Multi-level marketing companies to be brought under stricter control.
Fines imposed on 17 multi-level marketing companies in Hanoi during 2015 totaled VND1.561 trillion ($70 million), according to the Hanoi Department of Industry and Trade.
Inspections on companies conducted in 2015 and the first quarter of this year revealed that all had violated certain administrative procedures and many exhibited signs of fraudulent behavior.
Most do not have a business license even though they have sold products.
One enterprise was fined VND180 million ($8,074) after selling functional food supplements that did not meet food safety standards. It was forced to return VND2 billion ($89,720) worth of goods to wholesalers.
Many companies were fined between VND80 million ($3,588) and VND100 million ($4,486) for violations in labeling and conducting business without a license.
The department has requested leaders of people’s committees around the country to adopt solutions to control and limit multi-level marketing activities. It also proposed that the Vietnam Competition Authority cease to issue licenses to new multi-level marketing companies and review and assess the operations of existing companies.
It has asked the Ministry of Industry and Trade and the Ministry of Public Security to investigate multi-level marketing companies exhibiting signs of fraudulent behavior and to publish its results so that consumers are aware of the issues.