Posted in Legislative Research on May 22, 2020

This bill was posted on the Pyidaungsu Hluttaw website on 23.03.2020 and described in the state-run newspapers Myanmar Alin and The Mirror on 21st, 22nd and 23rd of March, requesting input from the public.

Current Status (22.05.2020) – Bill Committee’s report has been submitted and awaiting for debate at the Pyithu Hluttaw

(1) Backgrounder

On 8th of December 2016, Pyithu Hluttaw MP U Aung Kyaw Kyaw Oo from Hlaing Constituency asked a starred question about whether there is any plan to forbid and restrict the Multi-Level Market (MLM). He said that the MLM exploited people, the number of those being exploited was increasing, and the participation of foreign companies in such business was impacting on the country’s monetary market.

Captain Aung Soe, the Deputy Minister for Home Affairs, answered that ASEAN countries enacted laws to control and restrict MLM – Malaysia in 1993, Singapore in 2000, Thailand in 2002, Philippines in 2004, and Vietnam and Indonesia in 2014. Since there is no yet a separate law, the Emergency Provisions Act is currently used in Myanmar to control this kind of business, and a restrictive order will be released under the Essential Supplies and Services Law.

The Ministry of Commerce issued Notification No. 46/2018 on 18th of September 2018, to regard and restrict the MLM as an essential service. If violated, Section 5 says that the punishment is the imprisonment for a term from 6 months to 3 years with the fine not exceeding MMK 500,000.

It is known that this bill was drafted by the Ministry of Commerce, learning from laws in Thailand, Malaysia, Vietnam, China and India.

(2) Bill Summary

The Bill includes provisions relating to duties and powers of the relevant ministry and department, duties of the registrar and employers, and duty and rights of sales representatives.

  • Its objectives are:
    • to regulate direct selling with a legal framework
    • to raise awareness of that business and distribute information
    • to support the country’s economic development.
  • The Ministry of Commerce can formulate policy, supervise direct selling, set necessary plans, coordinate with other relevant ministries, and act as the final appeal body.
  • The duty and power of the Consumer Affairs Department are to appoint the registrar, to prescribe regulations for direct selling, to issue or reject registration certificates, extensions and changes, to sue in cases submitted by the registrar, and to implement temporary/limited/permanent closure of registration certificates during legal proceedings. Moreover, it can set fees for sales representatives and trainings, and encourage the formation of direct selling associations.
  • The duties of the registrar are to submit to the Department applications for registration certificates, extensions and data changes, to supervise the reports of employers, and to submit to the Department information about misconduct of direct selling for legal proceedings.
  • Duties of employers are:
    • to make contracts with sales representative
    • to explain goods return policies to sales representatives
    • to prior notify the business’s formation, income status and the distribution of sales representatives to those who want to be sales representative
    • to record the types and qualities of goods, sales income and taxation of sales representatives
    • to secure the consent of Department to sue sales representative
    • to apply to the Department the permission of business closure after the clearance with sales representative.
  • For sales representatives, they have duty and rights – the disclosure of addresses while advertising goods/services, the prior explanation of side effects and additional costs to the consumer before the sales, the recording of the sales, and complaints about employers to the Department.
  • It also includes the administrative penalties, appeals, and offences and punishment. The offences are regarded as cognizable offences. If violated by the company/organisation, the person-in-charge is responsible.

Relevant Laws

The Sale of Goods Act (1930)

The National Drug Law (1992)

The National Food Law (1997)

The Essential Supplies and Services Law (2012)

Consumer Protection Law (2019)

Links

Bill Text

World Federation of Direct Selling Association

Contact

Moe Aung, The Ananda, moeaung@theananda.org