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Multi-level marketing is under strict managment

Update: December, 06/2018 - 09:00
Nguyễn Thanh Hải. — Photo

Nguyễn Thanh Hải, deputy director of the Hà Nội Department of Industry and Trade, speaks to the Hà Nội Mới (New Hà Nội) newspaper on his department’s resolve to monitor closely the multi-level marketing activities in the city

What are the main responsibilities of management agencies in the management of multi-level marketing?

The Hà Nội Department of Trade and Industry has co-operated with agencies in the city, including the Hà Nội market management agency to step up their supervision activities on multi-level marketing in the locality. We have also organised many workshops and training courses on the multi-level marketing trends.

In the last few years, the Hà Nội Department of Trade and Industry with support from other agencies, conducted many inspection visits and handed out punishments to many violators. In 2016 alone, 32 enterprises were fined for their violations on multi-level marketing with a total sum of VNĐ2.5 billion (US$107,000); in 2017, eight enterprises were fined a sum of VNĐ1 billion ($43,000); and in the first 10 months of 2018, in our special inspection missions on eight multi-level marketing enterprises, we found some of them violated the business law and decided to fine them a total of VNĐ133 million ($5,700).

Thanks to our hard work, I’m very glad to say that the number of multi-level marketing businesses has gone down by more than half – from 57 to 27 and Hà Nội takes the lead in slashing down the multi-level marketing businesses which don’t have licences to operate.

In many countries multi-level marketing businesses have also developed rapidly, but their operation is in compliance with their countries’ legal system. Do you think our legal system is strong enough to control the multi-level marketing businesses?

It is undeniable that multi-level marketing business has been legally accepted in many countries. Việt Nam now is a member of the World Trade Organisation (WTO), so the multi-level marketing business should be given a licence to operate in accordance to international practices.

By early November, the Hà Nội Department of Industry and Trade had received letters of request to organise more than 900 conferences/seminars/trainings on the topic of multi-level marketing business.

We have sufficient legal documents to manage the operation of multi-level marketing businesses. However, in real life, fraudulent activities are still reported. Under Clause 1 in Article 5 or Clause 3 in Article 47 of the Decree No 40/2018/NĐ-CP if any fraud is detected, the business owners’ permits are to be withdrawn immediately.

So what are your recommendations for the general public when they use services offered by the multi-level marketing businesses?

We’re now living in a society ruled by law, so everyone should regularly update their general legal knowledge about trade in the country and internationally, particularly the multi-level marketing business. This is the best way for the general public to protect themselves from malpractice in the society, including those in the multi-level marketing business.

What’s about the role of the Hà Nội Department of Industry and Trade in preventing trade fraud?

We have launched various communication activities to help the people easily recognise fraudulent activities. We have even made public a list of enterprises having breached the law on such a business. In 2018 alone, the Hà Nội Department of Industry and Trade printed and distributed 24,000 legal documents on this topic in the form of a Q&A to people living in the inner city as well as in the outlying districts.

In addition, we have co-ordinated with concerned agencies and organisations to launch awareness for the people to avoid any mishaps that may happen to them.

To have better management of the multi-level marketing activities, what should our law be revised to encompass such new activities?

In my opinion, the mass communication campaign has played a key role in helping the general public understand about the nature of multi-level marketing – both its positive and negative sides.

In addition, the Ministry of Public Security has vowed to give due sanctions to any trade fraudulent acts if they are detected.­ — VNS

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