint-stock companies, partnerships or cooperatives unless specified otherwise;

- Consulting domestic or foreign enterprises, organizations or individuals about matters regarding secrets of the State, secrets of business within his/her competence to handle or collaborate;

Guidelines on giving and receiving gifts are specified

Regarding guidelines on receiving gifts, the office holding agencies, organizations, units or individuals must not by all means receive the gifts from the agencies, organizations, units or individuals involved in their work or under their management. In case of being unable to reject, the agencies, organizations or units must follow mane and handle according to regulations and laws.

The agencies, organizations or units must reject the inappropriate gifts; if unable to reject, the gifts must be handed over to the department in charge of managing gifts of that agencies or units for further handling as specified in this Decree.

Implementation of anti-corruption measures in enterprises and non-state social organizations is regulated

The Decree elaborates assurance of publicity and transparency in organization and operation of enterprises and non-state organizations; management of conflict of interest in enterprises, non-state organizations; responsibility and sanctions against heads and deputies of enterprises and non-state organizations for corruption in their organizations; inspection contents and handling overlaps in inspection on the compliance with the Law on Anti-corruption of enterprises and organizations.

Provision of information at the request of authorities and organizations is made

The Decree elaborates rights and obligations of the information requesting agencies and organizations; rights and obligations of the requested organizations and agencies; responsibilities of heads of agencies, organizations and units in provision of information at the request of agencies, organizations; methods of requesting for information of organizations and agencies; response to the information request and protecting rights and obligations to request information of organizations and agencies.

Besides, the Decree elaborates some contents of accountability, criteria for assessing anti-corruption works, reassignment and disciplining heads and deputies of agencies, organizations and units for allowing corruption to occur and sanctions against other violations relating anti-corruption law.

With these new regulations, the new law on anti-corruption has now been widened its scope of application – it no longer only applies to govern behaviors of the public sector – but will also apply its supervisory upon behaviors of private entities. In this update, we note a number of remarkable changes required by the new regulations for private sector’s attention.

New definition of “corruption” and “person with title/power”

Under the AC Law 2018, the definition of “corruption” and “person with title/power” have been substantially amended to widen the scope of application of this law covering the private sector.

In particular, the AC Law 2018 now clearly separates the actions to be considered as “corruption” in public and private sectors. While the ambit of “corruption” remains as same for state entities as those under the AC Law 2005, the definition of “corruption” applicable to private sector is limited in three actions as below:

1. Embezzling property

2. Taking a bribe

3. Offering or brokering bribe for the entities

Regarding the term “person with title/power,” the AC Law 2018 now provides a broader description –i.e. it refers to person who is appointed, elected, hired, either on contractual or other bases, either with or without salary, to perform specific tasks and duties and has specific powers in performing such tasks and duties. Under this broader definition, the term “person with title/power” now covers a person who holds a management position in private enterprises or organizations.

 New responsibilities and obligations applicable to private sector

General responsibilities

The AC Law 2018 and Decree 59 sets out new general obligations and requirements for private sector in preventing and fighting against corruption. In particular, entities in private sector are now required to:

(1) Issue and implement anti-corruption measures/policies, such as the ethics code, code of conduct and internal control mechanism;

(2) Report to and cooperate with competent authorities in handling corrupt acts in the Company/organization.

(3) Promptly notify to and provide information on the corrupt acts of the management positions in the enterprises/organizations with the competent authorities.

In addition, private enterprises being public companies or credit institutions are also required to establish policies on transparency and conflict of interest for enforcement throughout the operation of such enterprises.

Ethics code, code of conduct and internal control mechanism

One of the remarkable regulations is that the AC Law 2018 urges entities in private sector to establish business ethics code for their employees and/or members in order to create a non-corrupt working environment.

In addition to the ethics code, enterprises in private sector have to formulate a code of conduct and internal control mechanism (collectively, the Internal Code) to prevent and fight corruption as well as the conflict of interests. It is advisable for enterprises in private sector to prepare the Internal Code with the following specifications on:

(1) Clear definition of “corrupt acts,” “persons with title/value,” “gift/valuable” or equivalent terms;

(2) The prohibited actions (i.e., actions which would constitute the “corrupt acts”);

(3) suspected violations reporting mechanism;

(4) Relevant disciplinary measures etc., (NB: such disciplinary measures must also be clearly specified in the internal labor rule of such enterprises for registration with labor authorities).

 Specific regulations applied to public companies and credit institutions

Along with the above regulations, private entities being public companies and credit institutions must also comply with the following obligations:

(1) To publicly disclose information of public companies/credit institutions relating to the Employees’ benefits policies, companies’ or institutions’ asset usage, or the organizational structure.

(2) To take measures to strengthen the control of conflict of interests within its organization (i.e., imposing a reporting or control mechanism of transaction with related party of person holding a management positioned.)

In addition, if there is any corrupt act occurring within the business, managers of the company (such as the General Director, CEO, CFO etc.,) may also be held responsible.

Furthermore, the AC Law 2018 and Decree 59 now provide specific the measures to handle the violations in these entities. If any corrupt act occurs within the business:

(1) The public company/credit institution shall be imposed an administrative fine (by competent authorities); and

(2) The managers of such company/institution need to be disciplined or imposed penalties by the company/institution in accordance with the charter of such company/institution (NB: there must be clear regulation to discipline or penalize the company/institution’s manager in this regards for strict compliance with this requirement under AC Law 2018 and Decree 59).

In case such public company/credit institution does not impose any measure to handle the violation of its managers, competent authorities have discretionary power to publicly disclose the name, address and (description of) the violation of such person.

Decree 59 also sets out inspection mechanism for competent authorities to conduct inspection on the implementation of AC Law’s requirements applicable to private enterprises. Specially, public companies and credit institutions shall be inspected on the compliance with transparency and conflict of interest regulations under the AC Law 2018. However, the inspection shall not be conducted on regular basis, as competent authorities must rely on clear basis to support an inspection decision:

(1) If there is clear sign of failure to comply with regulations and law on corruption precautions;

(2) If there is report or claim on violations of the enterprises.

 Remarks With the adoption of the AC Law 2018 and the Decree No. 59/2019/ND-CP, this is the first time that private sector has become the subject to be governed by Vietnam’s anti-corruption legislations.


This Decree comes into force from August 15, 2019.









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