Tiếng Việt
Legal issue:Can a person be found guilty of loan sharking if they loan VND 1.000.000 and receive VND 10.000 in interest per day?
Case 1: Earned an illegal profit from VND 30,000,000 to under VND 100,000,000.
Case 2: Previously incurred a civil penalty for being guilty of loan sharking.
Case 3: Has a previous conviction for the same offense of being guilty of loan sharking that has not been expunged.
Case 4: Collecting illegal profits is from VND 100,000,000 or more.
Case 5: Collecting illegal profit of VND 3.600.000, yet previously incurred a civil penalty for being guilty of loan sharking.
Rules:
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Penal Code in 2015:
“Article 201. Usury in civil transactions
1. Any person who offers loans at an interest rate that is five times or more higher than the maximum interest rate specified in the Civil Code and earns an illegal profit of from VND 30,000,000 to under VND 100,000,000 or previously incurred a civil penalty or has a previous conviction for the same offence which has not been expunged shall be liable to a fine of from VND 50,000,000 to VND 200,000,000 or face a penalty of up to 03 years’ community sentence.
2. If the illegal profit is VND 100,000,000 or over, the offender shall be liable to a fine of from VND 200,000,000 to VND 1,000,000,000 or face a penalty of 06 – 36 months’ imprisonment.
3. The offender might also be liable to a fine of from VND 30,000,000 to VND 100,000,000, be prohibited from holding certain positions or doing certain works for 01 – 05 years.”
1. Any person who offers loans at an interest rate that is five times or more higher than the maximum interest rate specified in the Civil Code and earns an illegal profit of from VND 30,000,000 to under VND 100,000,000 or previously incurred a civil penalty or has a previous conviction for the same offence which has not been expunged shall be liable to a fine of from VND 50,000,000 to VND 200,000,000 or face a penalty of up to 03 years’ community sentence.
2. If the illegal profit is VND 100,000,000 or over, the offender shall be liable to a fine of from VND 200,000,000 to VND 1,000,000,000 or face a penalty of 06 – 36 months’ imprisonment.
3. The offender might also be liable to a fine of from VND 30,000,000 to VND 100,000,000, be prohibited from holding certain positions or doing certain works for 01 – 05 years.”
- Resolution No. 01/2021/NQ-HDTP of December 20, 2021, guiding the application of Article 201 of the Penal Code and the adjudication of criminal cases on usury in civil transactions:
“Article 2. Regarding some terms
1. “Usury” is a case where the lender lends money to the borrower at an interest rate 5 times or more higher than the highest interest rate prescribed in Clause 1, Article 468 of the Civil Code.
In case of lending with other assets (not money), the value of that asset must be converted into money at the time of transferring the borrowed assets when resolving the case.
2. “Illegal profits” are the amount of interest exceeding the highest loan interest rate prescribed by the Civil Code and other illegal income of the borrower.
In case of illegal profits being other assets (not money), they must be converted into money at the time of transferring the borrowed assets.“
- Civil Code in 2015:
“Article 468. Interest rate
1. The interest rate of a loan shall be agreed upon by the parties.
In case the parties have agreed on an interest rate, the agreed interest rate must not exceed 20% of the loan amount per year, unless otherwise prescribed by a relevant law. Based on actual conditions and at the proposal of the Government, the Standing Committee of the National Assembly shall decide to adjust the above said interest rate and report it to the National Assembly at the coming session.
In case the agreed interest rate exceeds the maximum interest rate prescribed in this clause, the excessive interest rate shall be null and void.
2. In case the parties have agreed on payment of interest but not yet determined a specific interest rate and have a dispute over an interest rate, such interest rate shall be determind to be equal to 50% of the maximum interest rate prescribed in clause 1 of this Article at the time of debt repayment.”
Application:
The loan amount is VND 1,000,000 and the interest rate is VND 10,000 per day. Loan interest rate: 0.98% per day, 360% per year. Compared to the highest interest rate in the Civil Code of 20% per year, the loan interest rate of 360% per year is 18 times higher.
Conclusion:
Case 1: Lenders with interest rates of 5 or more times (more than 18 times), collecting illegal profit over VND 30,000,000 but less than VND 100,000,000, are guilty of loan sharking in civil transactions.
Case 2: Lenders with interest rates of 5 or more times (more than 18 times) and previously incurred a civil penalty for being guilty of loan sharking, are guilty of loan sharking in civil transactions.
Case 3: Lenders with interest rates of 5 or more times (more than 18 times), has a previous conviction for the same offense of being guilty of loan sharking that has not been expunged, are guilty of loan sharking in civil transactions.
Case 4: Lenders with interest rates of 5 or more times (more than 18 times), collecting illegal profits is from VND 100,000,000 or more, are guilty of loan sharking in civil transactions.
Case 5: Collecting illegal profit of VND 3.600.000, yet previously incurred a civil penalty for being guilty of loan sharking. There is no criminal record of guilty of loan sharking in civil transactions. There will be no punishment for guilty of loan sharking in civil transactions.