DECREE

ON REGULATORY FRAMEWORK FOR MULTI-LEVEL MARKETING

The Government’s Decree No. 40/2018/ND-CP dated March 12, 2018 providing regulatory framework for multi-level marketing, coming into force from May 14, 2018, is amended by:

The Government’s Decree No. 03/2023/ND-CP dated February 10, 2023 defining functions, tasks, powers and organizational structure of Vietnam Competition Commission, coming into force from April 01, 2023.

Pursuant to the Law on Organization of Government dated June 19, 2015;

Pursuant to the Competition Law dated December 03, 2004;

Pursuant to the Law on Investment dated November 26, 2014 and the Law dated November 22, 2016 on amendments to Article 6 and Appendix 4 - The list of conditional business lines under the Law on investment;

At the request of the Minister of Industry and Trade,

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Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Decree deals with multi-level marketing and management of multi-level marketing activities.

Article 2. Regulated entities

This Decree applies to multi-level marketing companies, multi-level marketing salespeople and other organizations and individuals involved in multi-level marketing.

Article 3. Definitions

For the purposes of this Decree, the terms below are construed as follows:

1. “multi-level marketing (MLM)” means a business model that utilizes the network of participants at different levels wherein commissions, bonuses and other economic benefits are or may be paid to participants based on their personal sales and the sales made by other distributors below the participants, also known as downline distributors. 

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3. “participant” means a salesperson who participates in the MLM under the contract signed with the MLM company.

4. "MLM contract” means a written agreement on the participation in the MLM entered into by and between a salesperson and the MLM company.

5. “business rule” means a set of rules established by a MLM company for governing activities of MLM participants, process and procedures for performing MLM activities.

6. “compensation plan” means a plan used by a MLM company to calculate and pay commissions, bonuses and other economic benefits to participants based on their own sales efforts and the sales made by their downline distributors.

7. “position and identity number in the MLM” means the position and identity number of a participant in the MLM network which are used as a basis for calculating commissions, bonuses and other economic benefits paid out to that participant.

Article 4. MLM subjects

1. The MLM business model is used to sell products only. Any business activities carried out in the form of MLM regarding a subject other than commodities are prohibited, unless otherwise prescribed by law.

2. The following goods cannot be sold through the MLM business model:

a) Medicines; medical equipment; veterinary drugs (including veterinary drugs used in aquaculture); pesticides; insecticidal and germicidal chemicals and preparations which are restricted or banned from household and medical use; other hazardous chemicals;

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Article 5. Prohibited acts in MLM

1. MLM companies are prohibited from: 

a) requesting a salesperson to deposit or pay a certain amount of money in any way to obtain eligibility to enter into a MLM contract;

b) requesting a prospective participant to buy a certain quantity of products in any way to obtain eligibility to enter into a MLM contract;

c) paying money or other economic benefits to a participant in compensation for his/her recruitment of new participants without consideration of his/her sale of products to such new participants;

d) refusing to pay, without legitimate reasons, commissions, bonuses or other economic benefits to eligible participants;  

dd) providing false information concerning the compensation plan or benefits from participation in the MLM;

e) providing false or misleading information about features or uses of products or operations of the MLM company through speakers or trainers at conferences, meetings, training courses or training materials of the MLM company;

g) maintaining more than one MLM contract, position, identity number or others of equivalent validity for a participant;

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i) providing commercial intermediary services as regulated by the Law on Commerce with the aims of maintaining, expanding and developing the MLM network;

k) receiving or accepting a participant's application or another document which states that the participant relinquishes a part or all of his/her rights as prescribed in this Decree or says that the MLM company must not fulfill any obligations towards to the participant as prescribed in this Decree;

l) using the MLM strategy to trade or sell a subject other than the one permitted in Article 4 of this Decree;

m) failing to use the management system registered with the regulatory authority that issued the MLM registration certificate to manage MLM participants;

n) trading or transferring the network of MLM participants to another enterprise, except for acquisition, consolidation or merger of enterprises.

2. MLM participants are prohibited from: 

a) Committing the prohibited act specified in Point a Clause 1 of this Article;

b) providing false or misleading information about benefits of a participant, features or uses of products, or operations of the MLM company;

c) failing to obtain a written authorization from the MLM company before organizing MLM conferences, meetings or training courses;

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dd) taking advantage of his/her position, power or social position to encourage, request, lure or entice other persons to participate in MLM network or buy products through the MLM model;

e) performing MLM activities in a province in which the MLM company does not yet carry out registration of MLM activities.

3. Organizations and individuals performing business using the MLM model are prohibited from organizing conferences, meetings, training courses or introduction of their MLM activities or the MLM of the others without obtaining the MLM registration certificate, unless otherwise prescribed by law.

4. Individuals are prohibited from participating in the MLM network of an organization or individual that is not granted the MLM registration certificate, unless otherwise prescribed by law.

Chapter II

REGISTRATION OF MULTI-LEVEL MARKETING

Article 6. Registration of multi-level marketing

The registration of MLM must be properly carried out in accordance with regulations of this Decree.

Article 7. Eligibility requirements for MLM registration

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a) It must be an enterprise that is duly established within the territory of Vietnam under the law of Vietnam and has never had a MLM registration certificate revoked;

b) It must have at least VND 10 billion of charter capital;

c) The partners, if the MLM company is a partnership, the proprietor or company’s owner, if the MLM company is a sole proprietorship or a single-member limited liability company, the members, if the MLM company is a limited liability company of two or more members, the founding shareholders, if the MLM company is a joint-stock company, or the legal representative of the MLM company must have never held one of the said positions at a MLM company whose MLM registration certificate has been revoked in accordance with the provisions of the Government's Decree No. 42/2014/ND-CP dated May 14, 2014 and this Decree; 

d) It must deposit money at a commercial bank or a foreign bank branch in Vietnam as prescribed in Clause 2 Article 50 of this Decree;

dd) Its MLM contract forms, business rule, compensation plan and training programs must be available, obvious, transparent and conformable with the provisions of this Decree;

e) It has an information technology system to manage participants in its MLM and a website to provide information about its profiles and MLM activities;

g) It has a communications system to receive and take actions against complaints or queries of MLM participants.

2. The applicant shall prepare an application for MLM registration certificate as prescribed in Article 9 of this Decree and be legally responsible for the legitimacy of its submitted application.

Article 8. MLM registration certificate

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2. The MLM registration certificate is made into 02 originals, of which 01 original is delivered to the applicant and the other is kept by the Ministry of Industry and Trade of Vietnam.

3. A MLM registration certificate includes the following contents: The name of MLM company; information concerning the enterprise registration certificate/ investment registration certificate (if any), including: enterprise ID number, issuing authority, date of initial issuance, date of the latest modification; head office’s address, telephone number, fax number, website and email address; information about the legal representative, including:  full name, nationality, details of ID card/ citizen identity card/ passport, position, registered permanent residence/ temporary residence; scope of products sold through the MLM.

Article 9. Application for MLM registration certificate

An application for the MLM registration certificate includes the following documents (which must bear the applicant's stamp):

1. The application form for the MLM registration certificate made using Form No. 01 in the Appendix enclosed herewith.

2. A copy of the enterprise registration certificate or another document of equivalent legal effect.

3. A list of persons mentioned in Point c Clause 1 Article 7 of this Decree, enclosed with copies of their personal identity papers (ID card or citizen identity card or passport if that is a Vietnamese citizen; passport and certificate of registration of temporary residence issued by a Vietnamese authority if that is a foreigner permanently residing in Vietnam; passport if that is a foreigner who does not permanently reside in Vietnam).

4. 02 sets of documents concerning the applicant’s MLM activities, including:

a) The MLM contract form;

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c) The basic training program;

d) The business rule.

5. A list of products sold through the MLM, including: Name, type, origin, packaging specifications, warranty (if any), selling price, point volume calculated based upon the selling price, and time of application.

6. An original of the bank’s deposit confirmation.

7. Technical documents concerning the information technology system used for managing participants as prescribed in Article 44 of this Decree.

8. Documents proving that the applicant’s website meets the requirements laid down in Article 45 of this Decree.

9. Documents proving the applicant’s communications system capable of receiving and taking actions against complaints or queries of MLM participants.

Article 10. Procedures for issuance of a MLM registration certificate

1. Receipt of application:

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b) Within 05 working days from the receipt of the application, the Ministry of Industry and Trade of Vietnam shall check its adequacy and validity. If an application is inadequate or invalid, the Ministry of Industry and Trade of Vietnam shall request the applicant in writing to modify its application;

c) Within 30 days from the receipt of the written request from Ministry of Industry and Trade of Vietnam, if the applicant fails to modify its application as requested, the Ministry of Industry and Trade of Vietnam shall return the application.

2. Processing of application:

a) Upon the receipt of an adequate and valid application, the Ministry of Industry and Trade of Vietnam shall notify the applicant of the application processing fees. The Ministry of Industry and Trade of Vietnam shall return the application if the applicant fails to fully pay the application processing fees within 30 days from the notification date;

b) The Ministry of Industry and Trade of Vietnam shall process the received application within 20 working days from the receipt of application processing fees in full;

c) Application processing steps:

- Obtain a written verification of the accuracy of the deposit confirmation from the bank where the applicant deposits money;

- Consider the conformity of the documents included in the application for the MLM registration certificate with the provisions of this Decree.

d) If the application fails to meet the requirements laid down in this Decree, the Ministry of Industry and Trade of Vietnam shall request the applicant in writing to modify its application. The applicant may only modify its application once within 30 days from the receipt of the written request from the Ministry of Industry and Trade of Vietnam.

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3. Return of application:

If the applicant fails to modify the application within the time limit specified in Point d Clause 2 of this Article or the application still fails to meet the requirements laid down in this Decree after it has been modified, the Ministry of Industry and Trade of Vietnam shall give a written notification of application return in which reasons for such return shall be indicated.

4. Issuance of a MLM registration certificate:

If the application meets all of requirements laid down in this Decree, the Ministry of Industry and Trade of Vietnam shall issue the MLM registration certificate using Form No. 02 in the Appendix enclosed herewith and return 01 set of the documents specified in Clause 4 Article 9 of this Decree to the applicant after they are sealed by the Ministry of Industry and Trade of Vietnam.

5. Within 10 working days from the date of issue of the MLM registration certificate, the Ministry of Industry and Trade of Vietnam shall publish relevant information on its website, notify the bank where the MLM company deposits money and provide the copy of the MLM registration certificate and copies of the documents specified in Clause 4 and Clause 5 Article 9 of this Decree to Provincial Departments of Industry and Trade nationwide adopting one of the following methods:

a) By post;

b) By email;

c) Via the MLM management system of the Ministry of Industry and Trade of Vietnam.

Article 11. Modification of MLM registration certificates

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a) In case there are any changes in the MLM company’s profiles, including name, legal representative, head office's address, founding shareholders, proprietor or company’s owner, the amounts deposited at bank, the MLM company shall carry out procedures for modification of its MLM registration certificate within 15 working days from the date on which such a change is certified by a competent authority;

b) In case there are changes in contents specified in Clause 4, Clause 7, Clause 8 and Clause 9 Article 9 of this Decree, the MLM company shall carry out procedures for modification of its MLM registration certificate before application.

2. In case there are changes in the list of products sold through the MLM, the MLM company shall inform the Ministry of Industry and Trade of Vietnam in writing of such changes before application.

Article 12. Application and procedures for modification of MLM registration certificates

1. An application for modification of a MLM registration certificate includes:

a) The application form for modification of the MLM registration certificate made using Form No. 03 in the Appendix enclosed herewith;

b) An original of the MLM registration certificate issued by the Ministry of Industry and Trade of Vietnam;

c) The documents specified in Article 9 of this Decree in connection with the modified contents of the MLM registration certificate.

2. Procedures for modification of a MLM registration certificate are performed according to Article 10 this Decree.

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a) The MLM company shall send a written notification of changes, which specifies the changes and is enclosed with the new list of products sold through the MLM, to the Ministry of Industry and Trade of Vietnam (either by hand or by post);

b) The Ministry of Industry and Trade of Vietnam shall request the MLM company in writing to make modification, if necessary, within 15 working days after its receipt of the company’s notification.

The MLM company is allowed to sell products specified in the list of products sold through the MLM if no modification is requested by the Ministry of Industry and Trade of Vietnam within 15 working days after receipt of the company’s notification;

c) The Ministry of Industry and Trade of Vietnam shall notify Provincial Departments of Industry and Trade nationwide adopting one of the methods specified in Clause 5 Article 10 of this Decree of the MLM company’s notification of changes in its list of products sold through the MLM.

Article 13. Re-issuance of MLM registration certificates

1. In case a MLM registration certificate is lost, torn or destroyed, the MLM company shall submit an application for re-issuance of the MLM registration certificate using Form No. 04 in the Appendix enclosed herewith to the Ministry of Industry and Trade of Vietnam (either by hand or by post).

2. Within 10 working days from the receipt of a valid application for re-issuance of the MLM registration certificate, the Ministry of Industry and Trade of Vietnam shall re-issue the MLM registration certificate to the applicant.

Article 14. Extension of MLM registration certificates

1. A MLM registration certificate may be extended several times and for up to 5 years each.

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3. At least 03 months before the expiry date of its MLM registration certificate, the MLM company shall carry out procedures for extension of its MLM registration certificate.

4. An application for extension of MLM registration certificate includes:

a) The application form for extension of the MLM registration certificate made using Form No. 05 in the Appendix enclosed herewith;

b) The documents specified in Clause 2 and Clause 3 Article 9 of this Decree;

c) The documents specified in Clause 4 through 9 Article 9 of this Decree if there are any changes in the contents of the MLM registration certificate which has been also modified.

5. Procedures for extension of a MLM registration certificate are performed in accordance with the provisions of Article 10 of this Decree.

Article 15. Fees for processing of applications for MLM registration certificate

1. Fees for processing of applications for MLM registration certificate include fees for processing of applications for issuance, modification and extension of MLM registration certificate.

2. Fees for processing of applications for MLM registration certificate, collection, transfer, management and use thereof shall comply with regulations of law.

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1. The Ministry of Industry and Trade of Vietnam shall revoke the MLM registration certificate in the following cases:

a) The enterprise registration certificate or another document of equivalent legal effect is revoked or the MLM company is dissolved or declared bankrupt in accordance with regulations of law;

b) The submitted application for MLM registration certificate is found to contain false information;

c) The MLM company incurs penalties for committing one of the prohibited acts in Clause 1 Article 5 or Clause 3 Article 47 of this Decree in the course of selling products through the MLM as regulated by law;

d) The MLM company fails to implement remedial measures as requested by the competent authority in charge of managing MLM activities so as to meet the requirements in Article 7 of this Decree during its operation.

2. A MLM registration certificate ceases to have effect from the effective date of the decision on revocation of the MLM registration certificate.

3. Procedures for revocation of a MLM registration certificate:

a) The Ministry of Industry and Trade of Vietnam issues a decision on revocation of the MLM registration certificate upon the occurrence of one of the events specified in Clause 1 of this Article;

b) Within 10 working days from the effective date of the decision on revocation of the MLM registration certificate, the Ministry of Industry and Trade of Vietnam shall inform Provincial Departments of Industry and Trade nationwide of the revocation adopting one of the methods specified in Clause 5 Article 10 of this Decree, and also publish information on the revocation on its website.

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1. Cases in which MLM activities are terminated:

a) The MLM registration certificate expires without extension made as prescribed in Article 14 of this Decree;

b) The MLM company terminates MLM activities at its own will;

c) The MLM registration certificate is revoked by a competent authority.

2. When terminating MLM activities, the MLM company shall:

a) Send a written notification of termination of MLM activities to the Ministry of Industry and Trade of Vietnam, post up the notice thereof at its head office, branches, representative offices and business locations, and on its website;

b) Terminate or finalize MLM contracts and settle benefits for MLM participants in accordance with law regulations on MLM management;

c) Fulfill obligations under decisions on imposition of penalties for violations against regulations on MLM activities issued by competent authorities.

Article 18. Procedures for termination of MLM activities

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a) The notification of termination of MLM activities shall include:

- A notice of termination of MLM activities made using Form No. 06 in the Appendix enclosed herewith;

- A report made using Form No. 15 in the Appendix enclosed herewith;

- A copy of the enterprise registration certificate of the latest modification or another document of equivalent legal effect;

- The original MLM registration certificate;

- A copy of the decision on termination of MLM activities issued by the proprietor if the MLM company is a sole proprietor, or the company’s owner if the MLM company is a single-member limited liability company;  the decision on and the minutes of the meeting on termination of MLM activities issued by the Board of Members if the MLM company is a limited liability company with two or more members, or the General Shareholders’ Meeting if the MLM company is a joint-stock company, or general partners if the MLM company is a partnership; 

b) Procedures for termination of MLM activities:

- The MLM company shall send notification of termination of MLM activities, including the documents mentioned above, to the Ministry of Industry and Trade of Vietnam (either directly or by post);

- Within 10 working days from the receipt of a valid notification, the Ministry of Industry and Trade of Vietnam shall issue a written certification of receipt of the notification of termination of MLM activities, inform Provincial Departments of Industry and Trade nationwide of such termination of MLM activities adopting one of the methods specified in Clause 5 Article 10 of this Decree, and publish the termination-related information on its website.

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a) The notification of termination of MLM activities shall include:

- The notice of termination of MLM activities made using Form No. 06 in the Appendix enclosed herewith;

- A report made using Form No. 15 in the Appendix enclosed herewith;

- A copy of the enterprise registration certificate of the latest modification or another document of equivalent legal effect;

- The original MLM registration certificate.

b) Procedures for termination of MLM activities:

- Within 30 working days after the MLM registration certificate expires or is revoked, the MLM company shall submit the notification of termination of MLM activities, including the documents prescribed above, to the Ministry of Industry and Trade of Vietnam (either directly or by post);

- Within 10 working days from the receipt of a valid notification, the Ministry of Industry and Trade of Vietnam shall issue a written certification of receipt of the notification of termination of MLM activities, inform Provincial Departments of Industry and Trade nationwide of such termination of MLM activities adopting one of the methods specified in Clause 5 Article 10 of this Decree, and publish the termination-related information on its website.

Chapter III

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Article 19. MLM activities in a province

A MLM company is considered to have MLM activities in a province if:

1. Its head office, branch or representative office carries out MLM activities in such province.

2. It organizes conferences, meetings or training programs in MLM contents in such province.

3. A participant in its MLM network resides (either permanently or temporarily) or carries out marketing activities or sells products through the MLM in such province.

Article 20. Registration of MLM activities in a province

1. The MLM company shall carry out procedures for registration of MLM activities with the Provincial Department of Industry and Trade, and shall perform MLM activities in such province only after it has obtained a written certification of registration of MLM activities from such Provincial Department of Industry and Trade.

2. In case its head office, branch or representative office is not located in a province, the MLM company shall authorize an individual who resides in such province to act as its representative to contact and complete necessary procedures with competent authorities in such province.

3. The MLM company is obliged to keep documents concerning its MLM activities carried out in the province and present them at the request of competent authorities.

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1. An application for registration of MLM activities in a province includes:

a) The application form for registration of MLM activities in a province made using Form No. 07 in the Appendix enclosed herewith;

b) A copy of the enterprise registration certificate or another document of equivalent legal effect;

c) A copy of the MLM registration certificate;

d) A copy of the certificate of operation registration for branch or representative office, or the certificate of registration of business location (if any), or the written authorization to the company’s representative in such province, accompanied with a certified copy of his/her ID card/ citizen identity card/ passport. 

2. The MLM company shall submit an application for registration of MLM activities in the province, accompanied with the list of participants who reside in such province and are participating in its MLM network at the time of application submission if the company’s MLM activities have been performed in such province before the effective date of this Decree (such list must specify: full name, date of birth, residence (either permanent or temporary), number of ID card/ citizen identity card/ passport, number of the MLM contract, participant’s identity number, and telephone number), to the Department of Industry and Trade of the province where its MLM activities will be carried out (either directly or by post).

3. If the application is inadequate or invalid, within 05 working days from the receipt of the application, the Provincial Department of Industry and Trade shall request the MLM company in writing to modify its application. The MLM company shall modify its application within 15 working days from the receipt of the written request from the Provincial Department of Industry and Trade. The Provincial Department of Industry and Trade shall return the application to the MLM company that fails to modify its application within the prescribed time limit.

Within 07 working days from the receipt of an adequate and valid application, the Provincial Department of Industry and Trade shall issue a written certification of registration of MLM activities in the province which is made using the Form No. 08 in the Appendix enclosed herewith to the MLM company. If an application is refused, the Provincial Department of Industry and Trade shall give a written notification indicating reasons for refusal to the MLM company.

4. Within 05 working days from the issue of the written certification of registration of MLM activities, the Provincial Department of Industry and Trade shall publish information on such certification on its website and send a copy thereof to the Ministry of Industry and Trade of Vietnam adopting one of the methods specified in Clause 5 Article 10 of this Decree.

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1. The MLM company is responsible for carrying out procedures for registration of modification of its MLM activities carried out in a province with the Provincial Department of Industry and Trade when there are any changes in:

a) Its head office, branch, representative office or business location in such province;

b) Its representative in charge of MLM activities in such province.

2. Within 15 working days from the occurrence of any of the changes specified in Clause 1 of this Article, the MLM company must submit an application for registration of modification of MLM activities, made using Form No. 09 in the Appendix enclosed herewith, and the documents specified in Point b, Point d Clause 1 Article 21 of this Decree to the Provincial Department of Industry and Trade (either directly or by post).

3. If the application is inadequate or invalid, within 05 working days from the receipt of the application, the Provincial Department of Industry and Trade shall request the MLM company in writing to modify its application. The MLM company may only modify the application once within 15 days from the receipt of the written request from the Provincial Department of Industry and Trade. The Provincial Department of Industry and Trade shall return the application to the MLM company that fails to modify its application within the prescribed time limit.

4. Within 07 working days from the receipt of an adequate and valid application, the Provincial Department of Industry and Trade shall issue a written certification of registration of modification of MLM activities in the province, made using Form No. 10 in the Appendix enclosed herewith, to the MLM company. If an application is refused, the Provincial Department of Industry and Trade shall give a written notification indicating reasons for refusal to the MLM company.

5. The Provincial Department of Industry and Trade shall publish information concerning the MLM company’s registration of modification of MLM activities in the province on its website and inform it to the Ministry of Industry and Trade of Vietnam adopting one of the methods specified in Clause 5 Article 10 of this Decree.

Article 23. Revocation of certificate of registration of MLM activities in a province

1. The Provincial Department of Industry and Trade shall revoke the certificate of registration of MLM activities in a province in the following cases:

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b) The MLM company fails to carry out MLM activities in the registered province for a consecutive period of 12 months;

c) The MLM company fails to fulfill its responsibility specified in Clause 11 Article 40 of this Decree;

d) Its MLM registration certificate is revoked by a competent authority.

2. Within 10 working days after the issuance of the decision on revocation of the certificate of registration of MLM activities in a province, the Provincial Department of Industry and Trade shall publish information concerning such revocation on its website and inform the Ministry of Industry and Trade of Vietnam of the same adopting one of the methods specified in Clause 5 Article 10 of this Decree.

3. The certificate of registration of MLM activities in a province shall cease to have effect from the effective date of the revocation decision.

4. Within 30 days from the effective date of the revocation decision, the MLM company shall carry out procedures for termination of MLM activities in such province according to the provisions of Article 24 of this Decree.

5. The Provincial Department of Industry and Trade shall not re-issue the certificate of registration of MLM activities in a province to the MLM company within 06 months from the effective date of the revocation decision in the case specified in Point b Clause 1 of this Article, or within 12 months from the effective date of the revocation decision in the case specified in Point a or Point c Clause 1 of this Article.

Article 24. Termination of MLM activities in a province

1. Cases where MLM activities in a province are terminated:

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b) The MLM company terminates MLM activities in such province at its own will.

2. When terminating MLM activities in a province, the MLM company shall:

a) Send a written notification of termination of MLM activities to the Provincial Department of Industry and Trade, post up the notice thereof at its head office, branch, representative office or business location in such province (if any), and on its website;

b) Terminate or finalize MLM contracts and solve benefits for participants in the MLM network in such province in accordance with law regulations on MLM management;

c) Fulfill obligations under decisions on imposition of penalties for violations against regulations on MLM activities committed in the province issued by competent authorities.

Article 25. Procedures for termination of MLM activities in a province

1. If a MLM company voluntarily terminates its MLM activities in a province, it shall send a notice of termination of MLM activities in a province, made using Form No. 11 in the Appendix enclosed herewith, and the report made using Form No. 16 in the Appendix enclosed herewith to the Provincial Department of Industry and Trade (either directly or by post).

2. If a MLM company terminates its MLM activities in a province because its certificate of registration of MLM activities in such province is revoked, it shall submit the documents specified in Clause 1 of this Article to the Provincial Department of Industry and Trade (either directly or by post) within 30 working days after its certificate of registration of MLM activities is revoked.

3. In case a MLM company voluntarily terminates its MLM activities in a province, within 10 working days after the receipt of the valid notification thereof, the Provincial Department of Industry and Trade shall issue a written certification of receipt of the notification to the MLM company, publish information on such termination on its website and report it to the Ministry of Industry and Trade of Vietnam adopting one of the methods prescribed in Clause 5 Article 10 of this Decree.

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1. A MLM company shall only be allowed to organize MLM conferences, meetings and/or training programs in the province in which it has obtained a certificate of registration of MLM activities.

2. If a conference, meetings or training program is intended to be organized with the attendance of at least 30 persons or at least 10 participants in its MLM network, the MLM company shall be required to inform the Provincial Department of Industry and Trade before organization. 

3. The MLM company shall cooperate with relevant competent authorities in monitoring and supervising its MLM conferences, meetings and/or training programs in accordance with applicable law regulations.

Article 27. Documentation and procedures for notification of MLM conferences, meetings and training programs

1. A notification of a MLM conference, meetings or training program includes:

a) The notice of MLM conference, meetings or training program, made using Form No. 12 in the Appendix enclosed herewith;

b) Contents and documents to be presented at such conference, meetings or training program, and estimated number of participants;

c) The list of speakers, enclosed with piecework agreements signed with the MLM company, which specifies rights and responsibilities of each speaker;

d) The original power of attorney in case the MLM company authorizes an individual to organize the MLM training program, conference or meetings.

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3. The MLM company shall send the notification of a MLM conference, meetings or training program to the Provincial Department of Industry and Trade (either directly or by post) at least 15 days before the estimated date of organization.

4. If the notification is inadequate or invalid, within 05 working days from the receipt of the notification, the Provincial Department of Industry and Trade shall request the MLM company in writing to modify its notification. The MLM company must modify its notification within 10 working days from the receipt of written request from the Provincial Department of Industry and Trade.

5. The MLM company may organize the MLM conference, meetings or training program if it does not receive any request for modification from the Provincial Department of Industry and Trade within 05 working days from the date of notification.

6. The MLM company shall notify the Provincial Department of Industry and Trade in writing of any changes in its submitted notification of its MLM conference, meetings or training program at least 03 days before the estimated date of organization.

7. In case a MLM company cancels the MLM conference, meetings or training program as notified to the Provincial Department of Industry and Trade, it shall notify the Provincial Department of Industry and Trade in writing of such cancellation before the estimated date of organization as notified.

Chapter IV

MANAGEMENT OF PARTICIPANTS IN THE MLM NETWORK

Article 28. Eligibility requirements to be satisfied by a participant

1. A person wishing to participate in the MLM network must have full legal capacity as prescribed by law.

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a) A person who is serving an imprisonment sentence or has previous convictions for manufacturing and trading of counterfeit or banned products, false advertising, deceiving consumers, obtaining property by fraud, abuse of trust to appropriate property, illegal impoundment of property or any violations against regulations on MLM;

b) A foreigner who fails to possess a valid work permit granted by a competent authority of Vietnam, except for work permit exemption cases prescribed by the law;

c) A person who has participated in the MLM and incurred administrative penalties for violations against regulations in Clause 2, Clause 3 and Clause 4 Article 5 of this Decree but has not been treated as if he/she does not incur any administrative penalties;

d) The persons mentioned in Point c Clause 1 Article 7 of this Decree;

dd) Officials and public employees as prescribed in the law on officials and public employees.

Article 29. MLM contracts

1. The MLM company must enter into MLM contract with every participant.

2. A MLM contract shall include the following contents:

a) Name, legal representative and contract information of the MLM company;

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c) Full name and identity number of the introducer (or sponsor);

d) Information concerning the products sold through the MLM;

dd) Information concerning the compensation plan and business rule;

e) Rights and obligations of the parties, which must conform to this Decree and relevant laws;

g) The provisions on payment of commissions and bonuses by bank transfer;

h) The provisions on repurchase of products;

i) Cases where a MLM contract is terminated and obligations arising from such termination;

k) The policies for settlement of contract disputes.

3. A MLM contract shall meet the following format requirements:

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b) The text of the MLM contract must have sufficient color contrast against the background.

Article 30. Termination of MLM contracts

1. A participant is entitled to terminate the MLM contract by sending a written notification to the MLM company at least 10 working days before the intended date of termination.

2. The MLM company is entitled to terminate the MLM contract signed with a participant if he/she commits any violations against regulations in Article 41 of this Decree.

3. The MLM company must terminate the MLM contract signed with a participant if he/she commits violation against regulation in Clause 2 Article 5 of this Decree.

4. Within 30 days from the date on which the MLM contract is terminated, the MLM company shall make full payments of commissions, bonuses and other economic benefits which the participant is entitled to receive during his/her participation in the company's MLM network.

Article 31. Basic training program

1. The basic training program is compulsory for participants in the MLM network.

2. A basic training program includes the following contents:

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b) Ethic standards of a participant in the MLM;

c) Basic contents of a MLM contract, business rule and compensation plan;

d) The policies for assessment of a participant's completion of the basic training program in conformity with training contents and method.

3. The minimum duration of a basic training program is 08 hours.

Article 32. Provision of basic training program for participants

1. The MLM company is responsible for providing participants in its MLM network with training courses according to the basic training program registered with competent authorities without collecting any training fees.

2. Each participant is obliged to attend and have a grasp of all contents of the basic training program.

3. Only persons who are appointed by the MLM company as trainers may provide basic training programs for participants in the company’s MLM network.

4. A basic training program may be provided adopting one of the following methods:

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b) Distance training.

5. The MLM company shall evaluate the completion of the basic training program of a participant and give a written certification of basic training contents and volume completed by such participant.

6. The MLM company shall keep all documents concerning basic training programs provided for participants in its MLM network, including documents proving training duration, method, location (if any) and results.

7. In case there are any changes in the contents prescribed in Clause 2 Article 31 of this Decree, the MLM company shall provide additional training in such contents for participants or publish such changes in its website or at its head office, branches, representative offices and business locations within 30 days from the occurrence of such changes.

Article 33. Membership cards

1. The MLM company shall only issue membership cards to participants who have successfully completed the basic training program and entered into written commitments made using Form No. 13 in the Appendix enclosed herewith.

2. The MLM company shall issue membership cards free of charge to participants.

3. A membership card contains the following contents:

a) Name of the MLM company;

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c) Photograph of the participant;

d) Details of the participant, including: Name, number of ID card/ citizen identity card or passport, participant's identity number or number, date and place of issue of membership card.

4. A membership card shall be no longer valid when the MLM contract is terminated.

5. The MLM company shall publish the termination of validity of membership cards of participants on its website.

Article 34. Trainers

1. The MLM company shall appoint qualified trainers to provide basic training programs for participants in its MLM network.

2. Eligibility requirements to be satisfied by a trainer:

a) Have a certificate of proficiency in MLM laws as prescribed in Article 38 of this Decree;

b) Maintain a valid employment contract or training contract signed with the MLM company.

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a) A person who is serving an imprisonment sentence or has previous convictions for manufacturing and trading of counterfeit or banned products, false advertising, deceiving consumers, obtaining property by fraud, abuse of trust to appropriate property, illegal impoundment of property or any violations against regulations on MLM;

b) A foreigner who fails to possess a valid work permit granted by a competent authority of Vietnam, except for work permit exemption cases as prescribed by law;

c) A person who has participated in the MLM and incurred administrative penalties for violations against regulations in Clause 2, Clause 3 and Clause 4 Article 5 of this Decree but has not been treated as if he/she does not incur any administrative penalties;

d) The persons mentioned in Point c Clause 1 Article 7 of this Decree;

dd) Officials and public employees as prescribed in the law on officials and public employees.

4. The MLM company shall make and publish the list of trainers on its website, send it to the Ministry of Industry and Trade of Vietnam, and keep relevant documents.

5. The MLM company shall publish the updated list of trainers on its website and send it to the Ministry of Industry and Trade of Vietnam within 10 working days from the occurrence of any changes in the list of trainers.

6. The MLM company shall assume the full responsibility for its trainers’ provision of basic training programs.

Article 35. Training in MLM laws

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a) Law regulations governing MLM activities, advertising and consumer protection;

b) Ethic standards of participants in the MLM.

2. Training programs in MLM laws must be accredited by the Ministry of Industry and Trade of Vietnam.

Article 36. Application and procedures for accreditation of training programs in MLM laws

1. An application for accreditation includes:

a) The application form;

b) The copy of the decision on establishment of training institution issued by a competent authority or another document of equivalent legal effect;

c) The training program in MLM laws;

d) The list of at least 02 lecturers who obtain bachelor’s degree or higher.

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a) Within 07 working days from the receipt of the application for accreditation of a training program, the Ministry of Industry and Trade of Vietnam shall consider its validity. If the application is invalid, the Ministry of Industry and Trade of Vietnam shall request the applicant in writing to modify its application;

b) Within 30 working days from the receipt of the valid application, the Ministry of Industry and Trade of Vietnam shall process the application and issue an accreditation decision.

3. A decision on accreditation of the training program in MLM laws shall be valid for 03 years from the date on which it is signed.

4. The Ministry of Industry and Trade of Vietnam shall stipulate the framework training program in MLM laws.

Article 37. Operation of institutions providing training programs in MLM laws

1. a) Provision of training programs:

a) The training institution shall provide training programs in MLM laws according to the accredited training programs and contents, and grant certificates of completion of training programs to qualified participants, using Form No. 14 in the Appendix enclosed herewith;

b) The training institution shall send reports on training results to the Ministry of Industry and Trade of Vietnam within 10 working days after the completion of each training program in MLM laws.

2. Document retention:

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a) Learners’ admission documents, and the list of learners granted certificates of completion of each training program;

b) The list of lecturers in charge of each training program;

c) Documentation on issuance of certificates of completion of training program in MLM laws.

3. Inspection of training institutions providing training programs in MLM laws:

a) Each training institution is required to send reports on its provision of training programs in MLM laws in the previous year (including training results, examination and awarding of certificates of completion) to the Ministry of Industry and Trade of Vietnam by January 31 every year;

b) The Ministry of Industry and Trade of Vietnam shall carry out annual inspection of provision of training programs in MLM laws and issuance of certificates of completion thereof by training institutions.

The Ministry of Industry and Trade of Vietnam shall, based on inspection results and the severity of violation, request the violating training institution to implement remedial measures or suspend the decision on accreditation of training programs in MLM laws granted to such institution.

c) The Ministry of Industry and Trade of Vietnam shall revoke or suspend a decision on accreditation of training program in MLM laws in the following cases: A training institution is dissolved, or fails to implement remedial measures for violations within the prescribed period, or commits a violation which cannot be remedied.

Article 38. Certification of proficiency in MLM laws

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2. Successful candidates shall be granted certificates of proficiency in MLM laws by the Ministry of Industry and Trade of Vietnam.

3. The Ministry of Industry and Trade of Vietnam shall stipulate the examination, issuance and revocation of certificates of proficiency in MLM laws.

Article 39. Procedures for issuance of certificates of proficiency in MLM laws

1. The MLM company shall submit an application for the examination for certificate of proficiency in MLM laws to the Ministry of Industry and Trade of Vietnam (either directly or by post). Such application includes:

a) The application form;

b) The list of eligible candidates, indicating full name, sex, date of birth, number, date of issue and issuing authority of ID card/ citizen identity card of each candidate;

c) 02 photos of 3 x 4cm size of each candidate in the list specified in Point b Clause 1 of this Article;

d) A copy of the certificate of completion of training program in MLM laws of each candidate.

2. Within 15 working days after the examination for the certificate of proficiency in MLM laws, the Ministry of Industry and Trade of Vietnam shall issue certificates of proficiency in MLM laws to successful candidates.

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MULTI-LEVEL MARKETING ACTIVITIES

Article 40. Responsibilities of MLM companies

A MLM company shall:
1. Publish the documents specified in Clause 4 and Clause 5 Article 9 of this Decree at its head office, branches, representative offices and business locations.

2. Comply with the registered business rule and compensation plan.

3. Set and announce the prices of products sold through the MLM as well as sell products at the announced prices.

4. Issue invoices for each supply of products to a participant in its MLM network or to each client who buys products directly from the MLM company.

5. Supervise participants in its MLM network so as to ensure their compliance with the signed MLM contracts, the company’s business rule and compensation plan.

6. Assume responsibility for the sale of products by participants if it is carried out at the MLM company's head office, branches, representative offices, business locations or its conferences, meetings or training programs.

7. Deduct personal income tax amounts payable from participants’ commissions, bonuses or other economic benefits and pay them to state budget on their behalf, unless otherwise prescribed by law.

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9. Operate and regularly update the MLM company’s website in Vietnamese version, which must meet the requirements laid down in Article 45 of this Decree, in order to publish information concerning its profiles and MLM activities.

10. Operate a communications system to receive and take actions against complaints and queries of MLM participants, including telephone, email and contact address.

11. Provide the rights to access to the MLM company’s information technology system for managing participants at the written request of competent authorities in charge of managing the MLM.

12. Comply with law regulations on business conditions and sale of products through the MLM.

Article 41. Responsibilities of participants in MLM network

Each participant in a MLM company’s network shall:
1. Carry out marketing, sale and recruitment of downline distributors only after having been granted a membership card.

2. Present the membership card before introducing or selling products.

3. Comply with terms and conditions of the signed MLM contract and the MLM company’s business rule.

4. Provide adequate and accurate information concerning the MLM company, products sold through the MLM, the compensation plan and business rule of the MLM company.

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The MLM company’s business rule must include procedures for concluding MLM contracts, basic training program provided for participants, issuance of membership card, placing orders, payment, goods delivery, goods return (if any), warranty policy (if any), exchange, return and repurchase of products, and return of money to participants, resolution of complaints filed by participants, termination and liquidation of MLM contracts.

Article 43. Compensation plan

A compensation plan must indicate eligibility requirements, commissions, bonuses and other economic benefits paid to participants of each level/title.

Article 44. Information technology system for managing participants

1. The server used for operating the information technology system for managing participants must be located in Vietnam.

2. The following primary information must be available for participants on the information technology system for managing participants:

a) Basic information about participants as prescribed in Point b Clause 2 Article 29 of this Decree;

b) The number of the MLM contract, identity number, position, level and title of each participant, his/her upline and downline;

c) Information concerning the order history of a participant and his/her clients;

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3. Any failure in the information technology system must be promptly reported to the authority issuing the MLM registration certificate.

Article 45. Websites of MLM companies

1. The website of a MLM company must contain the following information:

a) Documents on its MLM activities, including the MLM registration certificate, the MLM contract form, business rule, compensation plan, basic training program and other necessary documents;

b) Information about products sold through the MLM, including name, selling price, ingredients, uses, usage, origin, and quality certificate (if any);

c) Information about the company registration, its head office, branches, representative offices and business locations;

d) Procedures for concluding MLM contracts, basic training program provided for participants, issuance of membership cards, placing orders, payment, goods delivery, goods return (if any), repurchase of products, and return of money to participants, resolution of complaints filed by participants, termination and liquidation of MLM contracts;

dd) Procedures and location for warranty, exchange or return of products, and after-sale services (if any);

e) Contact information for receiving and taking actions against complaints and queries of MLM participants, including: telephone number, email and mailing address;

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h) Actions against violations committed by participants, termination of MLM contracts and revocation of membership cards of violating participants;

i) The MLM company’s promotion programs.

2. The information specified in Clause 1 of this Article must be published on the homepage or links from the homepage of the MLM company’s website.

3. The MLM company shall strictly comply with other law regulations on operation of its website.

Article 46. Delivery of products

1. Within 30 days from the date on which a participant makes payment for products, the MLM company shall fully deliver products to that participant who shall also take charge of receiving his/her purchased products.

2. If the MLM company fails to deliver products or the participant fails to receive his/her purchased products within the time limit specified in Clause 1 of this Article, the MLM company shall cancel the transaction and fully return the received amount of money to that participant.

3. If a participant puts his/her purchased products in the MLM company’s warehouse but fails to receive products within the time limit specified in Clause 1 of this Article, the MLM company shall cancel the transaction and fully return the received amount of money to that participant.

Article 47. Return and repurchase of products

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2. Products to be returned must meet the following requirements:

a) Products returned must be in original package, stamp and label;

b) The invoice for purchase of products returned must be presented.

3. Within 30 days from the date on which a participant submits a valid request for return of products, the MLM company shall repurchase the products, which meet the requirements laid down in Clause 2 of this Article, and make payment for such repurchased products at the price which is agreed upon with the participant and shall not be lower than 90% of the purchase price previously paid by that participant.

4. The MLM company is entitled to deduct the amounts of commissions, bonuses and other economic benefits that the participant has received when purchasing products which are to be returned according to the provisions of this Article.

5. The MLM company is entitled to request other participants to return the amounts of commissions, bonuses and other economic benefits that they have received in relation to the products to be returned according to the provisions of this Article.

6. In case of termination of a MLM contract signed with a participant, the MLM company shall repurchase the products sold to that participant according to the provisions of Clauses 1 through 5 of this Article.

Article 48. Commissions, bonuses and other economic benefits

1. A MLM company shall pay commissions, bonuses and other economic benefits to participants according to the compensation plan registered with competent authorities.

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3. The sales specified in Clause 2 of this Article are generated from the MLM company’s MLM activities, exclusive of VAT.

4. The sum of commissions, bonuses and other economic benefits specified in Clause 2 of this Article excludes the difference between the announced retail price and the selling price at which the MLM company sells products to participants.

5. The MLM company shall make payment of commissions, bonuses and other economic benefits in cash to participants by bank transfer.

Article 49. Reporting by MLM companies

1. A MLM company shall, on a basis of every six months, submit reports on its MLM activities to the Ministry of Industry and Trade of Vietnam and the Department of Industry and Trade of province where its MLM activities are performed.

2. Reports for the first six months shall be submitted by July 31 every year. To be specific:

a) The report for the first six months sent to the Ministry of Industry and Trade of Vietnam shall be made using Form No. 15 in the Appendix enclosed herewith, and accompanied with its financial statements of the previous year which bear certification given by competent authorities in accordance with regulations of law;

b) The report for the first six months sent to the Provincial Department of Industry and Trade shall be made using Form No. 16 in the Appendix enclosed herewith.

3. The annual report shall be prepared and submitted by January 20 of the following year to the Ministry of Industry and Trade of Vietnam and the Provincial Department of Industry and Trade using Form No. 15 and Form No. 16 in the Appendix enclosed herewith respectively.

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5. The MLM company shall submit reports at the request of competent authorities in charge of managing MLM activities.

Chapter VI

COMPULSORY DEPOSIT

Article 50. Compulsory deposit

1. Compulsory deposit is an amount of money paid to ensure the MLM company’s fulfillment of obligations towards its participants and the Government in cases prescribed in Clause 1 Article 53 of this Decree.

2. A MLM company is required to open a deposit account at a commercial bank or a foreign bank branch in Vietnam, and deposit an amount that is equal to 5% of its charter capital but shall not be lower than VND 10 billion.

3. The bank where the MLM company deposits money shall give a written confirmation of compulsory deposit using Form No. 17 in the Appendix enclosed herewith, and cooperate in verification of the validity of such confirmation at the request of the Ministry of Industry and Trade of Vietnam.

4. If the MLM company wishes to modify any contents in the bank's confirmation of compulsory deposit, it shall follow procedures for modification of the confirmation of compulsory deposit with the bank.

5. The deposited amounts shall be blockaded during the MLM company’s operation and withdrawn or spent according to the written approval from the Ministry of Industry and Trade of Vietnam, except the case specified in Point a Clause 1 Article 51 of this Decree.

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7. The MLM company shall receive interests on its deposited amount at the interest rate agreed upon with the bank and may withdraw such interests.

Article 51. Withdrawal of deposits

1. A MLM company may withdraw its compulsory deposit in the following cases:

a) Its application for MLM registration certificate is refused by the Ministry of Industry and Trade of Vietnam;

b) Its MLM activities are terminated as prescribed in Clause 1 Article 17 of this Decree and it has fulfilled all obligations specified in Clause 2 Article 17 of this Decree;

c) The MLM company has made compulsory deposit as prescribed in Article 50 of this Decree at another commercial bank or foreign bank branch.

2. When withdrawing the deposited amounts as prescribed in Point a Clause 1 of this Article, the MLM company shall provide the bank with the original notice of application return given by the Ministry of Industry and Trade of Vietnam as prescribed in Clause 3 Article 10 of this Decree.

3. When withdrawing the deposited amounts as prescribed in Point b or Point c Clause 1 of this Article, the MLM company shall provide the bank with the original written approval given by the Ministry of Industry and Trade of Vietnam as prescribed in Clause 3 or Clause 4 Article 52 of this Decree.

4. The bank where the MLM company deposits money shall verify in writing with the Ministry of Industry and Trade of Vietnam before approving any withdrawal of compulsory deposit.

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1. The MLM company may submit an application for withdrawal of compulsory deposit to the Ministry of Industry and Trade of Vietnam (either directly or by post) after a period of 90 days from the date on which the Ministry of Industry and Trade of Vietnam issues a written certification of receipt of the notification of termination of MLM activities or from the effective date of the decision on revocation of the MLM registration certificate and after the MLM company has fulfilled its obligations specified in Clause 2 Article 17 of this Decree.

2. An application for withdrawal of compulsory deposit includes:

a) The application form made using Form No. 18 in the Appendix enclosed herewith;

b) The list of participants in its MLM network up to the time of termination of MLM activities (including name, number of ID card/ citizen identity card/ passport, address, telephone number, number and date of signing of the MLM contract, number of membership card of each participant).

3. Receipt of an application for withdrawal of compulsory deposit:

a) Within 05 working days from the receipt of an application for withdrawal of compulsory deposit from the MLM company, the Ministry of Industry and Trade of Vietnam shall check its adequacy and validity.

If the application is inadequate or invalid, the Ministry of Industry and Trade of Vietnam shall request the MLM company in writing to modify its application. The MLM company shall modify its application within 10 working days from the receipt of written request from the Ministry of Industry and Trade of Vietnam.

If the application is adequate and valid, the Ministry of Industry and Trade of Vietnam shall notify the MLM company’s termination of its MLM activities and request for withdrawal of compulsory deposit on its website.

b) Within a period of 30 days from the date on which the Ministry of Industry and Trade of Vietnam publishes a notice on its website as specified above, participants and authorities competent to take actions against violations in MLM sector shall notify the Ministry of Industry and Trade of Vietnam of any obligations which are not yet fulfilled by the MLM company as prescribed in Clause 2 Article 17 of this Decree.

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4. Procedures for withdrawal of compulsory deposit in the case specified in Point c Clause 1 Article 51 of this Decree:

a) The MLM company submits a written request for changes in the compulsory deposit, enclosed with the original confirmation given by another commercial bank or foreign bank branch where it deposits money to the Ministry of Industry and Trade of Vietnam (either directly or by post);

b) Within 10 working days from the receipt of the request for changes in the compulsory deposit as specified in Point a of this Clause, the Ministry of Industry and Trade of Vietnam shall request the commercial bank or foreign bank branch where the MLM company deposits money in writing to verify the authentication of its confirmation of compulsory deposit;

c) Within 10 working days from the receipt of a written verification from the commercial bank or foreign bank branch where the MLM company deposits money, the Ministry of Industry and Trade of Vietnam shall give a written approval for the MLM company’s withdrawal of the previously deposited amounts.

Article 53. Handling compulsory deposit

1. The compulsory deposit may be spent in the following cases:

a) A MLM company terminates its MLM activities as prescribed in Clause 1 Article 17 of this Decree but fails to fulfill its obligations towards participants and there is an effective decision or sentence granted by a competent authority on settlement of disputes between the MLM company and its participants over such obligations; 

b) A MLM company terminates its MLM activities but fails to comply with the effective decision given by a competent authority on imposition of penalties for violations committed by that MLM company during its operation.

2. Procedures for use of compulsory deposit in the case specified in Point a Clause 1 of this Article:

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b) Within a period of 10 working days from the receipt of the documents specified in Point a of this Clause, the Ministry of Industry and Trade of Vietnam shall consider the validity of such documents.

If the documents specified in Point a of this Clause are invalid, the Ministry of Industry and Trade of Vietnam shall request the applicant to modify his/her application. The application must be modified within 15 working days from the receipt of written request from the Ministry of Industry and Trade of Vietnam;

c) If all documents specified in Point a of this Clause are valid, the Ministry of Industry and Trade of Vietnam shall request the bank where the MLM company deposits money in writing to use the deposited amounts to fulfill obligations towards participants.

3. Procedures for use of compulsory deposit in the case specified in Point b Clause 1 of this Article:

If a MLM company terminates its MLM activities but fails to comply with an effective decision given by a competent authority on imposition of penalties for violations committed by that MLM company during its operation, the decision-issuing authority shall request the Ministry of Industry and Trade of Vietnam in writing to request the bank where the MLM company deposits money in writing to use the deposited amounts to fulfill obligations specified in such decision.

4. The Ministry of Industry and Trade of Vietnam shall grant approval for use of compulsory deposit in chronological order of receipt of valid applications for use of compulsory deposit.

Chapter VII

STATE MANAGEMENT OF MULTI-LEVEL MARKETING ACTIVITIES

Article 54. Responsibilities of Ministry of Industry and Trade of Vietnam

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a) Issue, modify, renew, re-issue and revoke MLM registration certificates and give certifications of receipt of notification of termination of MLM activities;

b) Collect, manage and use fees for processing of applications for the MLM registration certificate in accordance with applicable law regulations;

c) Give notification of issuance, modification, extension and revocation of the MLM registration certificate, and certification of receipt of notification of termination of MLM activities to Department of Industry and Trade of the province where the concerned MLM company is located;

d) Inspect MLM activities and take actions against violations within its competence;

dd) Instruct and cooperate with Provincial Departments of Industry and Trade to inspect and take actions against violations in MLM sector;

e) Report or request competent authorities to take actions against violations against regulations on management of the MLM;

g) Organize training programs for officials and public employees in charge of exercising state management of the MLM activities; disseminate MLM laws to enterprises and participants;

h) Formulate and request competent authorities to promulgate or amend legislative documents on the MLM management;

i) Fulfill other responsibilities as regulated in this Decree.

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3. The Vietnam Directorate of Market Surveillance affiliated to the Ministry of Industry and Trade of Vietnam shall assist the Minister of Industry and Trade of Vietnam in exercising state management duties specified in Point d, Point e and Point g Clause 1 of this Article.

Article 55. Responsibilities of ministries and ministerial agencies

1. Ministries and ministerial-level agencies shall, within the ambit of their assigned functions and powers, cooperate with the Ministry of Industry and Trade of Vietnam to perform the state management of the MLM.

2. The Ministry of Public Security of Vietnam shall:

a) Cooperate with the Ministry of Industry and Trade of Vietnam, the People’s Committees of provinces and central-affiliated cities, and relevant ministries and ministerial-level agencies in enhancing the efficiency of the state management of the MLM.

b) Prevent and combat crimes and violations against regulations on the MLM;

c) Receive and take actions against denunciation of crimes against regulations on the MLM; investigate crimes and perform other judicial duties as prescribed by law.

3. The Ministry of Health of Vietnam shall:

a) Inspect and take actions against violations against regulations on business conditions for products sold through the MLM under its management as regulated;

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c) Inspect and take actions against violations against regulations on advertising, conferences, meetings, dissemination, and provision of information concerning cosmetics, functional foods and other products sold by MLM companies within its competence.

4. The Ministry of Finance of Vietnam shall:

a) Inspect MLM activities in accordance with regulations of the law on taxation;

b) Publish accurate information concerning results of inspection of MLM activities in a timely and objective manner.

5. The Ministry of Science and Technology of Vietnam shall inspect and take actions against violations committed by MLM companies against standards and regulations on measurement and quality of products as well as intellectual property within its competence.

6. The Ministry of Agriculture and Rural Development of Vietnam shall:

a) Inspect and take actions against violations committed by MLM companies during their manufacturing, trading and advertising of products within its competence;

b) Inspect and take actions against violations against regulations on business conditions for products sold through the MLM under its management as regulated.

7. The Ministry of Information and Communications of Vietnam shall:

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b) Cooperate with press agencies in:

- Developing regular programs or specialized columns for disseminating laws on the MLM and warning people of disguised and illegal activities in the MLM; 

- Reporting or providing accurate information concerning the status of MLM companies in a timely and objective manner.

8. The State Bank of Vietnam shall instruct credit institutions to comply with procedures for confirmation and management of compulsory deposits paid by MLM companies in accordance with regulations herein.

Article 56. Responsibilities of people’s committees of provinces and central-affiliated cities

1. Each People’s Committee of province or central-affiliated city shall, within the ambit of their assigned functions and powers, perform state management of the MLM in such province, including:

a) Promulgate the mechanism for cooperation between local regulatory authorities in conducting inspections of the MLM in such province;

b) Issue and revoke the certificates of registration of MLM activities in a province, and certify any receipt of notification of termination of MLM activities in such province;

c) Inspect the MLM activities;

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dd) Report or request competent authorities to take actions against violations against regulations on management of the MLM;

e) Organize training programs for officials and public employees in charge of exercising state management of the MLM; disseminate laws on the MLM to enterprises and participants;

g) Submit annual reports or unscheduled reports to the Ministry of Industry and Trade of Vietnam on the MLM activities performed in such province;

h) Fulfill other responsibilities as regulated in this Decree.

2. A Provincial Department of Industry and Trade shall assist the People’s Committee of such province to perform duties specified in Clause 1 of this Article.

3. Local market surveillance forces shall assist the People’s Committee of such province and the Vietnam Directorate of Market Surveillance in fulfilling duties specified in Point c, Point d, Point dd and Point e Clause 1 of this Article.

Article 57. Actions against violations committed by MLM companies and participants

1. Any MLM companies or participants that commit violations against regulations of this Decree shall, depending on the nature and severity of each violation, face penalties in accordance with the Law on competition and the Law on penalties for administrative violations, or face a criminal prosecution as regulated by law.

2. Any MLM companies or participants that commit violations against regulations of this Decree and cause damage to other organizations and/or individuals shall make compensation for such damage as regulated by law.

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Article 58. Power and procedures for imposing penalties for violations

Procedures and power to impose penalties for violations against regulations of this Decree shall comply with regulations of the Law on penalties for administrative violations.

Chapter VIII

IMPLEMENTATION3

Article 59. Effect

1. This Decree comes into force from May 02, 2018.

2. This Decree supersedes the Government’s Decree No. 42/2014/ND-CP dated May 14, 2014 on management of multi-level marketing.

Article 60. Transition

1. Within a period of 09 months from the date of entry into force of this Decree, MLM companies operating under the Decree No. 42/2014/ND-CP shall be required to prove their satisfaction of eligibility requirements for the MLM as prescribed in this Decree.

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3. Certificates of trainers granted under the Decree No. 42/2014/ND-CP shall be used as substitutes for certificates of proficiency in MLM laws for a period of 09 months from the date of entry into force of this Decree.

4. Conditions, application and procedures for withdrawal and use of compulsory deposits paid by MLM companies granted MLM registration certificates under the Decree No. 42/2014/ND-CP shall comply with the provisions of this Decree.

5. Withdrawal and use of compulsory deposits paid by MLM companies granted MLM registration certificates under the Government’s Decree No. 110/2005/ND-CP dated August 24, 2005 shall be processed by Provincial Departments of Industry and Trade according to provisions on application and procedures thereof specified in Clause 2, Clause 3 Article 52 and Article 53 of this Decree.

Article 61. Responsibility for implementation

1. The Minister of Industry and Trade of Vietnam shall organize the implementation of this Decree.

2. Ministers, heads of ministerial agencies, heads of Governmental agencies, and Chairpersons of People’s Committees of provinces and central-affiliated cities shall implement this Decree./.

CERTIFIED BY

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