On August 26, 2020, the Government of Vietnam issued the Decree No. 98/2020/NĐ-CP prescribing penalties for administrative violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights. This Decree has specified the fine for luring, enticing participants of multi-level marketing.
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Specifically, according to Clause 3 Article 73 of Decree No. 98/2020/NĐ-CP of Vietnam’s Government, a fine ranging from VND 10.000.000 to VND 20.000.000 shall be imposed upon a participant in the MLM (multi-level marketing) for committing one of the following violations:
- Requesting a prospective participant to deposit or pay a certain amount of money or purchase a certain quantity of goods in any way to be eligible to enter into a MLM contract;
- Providing false or misleading information about the compensation plan, business rules, benefits of a participant, features or uses of products, or operations of the MLM company;
- Organizing MLM conferences, meetings or training courses without obtaining a written authorization from the MLM company;
- Luring, enticing or bribing participants of another MLM company to participate in the network of the MLM company of which he/she is a participant;
- Taking advantage of his/her position, powers or social position to encourage, request, lure or entice other persons to participate in the MLM network or buy products sold through the MLM model.
Moreover, MLM participants who commit one of the above acts may also be forced to take remedial measures such as:
- The violating entity is compelled to return any benefits illegally obtained from the commission of requesting a prospective participant to deposit or pay a certain amount of money or purchase a certain quantity of goods in any way to be eligible to enter into a MLM contract;
- The violating entity is compelled to correct false or misleading information if providing false or misleading information about the compensation plan, business rules, benefits of a participant, features or uses of products, or operations of the MLM company.
Thus, MLM participants who commit violations against regulations on multi-level marketing in general or luring, enticing or bribing participants of another MLM company to participate in the network of the MLM company of which he/she is a participant in particular, shall be fined up to VND 20.000.000. Depending on the nature, extent and scale of the number of people being enticed, the violators will be subject to corresponding sanctions.
Thuy Tram
- Key word:
- Decree No. 98/2020/NĐ-CP
