DEATH PENALTY: WTO Entry – Reprieve for Vietnamese Banker?

By IPS Correspondents Reprint | | Print |

Tran Dinh Thanh Lam

HO CHI MINH CITY, Nov 23 2006 (IPS) - Vietnam’s recent softening toward economic offences, brought about by its new trade status, could bring relief to traders facing the death penalty for making bad financial transactions.

In August, five traders were arrested following a foreign exchange dispute between Dutch bank ABN-Amro and the state-owned Incombank. One trader, Nguyen Thi Quynh Van, a former deputy head of trade finance at a branch of one of the largest state-owned banks, Industrial and Commercial Bank of Vietnam (Incombank), may face the death sentence for losing more than five million US dollars in speculative currency trades.

The case created international embarrassment for Vietnam at a time when the country is polishing its image as a new member of the World Trade Organisation (WTO). Hanoi hosted the APEC 2006 summit last week in a bid to launch the country onto the front stage of economic development.

“By solving the ABN-Amro issue in a fair way, Vietnam would send a clear message to the world business community that the country is willing to follow international rules and will give up its practice of criminalising economic wrong-doings,” lawyer Nguyen Van Anh of Van Anh and Associates told IPS in an interview.

To ease relations with the United States ahead of the APEC summit, Vietnam in September released without trial U.S. citizen Do Thanh Cong, 47, accused of terrorism. Earlier this month, three more U.S. citizens, Thuong Nguyen ‘Cuc’ Foshee, 58, Linda Huynh Bich Lien, 51, and Le Van Phu Binh, 41 – also arrested on terrorism charges – were given light sentences and released after a one-day trial.

As a result, the country has been removed from the U.S. blacklist of nations that severely violate religious freedom, though it failed to receive the Permanent Normal Trade Relation (PNTR) status.

“If decision-makers could release and deport some U.S. citizens convicted on terrorism charges, they could also solve that economic crime (the case of ABN-Amro and Incombank) in an amicable way,” Anh told IPS.

That may have been Prime Minister Nguyen Tan Dung’s intention when he called for police transparency in handling the eight-month-long case in which ABN-Amro’s Hanoi branch was charged of cheating Incombank.

Incombank, Vietnam’s fourth-largest bank by assets, filed a lawsuit in early August, seeking 5.4 million dollars from ABN-Amro for foreign exchange losses. Incombank said deals by their traders were speculative and made with an unauthorised Incombank trader.

The Incombank trader was arrested for “intentionally breaching state regulations, causing big losses to the state” and could face the death penalty, while the branch director of ABN-Amro in Hanoi was barred from leaving the country.

The indictments immediately incited diplomatic protests from the Netherlands, and prompted Dung to order police to quickly resolve it.

“Violations and guilty acts of all domestic and foreign individuals and organisations involved in the case must be brought to light in order to quickly bring the case to trial in line with the laws,” Dung said in a statement quoted by the Communist Party newspaper ‘Nhan Dan’.

Nhan Dan also quoted Dung as saying that if those who committed crimes repaid the money, they could be exempt from prosecution.

Lawyer Anh believes that statement offers the Dutch bank guidance on how to proceed.

“The ball is now in the hands of ABN-Amro. I believe with their long experience dealing business in Vietnam, the Dutch bank will know how to play it efficiently,” Anh said.

Dung also instructed the ministry of public security and the ministry of foreign affairs to “take initiative in cooperation with diplomatic agencies to deal with related issues in terms of foreign relations based on the result of investigation.”

“This is clear. The Prime Minister wants the brouhaha sparked by the affairs to be stopped so as to prevent any impact on the good investment environment that Vietnam is presenting to the world,” Anh said.

However, a spokesman for ABN-Amro told the press that the bank had neither been officially informed of Dung’s order nor of his reported instructions to the two ministries and the State Bank of Vietnam to meet ABN-Amro representatives.

“We continue to believe that our actions were legal and valid and we have not committed any crime,” the spokesman said. “We would look forward to any discussions on the matter.”

The director of Police Investigation Agency (PIA), Lt. Gen. Pham Quy Ngo, told the local press that investigators have found that of the nearly 600 foreign exchange trades between Hai Phong Incombank and ABN Amro Hanoi, only 85 were declared “legal.”

Ngo added investigators also found that ABN-Amro Hanoi’s foreign exchange trades with another state-run bank, the Bank of Agriculture and Rural Development (Agribank), caused losses of nearly 300 billion VN dong (18.75 million dollars) to the institution.

Ngo also said that the former director of ABN-Amro’s Hanoi branch, De T. Pham, was pregnant and had been allowed to leave for medical care in Singapore last August. “We let her go on humanitarian grounds, not to let her dodge her responsibility. She pledged to return after her delivery,” Ngo said.

Neither Incombank nor Agribank officials could be reached for comment.

The case of ABN-Amro has raised concerns among businesses in Vietnam; many said authorities usually “criminalise” unsuccessful business deals that lead to loss of state money.

The ABN-Amro case began with a trade dispute. Incombank filed a lawsuit at Hanoi’s Economic Court asking ABN-Amro to pay back the sums it claimed lost in speculative deals the bank executed through an unauthorised Incombank dealer. The case rapidly became an “economic crime” when police arrested traders on both sides of the deals and charged them with stealing money from the state.

Ngo of PIA said that when his agency began its investigation, the Hanoi Economic Court suspended its case and handed over all documents to PIA.

‘We do not “criminalise” the case,” Ngo said. “Our agency has observed the laws (during the investigation).”