Vietnam's Politburo requests prioritizing administrative measures to handle economic violations, instead of criminal prosecution

The Politburo, Vietnam's highest decision-making body, has ordered amendments to legal regulations to ensure that administrative measures are prioritized in handling civil and economic cases.

This will allow businesses and entrepreneurs to proactively address their wrongdoings and remedy damages, the Politburo said in a resolution on private sector development, signed on Sunday by Party chief To Lam.

Legal adjustment is among the solutions set forth in the document to boost the private economic sector.

The resolution says in cases where the practical application of the law could lead either criminal prosecution or non-criminal measures, criminal prosecution must definitely be ruled out.

For cases where criminal prosecution is considered, priority should be given to economic remedial measures first, which serve as an important basis for deciding further actions, according to the resolution.

Legal provisions should not be applied retroactively in a way that disadvantages businesses.

In cases with insufficient or unclear evidence, investigative authorities must reach a conclusion promptly to avoid impacting the reputation and the normal operations of businesses and entrepreneurs.

Additionally, they must uphold the principle of presumption of innocence during the investigation and trial of cases.

The Politburo stated that improving the legal framework aims to create a transparent, open, cost-effective business environment.

Accordingly, administrative procedures will be streamlined towards transparency, digitalization, automation, and the maximization of artificial intelligence and big data.

Authorities aim to cut at least 30% of the time spent on processing administrative procedures and compliance costs, and apply the same margin to business conditions this year.

The freedom to do business, property rights, fair competition, and contract enforcement for the private sector will be safeguarded, the resolution said.

The principle of clearly distinguishing between criminal, administrative, and civil liability, as well as between corporate and individual responsibility, in addressing violations will be upheld.

The Politburo also emphasized the need for the entire political system to adopt a consistent mindset regarding the position and role of the private sector.

The state should play a facilitating and supportive role, without administrative interference in the private sector’s business activities that go against market principles.

Another solution is to accelerate reforms and improve the quality of institutions, the Politburo said, adding that law-making and enforcement mindset should be updated to align with market mechanisms.

There is a need to reduce and eliminate administrative barriers, the 'ask-and-grant' system, and the mindset of banning what cannot be managed.

"Citizens and businesses are free to engage in any profession or industry not banned by the law," the resolution noted.

The right to do business can only be restricted for reasons of national defense and security, public order and morals, environmental protection, and public health, all of which must be specified by law.

A key economic engine

In the resolution, the Politburo affirmed the private sector as a key driver of the economy, and a pioneering force in science, technology, and innovation development.

It plays a central role, alongside the state-owned-enterprise sector and the collective economy, in building an independent, self-reliant, and resilient economy, closely linked with intensive and extensive international integration.

This will help the country avoid the risk of falling behind and advance towards prosperity, the Politburo noted.

Developing the private sector rapidly, sustainably, efficiently, and with high quality is a key, urgent, and long-term strategic task, which should be concretized in the country's development strategies and policies.

This aims to unleash all potential and strengths, especially among the people, to drive socio-economic development, it stated.

The Politburo called for the complete elimination of the 'prejudices against the private sector.' Authorities must encourage entrepreneurial spirit and innovation, while respecting businesses and entrepreneurs.

It also requested ensuring equal competition between private firms and those of other economic sectors in accessing business opportunities and resources such as capital, land, technology, human resources, and data.

Private enterprises should receive favorable conditions to compete regionally and globally, the Politburo added.

Authorities are tasked with devising and refining breakthrough mechanisms and policies to encourage the private sector to engage in priority areas, including research and development, science-technology application, innovation, creative startup, and digital transformation.

Vietnam will focus on training and nurturing a pool of entrepreneurs with ethics, business culture, resilience, intellect, creativity, and a strong resolve to advance, according to the resolution.

Private firms encouraged to join major national projects

Under the resolution, Vietnam aims to quickly form and develop large and medium-sized enterprises, as well as private economic groups of regional and global scale.

The state has mechanisms for restricted bidding or assignment of contracts, along with incentives to encourage the private sector to play a role in strategic sectors and major national projects, such as high-speed rails, urban railways, key industries, energy infrastructure, green transportation, defense industry, and security.

Small and micro enterprises, along with family businesses, will receive substantial and effective support.

Targeting 12% growth

With over 940,000 registered enterprises and more than 5 million family businesses, the private sector is currently contributing around half of the country’s GDP and over 30% of state budget revenue, and employs 82% of the workforce.

By 2030, Vietnam aims to have 2 million enterprises, equivalent to 20 businesses per 1,000 people. Among them, at least 20 large enterprises are expected to participate in global value chains.

Remarkably, the private sector is projected to record an average annual growth rate of around 10-12%, outpacing overall economic growth.

The sector will contribute approximately 55-58% of GDP and 35-40% of state budget revenue and provide jobs for about 84-85% of the workforce by 2030.

The resolution also sets the goal for Vietnam’s private sector to rank among the top three in ASEAN and top five in Asia in terms of technological capacity, innovation, and digital transformation by 2030.

By 2045, the sector is expected grow rapidly, robustly, sustainably, and actively participating in global production and supply chains. Businesses will possess high competitiveness both regionally and internationally. The goal is for Vietnam to have at least 3 million enterprises, contributing over 60% of GDP.