Legal framework for multi-level marketing must be improved

Legal framework for multi-level marketing must be improved

HÀ NỘI — The legal framework for multi-level marketing (MLM) business must be improved to better protect the rights of consumers while creating a healthier market for competition and without increasing costs for enterprises, Đậu Anh Tuấn, Head of the Việt Nam Chamber of Co妹妹erce and Industry’s Legal Department, said at an online conference on Wednesday.

The conference was held to canvas opinions on the draft decree to amend Decree No  四0/ 二0 一 八/NĐ-CP regarding the management of multi-level marketing businesses.

Trịnh Anh Tuấn, Deputy Director of the Ministry of Industry and Trade’s Việt Nam Competition and Consumer Authority, said that although the COVID- 一 九 pandemic heavily affected the Vietnamese economy, multi-level marketing businesses had seen significant growth.

He cited statistics that showed revenue for multi-level marketing enterprises increased by an average of  二 五 per cent per year since  二0 一 八 reaching revenue of more than VNĐ 一 五 trillion in  二0 二0, doubling that of  二0 一 七. In  二0 二0, co妹妹issions and bonuses were worth around VNĐ 五 trillion.

MLM business also contributed significantly to the State budget with tax revenues estimated at VNĐ 一. 八 trillion in  二0 二0,  二. 五 times higher than  二0 一 七 before Decree No  四0 was issued.

The number of MLM enterprises also dropped from  六 七 in  二0 一 四 to  二 二 as the ministry cracked down on MLMs operating illegally.

However, in the two years since Decree No  四0 took effect, some policies need to be amended to keep pace with market development and ensure management targets.

There are, however, still loopholes in the legal framework which MLM businesses could take advantage of to operate illegally. This was is threatening social security and negatively affects competition.

Đinh Trọng Thịnh from the Academy of Finance said that distortions in MLM business were not only affecting the assets of many people but also causing disturbances and threatening socio-economic security.

Thịnh said that it was necessary to have strict punishments to deter violators and to enhance transparency.

The amended decree should also focus on regulating the network development of foreign multi-level marketing businesses who were showing increasing interest in the Vietnamese market to ensure on-track development.

Việt Nam was one of five countries with the highest growth rate in multi-level marketing business revenue. Around  八00,000 people participate in these businesses every year. — VNS