The Case of Removing the EU’s Yellow Card for Vietnam and Implication
from Thailand’s Success

BUI Ngoc Khanh Linh, NGO The Vu and NGUYEN Quang Vu

Abstract

Illegal, unreported, and unregulated (IUU) fishing remains a critical barrier to the sustainable development of Vietnam’s seafood industry, particularly in light of the European Commission’s (EC) yellow card. This paper investigates the corporate compliance of Vietnamese seafood enterprises and identifies gaps between current regulations and practical enforcement. Drawing on the theories of “efficient breach” and institutional compliance, the study reveals that most firms, especially SMEs, adopt a cost-benefit logic when faced with compliance, undermining regulatory effectiveness. Through comparative analysis, the paper examines Thailand’s success in lifting its yellow card via flexible legal reforms under the Royal Fisheries Ordinance. Key lessons include spatial zoning based on vessel size and statutory minimum landing sizes for exploited and regulated aquatic species. These measures reduce compliance burdens on artisanal fishers while enhancing regulatory oversight of commercial fleets. The study proposes context-specific solutions for Vietnam to contribute to the broader discourse on fisheries governance by highlighting the need for adaptive legal design and behavioral alignment to meet international sustainability standards.
   
Keywords: Corporate compliance, seafood, yellow card, IUU, EU.

Résumé

La pêche illicite, non déclarée et non réglementée (INN) demeure un obstacle majeur au développement durable de l’industrie halieutique vietnamienne, notamment à la lumière du « carton jaune » imposé par la Commission européenne. Cet article examine le niveau de conformité des entreprises vietnamiennes du secteur des produits de la mer et met en évidence les écarts entre le cadre réglementaire en vigueur et son application concrète. S’appuyant sur les théories de la « violation efficiente » et de la conformité institutionnelle, l’étude révèle que la majorité des entreprises, en particulier les PME, adoptent une logique coûts-bénéfices face aux exigences réglementaires, ce qui fragilise l’effectivité du droit. Par une analyse comparative, l’article met en lumière le succès de la Thaïlande dans la levée de son carton jaune, grâce à des réformes juridiques souples introduites dans le cadre de l’ordonnance royale sur la pêche. Parmi les enseignements majeurs figurent la mise en place d’un zonage spatial fondé sur la taille des navires ainsi que l’instauration de tailles minimales légales de capture pour les espèces aquatiques exploitées et réglementées. Ces mesures permettent d’alléger les contraintes pesant sur les pêcheurs artisanaux tout en renforçant la surveillance des flottes commerciales. L’étude propose enfin des solutions adaptées au contexte vietnamien et contribue au débat plus large sur la gouvernance des pêches, en soulignant la nécessité d’une conception juridique évolutive et d’un alignement des comportements afin de satisfaire aux normes internationales de durabilité.
   
Mots-clés : conformité des entreprises, produits de la mer, carton jaune, pêche INN, Union européenne.

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1. Introduction

1.1. Background

1.1.1. Overview of the IUU Yellow Card

The IUU yellow card is a sanction imposed by the EC on non-European Union (EU) countries that fail to comply with IUU regulations. When a country receives a “yellow card” warning from the EC, its seafood products exported to the EU must undergo stricter inspections, leading to longer processing times and significantly increased costs. Moreover, the public disclosure of the EC’s sanctions worldwide can pose significant challenges to seafood export markets that do not meet ICC requirements, forcing these countries to tighten their fishing regulations. For nations with a high proportion of seafood exports to the EU, such as Vietnam,^[1] receiving a “yellow card” can have severe economic and social consequences.

1.1.2. Importance of IUU Compliance

By complying with IUU regulations, Vietnamese seafood enterprises in particular, and seafood exporters worldwide in general, can maintain their reputation and trust among international business partners, thereby expanding their markets and enhancing their global competitiveness. Moreover, IUU compliance plays a crucial role in protecting marine resources, ensuring the sustainability and stability of the seafood industry in the long run. Failure to adhere to IUU regulations may result in sanctions from Vietnam’s key trading partners, such as higher tariffs, additional trade restrictions, or, in the worst-case scenario, an absolute export ban. These measures would cause severe damage to the domestic seafood industry, not only directly impacting revenue but also hindering the growth and expansion potential of Vietnamese seafood enterprises. The value of domestic seafood products could decline significantly, leading to job and income losses for millions of people whose livelihoods depend on this sector. Therefore, complying with IUU regulations is not only a legal obligation but also a vital survival strategy for seafood businesses, especially given that Vietnam is one of the world’s largest seafood-exporting nations.

1.1.3. Introduction to Corporate Compliance

Compliance is a concept within the scope of corporate governance and is closely related to the law. According to Easterbrook and Fischel, corporate compliance is understood as “efficient breach” linked to the theory of “efficient contract breach”^[2] in which the maximum amount a company should invest in compliance is determined by the penalty cost of non-compliance. However, Professor Robert Cooter argued that this perspective overlooks the ethical aspect of the law, stating that this view ignores the moral dimension of law and equates compliance with paying a fee to engage in prohibited actions.^[3] A widely accepted perspective from Behringer defines corporate compliance as the awareness and adherence to legal requirements to ensure that all business activities align with the law. This definition also extends to compliance with relevant social norms and business practices established by the company itself.^[4] Compliance requires a systematic and organized approach to identifying, preventing, and managing risks related to legal violations or other regulatory breaches. For large corporations, this often involves establishing formal compliance programs, including the implementation of procedures to detect and address potential violations. Thus, corporate compliance is understood as a crucial element that not only entails adherence to current laws but also includes respecting ethical principles and internal standards that help businesses operate responsibly.

1.1.4. Purpose of the Research

This study aims to answer the research question: To what extent do Vietnamese seafood enterprises comply with both EC and national regulations on IUU fishing, and what legal challenges does Vietnam face and how to solve these challenges? By conducting a comparative analysis of Vietnam and Thailand’s legal regulations and enforcement practices, the paper contributes to the literature on regulatory compliance and policy implementation in fisheries governance. It also offers a policy-oriented contribution by proposing a legal and institutional toolkit for Vietnam, derived from Thailand’s successful experience in lifting the EU yellow card.

1.2. Legal Framework and International Standards Related to IUU

1.2.1. International and Regional Laws on IUU

1.2.1.1. The 1982 United Nations Convention on the Law of the Sea

The 1982 United Nations Convention on the Law of the Sea (UNCLOS) establishes general regulations regarding the rights and obligations of coastal states in the exploitation of marine resources. Specifically, the provisions related to IUU fishing focus on three main aspects:

First, coastal states are obligated to manage fishing quotas to ensure that living resources within their Exclusive Economic Zone (EEZ) are not overexploited. This obligation is outlined in Article 61 of the Convention, which states that coastal states must determine an allowable catch based on ecological and economic factors such as interspecies relationships^[5], fishing methods, and the economic interests of both individuals and coastal communities^[6]. In addition to setting catch limits, states must implement appropriate conservation and management measures based on scientific research and data. Article 62 allows coastal states to permit other nations (such as landlocked or geographically disadvantaged states) to exploit any surplus fish within their EEZ through agreements or treaties. However, foreign nationals engaged in such activities must comply with the conservation measures, procedures, and conditions set by the coastal state.

Second, coastal states have jurisdiction over violations of their sovereign rights in managing and exploiting living marine resources within their EEZ. Article 73 of UNCLOS grants coastal states the authority to take necessary enforcement measures, including inspections, detentions, and judicial proceedings, to ensure compliance with their resource management regulations. In practice, many coastal states adopt even stricter enforcement actions, such as seizing or even sinking violating fishing vessels and, in extreme cases, using force to prevent further incursions.

Third, for fishing activities in the high seas beyond EEZs, Article 87 affirms that “the high seas are open to all states, whether coastal or landlocked.” This means that all nations have the right to freely engage in fishing activities. However, this freedom comes with limitations. Article 116 requires states to exercise their fishing rights with “due regard” for the interests of other nations and by their international obligations. Furthermore, Articles 117 and 118 emphasize the need for international cooperation in the conservation and management of marine resources in international waters.

From this analysis, it is evident that UNCLOS 1982 primarily establishes general obligations without detailed provisions or enforcement mechanisms. Additionally, several key IUU-related issues, such as determining responsibility for IUU activities within EEZs or the criminalisation of IUU offences remain unaddressed under the Convention.

1.2.1.2. Food and Agriculture Organisation of the United Nations

The 1995 FAO Code of Conduct for Responsible Fisheries is one of the most frequently cited and widely recognized non-legally binding instruments in global fisheries management, second only to the 1982 UNCLOS. The purpose of this Code is to establish international standards for responsible conduct to ensure the conservation, management, and effective development of fisheries resources while protecting ecosystems and biodiversity. Its non-binding nature provides states the flexibility to adapt their guidelines to their specific circumstances, considering their technical and financial resources as well as national management strategies^[7].

The FAO Code of Conduct is closely linked to UNCLOS 1982 and various international fisheries legal instruments to which Vietnam is a party, such as the 1993 FAO Compliance Agreement and the 1995 UN Fish Stocks Agreement (UNFSA). These agreements provide detailed provisions for implementing UNCLOS principles. The 1993 FAO Compliance Agreement emphasises the flag state’s responsibility in managing and licensing fishing vessels, as well as sharing information regarding their activities in international waters. Meanwhile, UNFSA elaborates on the management and conservation of straddling fish stocks and highly migratory species. It also reinforces the legal authority of Regional Fisheries Management Organisations (RFMOs) in fish stock conservation and management. However, since RFMO regulations are only legally binding on member states, some countries have opted out of RFMO membership to continue benefiting from the legal ambiguities in UNCLOS. To address this issue, Article 8 of UNFSA states that: “States fishing on the high seas for such stocks and the relevant coastal States shall cooperate either by becoming members of the appropriate RFMO or by applying the conservation and management measures established by such an organisation.” This provision ensures that all states, whether RFMO members or not, must comply with RFMO management measures.

Following these agreements, the FAO launched several programs to support the implementation of the Code of Conduct, leading to the development of four International Plans of Action (IPOAs). Among them, IPOA-IUU was introduced to enhance the legal framework on IUU fishing and assist countries in addressing IUU activities. IPOA-IUU formally defined IUU fishing as consisting of three types of violations: Illegal fishing, unreported fishing, and unregulated fishing.

Many aspects of IPOA-IUU were later incorporated into the European Union’s IUU Regulation (Council Regulation (EC) No 1005/2008), which came into effect in January 2010. Finally, the first legally binding international instrument specifically addressing IUU fishing is the FAO Agreement on Port State Measures to Prevent, Deter, and Eliminate IUU Fishing (PSMA). The PSMA Agreement aims to prevent IUU vessels from using ports to land their catch, thereby blocking illegally harvested seafood from entering domestic and international markets. It grants port states the authority to inspect and monitor foreign fishing vessels when they request port entry or are already docked, ensuring that they are not involved in IUU fishing activities. Furthermore, the agreement strengthens flag state responsibilities, requiring them to provide information or assist port states when a vessel is suspected of engaging in IUU fishing. Finally, PSMA promotes international cooperation and information sharing among coastal states, flag states, and Regional Fisheries Management Organisations (RFMOs).

1.2.1.3. Council Regulation (EC) No. 1005/2008

Regulation No. 1005/2008 of the EC was established to create a Community system to prevent, deter, and eliminate IUU fishing activities by prohibiting the import of seafood products harvested through IUU fishing into the EU market. In general, the EU’s policy on IUU control focuses on three main aspects:

First, port state control over fishing vessels from third countries. Articles 4 and 5 of the Regulation stipulate that fishing vessels from third countries are only permitted to land, transship, or carry out port operations in EU member states if they meet certain conditions. These conditions include providing information on the cargo, such as the time and location of the catch, and the quantity of seafood products by species.

Second, the importation of seafood products into the EU market must be accompanied by a catch certificate, which must be approved by both the flag state of the vessel and the EU member state where the vessel seeks to land. According to Articles 17 and 18, the catch certificate must go through a verification process conducted by the competent authority of the port state.

Third, under Article 37, fishing vessels that fail to comply with IUU regulations will be listed as offenders and will be denied port entry, refused importation of their seafood products, and have their fishing gear confiscated.

In addition to measures targeting fishing vessels, based on the criteria in Article 31 and the procedures in Article 32 of Regulation 1005/2008, if the EU authorities determine that seafood products imported into the EU market from a particular country do not comply with catch certification or traceability regulations, they will notify the relevant country of the possibility of being designated as a “non-cooperating third country.” The EU provides the third country with a period to rectify the situation. This scenario is commonly referred to as the EC issuing a “yellow card” to seafood imports from the concerned third country. If the country fails to take necessary corrective actions to prevent and eliminate IUU fishing, the European Commission will designate it as a “non-cooperating third country” and issue a “red card” which results in a ban on the export of wild-caught seafood products to the EU market.

1.2.2. Legal Regulations in Vietnam

After receiving a “yellow card” warning from the EU, Vietnam has made significant efforts to strengthen and adjust its legal framework to combat IUU fishing. Specifically, the National Assembly of Vietnam passed the Fisheries Law in November 2017. Additionally, the directive of the Prime Minister, the Ministry of Agriculture and Rural Development issued two decrees and several circulars related to IUU fishing prevention and control. The legal framework in Vietnam regarding IUU fishing in the fisheries sector is specifically outlined in the following figure:

Table 1. Legal Framework in Vietnam on Illegal, Unreported, and Unregulated (IUU) Fishing in the Fisheries^[8]

Time	Events	EC Assessment / Recommendations	Vietnam’s Actions
2017	The EU issued a “Yellow Card” for Vietnam’s fisheries sector	Five recommendations: (1) Improve the legal framework for fisheries management; (2) Manage fishing fleets in line with available resources; (3) Strengthen monitoring, control, and surveillance at sea and in ports; (4) Implement catch certification and traceability of seafood products; (5) Improve illegal fishing by Vietnamese vessels in foreign waters	Draft revision of the Law on Fisheries
2018	1st EC Inspection	Four recommendations: (1) Legal framework; (2) Monitor, control, and surveillance system for fishing activities; (3) Law enforcement; (4) Catch traceability	Issued Decrees No. 26/2019/NĐ-CP and 42/2019/NĐ-CP, and related circulars
2019	2nd EC Inspection	Improvements recognized but remained: (1) Slow progress in installing vessel monitoring systems; (2) Limited and technically flawed monitoring coverage; (3) Inconsistent sanctions across localities, especially for violations in foreign waters; (4) Lack of evidence proving full traceability of raw materials at processing plants	Implementation of the Law on Fisheries and related decrees
2022	3rd EC Inspection	Four recommendations: (1) Improve the legal framework; (2) Strengthen vessel management; (3) Address violations by Vietnamese vessels in foreign waters; (4) Enhance catch traceability	Reviewed amendments to Decree No. 26/2019/NĐ-CP and Decree No. 42/2019/NĐ-CP
2023	4th EC Inspection	The EC agreed in principle with the direction of revising Decrees 26/2019/NĐ-CP and 42/2019/NĐ-CP. However, challenges remained in local-level implementation, particularly in vessel monitoring, IUU enforcement, and sanctions against fraudulent enterprises	Finalized legal framework revisions, leading to new decrees: Decree No. 37/2024/NĐ-CP (amending Decree 26/2019/NĐ-CP) and Decree No. 38/2024/NĐ-CP (amending Decree 42/2019/NĐ-CP)

It can be seen that these legal documents are relatively comprehensive and align with the EC’s requirements. First, Article 60 of the 2017 Fisheries Law lists 14 actions that are considered illegal fishing activities. Recently, to complete the legal framework in preparation for the EC’s inspection in October, the government has amended and supplemented several provisions of Decree 26/2019/ND-CP, Decree 42/2019/ND-CP, and Circular 23/2018/TT-BNNPTNT. However, I will point out several provisions in the two above-mentioned decrees that remain weak when compared with Thailand’s regulations, as illustrated in the table below:

Table 2. Comparison of Provisions between Vietnam and Thailand^[9]

Category	Vietnam	Thailand	Evaluation
Penalty for logbook and catch reporting violations	Article 25, Decree No. 38/2024/NĐ-CP: A fine ranging from VND 2,000,000 to 10,000,000, depending on the violation	Section 123, Royal Ordinance on Fisheries B.E. 2558 (2015): A fine ranging from 100,000 to 30,000,000 Baht, or 3–5 times the value of the catch, whichever is higher	The key weakness lies in Vietnam’s fixed fine structure, which is determined by vessel length rather than actual fishing capacity or economic gain. The use of length-based classification (meters) instead of gross tonnage (GT) reduces policy sensitivity to real harvesting power. Fixed fines (VND 2–10 million) are negligible compared to profits from offshore fishing, making violations a “cost of business” rather than a deterrent
Diversification of vessels	Article 50, Fisheries Law 2017: Fishing vessels ≥15 meters in length must install and operate Vessel Monitoring Systems (VMS) as prescribed by the Government	Commercial fishing vessels from 30 GT are obligated to have VMS onboard and maintain its functions at all times in accordance with article 81(1)	Thailand classifies vessels by gross tonnage (GT), consistent with FAO and IMO international standards, which better reflect actual fishing capacity, storage, and engine power. Vietnam’s classification by length (meters) was adopted for cost and practicality reasons due to the dominance of small-scale fleets lacking tonnage measurement. However, this creates management loopholes: two vessels of similar length (e.g., 14.9 m) may differ greatly in GT, allowing larger vessels to evade VMS obligations by design manipulation, leading to capacity underestimation and regulatory evasion
Management and conservation regulations	Article 7: Prohibits fishing in protected or conservation zones; fines range from VND 3–50 million, with a requirement to release live catch Article 7(4): Prohibits catching aquatic species smaller than prescribed sizes; fines VND 10–50 million Article 8: Prohibits catching endangered or rare species; fines VND 10–200 million, with possible revocation of the captain’s license and confiscation of the catch. Article 45, Fisheries Law 2017: Prohibits fishing during spawning seasons designated by the government	Article 56: No one is allowed to exploit aquatic animals in conservation areas as prescribed Article 57: No one is allowed to catch/take aquatic animals of a size smaller than prescribed Article 60: No one is allowed to catch marine mammals or endangered aquatic animals or even take them on board fishing vessels, except for the rescue purpose Article 70: No one shall engage fishing operation during the spawning season as prescribed	Thailand applies a “zero-tolerance” and criminal approach to conservation violations offenders may face license suspension or criminal charges. Vietnam’s framework is administrative and flexible, with proportional fines and corrective actions (e.g., releasing live catch). While this allows adaptive enforcement, it also reduces deterrence especially under EU IUU control standards, where stronger penal and automatic suspension mechanisms are favoured. Vietnam’s system thus appears more lenient and less aligned with IUU deterrence benchmarks

1.2.3. Requirements and Criteria of the European Commission (EC)

To export seafood to the EU, exporters must meet the following requirements: The first requirement is that the exporting country and business must be recognized. Seafood exported to Europe must be recognized by the competent European authorities. To meet this requirement, exporting countries and businesses must strictly comply with food safety regulations and ensure their products do not pose a threat to European consumers.

The second requirement is compliance with the Maximum Residue Levels (MRL). This is a strict regulation outlined in various EU legal documents. For each seafood shipment, exporters must prove that the product does not exceed the MRL by providing a health certificate issued by an accredited laboratory.

The third requirement is adherence to strict labeling regulations. The EU has clear labeling requirements. However, there may be minor differences between labeling requirements for unprocessed and processed seafood, as well as between wild-caught and farmed seafood.

The fourth requirement is that seafood must have a legal origin. The EU requires seafood products to be certified as not being linked to IUU fishing. Wild-caught seafood must have a catch certificate issued by the competent authority, and exporters must obtain certification for seafood purchased from legally registered fishing vessels.

The final requirement is the inspection of seafood shipments at the port of entry. After transportation, imported shipments must enter the EU through an approved Border Control Post. The actual inspection frequency depends on the risk profile of the product and the results of previous inspections. Shipments found non-compliant with EU regulations will be destroyed or, in certain conditions, returned within 60 days. Additionally, exporters may face restrictions, and the relevant authorities could be subject to disciplinary measures.

To enhance competitiveness, exporters can also meet additional requirements such as food safety certification, social compliance certification, and sustainability certification.

2. Methodology

2.1. Research Design

This study employs qualitative research combining doctrinal legal analysis, case studies, and comparative analysis. The main sources of data include official reports from the Government of Vietnam, the EC inspection missions, and the Vietnam Association of Seafood Exporters and Producers (VASEP), as well as statistical data from the Customs Department, provincial reports, and relevant publications from non-governmental organizations and the press.

The research scope is the period from 2017 to 2024. The reason for choosing this period is from when the EU issued the “yellow card” warning to Vietnam to now. The study focuses on Vietnam and Thailand, which successfully lifted their EU yellow card in 2023.

The analytical framework is primarily based on doctrinal legal analysis of IUU-related regulations and enforcement mechanisms, complemented by selected case studies illustrating non-compliance practices among Vietnamese seafood enterprises. A policy comparison is also conducted between Vietnam and Thailand to identify transferable lessons for improving Vietnam’s compliance framework. In addition, case selection is based on two main criteria: (1) enterprise size (large versus small and medium enterprises), and (2) the level of participation in IUU compliance commitments (enterprises that have signed and implemented commitments versus those that have not).

The study acknowledges certain limitations, including the lack of direct interviews with enterprises due to limited access and confidentiality constraints, and the restricted availability of detailed government data on enterprise-level compliance with IUU fishing regulations. Despite these constraints, the triangulation of multiple secondary sources enhances the validity and reliability of the findings.

3. Findings

3.1. Current Compliance Status of Vietnamese Seafood Enterprises

3.1.1. Classification of Enterprises

Seafood enterprises are typically classified based on criteria such as capital size, workforce, and market scope. These enterprises are generally divided into large, medium, small, and micro enterprises. Additionally, based on market orientation, they can be categorized into export-oriented and domestic enterprises.

When classified by size, large, medium, small, and micro-various criteria are used, including capital scale and the number of employees. Specifically, Clause 1, Article 6 of Decree 39/2018/ND-CP states, “A micro-enterprise in the fisheries sector has an average annual number of employees participating in social insurance of no more than 10 people and an annual revenue of no more than 3 billion VND, or total capital not exceeding 3 billion VND.” This classification enhances transparency in providing information, consulting, and resource development while also facilitating management, monitoring, and enforcement.

When categorized into export-oriented and domestic enterprises, the primary criterion is the target market. Export-oriented enterprises tend to have a high level of compliance with IUU regulations due to strict international market requirements. In contrast, domestic enterprises generally have lower compliance levels due to cost barriers and reduced regulatory pressure in the domestic market. Understanding these differences allows regulatory agencies to develop tailored solutions for each group.

3.1.2. Analysis of the Current Compliance Level of Vietnamese Seafood Enterprises

Across the country, following the fourth inspection (October 2023), the EC acknowledged that Vietnam has achieved an installation rate of nearly 100% for Vessel Monitoring Systems (VMS) on fishing boats over 15 meters in length.^[10] Additionally, the installation of VMS on vessels over 24 meters has been largely completed.^[11]

To provide in-depth information about the degree of compliance with this key EC recommendation, the author selected four provinces with the highest levels of IUU fishing violations, identified in the Conclusion of Deputy Prime Minister Trần Lưu Quang at the 9th meeting of the National Steering Committee on IUU. These provinces include Bình Thuận, Bà Rịa–Vũng Tàu, Cà Mau, and Nghệ An.

Table 3. Provincial Statistics on VMS Installation (2022–2024)^[12]

Province	Over 15m fishing vessels	VMS installation rate	Non-compliance cases	Sanctioned cases	Total fines (VND)
Bình Thuận	1.941	100%	Non	32	No information
Bà Rịa-Vũng Tàu	No information	97,15%	205	94	2,3 Billion
Cà Mau	1.500	100%	42/43	30	1,2 Billion
Nghệ An	No information	100%	135	135	3,25 Billion

Although most fishing vessels have been equipped with VMS and overall compliance remains high, violations often stem from deliberate or prolonged disconnections of tracking signals over six hours or more than ten days. Administrative sanctions account for the majority of enforcement actions, while only a few serious cases have been prosecuted criminally. In addition, the rate of sanctions remains relatively low compared to the number of violations, raising concerns about the deterrent effect and actual enforcement. It can be seen that in Bà Rịa–Vũng Tàu, out of 205 violations, only 94 cases were sanctioned. This discrepancy suggests that in some areas, VMS installation and enforcement may still be largely symbolic, serving as a compliance formality rather than an effective control mechanism.

As of 2021, Vietnam has 409 seafood firms that export to the EU. However, just 52 of them agreed to avoid obtaining fish from vessels that violated IUU restrictions. Notably, the majority of these 52 organizations were small-scale, and none of the country’s top 500 seafood exporters took part in this pledge. This shows that the majority of businesses continue to operate under the “efficient breach” paradigm, which prioritizes economic advantages over regulatory compliance, especially in situations when compliance is expensive and fines are ineffective as a deterrent.

For small and medium-sized enterprises, compliance remains constrained by limited capacity, inadequate traceability systems, and weak enforcement. Ethical lapses have also been documented, as some companies colluded with port authorities to legalize seafood certificates from non-compliant sources.

Table 4. Case Study Summary of IUU-related Companies^[13]

Case Name	Reason	Sanction	Lesson Learned
T&H Nha Trang Co., Ltd	Submitted falsified origin certificates for EU exports	Fined 256 million VND, delisted from the EU exporters list and ceased seafood export processing	Weak document verification; falsified origin certification
Thịnh Hưng Co., Ltd	Aggregated catch data from multiple vessels under one license to legalize seafood origin	Investigated and two related cases prosecuted	Traceability manipulation; poor compliance control
Cát Tiên Co., Ltd			Lax supervision and traceability oversight

The table depicts three cases, including T&H Nha Trang Co., Ltd., Thinh Hung Co., Ltd., and Cat Tien Co., Ltd. that show the weaknesses in legal compliance culture and business ethics among small and medium-sized seafood processing and exporting firms in Vietnam. These companies were found to have (1) purposefully distorted traceability data and (2) fabricated certificates of origin to maintain entry into the European Union (EU) market.

These enterprises claimed to have cooperated with port management officials in Khanh Hoa and Ba Ria-Vung Tau, two important seafood exporting areas, to falsify certification paperwork for illegally harvested seafood. Specifically, they collected catches from many fishing vessels under the record of a single licensed vessel, resulting in ostensibly legal documentation for export. This illegal method was uncovered when the quantity of swordfish in their export shipments seemed abnormally large, significantly beyond the vessels’ real fishing capability. Among the cases, T&H Nha Trang Co., Ltd. was fined VND 256 million, removed from the list of EU-authorized exporters, and compelled to cease its seafood export processing activities. Thinh Hung Co., Ltd. was investigated and prosecuted in two linked incidents in Ba Ria-Vung Tau, which resulted in the suspension of its export activity. Meanwhile, Cat Tien Co., Ltd. is still under administrative review, but manufacturing continues.

These cases demonstrate a deliberate and calculated pattern of non-compliance aimed at maximizing profits, aligning with Easterbrook’s concept of the “efficient breach” where firms choose to violate regulations when the expected benefits outweigh the costs of potential penalties. In a context marked by limited transparency and weak law enforcement, the motivation to comply with legal requirements is replaced by short-term economic incentives, prompting firms to take legal risks in pursuit of profit.

However, the primary cause of these violations is not solely the firms themselves, but also cooperation with state management authorities. For example, in the case of T&H Nha Trang Co., Ltd., the violation expanded beyond the corporation, including the Hoai Nhon Town Fisheries Port and Urban Services Management Board, which illegally certified fish origins. This context demonstrates that insufficient monitoring and tacit complicity on the part of local authorities essentially convert corporate misbehaviour into a systemic type of legalized infringement. Furthermore, these businesses were identified in 2022, legal penalties were imposed in 2024 and the investigation against Cat Tien Co., Ltd. is still ongoing. This delay emphasises shortcomings in administrative enforcement and accountability processes.

Therefore, responsibility must be addressed in parallel on both fronts by penalizing enterprises and holding accountable individuals and agencies within the public administration who engage in protectionism or collusion. Focusing solely on corporate punishment without strengthening deterrence, supervision, and administrative accountability will allow this “legalization of violations”.

3.1.3. Challenges

After the EC fourth inspection, several key recommendations were made, including preventing fishing vessels from illegally operating in foreign waters, ensuring no vessels remain disconnected from the monitoring system for more than ten days, eliminating “three-no” vessels (those without registration, inspection, or licenses), and improving the currently low rate of penalties for violations.

For example, in Bình Thuận province, from early 2023 to the present, there have been 23 cases of fishing vessels crossing the allowed boundary. Regarding vessel disconnections, Bình Thuận recorded 69 vessels losing connection for more than six hours without reporting their location to shore and 43 vessels being disconnected for ten days without returning as required. According to current regulations, vessels that lose connection for more than six hours, remain disconnected for over ten days, or cross the allowed boundary are subject to penalties. However, in practice, many connection losses result from the inadequate quality of existing VMS equipment rather than intentional violations by vessel owners. Moreover, Decree 38/2024/NĐ-CP and Decree 135/2021/NĐ-CP outline technical standards for monitoring devices but lack specific criteria for what qualifies as a compliant device. This lack of clear guidelines makes it difficult to determine whether connection failures are due to the vessel owners’ actions or faulty equipment. In Bình Thuận, over 100 vessels lose connection for more than six hours on certain days, with the majority of cases stemming from equipment malfunctions rather than deliberate violations, making enforcement challenging.

Beyond vessel monitoring and penalties, weaknesses in seafood traceability remain a major issue. Certification and verification of seafood origin still have shortcomings, particularly as monitoring of vessels entering and exiting ports is insufficient, and vessel tracking systems do not meet required standards. One major challenge is the lack of awareness among fishers about IUU regulations. Despite a high percentage of vessels being equipped with VMS, some still attempt to deceive authorities by carrying multiple VMS devices from other vessels to mislead regulators. Between October 2023 and October 2024 alone, at least four cases of vessels carrying multiple VMS devices belonging to other vessels were detected. These incidents predominantly occurred in provinces with the highest seafood production, such as Cà Mau and Kiên Giang. In one case, a single fishing vessel was found carrying 14 VMS devices belonging to other vessels.

Furthermore, most Vietnamese seafood enterprises are small to medium-sized and have limited resources. Compliance with IUU regulations involves high costs, including expenses for installing monitoring equipment, upgrading technology, and adhering to EU standards. According to Michelin, while technology can improve vessel monitoring, fewer than 1% of fishing vessels worldwide currently use these solutions due to infrastructure limitations and costs. More affordable alternatives, such as electronic logbooks and smartphone applications, are available but remain underutilized. While some technologies offer solutions, their high costs only address specific aspects of the problem. Achieving a comprehensive solution requires significant investment in multiple technologies. Additionally, many of these technologies rely on complex models, making it difficult for Vietnam to meet the infrastructure and human resource demands for widespread implementation.

Thus, Vietnam faces significant challenges in controlling and preventing IUU fishing, particularly in VMS quality, enforcement, traceability, and financial barriers to adopting new technologies. First, frequent VMS disconnections often due to substandard equipment rather than vessel owners’ faults create difficulties in determining responsibility for violations, leading to enforcement challenges. Second, although regulations exist, actual penalties for violations remain low due to difficulties in distinguishing between equipment failures and intentional violations. This reduces the deterrent effect of enforcement measures. Finally, financial and technological constraints make compliance even more difficult for seafood enterprises. Addressing these issues will require clearer technical regulations, stronger enforcement mechanisms, and financial support to improve technology adoption in the industry.

3.2. Solutions

3.2.1. Similarities between Vietnam and Thailand’s Cases

In combating IUU fishing, Vietnam and Thailand share many similarities in terms of geographical location, socio-economic context, and the common challenges they face regarding IUU fishing. Therefore, learning from some of Thailand’s anti-IUU measures – a country that has successfully lifted the EC’s yellow card – is a feasible approach for Vietnam and could help accelerate the yellow card removal process. Specifically:

3.2.1.1. Economic-Geographical Characteristics and the Role of the Fisheries Industry

Thailand and Vietnam, with their strategic locations in Southeast Asia, boast long coastlines and rich marine ecosystems, creating ideal conditions for the development of the fisheries sector. In both countries, the fisheries industry not only contributes to GDP but also plays a crucial role in food security, job creation, and local economic development. According to (VASEP, 2022), Vietnam ranks third globally in seafood exports, with an export turnover of nearly $9 billion in 2022. Meanwhile, Thailand has a lower fishing yield than Vietnam, and is well known for high-value processed seafood products but reaches approximately $6.6 billion (FAO, 2022).

3.2.1.2. Overfishing Pressure and the Decline of Fisheries Resources

Both Thailand and Vietnam face overfishing and unsustainable exploitation, leading to a significant decline in marine resources. According to data from Havoscope (2019), Thailand and Vietnam rank 5th and 6th, respectively, among the countries with the highest financial losses due to IUU fishing.

In Vietnam, annual fishing output exceeds 3.6 million tons, accounting for 50% of the country’s total seafood production. However, a lack of control over fishing activities, especially in distant waters, has led to a sharp decline in economically valuable species such as tuna and red snapper. Similarly, in Thailand, fishing output has dropped from 2 million tons in 2000 to 1.5 million tons in 2020 (World Bank, 2021).

Both countries are under pressure from international markets, particularly the EU, as sustainability and traceability standards become increasingly stringent. The EU requires seafood-exporting countries to ensure that their entire supply chain is free from any products linked to IUU fishing. This has driven both Thailand and Vietnam to implement extensive reforms to comply with these regulations.

3.2.1.3. Fishing Scale

Most fishing activities in both Vietnam and Thailand are small-scale. Approximately 90% of fishing households in Thailand operate on a small scale (Juntarashote & Chuenpagdee, 2011), and Vietnam has a similar situation, with over 100,000 small fishing vessels operating along its coastline (Directorate of Fisheries, 2022). Moreover, these fishing households are primarily small-scale fishermen, often considered the poorest among the poor (Tô Văn Trường, 2013). Many of these fishermen face economic hardships and lack proper education on ethical fishing practices. While small-scale fishermen generally agree on the importance of combating illegal fishing, they remain concerned about certain regulations that could impose additional costs, such as vessel registration fees and fishing licenses, which may impact their economic livelihood.

Because small-scale fishing is often conducted by impoverished fishermen, their facilities and equipment are typically inadequate, making it difficult for them to meet EU standards. This poses significant challenges for managing the small-scale fleet, as they often lack modern equipment such as VMS or electronic fishing logs. As a result, overfishing or fishing in restricted areas is more likely to occur. Similarly, in Thailand, before implementing reforms, more than 40% of fishing vessels were either unregistered or operated beyond regulatory control, making it nearly impossible to address violations effectively.

3.2.1.4. Fisheries Monitoring and Management

Another similarity between Vietnam and Thailand lies in fisheries monitoring and management. In Vietnam, the four key recommendations for eliminating IUU fishing include: stricter law enforcement; improving the registration, licensing, and monitoring system; enhancing the traceability of fishery products; preventing illegal seafood from entering Vietnamese territory; and strengthening cooperation with other countries and Regional Fisheries Management Organizations (VASEP, 2018). Among these, two main aspects are (a) preventing and eliminating illegal fishing outside Vietnam’s Exclusive Economic Zone (EEZ) and (b) implementing traceability measures for fish and seafood products (World Bank, 2021).

3.2.2. Implications for Vietnam

In this part, the author examines Thailand’s regulatory modifications before 2015 (before the EU yellow card) and after 2015, up to the present, in terms of two essential aspects: control and enforcement. After analysing Thailand’s fundamental weaknesses, the author compares these reforms to Vietnam’s present legislative framework and makes suggestions for improvement.

3.2.2.1. Control

Before 2015, Thai fisheries were recognized under the Fisheries Act of 1947, following a conventional open access/collection-of-revenue approach, rather than being focused on fisheries management. There were no restrictions on licensing, vessel registration, or actual fishing effort. After that, Thailand revised its vessel classification and fishing grounds to address these issues. Thailand also improved the licensing and registration process for fishing vessels. Thailand managed fishing operations not in Thai waters better and used and conserved aquatic resources more sustainably. This study develops comparisons between Vietnam and other countries regarding (i) fishing vessel classification and zonation of fishing operations and (ii) strengthening aquatic resources management and conservation.

Fishing Vessel Classification and Zonation of Fishing Operations

The classification of fishing boats according to GT (gross tonnage) and the division of fishing areas between coastal and offshore fisheries are specified in Articles 5, 34, 36, 37 and 38 of the Royal Ordinance on Fisheries B.E. 2558 (2015). This division is also one of the major reforms of Thailand’s fisheries management system. The Thai fishing fleet can be broadly divided into two types of fishing vessels: artisanal fishing vessels under 10 GT and commercial fishing vessels of 10 GT or more. For the remedy of this, a so-called “zoning management” system was proposed, allocating coastal waters (1.5 to 12 nautical miles (2.8 to 22.2 km)) to artisanal fishing vessels and offshore waters (outer coastal boundary to the EEZ limit) to commercial vessels.

In contrast, Vietnam currently classifies fishing vessels based on their maximum length (meters) as stipulated in Article 50 of the Fisheries Law 2017 and Decree No. 26/2019/NĐ-CP. Accordingly, vessels with a maximum length of 15 meters or more must install VMS and meet technical standards to obtain a fishing license. This approach was adopted to simplify measurement and registration procedures, reducing costs for fishermen most of whom operate small-scale, nearshore vessels lacking the capacity to measure gross tonnage.

However, this length-based classification poses significant managerial challenges. First, vessel length does not accurately reflect fishing capacity; two vessels of the same length (e.g., 14.9 m) might have different tonnage and fishing power due to changes in hull design, breadth, and gear capacity. This brings up a legal loophole, allowing vessel owners to construct ships under 15 meters to evade VMS rules while keeping the same fishing power as larger vessels. Second, categorising and licensing vessels simply based on length makes it impossible for authorities to adequately assess overall fishing capacity, which frequently leads to over-allocation of fishing licenses beyond the ecosystem’s capability. As a result, even if the actual number of vessels remains constant, overall fishing capacity continues to rise, leading to the decline of coastal fish populations.

Thus, the core difference between the two countries lies in how effectively vessel classification reflects actual fishing capacity and mitigates IUU risks. Vietnam should consider gradually transitioning from a length-based to a GT classification system, at least for offshore vessels, to enhance transparency, align with international standards, and support its long-term goal of lifting the EU yellow card.

Strengthening Resource Management and Conservation

Since 2015, Thailand’s fisheries legislation has undergone a fundamental transformation toward science-based and ecosystem-oriented management, as reflected in Articles 56, 57, 60, 70, and Section 45 of the Royal Ordinance on Fisheries B.E. 2558 (2015). These provisions prohibit all fishing activities within conservation zones, ban the capture or retention of undersized fish, strictly forbid the taking, transport, or possession of endangered and protected aquatic species or marine mammals (except for rescue purposes), and establish seasonal fishing bans to protect spawning and juvenile habitats.

In addition, Section 45 introduces HCRs, a technique that establishes biological limits for fishing effort. When scientific data show that fish populations have declined below sustainable reproductive levels, the Ministry of Agriculture and Cooperatives may suspend new fishing licenses and adjust the Total Allowable Catch (TAC) following consultations with government agencies, research institutions, and fishing communities. This marks an important step towards evidence-based fisheries management (EAFM) and long-term ecological sustainability.

Vietnam’s legal framework also contains similar provisions on protected areas, restricted species, and spawning seasons under Articles 7, 8, and 45 of the Fisheries Law 2017, as well as Decree No. 38/2024/NĐ-CP. Article 7 prohibits fishing in marine protected areas and closed zones, with administrative fines ranging from VND 3–50 million, along with mandatory release of live catches. Article 7(4) imposes fines of VND 10–50 million for catching undersized species. Article 8 bans the exploitation of endangered or rare species, with fines between VND 10–200 million, depending on species and volume. Article 45 establishes seasonal fishing bans as declared by the Ministry of Agriculture and Rural Development.

However, Vietnam has yet to develop a system of harvest control or biological reference points. Licensing and management are dependent on the number of boats and engine horsepower (HP), with little consideration for stock assessments or environmental indicators. Although the 2017 Fisheries Law sets the basis for HCR development, Vietnam still lacks the scientific data infrastructure and legislative mechanisms to change quotas or halt fishing by species or area.

As a result, Thailand has advanced one step ahead of Vietnam in the shift from administrative to data-driven and ecosystem-based fishery management. This change enables Thailand to predict and avoid resource depletion, whereas Vietnam is mostly reactive to infractions or stock decreases. If Vietnam implements a species-specific quota system (TAC/HCRs) and incorporates data from VMS, e-logbooks, and stock monitoring, it might increase sustainable fisheries management while improving its chances of removing the EU yellow card.

3.2.2.2. Enforcement

Prior to 2015, Thailand’s fisheries law enforcement mechanism was ineffective and obsolete. The major reasons under the Fisheries Act of 1947 were standard criminal penalties, including fines and jail. The maximum fine of 10,000 Baht was insufficient to prevent infractions. Furthermore, slow court procedures, inadequate punishment capability, and a lack of collaboration among agencies resulted in numerous infractions being delayed or overlooked. After 2015, Thailand established a two-tier sanctioning system consisting of criminal and administrative measures, marking a turning point in fisheries governance.

Criminal Sanctions

Under Chapter 11 of the Royal Ordinance on Fisheries (2015) can range from 30 million Baht (about USD 890,000) to five times the value of the illegal catch. Serious offences, including prohibited fishing (Article 36), the utilisation of unrecognised vessels (Article 10), and removing the VMS device (Article 81), carry maximum penalties, including equipment confiscation and vessel detention. Notably, sanctions are equal to the illegal gain rather than predefined amounts, ensuring appropriate deterrence.

Administrative Sanctions

Under Chapter 10 (Articles 111-114), Thailand established an Administrative Sanction Committee consisting of representatives from the Department of Fisheries (DOF), Royal Thai Police (RTP), Department of Labour, and Marine Department, among others. This committee has the jurisdiction to suspend, revoke, or withdraw fishing permits, seize fishing gear, halt operations for up to 90 days, and publicly name IUU vessels. This administrative approach significantly reduced the time necessary to manage infractions, from months to mere days, delivering a rapid deterrent without the need for criminal charges. It is widely recognized as one of the major events that enabled Thailand to get rid of its yellow card in 2023. In contrast, Vietnam has had a dual system of administrative and criminal penalties for years, but enforcement remains limited in practice.

Administrative Enforcement

Under Decree No. 38/2024/NĐ-CP, specific penalties are outlined for fisheries violations. For instance, Article 25 prescribes a fine of VND 2–3 million (USD 80–120) for vessels between 12–15 meters that fail to record or incorrectly fill in fishing logs. This is 30–40 times lower than comparable Thai penalties. Additionally, Vietnam’s fines are based on vessel length rather than tonnage (GT), leading to weaker deterrence for large-capacity vessels.

Criminal Enforcement

Illegal fishing is defined under Article 242 of Vietnam’s Penal Code, with penalties ranging from three years in prison or VND 500 million in fines for individuals to VND 1 billion for legal enterprises. However, only a few cases have been addressed under this provision due to the difficulty of demonstrating criminal intent, a lack of independent monitoring data, and issues in estimating environmental harm. Most IUU cases are dealt with administratively, which reduces deterrence efficacy.

Institutional Mechanisms

Vietnam lacks an interagency administrative punishment agency. Enforcement responsibilities are divided among the Fisheries Surveillance Department, Border Guard, and Inspectorate of the Directorate of Fisheries, resulting in overlapping authorities and delays. The public disclosure of IUU vessel listings is in the developmental stage and is far less transparent than Thailand’s consolidated DOF-managed database.

To conclude, both countries possess comprehensive legal frameworks for fisheries enforcement, but their implementation capacity differs significantly. Vietnam was an early mover in establishing its institutional framework, but Thailand has surpassed it in practical effectiveness through rapid reform after the yellow card. Thailand’s system links sanctions to fishing capacity and the value of illegal gains, ensuring proportionality and deterrence, while Vietnam’s penalties remain fixed and largely symbolic.

Conclusion

Overall, Vietnamese seafood enterprises are facing numerous challenges in complying with regulations against IUU fishing, especially in the context of the EU issuing a yellow card. The analysis results indicate the following:

First, the current level of compliance remains inadequate, despite a relatively high rate of VMS installation and the adoption of traceability processes by enterprises. However, implementation lacks uniformity. Many vessels have installed VMS, but some are incorrectly installed on the wrong vessels, or a single vessel may be equipped with multiple VMS devices from different fishing boats, leading to inaccurate reporting.

Second, financial and resource barriers remain significant. Enterprises face high compliance costs, such as investing in monitoring and traceability technology, while many lack sufficient resources to fully meet the requirements.

Third, the negative consequences of non-compliance, particularly the imposition of the yellow card, impact not only export capabilities but also damage the reputation of Vietnam’s seafood industry on the international stage. Enterprises must undergo stringent inspections, which increase costs and affect revenue.

Based on this analysis, to enhance compliance and expedite the removal of the IUU yellow card, the government, businesses, and relevant organisations may consider implementing the following specific solutions:

First, transition from length-based to GT vessel classification and licensing control.

Second, establishment of a science-based management mechanism: HCRs and TAC.

Third, strengthening enforcement through proportional penalties and inter-agency coordination.

This paper contributes to the literature on regulatory compliance in fisheries by emphasizing the behavioral gap between formal legal frameworks and actual firm practices in a changing economy. The comparison with Thailand illustrates that legislative measures are insufficient in the absence of cultural and institutional transformations.

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