Fake milk powder case profits 500 billion: 3 common legal risks that businesses ignore

According to lawyer Truong Anh Tu - Chairman of TAT Law Firm, an expert in criminal and economic matters - this case has all the elements of a particularly serious economic crime: organized behavior, taking place over many years, targeting vulnerable consumer groups (children, sick people) and illegally profiting nearly 500 billion VND.

More worryingly, in addition to producing and trading in counterfeit food products, these subjects also violated accounting regulations, legalized cash flows and concealed violations, causing serious consequences that spread to the entire financial and tax system.

Legally, this behavior can be prosecuted under Article 193 of the Penal Code, with the highest penalty being life imprisonment. In addition, if there is sufficient evidence, crimes such as tax evasion, violations of accounting regulations or money laundering can also be considered for additional handling.

Mr. Tu believes that the saying "one mistake, a lifetime" in this case is not only a moral warning, but also completely correct in terms of law. An act that seems to be just a "law loophole" to overcome immediate difficulties, if not stopped soon, can lead to serious criminal liability, loss of property, reputation and even the future.

This is a valuable lesson not only for the individual violator, but also for anyone who is taking legal standards lightly in business.

Thousands of boxes of fake milk powder were seized for investigation. Photo: P. Tam

According to lawyer Truong Anh Tu, there are 3 common types of legal risks that many businesses easily ignore:

Criminal risks related to product quality : When products are not as declared, are falsely advertised or do not meet registration standards, businesses can be prosecuted for manufacturing or trading in counterfeit goods - even in cases of unintentional violations.

Risks associated with the distribution system : Units such as agents, pharmacies, supermarkets, and supply chains, if they do not strictly control the origin and quality of goods, can completely become victims - or more seriously, related parties in criminal proceedings.

Accounting and financial risks : Using dishonest reports, non-transparent cash flows, tax evasion or recording virtual costs can lead to violations of accounting and tax laws, leading to criminal consequences.

Lawyer Truong Anh Tu recommends that businesses should proactively take three key steps: Review the entire process of announcing, advertising and distributing products, especially those related to public health.

Set up an internal compliance department, working closely with accounting and legal departments. Consult with lawyers regularly - not just when a legal incident occurs.

“My colleagues and I have supported many businesses in building effective risk prevention mechanisms - not only minimizing legal risks but also improving management capacity and reputation in the market,” said lawyer Tu.

“Such models need to be replicated, especially in the context of increasingly tightening laws on criminal responsibility for economic organizations.”

From there, he emphasized: “Entrepreneurs should not gamble with their future with subjectivity. The law does not wait until a business goes bankrupt or gets into trouble with the law to take effect. Be proactive in creating a solid legal governance foundation - that will not only help the business survive, but also help leaders sleep well at night."

What does the Ministry of Industry and Trade say about the 500 billion VND fake milk production line? Regarding the 500 billion VND fake milk production line, Director Tran Huu Linh said that the Ministry of Industry and Trade did not license and directly manage the products of the 2 violating enterprises.

Source: https://vietnamnet.vn/vu-sua-bot-gia-thu-loi-500-ty-3-rui-ro-phap-ly-pho-bien-doanh-nghiep-bo-qua-2392354.html