Stubborn firms in the crosshairs

There will be no let-up in the war against enterprises that flout price registration rules.

Deputy Minister of Finance (MoF) Vu Thi Mai early last week signed off on Decision 779/QD-BTC on price and tax regulation inspections for certain key products.

Accordingly, the MoF will inspect 24 enterprises that sell seven kinds of products for which price registration is obligatory. Those are construction steel, liquefied petroleum gas, milk, livestock feed, sugar, cement and fertiliser.

The round of inspections will be carried out from mid-April to early May and last less than 10 days for each company.

MoF’s Financial Inspectorate said the MoF would consider all factors contributing to selling prices for these products as well as factors that directly and indirectly had impacts on input costs such as petrol and oil prices, and the exchange rate.

For this reason the inspections would mainly concentrate on enterprises with large market shares in the seven types of products in question, said the agency.

Meanwhile, the MoF also signalled its tough stance with fines for offending companies set to double in some cases.

Nguyen Tien Thoa, director of the MoF’s Price Management Department, said the MoF was working with other related ministries to sign off on a draft decree on pricing administrative sanctions. “It is unclear when the decree will be released,” he said.

The draft, if approved, will replace Decree 169/2004/ND-CP outlining penalties for violations in the pricing domain as well as certain provisions of Decree 107/2008/ND-CP which details sanctions for goods speculation and hoarding, excessive price hikes, spreading of rumours, smuggling and trade fraud.

Thoa said the draft decree looked at price registration and declaration, calculation rules and raising fines for other violations.

Significantly, some fine levels provided in the draft decree would double existing amounts.

Currently, the minimum fine for price declaration offences stands at VND200,000 ($9.6), while the top limit for other serious violations is set at VND30 million ($1,449).

“The current weak and inadequate sanctions cannot deter violators,” said Thoa.

“Under the draft, besides the fines, non-compliant enterprises may be subject to additional sanctions, including revocation of the business registration certificate. If there are any signals of criminal violations, the MoF will hand the case to the police,” he added.

James Lockett, special counsel at law firm Baker and McKenzie, previously told VIR that the draft decree indicated that management ministries would strongly control price declarations in line with Circular 122/2010/TT-BTC on price stabilisation, effective from October 1, 2010.

Under Circular 122, all enterprises, including private enterprises, are required to register their prices for 17 kinds of goods and services, including petrol, cement, construction steel, liquefied petroleum gas, milk, fertilisers and livestock feed.

Further evidence of MoF’s determination to clamp down on price violations came when Thoa said the MoF’s Price Management Department was working with the General Department of Customs and other related ministries to establish base prices for these 17 items to help determine whether enterprises’ registered prices were reasonable.