CIRCULAR

110/2005/ND-CP DATED AUGUST 24, 2005, ON MANAGEMENT OF MULTI-LEVEL SALE OF GOODS

Pursuant to Decree No. 29/2004/ND-CP of January 16, 2004 of the Government, defining the functions, tasks, powers and organizational structure of the Ministry of Trade The Ministry of Trade hereby guides a number of contents in Decree No. 110/2005/ND-CP as follows:

1. Subjects applying for multi-level sale registration papers

Subjects applying for multi-level sale registration papers are enterprises established in Vietnam under the provisions of law on enterprises and wishing to organize multi-level sale after the effective date of Decree No. 110/2005/ND-CP dated August 24, 2005, on management of multi-level sale of goods.

2. Agencies granting multi-level sale registration papers

Agencies granting multi-level sale registration papers are provincial/municipal Trade Services or Trade-Tourism Services with which enterprises applying for multi-level sale registration papers have made their business registrations.

3. Responsibilities of the agencies granting multi-level sale registration papers

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b) To grant multi-level sale registration papers to enterprises, which have dossiers satisfying the conditions specified in Article 14 of Decree No. 110/2005/ND-CP;

c) To consider the grant of multi-level sale registration papers within the time limit provided for in Article 16 of Decree No. 110/2005/ND-CP and under the guidance in this Circular;

d) To collect, manage and use the fee for grant of multi-level sale registration papers under the guidance of the Ministry of Finance;

e) To report in writing to the competition-managing office of the Ministry of Trade on the grant, additional grant or re-grant of multi-level sale registration papers according to the provisions of Clause 4, Article 16 of Decree No. 110/2005/ND- CP;

f) After granting multi-level sale registration papers, to assume the prime responsibility for, and coordinate with other competent state agencies in, inspecting and supervising the organization of multi-level sale according to the granted multi-level sale registration papers; to detect violations of provisions of law on management of multi-level sale activities and apply measures to handle such violations according to their competence or report them to competent authorities for handling;

g) To fully comply with regulations on archive of dossiers of application for multi-level sale registration papers, dossiers of application for supplementation of multi-level sale registration papers and dossiers of application for re-grant of multi-level sale registration papers according to the provisions of law on archives;

h) Other responsibilities provided for by law.

4. Dossiers of application for multi-level sale registration papers

a) A dossier of application for a multi-level sale registration paper shall comprise the documents specified in Article 15 of Decree No. 110/2005/ND-CP.

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c) Heads of enterprises defined in Clause 5, Article 15 of Decree No. 110/2005/ND-CP include owners of private enterprises, partners of partnerships, members of members' councils, chairpersons of companies, members of managing boards, directors (general directors) and other important managerial posts defined in the charters of limited liability companies or joint stock companies.

5. Principal contents of the model contract on participation in multi-level sale

a) The name, address of the head office and at-law representative of the multi-level sale enterprise;

b) The full names, registered places of permanent residence (or registered places of sojourn, for foreigners), registered places of temporary residence, numbers of identity cards (or numbers of passports, for foreigners) of participants; numbers of working permits of participants being foreigners;

c) The origin, category, quality, price, utility and usage of goods on sale, reselling price of goods warranty, conditions and scope for goods (if any);

d) The method of calculating commissions, bonuses and economic benefits to be enjoyed by participants for their goods marketing and sale activities and by subordinate participants in the networks organized by participants themselves and accepted by the multi-level sale enterprise;

e) Rights and obligations of the multi-level sale enterprise and participants, including the responsibility of the multi-level sale enterprise to pay damages to consumers or participants;

f) Cases of contract termination and liquidation.

6. Procedures for grant of multi-level sale registration papers

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- The agencies granting multi-level sale registration papers shall have to receive dossiers of application for multi-level sale registration papers.

- The dossier-receiving agencies must write dossier receipts. A dossier receipt shall be made in two copies according to form MTB-1 in Appendix II to this Circular (not printed herein). One copy shall be handed to the enterprise applying for a multi-level sale registration paper while the other shall be kept at the agency granting multi-level sale registration papers.

- For incomplete and invalid dossiers of application for multi-level sale registration papers, the dossier-receiving agencies shall, within three working days after receipt of such dossiers, ask in writing the enterprises to amend and complete their dossiers according to form MTB-2 in Appendix II to this Circular (not printed herein).

- Enterprises may request the dossier-receiving agencies to clearly explain the required amendment to and completion of dossiers while the dossier-receiving agencies shall have to satisfy such request of enterprises.

- Where no amendment to dossiers is required, the time limit for examination of dossiers shall be counted from the date of receipt of dossiers.

b) Examination of dossiers before making decision to grant multi-level sale registration papers

- Within 15 working days after the date of receipt of complete and valid dossiers, the agencies competent to grant multi-level sale registration papers shall, on the basis of relevant current provisions of law, examine such dossiers before deciding to grant or not to grant multi-level sale registration papers.

- In case of refusal to grant multi-level sale registration papers, agencies competent to grant multi-level sale registration papers shall have to reply in writing, clearly stating reasons therefor.

c) Multi-level sale registration papers

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- A multi-level sale registration paper shall be made in two original copies. One copy shall be granted to the applying enterprise while the other shall be kept at the agency granting the multi-level sale registration paper.

- Agencies granting multi-level sale registration papers shall write the serial numbers of registration papers according to the following regulations:

+ Provincial codes: two-digit numbers (specified in Appendix l to this Circular, not printed herein).

+ Enterprise type codes: 01 denotes private enterprises, 02 denotes limited liability companies with two members or more, 03 denotes joint-stock companies, 04 denotes one-member limited liability companies, 05 denotes partnerships, 06 denotes cooperatives, 07 denotes joint-venture enterprises, 08 denotes enterprises with 100% foreign investment capital, and 09 denotes state enterprises.

+ Ordinal numbers of enterprises: 6-digit numbers, from 000001 to 999999.

+ Codes and numbers are joined with hyphens.

An example of the numbering of a multi-level sale registration paper: A private enterprise which makes its business registration in Hanoi shall have its multi-level sale registration paper numbered as follows:

01-01-000002 (multi-level sale registration paper granted to the second private enterprise in Hanoi).

d) Collection of the fee for grant of multi-level sale registration papers

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7. Supplementation of multi-level sale registration papers

a) A dossier of application for supplementation of a multi-level sale registration paper shall comprise:

- An application for supplementation of a multi-level sale registration paper, made according to form MD-2 in Appendix II to this Circular (not printed herein);

- The original multi-level sale registration paper granted by a competent agency;

- Documents related to changes in the sale program.

b) The procedures for supplementation of multi-level sale registration papers shall comply with the guidance in Clause 6 of this Circular.

Agencies which approve the supplementation of multi-level sale registration papers shall only write the additionally registered contents and certifications on the multi-level sale registration papers already granted to enterprises.

8. Re-grant of multi-level sale registration papers

a) Re-grant of multi-level sale registration papers in cases where they are lost

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- Within seven working days after making declarations to the police offices, the enterprises shall have to request the agencies which have granted the multi-level sale registration papers to re-grant multi-level sale registration papers to them.

- A dossier of application for re-grant of a multi-level sale registration paper comprises:

+ An application for re-grant of a multi-level sale registration paper, made according to form MD-3 in Appendix II to this Circular (not printed herein);

+ The commune-level police office's certification that the enterprise has declared the loss of its multi-level sale registration paper.

b) Re-grant of multi-level sale registration papers in cases where they are torn or ragged

- Where their multi-level sale registration papers are tom or ragged, enterprises may apply for re-grant thereof.

- A dossier of application for re-grant of a multi-level sale registration paper comprises:

+ An application for re-grant of a multi-level sale registration paper, made according to form MD-3 in Appendix II to this Circular (not printed herein);

+ The torn or ragged original multi-level sale registration paper.

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- Upon receiving the dossiers of enterprises in the cases specified at Points b of this Clause, the agencies granting multi-level sale registration papers shall have to write dossier receipts. A dossier receipt shall be made in two copies according to form MTB-1 in Appendix II to this Circular. One copy shall be handed to the applying enterprise while the other shall be kept at the agency granting multi-level sale registration papers.

- Within five working days after the date of receipt of complete and valid dossiers, the agencies granting multi-level sale registration papers shall re-grant multi-level sale registration papers, made according to form MG-1 in Appendix II to this Circular, to enterprises. The serial numbers of re-granted multi-level sale registration papers shall be those of the lost, torn or ragged ones. Re-granted multi-level sale registration papers must specify the re-granting time.

- Before handing multi-level sale registration papers to enterprises which apply for re-grant thereof, the agencies granting multi-level sale registration papers shall collect a fee therefor under the guidance of the Ministry of Finance.

d) Re-grant of multi-level sale registration papers in cases where they are withdrawn or their use right is deprived of.

For enterprises which have their multi-level sale registration papers withdrawn or their right to use such papers deprived of, their dossiers of application for re-grant of multi-level sale registration papers shall not be considered by the agencies granting multi-level sale registration papers within one year after the date of issue of the withdrawal or right deprival decisions.

- The re-grant of multi-level sale registration papers to enterprises, which have had their multi-level sale registration papers withdrawn or their right to use such papers deprived of by competent state agencies shall be conducted as for the grant of new multi-level sale registration papers.

9. Multi-level sale network member cards

a) Within seven working days after entering into a contract on participation in multi-level sale, a multi-level sale enterprise shall have to grant multi-level sale network member cards to the participants.

b) A multi-level sale network member card shall contain the following basic information:

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- The address of the head office and telephone number of the multi-level enterprise;

- The full name and the number of the identity card (or passport) of the participant;

- The serial number of the multi-level sale network member card;

- A 4 cm x 6 cm photo of the participant taken within six months before the contract on participation in multi-level sale is entered into;

- The date of grant of the card, the signature and seal of the multi-level sale enterprise's at-law representative;

- Rules for the card holder.

c) Multi-level sale network member cards shall be laid out according to form MT-1 in Appendix III to this Circular.

d) Multi-level sale enterprises shall renew old cards or grant new cards to participants in the following cases:

- Cards are torn, ragged or lost;

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e) Multi-level sale enterprises shall have to withdraw multi-level sale network member cards upon termination of contracts on participation in multi-level sale according to the provisions of Article 10 of Decree No. 110/2005/ND-CP.

10. Notification of multi-level sale when multi-level sale enterprises develop their sale networks

a) When a multi-level sale enterprise develops its sale network to provinces or centrally-run cities other than the province or centrally-run city where it is headquartered, it shall have to notify the Trade Services or Trade and Tourism Services of such provinces or centrally-run cities of such development. Such notice shall be made according to the form of multi-level sale organization notice (MTB-3) set in Appendix III to this Circular (not printed herein).

b) After receiving multi-level sale notices of enterprises, the provincial/municipal Trade Services or Trade and Tourism Services shall have to inspect and supervise multi-level sale activities in their respective localities and handle violations of law provisions on management of multi-level sale activities according to their competence or report them to competent authorities for handling.

11. Organization of implementation

a) Provincial/municipal Trade Services or Trade and Tourism Services shall base themselves on the provisions of law and the guidance in this Circular to assist provincial/municipal People's Committees in organizing the grant of multi-level sale registration papers; and regularly inspect, supervise and handle violations in multi-level sale activities in their localities.

b) Before January 15 every year, provincial/municipal Trade Services or Trade and Tourism Services shall have to report to the competition-managing office of the Trade Ministry on the inspection, supervision and handling of violations in multi-level sale activities in their localities.

c) In case of necessity, provincial/municipal Trade Services or Trade and Tourism Services shall have to report on matters related to multi-level sale activities in their localities at the request of the competition-managing office of the Ministry of Trade.

This Circular takes effect 15 days after its publication in CONG BAO. Any problems arising in the course of implementation should be promptly reported by the concerned branches and localities to the Ministry of Trade for study, amendment or supplement.

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FOR THE MINISTER OF TRADE
VICE MINISTER




Le Danh Vinh