Strictly control multi-level marketing activities.

(Baonghean - Faced with the complex developments in multi-level marketing activities, on January 8, 2016, the Provincial People's Committee issued Document No. 115/UBND-NC directing the authorities of districts, cities, and towns, the Department of Industry and Trade, the Provincial Police, and other relevant departments to strengthen management.)

According to statistics from the Department of Industry and Trade, by the end of 2015, there were 22 multi-level marketing (MLM) businesses in the province that had notified and been approved by the department. These MLM businesses mainly have their headquarters located outside the province or in major cities such as Hanoi, Dong Nai, Ho Chi Minh City, Binh Duong, Bac Giang, etc., with none having their main headquarters within the province. Therefore, businesses operating within the province are usually distribution centers, branches, or agents; their network operates throughout the province, primarily in Vinh City.

In terms of goods, multi-level marketing businesses sell a wide variety of items such as technology products, functional foods, cosmetics, household products, etc., with functional foods and dietary supplements being the main focus.

The number of people participating in multi-level marketing networks throughout the province has reached over 11,000 to date (Thien Ngoc Minh Uy Company has approximately 1050 people, Thien Su Vietnam Co., Ltd. has approximately 2120 people, Lien Ket Trien Vong Company has approximately 3530 people, Herbalife Company has approximately 700 people…), with an average income of about 300 million VND per business.

Dietary supplements are a common product sold by multi-level marketing companies.

Businesses that have been certified by the Department of Industry and Trade generally comply with the periodic reporting requirements. However, some still fail to properly complete the required documentation as stipulated in Article 10 of Circular 24/2014/TT-BCT dated July 30, 2014, issued by the Ministry of Industry and Trade, which details the implementation of several articles of Decree 42/2014/NĐ-CP dated May 14, 2014, on the management of multi-level marketing activities; some businesses provide inaccurate contact information in the locality, causing difficulties in the assessment, confirmation of notifications, and management of sales network activities; and some businesses still fail to notify the authorities about multi-level marketing activities or organize seminars, etc.

Furthermore, according to Ms. Tran Thi My Ha, Head of the Trade Management Department, there are still businesses operating multi-level marketing schemes illegally in the province, without registering with the competent authorities for assessment and licensing. In 2015, the Department's leadership directed the inspectorate to check the compliance with the law by businesses operating multi-level marketing schemes in the province and discovered and fined one business 80 million VND.

One multi-level marketing company that has been penalized is Truong Sinh Science and Technology Company (located at TT1A, Vinaconex9B building, Le Nin Avenue, Nghi Phu commune, Vinh City). In addition, there are other businesses operating illegally through multi-level marketing schemes that have been reported on by the press, such as New Star International Joint Stock Company and the Center for Supporting the Poor in New Rural Development…

This is an online promotional page for a multi-level marketing company.

According to the Chief Inspector of the Department of Industry and Trade, Mr. Nguyen Trong Luong, Truong Sinh Science and Technology Company violated the law by organizing multi-level marketing without a registration certificate issued by a competent state agency. In accordance with Article 4, Clause 2 and Article 92, Clause 7, Point a of Government Decree 185/2013/ND-CP dated November 15, 2013, on administrative penalties in commercial activities, production, trading of counterfeit and prohibited goods, and consumer protection, on November 16, 2015, the Department's inspectorate issued Decision No. 86/QD-XPVPHC imposing an administrative fine of 80 million VND on Truong Sinh Science and Technology Company for violating multi-level marketing regulations.

According to Ms. Vo Thi An, Deputy Director of the Department of Industry and Trade, although multi-level marketing is permitted by law, it has become increasingly complex in the province recently. The emergence of some organizations and individuals exploiting a lack of information to conduct illegal multi-level marketing activities, using the multi-level marketing business model to raise funds, and engaging in multi-level marketing without registering with the competent authorities has negatively impacted people's lives and, in some areas, even affected public security and order.

Therefore, the Department of Industry and Trade advised the Provincial People's Committee to issue Official Letter No. 115/UBND-NC on strengthening the management of multi-level marketing activities in the province.

Market management officials inspect the design and quality of goods at Vinh Market.

According to Official Document 115/UBND-NC, the authorities of districts, cities, towns, and media agencies need to strengthen propaganda efforts to raise awareness about multi-level marketing activities and the laws governing multi-level marketing activities. This is to prevent the enticement and coercion to participate in illegal multi-level marketing activities, and to prevent the exploitation of multi-level marketing business models to raise funds and conduct multi-level marketing without registering with the competent authorities.

The provincial police are strengthening their management and closely monitoring the situation related to multi-level marketing activities; promptly detecting and strictly handling violations in multi-level marketing activities in accordance with the law. The Department of Industry and Trade is strengthening state management of organizations and individuals engaged in multi-level marketing; directing the Market Management Sub-department to coordinate effectively with the authorities of districts, cities, and towns and relevant agencies to strengthen inspection and supervision of multi-level marketing activities; promptly detecting and strictly handling violations…

Ms. Vo Thi An said: “Due to profit motives, some businesses use tricks and schemes to circumvent authorities. Furthermore, multi-level marketing (MLM) develops its network through multiple levels of sales without fixed business locations, making management extremely difficult. Therefore, the Department of Industry and Trade hopes that the authorities of districts, cities, and towns, the Provincial Police, and relevant departments will cooperate effectively to ensure that the directives of the Provincial People's Committee in Official Letter No. 115/UBND-NC achieve positive results…”

Nhat Lan