For illegal multi-level marketing activities, the penalties have been increased from 80 to 100 million VND. Individuals involved in these unlicensed schemes face fines of up to 25 million VND.
Prime Minister Nguyen Xuan Phuc has just signed a decision promulgating Decree 141/2018/ND-CP amending and supplementing a number of articles of the Decree regulating the handling of violations of the law in business activities, specifically regarding illegal multi-level marketing practices.
The most notable change in this Decree is the new penalty for illegal multi-level marketing practices.
A fine of 80-100 million VND will be imposed for requiring others to pay a deposit, meaning a sum of money or purchase a certain quantity of goods in order to sign a contract, and then failing to fulfill or intentionally failing to fulfill the obligation to repurchase the goods as stipulated by law.
In addition, this penalty also applies to the act of providing money or other economic benefits to individuals engaging in illegal multi-level marketing or participating in referral schemes that do not originate from the purchase or sale of goods by the referred individuals.
Refusing to pay commissions, bonuses, or other benefits that participants in multi-level marketing are entitled to, or providing inaccurate or false information about the bonus payment plan, or causing confusion about the features and uses of goods, will also be subject to a fine of 80 to 100 million VND.
Decree 71/2014/ND-CP
The minimum fine in the new Decree is 20 million VND higher than the old minimum fine (60 million VND) in Decree 71/2014/ND-CP issued in 2014 for illegal multi-level marketing activities.
The new decree stipulates that in cases where illegal multi-level marketing activities are carried out in two or more provinces or centrally-governed cities, the penalties will be doubled.
In addition, organizations that violate the law will have their assets confiscated, including any profits obtained from the violation, and will be required to issue a public correction.
Decree No. 141/2018/ND-CP
In addition, Decree 141/2018/ND-CP also adds a fine of 20-25 million VND for individuals participating in the activities of multi-level marketing organizations or individuals that have not been licensed to operate in this field.
A fine of 30-40 million VND will be imposed on individuals or organizations that hold conferences, training sessions, seminars, or introduce illegal multi-level marketing activities without a valid registration certificate.
"Individuals engaging in multi-level marketing without a registration certificate who illegally profit less than 200 million VND or cause damage to others less than 500 million VND will be fined between 40 and 50 million VND," according to Decree No. 141.
Decree No. 141/2018/ND-CP officially came into effect on November 25th.
>Multi-level marketing (MLM) sales reach 4000 trillion VND in Vietnam.
