Penalties, revocation of certificate of registration of operation
In June 2024, Thien Su Vietnam Co., Ltd. in Dai An Industrial Park (Hai Duong City) was fined VND 245 million by the National Competition Commission (Ministry of Industry and Trade) for violations of multi-level marketing. The reason was that during its operation, Thien Su Vietnam Co., Ltd. did not fulfill its responsibility to provide basic training to multi-level marketing participants as prescribed; did not notify the Ministry of Industry and Trade on time when there was a change in the list of trainers; did not properly provide basic training to multi-level marketing participants as prescribed. This enterprise also did not or did not properly issue membership cards to multi-level marketing participants as prescribed; did not notify the Hai Duong Department of Industry and Trade when organizing conferences, seminars, and training courses that are required to be notified as prescribed.
In 2019, Thien Su Vietnam Company Limited was fined VND 585 million by the Department of Competition and Consumer Protection (now the National Competition Commission) for many violations in the process of multi-level sales activities.
Thien Su Vietnam Co., Ltd. invested 1.5 million USD to implement the Project of manufacturing and trading functional food and cosmetic products in Dai An Industrial Park since 2008 with an annual production scale of 582,000 boxes of functional food and 24,000 boxes of cosmetic products. Of which, 60% of the products are supplied to the Vietnamese market, the rest are exported.
Previously, in 2022, the Department of Industry and Trade revoked the local multi-level marketing registration certificate for Siberian Health International Co., Ltd. (headquartered in Thanh Xuan Trung Ward, Thanh Xuan District, Hanoi). This enterprise was fined VND 815 million by the Department of Competition and Consumer Protection for a series of violations in business activities such as: not complying with the operating rules and registered reward plans; providing basic training before signing a multi-level marketing contract, not providing retraining after signing a multi-level marketing contract; providing false and confusing information about the features and uses of the product at the company's headquarters through the product brochure. In addition to being fined, this company had its license revoked and was forced to stop operating from October 14, 2022.
Tight management
Compared to early 2023, the management of multi-level business activities in the province has changed significantly thanks to the implementation of Decree No. 18/2023/ND-CP dated April 28, 2023 of the Government, effective from June 20, 2023. In case an enterprise does not have a headquarters, branch, representative office or business location in the locality, it must appoint a local contact person and this contact person must be trained, pass a knowledge test and be certified by the Ministry of Industry and Trade to be able to act as a contact person for the enterprise.
Specifically, on June 26 and July 10, 2024, the Department of Industry and Trade confirmed the receipt of the notification dossiers to terminate multi-level marketing activities in the locality of Aloe Trading Company Limited (headquartered in District 3) and Kim Cuong Vietnam Lifestyle Company Limited (headquartered in Phu Nhuan District, both in Ho Chi Minh City). The reason these two enterprises terminated their sales activities in Hai Duong was because they could not meet the conditions for local contacts according to Decree No. 18.
Currently, in Hai Duong, there are 12 enterprises that are allowed to sell multi-level products. Of these, 1 enterprise has its headquarters in Hai Duong, Thien Su Company, 10 enterprises have representative offices in Hai Duong, only Unicity Marketing Vietnam Co., Ltd. has its headquarters in Ho Chi Minh City but currently does not have a branch or representative office in Hai Duong. Meanwhile, in the same period last year, most of the enterprises that are allowed to sell multi-level products did not have representative offices or branches in Hai Duong.
Currently, the number of people participating in multi-level marketing in the province is more than 14,000. Enterprises confirmed to operate multi-level marketing in Hai Duong mainly trade in functional foods, cosmetics, household appliances, etc. In 2023, the Department of Industry and Trade received 13 notices to organize conferences, seminars, and training courses according to regulations from multi-level marketing enterprises. Total revenue from multi-level marketing sales in the province in 2023 was more than 480 billion VND.
According to the list of representative offices of multi-level marketing companies in Hai Duong provided by the Department of Industry and Trade, we went to the representative office of Amway Vietnam Co., Ltd. at 53A Quang Trung Street, Quang Trung Ward (Hai Duong City). However, according to some residents living here, this office is rarely open or active. Also according to the above list of the Department of Industry and Trade, the reporter contacted the head of the representative office in Hai Duong of Nu Skin Enterprises Vietnam Co., Ltd., who said that Nu Skin Enterprises Vietnam's business activities in Hai Duong are still small, with few distributors. The company also does not hold conferences or seminars in Hai Duong, so it refused to provide information.
Ms. Vu Thi Sau, Deputy Head of the Trade Management Department (Department of Industry and Trade) said that after more than 1 year of Decree No. 18 taking effect, the effectiveness of management of multi-level marketing activities has been significantly improved. However, recently, with the development of e-commerce and information technology, there has been a situation of taking advantage of the multi-level marketing model on the Internet to carry out illegal financial activities, fraud, and property appropriation. Decree No. 40/2018/ND-CP stipulates that multi-level marketing activities are only carried out with goods, the industry and trade sector only performs state management of enterprises that are granted certificates and is responsible for the multi-level marketing activities of these enterprises. The phenomena, financial mobilization activities, foreign currency trading, virtual currency, etc. are not within the scope of state management and handling authority of the industry and trade sector, so the coordination of functional forces is very necessary.
In the coming time, the Department of Industry and Trade of Hai Duong plans to continue to coordinate with the Department of Market Management of Hai Duong, the police force, and the People's Committees at the district level to monitor multi-level marketing activities of enterprises in the province to promptly detect violations, disguised activities, and enticement of a group of participants to gain illegal profits.
I think the authorities need to increase regular direct inspections at the representative offices of businesses in Hai Duong, to avoid the situation of renting offices just to deal with the situation, but in reality just closing them down.
PVSource: https://baohaiduong.vn/manh-tay-xu-ly-vi-pham-trong-kinh-doanh-da-cap-tai-hai-duong-388139.html
Comment (0)