Vietnam reduces penalties for illegal currency exchange
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Vietnam has significantly lowered penalties for illegal currency exchanges following outrage over a man being fined VND90 million ($3,900) for exchanging $100 last year.
The fine was revoked after a public outcry erupted over disproportionate punishment.
An individual or a shop illegally exchanging up to $1,000 will receive a warning instead of a fine of up to VND100 million ($4,300), according to a new government decree set to take effect December 31.
The fine will increase progressively, with a maximum penalty of VND100 million levied for illegally exchanging more than $100,000, the decree says.
Illegal exports and imports of currency will be fined up to VND250 million ($10,800).
The legal amendments come after a resident of the southern city of Can Tho was fined VND90 million ($3,900) in October 2018 for exchanging a $100 note at a gold shop.
It is a common practice for Vietnamese citizens to exchange currencies at local gold shops that offer better prices than banks, even though very few of the shops are licensed exchangers.
Can Tho authorities revoked the punishment after Deputy Prime Minister Truong Hoa Binh said such a heavy fine should be reviewed, and lawyers and lawmakers also said it was unreasonable?
However, the province confiscated the $100 note from the man, an electrician who makes VND4 million ($171) a month.
Questions & Answers
Q.What led to Vietnam revising its penalties for illegal currency exchange?
What led to Vietnam revising its penalties for illegal currency exchange?
The change followed a public outcry last year when a man was fined VND90 million for exchanging $100. This disproportionate punishment was widely criticised, prompting authorities to review the existing regulations.
Q.How do the new regulations affect someone illegally exchanging a small amount of foreign currency?
How do the new regulations affect someone illegally exchanging a small amount of foreign currency?
Under the new decree, an individual illegally exchanging up to $1,000 will now receive a warning instead of a fine. This is a significant reduction from the previous maximum fine of VND100 million.
Q.Why do Vietnamese citizens often exchange currency at gold shops instead of banks?
Why do Vietnamese citizens often exchange currency at gold shops instead of banks?
It is a common practice because local gold shops frequently offer better exchange rates than banks. This happens despite very few of these shops being officially licensed currency exchangers.
Q.What was the final outcome for the man who was initially fined for exchanging $100?
What was the final outcome for the man who was initially fined for exchanging $100?
Can Tho authorities revoked the VND90 million fine after public and official pressure. However, the province did confiscate the $100 note from the electrician, who earns VND4 million monthly.
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