As global trade increases rapidly, in addition to the flows of legal trading moving globally, illegal business activities of transnational criminals are globalized, increasingly expanding their areas and taking advantage of markets. In addition, the internet has increased developments in technology and social media has made communication across countries much easier, which in turn also facilitates a much larger scale for fraudsters targeting millions of potential victims globally. Cross-border crimes are rapidly increasing, especially drug trafficking and highly profitable crimes such as firearms trafficking, human trafficking, money laundering, international economic crime, and high-tech crime. In addition, many other illegal trade activities are also appearing and increasing, such as trade in rare animals, artworks, stolen antiquities, and cross-border crimes related to credit cards.
Transnational criminal organizations fully exploit international deregulation, border controls, and the promotion of freedom to expand their reach in many countries around the world; colluding with each other more often and more closely, to take advantage of the strengths, and limit the weaknesses of each organization, divide criminal activities and reduce the risk of detection.
1. Introduction
Cross-border crimes are rapidly increasing, especially drug trafficking and highly profitable crimes such as firearms trafficking, human trafficking, money laundering, international economic crime, and high-tech crime. In addition, many other illegal trade activities are also appearing and increasing, such as trade in rare animals, artworks, stolen antiquities, and international crime related to credit cards.
The flows of people, money, and goods moving from one country to another in the context of globalization and international economic integration are favorable conditions for criminals to expand their activities such as smuggling, trafficking of women and children, and sending people abroad to reside and work illegally.
Transnational criminal organizations fully exploit international deregulation, border controls, and the promotion of freedom to expand their reach in many countries around the world; colluding with each other more often and more closely, to take advantage of the strengths, and limit the weaknesses of each organization, divide criminal activities and reduce the risk of detection.
2. Cross-Border Crime Situation in Vietnam
In the past years, the cross-border crimes situation related to Vietnam has also tended to increase gradually in terms of both the number of cases, their nature and severity, and especially the activities of cross-border organized criminal groups. Highlighted are:
2.1 Crime of trafficking Vietnamese women and children abroad
This type of crime is increasingly complicated and tends to increase with many new and more sophisticated tricks, such as fake marriages, taking advantage of visa exemptions, and using fake passports to smuggle people into the country.
Vietnamese women and children go abroad to work in prostitution, are sold as foreign wives, exploited as labor, etc., concentrated in a few countries and territories such as Russia, China, Hong Kong, Korea, Taiwan, Cambodia, Malaysia, and Singapore.
2.2 Crime of sending people abroad illegally
Scam activities to bring Vietnamese people abroad to reside and work illegally have also tended to increase and involve mainly sending Vietnamese people to Eastern Europe, Western Europe, Northeast Asia (Japan and South Korea), and Australia as well as countries and territories in the region such as Malaysia, Thailand, and Taiwan.
2.3 Drug crimes
In recent years, the international and foreign-related factors of drug crimes in Vietnam have become clearer. Specialized forces in Vietnam and other countries discovered that many drug offenders were overseas Vietnamese and foreigners entering Vietnam to trade and transport drugs. At the same time, through international cooperation, the functional forces of Vietnam coordinated with the functional forces of other countries to detect and arrest many cases of drug transport from Vietnam to other countries (such as Australia, Canada, New Zealand and the USA) and transporting drugs from abroad into Vietnam (from China, Laos and Cambodia, for example). However, the situation of drug trafficking and transportation from abroad into Vietnam and vice versa is still very complicated, especially over land borders and sea and air routes.
2.4 Crime of producing and trading in counterfeit money, counterfeit goods, commercial fraud, smuggling, economic fraud, import and export tax evasion in free trade economic zones and e-commerce.
The production, transportation, and consumption of counterfeit money (including Vietnamese and foreign currency) is complicated and has increased. The source of fake Vietnamese money is mainly brought into the country from the border area. The offense is established in the way that domestic people often buy counterfeit money in border areas, mainly sourced from foreigners, then bring it inland for consumption.
In addition, some foreigners use fake cheques and credit cards to enter Vietnam to withdraw money. Smuggling and commercial fraud are complicated. The main offenses are transporting goods, especially consumer goods from other countries into Vietnam for consumption, and transporting precious and rare petroleum and forest products from Vietnam to foreign countries taking advantage of the ‘loopholes’ in the law, limitations in management, and control to evade taxes.
2.5 Crime of fraud, appropriation of property
Foreign criminals take advantage of ‘loopholes’ in Vietnam’s regulations on economic management, set up ‘ghost’ companies, and fraudulently appropriate property. Recently, some foreigners have operated in the form of limited liability companies, then appropriated money and fled back to their home or third countries.
2.6 High-tech crime
This type of crime in Vietnam has thrived in recent years with dozens of cases related to taking advantage of stolen credit cards from foreigners via the Internet (ATM Cashout). It is complex with extremely sophisticated technological elements and includes attacks on the websites of businesses, and financial institutions, theft of confidential information, hackers, theft of money through banks using a device, and theft of telecommunications fees.
2.7 Crimes committed by overseas Vietnamese who then fled back to Vietnam
In recent years, in some countries, many Vietnamese criminal gangs have appeared, with activities such as smuggling (drugs and weapons for example), cheating, abduction extortion, murder, robbery, money laundering, and trafficking of women and children.
Through international cooperation, Vietnamese authorities have discovered and arrested many people belonging to overseas Vietnamese criminal gangs that collude with domestic criminals conducting such smuggling activities, illegal money transfers, kidnapping, debt collection, and forming smuggling and human trafficking lines. Most overseas Vietnamese criminal gangs have colluded with criminal gangs in Vietnam and other countries to conduct cross-border criminal activities.
2.8 Crimes committed by foreigners in Vietnam
Currently, there are nearly 400,000 foreigners living in Vietnam (of which Chinese, Taiwanese, and Korean nationals account for about 40 percent). Many foreigners enter Vietnam to carry out new criminal activities such as credit card fraud, fraud through the implementation of economic contracts via the Internet, high-tech crimes, etc.
3. Vietnam’s Current Relevant Regulatory Framework
Vietnamese law has domesticated most of the content recognized in ASEAN conventions on cross-border crimes. As required by the ASEAN Convention against Trafficking in Persons, Especially Women and Children (‘ACTIP’). Vietnam has criminalised acts such as human trafficking, corruption, legalization of property acquired by crime, and acts of obstructing judicial activities.
Similarly, by the provisions of ACCT, Vietnam has also criminalized the crime of terrorism, terrorist financing, money laundering, and other acts related to this crime. In addition, several other cross-border crimes such as drug crimes, high-tech crimes, and weapons trafficking are also criminalized under Vietnam’s criminal law.
In the spirit of preventing and combating cross-border crimes in the region, besides the promulgation of legal regulations, Vietnam has constantly launched programs and action plans to effectively implement crime prevention and control. Although the country has paid much attention to building the legal system related to cross-border crime prevention and control, there are still many shortcomings, lack of synchronization and lack of a system, requiring further research to supplement and amend the current regulations to suit international law in general and ASEAN law, in particular:
3.1 Specialised legal documents on the prevention and combat of some typical regional cross-border crimes such as terrorism financing, high-tech crimes, and pivacy crimes have not been developed yet
The act of financing terrorism is an act as dangerous as the criminal acts of terrorism. However, Vietnam does not have any separate law regulating this issue; it is only mentioned in a few laws by the Ministry of Finance, the criminal law; the Law on Anti-Terrorism; the Law on Anti-Money Laundering, etc. Moreover, piracy is also a dangerous crime. Criminal acts are also quite common in the region and high-tech crimes are becoming more and more complicated.
However, Vietnam’s law only provides regulations on the punishment for this type of crime, but there are no other regulations on detecting, warning, or coordinating to prevent and handle such crimes in a specific way. In addition, the provisions of Vietnamese law on cross-border crimes have not yet fully codified the provisions of the legal documents of ASEAN, such as the Law on Prevention and Control of Terrorism 2013 which does not have provisions on ‘refugee status’ or ‘rehabilitation program for offenders’. Meanwhile, these are regulations that ACCT requires countries to take appropriate measures to enforce.
3.2 Some regulations of Vietnamese law are not compatible with international and regional laws on national crime prevention and control
Regarding the provisions of the crime of trafficking in persons, ACTIP also covers the trafficking of a child or person who is unable to care for or protect themselves because of a physical or mental disability or condition considered to be particularly vulnerable. Therefore, when committing a crime against these individuals, it is considered as one of the aggravating circumstances to impose a heavier penalty than a normal crime.
However, at present, Vietnamese law only stipulates children be considered particularly vulnerable people; there is no other provision for aggravating circumstances for crimes involving victims who are incapable of taking care of or protecting themselves because of a disability or physical or mental condition.
For example: Article 151 of the Criminal Code 2015 regarding the trafficking of a person under 16 years old.
In addition, the ACTIP defines ‘a child as any person under the age of 18’, while Vietnamese law defines ‘a child as a person under the age of 16’. That is why Vietnam’s Criminal Code 2015 stipulates that the crime of trafficking in people from 16 to under 18 years old is a common human trafficking crime without having to trade in children as prescribed in the ACTIP. This shows that the Criminal Code of Vietnam has the policy to deal with the crime of trafficking in persons from 16 to under 18 years old in Article 150 which is not compatible with international treaties of which Vietnam is a member.
In addition, according to the provisions of the ACTIP, ‘Trafficking in persons is the recruitment, transportation, transfer, harboring or receipt of persons for..’. Thus, the acts specified in the ACTIP that constitute the crime of human trafficking, such as the act of transferring, receiving, recruiting, transporting, and harboring are independent of each other. When any of these acts are committed for the Convention, it constitutes a crime of trafficking persons.
However, the Vietnam Criminal Code 2015 has a completely different stipulation, that is, recruiting, transporting, harboring other people to perform acts, transferring or receiving people to deliver or receive money and property or other material benefits; the transfer or receipt of a person for sexual exploitation, forced labor, organ removal or other inhumane purposes, constitutes a crime of human trafficking.
The ACTIP requires its members to adopt legislative and other measures as appropriate so that those who commit crimes are subject to more severe penalties than would otherwise be the case for ordinary crimes in one of the following aggravating circumstances:
• When the crime causes serious injury or death to the victim or another person, including when the person dies by committing suicide.
• When the crime involves a victim who is a particularly vulnerable person such as a child or who is unable to take care of or protect themselves because of a disability or physical or mental condition.
• Crimes expose victims to life-threatening diseases, including HIV/AIDS.
• Committing crimes with multiple victims.
• When the crime is committed as part of an organized crime group’s activities.
• When the offender has been convicted of the same or similar crime.
• When the offender is a public servant who abuses his position or power to commit a crime.
However, in both Articles 150 and 151 of the Criminal Code 2015, the aggravating penalty frame has not been applied to the circumstances required by the Convention, for example, circumstances when the offender is a public official or circumstances of causing victims infected with dangerous diseases such as HIV/AIDS. In addition, Article 150 and Article 151 provide inconsistent aggravating circumstances.
For example, Article 51 contains the circumstance of ‘abusing position and rights’, but Article 150 does not so stipulate. Therefore, this issue should be considered and a relevant adjustment to the prevailing Criminal Code should be made based on the ACTIP.
In addition, the ACTIP provides that its members consider, through legislative or other appropriate measures, permitting victims of trafficking to remain in their territories, either temporarily or permanently, on a case-by-case basis. Up to now, Vietnamese law has only assisted in arranging temporary accommodation for victims. The lack of specific provisions on assisting trafficked persons to remain in its territory permanently can make it difficult for victims in certain circumstances. For example, trafficked children are children who have been kidnapped and sold since birth. It is difficult to determine their hometown and origin, so it is difficult to return them to their homeland.
Furthermore, the ACTIP provides that its members consider not imposing penalties or administrative liability on a trafficked person for his or her unlawful conduct if such illegal acts are the direct consequences of human trafficking. This is also an important issue to ensure the legitimate rights and interests of victims, but this issue has not been recognized by Vietnamese law so far. After being trafficked, victims are mostly dependent on criminals, easily exploited by them, and required to perform illegal acts.
For example, trafficked persons should not be punished for immigration fraud, working illegally, or working in the sex industry. This consideration and recognition of these rights is necessary for the specific situations of trafficked children and others with special protection needs. If the provision of criminal and administrative liability for such acts would be unfair to victims, it would also make them hesitate to report crimes by traffickers or cooperate in giving testimony and evidence related to the crime.
3.3 The international legal basis
In the area of extradition agreements, bilateral agreements on this issue are still modest, especially since there is no basis for cooperation with some ASEAN countries with large numbers of Vietnamese working and living there. Moreover, some documents have been signed for a long time and need to be amended and supplemented accordingly. It is worth noting that Vietnam currently affirms not to apply many multilateral international treaties to which Vietnam is a member (such as the United Nations Convention against Corruption and the United Nations Convention against Transnational Organized Crime) as a direct legal basis for extradition activities but must apply those provisions following the basic principles of the national legal system and on the principle of reciprocity. This will significantly limit the possibility of cooperation in arresting and transferring criminals between Vietnam and the member countries of the conventions, including ASEAN countries.
3.4 Coordination between Vietnam’s central agency and ASEAN agencies
Practice shows that the coordination relationship between Vietnam’s central agency on the implementation of cooperation in crime prevention and control (extradition, mutual legal assistance in criminal matters, and the transfer of persons sentenced to imprisonment) and the corresponding agencies of ASEAN countries is not close and effective. There is still a lack of information on contact points, making information exchange and cooperation requirements difficult. Some countries request that the request for cooperation be transferred through diplomatic channels, which takes a long time.
4. The Role of Lawyers in Helping Clients Identify Behaviour and Implement Effective Enforcement Actions Against Cross-Border Fraud
4.1 Introduction
In the practice of law in Vietnam, the participation of lawyers in the investigation and handling of cross-border crimes is still limited and not conclusive. During this stage, the role of the investigating agency and mutual legal assistance between the state agencies of the concerned countries plays a significant part.
However, the role of lawyers cannot be denied in the preparation and negotiation stage for several cross-border crimes of trading transactions such as the purchase and sale of goods, transactions of shares, and capital contributions between enterprises (‘M&A transactions’). As cross-border trading transactions or M&A transactions are always risky, even companies that regularly conduct M&A activities, with a large and elite team of M&A developers, cannot be completely sure to anticipate all possible risks encountered. The complexity and risks of M&A transactions require companies to consult with experienced lawyers.
In these transactions, lawyers will be involved in legal due diligence to determine the legal status of the seller or buyer and review the activities of the seller/buyer to determine the suitability of the conditions and standards as prescribed by law. In addition, there will also be the participation of an audit firm or experts with specialized functions to conduct due diligence and investigation of issues related to finance, accounting, commerce, information technology, intellectual property, etc. From there, it is possible to detect current or potential risks to provide important insights and necessary warnings about signs of fraud and dishonesty for clients to consider.
4.2 Legal Due Diligence
Lawyers will review in general and give expert legal opinions on the implementation of M&A transactions. In other words, lawyers will:
- Play the role of strategic consultant and may also be involved in negotiations as requested and proposed by clients in the first stage.
Specifically, the lawyer will analyze the potential of clients based on tangible and intangible aspects such as vision, strategy, brand, exclusive products, human resources and ability to be listed on the stock exchange. Accordingly, it will help clients to exactly identify their capacity and position in conducting M&A transactions appropriately and effectively.
- Help clients determine the accuracy of the information.
There will be a lot of information that should be carefully considered while conducting M&A transactions or cross-border trading transactions because when any information about both the buyer and the seller appears, it can affect the success of the M&A transactions or cross-border trading transactions. Therefore, the lawyer will be able to assess the accuracy and reliability of the information given to help clients make the right decisions and take the right steps in the actual situation.
- Analyse and forecast potential risks
Risk forecasting will determine the success of M&A transactions or cross-border trading transactions. Especially in M&A transactions, risks can still occur after the transaction is completed. Some of the risks considered by lawyers may be the prediction of non-depreciable assets, doubtful debts, or cash flows from the sale of fixed assets that are not commodities. In addition, the risk related to personnel instability is also an aspect related to M&A transactions that should be raised as after the M&A transaction is made, key officials are no longer interested in the company, which will affect the sustainable development of enterprises.
- Support on drafting necessary meeting minutes, memoranda of understanding, sale and purchase contracts, and internal governing documents related to the change of capital structure and number of members or shareholders.
4.3 Financial Due Diligence
Lawyers will cooperate with financial professionals to verify the financial information provided, evaluate the underlying business activities of the target business as well as check compliance with accounting standards. Accordingly, lawyers will coordinate the assessment of income, assets, liabilities, cash flow, loans as well as the internal control system of the target business based on the following documents: financial statements, accounting balance sheets, agreements, profit/loss records, taxation applications, reports on business results and activities, etc.
4.4 Other Due Diligence
Lawyers will cooperate with professionals to verify the environment in which the buyer/seller is operating, such as assessing clients, competitors, business sectors, prospects, and risks as well as evaluating the assumptions used in developing the business plan. The assessment is often based on the SWOT analysis model: Strengths, Weaknesses, Opportunities, and Threats.
- Regarding tax due diligence, lawyers may coordinate in assessment of relevant taxes, compliance records, tax status, tax planning, tax incentives, and tax risks.
- Regarding IT due diligence, lawyers may coordinate in assessment of accounting software, enterprise-wide management systems, internal servers, software, and network systems.
- Regarding intellectual property due diligence, lawyers may coordinate the assessment of property titles by certificate of ownership, use rights, certificate of copyrights, patents, industrial designs, and trade secrets.
4.5 Conclusion
Although Vietnam has made efforts to sign and join international treaties related to crime prevention and control, within ASEAN there is no such agreement on extradition.
5. Suggestions for Improvement
From the experience of some countries and the implementation of the ASEAN community’s law on the prevention and combat of cross-border crimes in Vietnam, some recommendations for Vietnam can be summarised and highlighted as follows:
5.1 Developing specialised legal documents on several specific cross-border crimes and mutual criminal justice assistance
It is necessary to develop specialised legal documents to clearly define the measurement for crime prevention and control in a general way, such as the Law on Prevention and Control of Terrorism 2013; the Law on Prevention and Combat of Human Trafficking 2011, and the Law on Drug Prevention and Control 2008. Only these specialised laws can internalise all provisions of international conventions on crime prevention and control, such as crime prevention measures, information communication, mechanism building, and victim support.
In the context of the current complicated developments in the financing of terrorism, high-tech crimes, and piracy, Vietnam should quickly develop specialised legal documents to regulate these types of crimes to create a solid and specific legal basis for the fight against cross-border crimes. There should be separate laws on mutual legal assistance in civil matters, mutual legal assistance in criminal matters, extradition, and the transfer of persons serving prison sentences. This will help specify in detail the order, procedures, principles, and conditions to implement mutual assistance for each field as above; to better define the competence, responsibilities, and coordination relationship between the competent authorities in the process of carrying out activities related to mutual criminal justice assistance, meeting the requirements specified in the ASEAN Agreement on Mutual Legal Assistance in Criminal Justice 2004.
5.2 Completing the content of legal provisions on combatting transnational crime prevention to be compatible with ASEAN legal documents
To improve the effectiveness of transnational cross-border crimes prevention and control as well as increase the compatibility of Vietnamese law with the ASEAN community’s law on the fight against cross-border crimes, Vietnam should actively research and improve its provisions in specialized legal documents for each specific type of crime. For example, regarding the crime of human trafficking, it is necessary to supplement regulations to protect the legitimate rights and interests of victims, specifically:
- Add provisions on crimes involving particularly vulnerable victims, including people who are unable to take care of or protect themselves because of a disability or physical or mental condition.
- Promulgate provisions to assist trafficked persons to remain in their territory indefinitely in certain specific circumstances.
- Add provisions that do not impose penalties or administrative responsibilities on trafficked persons for their illegal acts if such illegal acts are the direct consequences of human trafficking.
For terrorist crimes, the legislative body should consider amending a few regulations to identify terrorist crimes in accordance with international treaties to which Vietnam is a member, such as the group of acts related to aircraft and infringing on civil aviation safety, the group of acts infringing upon the safety of navigation and fixed structures on the continental shelf and the group of acts related to illegal use of dangerous weapons and explosives.
5.3 Refining the legal institutions on transnational crime prevention and control
From the experience of two other countries in the region (Cambodia and the Philippines), Vietnam should build specialised national committees responsible for managing activities to prevent and combat specific types of crime. At the same time, in addition to the Drug Crime Investigation Police Department and the High-Tech Crime Prevention and Control Police Department, it is necessary to set up other specialized police departments such as the Investigation Police Department to prevent and fight human trafficking and the Police Department for preventing and fighting terrorist crimes.
5.4 Strengthening skills and improving the quality of law enforcement officers and civil servants
To achieve high results in cooperation in the fight against crime, Vietnam needs to focus on improving the knowledge and skills of officials, civil servants, and public employees working in the field of transnational crime prevention and control (such as foreign language skills, computer skills, and professional knowledge) to exchange information and data quickly and efficiently, especially in the context of ASEAN where the only regional administrative language is English.
In addition, it is necessary to promote cooperation activities outside the ASEAN region, strengthen the organization with conferences, seminars, training courses, and multilateral and bilateral forums on the content of international treaties related to cooperation activities, and share, consult on experiences, improve qualifications and the capacity for specialised staff to meet the increasing requirements of international cooperation on the prevention and the control of transnational crime among ASEAN countries.
5.5 International treaties and participation in ASEAN forums
The promotion and strengthening of negotiation, signing, accession, and well-organized implementation of international treaties on the prevention and control of ASEAN transnational cross-border crimes, especially the General Convention on Extradition and Convention on drug crime prevention, is important.
In addition, Vietnam should continue to keep an active and proactive role in maintaining its participation in annual regional forums such as ASEANAPOL (ASEAN Conference of Police Commanders), Ministerial Conference on Combating Transnational Organized Crime (AMMTC), COMMIT (Ministerial Coordination Initiative in the Prevention and Combat of Human Trafficking in the Mekong Sub-region) and ASOD (Annual Meeting of ASEAN Senior Officials on Drug Issues) to further promote coordination in formulating cooperation policies, as a foundation for the implementation and negotiation of international treaties in each specific area.
5.6 Cooperation mechanism between ASEAN central agencies
Vietnam should do its best to push other member states to build an effective cooperation mechanism between the central agencies of ASEAN countries in the implementation of international treaties on crime prevention and control; to notify and regularly update information about the central authority (address, phone number, contact officer, request forms for mutual legal assistance, etc.) of member countries, building common data for mutual legal assistance in criminal matters, the extradition and transfer of sentenced persons to countries in the region, ensuring the elements of speed, accuracy and efficiency.
6. Conclusion
As cross-border organized crimes continue to evolve with increasingly sophisticated methods, Vietnam faces significant challenges in its efforts to integrate economically with the world. The complexity of these criminal activities, aiming at political, economic, and social objectives, poses a real test for law enforcement agencies both regionally and globally. The spread of fake news and misinformation further complicates the public security landscape, undermining social stability and public trust.
Moreover, the exponential growth in e-commerce transactions and digital payments has opened new avenues for high-tech criminal activities. These crimes, characterized by their evolving nature and increasing severity, directly impact various aspects of social life and present substantial obstacles to preventive measures.
In response to these emerging challenges, it is imperative for Vietnam to actively refine its legal framework, aligning it closely with international treaties and agreements. By doing so, Vietnam can enhance its legislative and enforcement capabilities to effectively tackle cross-border crimes. Additionally, developing comprehensive plans and strategies for crime prevention and control is crucial in the context of globalization and international economic integration. These efforts will not only safeguard the nation’s security and economic interests but also contribute to regional and global stability in the face of evolving transnational criminal threats.
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IPBA Journal | Cross-border fraud - Law and investigations in Vietnam
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