Remedial measures are the costliest part of an administrative land-violation penalty decision — the fine is paid once, but an order to restore the land to its original state can mean demolishing buildings, relocating assets and re-levelling the site. For FDI enterprises leasing land for factories, understanding this mechanism lets them price legal risk before signing.
What remedial measures are and when they apply
Under the 2012 Law on Handling Administrative Violations (amended 2020), besides fines, competent authorities may impose remedial measures to eliminate the consequences of a violation. In land, the current framework is Decree 123/2024/ND-CP (issued 4 October 2024, effective the same day, replacing Decree 91/2019/ND-CP and Article 1 of Decree 04/2022/ND-CP). The core distinction: fines punish past conduct; remedial measures repair the present — returning land to its lawful pre-violation state.
Typical remedial measures in land
Decree 123/2024/ND-CP pairs each measure with violation groups: (1) restoring the land’s original pre-violation state — for land destruction or wrong-purpose use; (2) returning encroached or illegally occupied land; (3) disgorging illegal gains, e.g. rent collected from encroached land; (4) demolishing illegally built structures. In practice (1) and (4) hit enterprises hardest: a factory built for a purpose inconsistent with the land-use purpose can be ordered fully demolished, with demolition and production-downtime costs borne by the enterprise.
Deadlines and compulsory enforcement
The completion deadline is set in each penalty decision — there is no one-size number, since violations differ. The general framework: the 2012 Law on Handling Administrative Violations (amended 2020) sets a 10-day execution period from receipt of the decision, unless the decision states a longer period. Past that, authorities organise compulsory enforcement of the decision, with all enforcement costs charged to the violator. Bluntly: stalling does not erase the obligation; it only inflates the bill.
What FDI enterprises should do
Risk usually sits not in the enterprise’s own violations but in leasing land whose owner already violated — e.g. a plot illegally levelled or built on. Before signing: ask the local land authority about the plot’s penalty and remediation history; insert lessor warranties on the plot’s legal status and indemnities if remedial measures are later imposed. Once cited, the smart move is voluntary compliance within the decision’s deadline — it avoids enforcement costs and counts in the enterprise’s favour if the fine itself is appealed.
Frequently asked questions
1. What does an order to restore the land’s original state mean?
It compels the violator to return the land to its pre-violation condition: re-levelling excavated ground, demolishing illegal structures, ending wrong-purpose use — applied under Decree 123/2024/ND-CP according to the violation group.
2. If the violator does not comply, who enforces and who pays?
The State organises compulsory enforcement of the penalty decision under the Law on Handling Administrative Violations; all enforcement costs are charged to the person enforced against, on top of the remediation duty itself.
3. What if a solid building exists and the original state cannot be restored?
The law grants no “already built” exception: demolition and restoration are still required. Where a structure can be regularised — e.g. an approved change of land-use purpose — remediation may take another form decided by the competent authority, but that is a rare exception, not an automatic right.
4. How long is the deadline for completing remediation?
Each penalty decision sets its own deadline; the general framework of the Law on Handling Administrative Violations is 10 days from receipt of the decision, unless a longer period is stated. Read the deadline in your own decision instead of borrowing another case’s experience.
Key takeaways for investors
- Remediation usually costs more than the fine: demolition, land return, disgorgement of illegal gains.
- Current framework: Decree 123/2024/ND-CP (from 4 October 2024, replacing Decree 91/2019).
- The decision sets the deadline; stalling triggers compulsory enforcement at the violator’s expense.
- FDI tip: check the plot’s violation history before leasing; put warranties in the lease.
