DECREE 24/2025/ND-CP STIPULATES SEVERAL PROVISIONS RELATED TO PENALTIES FOR ADMINISTRATIVE VIOLATIONS IN MULTI-LEVEL MARKETING ACTIVITIES

On February 21, 2025, the Government issued Decree 24/2025/ND-CP amending and supplementing several articles of Decree 98/2020/ND-CP on penalties for administrative violations in commercial activities, production, trading in counterfeit and prohibited goods, and protection of consumer rights. This includes amendments and supplements to several regulations related to penalties for administrative violations in multi-level marketing activities as follows:

Increased penalties for multi-level marketing participants:

Decree 24/2025/ND-CP adjusts and increases the penalties for individuals participating in multi-level marketing who violate regulations. Specifically:

1. Increased the previous fine from 3,000,000 VND to 5,000,000 VND to 5,000,000 VND to 10,000,000 VND for the following acts: Conducting marketing, sales, and developing a multi-level sales network without being granted a member card; Failure to present a member card before introducing or marketing and selling goods.
2. Increased the previous fine from 5,000,000 VND to 10,000,000 VND to 10,000,000 VND to 20,000,000 VND for the following acts:

• Failure to comply with the multi-level sales participation contract or the company’s operating rules;
• Participating in multi-level sales when not meeting the participation conditions as prescribed; Conducting multi-level sales activities in a locality where the enterprise has not been granted confirmation of registration of multi-level sales activities in that locality.

3. Increased the previous fine from 10,000,000 VND to 20,000,000 VND to 20,000,000 VND to 40,000,000 VND for the following acts:

• Requiring others to deposit or pay a sum of money, purchase a certain quantity of goods to be signed a multi-level sales participation contract;
• Providing fraudulent or misleading information;
• Organizing seminars, conferences, training on multi-level business without being authorized in writing by the multi-level sales enterprise;
• Luring, enticing, bribing multi-level sales participants of other enterprises; Taking advantage of positions, powers, social status, professions to encourage, request, lure, entice others to participate in multi-level sales networks or purchase goods for multi-level business.

4. Increased the previous fine from 20,000,000 VND to 30,000,000 VND to 40,000,000 VND to 60,000,000 VND for the following acts:

Participating in the activities of organizations, individuals conducting business/organizing conferences, seminars, training, introducing multi-level business activities of organizations, individuals conducting multi-level business but have not been granted a certificate of registration of multi-level sales activities.

Decree 24/2025/ND-CP has supplemented the following violations:

• A fine of 5,000,000 VND to 10,000,000 VND shall be imposed on multi-level sales participants who fail to retain multi-level sales participation contracts as prescribed; Failure to participate in basic training programs as prescribed in the operating rules within 30 days from the date of signing the multi-level sales participation contract.
• A fine of 20,000,000 VND to 40,000,000 VND shall be imposed on multi-level sales participants who request others to purchase a certain quantity of goods to be signed a multi-level sales participation contract.

Increased penalties for multi-level sales enterprises:

The Decree has also adjusted and increased the fines for violations by multi-level sales enterprises. Specifically:

5. Increased the previous fine from 30,000,000 VND to 40,000,000 VND to 60,000,000 VND to 80,000,000 VND for the following acts:

• Failure to perform or improper performance of: procedures for requesting amendments and supplements to the certificate of registration of multi-level sales activities; notification procedures in case of changes in information in the list of goods for multi-level business as prescribed by law;
• Failure to properly comply with regulations on procedures for extension; procedures for requesting re-issuance of the certificate of registration of multi-level sales activities in cases prescribed by law;
• Signing multi-level sales participation contracts not in accordance with legal regulations;
• Failure to perform or improper performance of regulations on the establishment, updating of the list of trainers, retention of accompanying dossiers, publication of the list of trainers on the electronic information page and notification to the Ministry of Industry and Trade;
• Failure to perform or improper performance of regulations on registration of amendments and supplements to the content of multi-level sales activities in the locality with the Department of Industry and Trade in cases prescribed by law;
• Failure to perform or improper performance of reporting obligations in multi-level sales activities as prescribed by law.
• …

6. A fine of 80,000,000 VND to 100,000,000 VND shall be imposed for organizing multi-level business activities without being granted a certificate of registration of multi-level sales activities, illegally profiting up to under 200,000,000 VND or causing damage to others up to under 500,000,000 VND.

The fine shall be doubled if the violation is committed in two or more provinces or centrally-run cities.

7. Increased the previous fine from 40,000,000 VND to 60,000,000 VND to 80,000,000 VND to 120,000,000 VND for the following acts:

• Organizing multi-level sales activities in a province or centrally-run city without written confirmation of registration of multi-level sales activities in that locality;
• Failure to perform or improper performance of the responsibility to notify the Department of Industry and Trade when organizing conferences, seminars, training on multi-level sales as prescribed;
• Paying multi-level sales participants a total value of commissions, bonuses and other economic benefits, including benefits enjoyed under promotional programs, in a year exceeding 40% of the company’s multi-level sales revenue in that year; Failure to perform or improper performance of the obligation to pay multi-level sales participants as prescribed;
• Failure to pay commissions, bonuses, promotions and other economic benefits in cash to multi-level sales participants in the form of bank transfer;
• Failure to sign multi-level sales participation contracts in writing;
• Providing basic training for multi-level sales participants not in accordance with legal regulations; Failure to perform or improper performance of the issuance of member cards;
• Failure to properly comply with registered operating rules and reward plans;
• …

8. Increased the previous fine from 60,000,000 VND to 80,000,000 VND to 120,000,000 VND to 160,000,000 VND for the following acts:

• Maintaining more than one multi-level sales participation contract, multi-level business position, multi-level business code or other equivalent forms for the same multi-level sales participant;
• Implementing promotions using multi-level, multi-branch networks in which participants in the promotional program have more than one position, code or other equivalent forms;
• Organizing commercial intermediary activities as prescribed by commercial law to serve the maintenance, expansion and development of multi-level sales networks;
• Failure to use the registered multi-level sales participant management system;
• Trading or transferring multi-level sales participant networks to other enterprises, except in cases of enterprise purchase, consolidation or merger.
• …
• The fine shall be doubled if the violation is committed in two or more provinces or centrally-run cities.

9. Increased the previous fine from 80,000,000 VND to 100,000,000 VND to 160,000,000 VND to 200,000,000 VND for the following acts:

• Requiring others to deposit or pay a sum of money; purchase a certain quantity of goods to be signed a multi-level sales participation contract;
• Allowing multi-level sales participants to receive money or other economic benefits from introducing others to participate in multi-level sales activities that are not from the purchase and sale of goods by the introduced person;
• Refusing to pay without justifiable reasons commissions, bonuses, or other economic benefits that multi-level sales participants are entitled to;
• Providing fraudulent or misleading information;
• Failure to perform or improper performance of the obligation to repurchase goods as prescribed;
• Organizing multi-level business activities that do not conform to the content of the certificate of registration of multi-level sales activities, resulting in illegal profits;
• Conducting multi-level business with subjects not permitted to conduct multi-level business as prescribed.
• …

The fine shall be doubled if the violation is committed in two or more provinces or centrally-run cities.

Specific violations are detailed in Article 56, “Violations of multi-level business activities,” in Section 9 of Clause 5 of Article 1 of Decree 24/2025/ND-CP, amending and supplementing several articles of Decree 98/2020/ND-CP, effective from February 21^st, 2025.