In Vietnam, the Law on Prices promulgated in 2012 has set out regulations on price management in a market economy. It also has ensured price regulations in line with international commitments. Accordingly, the right of self-determination and competition of prices of production and business organizations have been respected and promoted too.

Currently, in the increasingly complicated situation of the COVID-19, most people are rushing to buy medical masks, which results in scarcity, speculation and price rises everywhere. In comparison with normal days, each box of 3 or 4-layer masks costs VND 50,000 – 60,000, however, the price of each one has now been pushed up 4 to 8 times higher. As of February 10, 2020, a total number of nearly 3,500 cases were inspected, supervised and sanctioned by the General Department of Market Management.

The Law on Prices has stipulated that face masks are not included in the list of goods and services subject to price stabilization. However, face masks may be stabilized if their price level changes affect socio-economic stabilization or their market price has irregular changes:

  1. The purchase or selling price in the market increases too high or decreases too low unreasonably compared with the increase or decrease due to the impact of price formation elements calculated by policy regulations, technical and economic norms or pricing methods issued by the state competent authority;
  2. The purchase or selling price in the market unreasonably increases or decreases in case of natural disasters, fires, epidemics, sabotage, financial – economic crises, temporary imbalance of supply and demand;

To implement price stabilization, the Government shall decide on guidelines and one or several price stabilization measures, including: (i) operating goods circulation, buying or purchasing out the national reserve goods, circulating reserve goods; (ii) implementing financial and monetary measures; (iii) using price stabilization fund; (iv) implementing price registration; (v) examining elements forming prices, controlling inventory goods (vi) applying supporting measures of price; and (vii) determining the particular prices, maximum prices, minimum prices or price frame. Accordingly, the Ministry of Finance and related ministries and agencies shall guide and organize the implementation of these measures under their functions. However, the specific time limit for price stabilization measures to be implemented in practice is not stipulated in the Law on Prices or the guiding legal documents.

To urgently respond to the situation of over-priced face masks, at a meeting on the prevention of the COVID-19 on February 1st, Deputy Prime Minister Vu Duc Dam issued a directive to revoke the business license of establishments raising face masks’ prices during the epidemic season, also requiring to keep prices unchanged. However, the price rise of face masks does not fall into the cases of revocation of Eligibility Certificate for pharmacy establishments under Article 40 of the Law on Pharmacy 2016, and the conditions for revoking the Enterprise Registration Certificate stated in Article 211 Law on Enterprises 2014. In addition, according to Article 17 of Decree 109/2013/ND-CP on penalties for administrative violations against the Law on Pricing, fee management, and invoicing, a fine of from VND 20,000,000 to VND 30,000,000 shall be imposed for taking advantage of economic crisis, natural disasters, wars, fire, epidemics to impose irrational prices. Moreover, the requirement of keeping prices unchanged is the decision not consistent with the law of supply and demand, as well as regulations on price control. Therefore, encouraging production, increasing supply and not hoarding, not speculating on face masks which promote the development of a healthy legal environment and business culture is more reasonable and appropriate.

If face masks are included in the list of goods and services subject to price stabilization and any person who takes advantage of the scarcity or pretends scarcity during an epidemic to buy in large quantities and stockpile in order to earn illegal profit, he/she shall be liable for speculation crime. A fine of from VND 30,000,000 to VND 300,000,000 or 6 – 36 months’ imprisonment shall be imposed.

Overseas examples include: According to the Price of Goods and Services Act 1999 of Thailand, a person who takes any action with his/her intention to unreasonably suppress the price or unreasonably inflate the price, or causes fluctuation of the price of any goods or services, or stockpiles controlled goods shall be liable to imprisonment for a term not exceeding seven years or to a fine not exceeding 140,000 Baht or both. For South Korea, newly approved tougher penalties against the hoarding of protective masks and hand sanitizers with the COVID-19 outbreak has sparked a rise in demand. A person who engages in hoarding of such products will face a prison sentence of a maximum of two years or a fine of 50 million Korean won (~US$42,000). Such penalties went into effect on February 5, 2020 and will be in force until April 30, 2020, according to the Ministry of Finance.

Meanwhile, regarding goods speculation, the US law has provided a different approach. The Commodity Exchange Act (CEA) of the US has the regulations imposing limits on the size of speculative positions. There are three basic elements to the regulatory framework for speculative position limits, including: (1) the size (or levels) of the limits; (2) the exemptions from the limits; and (3) the policy on aggregating accounts for purposes of applying the limits. For the purpose of diminishing, eliminating, or preventing excessive speculation, Section 4a(a) of the CEA stipulates that the Commodity Futures Trading Commission may impose limits on the amount of speculative trading or speculative positions that may be held in contracts for future delivery.


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