Penalties for Unlicensed Chemical Business

The penalties for unlicensed chemical business are specified in Vietnam’s current legal framework. Violations concerning the trade of restricted and conditional chemicals are subject to strict administrative sanctions. Businesses must understand these penalties and remedial measures to ensure legal compliance. This analysis details the current fines and provides guidance on handling violations.

Primary Fines for Unlicensed Chemical Business

The primary financial penalties for violations involving chemicals are designed to ensure adherence to legal standards and control high-risk chemical activities.

For Restricted Chemicals in the Industrial Sector

Operating a business involving chemicals on the List of restricted chemicals without a valid license constitutes a serious violation. This activity affects national security and environmental safety. The government, through Decree No. 71/2019/ND-CP and Decree No. 17/2022/ND-CP, sets penalties based on the scale and hazard level of the chemicals.

According to Article 17, Clause 6 of Decree No. 71/2019/ND-CP, specific sanctions for violating licensing regulations for restricted industrial chemicals are as follows:

A fine ranging from VND 20,000,000 to VND 25,000,000 is imposed for producing or trading restricted industrial chemicals without the required license. This penalty also applies to entities that continue operations while their license is suspended or revoked by a competent authority.

This substantial fine underscores the government’s firm stance on controlling high-risk activities. The regulation serves not only as a punishment but also as a deterrent, compelling organizations to strictly adhere to licensing requirements and uphold safety and accountability in the chemical sector.

For Conditional Chemicals in the Industrial Sector

Trading chemicals on the List of conditional chemicals without a Certificate of Eligibility is a violation under Decree No. 71/2019/ND-CP. These are hazardous chemicals that demand strict technical safety controls during production and commerce. Violations are often identified during inspections by regulatory bodies.

According to Article 16, Clause 6 of Decree No. 71/2019/ND-CP, the specific penalties are:

A fine ranging from VND 15,000,000 to VND 20,000,000 is imposed for producing or trading conditional industrial chemicals without a Certificate of Eligibility. This also applies to continuing operations during a suspension period or after the certificate has been revoked.

Supplementary Penalties and Remedial Actions

Beyond financial fines, a business in violation must face supplementary penalties and implement corrective measures. These actions ensure legal compliance and protect public health and the environment.

As stipulated in Article 16, Clause 8, and Article 17, Clause 8 of Decree No. 71/2019/ND-CP, the required remedial actions include:

• Immediate Cessation of a Violation: The enterprise must halt all illegal chemical production and business activities at once. This is an urgent requirement to prevent potential hazards.
• Environmental Protection Measures: The business must implement necessary environmental safety protocols, such as collecting and treating hazardous waste from the illegal operations.
• Payment for Remediation and Damages: If the violation causes environmental pollution or damages, the business is liable for all remediation costs. It must also compensate affected organizations and individuals as required by environmental protection laws.
• Disgorgement of Illicit Profits: The business is compelled to surrender all illegal profits obtained from the violation. This measure removes the economic incentive for non-compliance and ensures fairness in administrative enforcement.

These comprehensive consequences ensure that accountability extends beyond financial penalties to address the full impact of the violation.

Legal Recourse for Disputing a Penalty

If an organization or individual disagrees with an administrative penalty decision, the law provides channels to protect their legal rights and interests.

Administrative Complaint

You have the right to file a complaint under the Law on Complaints 2011. According to Article 9 of this law, the complaint must be filed within 90 days of receiving the penalty decision.

The initial complaint resolution process, per Article 28 of the Law on Complaints 2011, may take 30 to 45 working days, depending on the case’s complexity. The resolving authority can uphold, amend, or annul the penalty decision.

If the initial complaint is not resolved within the specified timeframe, or if you disagree with the outcome, you have the right to file a second complaint within 30 days (or 45 days for remote areas). This second complaint must be sent to the higher-level competent authority along with the initial decision and relevant documents.

Legal Action (Lawsuit)

If the complaint process is exhausted and you remain dissatisfied, you can file an administrative lawsuit at a competent People’s Court, as governed by the Law on Administrative Procedures. This is the final step to defend your business’s legal interests. The lawsuit petition must be prepared with specific details and supporting evidence.

The litigation process proceeds as follows:

• Petition Review: The Court reviews the petition within 3 working days of receipt and assigns it to a Judge.
• Court Fee Notice: If the case is accepted, the petitioner has 10 days to pay the advance court fee and submit the receipt.
• Case Acceptance: The Court officially accepts the case and notifies all relevant parties.
• Trial Preparation (up to 4 months): The Judge builds the case file, gathers evidence, and organizes a conciliation session to facilitate dialogue between the parties.
• Conclusion of Preparation: The Judge will then decide to either bring the case to trial, temporarily suspend it, or terminate it.

Expert Recommendations for Chemical Business Operations

To mitigate risks when engaging in the chemical business, especially with restricted substances, strict adherence to legal regulations is paramount. Industry experts advise proactive research into business conditions and penalty regulations.

Compliance with Justifiable Penalties

Upon receiving a penalty decision, conduct an objective assessment of the violation and the applied fine. Complying with a proportionate penalty saves time, reduces costs, and avoids further legal complications. A cooperative attitude can also build a positive relationship with regulatory authorities for future interactions.

Appeals or lawsuits are generally advisable only when there is clear evidence of procedural errors or excessive fines. The success rate for such actions is often low due to the specific nature of chemical regulations. The financial and time investment in litigation can exceed the initial fine. Instead of litigation, prioritize completing the licensing application to resume operations legally.

Proper Licensing and Registration

To avoid the penalties for unlicensed chemical business, complete all licensing procedures as required by the Law on Chemicals 2007 and its guiding documents. Prepare a thorough and accurate application dossier to prevent delays.

The application for a License to Produce or Trade Restricted Chemicals typically includes:

• An application form
• A copy of the Business Registration Certificate
• An environmental impact assessment report and other technical qualification documents.

After licensing, the business must operate strictly within the terms of the license and submit periodic reports. Any changes to location, scale, or chemical types require approval from the competent authority.

>>> See more at: Vietnam Chemical Business License Guide [2025]

Consulting Services from Long Phan Consulting Company

Long Phan Consulting Company offers expert consulting services on all matters related to the chemical business, including penalty assessments and licensing support. Our experienced legal team provides optimal solutions for your business needs.

Our specialized support includes:

• Determining the appropriate license type for your specific operations.
• Assisting in the preparation of a complete and accurate application dossier.
• Representing your business in dealings with government authorities.
• Tracking the application process to ensure timely completion.
• A commitment to fast, efficient, and successful outcomes.

Frequently Asked Questions (FAQ)

What regulations govern the penalties for unlicensed chemical business?

The primary regulations are Decree No. 71/2019/ND-CP and Decree No. 17/2022/ND-CP issued by the Government of Vietnam.

What is the fine for trading restricted chemicals without a license?

The fine is from VND 20,000,000 to VND 25,000,000, according to Article 17, Clause 6 of Decree No. 71/2019/ND-CP.

What is the penalty for trading conditional chemicals without a Certificate of Eligibility?

The fine is from VND 15,000,000 to VND 20,000,000, according to Article 16, Clause 6 of Decree No. 71/2019/ND-CP.

Besides fines, what other remedial measures are imposed?

Violators must cease operations, implement environmental protection measures, pay for remediation and damages, and surrender any illegal profits.

Can a business appeal an administrative penalty decision?

Yes, a business has the right to file a complaint within 90 days of receiving the penalty decision, as stipulated by the Law on Complaints 2011.

Conclusion

Understanding the penalties for unlicensed chemical business is critical for any enterprise in this sector. Strict adherence to laws on licensing and chemical safety is essential to avoid severe consequences. Long Phan Consulting Company is ready to assist your business with all related matters. Contact us via hotline 1900.63.63.89 for professional support from our team of leading experts.