1. On responsibility and competence to decide asset values
Clause 1 of Article 49 of the Draft Law on the determination of the value of exhibits and means used in administrative violations as a basis for determining the fine bracket and sanctioning competence currently provides: “Where it is necessary to determine the value of exhibits and means used in administrative violations as a basis for determining the fine bracket and sanctioning competence, the person with competence who is handling the case must determine the value of the exhibits and means and must bear responsibility for such determination”.
Accordingly, while the Draft requires that the value of the exhibits and means be determined and that responsibility be borne for such determination, it does not stipulate that the decision on the value of the violating assets must be made in the form of an administrative decision issued by the competent authority handling the case, to serve as the basis for determining sanctioning competence and the applicable sanctioning bracket.
Clause 4 of Article 55 of the Law on Prices 2023 on valuation certificates and valuation reports of valuation enterprises provides: “Valuation certificates and valuation reports shall be used as one of the bases for customers and relevant organizations and individuals specified in valuation contracts to consider, decide on, or approve the prices of assets”.
Clause 1 of Article 64 of the Law on Prices 2023 on notices of valuation results and valuation reports of the State Valuation Council provides: “Notices of valuation results and valuation reports of the State Valuation Council shall be used as a basis for advising competent agencies, organizations, and persons to consider and decide on or approve asset prices in accordance with relevant laws”.
Thus, valuation results issued by valuation enterprises or the State Valuation Council constitute only one of the bases for competent persons to consider and decide on asset prices, and do not substitute for the decision of the person handling the administrative violation. In this regard, the Law on Handling of Administrative Violations should codify clear procedures for issuing a decision on the value of violating assets, either as an independent decision or incorporated into the administrative sanctioning decision. Such a document serves as professional evidence in the case file, establishes the legal basis for applying the sanctioning bracket and determining sanctioning competence, and ensures transparency prior to the issuance of the official sanctioning decision.
Where the asset value stated in the record or in the notice of the State Valuation Council or the valuation certificate indicates that the asset value exceeds the handling competence, procedures for transferring the case file to the authority with adequate competence must be promptly completed in accordance with the law. The subsequent competent authority, if it finds that the valuation/price determination grounds in the file are reliable and compliant with procedures, may use such valuation grounds contained in the file to issue a decision on the value of the violating assets.
In practice, many violating assets, once their value is determined, exceed the handling competence, requiring the case file to be transferred to the appropriate authority. However, transferred files often lack a clearly defined administrative procedural component. The initial determination of the value of the violating assets (where it is beyond the original handling competence) is limited to the valuation results provided for in Clauses 2 and 3 of this Article, which are enclosed with the transferred file, without the issuance of a decision approving the value of the violating assets. There is therefore a need for provisions clarifying whether valuation results from the previous stage may continue to be used or whether re-valuation is required, and related issues.
2. Grounds for determining the value of violating assets
The valuation of assets of large value or a complex nature necessarily requires a minimum period of time for implementation. However, Clauses 2 and 3 of Article 49 of the Draft are currently overly concise and conflated, failing to clearly reflect the valuation process. The amended provisions should therefore set out more specific rules on responsibilities and procedures for determining the value of exhibits as follows:
First, compliance with the asset valuation procedures for administrative violations under the Law on Prices through a valuation council is a mandatory requirement to ensure legality. Nevertheless, guidance is needed on a simplified procedure applicable to urgent cases or cases involving common exhibits of low value. It should be mandatory to temporarily seize the exhibits where the value of the violating assets cannot be determined at the time of handling or where the case is complex and requires cross-checking and verification against actual production scale. Temporary seizure is a prerequisite for preserving the current condition of the assets, serving the valuation work of the council or valuation enterprises within the statutory time limits.
Second, where the competent person handling the violation considers that the information provided on the value of the violating assets (including contract prices, invoices, import declarations, cost prices, etc.) is sufficiently reliable, or where officially issued prices of similar assets by state authorities are available and may serve as a basis for determining the value of the violating assets, such value may be decided without issuing a decision on temporary seizure of the violating assets.
The use of prices stated in valuation certificates should not be incorporated into this part, because in terms of handling time (where no decision on temporary seizure has yet been issued), it would not be feasible to obtain a valuation certificate in a timely manner, while the Draft does not specify the entity responsible for providing a valuation certificate within such a short timeframe.
Additional cases should be provided for, namely: where the violating assets are finished products that have not yet been sold, their value shall be determined as production cost; where the goods are unfinished, their value shall be determined as the aggregation of production costs incurred up to the time of handling, based on information provided by the violator. Information provided by the violator must be accompanied by accounting records or documents evidencing actual costs consistent with the assets subject to handling. However, the use of such information shall apply only where the competent person assesses that it is highly reliable and that direct cross-checking with actual production scale at the site is unnecessary. The information provider shall bear full responsibility for the accuracy of the information supplied.
Third, where the assets are of large value, involve multiple categories of complex goods, or where the information provided on the violating assets is not sufficiently reliable, the competent person handling the violation must issue a decision on temporary seizure of the violating assets in order to have sufficient time to determine their value through subsequent procedures.
A temporary seizure period for valuation purposes not exceeding 10 working days may be insufficient in practice. Adequate time is required to establish a valuation council, engage consultants, conduct valuation in accordance with valuation standards, and possibly carry out quality appraisal, origin verification, and meetings to approve valuation results. The law should therefore allow a longer handling period in cases involving complex assets of large value, which may extend to no more than 30 days.
At Clauses 2 and 3 of Article 49 of the Draft, the process is currently presented in an overly concise and conflated manner. The amended law should therefore provide more specific provisions on responsibilities and procedures for determining the value of exhibits in particular cases as follows:
- Where the violating assets lack any of the grounds specified above (in Clause 1 of Article 49), or where the competent person authorized to handle the violating assets considers that the available information is not sufficiently reliable, the competent person authorized to handle the violating assets shall issue a decision on temporary seizure of the violating assets and establish a Valuation Council in accordance with the Law on Prices to conduct valuation as a basis for deciding the value of the violating assets, specifically:
+ The Council shall comprise the decision-maker on temporary seizure as the Chairperson, and representatives of the finance authority and specialized authority at the same level as members, in accordance with the Law on Prices on State valuation; the Council shall be responsible for conducting asset valuation strictly in accordance with the Law on Prices.
+ The Council shall have the right to engage an independent valuation enterprise to determine the market value of the violating assets. Based on the valuation results, the Council shall convene a meeting, prepare minutes of the meeting, and issue a notice of valuation results so that the competent person handling the administrative violation has a basis to decide the asset value for the purpose of applying the relevant provisions.
Fourth, provisions on valuation and appraisal of violating assets in special cases. Under the Vietnamese Valuation Standards, valuation requires identifying identical or similar assets. However, for counterfeit goods, substandard goods, and prohibited goods, market information may be unavailable or insufficient to adjust to the violating assets, resulting in the inability to identify valuation service providers. The law should provide open provisions allowing State valuation/appraisal and valuers to rely on comparable market information to have sufficient grounds for valuation/appraisal as follows:
+ For counterfeit goods and substandard goods: apply the market price of genuine goods or goods with equivalent functions and technical characteristics at the place where the violation is detected.
+ For prohibited goods: use the market price of genuine goods or goods with equivalent functions, technical characteristics, and uses, with adjustments for costs related to location and time of sanctioning.
3. Funding for valuation activities
There should be clear provisions on funding for valuation activities, quality appraisal, and determination of origin and provenance of violating assets, in order to ensure adequate financial resources for asset valuation and to support competent persons handling administrative violations in deciding asset values as a basis for imposing administrative sanctions, specifically as follows:
- On an annual basis, authorities competent to handle administrative violations under this Law shall be responsible for preparing estimates of recurrent expenditures for administrative sanctioning activities within their assigned scope and competence, to cover costs for valuation of assets involved in administrative violations, operation of valuation councils, engagement of valuation service providers, quality appraisal of assets, appraisal of asset origin and provenance, and related activities. Where actual expenses exceed the approved estimates, other funding sources may be temporarily used to meet urgent operational requirements, and supplementary budget estimates shall be promptly prepared.
- Where the value of the violating assets, after valuation, exceeds the handling competence, final settlement of valuation expenses shall be conducted by the authority that initially engaged the valuation service. The valuation dossier shall be transferred together with the administrative violation handling file to the authority with proper competence.
Standardizing the valuation procedures in Article 49 of the Draft not only helps remove operational bottlenecks for executive authorities, but also ensures consistency among specialized laws, particularly the Law on Prices. Such standardization is not merely a technical solution, but also a form of legal protection for public officials, enabling them to confidently make decisions based on scientific and transparent grounds.
It is hoped that these practice-oriented contributions will be taken into consideration by the Drafting Committee, thereby helping to improve the legal framework on handling administrative violations and, in turn, enhancing the rigor and effectiveness of state administrative governance in the coming period.
Ngo Gia Cuong
Vietnam Valuation and Appraisal Company Limited (VAI)
