Vietnam Introduces New Penalties for Customs Violations Under Decree 169, Enhancing Corporate Compliance

Effective July 1, 2026, Vietnam's government has implemented Decree 169/2026/ND-CP, replacing previous frameworks and marking a significant overhaul of the nation's customs penalty system. This new decree impacts a wide range of stakeholders, including importers, exporters, export processing enterprises (EPEs), FDI manufacturers, authorized economic operators (AEOs), and customs brokers. Key changes introduced by Decree 169 include broader circumstances for administrative penalty exemptions, particularly for timely and compliant corrections of customs declarations. This encourages businesses to review and refine their amendment and finalization procedures to leverage these provisions. Conversely, the decree introduces new administrative penalties for several previously unpenalized customs compliance breaches. Notably, inconsistencies among Bill of Materials (BOM), consumption norms, inventory, and finalization reports are now subject to sanctions, especially for EPEs and export manufacturers. This expansion necessitates a thorough review of existing compliance procedures. The decree also supports the digitalization of customs enforcement by allowing electronic issuance of violation records and penalty decisions. Businesses must ensure robust management of electronic accounts, digital signatures, and document retention for inspection purposes. Furthermore, Public Security authorities are granted expanded powers to handle customs-related violations, including imposing fines of up to VND 200 million and confiscating goods. The penalty calculation framework has been revised, with fines starting from the midpoint of the applicable range and adjusted based on mitigating or aggravating factors. Fines for organizations are double those for individuals. Statutes of limitations for penalty imposition and tax recovery have been clarified: five years for tax evasion not rising to criminal prosecution, and two years for other customs violations. However, tax recovery for underpaid, exempted, reduced, refunded, or evaded taxes can extend up to 10 years. Regarding retroactivity, violations committed before July 1 but discovered afterward will be judged under Decree 169 if it offers more lenient treatment. Cases with existing penalty decisions or pending appeals under old rules will continue under those regulations. For importers and FDI manufacturers, reconciling customs declarations with ERP systems, accounting records, and inventory is crucial to avoid escalating into tax-shortfall analysis. Promptly addressing discrepancies among BOM, consumption norms, and finalization reports is vital for EPEs and export manufacturers. Decree 169 offers relief for minor errors but strengthens enforcement through electronic procedures and expanded authority for Public Security. Businesses must prioritize accurate data reconciliation, stringent control over electronic notifications, and adaptation to these updated regulations to ensure compliance.