Decree No. 42/2014/ND-CP on Management of Multi-Level Marketing Activities

 

DECREE

concerning the management of multi-level marketing activities

__________

 

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

Pursuant to the Electricity Law dated December 3, 2004, the Law Amending and Supplementing Certain Provisions of the Electricity Law;

At the proposal of the Minister of Industry and Trade,

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

Chapter I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the multi-level marketing activities and the management of such activities within the territory of the Socialist Republic of Vietnam.

Article 2. Applicability

This Decree applies to multi-level marketing enterprises, participants in multi-level marketing activities, and other agencies, organizations, and individuals related to multi-level marketing activities.

Article 3. Explanation of Terms

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

1. A multi-level marketing enterprise is an enterprise that conducts retail sales activities through a multi-level marketing method.

2. Multi-level marketing business is a form of business conducted through a network of participants consisting of multiple levels and branches, wherein participants earn commissions, bonuses, and other economic benefits from their own business activities and those of the network they build.

3. A participant in multi-level marketing is a person who enters into a multi-level marketing participation contract with a multi-level marketing enterprise.

4. A multi-level marketing participation contract is an agreement establishing the relationship between a person wishing to participate in multi-level marketing and a multi-level marketing enterprise in multi-level marketing activities.

5. Commissions, bonuses, and other economic benefits are the advantages that a multi-level marketing enterprise pays to a participant in multi-level marketing in any form.

6. Operating rules are a set of rules established and applied by a multi-level marketing enterprise to regulate the behavior, rights, and obligations of multi-level marketing participants.

7. A reward program is a system used to calculate commissions, bonuses, and other economic benefits that multi-level marketing participants primarily receive from sales income.

8. Basic training program is a program established by a multi-level marketing enterprise to train multi-level marketing participants, including the following contents:

a) Laws related to the multi-level marketing activities of the enterprise;

b) Information about goods sold through the multi-level marketing method;

c) Information about the enterprise, Operating Rules, and Reward Program of the multi-level marketing enterprise;

d) Basic skills for conducting multi-level marketing activities.

9. Multi-level marketing position is the position of a multi-level marketing participant arranged by a multi-level marketing enterprise in the reward program.

10. Pyramid scheme business is the conduct of multi-level marketing activities wherein the income of participants mainly originates from: recruiting new participants; renewing contracts of existing participants; fees, deposits, or investments of participants in the network.

Article 4. Objects of multi-level marketing business

1. Goods sold through the multi-level marketing method must comply with relevant legal provisions.

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

a) Goods listed in the Prohibited Goods Catalogue, Restricted Goods Catalogue, or goods subject to urgent measures for compulsory recall, prohibition of circulation, or suspension of circulation according to the law;

b) Goods are medicines; medical devices; veterinary drugs (including aquatic animal veterinary drugs), plant protection chemicals; hazardous chemicals and products containing hazardous chemicals according to the law.

3. Any type of service or other business activity that is not the sale of goods shall not be conducted through the multi-level marketing method, except where permitted by law.

Article 5. Prohibited Acts in Multi-Level Marketing Activities

1. Multi-level marketing enterprises shall not engage in the following acts:

a) Requiring individuals wishing to join multi-level marketing to deposit or pay a certain amount of money under any form to obtain the right to join the multi-level marketing network;

b) Requiring individuals wishing to join multi-level marketing to purchase a certain quantity of goods under any form to obtain the right to join the multi-level marketing network;

c) Requiring multi-level marketing participants to pay an additional amount of money under any form to maintain, develop, or expand their multi-level marketing network;

d) Unreasonably restricting the development rights of multi-level marketing participants under any form;

đ) Allowing multi-level marketing participants to receive commissions, bonuses, or other economic benefits from enticing others to join multi-level marketing;

e) Refusing to pay commissions, bonuses, or other economic benefits that multi-level marketing participants are entitled to without justifiable reasons;

g) Requiring multi-level marketing participants to recruit new members or extend their participation contracts with a certain number of multi-level marketing participants to be eligible for commissions, bonuses, or other economic benefits;

h) Requiring multi-level marketing participants to pay money or fees under any form for attending meetings, seminars, or training sessions on topics specified in Clause 8, Article 3 of this Decree, except for reasonable costs for purchasing training materials;

i) Compelling multi-level marketing participants to attend meetings, seminars, or training sessions on topics not specified in Clause 8, Article 3 of this Decree;

k) Requiring multi-level marketing participants to pay money or fees higher than reasonable costs for attending meetings, seminars, or training sessions on topics not specified in Clause 8, Article 3 of this Decree;

l) Charging fees for issuing or exchanging membership cards as stipulated in Clause 1 and Clause 3, Article 21 of this Decree under any form;

m) Not committing to return goods and refund amounts transferred to the enterprise by multi-level marketing participants as stipulated in Article 26 of this Decree;

n) Obstructing multi-level marketing participants from returning goods as stipulated in Article 26 of this Decree;

o) Providing false or misleading information about the benefits of joining the multi-level marketing network, the nature, utility of goods, or the activities of multi-level marketing enterprises to entice others to join multi-level marketing;

p) Maintaining more than one multi-level business position, multi-level sales contract, multi-level business code, or equivalent forms for the same multi-level marketing participant;

q) Operating under a pyramid model;

r) Buying or transferring the multi-level marketing participant network to another enterprise except in cases of acquisition, merger, or consolidation of enterprises;

s) Requesting or inciting multi-level marketing participants to perform prohibited acts as stipulated in Clause 2 of this Article;

2. Multi-level marketing participants shall not engage in the following acts:

a) Requiring individuals wishing to join multi-level marketing to pay a certain amount of money, provide a deposit, or purchase a certain quantity of goods under any form to obtain the right to join the multi-level marketing network;

b) Providing false or misleading information about the benefits of joining multi-level marketing, the nature, utility of goods, or the activities of multi-level marketing enterprises to entice others to join multi-level marketing;

c) Organizing meetings, customer seminars, product introduction seminars, or training sessions without written authorization from the multi-level marketing enterprise;

d) Luring, enticing, or bribing participants in multilevel marketing activities from other enterprises to join their own multilevel marketing network;

đ) Exploiting positions, powers, or social status to require others to join the multi-level marketing network or purchase goods for multi-level marketing;

Chapter II

PROCEDURES FOR REGISTRATION, TEMPORARY SUSPENSION,

TERMINATION 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

The organization registering multi-level marketing activities must meet the following conditions:

1. It must be a business established in Vietnam in accordance with the law, having a business registration for retail trade through multi-level marketing methods.

2. It must have the statutory capital as prescribed in Article 8 of this Decree.

3. Goods traded through multi-level marketing methods must be consistent with the content recorded in the Business Registration Certificate or Investment Certificate.

4. It must have the necessary business conditions or be issued a Business Condition Compliance Certificate in accordance with the law when trading goods subject to specific business conditions.

5. It must deposit a guarantee fund at a commercial bank operating in Vietnam as prescribed in Article 29 of this Decree.

6. It must have Rules of Operation, Reward Program, Basic Training Program that do not contravene the law.

7. For a limited liability company, the general partner of a partnership, the owner of a private enterprise, the member of a limited liability company, the founding shareholder of a joint-stock company, and the legal representative of a limited liability company or a joint-stock company must be individuals who have never held any of the aforementioned positions in a multi-level marketing business whose Business Registration for Multi-Level Marketing Activities has been revoked according to Point b, Point c Clause 1 Article 14 of this Decree.

Article 8. Statutory Capital

The statutory capital of a business registering retail trade through multi-level marketing methods is 10 billion VND.

Article 9. Multi-Level Marketing Business Registration Certificate

1. The Multi-Level Marketing Business Registration Certificate is valid for five years from the date of issuance.

2. The Multi-Level Marketing Business Registration Certificate shall be made in two original copies, one copy given to the business registering multi-level marketing activities and one copy retained by the issuing authority.

3. The Ministry of Industry and Trade shall prescribe the form of the Multi-Level Marketing Business Registration Certificate, the dossier, procedures, and process for issuing the Multi-Level Marketing Business Registration Certificate.

Article 10. Amendment and Supplement to the Multi-Level Marketing Business Registration Certificate

1. In cases where there are changes related to the contents of the application dossier for the Multi-Level Marketing Business Registration Certificate, the multi-level marketing business must undertake the procedures to request amendments and supplements to the Multi-Level Marketing Business Registration Certificate.

2. The Ministry of Industry and Trade shall prescribe the dossier, procedures, and process for amending and supplementing the Multi-Level Marketing Business Registration Certificate.

Article 11. Reissue of the Multi-Level Marketing Business Registration Certificate

1. In cases where the Multi-Level Marketing Business Registration Certificate is lost, torn, or destroyed, the multi-level marketing business must immediately undertake the procedures to request reissuance of the Multi-Level Marketing Business Registration Certificate upon occurrence of such events.

2. The Ministry of Industry and Trade shall prescribe the dossier, procedures, and process for reissuing the Multi-Level Marketing Business Registration Certificate.

Article 12. Extension of the Multi-Level Marketing Business Registration Certificate

1. The Multi-Level Marketing Business Registration Certificate may be extended multiple times, each extension lasting five years.

2. Three months before the expiration of the Multi-Level Marketing Business Registration Certificate, the multi-level marketing business must undertake the procedures to extend the Multi-Level Marketing Business Registration Certificate.

3. A multi-level marketing business is eligible for an extension of the Multi-Level Marketing Business Registration Certificate if it meets the conditions stipulated in Article 7 of this Decree.

4. The Ministry of Industry and Trade shall prescribe the dossier, procedures, and process for extending the Multi-Level Marketing Business Registration Certificate.

Article 13. Fees and charges for managing direct selling activities

1. Fees and charges for managing direct selling activities include fees and charges for issuing, amending, supplementing, reissuing, and extending Direct Selling Registration Certificates.

2. The collection rates, collection procedures, payment, management, and use of fees and charges for managing direct selling activities shall be implemented in accordance with the provisions of the law.

Article 14. Revocation of Direct Selling Registration Certificates

1. The authority issuing Direct Selling Registration Certificates shall revoke Direct Selling Registration Certificates in the following cases:

a) Business registration certificates or investment certificates are revoked or become invalid;

b) The application documents for Direct Selling Registration Certificates contain false information;

c) The enterprise is penalized for certain violations stipulated in Clause 1, Article 5 of this Decree during the organization of direct selling activities in accordance with the law;

d) The enterprise does not implement direct selling activities for a continuous period of 12 months from the date of issuance of the Direct Selling Registration Certificate;

đ) The enterprise fails to meet all conditions prescribed in Article 7 of this Decree during the operation of direct selling activities;

e) The enterprise temporarily suspends direct selling activities for more than 12 consecutive months;

g) The enterprise is dissolved or declared bankrupt in accordance with the law.

2. The authority issuing Direct Selling Registration Certificates will not consider issuing Direct Selling Registration Certificates to enterprises within three years from the date such enterprises have their Direct Selling Registration Certificates revoked under Point b and Point c of Clause 1 of this Article.

3. The Ministry of Industry and Trade shall prescribe the procedures and formalities for revoking Direct Selling Registration Certificates.

Article 15. Temporary Suspension of Direct Selling Activities

1. Enterprises engaged in direct selling are permitted to temporarily suspend direct selling activities for a period not exceeding 12 consecutive months.

2. When temporarily suspending direct selling activities, enterprises engaged in direct selling shall fulfill the following obligations:

a) Comply with the regulations on temporarily suspending business operations as prescribed by the law on enterprises;

b) Notify in writing the Ministry of Industry and Trade, the Department of Industry and Trade where the enterprise conducts direct selling activities, participants in direct selling, and publicly post at the main office within thirty working days before temporarily suspending direct selling activities;

c) Ensure the rights of participants in direct selling activities in accordance with the law.

3. When resuming direct selling activities after the suspension period, enterprises shall notify in writing the Ministry of Industry and Trade, the Department of Industry and Trade where the enterprise conducts direct selling activities.

4. The Ministry of Industry and Trade shall prescribe the documentation, procedures, and formalities related to notifying the temporary suspension of direct selling activities and resuming direct selling activities after the suspension period.

Article 16. Termination of Direct Selling Activities

1. Cases of termination of direct selling activities:

a) The Direct Selling Registration Certificate becomes invalid;

b) The enterprise voluntarily terminates direct selling activities;

c) The Direct Selling Registration Certificate is revoked by the competent authority in accordance with Article 14 of this Decree.

2. When terminating direct selling activities, enterprises engaged in direct selling shall fulfill the following obligations:

a) Notify in writing the Ministry of Industry and Trade, the Department of Industry and Trade where the enterprise conducts direct selling activities, participants in direct selling, and publicly post at the main office;

b) Ensure the rights of participants in direct selling activities in accordance with the law on managing direct selling activities;

c) Other obligations as prescribed by law.

3. The Ministry of Industry and Trade shall prescribe the documentation, procedures, and formalities related to terminating direct selling activities.

Article 17. Notification of Multi-Level Marketing Activities

1. Prior to organizing multi-level marketing activities in provinces and centrally governed cities, multi-level marketing enterprises must submit notification files to the Department of Industry and Trade at the local level.

2. Multi-level marketing enterprises may only organize multi-level marketing activities in provinces and centrally governed cities after receiving a written confirmation from the Department of Industry and Trade at the local level regarding the acceptance of the notification file.

3. The Ministry of Industry and Trade shall stipulate the notification file, procedures, and formalities for notifying and confirming multi-level marketing activities.

Article 18. Notification of Conference, Seminar, and Training Organization

1. Multi-level marketing enterprises must notify the Department of Industry and Trade where the conference, seminar, or training will be held if such activities include any of the following contents:

a) Laws related to the multi-level marketing activities of the enterprise;

b) Information about goods sold through the multi-level marketing method;

c) Information about the enterprise, Operating Rules, and Reward Program of the multi-level marketing enterprise;

d) Skills to implement multi-level marketing activities.

2. Multi-level marketing enterprises may only organize the activities specified in Clause 1 of this Article after receiving a written confirmation from the Department of Industry and Trade at the local level regarding the acceptance of a complete and valid notification file.

3. Multi-level marketing enterprises have the obligation to notify about the organization of conferences, seminars, and training sessions according to the provisions of Clause 1 of this Article when delegating others to carry out these activities.

4. The provisions of Clause 1 of this Article do not apply to cases where multi-level marketing enterprises organize conferences, seminars, and training sessions at their headquarters, branches, representative offices, or business locations.

5. The Ministry of Industry and Trade shall stipulate the notification file, procedures, and formalities for notifying and confirming the organization of conferences, seminars, and training sessions.

Chapter III

RECRUITMENT, TRAINING AND MANAGEMENT OF PERSONS

PARTICIPATING IN MULTI-LEVEL MARKETING

Article 19. Conditions for Persons Participating in Multi-Level Marketing

A person participating in multi-level marketing is an individual with full capacity for civil acts. The following persons are not allowed to participate in multi-level marketing:

1. Persons currently serving a prison sentence or having a criminal record for offenses related to producing, selling counterfeit goods, false advertising, illegal business operations, tax evasion, deceiving customers, fraud, misappropriation of assets through abuse of trust, and unlawful possession of property.

2. Foreign nationals without a labor permit issued by the competent authority in Vietnam.

Article 20. Training of Persons Participating in Multi-Level Marketing

1. After signing a participation contract in multi-level marketing, multi-level marketing enterprises are responsible for training and issuing certificates according to the model of the Ministry of Industry and Trade to persons participating in multi-level marketing upon completion of the basic training program prescribed in Clause 8 of Article 3 of this Decree. Only those who have been issued a Training Certificate according to the model of the Ministry of Industry and Trade are permitted to conduct training for persons participating in multi-level marketing.

2. When there are changes to the contents stipulated in Clause 8 of Article 3 of this Decree, multi-level marketing enterprises are responsible for training or informing participants in multi-level marketing about these changes according to the regulations of the Ministry of Industry and Trade.

3. The Ministry of Industry and Trade shall stipulate the training content for trainers as provided in Clause 1 of this Article.

Article 21. Member Card

1. After completing the training as prescribed in Clause 1 of Article 20 of this Decree, multi-level marketing enterprises are responsible for issuing a Member Card according to the model of the Ministry of Industry and Trade to persons participating in multi-level marketing who have completed the training.

2. Persons participating in multi-level marketing may only engage in multi-level marketing activities after being issued a Member Card.

3. Multi-level marketing enterprises shall issue new cards or replace old cards for persons participating in multi-level marketing in the following situations:

a) The card is torn, damaged, or lost;

b) There is a change in information as prescribed on the Member Card model.

4. Multi-level marketing enterprises are responsible for recalling the Member Card when terminating the participation contract in multi-level marketing.

Chapter IV

MULTI-LEVEL MARKETING ACTIVITIES

Article 22. Responsibilities of Multi-Level Marketing Enterprises

1. Publicly disclose at their headquarters and provide to individuals intending to join the multi-level marketing network of the enterprise all relevant documents concerning the enterprise's activities and goods sold through multi-level marketing methods.

2. Regularly monitor the activities of participants in multi-level marketing to ensure that they comply with the enterprise’s Operating Rules and Reward Programs.

3. Bear responsibility for the multi-level marketing activities of participants in the following cases:

a) Conducted at the main office, branch, representative office, or business location of the enterprise;

b) Conducted outside the main office, branch, representative office, and business location of the enterprise, except where such activities are not related to the enterprise.

4. Ensure the truthfulness and accuracy of information provided to participants in multi-level marketing.

5. Ensure the quality and warranty services (if applicable) for goods sold through multi-level marketing methods.

6. Resolve complaints from participants in multi-level marketing and consumers.

7. Deduct personal income tax from participants in multi-level marketing before paying commissions, bonuses, or other economic benefits to them.

8. Manage participants in multi-level marketing through a Membership Card system as stipulated in Article 21 of this Decree.

9. Inform participants in multi-level marketing about goods that the enterprise does not purchase back prior to their purchase.

10. Other responsibilities as prescribed by law.

Article 23. Responsibilities of Participants in Multi-Level Marketing

1. Present the Membership Card before introducing products or promoting sales.

2. Provide complete information about the enterprise and goods sold through multi-level marketing methods when sponsoring another person to join the multi-level marketing network.

3. Provide truthful and accurate information about the goods being offered.

4. Adhere to regulations set forth in the enterprise’s Operating Rules and Reward Programs.

5. In case of non-compliance with the provisions of Clause 2, Article 5 of this Decree and Clause 1, Clause 2, Clause 3, Clause 4 of this Article, causing damage to consumers or other participants in multi-level marketing, the participant shall be responsible for compensating the damage caused in accordance with the law.

6. Other responsibilities as prescribed by law.

Article 24. Participation Contracts in Multi-Level Marketing

1. Multi-level marketing enterprises must enter into 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, address of the main office, and legal representative of the multi-level marketing enterprise;

b) Full name, permanent residence registration (or temporary residence registration for foreigners), place of temporary residence registration, identification number (or passport number for foreigners) of the participant in multi-level marketing; work permit number in case the participant in multi-level marketing is a foreigner;

c) Name, function, usage method, selling price, conditions and scope of warranty (if any), policy on exchange and repurchase of goods;

d) Method of calculating commissions, bonuses, or other economic benefits received by the participant in multi-level marketing from their own business activities and those of the network they build;

đ) Responsibility of the multi-level marketing enterprise for the activities of participants in multi-level marketing in compensating damages to consumers or other participants in multi-level marketing;

e) Circumstances for terminating, extending, and dissolving participation contracts in multi-level marketing;

g) Dispute resolution mechanism for contracts.

Article 25. Termination of Multi-Level Marketing Participation Contracts

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

2. The multi-level marketing company has the right to terminate the contract with participants when they fail to comply with the provisions set forth in Clause 2, Article 5 and Article 23 of this Decree, and must notify the participant in writing at least ten working days prior to the termination of the contract.

3. 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.

Article 26. Purchase of Goods from Multi-Level Marketing Participants

1. When a participant requests it, the multi-level marketing company shall be responsible for repurchasing goods sold to that participant, including those sold under promotional programs.

2. Conditions for repurchasing goods from multi-level marketing participants:

a) Goods still within their shelf life;

b) Goods still in original packaging, with seals and labels intact;

c) Repurchase requests must be made within thirty days from the date the participant received the goods.

3. In cases where goods must be repurchased according to the provisions of Clause 1 of this Article, the multi-level marketing company shall be responsible for:

a) Refunding the total amount paid by the participant to receive the goods if there is no basis for deduction as provided in Point b of this Clause;

b) Refunding the total amount after deducting management costs, re-storage costs, and administrative expenses, but not less than ninety percent of the amount paid by the participant to receive the goods.

4. When refunding money according to the provisions of Clause 3 of this Article, the multi-level marketing company may deduct commissions, bonuses, and other economic benefits that the participant has received from purchasing the goods.

5. After the multi-level marketing participation contract is terminated, the multi-level marketing company shall be responsible for repurchasing goods sold to the participant according to the provisions of Clauses 1, 2, 3, and 4 of this Article.

Article 27. Provisions on Commission Payments, Bonuses, and Other Economic Benefits

1. The multi-level marketing company must pay commissions, bonuses, and other economic benefits to participants according to the reward program registered with the competent authority when registering for multi-level marketing activities.

2. The total value of commissions, bonuses, and other economic benefits paid to participants in one year, converted into monetary value, shall not exceed forty percent of the multi-level marketing sales revenue of the company in that year.

Article 28. Reports of Multi-Level Marketing Companies

1. Semi-annually, multi-level marketing companies shall be responsible for reporting to the Ministry of Industry and Trade and the Department of Industry and Trade where the company conducts multi-level marketing activities about its multi-level marketing operations.

2. In case of necessity, multi-level marketing companies shall be responsible for reporting according to the requirements of the competent state management agency.

3. The Ministry of Industry and Trade shall specify the contents, procedures, and formalities for periodic reports as stipulated in Clause 1 of this Article.

Chapter V

DEPOSIT

Article 29. Deposit Money

1. A multi-level marketing enterprise must deposit an amount of money equivalent to 5% of its registered capital but not less than five billion Vietnamese dong (five billion Vietnamese dong) at a commercial bank where the enterprise's main office is located. The bank where the enterprise deposits the money shall confirm in writing the deposit of the multi-level marketing enterprise.

2. The deposit money is a guarantee for the performance of the multi-level marketing enterprise’s obligations towards participants in multi-level marketing when the multi-level marketing enterprise terminates its multi-level marketing activities as stipulated in Clause 1, Article 16 of this Decree.

3. The deposit account shall be frozen by the bank throughout the operation period of the enterprise and can only be withdrawn or used with the written consent of the agency issuing the Certificate of Registration for Multi-Level Marketing Activities, except in cases provided for in Clause 1, Article 30 of this Decree.

4. In case the bank where the enterprise deposits the money withdraws or uses the deposit money of the enterprise without the written consent of the agency issuing the Certificate of Registration for Multi-Level Marketing Activities, it shall be handled according to the provisions of the law on banking operations and credit organizations.

5. The multi-level marketing enterprise shall enjoy interest on the deposit money according to the agreement with the bank.

6. In case there are changes related to the basic contents of the deposit confirmation document, the multi-level marketing enterprise shall be responsible for changing the deposit confirmation document and notifying the agency issuing the Certificate of Registration for Multi-Level Marketing Activities.

7. The Ministry of Industry and Trade shall specify the basic contents in the deposit confirmation document.

Article 30. Withdrawal of Deposit Money

1. In case the agency issuing the Certificate of Registration for Multi-Level Marketing Activities refuses to issue the Certificate of Registration for Multi-Level Marketing Activities to the enterprise, the enterprise may present the refusal letter from the agency issuing the Certificate of Registration for Multi-Level Marketing Activities to the bank where the enterprise deposited the money to proceed with the procedures for withdrawing the deposit money.

2. After terminating multi-level marketing activities as stipulated in Clause 1, Article 16 of this Decree and completing all obligations related to multi-level marketing activities towards participants in multi-level marketing, the multi-level marketing enterprise has the right to proceed with the procedures for withdrawing the deposit money.

3. The Ministry of Industry and Trade shall specify the dossier, procedure, and process for withdrawing the deposit money.

Article 31. Use of Deposit Money

1. The deposit money shall be used under the following conditions:

a) The multi-level marketing enterprise terminates multi-level marketing activities as stipulated in Clause 1, Article 16 of this Decree;

b) The multi-level marketing enterprise fails to fully perform its obligations related to multi-level marketing activities towards participants in multi-level marketing and there is 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 related to those obligations.

2. The Ministry of Industry and Trade shall specify the procedure and process for using the deposit 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 is responsible before the Government for performing state management functions over multi-level marketing activities nationwide.

2. The Competition Management Agency under the Ministry of Industry and Trade shall be responsible for assisting the Minister of Industry and Trade in the following specific management contents:

a) Issuing, amending, supplementing, extending, reissuing, and revoking the Certificate of Registration for Multi-Level Marketing Activities;

b) Collecting, managing, and using fees and charges for issuing, amending, supplementing, extending, and revoking the Certificate of Registration for Multi-Level Marketing Activities in accordance with the law;

c) Notifying the issuance, amendment, supplementation, extension, and revocation of the Certificate of Registration for Multi-Level Marketing Activities to the Departments of Industry and Trade where the enterprise organizes multi-level marketing activities;

d) Storing the application dossier for the Certificate of Registration for Multi-Level Marketing Activities;

đ) Guiding and coordinating with the Departments of Industry and Trade and other competent state agencies to conduct inspections and supervision of multi-level marketing activities;

e) Directly inspecting and supervising multi-level marketing activities when necessary; handling according to its authority or reporting and transferring to the competent authority for handling violations of laws on the management of multi-level marketing activities;

g) Building and submitting to the competent authorities for promulgation or amendment of legal documents related to ensuring order in organizing multi-level marketing activities, protecting the rights and interests of participants in multi-level marketing, consumers, and maintaining economic and social stability;

h) Performing other responsibilities as prescribed in this Decree.

Article 33. Responsibilities of the People's Committee of Provinces and Municipalities Directly Under the Central Government

1. The People's Committee of Provinces and Municipalities Directly Under the Central Government shall be responsible for state management over direct selling activities within their localities in accordance with this Decree and other relevant laws.

2. The Department of Industry and Trade shall assist the People's Committee of Provinces and Municipalities Directly Under the Central Government in the following activities:

a) Inspecting, examining, and supervising direct selling activities within their localities according to their authority;

b) Handling violations according to their authority or reporting to competent authorities to handle violations of laws on managing direct selling activities as prescribed by law;

c) Reporting to the Ministry of Industry and Trade about receiving notification files of direct selling enterprises' operations within their localities as stipulated in Article 17 of this Decree;

d) Reporting annually to the Ministry of Industry and Trade on the results of inspections, supervision, and handling of violations of laws on managing direct selling activities within their jurisdiction;

đ) Performing other responsibilities as prescribed in this Decree.

Article 34. Handling Violations by Direct Selling Enterprises and Participants in Direct Selling

1. If direct selling enterprises and participants in direct selling commit acts violating this Decree, they shall be subject to administrative penalties and competition law penalties depending on the nature and severity of the violation as prescribed by law.

2. In cases where direct selling enterprises and participants in direct selling violate this Decree causing material damage to related organizations or individuals, they must compensate for such damage in accordance with the law.

Article 35. Competent Authority and Procedures for Handling Violations in Direct Selling

1. The authority to handle violations of the provisions set forth in this Decree shall be carried out in accordance with the Competition Law and the Law on Administrative Penalties.

2. The procedures for handling violations of the provisions set forth in this Decree shall be carried out in accordance with the Competition Law and the Law on Administrative Penalties.

Chapter VII

IMPLEMENTING PROVISIONS

Article 36. Effective Date

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

2. The registration certificate for organizing direct selling issued in accordance with Decree No. 110/2005/NĐ-CP dated August 24, 2005 on managing direct selling activities remains valid until the enterprise receives the Certificate of Registration for Direct Selling Activities under this Decree but not exceeding six months from the date this Decree takes effect.

3. This Decree replaces Decree No. 110/2005/NĐ-CP dated August 24, 2005 on managing direct selling activities.

Article 37. Responsibility for Implementation

1. The Minister of Industry and Trade is responsible for organizing and guiding the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the central government shall be responsible for enforcing this Decree./.