Vietnam: Proposal of amendments to Criminal Code regarding offences against regulations of law on multi-level marketing

Vietnam: Proposal of amendments to Criminal Code regarding offences against regulations of law on multi-level marketing (Illustration)

To maintain the results achieved from the Scheme 2018-2020 and address issues arising from practical requirements, the Ministry of Industry and Trade of Vietnam continues to issue a Scheme to enhance the effectiveness of managing multi-level marketing activities for the 2021-2025 period (Scheme 2021-2025) for relevant state management agencies and media agencies to participate and coordinate actions to improve legal management effectiveness in business at Decision 2837/QD-BCT.

To successfully improve the legal framework regulating multi-level marketing activities under the Scheme 2021-2025, the Ministry of Industry and Trade of Vietnam has proposed four solutions to improve the legal framework regulating multi-level marketing activities as follows:

- Review, amend, and supplement the provisions of Decree 40/2018/ND-CP on the management of multi-level marketing activities (Implementation period: 2021-2022);

- Amend regulations on handling violations of laws in multi-level marketing activities to ensure compatibility with content regulations and ensure deterrence (Implementation period: 2021-2022);

- Amend, supplement, or replace Circular 10/2018/ND-CP which provides detailed guidance on a number of articles of Decree 40/2018/ND-CP regarding the management of multi-level marketing activities (Implementation period: 2021-2022);

- Research and evaluate the implementation of Article 217a of the Criminal Code 2015 (amended and supplemented in 2017) on offences against regulations of law on multi-level marketing and propose amendments if necessary (Implementation period: 2023-2024).

Therefore, with the task of strictly handling illegal multi-level sales activities, especially unauthorized multi-level marketing activities, to improve the legal framework for managing multi-level marketing, the Ministry of Industry and Trade proposes researching, evaluating, and implementing Article 217a of the Criminal Code 2015, amended and supplemented in 2017, on offences against regulations of law on multi-level marketing and propose amendments if necessary. Article 217a of the Criminal Code 2015, amended and supplemented in 2017, defines offences against regulations of law on multi-level marketing in Vietnam as follows:

Article 217a. Offences against regulations of law on multi-level marketing

1. Any person who runs a multi-level marketing company without or against the certificate of registration of multi-level marketing business in any of the following circumstances, except in the circumstances specified in Article 174 and Article 290 hereof, shall be liable to a fine of from VND 500,000,000 to VND 1,000,000,000 or face a penalty of up to 03 years’ community sentence or 06 – 02 years’ imprisonment:

a) The offender has incurred an administrative penalty or has an unspent conviction for the same offence;

b) The illegal profit earned is from VND 200,000,000 to under VND 1,000,000,000;

c) The offence causes a loss of from VND 500,000,000 to under VND 1,500,000,000 for another person.

2. This offence committed in any of the following circumstances carries a fine of from VND 1,000,000,000 to VND 5,000,000,000 or a penalty of 01 - 05 years' imprisonment:

a) The illegal profit earned is ≥ VND 1,000,000,000;

b) The offence causes a loss of ≥ VND 1,500,000,000 for another person;

c) The network is participated in by ≥ 100 people.

3. The offender might also be liable to a fine of from VND 100,000,000 to VND 500,000,000 or prohibited from holding certain positions or doing certain jobs for 01 - 05 years.

Thus, multi-level marketing is a modern business method. However, multi-level marketing will cause significant harm to the people, especially students and poor people in rural and mountainous areas if it is conducted with fraudulent purposes and against legal regulations. Therefore, the proposal to amend and supplement the crime of violating multi-level marketing regulations in the Criminal Code is entirely reasonable and necessary to prevent rapidly growing multi-level marketing enterprises from causing severe damage to the rights and interests of thousands of people of all ages, especially students and poor people in remote rural and mountainous areas.

Ty Na

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