On 29 March 2021, the Government issued Decree No.38/2021/ND-CP prescribing penalties for administrative violations involving cultural and advertising activities (Decree 38). It replaces the previous Decrees No. 56/2006/ND-CP and No. 158/2013/ND-CP. Decree 38 will enter into force on 1 June 2021,

The range of administrative violation categories under Decree 38 spreads from film production, cultural heritage to advertisement. However, in this legal update, we will set out the most remarkable points regarding the penalties and remedies applicable to notable administrative violations in the cultural and advertising field.

1. Scope and Definitions

Compared to the previous decrees, Decree 38 contains a more detailed scope of entities to be governed by it:

- Vietnamese organisations and individuals that commit administrative violations in the field of culture and advertising in Vietnam and abroad; and

- Foreign organisations and individuals that commit administrative violations in the field of culture and advertising on Vietnam’s territory; and

Decree 38 stipulates explicitly that the organisations as mentioned above include, among others, Vietnamese and foreign enterprises along with their representative offices or branches, international organisations and foreign organisations in Vietnam, and foreign cultural institutions in Vietnam and their branches.

Decree 38 also lists out specific forms of sanctions, supplementary penalties, and more remedy measures for the violated parties to bear, which were not clearly set out under the previous decrees.

Please note that most of the penalties fines rate set out under Decree 38, and as mentioned in this legal update, are applicable to violating parties being an individual only, except for specific cases listed in Decree 38. The rate applicable to violating organisations will be twice the amount for individuals.

2. Violation in the Cultural Field

Decree 38 introduces a new sanction regarding the operation of the Vietnam representative office of foreign cinematographic establishments . As of now a representative office might be subject to multiple monetary fines if it is operating in Vietnam without the statutory operational license or not in accordance with the registered contents stated in the granted license. In addition to the monetary fine, the representative office might also face the risk of having its license temporarily revoked in case its operation does not comply with the contents of its license.

3. Violation of Advertisement Regulations

Under Decree 38, the Government has increased many monetary fines for existing violations and added new violations regarding advertisements. Some remarkable points:

3.1 General Advertisement Regulations

The Government has significantly increased from VND 40,000,000-50,000,000 (~USD1,700-2,200) to VND 50,000,000-70,000,000 (~USD2,200-3,000) for violations in advertising products and services already being banned from advertisement, such as: tobacco and cigarettes, beverages containing at least 15% alcohol, prescription drugs and over-the-counter drugs restricted by the authorities; and the violating party may be requested by to remove, withdraw or delete its violating content from any and all advertisement instruments as a form of remedies.

3.2 Media and E-commerce Sector

The provisions on penalties for violations of regulations on advertisements in online newspapers and websites are most likely to affect enterprises and investors operating in the media and e-commerce sectors. Any Vietnamese advertising service provider failing to report its advertising services for the owner of a foreign website - being a website belonging to the foreign organisation or individual providing cross-border advertising services to Vietnamese users - to the provincial Department of Culture, Sports and Tourism will get a fine from VND 5,000,000-10,000,000 (~USD215-430), which is twice the current fine.

4. Advertisements for Special Products and Services

Pursuant to Decree 38, some special products or services which the government considers having a major impact on public health or national security are subject to specific and separate penalties in case of violations as set out hereafter.

4.1 Content Validation for Advertisement

If the advertisements are for special products and services such as drugs, cosmetics, medical equipment, fertiliser, or healthcare services, and these are published without the competent authority’s validation of content, this will be considered a severe violation. The violating party could be imposed a monetary fine of VND 20,000,000-25,000,000 (~USD860-880). This is an increase from the current fine of VND 5,000,000-10,000,000 (~USD215-430).

In addition, the relevant sub-license might be revoked; and the violator needs to remove the violating content from all advertisement instruments.

4.2 Cosmetic and Beauty Products

By introducing new penalties for violation of product advertisement which are not issued with the template for notification of cosmetic products (Template) or not conform the feature listed in such Template, the government intends to ensure that enterprises will acquire the Template before advertising and commit to the content stated in the Template so as not to violate the regulations. Furthermore, the penalties for violations in advertisement of cosmetic and beauty products have increased significantly comparing to the previous decrees.

4.3 Healthcare Services

Decree 38 clarifies that any form of healthcare service advertisement without the having obtained the required sub-license(s) will be penalised with a fined VND 30,000,000-40,000,000 (~USD1,290-1,720).

In addition, beside the comparable monetary fines as stated in the previous decrees, a supplementary penalty has been added to temporarily revoke the sub-license(s) for operating the healthcare services in case the organisations fail to specify their scope of healthcare operation stated in such sub-license(s) during period the advertisement campaign is running.

5. Conclusion

In light of the complicated situation of the COVID-19 pandemic, a strict policy is important to ensure the public is protected against false and incorrect advertisements in the healthcare sector.

For more information, please contact:

Mark Oakley / Managing Partner  mark.oakley@acsvlegal.com

An Tran / Senior Associate  an.tran@acsvlegal.com

Cuong Ta / Junior Associate  cuong.ta@acsvlegal.com

© 2021 ACS Legal Vietnam Company Limited – All rights reserved.  This legal update is not an advice and should not be treated as such.