PM orders stricter controls over multi-level marketing

Wednesday, Nov 02, 2016 09:00

Prime Minister Nguyen Xuan Phuc has released a directive requiring ministries and relevant agencies to tighten State management of multi-level marketing (MLM) activities. — Photo
HA NOI (Biz Hub) — Prime Minister Nguyen Xuan Phuc has released a directive requiring ministries and relevant agencies to tighten State management of multi-level marketing (MLM) activities.

The directive aims to ensure social security and people's rights while facilitating MLM companies' ability to operate under a legal framework.

The PM instructs the Ministry of Industry and Trade (MoIT), in co-operation with the Ministry of Justice and relevant agencies, to review regulations that do not fit the current reality in multi-level marketing management.

Accordingly, the MoIT is required to uncover and strictly punish violations by multi-level marketing firms operating without business licences. The ministry will investigate, check and resolve violations by marketing companies with products beyond their granted business licences.

Check-ups ensuring the businesses' food safety, promotions, advertisements and conferences will also be enhanced.

In addition, the ministry instructs market management departments to define goods' origins, especially those that are domestically produced.

The Ministry of Police should quickly investigate and strictly punish organisations and individuals taking advantage of MLM committing tax evasion, commercial fraud, smuggling, counterfeiting, manufacturing poor quality products and illegal financial mobilisation nationwide.

The PM also asked the MoJ to co-operate with relevant agencies to study and propose supplemental criminal punishments for firms using multi-level marketing for illegal trading activities.

The Ministry of Health will investigate the production, processing, transport, import and export of food and cosmetics products of these companies.

The Ministry of Finance is required to quickly publish exact information on tax investigation results and check-ups on multi-level marketing businesses nationwide.

The Ministry of Science and Technology will be in charge of resolving violations of measurements, product quality and intellectual property rights of MLM companies.

The Ministry of Agriculture and Rural Development will investigate and prevent violations of production, packaging, imports and advertisements – especially fertilisers.

The State Bank of Viet Nam has instructed credit institutions to follow regulations on deposit management of multi-level marketing companies according to a decree published on May 14, 2014. The institutions are required to quickly freeze a businesses' accounts to facilitate investigations and withdraw the assets of violated firms.

The PM asked provincial People's Committees to enhance management and investigate violations, while organising training courses to popularise legal regulations on multi-level marketing. — VNS


MLM firms fined, terminated

The Viet Nam Competition Authority under the Ministry of Industry and Trade has punished several multi-level marketing firms, including the Absonutrix Viet Nam Joint Stock Company and Global Trade and Investment Corporation, for various violations.

The Absonutrix Viet Nam Joint Stock Company in HCM City has been fined VND350 million (US$15,593) for failure to submit financial reports, while the Global Trade and Investment Corporation has had its  business registration licence revoked and its deposits seized.

The MoIT is set to terminate operations of the Thang Long Franchise Company Limited in Ha Noi, while requiring them to pay their dues to people who had participated in the company's multi-level marketing network. — VNS

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