Tightening management of binary models: Cannot let businesses "self-announce" to circumvent the law - Lang Son Newspaper and Radio and Television Station

Food products containing banned substances were seized by Phu Tho provincial police. Photo: Nhan Dan Newspaper

This is a sobering lesson in the context of disguised business models increasingly taking advantage of the development of digital technology to spread and transform.

Binary Mechanism and the Lure

On the morning of May 23, 2025, Phu Tho Provincial Police simultaneously searched Bitney Vietnam's headquarters in Viet Tri and many headquarters in Ho Chi Minh City, seizing nearly VND 2 billion in cash, three luxury cars, 15 phones, 7 laptops and more than 41,800 boxes of Multi Juice tea. Initial investigation determined that this network operated in 63 provinces and cities, attracting nearly 200,000 members (of whom 107,348 were Vietnamese citizens). The logistics, customer care and distribution systems operated 24/7, showing a professionally organized model.

Bitney's business model is based on a "binary" mechanism, each participant must pay an "activation fee" to receive the starting product package and invite a minimum of two new people. Commissions are calculated on the weaker leg, with a discount rate of 20% to 50%, especially attracting low-income people because of the promise of "passive income".

The Bitney case clearly shows the loopholes in the supervision and management of the multi-level marketing market. Although not licensed under Competition Law In 2018 and Decree No. 40/2018/ND-CP, this enterprise still openly organized its network, distributed products and paid commissions, reflecting that the post-audit mechanism was not strong enough to prevent sophisticated violations.

Key products such as Bitney Multi Juice, Lucenta (deer placenta) and Bitney Multi Cream are promoted as "miracle drugs" for beauty and health. However, the 2022-2023 inspection results of the Ho Chi Minh City Food Safety Management Board, in coordination with the National Institute for Food Safety and Hygiene Control and the Nha Trang Pasteur Institute, confirmed that Multi Juice contains Tadalafil - an active ingredient that can only be used with a prescription and is absolutely not allowed to be used in functional food

The 2022-2023 inspection results of the Ho Chi Minh City Food Safety Management Board, in coordination with the National Institute for Food Safety and Hygiene Control and the Nha Trang Pasteur Institute, confirmed that Multi Juice contains Tadalafil - an active ingredient that can only be used with a prescription and is absolutely not allowed to be used in functional foods.
Ho Chi Minh City Food Safety Management Board

Not only did the Bitney case expose clear violations from the business side, it also exposed a worrying reality: people, especially in remote areas, lack legal knowledge, and thus easily become victims of illegal activities. multi-level marketing model

Many people, especially in remote areas, have fallen into credit and multi-level traps. Ms. Vu Lien (Tuyen Quang) shared: "I thought this was an opportunity to get rich, but it turned out to be an economic trap. If we only broadcast propaganda on television or social networks, many people like me would not be able to access it. We need to bring programs to popularize the law to villages and hamlets."

Ms. Le Thi Minh, a teacher at a high school in Cau Giay district, Hanoi, also commented: "People do not clearly understand 'self-declaration of products' or the binary mechanism. It is necessary to bring legal education into schools to form self-protection skills."

This situation shows that the barrier of legal knowledge is creating conditions for disguised multi-level models to develop. Not only is there a lack of knowledge on the part of the people, but also at the management level, the lack of connection between functional agencies also contributes to slowing down the processing process.

Ms. Nguyen Thi Thu Hang, Hanoi Center for Drug, Cosmetic and Food Testing, said: "The management agency has been too slow in sharing inter-sectoral data. If there was an interconnected monitoring system between the Ministry of Health, the Ministry of Industry and Trade and the Ministry of Public Security, violations would have been detected earlier. It is necessary to establish a National Food Safety Data Center to publicize appraisal data and support effective control."

Adding to the above warning, Dr. Nguyen Van Minh (Vietnam Legal and Media Company) suggested: "It is necessary to apply artificial intelligence (AI) and blockchain technology. (blockchain) to track cash flow and commission payments, two elements that frequently appear in Ponzi or pyramid scheme-style financial fraud models.

It can be seen that experts all focus on three core groups of solutions: (1) Strengthening data connectivity between management agencies; (2) Making licensing and product appraisal activities transparent; and (3) Applying modern technology to market surveillance. This is an important premise for early detection of disguised models, minimizing risks for consumers.

From a legal perspective, Lawyer Nguyen An Binh, Head of Nguyen An Binh Law Office and Associates (Hanoi Bar Association), emphasized: "Any commitment to interest rates of 30%/year or more lacks legal basis. Multi-level marketing enterprises need to publicly disclose contracts, audited financial reports and refund procedures to protect the rights of participants."

Meanwhile, Dr. Ta Ngoc Hai, former Deputy Director of the Institute of State Organizational Sciences (Ministry of Home Affairs), said: "There is no centralized and interconnected monitoring system between functional agencies, causing warnings and handling of violations to be slow and lacking in initiative." He also proposed the establishment of a multi-level safety fund at the provincial level, managed by the Consumer Protection Association and the Department of Industry and Trade, to provide timely support to victims immediately after the inspection results are available, and to deter violating businesses.

The above opinions clearly show a reality: the current "self-declaration" mechanism is being exploited, while the post-audit tool has not kept up. This requires not only a complete legal framework, but also a synchronous management ecosystem, from data, technology to cross-sectoral responsibilities.

It is urgent to complete the legal framework and strengthen technology supervision.

The fact that Bitney is operating illegally with nearly 200,000 participants is a clear demonstration of the loopholes in post-audit and licensing. This is an urgent warning about the need to tighten the current legal system.

Dr. Ta Ngoc Hai affirmed: "The dismantling of a 'binary' multi-level network with nearly 200,000 members in Phu Tho province shows the power of the law and the determination of the authorities. However, to prevent this problem from its root, we need to synchronize four groups of solutions:

(1) Completing the legal framework on multi-level marketing and food safety, forcing businesses to register transparently and ensure deposits;

(2) Applying big data and artificial intelligence (AI) in transaction monitoring, promptly detecting illegal patterns;

(3) Publicly announce the list of licenses and product post-inspection results on the state information portal;

(4) Promote legal propaganda to villages and hamlets so that people can identify and protect themselves from fraudulent tricks.

Only when the State, businesses and people share responsibility, will the multi-level market be truly transparent, healthy, protecting consumer rights and national interests.

Prime Minister's Official Dispatch No. 72/CD-TTg to intensify the fight against smuggling and counterfeit goods:

On May 24, 2025, Prime Minister Pham Minh Chinh signed Official Dispatch No. 72/CD-TTg requesting ministries, branches and localities to: Continue to step up the fight to prevent and repel smuggling, trade fraud, counterfeit goods, and infringement of intellectual property rights; Strictly handle cadres, civil servants and officers who assist or protect economic crimes; closely cooperate with the Fatherland Front and socio-political organizations to enhance community responsibility in supervision from the grassroots level.

The Prime Minister requested Ministers of ministries, heads of ministerial-level agencies, Government agencies, Chairmen of People's Committees of provinces and centrally-run cities to continue to launch and strengthen the direction of functional forces and units to step up the peak period of the fight to prevent and repel smuggling, trade fraud, counterfeit goods, and infringement of intellectual property rights; continue to step up the peak period of attacks with more vigor, determination, and fierceness; make more efforts; promptly detect and strictly handle violators; at the same time, strictly handle cadres, civil servants, and officers who show signs of moral degradation, corruption, negativity, protection, and abetting of law violators.

The Prime Minister requested the Minister of Health to urgently submit to the Government amendments and supplements to Decree No. 15/2018/ND-CP dated February 2, 2018 of the Government detailing the implementation of a number of articles of the Law on Food Safety, to be completed by May 2025; to preside over and coordinate with relevant agencies to report to the Government to propose competent authorities to immediately handle a number of limitations and shortcomings of the Law on Food Safety according to the recommendations of ministries and branches, especially the recommendations of the Ministry of Public Security in Document No. 1977/BCA-C01 dated May 13, 2025, to be completed before June 5, 2025, ensuring submission to the National Assembly in June 2025.

Press and media agencies should increase reporting on the dangers of smuggling, trade fraud, counterfeit goods, and intellectual property rights infringement; promptly commend positive examples and good practices of ministries, branches, and localities; criticize and condemn negative behaviors and lack of responsibility that lead to consequences...

Source: https://baolangson.vn/siet-quan-ly-mo-hinh-nhi-phan-khong-the-de-doanh-nghiep-tu-cong-bo-lach-luat-5048201.html