Legal News
Crimes of violating the regulations on multi-level business

10 October 2017

VGP

The National Assembly on June 20, 2017 voted to pass Law No. 12/2017/QH14 (“Amended Penal Code”) on amending and supplementing some articles of Penal Code No. 100/2015/QH13 issued by the National Assembly as of November 27, 2015 (“The 2015 Penal Code”).

Question: What are the regulations on the governance of multilevel business?

Answer: In order to curb multi-level businesses from abusing the system for improper gain, the Amended Penal Code supplements the crimes of violating regulations on the governance of multilevel businesses.

Specifically, Article 217a of the Amended Penal Code stipulates: “Those who carry out multi-level business operations without registration certificates or in noncompliance with the content of the registration certificate for multi-level sales falling into any of the following cases, (excluding the misappropriation of properties through fraud, or using computers or electronic means to misappropriate properties) will be fined VND 500 million to VND 1 billion, subjected to a noncustodial reform of up to three years or imprisonment of six months to two years:

a) Having been sanctioned for administrative violations or convicted for this conduct, continuing violations without clearing their criminal record;
b) Gaining improper profits of VND200 million to under VND1 billion;
c) Causing others to suffer asset damage from VND500 million to under VND1.5 billion.

Depending on the value of the violation, the criminal may be fined VND1-5 billion or imprisoned 1-5 years and may further be fined VND100-500 million, prohibited from conducting a particular practice or a particular job for 1-5 years.”

The Amended Penal Code also amends and supplements many regulations on sanction levels related to such economic crimes as abusing trust to misappropriating properties, violating regulations on competition, conducting fraudulent acts in the insurance business, infringing copyrights and related rights, infringing industrial property rights etc., and those rights related to labor safety and hygiene, recruitment of employees under 16 years old, illegal dismissal of employees etc. Besides, the Amended Penal Code also removes the regulations on the crime of providing illegal services on computer networks and telecommunication networks.

The Amended Penal Code will take effect as from January 1, 2018./.

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