In a highly competitive business environment, the provision of unauthorized services entails significant risks and serious legal consequences for both providers and customers (clients). To clarify this issue, NPLaw analyzes the relevant legal provisions governing unauthorized services and highlights potential legal consequences, thereby helping individuals and organizations comply with the law and protect their legitimate rights.
I. Current situation of providing unauthorized services
In today’s business market, certain service sectors are prohibited from profit-making activities unless specifically approved by competent authorities. However, in practice, many individuals and organizations still engage in business activities without proper authorization. What does the law stipulate in such cases? Let us examine this issue further with NPLaw.
II. Legal provisions on providing unauthorized services
1. What is the provision of unauthorized services?
Clause 9, Article 3 of the Law on Commerce 2005 defines “service provision” as a commercial activity under which one party (the service provider) is obliged to perform services for another party (the customer), who in turn is entitled to receive the payment and use the services as agreed.
Current legislation does not explicitly define “the provision of unauthorized services,” but it does regulate prohibited business services, restricted business services, and conditional business services. Pursuant to Article 76 of the Law on Commerce 2005:
- Prohibited business services: Services not permitted for business operation;
- Restricted business services and conditional business services: Services that may only be provided if both the services and providers satisfy the statutory conditions.
Accordingly, unauthorized service provision may be understood as engaging in services that are prohibited, restricted, or conditional, without meeting the required legal conditions or obtaining authorization from competent authorities.
2. Fines for providing unauthorized services
Pursuant to Clause 2, Article 4, and Clauses 3 and 4, Article 16 of Decree No. 122/2021/ND-CP, engaging in investment or business activities in prohibited service sectors is subject to an administrative fine ranging from 200,000,000 VND to 300,000,000 VND, along with remedial measures such as termination of the business activity and reimburse of illegal gains.
In addition, Clause 3, Article 6 of Decree No. 98/2020/ND-CP (as amended by Decree No. 17/2022/ND-CP) provides for fines of 10,000,000 VND to 15,000,000 VND for the following violations:
- Conducting business in conditional service sectors without a business license;
- Conducting business in conditional service sectors with an expired license;
- Conducting business in conditional service sectors without satisfying statutory business conditions.
Thus, any merchant, individual, or organization providing unauthorized services such as prohibited, restricted, or conditional services without compliance shall be sanctioned accordingly.
3. Categories of unauthorized services under Law
Articles 6 and 7 of the Law on Investment 2020 provide the list of prohibited, restricted, and conditional business sectors:
Prohibited business activities include:
- Trade in narcotics (Appendix I);
- Trade in certain chemicals and minerals (Appendix II);
- Trade in specimens of wild plants and animals of natural origin as prescribed in Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora; specimens of endangered, precious and rare Group I forest plants, forest animals and aquatic products of natural origin as prescribed in Appendix III of this Law;
- Trade in prostitution;
- Trade in human, and human tissues, corpses, organs, or fetuses;
- Human cloning-related business activities;
- Trade in fireworks/explosives;
- Debt collection services.
Conditional business sectors (Appendix IV) include: Pawn services, massage services, security services, accounting, auditing, tax and customs services, valuation, commercial inspection, vocational skill assessment, labor safety inspection, employment services, etc.
Accordingly, the provision of unauthorized services is stated in the List of conditional or prohibited service industries mentioned above.
III. Questions on providing unauthorized services
1. What fines apply if services are provided without meeting statutory conditions?
As per Clause 3, Article 6 of Decree No. 98/2020/ND-CP (as amended by Decree No. 17/2022/ND-CP), fines of 10,000,000 VND – 15,000,000 VND are applied to entities:
- Operating in conditional business sectors without licenses;
- Operating with expired licenses;
- Failing to maintain statutory conditions during business operations.
Accordingly, under Clause 4, Article 7 of Decree No. 12/2022/ND-CP, providing employment services without an operating license may result in fines of 45,000,000 VND – 60,000,000 VND, along with remedial measures.
2. What is the fine for providing travel services without a license?
According to point d, Clause 14, point a, Clause 16 of Article 7, and Clause 2, Article 5 of Decree No. 45/2019/ND-CP, fines range from 90,000,000 VND – 100,000,000 VND for engaging in travel service business without a travel service license. In addition, violators must return illegal profits obtained from unauthorized operations.
3. What are conditional business sectors, and how are they related to unauthorized service provision?
Pursuant to Article 7 of the Law on Investment 2020, conditional business sectors are those requiring compliance with necessary conditions for reasons of national defense, security, public order, social morality, or community health.
Therefore, unauthorized service provision includes services in conditional sectors where legal requirements are not satisfied.
4. Can unauthorized service provision be subject to criminal liability?
According to Clauses 3 and 4, Article 16 of Decree No. 122/2021/ND-CP, engaging in business in prohibited service sectors incurs administrative fines of 200,000,000 VND – 300,000,000 VND, with remedial measures of termination of unauthorized services and return of illegal profits.
While administrative sanctions are the primary enforcement mechanism, if the unauthorized provision of services satisfies the elements of a criminal offense as defined under criminal law, criminal liability may arise.
5. How are individuals providing unauthorized services via social media sanctioned?
Individuals engaging in unauthorized service provision through social media are subject to administrative fines. Specifically, under Clauses 2, 3, and 4 of Article 16 of Decree No. 122/2021/ND-CP, fines range from 200,000,000 VND to 300,000,000 VND, with remedial measures including cessation of the business activity and return of illegal gains.
IV. Legal consultancy on unauthorized service provision
The above constitutes NPLaw’s legal analysis on providing unauthorized services. Should you have any further inquiries or require legal assistance in this matter, please contact NPLaw directly.
