Vietnam: Requesting a prospective participant to deposit to be eligible to enter into a multiple-level marketing contract shall be fined up to VND 100 million

According to Clause 9 Article 73 of Decree No. 98/2020/NĐ-CP of Vietnam’s Government, a fine ranging from VND 80.000.000 to VND 100.000.000 shall be imposed upon a MLM (multiple-level marketing) company for committing one of the following violations:

1. Requesting a prospective participant to deposit or pay a certain amount of money in any way to be eligible to enter into a MLM contract;

2. Requesting a prospective participant to buy a certain quantity of products in any way to be eligible to enter into a multi-level marketing contract;

3. Paying money or other economic benefits to a participant in compensation for his/her recruitment of new distributors without consideration of his/her sale of products to recruited distributors;

4. Refusing to pay, without legitimate reasons, commissions, bonuses or other economic benefits to eligible participants;

5. Providing false information concerning the compensation plan or benefits obtained from the participation in the MLM network;

6. 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;

7. Failing to repurchase products or repurchasing products against regulations;

8. Operating the MLM network without obtaining the MLM registration certificate or against the contents of the MLM registration certificate if obtaining illegal profit less than VND 200.000.000 or causing damage estimated at less than VND 500.000.000 to others;

9. Using the MLM strategy to trade or sell subjects other than the permitted ones. 

View more details at the Decree No. 98/2020/NĐ-CP of Vietnam’s Government, effective from October 15, 2020.

Le Vy

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