Decree No. 40/2018/ND-CP On Management of Multi-Level Marketing Business Activities

DECREE

On managing business activities under multi-level marketing methods

 

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Competition Law dated December 3, 2004;

Pursuant to the Investment Law dated November 26, 2014 and the Law amending and supplementing Article 6 and Appendix 4 on the list of industries and businesses subject to conditions for investment of the Investment Law dated November 22, 2016;lThe Government promulgates the Decree on managing business activities under multi-level marketing methods.

At the proposal of the Minister of Industry and Trade;

This Decree stipulates business activities under multi-level marketing methods and the management of such business activities.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree applies to direct selling enterprises, participants in direct selling, and other organizations and individuals related to business activities under multi-level marketing methods.

Article 2. Applicability

1. Business activity under multi-level marketing methods is a business activity using a network of participants comprising multiple levels and branches, wherein participants earn commissions, bonuses, and other economic benefits from their own business results and those of others within the network.

In this Decree, the following terms are understood as follows:

3. Participants in direct selling are individuals who enter into contracts to participate in direct selling with direct selling enterprises.

4. Participation contract in direct selling is a written agreement between an individual and a direct selling enterprise regarding participation in the direct selling network.

5. Operating rules are a set of rules of direct selling enterprises regulating the behavior of participants in direct selling, procedures, and processes for implementing direct selling activities.

6. Reward plan is a plan used by direct selling enterprises to calculate commissions, bonuses, and other economic benefits that participants in direct selling enjoy from their own business results and those of others within the network.

7. Multi-level sales position, multi-level sales code is the position and code of participants in direct selling arranged in the network for calculating commissions, bonuses, and other economic benefits paid to participants in direct selling.

2. Direct selling enterprise is an enterprise organizing business activities under multi-level marketing methods to sell goods.

1. Business activities under multi-level marketing methods can only be carried out with goods. All business activities under multi-level marketing methods with objects that are not goods are prohibited, except where otherwise provided by law.

2. The following goods shall not be sold through multi-level marketing methods:

a) Goods that are drugs; medical devices; veterinary drugs (including aquatic veterinary drugs); plant protection chemicals; restricted-use and banned-use chemical substances and preparations for pest control and bactericidal purposes in household and medical fields and dangerous chemical substances;

b) Digital content products.

Article 5. Prohibited acts in business activities under multi-level marketing methods

1. Direct selling enterprises are prohibited from carrying out the following acts:

a) Requiring others to deposit or pay a certain amount of money to sign a participation contract in direct selling;

b) Requiring others to purchase a certain quantity of goods to sign a participation contract in direct selling;

c) Allowing participants in direct selling to receive money or other economic benefits from introducing others to join the direct selling network without purchasing or selling goods from the introduced person;

d) Refusing to pay commissions, bonuses, or other economic benefits that participants in direct selling are entitled to without justifiable reasons;

đ) Providing false information about reward plans or the benefits of joining the direct selling network;

e) Providing false or misleading information about the features and functions of goods or the activities of enterprises through speakers, trainers at conferences, seminars, training sessions, or enterprise documents;

g) Maintaining more than one participation contract in direct selling, multi-level sales positions, multi-level sales codes, or equivalent forms for the same participant in direct selling;

h) Implementing promotional activities using a network comprising multiple levels and branches wherein participants in the promotional program have more than one position, code, or equivalent forms;

i) Organizing intermediary trade activities as prescribed by commercial laws to serve the maintenance, expansion, and development of the direct selling network;

k) Accepting or accepting any form of document from participants in direct selling declaring the abandonment of part or all of their rights as prescribed by this Decree or allowing enterprises not to fulfill their obligations to participants in direct selling as prescribed by this Decree;

l) Conducting business under multi-level marketing methods with objects not permitted as prescribed in Article 4 of this Decree;

m) Not using the participant management system registered with the authority issuing the registration certificate for direct selling activities to manage participants in direct selling;

n) Buying, selling, or transferring the participant network to another enterprise, except in cases of acquisition, merger, or consolidation of enterprises.

2. Participants in direct selling are prohibited from carrying out the following acts:

a) Acts prescribed in point a, Clause 1 of this Article;

b) Providing false or misleading information about the benefits of participating in direct selling, the features and functions of goods, or the activities of direct selling enterprises;

c) Organizing conferences, seminars, or training on multi-level marketing methods without written authorization from direct selling enterprises;

d) Luring, enticing, or bribing participants in direct selling from other enterprises to join the network of the enterprise they are currently participating in;

đ) Taking advantage of positions, powers, social status, or professions to encourage, require, lure, or entice others to join the direct selling network or purchase goods for multi-level marketing business activities.

đ) Exploiting positions, powers, social status, or professions to encourage, demand, lure, or entice others to participate in multi-level marketing networks or purchase goods for business through multi-level marketing methods;

e) Conduct multi-level marketing activities in localities where the enterprise has not yet been granted confirmation of registration for multi-level marketing activities in such localities.

3. Prohibit organizations and individuals engaged in multi-level marketing business models from organizing meetings, seminars, training sessions, or introducing their own or others' multi-level marketing business activities without having obtained a certificate of registration for multi-level marketing activities, except as otherwise provided by law.

4. Prohibit individuals from participating in the activities of organizations or individuals engaged in multi-level marketing business models that have not been granted a certificate of registration for multi-level marketing activities, except as otherwise provided by law.

Chapter II

REGISTRATION OF MULTI-LEVEL MARKETING ACTIVITIES

Article 6. Registration of Multi-Level Marketing Activities

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

Article 7. Conditions for Registration of Multi-Level Marketing Activities

1. Organizations registering for multi-level marketing activities must meet the following conditions:

a) Be a business entity established in Vietnam in accordance with the law and has not previously had its certificate of registration for multi-level marketing activities revoked;

b) Have a charter capital of at least 10 billion VND;

d) Deposit a guarantee fund in a commercial bank or a foreign bank branch in Vietnam in accordance with Clause 2 of Article 50 of this Decree;

đ) Possess clear, transparent, and compliant model contracts for participation in multi-level marketing, rules of operation, reward plans, and basic training programs in accordance with the provisions of this Decree;

e) Have an information technology system to manage the network of participants in multi-level marketing activities and an electronic information website to provide information about the business entity and its multi-level marketing activities;

2. Enterprises registering for multi-level marketing activities must prepare a dossier requesting issuance of a certificate of registration for multi-level marketing activities in accordance with Article 9 of this Decree and bear responsibility for the legality of the dossier.

Article 8. Certificate of Registration for Multi-Level Marketing Activities

1. The certificate of registration for multi-level marketing activities is valid for a period of five years from the date of issuance.

2. The certificate of registration for multi-level marketing activities shall be made in two original copies, one copy to be handed over to the enterprise registering for multi-level marketing activities and one copy to be kept at the Ministry of Industry and Trade.

3. The certificate of registration for multi-level marketing activities includes the following contents: Name of the enterprise; information on the enterprise registration certificate/business registration investment certificate (if applicable): Enterprise code, issuing authority, date of first issuance, latest date of change; main office address, telephone number, fax number, website, email; information on the legal representative: Name, nationality, identification card/residence card/passport information, position, place of permanent residence/registered residence; scope of goods permitted to be traded through multi-level marketing methods.

Article 9. Documents for Application to Obtain a Certificate of Registration for Multi-Level Marketing Activities

The documents for application to obtain a certificate of registration for multi-level marketing activities include the following documents (stamped with the enterprise's confirmation seal):

1. An application form for obtaining a certificate of registration for multi-level marketing activities according to Model No. 01 attached to this Decree.

2. One copy of the business registration certificate or other equivalent legal documents.

4. Two sets of documents related to the multi-level marketing activities of the enterprise, including:

a) A sample of the multi-level marketing participation contract;

b) Reward plan;

c) Basic training program;

d) Operating rules.

5. One list of goods sold through multi-level marketing methods of the enterprise, including information such as name, type, origin, packaging specifications, warranty conditions (if applicable), selling price, corresponding reward points, and effective date.

6. One original copy of the deposit confirmation document.

8. Documentation proving that the enterprise has an electronic website meeting the requirements set forth in Article 45 of this Decree.

Article 10. Procedures for Issuing a Certificate of Registration for Multi-Level Marketing Activities

1. Receiving applications

b) Within five working days from the date of receiving the documents, the Ministry of Industry and Trade is responsible for checking the completeness and validity of the documents. In cases where the documents are incomplete or invalid, the Ministry of Industry and Trade will notify the enterprise in writing to amend and supplement the documents.

c) If the enterprise does not amend and supplement the documents as required within thirty days from the date the Ministry of Industry and Trade issues the notification to amend and supplement the documents, the Ministry of Industry and Trade will return the documents to the enterprise.

2. Reviewing the documents

a) After receiving complete and valid documents, the Ministry of Industry and Trade notifies the enterprise to pay the review fee. The Ministry of Industry and Trade returns the documents if the enterprise fails to pay the review fee within thirty days from the date of issuing the notification.

b) The Ministry of Industry and Trade reviews the documents within twenty working days from the date of receiving the review fee.

c) Content of the review: - Confirm in writing with the bank where the enterprise has deposited the security about the authenticity of the deposit confirmation document; - Review the contents of the documents in the application for a certificate of registration for multi-level marketing activities to ensure compliance with the provisions of this Decree.

d) In cases where the enterprise's documents do not fully meet the conditions stipulated in this Decree, the Ministry of Industry and Trade will notify the enterprise in writing to amend and supplement the documents. The enterprise may submit supplementary documents once within thirty days from the date the Ministry of Industry and Trade issues the notification. The review period for amended and supplemented documents is fifteen working days from the date the Ministry of Industry and Trade receives the amended and supplemented documents.

3. Returning the documents In cases where the enterprise fails to amend and supplement the documents within the time limit specified in point d, Clause 2 of this Article or the enterprise's documents do not meet the conditions stipulated in this Decree even after amendment and supplementation, the Ministry of Industry and Trade will notify the enterprise in writing to return the documents, specifying the reasons for returning the documents.

4. Issuing a Certificate of Registration for Multi-Level Marketing Activities In cases where the enterprise's documents fully meet the conditions stipulated in this Decree, the Ministry of Industry and Trade will issue a certificate of registration for multi-level marketing activities according to Model No. 02 attached to this Decree and return one copy of the documents specified in Clause 4, Article 9 of this Decree stamped with the Ministry of Industry and Trade's seal to the enterprise.

5. Within ten working days from the date of issuing the certificate of registration for multi-level marketing activities, the Ministry of Industry and Trade is responsible for publishing on its electronic website, notifying the bank where the enterprise has deposited the security, and providing copies of the certificate of registration for multi-level marketing activities along with copies of the documents specified in Clauses 4 and 5, Article 9 of this Decree to provincial Departments of Industry and Trade nationwide through one of the following methods:

b) Email;

c) The Ministry of Industry and Trade's multi-level marketing management information technology system.

Article 11. Amending and Supplementing the Certificate of Registration for Multi-Level Marketing Activities

1. A multi-level marketing enterprise shall be responsible for carrying out procedures to request amending and supplementing the Certificate of Registration for Multi-Level Marketing Activities in the following cases:

a) In case there is a change in information related to the enterprise, including the enterprise's name, legal representative, main office address, founding shareholders, principal owners, information related to the deposit, the enterprise shall complete the procedures to amend and supplement the Certificate of Registration for Multi-Level Marketing Activities within fifteen working days from the date of the change being confirmed by the competent authority;

b) In case there is a change related to Clause 4, Clause 7, Clause 8, and Clause 9 of Article 9 of this Decree, the enterprise shall complete the procedures to amend and supplement the Certificate of Registration for Multi-Level Marketing Activities before applying such changes.

2. In case there is a change in information in the list of goods traded through multi-level marketing methods, the enterprise shall be responsible for notifying the Ministry of Industry and Trade in writing before applying such changes.

Article 12. Documents, Procedures, and Formalities for Amending and Supplementing the Certificate of Registration for Multi-Level Marketing Activities

1. The documents for requesting to amend and supplement the Certificate of Registration for Multi-Level Marketing Activities include:

a) An application form for amending and supplementing the Certificate of Registration for Multi-Level Marketing Activities according to Model No. 03 attached to this Decree;

b) One original copy of the Certificate of Registration for Multi-Level Marketing Activities issued by the Ministry of Industry and Trade;

c) Documents stipulated in Article 9 of this Decree relating to the contents amended and supplemented in the Certificate of Registration for Multi-Level Marketing Activities.

2. The procedures and formalities for amending and supplementing the Certificate of Registration for Multi-Level Marketing Activities shall be carried out in accordance with the provisions of Article 10 of this Decree.

3. Procedures and formalities for notifying changes in the list of goods traded through multi-level marketing methods:

c) The Ministry of Industry and Trade shall be responsible for notifying all Provincial Departments of Industry and Trade throughout the country through one of the methods prescribed in Clause 5 of Article 10 of this Decree about the enterprise's notification of changes in the list of goods traded through multi-level marketing methods.

Article 13. Reissuing the Certificate of Registration for Multi-Level Marketing Activities

2. Within ten working days from the date of receipt of a valid application for reissuing the Certificate of Registration for Multi-Level Marketing Activities, the Ministry of Industry and Trade shall reissue the Certificate of Registration for Multi-Level Marketing Activities for the enterprise.

Article 14. Extension of the Certificate of Registration for Multi-Level Marketing Activities

1. The Certificate of Registration for Multi-Level Marketing Activities may be extended multiple times, each extension having a duration of five years.

2. A multi-level marketing enterprise shall be eligible to extend its Certificate of Registration for Multi-Level Marketing Activities if it meets the conditions stipulated in Article 7 of this Decree.

3. At least three months before the Certificate of Registration for Multi-Level Marketing Activities expires, a multi-level marketing enterprise shall be responsible for completing the procedures to extend the Certificate of Registration for Multi-Level Marketing Activities.

4. The application dossier for extending the Certificate of Registration for Multi-Level Marketing Activities includes:

a) An application form for extending the Certificate of Registration for Multi-Level Marketing Activities according to Form No. 05 attached to this Decree;

b) Documents specified in Clause 2 and Clause 3 of Article 9 of this Decree;

5. The procedure and formalities for extending the Certificate of Registration for Multi-Level Marketing Activities shall be carried out in accordance with the provisions of Article 10 of this Decree.

Article 15. Fees for the Examination and Issuance of the Certificate of Registration for Multi-Level Marketing Activities

1. The fees for the examination and issuance of the Certificate of Registration for Multi-Level Marketing Activities include fees for issuance, amendment, supplementation, and extension of the Certificate of Registration for Multi-Level Marketing Activities.

2. The collection, payment, management, and utilization of fees for the examination and issuance of the Certificate of Registration for Multi-Level Marketing Activities shall be implemented in accordance with the provisions of the law.

Article 16. Revocation of the Certificate of Registration for Multi-Level Marketing Activities

1. The Ministry of Industry and Trade shall revoke the Certificate of Registration for Multi-Level Marketing Activities in the following circumstances:

a) The business registration certificate or other equivalent legal documents are revoked, or the enterprise is dissolved or declared bankrupt in accordance with the law;

b) The application dossier for the Certificate of Registration for Multi-Level Marketing Activities contains false information;

d) The enterprise fails to promptly rectify, as required by the competent authority managing multi-level marketing activities, to meet all the conditions stipulated in Article 7 of this Decree during the conduct of multi-level marketing activities.

2. The Certificate of Registration for Multi-Level Marketing Activities shall become invalid from the date the decision revoking the Certificate of Registration for Multi-Level Marketing Activities takes legal effect.

3. The procedure and formalities for revoking the Certificate of Registration for Multi-Level Marketing Activities:

a) The Ministry of Industry and Trade shall issue a decision to revoke the Certificate of Registration for Multi-Level Marketing Activities when one of the circumstances specified in Clause 1 of this Article occurs;

b) Within ten working days from the date the decision to revoke the Certificate of Registration for Multi-Level Marketing Activities takes legal effect, the Ministry of Industry and Trade shall be responsible for notifying all provincial Departments of Industry and Trade throughout the country through one of the methods stipulated in Clause 5 of Article 10 of this Decree and publishing on the Ministry's electronic information website.

Article 17. Termination of Multi-Level Marketing Activities

1. Cases for terminating multi-level marketing activities:

a) The registration certificate for multi-level marketing activities expires without renewal in accordance with Article 14 of this Decree;

b) The enterprise voluntarily terminates its multi-level marketing activities;

c) The registration certificate for multi-level marketing activities is revoked by the competent authority.

2. Responsibilities of enterprises when terminating multi-level marketing activities:

a) Notify in writing to the Ministry of Industry and Trade, publicly post at the main office, branches, representative offices, business locations, and publish on the company's website;

b) Terminate and liquidate contracts for participation in multi-level marketing activities and resolve the rights of participants in accordance with the law on managing multi-level marketing activities;

c) Fulfill all obligations according to the decision on handling violations in multi-level marketing activities issued by the competent authority.

1. In cases where the enterprise voluntarily terminates multi-level marketing activities:

a) The notification dossier for terminating multi-level marketing activities includes: - Notification of termination of multi-level marketing activities according to Form No. 06 attached to this Decree; - Report according to Form No. 15 attached to this Decree; - One copy of the latest amended business registration certificate or equivalent legal document; - One original registration certificate for multi-level marketing activities; - One copy of the decision to terminate multi-level marketing activities by the individual business owner or sole member of a limited liability company; resolution and minutes of the meeting regarding the termination of multi-level marketing activities by the board of directors if it is a limited liability company with two or more members, by the shareholders' meeting if it is a joint-stock company, or by the general partners if it is a partnership;

b) Procedures and formalities for terminating multi-level marketing activities: - The enterprise submits the notification dossier for terminating multi-level marketing activities to the Ministry of Industry and Trade (directly or via postal service); - Within ten working days from the date of receipt of a valid notification dossier for terminating multi-level marketing activities, the Ministry of Industry and Trade issues a confirmation document for receiving the notification dossier, notifies provincial industry and trade departments nationwide through one of the methods prescribed in Clause 5 of Article 10 of this Decree, and publishes on the Ministry of Industry and Trade’s website.

2. In cases where the enterprise terminates multi-level marketing activities due to the expiration or revocation of the registration certificate for multi-level marketing activities:

a) The notification dossier for terminating multi-level marketing activities includes: - Notification of termination of multi-level marketing activities according to Form No. 06 attached to this Decree; - Report according to Form No. 15 attached to this Decree; - One copy of the latest amended business registration certificate or equivalent legal document; - One original registration certificate for multi-level marketing activities.

b) Procedures and formalities for terminating multi-level marketing activities: - Within thirty working days from the date of expiration or revocation of the registration certificate for multi-level marketing activities, the enterprise is responsible for submitting the notification dossier for terminating multi-level marketing activities to the Ministry of Industry and Trade (directly or via postal service); - Within ten working days from the date of receipt of a valid notification dossier for terminating multi-level marketing activities, the Ministry of Industry and Trade issues a confirmation document for receiving the notification dossier, notifies provincial industry and trade departments nationwide through one of the methods prescribed in Clause 5 of Article 10 of this Decree, and publishes on the Ministry of Industry and Trade’s website.

Chapter III

LOCAL MANAGEMENT OF MULTI-LEVEL MARKETING ACTIVITIES

Article 19. Multi-level marketing activities at local level

A multi-level marketing enterprise shall be considered to have multi-level marketing activities at the local level if it falls under any of the following cases:

1. The enterprise has its headquarters, branch, or representative office that performs functions related to multi-level marketing activities at the local level.

2. The enterprise organizes meetings, seminars, or training sessions on multi-level marketing at the local level.

3. The enterprise has participants in multi-level marketing residing (permanent residence or temporary residence in cases where they do not reside at their permanent residence) or conducting marketing and sales activities through the multi-level marketing method at the local level.

Article 20. Registration for multi-level marketing activities at the local level

1. A multi-level marketing enterprise shall be responsible for completing registration procedures with the Department of Industry and Trade of the province or centrally governed city and may only organize multi-level marketing activities after receiving a written confirmation of registration for multi-level marketing activities from the Department of Industry and Trade of the province or centrally governed city.

3. A multi-level marketing enterprise shall be responsible for storing and presenting documents and materials related to multi-level marketing activities at the local level upon request of competent authorities.

Article 21. Documents, procedures, and formalities for registering multi-level marketing activities at the local level

a) An application for registering multi-level marketing activities at the local level according to Model No. 07 attached hereto;

b) One copy of the business registration certificate or equivalent legal document;

c) One copy of the certificate of registration for multi-level marketing activities;

d) One copy of the certificate of registration for branches, representative offices, or business locations (if any), or one authorization letter for the local representative accompanied by one certified copy of the identification card/residence book/passport of the local representative in cases where the enterprise does not have a headquarters, branch, or representative office at the local level.

4. Within five working days from the date of issuance of the written confirmation of registration for multi-level marketing activities at the local level, the Department of Industry and Trade shall be responsible for publishing on its electronic information website and sending a copy of the written confirmation to the Ministry of Industry and Trade in accordance with one of the methods prescribed in Clause 5, Article 10 of this Decree.

Article 22. Registration for Amending and Supplementing the Content of Multi-Level Marketing Activities at Local Level

1. During the process of conducting multi-level marketing activities in provinces and centrally-administered cities, multi-level marketing enterprises shall be responsible for registering to amend and supplement the content of their multi-level marketing activities at the local level with the Department of Industry and Trade when there is any change related to:

a) The head office, branch, representative office, business location of the enterprise in the locality;

3. In case the dossier is incomplete or invalid, within five working days from the date of receipt of the dossier, the Department of Industry and Trade shall notify in writing for the enterprise to amend and supplement. The enterprise is allowed to supplement the dossier once within fifteen working days from the date the Department of Industry and Trade issues the notification. The Department of Industry and Trade shall return the dossier in case the enterprise does not amend and supplement the dossier within the aforementioned period.

4. In case the dossier is complete and valid, within seven working days from the date of receiving the dossier, the Department of Industry and Trade shall send the enterprise a confirmation document for registering to amend and supplement the content of multi-level marketing activities at the local level according to Form No. 10 attached hereto. In case of refusal to confirm, the Department of Industry and Trade shall be responsible for replying in writing specifying the reasons.

5. The Department of Industry and Trade shall be responsible for publishing on its electronic information website and notifying the Ministry of Industry and Trade via one of the methods prescribed in Clause 5 of Article 10 of this Decree about the confirmation of registration to amend and supplement the content of multi-level marketing activities at the local level of multi-level marketing enterprises.

Article 23. Revocation of Confirmation of Registration for Multi-Level Marketing Activities at Local Level

1. The Department of Industry and Trade shall revoke the confirmation of registration for multi-level marketing activities at the local level in cases where:

a) The registration dossier for multi-level marketing activities at the local level contains false information;

b) The enterprise does not implement multi-level marketing activities for a continuous period of twelve months;

c) It fails to comply with the responsibilities prescribed in Clause 11 of Article 40 of this Decree;

2. Within ten working days from the date of issuance of the decision to revoke the confirmation of registration for multi-level marketing activities at the local level, the Department of Industry and Trade shall be responsible for publishing on its electronic information website and notifying the Ministry of Industry and Trade via one of the methods prescribed in Clause 5 of Article 10 of this Decree.

3. The confirmation of registration for multi-level marketing activities ceases to be effective from the date the revocation decision takes legal effect.

4. Within thirty days from the date the revocation decision takes legal effect, the enterprise shall be responsible for implementing procedures to terminate multi-level marketing activities at the local level in accordance with Article 24 of this Decree.

5. The Department of Industry and Trade shall not reissue the confirmation of registration for multi-level marketing activities at the local level to multi-level marketing enterprises within six months from the date the revocation decision takes effect for the case stipulated in point b of Clause 1 of this Article, and within twelve months for the cases stipulated in points a and c of Clause 1 of this Article.

Article 24. Termination of Multi-Level Marketing Activities in a Local Area

1. Cases for terminating multi-level marketing activities in a local area:

a) The enterprise has its registration confirmation for multi-level marketing activities in the local area revoked;

b) The enterprise voluntarily terminates multi-level marketing activities in the local area.

b) Terminating and liquidating contracts for participation in multi-level marketing and resolving the rights of participants in multi-level marketing in the local area in accordance with the laws governing the management of multi-level marketing activities;

c) Fulfilling obligations according to the decision on handling violations in multi-level marketing activities issued by the competent authority in the local area.

Article 25. Procedures and Formalities for Terminating Multi-Level Marketing Activities in a Local Area

3. In the case where the enterprise voluntarily terminates multi-level marketing activities in a local area, within 10 working days from the date of receiving a valid termination activity notification file, the Department of Industry and Trade shall issue a document confirming receipt of the termination activity notification file, publish it on the Department of Industry and Trade’s information website, and notify the Ministry of Industry and Trade via one of the methods stipulated in Clause 5 of Article 10 of this Decree.

Article 26. Notification of Organizing Conferences, Seminars, and Training on Multi-Level Marketing

1. A multi-level marketing enterprise may only organize conferences, seminars, and training on multi-level marketing in provinces and centrally-administered cities where the enterprise has been granted registration confirmation for multi-level marketing activities in the local area.

3. The multi-level marketing enterprise shall be responsible for coordinating with relevant authorities during the process of fulfilling the responsibility of monitoring, inspecting, and supervising conferences, seminars, and training on multi-level marketing organized by the enterprise, ensuring compliance with legal regulations.

1. The documents for announcing the organization of meetings, seminars, and training on multi-level marketing include:

a) Notification of organizing meetings, seminars, and training according to Model No. 12 attached as Appendix to this Decree;

b) Content, materials presented at the seminar, and the expected number of participants;

c) A list of speakers at the meeting, seminar, and training accompanied by the business enterprise's contract, which clearly defines the rights, responsibilities, and reporting content of the speakers;

d) One original power of attorney document in cases where the business enterprise authorizes an individual to conduct training or organize meetings and seminars.

2. Multi-level marketing enterprises may announce the organization of multiple meetings, seminars, and training sessions on multi-level marketing in a single notification document.

3. Multi-level marketing enterprises must submit the notification documents for organizing meetings, seminars, and training on multi-level marketing to the Department of Industry and Trade (either directly or via postal service) at least 15 working days before the planned implementation date.

4. In cases where the documents are incomplete or invalid, within five working days from the date of receipt of the documents, the Department of Industry and Trade will notify the enterprise in writing to make corrections and supplements. The deadline for making corrections and supplements is ten working days from the date the Department of Industry and Trade issues the notification.

5. An enterprise is permitted to organize meetings, seminars, and training if, within five working days from the date the Department of Industry and Trade receives the notification, the Department does not request any corrections or supplements.

6. When there are changes in the information in the notification documents for organizing meetings, seminars, and training, the enterprise has the responsibility to notify the Department of Industry and Trade in writing at least three working days before the planned implementation date.

7. If an enterprise has already announced the organization of meetings, seminars, and training with the Department of Industry and Trade but does not proceed with it, the enterprise has the responsibility to notify the Department of Industry and Trade in writing before the date specified in the notification document.

Chapter IV

MANAGEMENT OF PARTICIPANTS IN MULTI-LEVEL MARKETING

Article 28. Conditions for Participants in Multi-Level Marketing

2. The following cases are not allowed to participate in multi-level marketing:

a) Individuals currently serving a prison sentence or having a criminal record for offenses related to producing, selling counterfeit goods, producing, selling prohibited goods, false advertising, deceiving customers, fraud, misappropriation of trust, illegal possession of property, violation of regulations on multi-level marketing operations;

c) Individuals who have been penalized for violating the provisions of Clause 2, Clause 3, and Clause 4 of Article 5 of this Decree and whose penalty period has not yet expired;

d) Individuals as stipulated in Point c, Clause 1, Article 7 of this Decree;

đ) Civil servants as defined by the law on civil servants.

Article 29. Contracts for Participation in Multi-Level Marketing

1. Multi-level marketing enterprises are responsible for signing participation contracts in multi-level marketing in writing with participants in multi-level marketing.

2. Participation contracts in multi-level marketing must include the following basic contents:

a) Name of the enterprise, legal representative, contact information of the multi-level marketing enterprise;

b) Full name, date of birth, permanent address (or registration address for foreign individuals), place of residence (permanent or temporary residence in case of non-residence at the permanent address), telephone number, bank account number, identification card number, citizen identity card number, or passport number of the participant in multi-level marketing; work permit number in case the participant in multi-level marketing is a foreign individual;

c) Full name and code of the introducer (sponsor);

d) Information about goods sold through multi-level marketing methods;

đ) Information about reward plans and operational rules;

e) Rights and obligations of both parties, ensuring compliance with the provisions of this Decree and relevant laws;

g) Provisions on payment by bank transfer for commissions and rewards;

h) Provisions regarding the purchase back of goods;

i) Circumstances leading to termination of the participation contract in multi-level marketing and accompanying obligations;

k) Mechanism for resolving disputes over the contract.

3. Participation contracts in multi-level marketing must meet the following conditions regarding form:

a) Written in Vietnamese, font size no less than 12;

b) Paper background and ink color used to display the content of the contract must be contrasting.

Article 30. Termination of Multi-Level Marketing Participation Contracts

1. Participants in multi-level marketing have the right to terminate their multi-level marketing participation contracts by sending a written notice to the multi-level marketing company at least ten working days before the termination date.

2. The multi-level marketing company has the right to terminate the contract with the participant when the participant violates the provisions set forth in Article 41 of this Decree.

3. The multi-level marketing company shall be responsible for terminating the contract with the participant when the participant violates the provisions set forth in Clause 2 of Article 5 of this Decree.

4. Within thirty working days from the date of contract termination, the multi-level marketing company shall be responsible for paying the participant the commission, bonuses, and other economic benefits that the participant is entitled to receive during their participation in the multi-level marketing network of the company.

Article 31. Basic Training Program

1. The basic training program is a mandatory training program for participants in multi-level marketing.

2. The content of the basic training includes the following:

a) Laws on multi-level marketing;

b) Ethical standards in multi-level marketing activities;

c) Key contents of the multi-level marketing participation contract, operational rules, and reward plans;

d) Mechanism for evaluating the completion of the basic training program in accordance with the training content and methods.

3. The minimum training duration is eight hours.

Article 32. Basic Training for Multi-Level Marketing Participants

1. The multi-level marketing company shall be responsible for training participants according to the registered basic training program with the competent authority and shall not charge any fees under any form.

2. Participants in multi-level marketing shall be responsible for participating and fully grasping the contents of the basic training program.

3. Only those designated by the multi-level marketing company as trainers may conduct basic training for the company's multi-level marketing participants.

4. The basic training program can be conducted through methods ensuring interaction during the training process, including:

a) In-person training;

b) Remote training.

5. The multi-level marketing company shall be responsible for assessing the level of completion of the basic training program by participants and confirming in writing the completion of the content and duration of the basic training program by participants.

6. The multi-level marketing company shall be responsible for storing documents related to the basic training activities for participants, including time, method, location (if applicable), and training results.

7. When there are changes related to the provisions set forth in Clause 2 of Article 31 of this Decree, the multi-level marketing company shall be responsible for providing additional training or notifying participants via the company’s website or publicly posting such information at the main office, branches, representative offices, and business locations within thirty days from the date of change.

Article 33. Member Card

1. A multi-level marketing enterprise may only issue a Member Card to individuals who have completed the basic training program and provided a written commitment according to Model No. 13 attached to this Decree.

2. A multi-level marketing enterprise shall be responsible for issuing Member Cards free of charge to participants in multi-level marketing.

3. The Member Card includes the following contents:

a) Enterprise name;

b) Contact information of the enterprise;

c) Photo of the multi-level marketing participant;

d) Information of the multi-level marketing participant, including: Name, identification card number/citizen identification card number or passport number, member code or card number, date of issuance, place of issuance.

4. The Member Card becomes invalid when the multi-level marketing participation contract terminates.

5. A multi-level marketing enterprise shall be responsible for publicly announcing the termination of the validity of the Member Card on its website.

Article 34. Trainer

1. A multi-level marketing enterprise shall be responsible for appointing Trainers to conduct basic training for its multi-level marketing participants.

2. Conditions for Trainers:

a) Having been granted confirmation of knowledge of laws regulating multi-level marketing activities according to Article 38 of this Decree;

b) Having a labor contract or training contract with the multi-level marketing enterprise.

3. The following cases do not meet the conditions to become Trainers:

a) Individuals currently serving a prison sentence or having a criminal record for offenses related to producing, selling counterfeit goods, producing, selling prohibited goods, false advertising, deceiving customers, fraud, misappropriation of trust, illegal possession of property, violation of regulations on multi-level marketing operations;

b) Foreign nationals without a work permit issued by the competent authority in Vietnam, except in cases exempted under the law;

c) Individuals who have been penalized for violating the provisions of Clause 2, Clause 3, and Clause 4 of Article 5 of this Decree and whose penalty period has not yet expired;

d) Individuals as stipulated in Point c, Clause 1, Article 7 of this Decree;

đ) Civil servants as defined by the law on civil servants.

4. A multi-level marketing enterprise shall be responsible for compiling a list of Trainers, retaining accompanying files, publishing the list of Trainers on its website, and notifying the Ministry of Industry and Trade.

5. A multi-level marketing enterprise shall be responsible for updating the list of Trainers on its website and notifying the Ministry of Industry and Trade within ten working days from the date of any change in the list of Trainers.

6. A multi-level marketing enterprise shall be liable for all activities of Trainers during the implementation of basic training.

Article 35. Training on Legal Knowledge about Multi-Level Marketing

1. The content of training on legal knowledge about multi-level marketing includes:

a) Provisions of laws regulating multi-level marketing activities, advertising laws, consumer protection laws;

b) Ethical standards in multi-level marketing activities.

2. The training program on legal knowledge about multi-level marketing must be recognized by the Ministry of Industry and Trade.

1. The application documents include:

b) Copy of the decision establishing the training institution with the appropriate functions issued by the competent authority in accordance with the law or equivalent legal documents;

c) The training program on legal knowledge about multi-level marketing;

d) List including at least two lecturers with bachelor's degree or higher qualifications.

2. The procedures and formalities for recognizing the training program on legal knowledge about multi-level marketing are carried out as follows:

a) Within seven working days from the date of receipt of the application for recognition, the Ministry of Industry and Trade examines the validity of the application. In case the application is not valid, the Ministry of Industry and Trade issues a document requesting the training institution to supplement the application;

b) Within thirty working days from the date of receipt of a valid application for recognition, the Ministry of Industry and Trade reviews the application and issues a recognition decision.

4. The Ministry of Industry and Trade stipulates the framework of the training program on legal knowledge about multi-level marketing.

Article 37. Activities of Training Institutions for Legal Knowledge on Multi-Level Marketing Sales

1. Training Organizations:

a) The training institution for legal knowledge on multi-level marketing sales conducts training in accordance with the recognized content and program, and issues certificates of completion of the legal knowledge training course on multi-level marketing sales according to Model No. 14 attached to this Decree;

b) The training institution for legal knowledge on multi-level marketing sales is responsible for reporting in writing to the Ministry of Industry and Trade about the results of training at its institution within ten working days after the end of each training course.

2. Record Keeping: The training institution for legal knowledge on multi-level marketing sales is responsible for storing records of training courses in accordance with the law on record keeping. The stored records include:

a) Enrollment files of trainees, lists of trainees who have been issued certificates of completion of each training course;

b) Lists of lecturers participating in teaching each training course;

c) Files managing the issuance of certificates of completion of the legal knowledge training course on multi-level marketing sales.

3. Inspection and Supervision of Training Institution Activities:

b) Annually, the Ministry of Industry and Trade conducts inspections of the training and issuance of certificates of completion of the legal knowledge training course on multi-level marketing sales by training institutions. Based on the inspection results, depending on the level of violations, the Ministry of Industry and Trade may require the training institution to rectify the violations or temporarily suspend the decision recognizing the training program for legal knowledge on multi-level marketing sales;

c) The Ministry of Industry and Trade revokes or suspends the decision recognizing the training program for legal knowledge on multi-level marketing sales in the following cases: The training institution has been dissolved; the training institution cannot rectify the violations during the temporary suspension period or the violations are irreparable.

1. A person who has completed the legal knowledge training course on multi-level marketing sales is eligible to register for the examination of legal knowledge on multi-level marketing sales organized by the Ministry of Industry and Trade.

2. The Ministry of Industry and Trade issues confirmation of legal knowledge on multi-level marketing sales to those who pass the examination of legal knowledge on multi-level marketing sales.

3. The Ministry of Industry and Trade specifies the procedures for examination, issuance, and revocation of confirmation of legal knowledge on multi-level marketing sales.

1. The multi-level marketing sales enterprise submits an application for examination and confirmation of legal knowledge on multi-level marketing sales to the Ministry of Industry and Trade (either directly or through postal service). The application includes:

a) An application for examination and confirmation of legal knowledge on multi-level marketing sales;

b) A list of individuals proposed for examination and confirmation of legal knowledge on multi-level marketing sales, including the following information: Full name, gender, date of birth, identification number, date of issue, place of issue of identity card/residence registration card;

c) Two photographs measuring 3 x 4 cm of individuals listed in point b, Clause 1 of this Article;

d) One copy of the certificate of completion of the legal knowledge training course on multi-level marketing sales.

2. Within fifteen working days from the date of conducting the examination of legal knowledge on multi-level marketing sales, the Ministry of Industry and Trade issues confirmation of legal knowledge on multi-level marketing sales to those who pass the examination.

Chapter V

MULTI-LEVEL MARKETING ACTIVITIES

Article 40. Responsibilities of Multi-Level Marketing Enterprises

1. Publicly display at their headquarters, branches, representative offices, and business locations the documents specified in Clause 4 and Clause 5, Article 9 of this Decree.

2. Adhere to the operational rules and reward plans registered.

3. Establish and publish prices for goods sold through multi-level marketing methods and comply with published prices.

4. Issue invoices for each transaction with each multi-level marketing participant and customers purchasing directly from the enterprise.

5. Monitor the activities of multi-level marketing participants to ensure they comply with their multi-level marketing participation contracts, operational rules, and reward plans.

6. Be responsible for the multi-level marketing activities of participants when such activities occur at the headquarters, branches, representative offices, business locations, or at company meetings, seminars, and training sessions.

7. Deduct personal income tax from multi-level marketing participants before paying commissions, rewards, or other economic benefits, except where otherwise provided by law.

8. Operate an information technology management system for the multi-level marketing network that complies with the provisions of Article 44 of this Decree, consistent with the technical explanation provided during registration of multi-level marketing operations, ensuring participants can access and retrieve basic information about their multi-level marketing activities.

9. Maintain and regularly update a Vietnamese-language website providing information about the enterprise and its multi-level marketing activities in accordance with the provisions of Article 45 of this Decree.

10. Operate a communication system to receive and resolve inquiries and complaints from multi-level marketing participants, including telephone, email, and reception addresses.

11. Provide access to the management account of the information technology system managing multi-level marketing activities upon written request by competent state management agencies overseeing multi-level marketing activities.

Article 41. Responsibilities of Multi-Level Marketing Participants

1. Multi-level marketing participants may only engage in marketing, sales, and network development activities after obtaining a Member Card.

2. Present the Member Card before introducing or marketing products.

3. Comply with the multi-level marketing participation contract and operational rules of the enterprise.

Article 42. Operational Rules

Operational rules must clearly specify procedures and formalities for signing multi-level marketing participation contracts, basic training for multi-level marketing participants, issuing Member Cards, placing orders, payment, delivery, return (if applicable), warranty (if applicable), exchange, refund, repurchase of goods, and refunding money to multi-level marketing participants, resolving complaints, terminating, and settling contracts.

The reward plan must clearly specify the conditions for achievement, commissions, bonuses, and other economic benefits paid at each level and title for participants in multi-level marketing.

Article 44. Information Technology System for Managing the Network of Participants in Multi-Level Marketing

1. The information technology system for managing the network of participants in multi-level marketing of a multi-level marketing company must be operated on a server located in Vietnam.

2. The information technology system for managing the network of participants in multi-level marketing must provide participants in multi-level marketing with the following basic information:

a) Basic information about participants in multi-level marketing as stipulated in point b, Clause 2, Article 29 of this Decree;

b) Information about the number of multi-level marketing participation contracts, code numbers, positions, levels, titles of participants in multi-level marketing, upper-line, and sub-line systems of participants in multi-level marketing;

c) Information about the purchase history of participants in multi-level marketing and customers introduced by them;

3. In case of system malfunction, timely notification must be made to the authority issuing the registration certificate for multi-level marketing activities.

Article 45. Electronic Information Website of Multi-Level Marketing Companies

1. The electronic information website of a multi-level marketing company must include the following basic contents:

a) Documents related to multi-level marketing activities of the company, including the registration certificate for multi-level marketing activities, sample participation contracts, operational rules, reward plans, basic training programs, and other necessary documents;

b) Information about goods sold through multi-level marketing methods, including name, price, composition, function, usage method, origin, product standard certificates and certifications (if applicable);

c) Information about business registration, headquarters, branches, representative offices, business locations;

d) Procedures and formalities for signing participation contracts, basic training for participants in multi-level marketing, issuance of Member Cards, ordering, payment, delivery, return (if applicable), repurchase of goods and refund of money, resolution of complaints from participants in multi-level marketing, termination and settlement of contracts;

đ) Procedures and locations for warranty, exchange, return of goods and post-sale services (if applicable);

e) Contact information for receiving and resolving inquiries and complaints from participants in multi-level marketing, including: telephone number, email address, reception address;

g) Information about multi-level marketing activities of the company, including: current operating areas; highest, average, and lowest income of participants in multi-level marketing in the previous fiscal year;

h) Handling violations, contract termination, and revocation of Member Card effectiveness for participants in multi-level marketing;

i) Promotional programs of the company.

2. The information specified in Clause 1 of this Article must be provided on the homepage or directly linked from the homepage of the company's electronic information website.

3. Multi-level marketing companies are responsible for complying with other relevant legal regulations when operating their electronic information websites.

Article 46. Delivery, Acceptance, and Storage of Goods

1. Within thirty days from the date the multi-level marketing participant pays for goods, the multi-level marketing enterprise shall be responsible for delivering all goods corresponding to the amount paid by the multi-level marketing participant, and the multi-level marketing participant shall be responsible for accepting all goods from the multi-level marketing enterprise.

2. In cases where the multi-level marketing enterprise fails to deliver goods or the multi-level marketing participant fails to accept goods within the time limit stipulated in Clause 1 of this Article, the multi-level marketing enterprise shall be responsible for canceling the transaction and refunding the full amount paid by the multi-level marketing participant.

3. In cases where the multi-level marketing participant stores goods at the multi-level marketing enterprise without accepting them within the time limit stipulated in Clause 1 of this Article, the multi-level marketing enterprise shall be responsible for canceling the transaction and refunding the full amount paid by the multi-level marketing participant.

Article 47. Return and Repurchase of Goods

1. The multi-level marketing participant has the right to return goods purchased from the multi-level marketing enterprise, including goods purchased under promotional programs, within thirty days from the date of receipt.

2. Returned goods must meet the following conditions:

a) Goods remain in original packaging, with labels and seals intact;

b) Accompanied by the invoice for the returned goods.

3. Within thirty days from the date the multi-level marketing participant makes a valid request to return goods, the multi-level marketing enterprise shall be responsible for repurchasing goods that meet the conditions specified in Clause 2 of this Article and refunding according to the agreed level with the multi-level marketing participant but not less than ninety percent of the amount paid by the multi-level marketing participant for those goods.

4. The multi-level marketing enterprise has the right to deduct commission, bonuses, and other economic benefits received by the multi-level marketing participant from the sale of returned goods as stipulated in this Article.

5. The multi-level marketing enterprise has the right to recover from other multi-level marketing participants the commissions, bonuses, and other economic benefits received related to the returned goods as stipulated in this Article.

6. In cases where the multi-level marketing participation agreement terminates, the multi-level marketing enterprise shall be responsible for repurchasing goods sold to the multi-level marketing participant according to the provisions of Clauses 1, 2, 3, 4, and 5 of this Article.

Article 48. Commissions, Bonuses, and Other Economic Benefits

1. The multi-level marketing enterprise shall be responsible for paying commissions, bonuses, and other economic benefits to the multi-level marketing participant according to the reward plan registered with the competent authority.

2. The total value of commissions, bonuses, and other economic benefits, including benefits obtained through promotional programs, paid to the multi-level marketing participant in one year, when converted to cash, shall not exceed forty percent of the multi-level marketing sales revenue of the multi-level marketing enterprise in that year.

3. The multi-level marketing sales revenue referred to in Clause 2 of this Article is the revenue from the multi-level marketing activities of the enterprise, excluding value-added tax.

4. The total value of commissions, bonuses, and other economic benefits specified in Clause 2 of this Article does not include the difference between the retail price announced by the enterprise and the price at which the enterprise sells to the multi-level marketing participant.

5. The multi-level marketing enterprise shall be responsible for paying commissions, bonuses, promotions, and other economic benefits to the multi-level marketing participant in cash form via bank transfer.

1. Every six months, multi-level marketing enterprises shall be responsible for reporting to the Ministry of Industry and Trade and the Department of Industry and Trade where the enterprise conducts multi-level marketing activities regarding its multi-level marketing operations.

2. The mid-year report must be submitted before July 31 each year:

a) The mid-year report sent to the Ministry of Industry and Trade shall include contents according to Form No. 15 attached to this Decree and the financial report of the previous fiscal year with confirmation from the competent authority as prescribed by law;

b) The mid-year report sent to the Department of Industry and Trade shall include contents according to Form No. 16 attached to this Decree.

3. The annual report must be submitted before January 20 each year to the Ministry of Industry and Trade according to Form No. 15 and to the Department of Industry and Trade according to Form No. 16 attached to this Decree.

5. Multi-level marketing enterprises shall be responsible for reporting as required by the competent authority managing multi-level marketing activities.

Chapter VI

GUARANTEE DEPOSIT

Article 50. Guarantee Deposit

2. Multi-level marketing enterprises shall be responsible for opening a guarantee deposit account and depositing an amount equivalent to 5% of the charter capital but not less than 10 billion VND (ten billion VND) at a commercial bank or foreign bank branch in Vietnam.

3. The bank where the enterprise deposits the guarantee deposit shall confirm in writing the guarantee deposit of the multi-level marketing enterprise according to Form No. 17 attached to this Decree and shall be responsible for cooperating in confirming contents related to the guarantee deposit confirmation document when requested by the Ministry of Industry and Trade.

4. In case there is a change in information on the guarantee deposit confirmation document, the multi-level marketing enterprise shall be responsible for processing the adjustment procedures for the guarantee deposit confirmation document with the bank.

5. The guarantee deposit amount shall be frozen by the bank throughout the operation period of the enterprise and may only be withdrawn and used upon written approval of the Ministry of Industry and Trade, except in the case specified in point a of Clause 1 of Article 51 of this Decree.

6. The bank where the enterprise deposits the guarantee deposit shall be responsible for managing the guarantee deposit of the enterprise in accordance with the provisions of the law.

7. Multi-level marketing enterprises shall enjoy interest on the guarantee deposit according to the agreement with the bank and are permitted to withdraw interest from the guarantee deposit.

Article 51. Withdrawal of Deposit Money

1. The enterprise may withdraw deposit money in the following cases:

a) The Ministry of Industry and Trade refuses to issue a registration certificate for multi-level marketing sales activities to the enterprise;

b) The enterprise terminates its multi-level marketing sales activities in accordance with Clause 1, Article 17 of this Decree and has completed all responsibilities stipulated in Clause 2, Article 17 of this Decree;

c) The enterprise has deposited money in accordance with Article 50 of this Decree at a bank or another branch of the bank.

2. When withdrawing deposit money as prescribed in point a, Clause 1 of this Article, the enterprise must provide the bank with one original copy of the notification from the Ministry of Industry and Trade regarding the return of the application file, as stipulated in Clause 3, Article 10 of this Decree.

3. When withdrawing deposit money as prescribed in points b and c, Clause 1 of this Article, the enterprise must provide the bank with one original copy of the approval document from the Ministry of Industry and Trade, as stipulated in Clauses 3 and 4, Article 52 of this Decree.

4. The bank where the enterprise deposited money shall be responsible for confirming in writing with the Ministry of Industry and Trade before allowing the enterprise to withdraw deposit money.

Article 52. Documents, Procedures, and Formalities for Withdrawing Deposit Money

2. The withdrawal request documents include:

a) A withdrawal request form according to Form No. 18 attached to this Decree;

b) A list of multi-level marketing sales participants up to the termination date (name, ID number or citizen identification card number or passport number, address, phone number, contract number for multi-level marketing sales participation, contract signing date, member card number).

3. Receiving the withdrawal request documents:

a) Within five working days from the date of receiving the documents, the Ministry of Industry and Trade is responsible for checking the completeness and validity of the multi-level marketing sales enterprise's withdrawal request documents. In case the documents are incomplete or invalid, the Ministry of Industry and Trade will notify in writing requesting the enterprise to amend and supplement the documents. The amendment and supplementation period does not exceed ten working days from the date the Ministry of Industry and Trade issues the notification. If the documents are complete and valid, the Ministry of Industry and Trade will publicly announce on its electronic information website about the termination of multi-level marketing sales activities and the withdrawal request of the enterprise.

b) Within thirty days from the date the Ministry of Industry and Trade posts the above information, multi-level marketing sales participants and authorities handling violations in multi-level marketing sales activities have the responsibility to notify the Ministry of Industry and Trade if the multi-level marketing sales enterprise has not completed all responsibilities stipulated in Clause 2, Article 17 of this Decree. In case there is no notification from multi-level marketing sales participants or authorities handling violations in multi-level marketing sales activities sent to the Ministry of Industry and Trade within the specified time, the Ministry of Industry and Trade will issue an approval document for the multi-level marketing sales enterprise to withdraw deposit money.

4. Procedure for withdrawing deposit money in the case prescribed in point c, Clause 1 of Article 51 of this Decree:

b) Within ten working days from the date of receiving the document requesting a change in deposit as prescribed in point a of this clause, the Ministry of Industry and Trade sends a document requesting the new deposit bank or branch to confirm the authenticity of the deposit confirmation document;

c) Within ten working days from the date of receiving the confirmation document from the new deposit bank or branch, the Ministry of Industry and Trade issues an approval document for the multi-level marketing sales enterprise to withdraw the old deposit amount.

1. The deposit amount shall be used in the following cases:

a) A multi-level marketing enterprise terminates its multi-level marketing activities in accordance with Clause 1, Article 17 of this Decree but fails to fully fulfill its obligations related to multi-level marketing activities towards participants in multi-level marketing and has a decision or judgment with legal effect from the competent authority regarding the resolution of disputes between the multi-level marketing enterprise and participants in multi-level marketing concerning those obligations;

b) An enterprise terminates its multi-level marketing activities but does not comply with the administrative penalty decision for violations in multi-level marketing activities that have taken legal effect from the competent authority.

2. Procedures and formalities for using the deposit amount in the case specified in point a, Clause 1 of this Article:

a) Participants in multi-level marketing submit a request document to use the deposit amount and certified copies of the judgments and decisions mentioned in point a, Clause 1 of this Article to the Ministry of Industry and Trade (either directly or via postal service);

b) Within ten working days from the date of receipt of the documents mentioned in point a of this clause, the Ministry of Industry and Trade shall be responsible for checking the validity of these documents. If the documents mentioned in point a of this clause do not ensure validity, the Ministry of Industry and Trade shall notify in writing requesting the person who made the request to amend and supplement. The deadline for amendment and supplementation shall not exceed fifteen working days from the date the Ministry of Industry and Trade issues the notification;

c) In the event that the documents mentioned in point a of this clause have ensured validity, the Ministry of Industry and Trade shall issue a document requiring the bank where the enterprise deposited the funds to withdraw the deposit amount to fulfill the request of the participant in multi-level marketing.

3. Procedures and formalities for using the deposit amount in the case specified in point b, Clause 1 of this Article: In the case where an enterprise terminates its multi-level marketing activities but does not comply with the administrative penalty decision for violations in multi-level marketing activities that have taken legal effect from the competent authority, the authority issuing the administrative penalty decision shall send a request document to the Ministry of Industry and Trade to issue a document requiring the bank where the enterprise deposited the funds to withdraw the deposit amount to implement the administrative penalty decision.

4. The Ministry of Industry and Trade shall handle the use of the deposit amount according to the sequence of time receiving valid application files for using the deposit amount.

Chapter VII

STATE MANAGEMENT RESPONSIBILITIES FOR BUSINESS ACTIVITIES UNDER THE MULTI-LEVEL MARKETING METHOD

Article 54. Responsibilities of the Ministry of Industry and Trade

1. The Ministry of Industry and Trade shall be responsible before the Government for performing state management functions over multi-level marketing activities throughout the country:

a) Issuing, amending, supplementing, extending, reissuing, and revoking certificates of registration for multi-level marketing activities and confirming the acceptance of enterprise applications to terminate multi-level marketing activities;

b) Collecting, managing, and using fees for the certification of registration for multi-level marketing activities in accordance with the provisions of the law;

c) Notifying the issuance, amendment, supplementation, extension, and revocation of certificates of registration for multi-level marketing activities, and confirmation of the acceptance of enterprise applications to terminate multi-level marketing activities to the Departments of Industry and Trade where enterprises organize multi-level marketing activities;

d) Inspecting, supervising, and handling multi-level marketing activities within its authority;

đ) Guiding and coordinating with the Departments of Industry and Trade to conduct inspections, supervision, and handling of violations of laws on the management of multi-level marketing activities;

e) Notifying and transferring cases of violations of laws on the management of multi-level marketing business activities to competent authorities for handling;

g) Organizing training and professional instruction for officials and civil servants directly implementing state management work on multi-level marketing; disseminating and promoting laws on the management of multi-level marketing activities to enterprises and participants in multi-level marketing;

h) Drafting and submitting to authorized levels for promulgation or amendment of legal regulatory documents on the management of multi-level marketing activities;

i) Fulfilling other responsibilities as prescribed in this Decree.

3. The Market Management General Department under the Ministry of Industry and Trade shall be responsible for assisting the Minister of Industry and Trade in implementing the management contents stipulated in points d, e, and g of Clause 1 of this Article.

Article 55. Responsibilities of Ministries and Ministerial-Level Agencies

1. Within their respective tasks and authorities, ministries and ministerial-level agencies shall be responsible for coordinating with the Ministry of Industry and Trade to implement state management over multi-level marketing business activities.

2. The Ministry of Public Security:

a) Coordinate with the Ministry of Industry and Trade, provincial People's Committees under the central government, and other ministries and ministerial-level agencies to enhance the effectiveness of state management over multi-level marketing business activities;

b) Carry out preventive measures and combat criminal offenses and violations of laws in multi-level marketing business activities;

c) Receive, process reports and accusations regarding crimes related to multi-level marketing business activities; initiate investigations, investigate crimes, and perform other judicial tasks as prescribed by law;

3. The Ministry of Health:

a) Inspect, examine, and handle violations concerning compliance with conditions for trading goods of multi-level marketing enterprises within their regulatory scope as prescribed by law;

b) Inspect, examine, and handle violations of laws during production, preliminary processing, processing, preservation, transportation, export, import, and trading of food products, cosmetics, and other products of multi-level marketing enterprises within their jurisdiction;

c) Inspect, examine, and handle, within their authority, advertising, conferences, seminars, propaganda, and information provision about cosmetic, health food, and other products of multi-level marketing enterprises as prescribed by law;

a) Inspect and examine multi-level marketing business activities according to tax laws;

b) Timely, accurately, and objectively disclose information on tax inspection and examination results for multi-level marketing business activities;

5. The Ministry of Science and Technology shall be responsible for inspecting, examining, and handling violations of laws by multi-level marketing enterprises in the fields of standards, measurement, product quality, and intellectual property within its jurisdiction;

6. The Ministry of Agriculture and Rural Development:

a) Inspect, examine, and handle violations during production, trading, and advertising of products of multi-level marketing enterprises within its jurisdiction;

b) Inspect, examine, and handle violations concerning compliance with conditions for trading goods of multi-level marketing enterprises within the regulatory scope as prescribed by law;

7. The Ministry of Information and Communications:

a) Develop and implement programs for publicizing and disseminating laws and multi-level marketing business activities through mass media for management agencies, press, and businesses;

b) Coordinate with press agencies: - Implement regular programs and special sections to publicize laws on multi-level marketing business activities and warn the public about deceptive and illegal activities in multi-level marketing; - Timely, accurately, and objectively reflect and provide information on the operations of multi-level marketing enterprises;

8. The State Bank of Vietnam shall be responsible for guiding credit organizations to comply with regulations on confirmation and management of deposit guarantees of multi-level marketing enterprises as prescribed by this Decree.

Article 56. Responsibilities of the People's Committee of Provinces and Central-South Cities

1. The People's Committee of Provinces and Central-South Cities within their scope of duties and powers shall be responsible for managing state activities related to multi-level marketing business at the local level:

a) Issuing regulations on coordination among relevant agencies at the local level in the work of inspection, examination, and supervision of multi-level marketing business activities;

b) Issuing and revoking confirmation of registration for multi-level marketing sales activities at the local level, and receiving notifications of termination of multi-level marketing sales activities at the local level;

c) Inspecting, examining, and supervising multi-level marketing business activities;

d) Handling violations according to their authority or reporting to competent authorities to handle violations of laws on management of multi-level marketing business activities;

đ) Notifying and transferring cases involving violations of laws on management of multi-level marketing business activities to competent authorities for handling;

e) Organizing training and professional instruction for officials directly implementing state management of multi-level marketing sales; disseminating and promoting laws on management of multi-level marketing sales to enterprises and participants in multi-level marketing sales;

h) Fulfilling other responsibilities as prescribed in this Decree.

2. The Department of Industry and Trade shall assist the People's Committee of Provinces and Central-South Cities in implementing the management contents stipulated in Clause 1 of this Article.

3. Market management forces at the local level shall assist the People's Committee of Provinces and Central-South Cities and the General Administration of Market Management in implementing the management contents stipulated in Points c, d, đ, and e of Clause 1 of this Article.

Article 57. Handling Violations Against Multi-Level Marketing Sales Enterprises and Participants

1. Multi-level marketing sales enterprises and participants who commit acts violating the provisions of this Decree shall be subject to administrative penalties under competition laws and laws on administrative violations, or criminal liability under criminal laws, depending on the nature and severity of the violation.

2. Multi-level marketing sales enterprises and participants who violate the provisions of this Decree causing damage to other organizations or individuals must compensate for damages in accordance with the law.

3. Results of handling violations in multi-level marketing sales activities must be publicly announced.

Article 58. Authority and Procedures for Handling Violations

The procedures, formalities, and authority for handling violations stipulated in this Decree shall be carried out in accordance with the laws on administrative violations.

Chapter VIII

IMPLEMENTING PROVISIONS

Article 59. Effective Date

1. This Decree shall take effect from May 2, 2018.

2. This Decree replaces Government Decree No. 42/2014/NĐ-CP dated May 14, 2014, on the management of multi-level marketing sales activities.

Article 60. Transitional Provisions

1. Within nine months from the date this Decree takes effect, multi-level marketing sales enterprises operating under the provisions of Government Decree No. 42/2014/NĐ-CP shall be responsible for meeting the conditions for multi-level marketing sales activities as prescribed in this Decree.

2. Within twelve months from the date this Decree takes effect, multi-level marketing sales enterprises that have been issued confirmation of receipt of notification of multi-level marketing sales activities at the local level under the provisions of Government Decree No. 42/2014/NĐ-CP shall be responsible for supplementing documents and registering multi-level marketing sales activities at the local level in accordance with this Decree.

3. Training certificates issued in accordance with the provisions of Government Decree No. 42/2014/NĐ-CP shall be valid as proof of knowledge of laws on multi-level marketing sales for nine months from the date this Decree takes effect.

4. Conditions, documents, procedures, and formalities for withdrawing and using the deposit of multi-level marketing sales enterprises that have been issued certificates of registration for multi-level marketing sales activities under the provisions of Government Decree No. 42/2014/NĐ-CP shall be implemented in accordance with this Decree.

5. Withdrawing and using the deposit of multi-level marketing sales enterprises that have been issued registration certificates for organizing multi-level marketing sales activities under the provisions of Government Decree No. 110/2005/NĐ-CP dated August 24, 2005, shall be conducted at the Department of Industry and Trade in accordance with the documents, procedures, and formalities stipulated in Clause 2 and Clause 3 of Article 52 and Article 53 of this Decree.

Article 61. Responsibility for Implementation

1. The Minister of Industry and Trade shall be responsible for organizing the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial and centrally-administered city People's Committees are responsible for implementing this Decree./.