Nghị định 42/2014/ND-CP

DECREE

ON MANAGEMENT OF MULTI-LEVEL MARKETING ACTIVITIES

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the December 3, 2004 Competition Law; At the proposal of the Minister of Industry and Trade,

The Government promulgates the Decree on management of multi-level marketing activities.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree provides multi-level marketing activities and management of these activities in the territory of the Socialist Republic of Vietnam.

Article 2. Subjects of application

This Decree applies to multi-level marketing businesses and participants and other agencies, organizations and persons involved in multi-level marketing activities.

Article 3. Interpretation of terms

In this Decree, the terms and phrases below are construed as follows:

1. Multi-level marketing business means an enterprise which is engaged in retail activities by the mode of multi-level marketing.

2. Multi-level marketing means a form of business run through a sale network of participants at different levels and branches, which allows participants to enjoy commissions, bonuses and other economic benefits from their sale activities and the network developed by themselves.

3. Multi-level marketing participant means a person who enters into a multi-level marketing contract with a multi-level marketing business.

4. Multi-level marketing contract means an agreement which establishes the relationship in multi-level marketing activities between a person wishing to participate in multi-level marketing and a multi-level marketing business.

5. Commissions, bonuses and other economic benefits mean benefits in any form paid by a multi-level marketing business to a multi-level marketing participant.

6. Rules of operation means a set of rules developed and applied by a multi-level marketing business to govern acts, rights and obligations of multi- level marketing participants.

7. Bonus payment program means a system used to calculate commissions, bonuses and other economic benefits generated mostly from incomes from sale activities to be enjoyed by multi-level marketing participants.

8. Basic training program means a program developed by a multi-level marketing business to train multi-level marketing participants, which covers the following contents:

a/ Laws related to multi-level marketing activities of the business;

b/ Information on goods traded by the mode of multi-level marketing;

c/ Information on, and rules of operation and bonus payment program of, the business;

d/ Basic skills to carry out multi-level marketing activities.

9. Multi-level marketing position means the position of a multi-level marketing participant ranked by the multi-level marketing business in its bonus payment program.

10. Pyramid selling means a form of multi-level marketing business under which incomes of participants are generated mostly from recruitment of new participants, extension of contracts of existing participants; charges, deposits or investment amounts of participants in the network.

Article 4. Objects of multi-level marketing

1. Goods traded by the mode of multi-level marketing must comply with provisions of relevant laws.

2. The following goods must not be traded by the mode of multi-level marketing:

a/ Goods on the list of goods banned from trading and the list of goods restricted from trading, goods currently subject to urgent measures of forcible recall, circulation ban or suspension as prescribed by law;

b/ Medicines; medical equipment; veterinary drugs (including aquatic veterinary drugs), plant protection drugs; chemicals, insecticidal and germicidal preparations for domestic and medical use; dangerous chemicals and products containing dangerous chemicals as prescribed by law.

3. All types of service or forms of business other than goods trading must not be traded by the mode of multi-level marketing, unless permitted by law.

Article 5. Prohibited acts in multi-level marketing

1. Multi-level marketing businesses are prohibited to commit the following acts:

a/ Requesting persons wishing to participate in multi-level marketing to deposit or pay a certain sum of money in any form in order to have the right to participate in a multi-level marketing network;

b/ Requesting persons wishing to participate in multi-level marketing to buy a certain quantity of goods in any form in order to have the right to participate in a multi-level marketing network;

c/ Requesting persons wishing to participate in multi-level marketing to pay an additional sum of money in any forms to have the right to maintain, develop or expand their multi-level marketing networks;

d/ Unreasonably restricting in any forms multi-level marketing participants’ right to develop their networks;

dd/ Permitting multi-level marketing participants to receive commissions, bonuses or other economic benefits from luring other persons into participating in multi-level marketing;

e/ Refusing to pay, without plausible reasons, commissions, bonuses or other economic benefits to be enjoyed by multi-level marketing participants;

g/ Requesting multi-level marketing participants to recruit, or expand multi-level marketing contracts with, a certain number of multi-level marketing participants in order to enjoy commissions, bonuses or other economic benefits;

h/ Requesting participants to conferences, seminars or training courses on one of the contents specified in Clause 8, Article 3 of this Decree to pay money or charges in any forms other than reasonable expenses for purchase of training documents;

i/ Forcing multi-level marketing participants to attend conferences, seminars or training courses on issues other than those specified in Clause 8, Article 3 of this Decree;

k/ Requesting participants to conferences, seminars or training courses on issues other than those specified in Clause 8, Article 3 of this Decree to pay money or charges higher than reasonable expenses for those activities;

l/ Collecting charges in any forms for the grant or renewal of member cards provided in Clauses 1 and 3, Article 21 of this Decree;

m/ Failing to commit to permitting multi-level marketing participants to return goods and receive back amounts already remitted to businesses under Article 26 of this Decree;

n/ Preventing multi-level marketing participants from returning goods under Article 26 of this Decree;

o/ Supplying false or misleading information on benefits from participation in multi-level marketing networks or properties and utilities of goods or activities of multi-level marketing businesses in order to lure other persons into participating in multi-level marketing;

p/ Maintaining more than one multi-level marketing position, multi- level marketing contract, multi-level marketing identification number or other similar forms for the same multi-level marketing participant;

q/ Running business by the mode of pyramid selling;

r/ Buying, selling or transferring networks of multi-level marketing participants to other businesses unless in case of corporate acquisition, consolidation or merger;

s/ Requesting or instigating multi-level marketing participants to commit the prohibited acts specified in Clause 2 of this Article.

2. Multi-level marketing participants are prohibited to commit the following acts:

a/ Requesting persons wishing to participate in multi-level marketing to pay or deposit a certain sum of money or buy a certain quantity of goods in any forms in order to have the right to participate in a multi-level marketing network;

b/ Supplying false or misleading information on benefits from participation in multi-level marketing, or properties and utilities of goods, or activities of multi-level marketing businesses in order to lure other persons into participating in multi-level marketing;

c/ Holding seminars, client conferences, product introduction seminars or training without being authorized in writing by multi-level marketing businesses;

d/ Dragging, inducing or buying off multi-level marketing participants of other businesses to participate in the sale networks of enterprises in which they participate;

dd/ Taking advantage of their positions, powers or social positions to request other persons to participate in multi-level marketing networks or buy goods traded by the mode of multi-level marketing.

Chapter II

ORDER AND PROCEDURES FOR REGISTRATION, SUSPENSION AND TERMINATION OF MULTI-LEVEL MARKETING ACTIVITIES

Article 6. Registration of multi-level marketing activities

Multi-level marketing activities must be registered in accordance with this Decree.

Article 7. Conditions for registration of multi-level marketing activities

An organization registering multi-level marketing activities must satisfy the following conditions:

1. It is an enterprise established in Vietnam in accordance with law which has registered the retail business by the mode of multi-level marketing.

2. Its legal capital complies with Article 8 of this Decree.

3. Goods traded by the mode of multi-level marketing conform with the enterprise registration certificate or the investment certificate.

4. It satisfies the business conditions or has obtained a certificate of eligibility for business as prescribed by law in case it trades in goods subject to conditional business.

5. It opens an escrow account at a commercial bank operating in Vietnam under Article 29 of this Decree.

6. It has rules of operation, bonus payment program and basic training program in accordance with law.

7. Partnership members, for partnerships; private enterprise owners; members, for limited liability companies; founding shareholders, for joint stock companies; and at-law representatives, for limited liability and joint stock companies, must be those who have not held one of the above positions at a multi-level marketing business which has its multi-level marketing registration certificate under Points b and c, Clause 1, Article 14 of this Decree.

Article 8. Legal capital

The legal capital of a business registering retail by the mode of multi - level marketing is VND 10 billion.

Article 9. Multi-level marketing registration certificates

1. A multi-level marketing registration certificate is valid for 5 years from the date of its signing.

2. A multi-level marketing registration certificate shall be made in 2 copies, 1 to be given to the business registering multi-level marketing activities and 1 to be kept at the agency granting such certificate.

3. The Ministry of Industry and Trade shall provide the form of the multi-level marketing registration certificate and the dossier, order and procedures for grant of multi-level marketing registration certificates.

Article 10. Modification and supplementation of multi-level marketing registration certificates

1. When there is a change related to the contents of the dossier of application for a multi-level marketing registration certificate, a multi-level marketing business shall carry out procedures to modify and supplement its multi-level marketing registration certificate.

2. The Ministry of Industry and Trade shall provide the dossier, order and procedures for modification and supplementation of multi-level marketing registration certificates.

Article 11. Re-grant of multi-level marketing registration certificates

1. When a multi-level marketing registration certificate is lost, torn or destroyed, a multi-level marketing business shall carry out procedures for re- grant of the multi-level marketing registration certificate immediately after the incident occurs.

2. The Ministry of Industry and Trade shall provide the dossier, order and procedures for re-grant of multi-level marketing registration certificates.

Article 12. Extension of multi-level marketing registration certificates

1. A multi-level marketing registration certificate may be extended many times, with each extension lasting 5 years.

2. Three months before a multi-level marketing registration certificate expires, a multi-level marketing business shall carry out procedures for extension of its certificate.

3. A multi-level marketing business may have its multi-level marketing registration certificate extended when it satisfies the conditions specified in Article 7 of this Decree.

4. The Minister of Industry and Trade shall provide the dossier, order and procedures for extension of multi-level marketing registration certificates.

Article 13. Charges and fees for management of multi-level marketing activities

1. The charges and fees for management of multi-level marketing activities include charges and fees for the grant, modification, supplementation, re-grant and extension of multi-level marketing registration certificates.

2. The rates and collection, remittance, management and use of charges and fees for management of multi-level marketing activities must comply with law.

Article 14. Revocation of multi-level marketing registration certificates

1. The agency granting a multi-level marketing registration certificate shall revoke that certificate in the following cases:

a/ The enterprise registration certificate or investment certificate is revoked or expires;

b/ The dossier of application for the multi-level marketing registration certificate contains untruthful information;

c/ The business is fined for an act specified in Clause 1, Article 5 of this Decree when organizing multi-level marketing activities as prescribed by law;

d/ The business fails to carry out multi-level marketing activities for 12 consecutive months after obtaining its multi-level marketing registration certificate;

dd/ The business fails to fully satisfy the conditions specified in Article 7 of this Decree when carrying out multi-level marketing activities;

e/ The business suspends multi-level marketing activities for more than 12 consecutive months;

g/ The business is dissolved or falls bankrupt in accordance with law.

2. The agency granting a multi-level marketing registration certificate to a business will not consider granting another multi-level marketing registration certificate to that business within 3 years from the date that business has its multi-level marketing registration certificate revoked under Point b or c, Clause 1 of this Article.

3. The Ministry of Industry and Trade shall provide the order and procedures for revocation of multi-level marketing registration certificates.

Article 15. Suspension of multi-level marketing activities

1. A multi-level marketing business may suspend its multi-level marketing activities for no more than 12 consecutive months.

2. When suspending its multi-level marketing activities, a business shall:

a/ Comply with regulations on suspension of business activities in accordance with the law on enterprises;

b/ Notify in writing to the Ministry of Industry and Trade, the provincial-level Industry and Trade Department of the locality where the business carries out multi-level marketing activities and multi-level marketing participants, and post up such suspension at its head office 30 working days before suspending multi-level marketing activities;

c/ Guarantee benefits of multi-level marketing participants in accordance with law.

3. When resuming multi-level marketing activities after suspension, the business shall notify such in writing to the Ministry of Industry and Trade and provincial-level Industry and Trade Department of the locality where it carries out multi-level marketing activities.

4. The Ministry of Industry and Trade shall provide the dossier, order and procedures for notification of suspension and resumption of multi-level marketing activities.

Article 16. Termination of multi-level marketing activities

1. Cases of termination of multi-level marketing activities:

a/ The multi-level marketing registration certificate expires;

b/ The business voluntarily terminates multi-level marketing activities;

c/ The multi-level marketing registration certificate is revoked by a competent agency under Article 14 of this Decree.

2. When terminating its multi-level marketing activities, a business shall:

a/ Notify such in writing to the Ministry of Industry and Trade, the provincial-level Industry and Trade Department of the locality where the business carries out multi-level marketing activities and multi-level marketing participants, and post up such termination at its head office;

b/ Guarantee benefits of multi-level marketing participants in accordance with the law on management of multi-level marketing activities;

c/ Have other obligations as prescribed by law.

3. The Ministry of Industry and Trade shall provide the dossier, order and procedures for termination of multi-level marketing activities.

Article 17. Notification of multi-level marketing activities

1. Before organizing multi-level marketing activities in a province or centrally run city, a multi-level marketing business shall send a notification dossier to the provincial-level Industry and Trade Department of that locality.

2. A multi-level marketing business may organize multi-level marketing activities in a province or centrally run city only after the provincial-level Industry and Trade Department of that locality certifies in writing its receipt of the notification dossier.

3. The Ministry of Industry and Trade shall provide the dossier, order and procedures for notification and certification of notification of multi-level marketing activities.

Article 18. Notification of organization of conferences, seminars and training

1. A multi-level marketing business shall notify to the provincial-level Industry and Trade Department of the locality where a conference, seminar or training is held when that event covers one of the following contents:

a/ Laws relevant to multi-level marketing activities of the business;

b/ Information on goods traded by the mode of multi-level marketing;

c/ Information on, and rules of operation and the bonus payment program of, the multi-level marketing business;

d/ Skills necessary for multi-level marketing activities.

2. A multi-level marketing business may organize the activities specified in Clause 1 of this Article only after obtaining written certification of receipt of its complete and valid notification dossier by the provincial-level Industry and Trade Department of the locality concerned.

3. A multi-level marketing business shall notify its organization of a conference, seminar or training provided in Clause 1 of this Article in case of authorizing the implementation of this activity.

4. Clause 1 of this Article does not apply to a multi-level marketing business which organizes a conference, seminar or training in its head office, branch, representative office or business place.

5. The Ministry of Industry and Trade shall provide the dossier, order and procedures for notification and certification of notification of organization of conferences, seminars and training.

Chapter III

RECRUITMENT, TRAINING AND MANAGEMENT OF MULTI-LEVEL MARKETING PARTICIPANTS

Article 19. Conditions on multi-level marketing participants

A multi-level marketing participant must be a person with full civil act capacity. A person may not participate in multi-level marketing when:

1. He/she is serving an imprisonment sentence or has previous convictions for counterfeit goods production and trading, deceitful advertising, illegal business, tax evasion, deceit of clients, swindling for appropriation of assets, abuse of trust for appropriation of assets or illegal seizure of assets.

2. He/she is a foreigner who has no permit of a competent agency to work in Vietnam.

Article 20. Training of multi-level marketing participants

1. After signing a multi-level marketing contract, a multi-level marketing business shall train and grant a certificate according to the form provided by the Ministry of Industry and Trade to the multi-level marketing participant after this person completes the basic training program provided in Clause 8, Article 3 of this Decree. Only those obtaining a trainer certificate according to the form provided by the Ministry of Industry and Trade may train multi-level marketing participants.

2. Where there is a change related to the contents specified in Clause 8, Article 3 of this Decree, a multi-level marketing business shall train or notify multi-level marketing participants of such change in accordance with regulations of the Ministry of Industry and Trade.

3. The Ministry of Industry and Trade shall provide contents of training for trainers provided in Clause 1 of this Article.

Article 21. Member cards

1. After organizing training under Clause 1, Article 20 of this Decree, a multi-level marketing business shall grant trained multi-level marketing participants a member card according to the form provided by the Ministry of Industry and Trade.

2. A multi-level marketing participant may carry out multi-level marketing activities only after obtaining a member card.

3. A multi-level marketing business shall renew or grant a new card to a multi-level marketing participant in the following cases:

a/ The card is torn, rumpled or lost;

b/ There is a change in information in the form of member card according to regulations.

4. A multi-level marketing business shall withdraw member cards when terminating multi-level marketing contracts.

Chapter IV

MULTI-LEVEL MARKETING ACTIVITIES

Article 22. Responsibilities of a multi-level marketing business

1. To post up at its head office and provide persons wishing to participate in its multi-level marketing network with documents related to its operations and goods traded by the mode of multi-level marketing.

2. To frequently supervise operations of multi-level marketing participants to ensure that they strictly comply with its rules of operation and bonus payment program.

3. To take responsibility for multi-level marketing participants’ multi- level marketing activities which:

a/ Are carried out at its head office, branch, representative office or business place;

b/ Are carried out outside its head office, branch, representative office or business place, unless these activities are not related to the business.

4. To ensure the truthfulness and accuracy of the information provided to multi-level marketing participants.

5. To ensure the quality and warranty and post-sale services (if any) for goods sold by the mode of multi-level marketing.

6. To settle complaints of multi-level marketing participants and consumers.

7. To withhold personal income tax of multi-level marketing participants for remittance into the state budget before paying commissions, bonuses or other economic benefits to multi-level marketing participants.

8. To manage multi-level marketing participants through the system of member cards provided in Article 21 of this Decree.

9. To notify multi-level marketing participants of goods which are not entitled to the business’ repurchase before they buy goods.

10. Other responsibilities as prescribed by law.

Article 23. Responsibilities of a multi-level marketing participant

1. To produce his/her member card before introducing or marketing goods for sale.

2. To fully provide information on the business and its goods traded by the mode of multi-level marketing when sponsoring another person to participate in the multi-level marketing network.

3. To provide truthful and accurate information on goods on sale.

4. To comply with rules of operation and bonus payment program of the business.

5. In case of failing to comply with Clause 2, Article 5 of this Decree and Clauses 1, 2, 3 and 4 of this Article and causing damage to consumers or other multi-level marketing participants, to pay compensation for such damage in accordance with law.

6. Other responsibilities as prescribed by law.

Article 24. Multi-level marketing contracts

1. A multi-level marketing business shall conclude a written multi-level marketing contract with a multi-level marketing participant.

2. A multi-level marketing contract must contain the following basic information:

a/ Name, head office address and at-law representative of the multi-level marketing business;

b/ Full name, permanent residence registration (or residence registration, for a foreigner), place of temporary residence registration and identity card number (or passport number, for a foreigner) of the multi-level marketing participant; work permit number, for a foreigner;

c/ Name, uses, use methods, sale price, conditions and scope of warranty (if any), policies for change and repurchase of goods;

d/ Methods of calculating commissions, bonuses or other economic benefits to be received by the multi-level marketing participant from his/her sale activities and sale network he/she develops;

dd/ The multi-level marketing business’ liability for multi-level marketing activities of the multi-level marketing participant in the payment of compensations for damage to consumers or to the multi-level marketing participant;

e/ Cases of termination, extension and liquidation of the multi-level marketing contract;

g/ Mechanism for settlement of contract disputes.

Article 25. Termination of multi-level marketing contracts

1. A multi-level marketing participant may terminate a multi-level marketing contract by sending a written notice to the multi-level marketing business at least 10 working days before terminating that contract.

2. A multi-level marketing business may terminate a multi-level marketing contract with a multi-level marketing participant when this person fails to comply with Clause 2, Article 5, and Article 23 of this Decree, and shall notify such in writing to the multi-level marketing participant at least 10 working days before terminating that contract.

3. Within 30 working days after terminating a contract, a multi-level marketing business shall pay a multi-level marketing participant commissions, bonuses and other economic benefit receivable by this participant in the course of participating in the multi-level marketing network.

Article 26. Repurchase of goods from multi-level marketing participants

1. When so requested by a multi-level marketing participant, a multi- level marketing business shall repurchase goods sold to that participant, including goods sold under sales promotion programs.

2. Conditions for repurchase of goods from a multi-level marketing participant:

a/ The goods’ use period has not expired;

b/ The goods’ packaging, stamp and label remain intact;

c/ The request for repurchase of foods is made within 30 days after the multi-level marketing participant receives such goods.

3. In case of repurchasing goods under Clause 1 of this Article, a multi- level marketing business shall:

a/ Refund the total amount paid by the multi-level marketing participant to receive such goods if there is no basis for deduction under Point b of this Clause;

b/ Refund the total amount after deducting expenses for management and re-warehousing and other administrative expenses, which, however, must not be lower than 90% of the amount paid by the multi-level marketing participant to receive such goods.

4. When refunding under Clause 3 of this Article, a multi-level marketing business may deduct commissions, bonuses and other economic benefits already received by the multi-level marketing participant under Clauses 1, 2, 3 and 4 of this Article.

Article 27. Provisions on payment of commissions, bonuses and other economic benefits

1. A multi-level marketing business shall pay commissions, bonuses and other economic benefits to a multi-level marketing participant under its bonus payment program registered with a competent agency upon registration of multi-level marketing activities.

2. The total value of commissions, bonuses and other economic benefits paid to a multi-level marketing participant in a year equivalent in currency must not exceed 40% of the multi-level marketing business’ sales from multi- level marketing in that year.

Article 28. Reports of multi-level marketing businesses

1. Every 6 months, a multi-level marketing business shall report on its multi-level marketing activities to the Ministry of Industry and Trade and the provincial-level Industry and Trade Department of the locality where it carries out multi-level marketing activities.

2. When necessary, a multi-level marketing business shall report at the request of a competent state management agency.

3. The Ministry of Industry and Trade shall provide the contents, order and procedures for periodical reporting provided in Clause 1 of this Article.

Chapter V

ESCROW

Article 29. Escrow money

1. A multi-level marketing business shall make an escrow equivalent to 5% of its charter capital, which, however, must not be lower than VND 5 (five) billion at a commercial bank in the locality where the business is headquartered. The bank where the business makes escrow shall make written certification of this escrow.

2. Escrow is an amount which secures the multi-level marketing business’ fulfillment of its obligations toward multi-level marketing participants when the business terminates its multi-level marketing activities, except the case provided in Clause 1, Article 16 of this Decree.

3. The escrow account shall be blocked by the bank throughout the operation of a business and may be withdrawn or used only when there is a written approval of the agency granting the multi-level marketing registration certificate, except the case provided in Clause 1, Article 30 of this Decree.

4. When a bank where a business makes escrow allows the withdrawal or use of the business’ escrow amount without written approval of the agency granting the multi-level marketing registration certificate, it shall be handled in accordance with the laws on banking operations and on credit institutions.

5. A multi-level marketing business may enjoy interests from its escrow amount under agreement with the bank concerned.

6. Where there is a change related to the basic contents of the written certification of escrow, a multi-level marketing business shall change such certification and notify such to the agency granting the multi-level marketing registration certificate.

7. The Ministry of Industry and Trade shall provide basic contents of the written certification of escrow.

Article 30. Withdrawal of escrow amounts

1. When the multi-level marketing registration certificate granting agency refuses to grant a multi-level marketing registration certificate to a business, this business may produce this agency’s written refusal to the bank where it makes escrow to carry out procedures to withdraw its escrow money.

2. After terminating multi-level marketing activities under Clause 1, Article 16 of this Decree and having fulfilled its multi-level marketing- related obligations toward multi-level marketing participants, a multi-level marketing business may carry out procedures to withdraw its escrow money.

3. The Ministry of Industry and Trade shall provide the dossier, order and procedures for withdrawal of escrow amounts.

Article 31. Use of escrow money

1. An escrow amount may be used when the following conditions are met:

a/ The multi-level marketing business terminates its multi-level marketing activities under Clause 1, Article 16 of this Decree;

b/ The multi-level marketing business fails to fully perform multi-level marketing-related activities toward multi-level marketing participants and there is a competent agency’s legally effective decision or judgment on the settlement of disputes related to those obligations between the multi -level marketing business and a multi-level marketing participant.

2. The Ministry of Industry and Trade shall provide the order and procedures for use of escrow money.

Chapter VI

SUPERVISION AND MANAGEMENT OF MULTI-LEVEL MARKETING ACTIVITIES

Article 32. Responsibilities of the Ministry of Industry and Trade

1. The Ministry of Industry and Trade shall take responsibility before the Government for performing the state management of multi-level marketing activities nationwide.

2. The Competition Authority under the Ministry of Industry and Trade shall assist the Minister of Industry and Trade in the following specific management contents:

a/ Grant, modification, supplementation, extension, re-grant and revocation of multi-level marketing registration certificates;

b/ Collection, management and use of charges and fees for the grant, modification, supplementation, extension and re-grant of multi-level marketing registration certificates in accordance with law;

c/ Notification of the grant, modification, supplementation, extension and revocation of multi-level marketing registration certificates to provincial- level Industry and Trade Departments of localities where businesses organize multi-level marketing activities;

d/ Preservation of dossiers of application for multi-level marketing registration certificates;

dd/ Provision of guidance to and coordination with provincial-level Industry and Trade Departments and other competent state agencies in the examination and supervision of multi-level marketing activities;

e/ Direct examination and supervision of multi-level marketing activities when necessary; settlement according to competence or notification and forwarding to competent agencies to handle violations of the law on management of multi-level marketing activities;

g/ Elaboration and submission to competent authorities for promulgation or revision of legal documents related to the assurance of order in the organization of multi-level marketing activities, protection of interests of multi-level marketing participants and consumers and maintenance of socio- economic stability;

h/ Performance of other responsibilities in accordance with this Decree.

Article 33. Responsibilities of provincial-level People’s Committees

1. Provincial-level People’s Committees shall perform the state management of multi-level marketing activities in their localities in accordance with this Decree and relevant laws.

2. Provincial-level Industry and Trade Departments shall assist provincial-level People’s Committees in the following activities:

a/ Inspecting, examining and supervising according to their competence multi-level marketing activities in their localities;

b/ Lawfully handling according to their competence or proposing competent authorities to handle violations of the law on management of multi-level marketing activities;

c/ Reporting to the Ministry of Industry and Trade on the receipt of dossiers of notification of multi-level marketing activities of multi-level marketing businesses in their localities under Article 17 of this Decree;

d/ Annually reporting to the Ministry of Industry and Trade on the results of examination, supervision and handling of violations of the law on management of multi-level marketing activities in their localities;

dd/ Performing other responsibilities in accordance with this Decree.

Article 34. Handling of violations for multi-level marketing businesses and multi-level marketing participants

1. Multi-level marketing businesses and multi-level marketing participants that violate this Decree shall, depending on the nature and severity of their violations, be handled in accordance with the laws on competition and on handling of administrative violations.

2. A multi-level marketing business or participant that violates this Decree and causes damage to material interests of related organizations or persons shall pay compensations in accordance with law.

Article 35. Competence and procedures to handle multi-level marketing-related violations

1. The competence to handle violations of this Decree must comply with the laws on competition and on handling of administrative violations.

2. The procedures for handling violations of this Decree must comply with the laws on competition and on handling of administrative violations.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 36. Effect

1. This Decree takes effect on July 1, 2014.

2. Registration certificates of organization of multi-level marketing granted under Decree No. 110/2005/ND-CP of August 24, 2005, on management of multi-level marketing activities remain effective until businesses are granted multi-level marketing registration certificates under this Decree, but for no more than 6 months from the effective date of this Decree.

3. This Decree replaces Decree No. 110/2005/ND-CP of August 24, 2005, on management of multi-level marketing activities.

Article 37. Implementation responsibilities

1. The Minister of Industry and Trade shall organize and guide the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government- attached agencies and chairperson of provincial-level People’s Committees shall implement this Decree.-