Maximum increase of 10 times the penalty for violations of multi-level marketing
The Government has just issued a decree to supplement a number of prohibited acts in multi-level marketing activities. Penalties for violations by multi-level marketers, traders and multi-level marketing legal entities have also been increased.
The Government has just issued Decree No. 141/2018/ND-CP amending and supplementing a number of articles of the decrees regulating the handling of violations of the law in multi-level business activities. Decree 141 takes effect from November 25, 2018 with many new points including increasing the level of penalties for violations in the field of multi-level business, with some violations being fined up to 10 times.
Specifically, for illegal multi-level marketing activities, Decree 141 stipulates a fine of 80 to 100 million VND if other people are required to deposit, pay money or buy a quantity of goods to sign a contract to participate in multi-level marketing.
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Next, it includes acts of allowing multi-level marketing participants to receive money or other economic benefits from introducing people to multi-level marketing activities; refusing to pay commissions and bonuses; not performing or improperly performing obligations to buy back goods...
The fine will double (from 160 to 200 million VND) if the above acts are committed in two or more provinces or centrally run cities.
Regarding the group of violations in multi-level marketing activities, Decree 141 stipulates a fine of 3 to 5 million VND for multi-level marketing participants if they violate marketing, sales and multi-level marketing network development activities, or fail to present a membership card... (old fine from 300 to 500 thousand VND).
Next, multi-level marketing sellers can be fined from 15 to 20 million VND if they require others to pay money to sign a contract; provide false information about the reward plan, benefits of participating in multi-level marketing or features and uses of goods...
Traders can be fined from 25 to 30 million VND if they sign a multi-level marketing contract with an unqualified individual or sign an incomplete contract; do not terminate the contract with a multi-level marketing seller when this person is penalized; do not build and announce the selling price of goods traded in a multi-level marketing manner...
Next, a fine of 30 to 40 million VND will be imposed on traders who pay multi-level sellers a total value of commissions, bonuses and other economic benefits exceeding 40% of the enterprise's revenue in that year; do not properly implement the operating rules and registered bonus payment plans; organize conferences, seminars, training courses, and introductions to multi-level marketing business activities without a license.
Traders can also be fined from 40 to 50 million VND for the act of buying, selling or transferring a network of multi-level sales participants to other businesses (except in cases of buying, merging or consolidating businesses); doing multi-level business with unauthorized subjects...