Based on the inspection of compliance with laws on multi-level marketing (MLM) business practices, on July 26, 2024, the Chairman of the VietNam Competition Commission issued a decision to impose an administrative penalty on Diamond Lifestyle Vietnam Co., Ltd. (head office address: 227 Nguyen Dinh Chinh, Ward 11, Phu Nhuan District, Ho Chi Minh City) with a fine of 305 million VND for the following violations:
(i) Appointing trainers who do not meet the conditions for conducting basic training for MLM participants;
(ii) Providing false information about the reward plan and the benefits of joining the MLM network;
(iii) Failing to publicly post documents related to the company's MLM activities and goods at its headquarters as required;
(iv) Failing to notify the local Department of Industry and Trade when organizing conferences, seminars, or training sessions that require notification according to regulations;
(v) Failing to apply for amendments or supplements to the MLM operation registration certificate as required by law;
(vi) Failing to fulfill reporting obligations in MLM activities to the state management agency as required by law.
Based on the provisions of Decree No. 40/2018/ND-CP dated March 12, 2018, on the management of MLM business activities (amended and supplemented by some provisions of Decree No. 18/2023/ND-CP), and based on the penalty decision, the VietNam Competition Commission issued a decision to revoke the MLM operation registration certificate of the company. Accordingly, the company must cease MLM activities from July 26, 2024.
The revocation of MLM certificates does not release the company from its obligations under the law, including ensuring the lawful rights and interests of MLM participants as stipulated by law.
To ensure their lawful rights and interests under Decree No. 40/2018/ND-CP, MLM participants can contact the company directly for resolution as stipulated. If there is a dispute with the company and direct contact does not resolve it or the resolution is unsatisfactory:
For disputes related to lawful benefits arising directly from MLM activities (such as commissions according to the reward program, returning goods within 30 days of receipt, etc.), MLM participants have the right to file a lawsuit in a competent court for resolution. After obtaining a legally effective court judgment on the dispute between the company and the MLM participant, the participant can send the judgment to the Ministry of Industry and Trade to use the escrow funds as prescribed in Article 53 of Decree No. 40/2018/ND-CP (amended and supplemented by some provisions of Decree No. 18/2023/ND-CP).
For other disputes, MLM participants need to resolve them according to civil or criminal law.
The VietNam Competition Commission respectfully informs all concerned parties./.
