HÀ NỘI — The Ministry of Industry and Trade will accelerate the completion of management policies and documents to tighten multi-level marketing regulations while limiting licensing for the activity, said minister Trần Tuấn Anh.

Anh said that not all multi-level marketing firms violated regulations or collapsed. However, the 1.2 million participants in the network could have big impacts on both participants and consumers.

"Multi-level marketing is complicated and has risks if we do not tighten management policies," he added.

"It is the reason that the Government should review Decree No 42/2014/NĐ-CP as well as investigate shortcomings of regulations on the location and headquarters of multi-level marketing firms," he said.

Trịnh Anh Tuấn, deputy director of the ministry’s Competitive Management Department told the conference held in Hà Nội on Monday to review multi-level marketing activities, and that by this month, the country has 50 licensed multi-level marketing companies.

In the first half of the year, multi-level marketing firms had total turnover of VNĐ4 trillion (US$177.7 million), contributing VNĐ452 billion to the State budget.

Of which, the foreign firms had turnover of VNĐ1.8 trillion, accounting for 45 per cent while the domestic ones had VNĐ2.2 trillion.

The number of people participating in the activities in the six month period was 500,000, a reduction of 57 per cent from the same period last year.

Tuấn added that Decree No 42/2014/NĐ-CP which took effect on July 1st 2014 has shortcomings as multi-level marketing has caused problems in reality.

There were nine multi-level marketing companies that had their licences withdrawn and were fined several thousand billion đồng.

Check-ups from the departments of Industry and Trade nationwide in the first half of the year showed that 26 out of 48 investigated had signs of violations with total fines of around VNĐ4.5 billion.

The most common violations included operations without licenses, and organising large-scale conferences and training without permission from the departments.

Nguyễn Thanh, director of Thừa Thiên Huế Province’s Department of Industry and Trade said the regulation allowing multi-level marketing firms to operate without branches and representative offices has caused difficulties in management and check-ups.

The investigations on the companies have encountered difficulties especially in remote and mountainous areas, Thanh added.

The ministry on March 9th 2016 promulgated Directive No 02 on enhancing the check-ups and supervision on the activities.

It found that fines in the Decree No 42/2014/NĐ-CP have not been strict enough to prevent the violations.

The ministry has been collecting opinions from relevant agencies for the revised Decree No 42/2014/NĐ-CP to submit to the Government for approval. — VNS