To strengthen law enforcement in the land management sector, the Government has promulgated Decree No. 123/2024/ND-CP (“Decree No. 123”) on October 4, 2024. ATA Legal Services has summarized the key changes and implications of this new regulation as follows [1]:
1. The Decree supplementing the provisions on defining and apportioning illegal profits in cases involving multiple violators.
Pursuant to Decree No. 123 Article 6.1, "Illegal gains" are defined as "the monetary value of benefits obtained by an organization or individual as a result of committing an administrative violation in the land sector, derived from the use of land after the violation, which must be paid into the state budget."
If multiple entities or individuals are involved in an administrative violation on a single piece of land, the illegal profits derived from such violation shall be divided equally among them.
2. Engaging in land use activities before the physical transfer of land, despite having received a state decision to grant or lease, is considered a land encroachment offense.
To enhance land management, Decree No. 123 also imposes strict penalties for individuals and organizations who use land that has been allocated or leased by the State but has not yet been physically handed over. Violators may face a maximum fine of up to 500 million VND for individuals and 1 billion VND for organizations if the encroached area is 2 hectares or more.
3. Adding provisions to penalize the illegal conversion of other types of land into land for large-scale concentrated livestock farming projects
For large-scale concentrated livestock farming projects, Decree No. 23 imposes a maximum fine of up to 100,000,000 VND for the unauthorized conversion of land into livestock farming land, starting from 1 hectare.
4. Introducing additional penalties for economic organizations and individuals who violate land use regulations, specifically for those who receive transferred agricultural land use rights without a proper land use plan or those who exceed the limit for rice land use without forming a required economic organization.
For economic organizations acquiring agricultural land use rights without an approved land use plan from the District People's Committee, the maximum penalty for this violation can reach up to 200,000,000 VND for areas of 3 hectares or more.
Individuals who, without being directly involved in agriculture, receive a transfer or gift of rice land in excess of the quota and fail to establish an economic organization shall be subject to a penalty ranging from 50,000,000 VND to 100,000,000 VND.
5. Introducing new regulations imposing administrative penalties on those who receive land use rights for socio-economic development projects without obtaining prior approval from the provincial People's Committee.
According to Article 127.3.c of the Vietnamese Land Law 2024, one of the conditions for land use to implement socio-economic development projects through an agreement on the receipt of land use rights is that there must be a written approval from the Provincial People's Committee regarding the agreement on the receipt of land use rights for the project.
Consequently, Article 23 of Decree No. 123 introduces a new provision imposing a penalty on those who receive land use rights for socio-economic development projects without the required approval from the provincial People's Committee. The maximum penalty for violations involving 2 hectares or more is 200,000,000 VND.
6. A significant increase in administrative penalties for violations involving agricultural land.
Compared to the administrative penalties for land encroachment and occupation as stipulated in Decree No. 91/2019/ND-CP ("Decree No. 91") on administrative sanctions in the land sector, Decree No. 123 has made significant changes to the maximum penalties for violations involving agricultural land. Notably:
+ The conversion of paddy fields to residential land within a commune now carries a higher maximum fine of 150-200 million VND for plots of 0.1 hectares or more, compared to the previous fine of 120-250 million VND for larger plots of 3 hectares or more under Decree 91;
+ Converting non-rice agricultural land to residential land within a commune is subject to a fine. For plots of 0.1 hectares or more, the maximum penalty is VND 100,000,000 to VND 150,000,000. This is a lower fine compared to the VND 100,000,000 to VND 200,000,000 penalty stipulated in Decree No. 91 for larger areas of 3 hectares or more…
Decree No. 123 takes effect from October 4, 2024.
[1] Please note that unless specified differently, all penalties mentioned in this bulletin refer to individuals. Organizations will be subject to penalties twice the amount imposed on individuals.
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