Socialist Republic of Vietnam

Vietnam's National Assembly (NA) passed the new Competition Law with 77.89 percent voting in favor on Nov. 9, the fourteenth day of the month-long National Assembly session.

Many of the NA deputies' suggestions during the ongoing session were added to the bill, according to the NA lawmaking group.

One such recommendation is that when imposing fines on organizations and individuals who violate the competition law, the government should also cancel their business licenses.

The law also stipulates that if institutions act improperly against a company or an individual suspected of violating competition laws while they are being investigated, they will be required to pay damages to said company or individual.

Particularly, the new law singled out "pyramid schemes" by banning four activities which facilitate pyramid scheme operations.

The illegal business, also known as "network marketing," has been used in Vietnam by a significant number of companies. It promises consumers or investors large profits based primarily on recruiting others to join their program, not on profits from any real investment or real sale of goods to the public.

All pyramid schemes eventually collapse when they reach a point where further recruitment is not feasible, experts say. Then, most investors find themselves unable to recoup their losses, while the "promoters" keep the bulk of the money.

With many investors borrowing to finance their involvement, the result could be widespread debt default, according to experts.

Reported by Manh Quan - Translated by Hieu Trung.
Thanh Nien Newspaper, November 10, 2004