Clarity, Consistency, and Practicality Needed in Administrative Penalty Regulations for Construction Violations, Says VCCI

Providing feedback on the Draft Decree on Administrative Penalties for Construction Violations (the Draft), the Vietnam Chamber of Commerce and Industry (VCCI) has submitted several critical comments to the drafting agency. These recommendations focus on clarifying the scope of application, refining penalty principles, reviewing inconsistent behaviors, and ensuring legal consistency. These improvements aim to enhance the Draft’s effectiveness and transparency in practice.

According to VCCI, Clause 2, Article 2 of the Draft lists organizations established under the Law on Investment, including domestic and foreign investors (excluding individuals) and economic entities with foreign investment. However, the Law on Investment does not regulate the establishment of economic entities. Investors identified under this law establish entities following the Enterprise Law, as stated in Clause 2(a). VCCI suggests removing Clause 2(c) to align with existing legal frameworks.

Regarding penalty principles, Clause 6, Article 4 addresses violations of both land and construction laws. VCCI notes ambiguity in whether construction violations are penalized for projects on land used correctly or incorrectly. This vagueness creates legal loopholes and may confuse local authorities. Clarifying this provision is essential for practical enforcement.

VCCI also highlights issues with penalizing acts of a civil nature. Typically, disputes in such cases are resolved through civil law, allowing affected parties to sue for damages. Penalizing these acts under administrative law is inappropriate. VCCI recommends removing provisions related to breaches of joint venture contracts, construction agreements, and real estate transactions, as these fall under civil law jurisdiction.

Clause 1, Article 73 penalizes land transferors who fail to monitor transferees’ compliance with construction timelines, designs, and permits. VCCI argues this is impractical, as transferors cannot compel transferees to build based on capital availability or other constraints. Non-compliance with construction regulations should be penalized under planning laws instead. VCCI suggests removing this clause.

Overlaps with existing laws are another concern. Article 15 penalizes unauthorized project adjustments and insufficient funding, which are already covered by Decree 122/2021/NĐ-CP on investment. Similarly, Clause 1, Article 41 penalizes delayed urban development projects, duplicating penalties in Clause 3(c). VCCI recommends removing Clause 2 and 3(c) of Article 15, as well as Clause 1 of Article 41, to avoid redundancy.

Clause 4, Article 66 penalizes misuse of condominiums for activities like karaoke or repairs without safety compliance. VCCI argues these acts are already regulated under specialized laws on security, fire safety, and environmental protection. Including them in the Draft creates unnecessary overlap. VCCI proposes removing Clause 4, Article 66.