1. Regarding the responsibility and authority to determine asset value
Clause 1, Article 49 of the Draft Law on Amendments, which provides for the determination of the value of exhibits and means used in administrative violations as a basis for identifying the applicable fine bracket and sanctioning authority, currently stipulates:“Where it is necessary to determine the value of exhibits or means used in an administrative violation as a basis for identifying the fine bracket and sanctioning authority, the person competent to handle the case must determine the value of such exhibits or means and shall bear responsibility for that determination.”
Accordingly, the Draft Law requires that the competent person “must determine the value of the exhibits or means and shall bear responsibility for that determination,” but it does not specify that the determination of the value of violating assets must be made in the form of an administrative decision issued by the competent sanctioning authority as a legal basis for identifying sanctioning competence and the applicable penalty framework.
Meanwhile, Clause 4, Article 55 of the 2023 Law on Prices provides, with respect to valuation certificates and valuation reports issued by valuation enterprises:“A valuation certificate and valuation report shall be used as one of the bases for clients and relevant organizations and individuals specified in the valuation contract to consider, decide on, or approve the value of the asset.”
Pursuant to Clause 1, Article 64 of the 2023 Law on Prices, which provides for the notification of valuation results and valuation reports issued by the State Valuation Council: “The notification of valuation results and the valuation report of the State Valuation Council shall be used as a basis for advising competent agencies, organizations, or persons to consider and decide on or approve prices in accordance with relevant laws.”
Accordingly, valuation results issued by a valuation enterprise or by the State Valuation Council constitute only one of the bases for a competent person to consider and decide on the asset value; they do not substitute for the decision of the person handling the administrative violation. In this context, the Law on Handling of Administrative Violations should expressly codify the procedure for issuing a decision on the value of violating assets, either as a standalone administrative decision or incorporated into the administrative sanctioning decision. Such a document would serve as procedural evidence in the case file, establish the legal basis for applying the appropriate fine bracket and determining sanctioning competence, and ensure transparency prior to the issuance of the official sanctioning decision.
Where the asset value stated in the written record, the notification issued by the State Valuation Council, or the valuation certificate indicates that the value exceeds the sanctioning competence of the handling authority, procedures must be promptly completed to transfer the case file to the authority with proper jurisdiction in accordance with the law.The subsequently competent authority, if satisfied that the valuation or appraisal basis contained in the case file is reliable and procedurally compliant, may rely on such valuation grounds as documented in the file to issue a decision on the value of the violating assets.
In practice, many violating assets, once valued, are found to exceed the sanctioning competence of the initial handling authority and therefore must be transferred to the appropriate level. However, transferred case files often lack clearly defined administrative procedural components. The initial determination of asset value (if made without proper competence) frequently remains only at the stage of valuation results as provided in Clauses 2 and 3 of this Article, attached to the transferred file without the issuance of a formal decision approving the asset value.It is therefore necessary to provide clear legal provisions on whether the valuation results obtained at the earlier stage may continue to be used by the competent authority receiving the case, or whether a re-valuation must be conducted to ensure procedural legality and legal certainty.
2. Grounds for Valuation of Violating Assets
The valuation of assets with large or complex value requires a minimum period of time to be carried out. However, Clauses 2 and 3 of Article 49 of the Draft Law are currently overly concise and unclear, lacking a clear presentation of this procedure. The amended provisions should specify more clearly the responsibilities and procedures for determining the value of exhibits as follows:
First: Compliance with the asset valuation procedure for administrative violations under the Law on Prices, through a Valuation Council, is mandatory to ensure legal validity. However, guidance is needed on a simplified procedure for urgent cases or for common exhibits of low value. It is necessary to provide for mandatory temporary seizure of exhibits in cases where the value of the violating assets cannot be determined at the time of handling or where the case is complex and requires comparison and verification against actual production scale. Temporary seizure is a prerequisite to preserve the condition of the assets, serving the valuation process conducted by the Valuation Council or a valuation organization within the statutory time limit.
Second: Where the person competent to handle the violation considers that the information on the value of the violating assets provided (including contract prices, invoices, import declarations, production costs, etc.) is sufficiently reliable, or where there is an available price for similar assets issued by a state authority that may serve as a basis for determining the value of the violating assets, a decision on the value of the violating assets may be made without the need to issue a decision on temporary seizure.
The use of the price stated in a valuation certificate should not be included in this section, because in terms of handling time (if no decision on temporary seizure has been issued), there would not be sufficient time to obtain a valuation certificate, while no provision specifies the entity responsible for providing such certificate within this short timeframe.
It is necessary to add the following cases: For violating assets that are finished products not yet sold, their value shall be determined based on production cost; for unfinished goods, the value shall be the accumulated production costs formed up to the time of handling, based on information provided by the violator. The 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 this source of information shall only apply where the competent person assesses that such information is highly reliable and that direct verification against the actual production scale at the site is unnecessary. The person providing the information shall bear full responsibility for the accuracy of the information provided.
Third: Where the assets are of large value, involve multiple categories of complex goods, or where the information provided regarding the violating assets is not sufficiently reliable, the person competent to handle the violation must issue a decision on temporary seizure of the violating assets in order to have sufficient time to carry out the determination of asset value in accordance with subsequent procedures.
The time limit for temporary seizure for valuation purposes not exceeding 10 working days may result in insufficient time for implementation. Adequate time must be calculated to establish a Council, hire consultants, conduct valuation in accordance with Valuation Standards, and even carry out quality inspection, verification of origin, and meetings to approve the results. The Law should provide additional time for handling cases involving complex, high-value assets, which may extend up to 30 days.
Clauses 2 and 3 of Article 49 of the Draft Law are currently overly concise and unclear regarding this procedure. The amended Law should more specifically provide for the responsibilities and procedures for determining the value of exhibits in the following cases:
- Where the violating assets do not have any of the grounds specified in Clause 1 of Article 49, or where the person competent to handle the violating assets determines that the available information is not sufficiently reliable, the competent person shall issue a decision on temporary seizure of the violating assets and establish a Valuation Council in accordance with the Law on Prices to determine the asset value as a basis for deciding the value of the violating assets, specifically:
+ The Council shall consist of the person issuing the temporary seizure decision as Chairperson, and representatives of the finance authority and the specialized authority at the same level as members, in accordance with the provisions of the Law on Prices on State valuation; the Council shall be responsible for conducting the asset valuation in full compliance with the Law on Prices.
+ The Council shall have the authority to hire an independent valuation organization 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 notification of the valuation results to provide the person competent to handle the administrative violation with a basis for deciding the asset value for the application of relevant legal 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, in the case of counterfeit goods, substandard goods, or prohibited goods, there may be no market information or insufficient grounds for adjustment to the violating assets, resulting in the inability to find a valuation enterprise willing or able to provide valuation services. The Law should provide flexible provisions allowing State valuation bodies and valuers to rely on comparable market information to have sufficient grounds to conduct valuation/appraisal as follows:
+ For counterfeit goods and substandard goods: Apply the market price of genuine goods or goods with equivalent functions and technical specifications at the place where the violation is detected.
+ For prohibited goods: Use the market price of genuine goods or goods with equivalent functions and technical uses, with adjustments for location and timing of sanctioning.
3. Funding for Valuation Activities
Clear provisions are needed regarding costs for valuation activities and for the inspection of quality, origin, and provenance of violating assets in order to ensure funding for asset valuation activities and to support the person competent to handle administrative violations in determining asset value as a basis for administrative sanctions, specifically as follows:
- Annually, authorities competent to handle administrative violations under this Law shall be responsible for preparing recurrent expenditure estimates for administrative sanctioning activities, based on their assigned scope and level of responsibility, to cover expenses for valuation of violating assets, operation of Valuation Councils, hiring valuation services, quality inspection of assets, verification of asset origin, etc. In cases where costs exceed the approved estimates, other funding sources may be temporarily used to promptly meet work requirements, and supplementary budget estimates shall be prepared in a timely manner.
- Where the value of the violating assets, after valuation, exceeds the sanctioning competence of the handling authority, settlement of valuation expenses shall be conducted by the authority that initially hired the valuation service; the valuation dossier shall be transferred together with the administrative violation case file to the authority with proper jurisdiction.
Standardizing the valuation procedure in Article 49 of the Draft Law will not only help remove procedural bottlenecks for executive authorities but also ensure consistency among specialized laws, particularly the Law on Prices. Such standardization is not merely a technical solution but also a legal safeguard for public officials, enabling them to confidently make decisions based on scientific and transparent grounds.
It is hoped that these practical recommendations will be considered by the Drafting Committee, thereby contributing to the improvement of the legal framework on handling administrative violations and enhancing the rigor and effectiveness of state management in the coming period.
Ngo Gia Cuong
Director
Vietnam Valuation and Inspection Company Limited (VAI)
