Can a Company Face Criminal Prosecution for Illegal Mineral Extraction in Vietnam?

Short answer: Yes — commercial legal entities bear criminal liability under Article 227(4)

Many business owners assume criminal liability for illegal mineral extraction applies only to the individuals who physically dig, dredge or excavate. In reality, Article 227 of the 2015 Penal Code devotes a separate clause (Clause 4) to commercial legal entities, with fines of up to VND 7 billion and suspension of operations for 06 months to 03 years. A company that organises unlicensed extraction can be prosecuted in its own right — and under Article 75 of the Penal Code, the entity’s liability does not exclude the personal liability of its directors or managers.

This article covers: (1) what “illegal” means under Article 227; (2) penalties for individuals; (3) criminal liability of companies; (4) the current licensing legal basis; (5) the administrative–criminal boundary.

Applicable text: the Penal Code as consolidated in 135/VBHN-VPQH (05/9/2025), consolidating Law 12/2017/QH14, Law 59/2024/QH15 and Law 86/2025/QH15 — in force at the time of writing (14/10/2026).

1. What does “illegal” mean under Article 227?

The full offence is “Violation of regulations on research, exploration and exploitation of resources” (Article 227). “Illegal” means extraction without a licence or not in accordance with the licence’s contents.

The scope is broad: acts committed on land, islands, internal waters, the territorial sea, the exclusive economic zone, the continental shelf and the airspace of Vietnam.

Important: Article 227 was not amended by Law 86/2025/QH15 (Law 86/2025 did not list Article 227 among the amended articles) — the penalty brackets below reflect the consolidated, current version.

2. Penalties for individuals

First bracket — a fine of VND 300 million to 1.5 billion or imprisonment of 06 months to 03 years, where: illegal gains are from VND 100 million to under 500 million; extracted minerals are valued from VND 500 million to under 1 billion; bodily injury of 61% or more is caused; or the offender was previously administratively sanctioned for the same act or convicted of this offence without the conviction being expunged.

Second bracket — a fine of VND 1.5 billion to 5 billion or imprisonment of 02 to 07 years, where: illegal gains are VND 500 million or more; minerals are valued at VND 1 billion or more; the act is committed by an organised group; an environmental incident is caused; or death results.

Supplementary penalty (Clause 3): a fine of VND 50 million to 500 million.

3. How companies are held criminally liable — Article 227(4)

This is the key point. Article 76 of the Penal Code lists Article 227 among the offences for which commercial legal entities bear criminal liability. Under Article 75, the conditions are: the act was committed in the entity’s name, for its benefit, and under its direction or approval.

Entity-specific penalties (Article 227(4)):

• Clause 4(a): cases under Clause 1 meeting entity thresholds — e.g. illegal gains from VND 300 million to under 500 million; minerals valued from VND 700 million to under 1 billion; bodily injury of 61% or more — fine of VND 1.5 billion to 3 billion.
• Clause 4(b): cases under Clause 2 — fine of VND 3 billion to 7 billion or suspension of operations for 06 months to 03 years.
• Clause 4(c) (supplementary): fine of VND 100 million to 500 million; ban on doing business, ban on operating in certain sectors, or ban on raising capital for 01 to 03 years.

A point companies often miss: under Article 75, prosecuting the entity does not exclude individual liability — directors and directly managing persons may still be prosecuted under Clauses 1–3 of Article 227 as individual offenders.

4. Current licensing basis: Law on Geology and Minerals 54/2024/QH15

To determine whether extraction is licensed — and whether it matches the licence — the current law applies: the Law on Geology and Minerals No. 54/2024/QH15 (passed 29/11/2024, effective 01/7/2025), which wholly replaces the 2010 Law on Minerals No. 60/2010/QH12.

Note: the 2010 Law on Minerals must not be cited as current law — it expired on 01/7/2025. All statements about licensing conditions, procedures and authority for mineral exploration and extraction must rely on Law 54/2024/QH15 and its current implementing regulations.

5. Below the criminal threshold: administrative sanctions

Not every unlicensed extraction is a crime. Where the quantitative thresholds of Article 227 are not met, the act is administratively sanctioned under Decree 36/2020/ND-CP (as amended by Decree 04/2022/ND-CP):

• Article 47: sanctions extraction without a licence;
• Article 48: other violations in extraction activities.
• Fines for organisations are twice those for individuals (Article 5).

The administrative–criminal boundary therefore turns on quantitative thresholds (mineral value, illegal gains) and aggravating circumstances (organisation, environmental incident, death). Companies should quantify this risk as soon as an administrative violation record is drawn up.

6. What should companies do to reduce risk?

1. Audit licences: compare licence scope, coordinates, reserves and term against actual operations — any deviation from the licence’s contents may count as “illegal”.
2. Update to the new law: migrate all internal legal files to Law 54/2024/QH15; remove forms and procedures still citing the 2010 Law on Minerals.
3. Supervise contractors: acts of hired extraction units may still engage the project owner’s liability where direction or approval is involved.
4. During inspections: demand clarity on the valuation basis for minerals and the alleged illegal gains — these decide whether the case stops at administrative sanction or proceeds to criminal prosecution.

Need advice on criminal risk in mineral extraction?

FLAT Law Firm advises companies on minerals and criminal-law compliance, assesses operational risk, and stands by clients through legal incidents. Contact us at https://flaw.vn/en/contact/.

For reference only; not legal advice.

Transparency: this article is undergoing FLAT Law Firm’s reviewed by the QA Council and has not yet passed the internal QA council.

For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.