Continue to take strong action against multi-level marketing

Multi-level marketing has developed well in developed economies with clear legal frameworks and high public awareness of the rule of law. However, when introduced to Vietnam, this model is often exploited, distorted and leaves many consequences for the economy as well as security and order, negatively affecting consumer confidence.

Continue to take strong action against multi-level marketing The National Competition Commission has warned about the illegal multi-level marketing activities related to Natural Intelligence Trading JSC/Natural Intelligence Science Center. (Photo: Internet)

According to the report of the National Competition Commission ( Ministry of Industry and Trade ), the country currently has 20 enterprises with multi-level marketing registration certificates. The total number of people participating in multi-level marketing is currently about 750,000, with revenue growing at 10-20% per year and concentrated in a group of large enterprises. These enterprises are currently operating in compliance with the provisions of Decree 18/2023/ND-CP on amending and supplementing a number of articles of Decree 40/2018/ND-CP on the management of multi-level marketing business activities.

However, besides the few enterprises that comply with the provisions of the law, many enterprises have taken advantage of the characteristics of the multi-level marketing business model to make illegal profits, defrauding multi-level marketing participants as well as consumers. Accordingly, the products traded through the multi-level marketing system are mostly items that are difficult to check in terms of value, quality, and effectiveness, the most common of which are functional foods, health care support products and equipment.

More serious and alarming are the tricks to entice and entice people to participate in multi-level marketing into buying shares, contributing capital, cooperating in business, buying business rights; especially in the form of financial investment, virtual currency, foreign exchange, online courses... causing great economic losses for many people. If not alert, people can easily be lured through the borderless communication environment on cyberspace outside the management framework of Decree 18/2023/ND-CP.

In the past, when detecting or receiving information about signs of disguised multi-level marketing activities, local authorities, including Thanh Hoa province, and management agencies have transferred information and documents to police agencies for monitoring and criminal handling according to the provisions of Article 217a of the Penal Code. From 2016 to present, the Ministry of Industry and Trade has revoked certificates and terminated or suspended multi-level marketing activities for 25 enterprises; investigated 65 cases, and fined 64 cases with a total fine of 11 billion VND.

It is known that in 2024, to continue to rectify the disguised multi-level marketing business activities, the Ministry of Industry and Trade will organize 5 rounds of multi-level marketing legal knowledge testing. The time to organize the multi-level marketing legal knowledge testing and knowledge for local contacts in Hanoi will be in March, September and November 2024; in Da Nang in May 2024 and in Ho Chi Minh City in July 2024.

Along with that, the competent authorities and specialized management agencies will also strengthen inspection activities with the group of enterprises with multi-level marketing registration certificates, continue to promote management solutions that have been effective in the past, promptly detect and handle enterprises operating in disguise. For disguised forms that are not under the management of the Ministry of Industry and Trade, the National Competition Commission will strengthen propaganda, warnings, and raise people's awareness of manifestations of disguised multi-level marketing; at the same time, coordinate with relevant ministries, branches, and forces, especially the police, to strictly handle violations.

Tung Lam

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