World Regulations

  • Are there regulations on Direct selling / network marketing?
  • Yes – Some Provinces introduced regulations requiring license/registration of direct sellers.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes - Most Canadian provinces require direct selling companies obtain a provincial license to engage in direct selling to consumers.
  • Here Are Some Links:

  • For example – in Nova Scotia by law, you must have a Direct Seller Company Permit if your company has representatives that sell door to door, host home parties or sell through multi-level distributors. If a person is found guilty of an offence under the Direct Sellers’ Regulation Act, they can be fined up to $10,000. Before starting you need to ensure that have:
    1. Registry of Joint Stock Companies number.
    2. name, address, position, and date of birth for you and any partners and officers.
    3. utility tokens are not immediately delivered to purchaser.
    4. 3-year employment history for you and any partners and officers.
    5. address for service in Nova Scotia.
    6. address for notice and returns.

  • Goods and Services Tax ("GST") / Harmonized Sales Tax ("HST"): If sales will be made in Canada, it will be necessary to register for Canada's federal sales tax, the goods and services tax. The provinces of Ontario, New Brunswick, Nova Scotia, Newfoundland / Labrador and Prince Edward Island have harmonized their sales taxes with the federal GST. The direct seller will have to address many GST/HST issues, including: collecting the correct amount of GST/HST on invoices, filing GST/HST returns and remitting GST/HST collected from consumers, claiming input tax credits and determining whether it is possible to become an approved network seller to use an Alternative Calculation Method relating to commissions paid to independent sales contractors.
  • Is there Direct selling association?
  • Yes
  • Comments
  • Generally, the definition of direct seller refers to person who offer products/services to customers outside the premises of the seller and usually at customers’ homes. In some cases, for online sells apply specific requirements concerning cancelation period, provision of detailed information about the product/service and others.
  • Are there regulations on Direct selling / network marketing?
  • No specific law on direct selling but Commercial Agents Law No. 76(I)1986, Regulation of the Relations between Commercial Agent and Principal Law 51(I)/1992, Unfair Business-to-Consumer Practices Law 103(I)/2007, Control of Misleading and Comparative Advertising Law 92(I)/2000, Consumer Rights Law of 2013 (Law 133(I)/2013) are applicable.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Commercial Agents Law No. 76(I)1986, as amended, which provides, among others, for the Council responsible for the registration of commercial agents, the conditions for registration and register of commercial agents.
    • Details
    • In order to practice as a commercial agent in the Republic of Cyprus, one needs to be registered as one by the Council of Commercial Agents and obtain an annual license for practicing the profession.
    • The term "Commercial Agent" refers to natural or legal persons who, under the capacity of independent mediator, are authorized on a permanent basis either to negotiate, on behalf of another person, the sale or purchase of goods or to negotiate and conclude such transactions on behalf of the represented person.
    • Every natural or legal person can be registered as a Commercial Agent, provided that the Council of Commercial Agents is satisfied that the applicant:
      - is a holder of a school leaving certificate of a recognized secondary school or of an equivalent qualification.
      - has not been convicted in the past 10 years immediately preceding the application for an offence involving dishonesty or for an offense against morality or the Exchange Control or Customs and Excise Laws for the time being in force and has not been declared bankrupt.
      - is a limited company duly registered in the Republic, or an EU member state of which at all times its directors or one of them or the secretary are eligible to hold a practicing license.
      - is a partnership duly registered in the Republic, an EU member state of which at all times at least one of its unlimited partners is a commercial agent holding a practicing license.
      A commercial agent is placed under specific duties to act according to the law and in good faith and in the nest interests of the principal. He must make every effort to negotiate the transactions entrusted to him, to conclude them and to keep the principal informed of such. The principal also owes the agent certain specific obligations, the most important of which are:
      - To indemnify the agent against all lawful acts done by the agent in the exercise of the authority which has been given to him, except for an act entailing criminal liability.
      - To compensate the agent for any injury or harm he encounters as a result of the neglect or want of skill of the principal.
      Before concluding the contract with your customer, you should provide the following information, in a clear and understandable manner:
      - the main characteristics of the goods or services.
      - your identity, physical and email addresses and telephone number (if available).
      - price of the goods or service - inclusive of all additional charges – such as taxes, delivery costs and postal charges, etc.);
      -arrangements for payment, delivery or performance, complaint handling.
      - charges to the customer when contacting you to terminate the contract, if they are above the basic rate (e.g. premium rate call charges for contracts to be concluded over the telephone).
      - conditions for the customer's right to withdraw, including.
      -time limits and procedures.
      - specific withdrawal form.
      - the customer's obligation to pay for returning goods (and, for bulky goods, the cost of returning them, or at least an estimate (based on the delivery cost).
      - the customer's obligation to pay for any services (or public utilities) supplied already during the withdrawal period (if they had asked for the services to be supplied immediately after concluding the contract and then decided to withdraw from the contract).
      - any exceptions from the right of withdrawal (e.g. perishable goods) or acts that forfeit the right (e.g. unsealing a sealed DVD or CD).
      - a reminder of the existence of a legal guarantee for goods.
      - conditions for any after-sales service or commercial guarantees.
      - how to access any code of conduct that applies.
      - the duration of the contract and the conditions for terminating it, including any minimum duration of the customer's obligations.
      - conditions for any deposits or financial guarantees to be paid.
      - information on available out-of-court schemes for resolving disputes.
      In addition, if you sell through a website, you must also state (at the latest at the beginning of the ordering process) information on:
      - whether delivery restrictions apply.
      - which means of payment are accepted.
    • Details
    • Consumer Protection.
    • How should you provide this information?

      • Online sales:
        Directly before the customer places his/her order you must clearly and prominently indicate the:
        - main characteristics of the goods or services.
        - total price, inclusive of all additional charges.
        - duration and the conditions for terminating the contract.
        - minimum duration of the consumer's obligations under the contract (if any).
        Customers must also be given the opportunity to acknowledge that placing the order obliges them to pay. E.g. your order confirmation button must be clearly labelled indicating that placing the order entails an obligation to pay, e.g. with words 'Order & pay’.
        The label can be designed in different ways as long as it gives a clear message about the obligation to pay.
        Sales by text message (and similar): If the selling channel makes it technically difficult to give all this information - e. g. contracts concluded by mobile phone text message - you can give a limited amount of information, such as:
        - your identity.
        - the main characteristics of the goods or services.
        - the total price.
        - the right of withdrawal - consumer have the right to return online / distance purchases within 14 days for a full refund. You The consumer can do so for any reason – even if you simply changed his/her mind.
        - the duration and the conditions for terminating the contract.
        - a link to another source (e.g. a website) for the complete information list.
      • Telephone sales: You must always disclose your identity at the beginning of the call and clearly state its commercial purpose. You also have to indicate the charges that the customer will have to pay (if they are above the basic rate) when contacting you to conclude the contract e. g. premium rate call charges for contracts to be concluded by telephone. In some EU Member States — when concluding contracts by telephone — you only have to confirm the offer to the customer who is bound by the contract once he/she has signed the offer.

      • Digital content:
        If you sell digital content such as music, video or software online, you must also inform customers about:
        - interoperability of the content with relevant hardware and software.
        - functionality of the content - such as any geographical restrictions on use and if you are allowed to make copies for personal use.
        Once the customer starts accessing the content — by downloading, streaming or otherwise — he/she can no longer withdraw from the contract with you. However, you must first give them the opportunity to explicitly agree to this and acknowledge that they lose their right to withdraw as soon as they start downloading, etc. You must also include a confirmation of this agreement and acknowledgement in the contract confirmation you send them.
  • Is there Direct selling association?
  • No
  • Are there regulations on Direct selling / network marketing?
  • Are there limitations or ban on direct marketing?
  • Yes.
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes
    • “Pyramid promotional schemes” are considered to be unfair and are prohibited under Point 14 of Annex 1 of the UCP. Under Point 14, a Pyramid Promotional Scheme is defined as: Establishing, operating or promoting a pyramid promotional scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.
    • CRD and its predecessors primarily regulate the types of information that must be provided to consumers in connection with sales transactions, as well as rights of consumers to return products within a specified time period (14 days, with the start date depending on the type of transaction).
    • Directive 2019/770 - The scope of Directive 2019/770/EU shall include contracts of digital services where the consumer pays not just money but data in exchange for the supply of content or services, e.g. social media and email accounts, cloud services or streaming services.
    • In order to conform with the contract, the digital services must meet objective requirements; more specifically, they shall have the qualities and performance features, including in relation to functionality, compatibility and security, which are usual for services and goods of the same type and which the consumer may reasonably expect. Further, according to Article 8 para 2 of Directive 2019/770/EU the trader is obligated to inform about and supply updates, including security updates, in order to keep the digital service in conformity. In the case of a lack of conformity, the consumer shall be entitled to the general remedies of legal warranty (entitlement to have the digital service brought into conformity, an appropriate reduction made in the price or termination of the contract).
    • Directive 2019/771/EU. The provisions of Directive 2019/771/EU explicitly include “goods with digital elements” (digital content or digital services), e.g. smartphones, smart TVs, fitness trackers.
    • As far as goods are concerned, Article 11 para 1 of Directive 2019/771/EU rules that in the future the seller will have to prove freedom of defects of goods within twelve months of the time when the goods were delivered instead of six months, as is the current legal situation in Austria.
    • Further, the seller of goods with digital elements shall not only be liable for defects which exist at the time of delivery of the goods, but also for any lack of conformity of the digital elements that occurs within two years upon delivery of these goods.
    • According to Article 7 para 3 of Directive 2019/771/EU the seller of goods is also subject to the obligation to inform and supply the consumer with updates for the digital elements. In the case of non-conformity with the contract, the consumer again is entitled to the general remedies of legal warranty.
    • By 1 July 2021, Member States shall adopt necessary regulations into national laws to comply with Directive 2019/771/EU and Directive 2019/770. However, the detailed regulations leave little room for Member States to implement rules diverging from the directives.
    • Consumer protection requirement.From the very first contact with a consumer, the business partner (seller) shall provide information, in line with the legal requirements (European Consumer Right Directive).
    • Right to "money-back guarantee" - The business partner shall inform customer about his right to cancel the purchase and return purchased items. For this, the consumer has 14 days. Consumer has the right to complete refund of payment for the returned item. Business partners should not seek contact with consumers at times and ways which can be considered pushy. Business partners must take the necessary measures to protect contact details and other confidential information that they have received from their (potential) customers. Business partners should not abuse of a consumer's confidence or lack of commercial experience. Businesses and their business partners should refrain from misleading comparisons or matters that create fair competition in the stand away.
    • Their behavior must be in line with the relevant European legislation. Each order should be submitted as soon as possible, however in any case within 30 days after placing the order.
    • If the consumer is in a dispute with both the business partner a mediation process shall be always available to the consumer via a third party (Disputes Committee or code manager).
    • Multi-level marketing (MLM).
    • A member could have two different forms of income within an MLM company: income from selling products their selves and income from commissions. According to Court of Appeal Den Bosch, these two activities are closely connected. Therefore, the two incomes should be assessed as one activity for the Dutch personal income tax.
    • VAT becomes chargeable on commissions when the member regularly receives commissions. Luckily for the MLM company, VAT can be reclaimed upon declaration, which does not make it inconvenient. The member can deduct the VAT on costs and investments, such as a computer, car etc., so that on balance, a benefit can often be obtained in the form of a VAT refund.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific, but in Australian Consumer Law (ACL) – Unsolicited consumer agreement.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Unsolicited consumer agreements.The ACL contains a law covering unsolicited sales practices, including door to door and telephone sales (to the extent not already covered by the Do Not Call Register Act 2006).
  • Here Are Some Links:
  • Is there Direct selling association?
  • Yes
  • The unsolicited selling law contains express supplier obligations about the way in which consumers are approached face-to-face, including:
    1. Permitted hours of visiting consumers for the purpose of negotiating an unsolicited consumer agreement, or for a related purpose.
    2. A duty on the ‘dealer’ to disclose the purpose of their visit and to appropriately identify themselves to the consumer.
    3. The duty to leave the premises immediately on request.
    4. Disclosure requirements, including the duty to provide the consumer with a copy of the agreement, and to inform a consumer of their rights to terminate an unsolicited sales agreement within 10 business days of making the agreement and in other circumstances..

  • Comments
  • Namely, of concern is the question whether these multi-level marketing (MLM), network marketing or direct selling companies may be engaged in Ponzi or Pyramid selling schemes which are illegal under Australian Consumer Law. Globally, the direct selling industry is keen to prevent illegal activity and to protect individuals from scams. Work is on-going in many jurisdictions to track the use of digital currencies within our channel so that we can issue best practice guidance
  • Are there regulations on Direct selling / network marketing?
  • Yes
  • Are there limitations or ban on direct marketing?
  • No.
  • Is there Direct selling association?
  • Yes
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes
    • McKenzie International Agency and Distribution Handbook Latin America
    • Mexican law does not provide a specific legal framework applicable to agency agreements. Based on Mexican commercial practices, the agency agreement in Mexico is an agreement under which a party undertakes to, on a regular basis and as an independent party, promote the sale of products or services for the benefit of the principal and without assuming any risk arising from any transaction under the agency agreement. An agent will typically perform its duties in a specific territory, on an exclusive or non-exclusive, and remunerated basis.
    • Under Mexican labor law, an agent-principal relationship may be re-characterized as an employer/employee relationship where the agent “permanently” provides his/her services to the principal, unless the agent does not perform his/her activities personally, or only participates in isolated transactions. The consequences of having the agent-principal relationship re-characterized as one of employment, are that any remuneration paid to the agent by the principal will be deemed to be a salary; the principal will be obliged to withhold payroll and income taxes and pay social security contributions and other benefits; and the agent may be entitled to severance pay upon termination of the relationship.
  • Are there regulations on Direct selling / network marketing?
  • No specific but regulated by the legislation.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes
    • Direct sales are a system for marketing products and services through personal contact and the relationship of independent entrepreneurs with their customers, through personal explanations and demonstrations.
    • From the promulgation of Law No. 6,586, dated 11.6.1978, direct selling by street vendors started to be disciplined in isolation, framing independent entrepreneurs as street traders, under the terms of article 1: “Street traders are those who, personally, on his own account and at his own risks, he has little commercial activity on public roads, or door to door ”.
    • There is also article 2, which will not be considered street traders, those who exercise activities under conditions that characterize the existence of an employment relationship with the supplier of the products.
    • The street trader, in accordance with Decree-Law No. 486/69, is released from following a uniform bookkeeping order, using the appropriate books and papers, provided that they are inserted in one of the following hypotheses, as in the case of independent entrepreneurs’ direct sales:
      • Artesian nature of the activity.
      • Predominance of own work or family members, even if the activity is organized.
      • Capital actually employed
      • Peculiar conditions of the activity, which reveal the smallness of the existing trade.
    • Direct sales entrepreneurs are mandatory contributors to Social Security, and must register as individual contributors, under the terms of Law No. 8,212 / 91 and Decree No. 3,048 / 99.
    • Direct sales companies respect the sector's self-regulation, under the terms of the Codes of Ethics, available here on the ABEVD website.
    • The street trader is considered a mandatory taxpayer for social security purposes, pursuant to Law No. 8,212 / 91 and Decree No. 3,048 / 99, being obliged to collect Social Security contributions calculated based on the rate of 20%.
    • The registration of the street trader and the collection of contributions confer the benefits of social security legislation (retirement, pension to beneficiaries, sickness benefit, maternity salary and others).
    • The street trader, in addition to the social security contribution, is subject to the following taxes:
      1. -Income Tax on Personal Income (IRPF): it is recommended that independent entrepreneurs write the cash book, so that effective profitability can be determined, under the terms of the Income Tax Regulation.
      2. -Tax on Circulation of Goods and Interstate and Intermunicipal Transport and Communication Services (ICMS): the direct sales operations are subject to the ICMS under the tax substitution regime, in which the direct sales companies calculate and collect the ICMS due on the operations resale of independent entrepreneurs to their customers, whose calculation basis is determined by applying an Added Value Margin that varies by State. This regime is regulated by the ICMS Agreement 45/99.
    • The Consumer Protection Code (Law 8,078 of 9/11/1990) defines consumer rights: it deals with the quality of products and services, the prevention and repair of damages; provides for harmful consumer practices and other consumer relations, including manufacturers, traders, government and other individuals / companies involved in the consumer chain
    • Despite this law not specifically dealing with direct sales, there are provisions that apply to this type of marketing, such as the repentance period (article 49), which determines that the consumer has 7 (seven) days to give up the purchase of the product or service, and the company and the independent entrepreneur are obliged to accept the return of the product
    • Payments corresponding to sales made by independent entrepreneurs are subject to withholding income tax, as well as social security contributions in the form of payment for self-employed persons.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Yes
  • Are there limitations or ban on direct marketing?
  • Yes,Companies dedicated to multilevel marketing are not authorized to negotiate with the so-called virtual currencies, nor with securities
  • Is there Direct selling association?
  • Yes
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Companies that offer goods or services in Colombia through multi-level marketing shall be established meeting the legal requirements under the applicable law and must have at least one office permanently open to the public. For the cases in which this activity is carried out through a trade representative, the latter must also have at least one office permanently open to the public and will be responsible for the compliance with the norms established in the Colombian legislation for the activities, products and services offered. The Law 1700/2013 arranges: - the rights of the Independent seller towards the MLM company: to ask questions, make queries and to be provided with accurate information; Receive timely and unambiguously compensation or benefits from the multi-level companies to which the independent sellers are entitled by reason of their activity; To be accurately informed by the multi-level company of the characteristics of the goods and services promoted, and the scope of the warranties that apply to such goods or services; - Compensation plans
    • Activities of the MLM companies are supervised by the Superintendence of Corporations. The law also arranges Minimum contractual requirements and Contractual prohibitions.
    • According to the Warning issued by the Superintendent of Companies foreign companies seeking to develop activity directly in Colombia via network marketing or multilevel, must establish a branch in the country.
    • Likewise, Superintendent of Companies warned that multilevel activity can only be carried out through legally constituted companies. In the case of foreign companies, the multilevel company must establish a branch or a subsidiary in Colombia.
    • Superintendent of Companies affirmed that there are specific regulations applicable to multi-level companies, whose compliance is imperative for all those who engage in this type of business. The entity also warned that in Colombia, no company is authorized to market virtual currencies, investments in Forex or financial education services through the multilevel system.
  • Are there regulations on Direct selling / network marketing?
  • Yes
  • Are there limitations or ban on direct marketing?
  • No
  • Is there Direct selling association?
  • Yes
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes, In province of Santa Fe.
    • (November 2019) The Argentine Direct Selling Chamber (CAVEDI) praised the recent approval in the province of Santa Fe of the first Law in Argentina to regulate Direct Selling (Law 36,541) which establishes the obligation to register companies that market consumer goods or services through Direct Selling systems. The approved regulation focuses on independent resellers as it clearly establishes their rights to prevent abuse. The independent reseller is also given the power to terminate the commercial contract that links him to the Direct Selling company unilaterally and at any time. The new regulations establish that the provincial State may fine and, if necessary, prohibit the operation of companies that do not comply with all the requirements.
  • Are there regulations on Direct selling / network marketing?
  • No specific legislation; general provisions of Venezuelan Civil Code and the Commercial Code apply.
  • Are there limitations or ban on direct marketing?
  • No
  • Is there Direct selling association?
  • Yes - Direct Selling Association of Venezuela–CEVEDIR–Provisional Member
  • Are there requirements for license / permission / registration to take part in direct selling?
    • McKenzie International Agency and Distribution Handbook Latin America
    • There are no specific regulations in the Venezuelan legal framework regarding agency agreements. Neither the Venezuelan Civil Code nor the Commercial Code regulates the specific requirements, nature or purpose of this type of agreement. However, both the Venezuelan Civil Code and the Commercial Code provide for some general rules for mandate and commissionaires, which also apply to an agency agreement. General contractual law principles apply to the terms and conditions that regulate the contractual relationship between an agent and its principal.
    1. A producer of goods or offer or of services (principal).
    2. An agent or promoter who acts independently and has its own organization. The “agent” is the party that is obliged to promote and conclude on a stable and continuous basis the business, products and services of the principal, on the latter’s behalf, without assuming any risks. Exclusive agency agreements may constitute an infringement of antitrust regulations, given that they impose limitations to economic competition between economic entities. If an exclusive agency agreement is executed, it may be declared void by the appropriate court of law.
  • Are there regulations on Direct selling / network marketing?
  • No special regulation – the relevant EU requirements apply.
  • Are there limitations or ban on direct marketing?
  • No, except EU provisions - prohibition of Pyramid promotional schemes.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Consumer protection requirement.From the very first contact with a consumer, the business partner (seller) shall provide information, in line with the legal requirements (European Consumer Right Directive).
    • Right to "money-back guarantee" - The business partner shall inform customer about his right to cancel the purchase and return purchased items. For this, the consumer has 14 days. Consumer has the right to complete refund of payment for the returned item. Business partners should not seek contact with consumers at times and ways which can be considered pushy. Business partners must take the necessary measures to protect contact details and other confidential information that they have received from their (potential) customers. Business partners should not abuse of a consumer's confidence or lack of commercial experience. Businesses and their business partners should refrain from misleading comparisons or matters that create fair competition in the stand away.
    • Their behavior must be in line with the relevant European legislation. Each order should be submitted as soon as possible, however in any case within 30 days after placing the order.
    • If the consumer is in a dispute with both the business partner a mediation process shall be always available to the consumer via a third party (Disputes Committee or code manager).
    • Dutch tax on Multi-level marketing income Recently (2018), the Dutch Court of Appeal Den Bosch, issued a judgment on the tax liability for personal income tax and VAT. This judgment is especially important for participants in Multi-level marketing (MLM).
    • Multi-level marketing (MLM).
    • A member could have two different forms of income within an MLM company: income from selling products their selves and income from commissions. According to Court of Appeal Den Bosch, these two activities are closely connected. Therefore, the two incomes should be assessed as one activity for the Dutch personal income tax.
    • VAT becomes chargeable on commissions when the member regularly receives commissions. Luckily for the MLM company, VAT can be reclaimed upon declaration, which does not make it inconvenient. The member can deduct the VAT on costs and investments, such as a computer, car etc., so that on balance, a benefit can often be obtained in the form of a VAT refund.
    • Right to "money-back guarantee" - The business partner shall inform customer about his right to cancel the purchase and return purchased items. For this, the consumer has 14 days. Consumer has the right to complete refund of payment for the returned item. Business partners should not seek contact with consumers at times and ways which can be considered pushy. Business partners must take the necessary measures to protect contact details and other confidential information that they have received from their (potential) customers. Business partners should not abuse of a consumer's confidence or lack of commercial experience. Businesses and their business partners should refrain from misleading comparisons or matters that create fair competition in the stand away.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific Law but Fair Trading Act is applicable
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Door to Door Selling is covered under the Fair Trading Act which regulates such sales as "Uninvited Direct Sales" and provides for consumer rights of cancellation of up to 5 working days. The DSA Code provides 10 days right of cancellation or 5 working days whichever is the greater.
    • Sales made by other methods by DSA members are still bound by the DSA Code obligations even if the sale is invited and not captured by this provision in the Fair Trading Act. This Act extends to the engaging in conduct outside New Zealand by any person resident or carrying on business in New Zealand to the extent that such conduct relates to the supply of goods or services, or the granting of interests in land, within New Zealand.
    • Sales made by other methods by DSA members are still bound by the DSA Code obligations even if the sale is invited and not captured by this provision in the Fair Trading Act.
    • This Act extends to the engaging in conduct outside New Zealand by any person resident or carrying on business in New Zealand to the extent that such conduct relates to the supply of goods or services, or the granting of interests in land, within New Zealand. The Fair Trading Act regulates the uninvited direct sales agreements where the consumer is contacted directly in his/her home/workplace or via telephone without invitation. The Act arranges disclosure requirements relating to uninvited direct sale agreements. The Act also provides for a cancelation period of 5 working days as of the date of the entering into the agreement by the consumer and arranges the consequences of such cancelation.
  • Is there Direct selling association?
  • Yes
  • Comments
  • The Fair Trading Act extends its application outside New Zealand for conduct of any person resident in New Zealand related to the supply of goods or services.
  • Are there regulations on Direct selling / network marketing?
  • No information available.
  • Are there limitations or ban on direct marketing?
  • No information available.
  • Are there requirements for license / permission / registration to take part in direct selling?
  • No information available.
  • Is there Direct selling association?
  • No information available.
  • Are there regulations on Direct selling / network marketing?
  • No
  • Are there limitations or ban on direct marketing?
  • No - except EU provisions - prohibition of Pyramid promotional schemes.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Direct selling in Finland
    • Direct selling means the selling of products (consumer goods and services) directly to consumers at homes, at workplaces or elsewhere outside fixed business premises so that the product presentation and sales are the responsibility of the direct seller. The company must have official representation in Finland
    • Network marketing is a form of direct selling. A network marketing company markets products and services to end consumers by means of direct selling through a multi-level sales organization. The provisions on door-to-door and distance selling contained in the Consumer Protection Act also apply to direct selling and network marketing.
    • Direct seller is responsible for the costs and losses arising from your own business operations. Under the Consumer Protection Act, direct seller (and not the company that he/she represents) must provide the buyer with a refund for faulty products.
    • If direct seller is a private person with a network marketing business, they must give the required information on their personal tax return. If the direct seller has a company, the taxation depends on the type of their business. In that case, shall ensure that all the necessary payments, such VAT and tax prepayments are made. Even if the direct seller only has a part-time business, they must take out a YEL insurance policy if meet its conditions for annual work income and the duration of the business operations. In practice, a full-time entrepreneur must always take out a YEL insurance policy. They should take out a pension insurance policy if run a network marketing business as a private person and the network does not pay their pension contributions.
    • It is not enough to return the goods, however: the consumer must submit a notice of cancellation using a pre-printed form or by another permanent method.
    • When a door-to-door sales agreement is made, the consumer must receive a copy of the order confirmation on paper or (with the consumer’s consent) in another permanent format.
    • VAT becomes chargeable on commissions when the member regularly receives commissions. Luckily for the MLM company, VAT can be reclaimed upon declaration, which does not make it inconvenient. The member can deduct the VAT on costs and investments, such as a computer, car etc., so that on balance, a benefit can often be obtained in the form of a VAT refund.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Yes
  • Are there limitations or ban on direct marketing?
  • No - except EU provisions - prohibition of Pyramid promotional schemes.
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes
    • Direct Selling Sweden
    • Law on distance contracts and agreements outside business premises.The Law specifies the information to be provided to the customer before entering into agreement for purchasing goods or services, the way the information shall be provided. In the case of distance contracts concluded on a website, the consumer is bound by an order which entails a payment obligation only if the obligation has been made clear before the order and the consumer has explicitly assumed the obligation.
    • The consumer has the right to withdraw from the contract (right of withdrawal) by submitting or sending a notice to the trader within 14 days from the date specified in section 12 (withdrawal period). If the consumer leaves the message on the trader's website, the trader shall without delay confirm receipt of the message in a readable and durable form that is available to the consumer.
    • Network marketing and network organization.The direct seller receives commission based partly on his own sales and partly on the sales that occur with the direct sellers whom they themselves have recruited and trained. This should not be confused with pyramid games, something that the Direct Trade Association strongly distances from.
    • Sweden got a new Marketing law
    • For a company with a network organization, the following applies:
    1. Low or no startup fee (registration fee). The fee should represent fair value.
    2. The prospective member of the network organization must be clearly informed of all costs associated with the membership for, for example, courses, information material etc.
    3. The product or products must be central to the business.
    • The majority of the remuneration must come from the sale of products and not as compensation for the recruitment of other members of the network organization.
    1. Opportunity to sell back quarantined but unsold products if the involvement with the network organization ends.
    2. The customary right of withdrawal applies to a new member of a network organization.
    • VAT becomes chargeable on commissions when the member regularly receives commissions. Luckily for the MLM company, VAT can be reclaimed upon declaration, which does not make it inconvenient. The member can deduct the VAT on costs and investments, such as a computer, car etc., so that on balance, a benefit can often be obtained in the form of a VAT refund.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes
    • Direct selling association in Philippines
    • In Philippines Chain Distribution Plans or Pyramid Sales Schemes in the Sale of Consumer Products are prohibited – in accordance of Article 53 of the Consumer Act of the Philippines. The definition of “chain distribution plan or pyramid scheme” as well as the administrative measures applicable in case of such activity is provided for in Administrative Order N8.
    • “Chain Distribution Plans or Pyramid Sales Scheme” means sales devices whereby a person, upon condition that he makes an investment, is granted by the manufacturer or his representative a right to recruit for profit one or more additional persons who will also be granted such right to recruit upon condition of making similar investments: Provided, that, the profits of the person employing such a plan are derived primarily from the recruitment of other persons into the plan rather than from the sale of consumer products, services and credit
    • Provided further, that limitation on the number of participants does not change the nature of the plan. Other Forms of Chain Distribution Plan/Pyramid Sales Scheme – without limiting the coverage of the term “chain distribution plan or pyramid sales scheme” above, business, sales or marketing plan or scheme is considered as Chain Distribution Plan or Pyramid Sales Scheme if:
    • a) A promoter persuades recruits to purchase products, services, credit, title or rank whereby the recruits can receive income primarily from the mere introduction, recruitment or sponsorship of other participants into the scheme rather than from the marketing and sale of products.
    • b) Where the profits of the person employing such are derived primarily from the recruitment of the other persons into the plan or scheme rather than from the sale of consumer products, services and credit and said plan/scheme includes, but not limited to, one or more of the following attributes.
    • b.1)Revenues or income are derived from participants’ entry fees
    • b.2)In order to earn income, participants must sponsor a fixed number of other participants, each of whom must in turn sponsor a fixed number of participants as in a plan compensating participant balancing number of recruits than number of sales volumes
    • b.3)A participant’s income is dependent primarily upon the participant’s slot or position within the organization as determined by the time, date and order of participation
    • b.4)Participants are not allowed to return marketable and unused products for refund within a reasonable period of time or the conditions for such product return are contrary to the provisions of the Consumer Act and/or its Implementing Rules and Regulation (DAO No. 2, s. of 1993).
    • b.5)there is no fair market value for the goods received (Fair market value is a price determined an open market system. An indicator would be that consumers would still be willing to buy a product at its quoted price even without participating in the compensation plan).
    • There are two Administrative procedures whereby complainants may seek to avail for themselves, to wit
    • R.A. 7394 otherwise known as the Consumer Act provides the procedures whereby a consumer, a natural person, may seek redress.
    • E.O. 913 as amended by M.O. 69 provides the procedures whereby juridical persons and DTI initiated complaint may be adjudicated accordingly.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Yes.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes
    • Direct Selling Association of Indonesia
    • Every company that runs direct sales must be registering direct selling company in Indonesia. This type of direct selling company must have a business license. In accordance with the provisions of article six in the law applicable in Indonesia, the direct sales company must have SIUPL and apply throughout the territory of the Republic of Indonesia. SIUPL validity period for new Companies conducting trading business activities with Direct Selling system is provided for one year. For the next SIUPL validity period of five years and may be renewed each time for the same period, if the performance evaluation result of the Company is considered good. The SIUPL extension is filed within two months before the SIUPL term expires. The Minister has the authority to regulate trading business activities with direct selling system.
    • In addition, the Minister delegate authority to SIUPL to the Director General of Domestic Trade as Acting Publisher SIUPL. Request for registering direct selling company in Indonesia will gain SIUPL submitted to the Officer Publisher SIUPL through the Director of Business Development and Corporate Registration by filling out the Application Form Direct Sales Business License “SIUPL” Model.
    • A. The company that has SIUPL obliged to register the company in list of companies as referred to in Act Number 3 of 1982 concerning Obligation of Company Register.
    • A company running for direct selling industry has to fulfill the following criteria:
    • -Has a permanent office with a clear address.
    • -Sell the product or service through network marketing.
    • -The company should own a distinct, transparent, and logic selling system.
    • -The company must obey the ethical code.
    • -The goods meet the valid standardization.
    • -Provide trusted information to the customer related to the quality.
    • -Has a permanent office with a clear address.
    • -Sell the product or service through network marketing.
    • -The company should own a distinct, transparent, and logic selling system.
    • -The company must obey the ethical code.
    • -The goods meet the valid standardization.
    • -Provide trusted information to the customer related to the quality.
    • There are two types of SIUPL license – provisional SIUPL and permanent SIUPL. In order to qualify for either of the SIUPL licenses, you need to follow the proper steps and get ready the right documents such as:
    • - Business partner compensation plan.
    • - Code of Ethics and other company’s regulation.
    • Businesses with SIUPL are prohibited from performing the following activities:
    • - Offer, promote, and, advertise goods and/or service different to the actual condition.
    • - Offer goods and/or services in manners that may cause physical and psychological interference against the consumer.
    • - Offer goods and/or service by mentioning the standard clause in the agreement that is against the provisions of the legislation regarding the protection of consumers.
    • - Sell and/or market goods whose product label does not display the direct-selling company name Trade with a direct sales system can be carried out by companies in the context of domestic investment or foreign investment in accordance with the laws and regulations in the field of investment. The foreign investment company as referred to in Article 6 paragraph (2) must have an investment capital of at least Rp. 5,000,000,000.00 (five billion rupiah) and use at least 1 (one) Indonesian citizen as a Director and 1 (one) Indonesian citizen as a Commissioner.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Yes.
  • Are there limitations or ban on direct marketing?
  • Yes – Prohibition of pyramid scheme sales- as per art. 23 of Retail Trade Management Act
  • Are there requirements for license / permission / registration to take part in direct selling?
  • Yes
    • In Spain, Direct Selling is regulated by Law 3/2014 , of March 27, which modifies the consolidated text of the General Law for the Defense of Consumers and Users and other complementary laws, approved by the Royal Decree Legislative 1/2007, of November 16, which adapts the consumer regulations to Directive 2011/83 / EU and which entered into force on March 29, 2014.
    • One of the main advantages of this regulation for the Spanish consumer is the right of withdrawal, which must be properly informed. The withdrawal period for distance and off-premises contracts is extended up to fourteen calendar days. If the consumer and user are not informed about this right, this will lead to a withdrawal period of twelve months after the expiry date of the initial period. Law 3/2014 contains detailed provisions on the exercise of the right of withdrawal. For its part, Multilevel Selling, applied by most direct selling companies, is regulated in Spain by Law 7/1996 on Retail Trade Management.
    • 1) Multi-level sales are a special form of retailing in which a manufacturer or wholesale merchant sells its goods or services through a network of independent but networked retailers and/or dealers whose profits are obtained as a margin based on the retail price, allocated via variable percentages of the total turnover generated by all the sellers operating in the commercial network and in proportion to each component’s sales.
    • For the intents and purposes of the provisions of this article, independent retailers and dealers shall be regarded as entrepreneurs for the purposes of the General Act on Consumer and User Protection and supplementary legislation.
    • 2)Marketing products and services under such arrangements is prohibited when:
    • a)It is unfair to consumers further to the provisions of Article 26 of Act 3/1991 of 10 January on Unfair Competition
    • b) suitable guarantees are not in place to ensure that either distributors are hired under due terms of employment or meet the legal requirements to conduct commercial activities
    • c) new distributors are obliged to buy a minimum supply of the products distributed with no agreement for repurchase under the same terms.
    • 3) Under no circumstances may the manufacturer or wholesaler managing the network make access to the network contingent upon payment of a quota or cannon, except for sums equivalent to the cost of a packet including promotional, informative or training materials provided at a price similar to analogous items on the market, which sums may not be in excess of an amount stipulated in the regulations.
    • Where a repurchase agreement is in place, the products must be returnable unless they are in a condition that clearly prevents subsequent sale.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Yes.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • “Direct marketing” means marketing with respect to goods or services which comprises offering information to promote sale of such goods or services, or direct sales of such goods to consumers at far distance, which require response from the consumer for the purchase of goods or services from the direct marketing business operator. Meanwhile, sale-purchase of such goods or services through electronic commerce is not considered as direct marketing and is subject to standards and terms specified in Ministerial Regulations. A direct sales business operator shall be a partnership or a company which has registered as direct sales business operator under the provisions of this Act.
    • A direct sales business operator and independent distributor shall be held jointly liable to consumers with respect to defective goods or services provided by such independent distributor to consumers, or with respect to losses suffered by consumers to performance of such independent distributor, namely, neglecting duties under the provisions of this Act. The direct sales business operator shall submit reports with respect to business operation to the registrar, in accordance with forms, standards and time periods designated and announced by the Board.
    • A direct sales business operator and independent distributor shall be held jointly liable to consumers with respect to defective goods or services provided by such independent distributor to consumers, or with respect to losses suffered by consumers to performance of such independent distributor, namely, neglecting duties under the provisions of this Act. The direct sales business operator shall submit reports with respect to business operation to the registrar, in accordance with forms, standards and time periods designated and announced by the Board.
    • Any partnership, company, or person wishing to carry on a direct sale or direct marketing business shall apply with the registrar, in accordance with standards and methods designated and announced by the Board. A direct sales or direct marketing business operator who wishes to stop carry on such business, shall apply with the registrar.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Yes.
  • Are there limitations or ban on direct marketing?
  • Yes –Ban on participation in MLM scheme or pyramid scheme – except in cases specified in the Ministerial Order
  • Are there requirements for license / permission / registration to take part in direct selling?
    • It shall be unlawful for any person to promote or participate in a multi-level marketing scheme or arrangement or a pyramid selling scheme or arrangement or to hold out that he is promoting or participating in such a scheme or arrangement. No business which is designed to promote a multi-level marketing scheme or arrangement or a pyramid selling scheme or arrangement shall be registered under any written law relating to the registration of businesses.
    • According to the Multilevel Marketing and Pyramid Act (Excluded Schemes and Arrangements) Order 2000 the definition of "Pyramid selling scheme or arrangement" in section 2 of the Act shall be taken not to include any scheme or arrangement, or any class of such schemes or arrangements, which satisfies the following terms and conditions.
    • i) A person shall not be required to provide any benefit or acquire any commodity in order to participate in the scheme or arrangement, other than the purchase of sales demonstration equipment or materials at a price not exceeding their cost which are not for resale and for which no commission, bonus or any other advantage will be given to any person.
    • ii) any benefit received:
    • a) by any promoter of, or participant in, the scheme or arrangement accrues as a result of the sale, lease, license or other distribution of a commodity to any other person.
    • b) By any promoter of the scheme or arrangement accrues as a result of the performance of one or more participants in relation to the sale, lease, license or other distribution of a commodity to any other person; subject to sub-paragraph.
    • iii) No benefit shall be received by any person as a result of the introduction or recruitment of one or more persons to be participants in the scheme or arrangement.
    • The legality of the operation lies in how it is structured, and the key question remains as to whether the participants profit from the sales of the people they recruit, or do they profit from the recruitment of the people. The aim of the Act is to prevent any unsustainable pyramid-selling. The multi-level scheme shall not be considered as illegal if comply with the following
    • - No entry fee.
    • - No recruitment commission.
    • - Maintenance and audit of records.
    • - No fraudulent activities or sales.
    • - Refund/ buy-back guarantee.
    • - Written confirmation of guarantee.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Before the consumer to be bound to any distance contract or contract entered into outside the premises of the merchant, the merchant shall provide the consumer with precise pre-contractual information in clear and understandable manner regarding: the main characteristics of the goods/services; information about the merchant – name, address, telephone number and others; the precise price of the goods/services; conditions for payment and shipment, other information.
    • The consumer has the right to withdraw from the contract from a distance or from the contract outside the commercial premises without giving a reason, without owing compensation or penalty and without paying any expenses, within 14 days. The Law arranges also the consequences of exercising the right of withdrawal by the consumer.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific regulation on direct sales and network marketing, but applicable are provisions of: Law No 173 of 6 April 1966 for the Protection of Agent Importers of Merchandise and Products.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Contractual relations between the parties to any agency agreement in the Dominican Republic are regulated by Law No 173 of 6 April 1966 for the Protection of Agent Importers of Merchandise and Products (Law No 173), if the contracts are registered in the Legal Department of the Central Bank of the Dominican Republic. Law No 173 protects local agents from untimely termination or breach of a contract on the part of their foreign counterparts by providing considerable compensation in these cases. Even when the Agreement contains a clause under which the parties unilaterally reserved the right to terminate the agreement, the Licensor (the Merchant) may neither terminate nor refuse to renew the agreement at the termination date, unless in case of lack of compliance of any of the essential obligations of the Agreement, any action or omission that could adversely affect in a substantial way the interest of the Merchant in the promotion or negotiation of the import, distribution, sale, lease, or any other form of trade of his merchandise, products or services.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No special regulation on direct selling, but rules of the Consumer protection law shall apply
  • Are there requirements for license / permission / registration to take part in direct selling?
    • The Law on Consumer Protection identifies abuse of product demonstrations as an invasive commercial practice. This law prohibits such demonstrations if they become invasive. The following demonstrator’s behavior and its outcomes are considered to be invasive.
    • • The consumer feels that he/she cannot leave the premises without buying something that was offered.
    • • The seller comes to the consumer’s home without the consumer’s previous consent.
    • • The seller repeatedly contacts the consumer (by phone, fax, or email).
    • • The seller tells the consumer that the job or existence of the seller are endangered if the consumer doesn’t buy what was offered.
    • The Inspection office within the Ministry of Foreign and Domestic Trade and Telecommunications is responsible for overseeing compliance.
    • The Law on Consumer Protection provides for the information to be provided to the consumer when the contract is agreed outside the Merchant’s premises.
    • The Consumer has the right to withdraw from the distance contract, entered into outside the premises within 14 days without giving reasons and without additional costs, except for the costs referred to in Art. 34 and 35 of this Law. The consumer has the right to cancel the contract by a statement that he can give on a special form for the waiver of a distance contract, outside the premises or in any other unambiguous manner.
    • The Law envisages formal conditions for the conclusion of a distance contract. The merchant is obliged, within 30 days from the date of conclusion of the distance contract and the contract concluded outside the business premises, to perform the service or delivery of goods, unless otherwise agreed.
  • Is there Direct selling association?
  • No information available.
  • Are there regulations on Direct selling / network marketing?
  • No specific law on direct sales but provisions of the Consumer protection law Apply (as well as Protection of Agents of Foreign Companies Act).
  • Are there requirements for license / permission / registration to take part in direct selling?
    • In Costa Rica, Agency and Distribution agreements are regulated in the Commercial Code of Costa Rica, in the Law for Protection of Foreign Company Representatives, Law No. 6209 (Law for Protection of Foreign Company Representatives, Law 6209 of the 3rd of April 1978; amended by Law No. 8629 of November 30, 2007). After entering into the DR - CAFTA, Dominican Republic-Central America Free Trade Agreement, many important changes were introduced in the Law for Protection of Foreign Company Representatives, Law No. 6209, because the law was considered as an INVESTMENT BARRIER, mainly due to.
    • • An exclusivity that was assumed, even without an agreement.
    • • Representation for an indefinite period of time.
    • • A mandatory formula to calculate the indemnity compensation that any foreign company was 3required to pay when terminating a relationship with a Costa Rican company.
    • • The obligation to resolve any dispute under the Costa Rican laws and jurisdiction, amongst other minor issues.
    • With DR - CAFTA, Costa Rica acquired the obligation to create a new regime. For this reason, Law No. 8629 of the 30th of November of 2007 was enacted to include major changes into said Law No. 6209. At the present time, foreign firms have the freedom to set forth the terms and conditions of their commercial relations, terminate the contracts with or without cause, following the terms of the contract pay the damages caused as a direct consequence of any transgression committed, in accordance with the principles of equity and reasonable appreciation, to be proved based on the Civil Code provisions; whereas, previously, they were set by an unmovable formula. In the absence of a specific agreement on dispute resolution, the law establishes arbitration as the dispute resolution mechanism.
    • COSTA RICA law
    • The e-commerce regulation was enacted as a new chapter to the Regulations of the Consumer Protection Law, entitled "Consumer Protection in the Context of Electronic Commerce".The main areas affected by this reform are:
    • -Advertising: The Regulation requires to clearly identify advertising materials, and the identity of advertisers. This affects all direct or indirect commercial communications, including "influencer marketing". Also, all websites, apps, and electronic means of communications must include certain mandatory information about the advertiser, as well as the transactions that may take place electronically. Reviews and complaints: All electronic media advertising a product and/or business must include the possibility to post and publish consumer evaluations and/or reviews of their products, and it is forbidden to delete negative feedback or scores.
    • Also, all commercial electronic media must have a process to receive complaints. This process must be free of cost and accessible by the same means used to carry out the sales. Online sales: Unless otherwise informed, products sold online must be delivered within 24 hours after the purchase is made.
    • Opt-in obligations: In addition, all consumer obligations and expression of consent must be express. It is not permissible to have pre-selected boxes, or to have purchases without having prior access to all the necessary and mandatory information for the purchase. In addition, once the sale is made, it is mandatory to send the consumer a receipt of the transaction made.
    • Personal information: Prior consent is required to be able to send commercial information to consumers by electronic means.
    • Likewise, all personal information must be treated confidentially and in full adherence to the provisions of the Data Protection Law and the General Telecommunications Law. Even though these are previously existing regulations, the novelty of this provision is that it appoints the Consumer Protection Agency as an additional enforcement body.
    • Security: Businesses have the obligation to carry out the transactions and payments in a secure electronic environment and use a certifying entity to validate their processes and technology. This must be informed to consumers prior to the payment of their purchases. Penalties: In case of any breach, the penalties could be up to approximately US$ 40,000.00.
    • Penalties
    • Is there Direct selling association?
    • Yes
    • Association for direct selling companies
  • Are there regulations on Direct selling / network marketing?
  • No specific legislation on direct selling, Article 392 to 399-B of the Salvadoran Code of Commerce (hereinafter called “SCC”) provides the legal framework applicable to agency and distribution agreements in El Salvador. Relevant are provisions of the Consumer protection act, as well as the new E-commerce law.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • EL SALVADOR
    • Under Art. 392 of the SCC, agents and distributors are defined as natural or legal persons that, with or without legal representation and through a contract, have continuously been appointed by a principal to represent or distribute its products or services in the country. As provided by Art. 392 of the SCC, an agent or distributor may be either an individual or a corporate entity. It is important to mention that Salvadoran regulation provides strong protection of the local party. Art. 397 of the SCC provides that written notice is required for the termination of the agreement.
    • In addition, Art. 398 of the SCC provides the only justifiable reasons for a principal to terminate, modify or refuse to extend the term of an agency or distribution agreement. On the other hand, Art. 399 of the SCC provides that the only fair reasons for an agent or distributor to terminate an agency or distribution agreement is when the principal unilaterally modifies the contract in a way that damages the rights or interests of the agent or distributor.
    • Art. 397 of the SCC provides that a three-month prior written notice is required.
    • Consumer protection act
    • Provides the consumer with the right of withdrawal from the contract. The consumer has the power to leave the contract without effect unilaterally without need to justify his/her decision and without any penalty within 8 days, provided that the good is not used and the service has not started to be provided. This rule applies for contracts concluded without physical presence of the parties, including in case of using electronic means of communication
    • New e-commerce law
    • Any person, established in El Salvador, that performs by itself or through intermediaries, commercial transactions using any kind of technology or through interconnected communication networks, must comply with all the obligations imposed by that law.
    • With DR - CAFTA, Costa Rica acquired the obligation to create a new regime. For this reason, Law No. 8629 of the 30th of November of 2007 was enacted to include major changes into said Law No. 6209. At the present time, foreign firms have the freedom to set forth the terms and conditions of their commercial relations, terminate the contracts with or without cause, following the terms of the contract pay the damages caused as a direct consequence of any transgression committed, in accordance with the principles of equity and reasonable appreciation, to be proved based on the Civil Code provisions; whereas, previously, they were set by an unmovable formula. In the absence of a specific agreement on dispute resolution, the law establishes arbitration as the dispute resolution mechanism.
  • Is there Direct selling association?
  • No information available.
  • Are there regulations on Direct selling / network marketing?
  • No specific law on direct selling - General contractual law apply.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • EL SALVADOR
    • Under Art. 392 of the SCC, agents and distributors are defined as natural or legal persons that, with or without legal representation and through a contract, have continuously been appointed by a principal to represent or distribute its products or services in the country. As provided by Art. 392 of the SCC, an agent or distributor may be either an individual or a corporate entity. It is important to mention that Salvadoran regulation provides strong protection of the local party. Art. 397 of the SCC provides that written notice is required for the termination of the agreement.
    • In addition, Art. 398 of the SCC provides the only justifiable reasons for a principal to terminate, modify or refuse to extend the term of an agency or distribution agreement. On the other hand, Art. 399 of the SCC provides that the only fair reasons for an agent or distributor to terminate an agency or distribution agreement is when the principal unilaterally modifies the contract in a way that damages the rights or interests of the agent or distributor.
    • Art. 397 of the SCC provides that a three-month prior written notice is required.
    • Consumer protection act
    • Provides the consumer with the right of withdrawal from the contract. The consumer has the power to leave the contract without effect unilaterally without need to justify his/her decision and without any penalty within 8 days, provided that the good is not used and the service has not started to be provided. This rule applies for contracts concluded without physical presence of the parties, including in case of using electronic means of communication
    • New e-commerce law
    • Any person, established in El Salvador, that performs by itself or through intermediaries, commercial transactions using any kind of technology or through interconnected communication networks, must comply with all the obligations imposed by that law.
    • With DR - CAFTA, Costa Rica acquired the obligation to create a new regime. For this reason, Law No. 8629 of the 30th of November of 2007 was enacted to include major changes into said Law No. 6209. At the present time, foreign firms have the freedom to set forth the terms and conditions of their commercial relations, terminate the contracts with or without cause, following the terms of the contract pay the damages caused as a direct consequence of any transgression committed, in accordance with the principles of equity and reasonable appreciation, to be proved based on the Civil Code provisions; whereas, previously, they were set by an unmovable formula. In the absence of a specific agreement on dispute resolution, the law establishes arbitration as the dispute resolution mechanism.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Representation, distribution and agency agreements are governed by Decree No. 549, Law on Representatives, Distributors and Agents of Domestic and Foreign Companies, dated December 7, 1977 (“the Dealers Law”) and its Regulation, Accord No. 669-79, Representation, Distribution and Agency of Domestic and Foreign Companies Regulation, – (“Dealers Law Regulation”). The Honduran Commercial Code may also apply.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • HONDURAS
    • The Dealers Law and its Regulation are both specifically designed for the protection of Honduran representatives, distributors or agents (“Dealers”). It prohibits termination for convenience and contains provisions on compensation/indemnification to local Dealers for wrongful termination. According to the terms of the Dealers Law, representation, distribution or agency activities in Honduras are deemed a public interest activity, and thus, the Dealers Law is considered a Honduran law of public interest.
    • Pursuant to Honduran Civil Code and general principles of law, the rights granted to the protected party by a law of public interest may not be impaired, lessened or waived by agreement of the parties, except where expressly provided so by the same law. Pursuant to Article 4 of the Dealers Law, only Honduran nationals (whether individuals or entities) may act as Dealers in Honduras. According to this legal provision, a Honduran entity is deemed to be an entity whose capital is comprised of no less than 51 percent of Honduran investments.
    • Pursuant to Article 12 of the Dealers Law Regulation, for a local Dealer to further claim the protection of the Dealers Law and Regulation, the local Dealer must file for registration before the relevant local government agency. In order to register a foreign principal’s contractual relation with a Dealer, either party to the agreement (normally, the local Dealer) may file a petition before the Economic Development Secretariat, requesting such registration. Once the Economic Development Secretariat determines the registration should be granted, it issues a decision granting the registration. The applicant must publish the certification or extract of such resolution in a newspaper in order to obtain its license.
    • The registration and license issued are both recorded in the Economic Development Secretariat Dealers Registry Log. The lack of registration does not affect or impair the validity or enforceability of an existing agreement. In these cases, general contract law will be applicable to the agreement (instead of the Dealers Law or the CAFTA-DR legal framework). Pursuant to the Dealers Law, the agreement may be terminated with mutual consent. Dealer relationships cannot be terminated at will or for convenience by one party, as the Dealers Law provides that the principal cannot unilaterally terminate, modify or refuse to renew an existing contract, without just cause, unless the principal makes indemnification payments to the local Dealer.
    • The statute of limitations by which a claim must be filed by the Dealer for recovery under the Dealer Law is three years. For pre-CAFTA Dealer relationships, Honduran Law is not clear on the possibility of abiding with foreign law. However, due to the fact that the Dealers Law is construed as a law of public interest, an award or judgment based on foreign law would not likely be recognized by local courts. Pursuant to this amendment, all disputes arising from a representation, distribution or agency agreement or commercial relationship must be resolved through arbitration following a mandatory conciliation process.
    • The parties may appoint foreign arbitrators, as long as such arbitrators demonstrate recognized credibility and experience that can be accredited at the appropriate Arbitration Centre. In case Honduran Legislation is required to be interpreted, at least one of the arbitrators must be Honduran.
  • Is there Direct selling association?
  • Yes - Asociación Hondureña De Empresas De Venta Directa No website available.
  • Are there regulations on Direct selling / network marketing?
  • No specific legislation on direct selling and network marketing – applicable are Commerce code
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Bolivia Guide to Doing Business
    • The Bolivian Commerce Code regulates agency and distribution agreements. Bolivian law does not distinguish between agents and distributors. Agents and distributors are independent persons or entities that promote or exploit businesses in a specific area within the country, as intermediaries of another entity, local or foreign.
    • Agency and distribution agreements must be registered before the Commerce Registry and must be governed by Bolivian law. Notarization of the agency or distribution agreement is also required.
    • Law 453 (the General Law) on the rights of users and consumers, dated December 4, 2013, regulates and determines user and consumer rights, the competent authority to resolve consumer conflicts, and the proceedings pursuant to consumer or user complaints.
    • The General Law is enforceable in the entire Bolivian territory and is applicable to every natural, corporate, private, and public person or entity that performs commercial, importation, and industrial activities destined to consumers and users in Bolivian territory. Any natural or corporate person who acquires or uses services, products, or goods, movable or non-movable, in the condition of final recipient is considered a user or consumer.
    • The following are some of the most important rights granted by the General Law to users and consumers:
    • • To have access to truthful, reliable, and timely information regarding price, conditions, and characteristics about the offered products and services.
    • • To obtain instruction regarding optimal and responsible use of the product and/or service.
    • • To receive and/or acquire the products and/or services in the conditions, deadlines, form, and any other circumstances in which the product and/or service has been offered, agreed upon, or advertised.
    • • To return a product and obtain its reparation, or the restitution of the infringed right, in a timely fashion.
    • On August 8, 2011, Law 164 (the Telecommunications Law) was enacted and serves the purpose of establishing the new regimen on telecommunications, information technology, communications, postal services, and its regulation system.
    • With regard to e-commerce, the offer and demand of goods through digital mediums must be handled in a secure technical environment and in compliance with the Commerce Code.
    • Electronic contracts or commercial transactions entered through digital documents are enforceable between the parties and in accordance to the provisions of the Telecommunications Law.
    • The legal valuation of a digital document that lacks a digital signature is admissible as evidence or circumstantial evidence. Finally, concerning e-mail, a difference is made between a personal e-mail and a work-related e-mail. Personal e-mails have the same legal treatment as regular post mail regarding privacy issues pursuant to the constitution. Privacy protection includes its creation, delivery, reception, and archive.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific legislation but the rules of Consumer protection act, Civil code and Commercial code shall apply.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • CHILE
    • Agency and distribution agreements are not expressly regulated in the Chilean Civil Code or Commercial Codes, but both codes include general provisions that apply to these kinds of agreement. There is no obligation to register the agency agreements before public authorities. However, the parties should register the agreement with the corresponding company or taxation authorities to legally perform their commercial activities in Chile. According to Chilean law, if parties do not establish any particular time period for payment, the payment of invoices related to services must be made prior to providing the service. Chilean law does not expressly regulate distribution agreements.
    • Chile does not have specific distributors’ protection laws. Accordingly, these agreements are regulated by the general rules contained in the Chilean Civil Code, the Chilean Commercial Code and the local commercial practice.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific law but provisions of the Consumer protection law, Commercial Code apply.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Consumer protection act
    • Art. 28 - Joint Responsibility - Producers, manufacturers, importers, distributors, merchants, who has put its mark on the thing or service and, in general, all those whose participation has influenced damage will be jointly responsible for civil compensation derived from damage caused by defect or defect in the property or services provided.
    • Art. 45 - Right of Return.- The consumer who purchases goods or services by phone, catalog, television, internet or at home will enjoy the right of return, which must be exercised within three days after receipt of the good or service, as long as its nature and the state of the good be the same in which it was received. In the case of services, the right of return will be exercised through the immediate cessation of the contract for the provision of the Service.
    • New Commercial Code
    • On the distribution contract: It mentions that the distributor “assumes the risk and venture of such operations” and, generally, makes a difference between agency and distribution based on the economic individuality theory. Besides, the Commercial Code orders that distribution contracts must be executed in writing and that the form of payment must be mentioned. In indefinite term distribution contracts it establishes a 90-day notice of termination obligation, except in the case of serious or repeated breach of contract (this provision opposes the 30-day notice in the Organic Law on Market Power Regulation and Control (LORCPM). It is particularly striking that the Code orders that distribution contracts must mention “the economic advantages for the distributor”.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Yes - Law 194/93 governs the relationship between foreign companies and local representatives, agents and distributors.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • McKenzie International Agency and Distribution Hand
    • A) Representation is the authority granted by contract to Dealer to negotiate and carry out commercial transactions for promotion, sale or distribution of products or services provided by Principal. Agency is contractual relationship whereby Principal grants Dealer authority to act as intermediary in negotiations or contracts with clients for the promotion, sale or distribution of products and services, contemplating payment of commission. Distributorship is contractual relationship between Principal and Dealer for purchase or consignment of products, with objective of reselling same.
    • B)Application of Paraguayan Law Parties may freely regulate their rights by contracts governed by the Paraguayan Civil Code, but waiver of rights recognized by Law 194/93 is not allowed.
    • C)Termination without Cause Principal may cancel, revoke, amend or refuse to renew the Representation, Agency or Distributorship, without statement of cause, but with obligation in such case to pay Dealer a minimum compensation pursuant to following criteria: a) duration of relationship; b) average gross benefits derived from relationship during last three years of activity.
    • D)Termination with Cause Representation, Agency or Distributor relationship may be cancelled, revoked, amended or not renewed for just cause, without obligation to pay compensation for following reasons.
    • a) noncompliance of contract clauses
    • b) fraud or breach of trust on part of Dealer.
    • c) Inability or negligence of Dealer in sale of products or services.
    • d) Continued reduction of sales or distribution of products or services for reasons attributable to Dealer; except if caused by quotas or restrictions on imports and sales, fortuitous events or force majeure.
    • e) Any act attributable to Dealer that affects or prejudices marketing, sale, or distribution of products or services.
    • f) conflict of interest due to the representation, agency or distribution of products or services that may be in competition with the products or services contemplated by relationship.
    • Prior to termination, Principal shall require Dealer to cure the cause invoked within a term of 120 days. Noncompliance by Dealer allows Principal to exercise its rights immediately.
    • Curing period not required if termination is related to fraud or breach. Stated causes shall be proved before Paraguayan courts or by arbitration if thus agreed; otherwise, cancellation, revocation, amendment or refusal to renew shall be deemed to be unjustified.
    • E) Purchase of Inventory At termination, Dealer, regardless of compensation that may correspond, has option to sell to Principal its inventory at market price
    • F) Jurisdiction Parties shall submit to the territorial jurisdiction of the courts of Paraguay or to arbitration. Parties may compromise in all patrimonial matters or submit to arbitration before or after suit is filed, provided that no judgment shall have been issued.
    • G) Evidence of Relationship From the date of enactment of the Law, the documents and contracts shall be recorded in the Public Registry of Commerce.
    • Dealer who invokes relationship by virtue of acts occurred or documents granted prior to the enactment of the Law, may use all types of evidence established in laws, and particularly any of following:
    • a) Letters of authorization from Principal to act as Dealer for promotion, sale or distribution of products and services.
    • b) Purchase invoices evidencing those commercial operations that have been carried out on the basis of authorization, at least during two years prior to the enactment of Law.
    • c) Payment of commissions to Dealer by Principal for commercial operations carried out for at least two years prior to the enactment of Law.
    • d) Advertising by Dealer incurred at his own account and expense indicating representation, agency or distributorship of goods and services in knowledge of but without opposition of Principal.
    • e) Payment or credit of commissions or compensation to Dealer by Principal for operations not carried out in their territory.
    • A modification of the Law 194/93 has been enacted. The reason to modify Law 194/93 according to the legislators is: “….Although this law had the intention to seek a legal shield of the contractual relationship that could generate between the affected individuals, in practice the proliferation of unfair terms inserted in contracts, or conditions which imposed unfavorable and extorsive conditions to continue with the relationship and accepted by the representatives, agents or distributors to prevent others from benefiting from the years of work invested in the placement of products within our market..”
    • The draft legislation aims to provide more elements of protection for Paraguayan representatives, agents or distributors, not acknowledging that many judicial actions have been initiated under Law 194/93, and serious precautionary measures were issued by Judges.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific law
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • In Peru, commercial advertising of goods and services is also ruled by the Repression of Unfair Competition Law, Legislative Decree No. 1044 and Law 29571 which regulates the protection of consumers. It is intended to protect customers from asymmetrical information before the advertisement.
    • The provisions of the Unfair Competition law shall apply to any act of unfair competition which produces or may produce effects on all or part of the national territory, even where said act has originated abroad. Acts of unfair competition, whatever form they adopt and whatever the means used to carry them out, including advertising activity, shall be prohibited and sanctioned, irrespective of the sector of economic activity in which they arise.
    • There are no specific regulations regulating distribution agreements and parties are free to agree any terms and conditions.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific legislation on direct selling and network marketing. General provisions of Code of Commerce and consumer protection regulations apply
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Consumer protection law
    • Currently, there is no legislation to explicitly protect agents’ rights in Uruguay. “Commercial agent” is defined as an individual, company or partnership ‘assuming the duty to promote or conclude, on behalf of another person or entity, a transaction or agreement regarding orders for the sale of goods or services’. The agency agreement may include a clause providing for a termination indemnity. However, in principle, in the absence of such an express provision, the agent is entitled to such an indemnity only in lieu of reasonable advanced notice.
    • Uruguayan law will apply even if the agency agreement provides for the law of another country to govern the contract. However, as a Hague Convention signatory, Uruguayan law permits the courts of another country to have jurisdiction over the agency agreement.
    • Baker McKenzie International Agency and Distribution Handbook Latin America
    • Act No. 16,497 establishes the obligation of every representative of a foreign firm to register with the National Register of Foreign Firms Representatives (to be kept by the Ministry of Economy and Finance). The act does not govern any substantive matter regarding agency agreements, but only deals with some administrative aspects. Although filing with the above registry has no impact on the substance of agency agreements, an agent may be required to show evidence of such filing as a practical matter.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific regulation on direct selling and network marketing, but Agency law Decree-Law 178/86 and Consumer protection law shall apply.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Consumer protection law
    • Agency agreements are regulated by Decree-Law 178/86, of 3 July, last amended by the Decree-Law 118/93, of 13 April, which transposed Directive 86/653/EEC on self-employed commercial agents (Self-employed Agents Directive). Agency is the contract by which one of the parties undertakes to promote, on behalf of the other, the conclusion of contracts in a certain area or a certain circle of customers, in an autonomous and stable manner and by means of remuneration. The Decree-Law 178/86 arranges the rights and obligations of the principal and the agent, such as right to receive commissions for the agent’s activity, obligation of the agent to provide complete and precise information about the goods and services promoted and others
    • Under this Law the agent is obliged to inform the interested parties about the powers he has, namely through signs posted at his workplaces and in all documents in which he identifies himself as an agent of others, and must always state whether or not he has representative powers and whether or not he can or do not collect credits.
    • Contracts regulated by this diploma that are developed exclusively or predominantly in national territory will only apply legislation other than Portuguese, with regard to the termination regime, if it proves to be more advantageous for the agent.
    • Consumer protection rights
    • Consumer protection rights are regulated by Decree-Law No. 24/2014. This decree-law transposes Directive No. 2011/83 / EU into the national legal order, establishing, from the start, a set of rules applicable to contracts concluded at a distance and contracts concluded outside of the establishment.
    • It provides requirements regarding the availability of pre-contractual information and the conclusion of the distance contract and the contract concluded outside the commercial establishment. The law introduces obligation for the supplier of goods or service provider to indicate, on its website where it is dedicated to electronic commerce, the possible application of restrictions on delivery, as well as the accepted means of payment. The right of free withdrawal - a right also harmonized in the Directive - is regulated in the same way in contracts concluded at a distance and in contracts concluded outside the commercial establishment, the period for the respective exercise being 14 days in a row. The supplier of goods or service provider must provide the consumer with a free resolution form, the model of which is found in the Annex to this Decree-Law
    • On websites dedicated to electronic commerce, it is mandatory to indicate, clearly and legibly, at the latest at the beginning of the ordering process, the possible existence of geographic or other restrictions on delivery and accepted payment methods.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No, but provisions of the Consumer code shall apply.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Regarding consumer protection with regard to home sales, the regulations are now codified in articles L.221-1 et seq.
    • A person engaged in direct selling in France must comply with regulations and ethics specific to the industry. These regulations mainly concern two areas: your status and conditions of customer relationships. It is responsibility of the Presenter to respect the rules associated with direct selling.
    • In initiating their business, Presenters have the choice between two social statuses: The Independent Home Vendor (Le Vendeur à Domicile Indépendant, VDI) or The Commercial Company (L’Entreprise Commerciale, RCS). An Independent Home Vendor (Le Vendeur à Domicile Indépendant, VDI) is an independent contractor who is not registered in the Commercial Register or the Commercial Agents Register.
    • The status of Independent Home Vendor (Le Vendeur à Domicile Indépendant, VDI), which was created specifically for direct selling, is defined in the articles 135 -1, L 135-2, and L 135-3 of the Commercial Code, and Article L 311-3 20 ° of the Social Security Code.
    • The VDI contract is a commercial contract between the individual engaged in direct selling and the company, which distributes its products in the market. The VDI is not an employee of the company, the contract is not an employment contract, there is no employer-employee relationship, and the VDI is free to exercise its activity at the pace and with the schedules that are most suitable to her. The VDI sets his/her own objectives. However, the Presenter must adhere to the rules of direct selling and the Presenter’s agreement. A VDI is registered with the General Social Security Regime (Article L 311-2 20 ° of the Social Security Code). The General Regime is the scheme for employees but in rare cases some self-employed professions included in this Regime.
    • Other legal requirements are required of those selecting VDI: compensation “occupational accident” insurance, health insurance equating to 120 hours during a quarter, and family allowances depending on the amount of the VDI earnings.
    • An individual who chooses RCS must register in the Register of Trade and Companies (RCS). One of two conditions typically will apply. a) The individual may already be registered with the RCS before signing her contract with the company and, in this case, shall address to the Business Formality Center (CFE) of his/her department an application to amend his/her license to include new direct sales business. He/She will submit to the company, in the month following the signing of the contract, a copy of amended registration document, called KBIS. b) The individual may be a VDI and have developed direct sales business to become a regular professional.
    • This individual’s earnings will have exceeded 50% of the social security ceiling (19,020 € in 2015) for three consecutive calendar years.
    • It provides requirements regarding the availability of pre-contractual information and the conclusion of the distance contract and the contract concluded outside the commercial establishment. The law introduces obligation for the supplier of goods or service provider to indicate, on its website where it is dedicated to electronic commerce, the possible application of restrictions on delivery, as well as the accepted means of payment. The right of free withdrawal - a right also harmonized in the Directive - is regulated in the same way in contracts concluded at a distance and in contracts concluded outside the commercial establishment, the period for the respective exercise being 14 days in a row. The supplier of goods or service provider must provide the consumer with a free resolution form, the model of which is found in the Annex to this Decree-Law.
    • On websites dedicated to electronic commerce, it is mandatory to indicate, clearly and legibly, at the latest at the beginning of the ordering process, the possible existence of geographic or other restrictions on delivery and accepted payment methods.
    • He/She can no longer benefit from the VDI status and must register as an individual to the Register of Commerce and Companies (RCS) with the Centre for Business Formalities (CFE) in her department (www.servicepublic.fr/professionnels-entreprises). He/She will receive four KBIS documents and will forward a copy to the company. c) For the individual to more quickly develop his/her direct sales business and to take a further step in the organization of network, the individual must be registered in advance with the RCS. In social terms, an individual registered with the RCS is registered, at the same time, by the CFE to the Régime de Sécurité Sociale des Indépendants (RSI) and therefore is responsible for paying her own social contributions.
    • Consumer protection law
    • French Consumer Code and must be observed at the same time by the business and by the seller.
    • The company is in fact civilly liable for sellers, even independent sellers, who act on their behalf.
    • Articles L. 221-1 et seq. Of the Consumer Code define canvassing and the conditions under which it must be carried out under the sales terminology "Off-premises" commercial.
    • The legal system has three main components of measures:
    • - The establishment of conforming documents.
    • - A ban on taking a payment for a period of 7 days.
    • - A right of withdrawal of 14 days.
    • - Article L.221-18 of the Consumer Code grants the consumer a period of 14 days, which begins to run from the day after the day.
    • - the conclusion of the contract for service contracts.
    • - the receipt of the goods by the consumer, or a third party designated by the consumer for contracts for the sale of goods and contracts for the provision of services including the delivery of goods.
    • - A ban on taking a payment for a period of 7 days.
    • -A right of withdrawal of 14 days.
    • Article L.221-18 of the Consumer Code grants the consumer a period of 14 days, which begins to run from the day after the day:
    • -the conclusion of the contract for service contracts
    • -the receipt of the goods by the consumer, or a third party designated by the consumer for contracts for the sale of goods and contracts for the provision of services including the delivery of goods
    • According to article L.221-20 of the Consumer Code , if the information on the right of withdrawal available to the consumer has not been provided to him in legal forms, the withdrawal period is extended by 12 months from the expiration of the initial withdrawal period.
    • However, if the professional finally provides this information to the customer during the 12 months, it is on the date on which the information was provided that becomes the starting point of the withdrawal period. As an exception to this principle, the law has provided for certain exceptions in which the customer does not benefit from the right of withdrawal. Article L.221-28 of the Consumer Code states that the right of withdrawal cannot be exercised in particular for contracts: - - the supply of digital content not supplied on a material medium, the execution of which has started after the express prior agreement of the consumer and express waiver of his right of withdrawal.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific regulation on direct selling, but applicable are:
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Under Legislative Decree No. 145/2007
    • Under Legislative Decree No. 145/2007 Implementing Section 14 of Directive 2005/29/EC amending Directive 84/450/EEC on misleading advertising (Decree 145/2007), advertising is any form of message diffused in the exercise of an economic activity with the aim of promoting the sale or transfer of movable or immovable goods, or the provision of works and services.
    • Decree 145/2007 applies to public dissemination by any means, including traditional means of dissemination, such as television, newspapers and magazines, billboards, direct marketing (communication via post, telephone and door-to-door offers), radio, cinema and product packaging. It also applies to new advertising vehicles, such as the internet and social networks. This Decree arranges the conditions under which comparative advertising is permissible – such as to compare goods or services meeting the same needs or intended for the same purpose; to objectively compare one or more material, relevant, verifiable and representative features of those goods and services; to it relate in each case to products with the same designation and others
    • Decree No. 145/2007
    • Under section 1742 of the Italian Civil Code, an agent is someone who "permanently assumes the task of promoting, on behalf of the other, for a consideration, the conclusion of certain agreements in a specific determined area". The Italian Civil Code provides for a specific regulation relating to the agency agreements (sections 1742 to 1753).
    • Consumer protection rules:
    • Decree no. 21 dated 21 February 2014 (the “Decree”) implementing the Directive 2011/83/UE of 25 October 2011 (the “Directive”) and entered into force as of 13 June 2014 constitutes the last step of the Italian legislative process towards the strengthening the consumers’ protection applicable framework.
    • Other legal requirements are required of those selecting VDI: compensation “occupational accident” insurance, health insurance equating to 120 hours during a quarter, and family allowances depending on the amount of the VDI earnings.
    • (i) In terms of obligations upon companies concluding contracts with consumers, the Decree deals with consumer information and right of withdrawal for distance and off-premises contracts. This further clarifies the additional rights of consumers which are identified on the basis of the ICA’s enforcement practice related to unfair extension of the content of the information that the trader shall provide to the consumer in the pre-contractual phase.
      (ii) the provision of formal requirements.
      (iii) the provision of a strengthened right of withdrawal. Obligations for pre-contractual information to be supplied to the customer in a clear and transparent manner are more specific now than in the past. For example, in relation to distance contracts concluded by electronic means, there is now a specific formal requirement that the consumer be informed that, by activating a button or a link, that he is then obliged to pay. Further, regarding contracts concluded by telephone, the trader must confirm the proposal and give acceptance in writing.
    • One of the most relevant changes to the previous regime appears to be that the right to withdraw from a contract is now extended in favor of the consumer to 14 working days instead of 10 working days, as previously provided. The written form is no longer required, and it is sufficient for the consumer to use any type of unequivocal statement. Regarding additional or extra payments, consumer express consent is always required so that traders are obliged to apply an opt-in mechanism rather than the opt-out procedure frequently used in the sale of goods and services. In terms of time for delivery a deadline of 30 days from the date of the contract is to be met by traders. The risk of loss or damages to the goods is shifted to the consumer only at the moment when he actually receives the goods. It is clearly of the utmost importance for any company doing business in Italy and concluding contracts with Italian customers to carry out a full review of their contracts and terms and conditions in order to comply with the new consumer protection framework introduced by the Decree.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Specified Commercial Transactions Act is applicable
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • "Door-to-door sales" refers to products that a seller or service provider contracts at a place other than a sales office (for example, a consumer's home), sales of specific rights, or provision of services. Before conducting solicitation, the business operator must inform the consumer of the following prior to solicitation:
    • - Business operator's name.
    • - The purpose of soliciting the conclusion of a contract.
    • - Types of products (rights, services) to be sold.
    • When making a door-to-door sale, businesses must endeavor to confirm that they are willing to receive solicitation from consumers prior to solicitation.
    • When a consumer indicates that he / she is not willing to conclude a contract, it is prohibited to continue solicitation at the time of the visit and to solicit again thereafter.
    • When a business operator receives an application for a contract or enters into a contract, the business operator must give the consumer a document stating the following items:
    • - Types of products (rights, services).
      - Sales price (consideration of service).
      - Payment timing, consideration method.
      - Product delivery time (transfer of rights, provision of services).
      - Matters concerning withdrawal of contract application (cancellation of contract) (including partial exclusion where cooling off is not possible).
      - Business operator's name (name), address, telephone number, and in the case of a corporation, the name of the representative.
      - Name of person in charge of contract application or conclusion.
      - Date of contract application or conclusion.
      - Product name, product trademark or manufacturer name.
      - Product type.
      - Quantity of goods.
      - If there is a hidden defect (a defect that cannot be seen at first glance) in the product, if there is a stipulation about the responsibility of the seller, the contents.
      - If there is a provision regarding cancellation of the contract, its content.
      -If there are other special contracts, their contents.
      The Specified Commercial Transactions Law prohibits the following unfair acts in door-to-door sales:
      - Telling the facts when soliciting to influence to conclude a sales contract, or to prevent withdrawal of contract application (cancellation of contract).
      - When soliciting the conclusion of a sales contract, etc., do not knowingly tell the facts.
      - Embarrassing the other party in order to conclude a sales contract or prevent withdrawal of contract application (cancellation of contract).
      - To solicit the conclusion of a sales contract, etc., at a place other than the place where the public goes in and out, to consumers who have attracted by a solicitation method that does not tell the purpose of solicitation (a method similar to so-called catch sales or appointment sales).
    • Withdrawal of contract application or cancellation of contract (cooling off system) (Article 9 of the Act)
    • Even if the consumer applies for a contract or concludes a contract during the door-to-door sales, the consumer will ask the business person within eight (8) days (20 days for Multilevel Marketing Transactions and Business Opportunity Sales Transactions) from the date when the document specified by law is received. The consumer can withdraw his/her application or cancel the contract (cooling off) in writing.
    • If the business operator misunderstands or is confused by the fact that the business person is not aware of the facts about the cooling-off or is improper, and the cooling is off, the above period will expire. However, the consumer can still turn off the cooling (it is recommended to use the special record mail, registered mail, content certifying mail, etc. to avoid later troubles when performing the cooling off).
    • After the cooling-off period has elapsed, if the contract is canceled due to the default of the consumer's debt, such as delay in payment of the price, etc. The Commercial Transaction Law stipulates that businesses cannot charge more than the following amounts:
      - When the product (right) is returned, the amount of the normal usage fee (if the selling price minus the resaleable price exceeds the normal usage fee, that amount).
      - If the product (right) is not returned, the amount equivalent to the selling price.
      - If the service has been provided, the amount equivalent to the consideration of the service provided.
      - If the goods (rights) have not been handed over (before the service is provided), the amount of cost normally required to conclude or fulfill the contract.
      A 6% annual statutory interest rate will be added to these items.
    • The Specified Commercial Transactions Act sets an upper limit to the amount of damages which business operators may claim in cases such as when consumers cancel a contract midterm.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Agency agreements are regulated by Greek Presidential Decree 219/1991; Also applicable are provisions of Act 2251/1994 On Consumer Protection.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • As a representative/distributor of an HDSA Member Company, you are responsible for upholding the same high standards of business ethics your company has pledged to uphold, which are embodied in the HDSA Code of Ethics. As a representative/distributor/salesperson, you should always:
      - Tell your potential customers who you are, why you're approaching them and what products you are selling.
      - Explain how to return a product or cancel an order.
      - Respect the privacy of your customers by calling at a time that is convenient for them.
      - Promptly end a demonstration or presentation at the request of your customer.
      - Provide accurate and truthful information regarding the price, quality, quantity, performance, and availability of your product or service.
    • Provide your name and contact information, as well as the contact information of the company you represent.
    • Offer a complete description of any warranty or guarantee.
    • A new law which came into effect in 2016 has set direct selling at further disadvantage because it requires that the people practicing direct selling pay social security contributions not based on their actual sales or earnings, but as if they were fully-employed with the basic salary in effect.
    • Details
    • A commercial agent acts in the name and on behalf of the principal (supplier) in exchange for an appropriate commission. Agency agreements are regulated by Greek Presidential Decree 219/1991 (PD 219/1991). As per paragraph 2 article 1 of PD 219/1991, the main characteristics of a commercial agency agreement are:
      (i) its bilateral character.
      (ii) the permanency of the relationship between the parties.
      (iii) the duration of the services rendered by the commercial agent.
      (iv) the independence and autonomy of the commercial agent’s provision of services.
      (v) the sale of goods and the rendering of services by the agent on behalf of and in the name of the principal.
      The basic consumer protection legislation in Greece is Law No. 2251/1994. It regulates various consumer issues, such as general terms and conditions in consumer contracts, distance selling, product safe use information obligations, mandatory guarantees and after-sales service, misleading and comparative advertising, product liability, unfair commercial practices and so on.
    • Contracts negotiated away from business premises is the subject matter of article 3 of the Greek Consumer Protection Law 2251/1994, which transposes into the Greek legal order the Directive 85/577/EEC. Such a contract is any contract for the supply of goods or services either concluded at the supplier’s initiative, without the express request of the consumer, or during a visit by the supplier at the consumer’s place of domicile, residence or work (para. 1) or following an express request of the consumer, but for different goods than those requested (para. 2). The party concluding contracts away from business premises falls within the protective scope of the law when acting in the capacity of the consumer, as determined in the general provision of art. 1 para. 4. Therefore, although the aforementioned Directive restricts its scope on natural person, the Greek Consumer Protection Law expands the protection to legal persons as well.
    • Details
    • The main means of protection that art. 3 of the Law 2251/1994 grants the consumer is his right of unjustifiable withdrawal within 14 calendar days from a contract negotiated away from premises. A similar right of withdrawal under the same conditions (no further justification, 14 days period) is provided for in article 4, in the case of distance contracts, i.e. contracts concerning goods or services concluded between a supplier and a consumer under an organized distance sales or service-provision scheme run by the supplier, who, for the purpose of the contract, makes exclusive use of one or more means of distance communication up to and including the moment at which the contract is concluded. A distance contract is not per se null and void, unless the supplier fails to provide information on certain areas pre-contractually (para. 2) or during the performance of the consumer contract (para. 9).
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific law on direct selling; applicable is the Law on Obligations, Consumer protection law.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • id="ref1">Details
    • The Law on Obligations regulates agency agreements. An agency agreement is a legal contract under which an agent must conclude agreements with third parties on behalf of the principal, and the principal must pay fees to the agent for each agreement concluded.
    • Each party can terminate an agency agreement if the other contracting party fails to perform their obligations or in the event of a change of circumstances.
    • id="ref1">Consumer protection
    • Right of cancelation of the agreement entered into by using remote communication – The consumer has a period of 14 days to withdraw from the distance contract or contract concluded outside the business premises without giving any reason and without incurring costs different from those provided for in the Law. Withdrawal from a distance agreement or an agreement concluded outside the business premises of the trader, the consumer implements by filling out the Form.
  • Is there Direct selling association?
  • No.
  • Are there regulations on Direct selling / network marketing?
  • No specific regulation on direct selling, but applicable are:
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?

    • Under the Act on door-to-door sales:
      The term "door-to-door seller" means a person who sets up or manages and operates an organization for door-to-door sales in order to engage in business of door-to-door sales (hereinafter referred to as "door-to-door sales business entity"), or a person who engages in door-to-door sales on behalf of a door-to-door sales entity (hereinafter referred to as "door-to-door salesperson").
      The term "multi-level marketing" means selling goods or services through a sales organization that meets all the following criteria (hereinafter referred to as "multi-level marketing organization").
      (a) An organization has a recruitment scheme under which a salesperson who signed up under a sales business entity solicits certain persons to join the organization as subordinate salespersons of the relevant salesperson.
      (b) Salespersons join the organization as referred to in item.
      (i) by three or more levels (Salespersons who have joined the organization without being solicited by any other salesperson are classified as Level 1 salespersons; hereinafter the same shall apply).
      (ii)Provided, That this shall include cases specified by Presidential Decree, where the salespersons are classified by two or less levels but are actually managed and operated at three or more levels.
      (iii)A sales business entity has a scheme to pay a bonus as defined in subparagraph 9 (b) or to his/her salespersons.
      A multi-level marketing business entity shall file documents for registration with the Fair Trade Commission, the Special Metropolitan City Mayor, or the competent Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor or Special Self-Governing Province Governor (hereinafter referred to as "Mayor/Do Governor").
      (1) A person who intends to join a multi-level marketing organization as a multi-level marketing salesperson shall register him/herself with the multi-level marketing business entity who manages and operates the organization, as prescribed by Ordinance of the Prime Minister.
      (2) A person who falls under any of the following subparagraphs shall be disqualified for registration as a multi-level marketing salesperson:
      (i) A state public official, local public official, educational public official, or a teaching member as defined in the Private School Act (including instructors referred to in Article 14 (2) of the Higher Education Act).
      (ii)A minor: Provided, That where the legal representative who does not fall under subparagraph 4 or 5 consents thereto shall be excluded here from.
      (iii)A corporation.
      (iv)The controlling shareholder or an executive officer or employee of a multi-level marketing business entity.
      (v)A person who has received orders to take measures for rectification under Article 49, at least two times: Provided, That this excludes persons in whose case three years have passed since they completed fulfilling the last measure for rectification.
      (vi)A person who violates this Act and is sentenced to imprisonment with labor and in whose case five years have yet to pass since the completion of the execution thereof (including the cases where the execution is regarded completed) or the exemption from the execution.
      (vii)A person who violates this Act, is sentenced to suspension of execution of punishment, and is under such suspension.
      (3) A multi-level marketing business entity shall issue a certificate of registration to a multi-level marketing salesperson who joins a multi-level marketing organization managed and operated by the business entity, as prescribed by Ordinance of the Prime Minister.
      (4) A multi-level marketing business entity shall keep a register of multi-level marketing salespersons, as prescribed by Ordinance of the Prime Minister, and shall allow a consumer to verify the identify of a multi-level marketing salesperson registered therein at a consumer's request, in order to prevent or relieve consumer damage.
      (5)A multi-level marketing business entity shall issue a pocketbook for multi-level marketing salespersons (including a pocketbook contained in an electronic device), from which information about the following matters can be found, to each multi-level marketing salesperson registered. Multi-Level Marketer has a duty to Provide Information to Consumers.
    • A multi-level marketing business entity shall establish objective and clear guidelines for the calculation and payment of bonuses and shall comply with the procedure prescribed by Presidential Decree in amending guidelines for the calculation and payment of bonuses.
    • A multi-level marketing salesperson may withdraw from a multi-level marketing organization at any time by expressing his/her intention to withdraw to the multi-level marketing business entity, and the multi-level marketing business entity shall not attach any condition to withdrawal.
    • A person who intends to register him/herself as a multi-level marketing business entity or door-to-door sales business entity under sponsorship shall execute a contract for indemnity insurance against consumer damages.
    • Withdrawal of Subscription
    • A consumer who has signed a contract for purchase of goods or services through door-to-door sales is entitled to withdrawal of subscription, etc. within the relevant period specified in the following subparagraphs (or the agreed period, if the parties to a transaction have agreed on a period longer than the relevant period specified in the following subparagraphs):
      (1) 14 days from the date on which the contract is received provided that if goods or services are provided later than the date on which the contract is received, the period shall be 14 days from the date on which goods or services are provided, or on which the provision of goods or services commences.
      (2) 14 days from the date on which the consumer became aware of, or could have become aware of, the address of the door-to-door seller or telemarketer in any of the following cases.
      (a) If the contract has not been received in accordance with Article 7 (2).
      (b) If the contract has been received without the address of the door-to-door seller or telemarketer stated therein.
      If it is impossible to withdraw subscription or cancel the contract within the period specified in subparagraph 1 due to a change of the address of the door-to-door seller or telemarketer or other causes.
      (3) 14 days from the date on which the consumer became aware, or could have become aware, that he/she had a right to withdraw subscription or cancel the contract, if the contract does not provide for matters regarding withdrawal of subscription, etc.;
      (4) 14 days from the date on which hindrance ends, where the door-to-door sales or telemarketing business entity hinders withdrawal of subscription, etc.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific legislation on direct marketing; general provisions of the law on contracts and the Competition Act and Consumer protection act apply.
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?

    • The Association will create, update and maintain a computerized database of all the registered direct selling individuals and companies. The Association will take pledge by all its members, abiding by the code of conduct enforced by KDSA, to pay their taxes on time; hence boosting the economy of Kenya.
      The Association will play its part for the documentation and registration of the not-yet-registered direct selling individuals and companies according to law of the land, hence providing its members a safe and secure trading environment.
      The Association will set the pre-qualification criteria for the direct sellers newly inducting in the industry and any new seller intending to join the industry will require a mandatory training. The Association will also guide on starting a new Network Marketing School for Africa in Kenya. There are no specific laws that regulate marketing agreements in Kenya. The law of contract therefore applies. The Competition Act 2010 applies where the relevant agreement in any way affects or distorts competition or constitutes a restrictive trade practice.
    • Consumer protection act

    • "direct agreement" means a consumer agreement that is negotiated or concluded in person at a place other than:
      (a) at the supplier's place of business.
      (b) at a marketplace, an auction, trade fair, agricultural fair or exhibition.
      Consumer may cancel an internet agreement at any time from the date the agreement is entered into until seven days after the consumer receives a copy of the agreement if:
      (a) the supplier did not disclose to the consumer the information required under section 38:
      (b) the supplier did not provide to the - consumer an express opportunity to accept or decline the agreement or to correct errors immediately before entering into it.
      Consumer may cancel an internet agreement within thirty days after the date the agreement is entered into, if the supplier does not comply with a requirement under section 43.
      Every direct agreement shall be in writing, Requirements shall be delivered to the consumer and shall be made in for direct accordance with the prescribed requirements.
      The copy of the remote agreement shall include such information as may be prescribed. For the purposes of subsection, a supplier is considered to have delivered a copy of the remote agreement to the consumer if the copy is delivered in the prescribed manner.
      A consumer may cancel a remote agreement at any time from the date the agreement is entered into until seven days after the consumer receives a copy of Disclosure of information on remote agreements. A consumer may cancel a remote agreement within one year after the date the agreement is entered into, if the supplier does not comply with a requirement under section 37.
      A consumer may, without any reason, cancel a direct agreement at any time from the date of entering direct into the agreement. In addition to the right under subsection (1), a consumer may cancel a direct agreement within one year after the date of entering into the agreement if the consumer does not receive, a copy of the agreement that meets the requirements under section 34.
      Before a consumer enters into a remote agreement, the supplier shall disclose the prescribed information to the consumer and shall satisfy the prescribed requirements.
      A supplier shall deliver to a consumer who enters into a remote agreement a copy of the agreement in writing within the prescribed period after the consumer enters into the agreement.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • No specific regulation on direct selling but Civil code shall apply regarding agency agreements, the general provisions of Government Emergency Ordinance No. 34/2014 on consumer rights in agreements with professionals (GEO 34/2014) is also applicable to business-to-consumer. GEO 34/2014 transposes into national legislation Directive 2011/83/EU on consumer rights (Consumer Rights Directive).
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • Agents can negotiate and conclude business arrangements for, or in the name of another, undertaking. Agents are entitled to minimum termination notice periods and compensation for termination of the agreement. Agency contracts are regulated by the Civil Code of Romania that entered into force on 1 October 2011.
      Consumer protection
    • GEO 34/2014 transposes into national legislation Directive 2011/83/EU on consumer rights (Consumer Rights Directive).

    • Ordinance 34 / 2014 establishes several rights for consumers as regards information requirements which should be met by professionals under distance and off-premises contracts as well as under other contracts. The information provided by professionals shall be legible and in plain, intelligible language, unless the context is sufficiently conspicuous. As regards the information requirements for distance and off-premises contracts, the professional shall provide the consumer with the following information:
      * where applicable, the consumer will have to bear the cost of returning the goods in case of withdrawal while, in the case of distance contracts, the cost of returning the goods if such goods, by their nature, cannot normally be returned by post.
      * where a right of withdrawal is not provided for in Ordinance 34/2011, the information that the consumer will not benefit from a right of withdrawal or, where applicable, the circumstances under which the consumer loses his right of withdrawal.
      * consumer’s right to withdraw from a distance contract or from an off-premises contract within a 14-day term, without giving any reason, and without incurring any additional costs.
      * in the case of withdrawal, the professional shall reimburse all payments received from the consumer, including the costs of delivery, without undue delay and in any event not later than 14 days from the day on which he is informed of the consumer’s decision to withdraw from the contract.
      * upon cancellation or termination of the contract, the professional shall reimburse all sums paid under the contract, without undue delay, within 7 days, at the latest, of the date on which the consumer notified the professional of his decision to terminate the contract.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Direct Selling and Network Marketing Bill 2019 has been finalized and soon will be presented in the National Assembly
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • According to Trade Development Authority of Pakistan, Direct Selling and Network Marketing Bill 2019 has dual advantage as on one hand this will create job opportunities in the country while on the other hand it will give due protection to the consumers, industry sources said. On the other hand, according to the report of the Research Council of Direct Selling Association of Pakistan, there has taken place extraordinary progress in the business of direct selling in the world during the past five years.
  • Is there Direct selling association?
  • Yes
  • Are there regulations on Direct selling / network marketing?
  • Yes
  • Are there limitations or ban on direct marketing?
  • No.
  • Are there requirements for license / permission / registration to take part in direct selling?
    • These Guidelines are issued as guiding principles for State Governments to consider regulating the business of „Direct Selling‟ and Multi-Level Marketing (MLM) and strengthen the existing regulatory mechanism on Direct Selling and MLM, for preventing fraud and protecting the legitimate rights and interests of consumers.
      Every Direct Selling entity has to comply with the following conditions:
      - A well-updated website must be maintained, and it must have following information.
      - A register named “Register of Direct Sellers” has to be maintained which will contain wherein relevant details of each enrolled Direct Seller i.e. verified proof of address, identity proof, and PAN. It must be updated time to time.
      - The Licensee of a trademark, service mark or any other identification mark related to the goods to be sold or supplied must be owned and held by it.
      Details of direct seller.Direct Sellers must have an identity card issued by the company.
      A proper manual/electronic record must be maintained regarding business dealing, with complete details of:
      -All relevant details of the entity.
      -Contact information of its management.
      -Products and its information.
      -Product quality certificate.
      -Complete income plan.
      -Terms of contract with direct seller.
      -Complaint redressal mechanism for direct sellers and consumers.
      The grievances must be addressed within 45 days of making such complaints.
      A direct selling company must monitor the value of the purchases of all its Direct Sellers on a monthly basis, and once the purchase value crosses the VAT threshold, it must intimate the Direct Seller to pay the VAT.
      Conditions for Direct Selling Contract Between Direct Seller & Direct Selling Entity.
      An agreement is mandatory for every direct selling company and a new member at the time of his enrolment.
      The Agreement has to be in accordance with section 10 of the Indian Contract Act, 1872.
      The agreement must be in writing, describing the material terms of participation and shall:
      Not force the direct sellers to buy such amount of products that cannot be sold to the consumer in reasonable time.
      Provide the direct seller a reasonable cooling-off period in which he can cancel his participation and receive a refund for goods or services purchased.
      Provide for a buy-back or repurchase policy for currently marketable goods or services sold to the direct seller.
      Certain Obligations For Direct Sellers.
      Accurate and complete explanations and demonstrations of the following must be given to a new and prospective customer:
      During the demonstration, a direct seller on without any request and on his own should truthfully identify himself as well as the identity of direct selling company and the nature of good.
      A direct seller should always carry his identity card while visiting a customer.
      No direct seller shall visit the customer’s premise without prior appointment.
      A new member or a prospect consumer at the time of sale must be provided with the following information:
      Name, address, registration number or enrollment number, identity proof and telephone number of the direct seller and details of the direct selling entity.
      A description of the goods or services to be supplied.
      Explain to the consumer about the goods return policy of the company in the details before the transaction.
      The Order date, the total amount to be paid by the consumer along with the bill and receipt.
      Time and place for inspection of the sample and delivery of the goods.
      Information about his/her rights to cancel the order and/or to return the product in saleable condition and avail full refund on sums paid.
      Details regarding the complaint redressal mechanism.
      APPOINTMENT OF MONITORING AUTHORITY
      Consumer Affairs Department will deal with the issue arising in direct selling at the Union and the respective State Governments in the States;
      Each and every State Governments have to set up a mechanism to monitor/supervise the activities of direct sellers, direct selling company regarding compliance of the guidelines for direct selling.
      Every direct selling entity conducting direct selling activities must submit an undertaking to the Department of Consumer Affairs, stating that it is in compliance with the prescribed guidelines.
    • Consumer protection act

    • "direct agreement" means a consumer agreement that is negotiated or concluded in person at a place other than:
      (a) at the supplier's place of business.
      (b) at a marketplace, an auction, trade fair, agricultural fair or exhibition.
      Consumer may cancel an internet agreement at any time from the date the agreement is entered into until seven days after the consumer receives a copy of the agreement if:
      (a) the supplier did not disclose to the consumer the information required under section 38:
      (b) the supplier did not provide to the - consumer an express opportunity to accept or decline the agreement or to correct errors immediately before entering into it.
      Consumer may cancel an internet agreement within thirty days after the date the agreement is entered into, if the supplier does not comply with a requirement under section 43.
      Every direct agreement shall be in writing, Requirements shall be delivered to the consumer and shall be made in for direct accordance with the prescribed requirements.
      The copy of the remote agreement shall include such information as may be prescribed. For the purposes of subsection, a supplier is considered to have delivered a copy of the remote agreement to the consumer if the copy is delivered in the prescribed manner.
      A consumer may cancel a remote agreement at any time from the date the agreement is entered into until seven days after the consumer receives a copy of Disclosure of information on remote agreements. A consumer may cancel a remote agreement within one year after the date the agreement is entered into, if the supplier does not comply with a requirement under section 37.
      A consumer may, without any reason, cancel a direct agreement at any time from the date of entering direct into the agreement. In addition to the right under subsection (1), a consumer may cancel a direct agreement within one year after the date of entering into the agreement if the consumer does not receive, a copy of the agreement that meets the requirements under section 34.
      Before a consumer enters into a remote agreement, the supplier shall disclose the prescribed information to the consumer and shall satisfy the prescribed requirements.
      A supplier shall deliver to a consumer who enters into a remote agreement a copy of the agreement in writing within the prescribed period after the consumer enters into the agreement.
  • Is there Direct selling association?
  • Yes

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