Is it a fraudulent misappropriation of bank assets?

Currently, the need to borrow money through the policy of each bank in accordance with the Civil Code, the Law on Credit Institutions and the relevant current legal documents, this is an era regulation. However, borrowing money from a bank that is then incapable of payment can conclude that the inability to pay the bank is a crime of fraudulent appropriation of bank assets? We - DFC's team of lawyers and legal consultants would like to send to you the following article to answer the above questions as follows:

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Legal grounds

• The 2015 Criminal Code, amended in 2017 by the National Assembly of the Socialist Republic of Vietnam;
• Civil Code 2015 of the National Assembly of the Socialist Republic of Vietnam;

Contents of consultation

Fraudulent appropriation of bank assets is one of the crimes in the operation of banks in particular and credit institutions in general. Generally, in the relevant laws, there are sanctions against individuals or organizations borrowing money without paying. In particular, there are two main types of restrictions: criminal and civil.

1. Criminal arbitration - appropriation of bank assets in accordance with the 2015 Criminal Code amended in 2017

Compared to the previous provisions of the 1999 Criminal Code amended and supplemented in 2009, the 2015 Amendment of the Criminal Code in 2017 specified in detail and clearly constituted crimes, typically crimes related to the appropriation of property.

It's impossible for a person to make a loan through a bank. Based on the Law on Credit Institutions 2010 amendments in 2017, when an individual or an organization borrows money at a bank, they must adopt a loan contract. This is the key to distinguish between the crimes of appropriation of property in accordance with the provisions of criminal law with each other.

Borrowing money from a bank without paying if it constitutes a crime will not be a crime of fraudulent appropriation of property because this appropriation factor occurs after the application of a loan contract where the fraudulent appropriation of property is formed before the fraud occurs. Therefore, according to the provisions of the 2015 Criminal Code amended in 2017, it constitutes a crime of abusing trust in appropriating property as prescribed in Article 175.

Specifically, according to Article 175 of the Penal Code 2015 amended in 2017, if the value of borrowed assets from VND 04 million or more to less than VND 50 million or less than VND 04 million has been sanctioned for administrative violations related to acts of appropriation of property or has been convicted of crimes in criminal groups of appropriation nature through a loan contract in one of the following cases:

- Using deceitful tricks to appropriate such property (such as giving children that money to buy a house, make a house ...) or the time limit for returning the property despite conditions, ability but deliberately not paying;

- Used such property for illegal purposes (such as gambling, drug trafficking...) resulting in the inability to return the property.

In addition to being criminally sanctioned, people who commit acts of appropriating bank assets must also take civil liability in accordance with law.

2. Civil-based restrictions - insufficient elements const in constding crimes of appropriation of property

If the borrower cannot pay the bank's money without showing signs of criminality of abusing trust in appropriating such assets, he/she shall only be held civilly liable. For example, the reason the person can not pay is the economic reason (due to loss of business, unsuccessful investment ...).

Based on Article 466, 468 of the Civil Code in 2015, the borrower must be obliged to pay. In case of overdue non-payment but the parties do not have an agreement on overdue interest, the overdue interest amount is equal to 10%/ year.

In this case, the borrower shall only be held civilly liable, including the responsibility for paying interest as well as paying the correct amount of the original amount without being criminally liable.

Hope the above article is useful to you! Sincerely.