Collecting Comments on the Draft Decree Amending and Supplementing a Number of Articles of Decree No. 40/2018/ND-CP on Management of Business Activities by Multi-level Method

23/06/2021, 09:10 AM

Collectingcomments on the Draft Decree amending and supplementing a number of articles of Decree No. 40/2018/ND-CP on management of business activities by multi-level method.

OnMarch 12, 2018, the Government issued Decree No. 40/2018/ND-CP on management of multi-level sales activities, creating a stricter and more effective management mechanism for this complex business activity. Decree No. 40/2018/ND-CPsupplementing regulations to improve transparency in the operation of multi-level sales enterprises, strengthening the decentralization and improving the management role of state agencies at local level, mobilizingthe participation of many ministries, branches and forces involved in management. After more than 3 yearsimplementation, Decree No.40/2018/ND-CP hashelped the Government better managemultilevel sales activities,genuine businesses also benefit by purging illegalenterprisesor poorly operating.

Besides, through the practice of managing multi-level sales activities, state agencies at all levels realize that legal regulations still need to be revised, futherimprove with the goaltransparency in the operation of multi-level sales, improving the management role of state agencies at local level, ensurethe consistency, clarification and easy application of each legal regulations. Therefore, base on the basis of localitiessurvey of opinions, the Ministry of Industry and Trade proposed and was assigned by the Prime Minister to assume the prime responsibility for developing a Decree amending and supplementing a number of articles of Decree 40/2018/ND. -CP on managing business activities by multi-level method.

Up to now, the Draft has been developed with a number of amendments and supplements as follows:

First, supplementing and clarifying regulations on conditions for registration of multi-level sale activities, in which additional conditions are added that foreign investors registering multi-level sale activities in Vietnam need to have experience in multi-level marketing activities in Vietnam. multi-level marketing activity for three consecutive years in another country;

Second, reduce the duration of compulsory basic training, adjust the training content to suit the reality;

Third, clarify the cases where the deposit can be used to ensure the interests of participants, thereby helping people to clearly identify their rights before proceeding with legal procedures, limiting the waste time and resources of both the people and the government in resolving disputes and using deposit.

Fourth, improve local management efficiency by clarifying conditions and responsibilities of local business representatives. Ensure that the local representative must be the person who understands the activities of the business in the area, has the authority and responsibility to work with the local competent authority as required.

Fifth, improve the transparency in the operation multi-level sales enterprisesby adjusting the international protection mechanism, preventing illegal activities or making illicit profits from the Vietnamese market.

Sixth, supplementing regulations on the minimum commission rate on individual sales of participants to encourage enterprises to promote participants' sales activities, limiting the risk of other business models of Multi-level has evolved towards only recruiting and consuming goods within the internal system.

In addition, the Draft amends a number of specific regulations and issues on administrative procedures to ensure consistency and convenience in implementation. 

Vietnam Competition and Consumer Authority – VCCAis looking forward to receiving comments from all people, the business community and related agencies and units to finalize the draft before submitting it to the Government in December 2021.


Source: Division of Investigation and Handling of Unfair Competition Acts