General Information

	ADDRESSEES	EFFECTS
REGULATION	All Member States, natural and legal persons	Directly applicable and binding in their entirety
DIRECTIVE	All or specific Member States	Binding with respect to the intended result. Directly applicable only under particular circumstances
DECISION	Not specified All or specific Member States; specific natural or legal persons	Directly applicable and binding in their entirety
RECOMMENDATION	All or specific Member States, other EU bodies, individuals	Not binding
AVIS	All or specific Member States, other EU bodies	Not binding
	Not specified

The Ordinary Legislative Procedure

INTRODUCTION Direct Selling Legislation in the EU

The Ordinary Legislative Procedure

The current introductory section aims to provide a general idea of the legislation governing the most important aspects of direct selling, followed by a section enlisting and summarizing the main directives affecting the industry.
Firstly, the Right of Withdrawal. After entering into force of the European Consumer Rights directive on 13 June, 2014, which is a maximum harmonization Directive, the right of withdrawal has been extended to 14 days. According to the Directive, the consumer shall have a period of 14 days to withdraw from a distance or off-premises contract, without giving any reason, and without incurring any costs (Article 9, CRD).

Unlike in the USA, there is no specific legislation governing Multi-Level Marketing in the European Union, however, some Member States have laws regulating this business model. Nevertheless, the Unfair Commercial Practices Directive (2005/28/EC) provides for the ban of pyramid promotional schemes defined as schemes “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.” Furthermore, the European Court of Justice came up with the definition of the pyramid scheme in its decision of “4finance” published in April, 2014 (Case C 515/12). According to the Court, in order to be recognized as pyramid the scheme has to meet two conditions:

1. The consumer is charged for participation (in any amount, no matter how small) in exchange for the possibility to receive remuneration for attracting new participants; and

2. The remuneration received by the consumer is derived mainly from subsequent contributions to the scheme from new joiners.

While laws of product safety, product liability or guarantees on consumer goods have been harmonized, the legislation concerning the specific products typically sold through the direct selling channel is a regulatory patchwork: some product categories are regulated at EU level, whereas others are partly or entirely regulated at national level. Some Member States have specific laws restricting the sale of products through certain channels of distribution.

Legislation concerning direct sellers is probably the most complex issue – while the Commercial Agents Directive (86/653/EEC) is a step towards the minimum harmonization of laws governing the standing of commercial agents, the status of direct sellers, as a sub-category of independent contractors, remains unresolved from a legislative perspective at the EU level. Similarly, there is no EU legislation concerning earnings claims, taxes, fees and social security of direct sellers. It is therefore the Member States’ laws that are to be consulted in this respect.

On 6 May 2015 the European Commission published a Digital Single Market Strategy for Europe. This Strategy sets out political and legislative initiatives that the Commission will undertake in 2015-2016. The Strategy includes many proposals that will impact retail and wholesale. As far as direct selling is considered, the initiative to harmonise rules on contracts and consumer protection for online shopping (tangible goods & digital content) is relevant as the Commission intends to harmonize the period of consumer guarantees within the EU. The proposal is expected by the end of 2015. In addition, Commission considers the possibility to introduce the Trader’s law principle meaning that in cross-border contract traders would be able to apply their national consumer protection law. The more detailed information cannot be provided at this stage as the proposal is still in the very early stage.

1. 1. EU Member States and Candidate Countries
      1. Member States of the European Union

ISO 3166 Code	Name
AT	Austria
BE	Belgium
BG	Bulgaria
CY	Republic of Cyprus
CZ	Czech Republic
DE	Germany
DK	Denmark
EE	Estonia
ES	Spain
FI	Finland
FR	France
GB	Great Britain
GR	Greece
HU	Hungary
IE	Ireland
IT	Italy
LT	Lithuania
LU	Luxemburg
LV	Latvia
MT	Malta
NL	The Netherlands
PL	Poland
PT	Portugal
RO	Romania
SE	Sweden
SI	Slovenia
SK	Slovakia

ISO 3166 Code	Name	Date of accession
HR	Croatia	1 July 2013

ISO 3166 Code	Name
AL	Albania
BA	Bosnia-Herzegovina
XK	Kosovo

Finland
Direct selling is regulated by the Consumer Protection Act. It is also affected by the Data Protection Act. The Unfair Competition applies in any case in which it may appear that a particular direct selling scheme is considered contrary to good business practices.

France
The 1972 law covering the marketing of products and services by a seller or its representatives protects consumers’ rights in direct selling, for person to person sales and party plan, at home or at the workplace (away from shops or exhibitions).

Germany
No information.

Guatemala
The direct selling industry In Guatemala is regulated on basis of the following:

• The civil code
• The law of the Guatemalan consumer rights protection
• Commercial Code
• Rules of civil partnership registration

Hong Kong
There is no regulation on direct-selling in HK. Any company which has registered with a business license could conduct wholesale/retail business in HK including direct-selling.

Hungary
Direct selling in Hungary is governed by the government decree 213/2008 (VIII.28) on off-premises contracts. This act entails the main rulings for direct selling contracts, such as consumers’ right to rescind from the off-premises contracts within 8 working days.

The government decree 133/2007. (VI. 13.) defines the list of products, the retail of which is banned through direct selling. What is rather unique in Hungary is that food and food supplements may not be sold to consumers through direct selling channels for reasons of public health.

Further important legislation is the Act XLII. of 2008 Consumer Protection; the Act XLVII. of 2008 on the Prohibition of Unfair Commercial Practices, and the Commercial Act (Act CLXIV of 2005).

India
Although in India direct selling exists by the way of corporation of goods to the consumers in a big way, until today there is no specialised law dealing specifically with the direct selling industry or direct sales.

However, there exists a legislation called Consumers Protection Act 1986 which has come into force since 15 April 1987 with amendments in 1991 which deals with the redress of grievances of the consumers in general with respect to the goods sold to them or services provided to them by the manufacturers or traders of the goods or institutions. This act based on the guidelines issued by the United Nation’s General Assembly on 9 April 1986 on consumer protection.

Under the said Act, consumer grievances are sought to be heard and redressed on complaint by Consumer through Consumer Forums at three different levels, ie:

1. District Level
2. State Level
3. Central Level

The object of the Act is to protect the consumer, inter alias, against:
> -An unfair trade – practice adopted by a trader
> -Goods bought which have defects
> -Services rendered found to have some deficiency.
> -Price charged for the goods in excess of the price fixed by law or displayed on the goods
-Goods offered for sale which are hazardous to life and safety and / or being sold in contravention of the provisions of the law.

The said Act provides for the following remedies to the consumer:
-Remove defects
-Replace goods
-Return the money / price paid by the consumer
-Pay compensation
-Discontinue unfair practices
-Not to offer hazardous goods for sale and to withdraw them
-Provide adequate costs to the parties.

These remedies are mostly the same as provided under the code of ethics prescribed by the national DSAs. The Act also empowers various forums under the Act to levy penalties by way of imprisonment and / or fine on traders failing to comply with the orders of the forum.

Apart from the said Act, there are the following Acts touching marginally on the rights of the consumers. They are:

1. Standard Weights and Measures Act
2. Drugs and Cosmetics Act
3. Prevention of Food Adulteration Act
4. Essential Commodities Act
5. Monopolies and Restrictive Trade Practices Act.

Indonesia
No information.

Ireland
The National Consumer Agency was established by the Consumer Protection Act 2007. Its functions include:

• Promoting and protecting the interests of consumers,
• Carrying out investigations and enforcing the law by bringing prosecutions,
• Promoting Alternative Dispute Resolution (ADR) schemes,
• Reviewing and approving codes of practice.
• Prosecuting relevant offences by summary proceedings.
• Referring more serious (indictable offences) to the Director of Public Prosecutions for possible prosecution.

Unfair Commercial Practices in dealings with consumers
The EU Directive on Unfair Commercial Practices towards consumers was implemented by the Consumer Protection Act 2007, which thus bans misleading, deceptive, aggressive practices and other unfair practices.

The 2007 Act also gives the minister power to make Consumer Information Regulations stipulating required information to be given with (or in advertisements for) specified categories of products.

Italy
The commercial activities of the direct selling industry are regulated by the Legislative Decree 114/98 as amended by Legislative Decree 59/2010, law 173/05 and Legislative Decree 206/05.

Japan
No information

Lithuania
The main laws governing the direct selling industry in Lithuania are:

1. regulations Regarding sale of goods outside the sale premises (Cabinet Regulation No. 226, Adopted 11 July 2001) – hereinafter referred to as Regulations
2. Lithuanian Civil Code.

Malaysia
All door to door and mail order selling (including selling by telephone) in Malaysia is subject to the Direct Sales Act 1993 which lays down the conditions under which business may be conducted, defines requirements of direct sales contracts and empowers the Minister to make regulations.

The Act’s regulating authority is the Ministry of Domestic Trade and Consumer Affairs.

Mexico
Direct Selling activities are considered in a Commercial Administrative Norm: “Commercial Practice and Information Criterion for the Sales at Home Systems” NOM 035 SCFI-2003.
http://www.economia-noms.gob.mx/ http://www.amvd.org.mx/cluster/HTMLobj-5/NOM_035_SCFI_2003__20_Oct_03_.doc

Netherlands
In the Netherlands consumer-organisations have for years advised against direct selling. When the current legislation (Colportagewet) came into force in 1975, it was expected that direct selling would disappear from the market soon. Nevertheless, direct selling kept growing and nowadays the members of the Vereniging Direkte Verkoop sell approx. Dfl. 305 million a year (138,5 million), whilst consumer-associations acknowledge the achievements of the Direct Selling Association.

New Zealand
Corporate & Company Structures
As in most countries, businesses in New Zealand trade as companies, general partnerships and some businesses trade as individuals or sole traders.

All companies which carry on business in New Zealand must be registered under the relevant Companies Act, either by registration under the Companies Act 1993 as an overseas company (commonly described as a branch) or through a local subsidiary. All local subsidiaries incorporated after 1 July 1994 must be incorporated under the Companies Act 1993.

Sole traders and general partnerships do not have registration requirements. Limited liability partnerships require certain registration formalities under the Partnership Act 1908.

Some trading entities exist under trustee arrangement although these are rare and usually set up for domestic reasons. It is common for business owners to hold property or assets under family trusts to protect that property in the event of business failure or legal suite however strict rules do apply on time of transition for such property to ensure this is not used to avoid legal remedies at the time of a business failure.

There are no specific anti-trust laws within New Zealand, although monopolies and collusion are monitored by the Commerce Commission under the Commerce Act and most commercial legislative requirements are policed also by the Commerce Commission.

Limited companies have reporting requirements both to the Registrar of Companies administered by the Ministry for Economic Development and to Inland Revenue. All companies trading in New Zealand are required to complete the statistical returns when required by the Department of Statistics. Failure to comply with any such requirements can result in fines.

Publicly listed companies also have reporting and mandatory requirements to the New Zealand stock exchange if listed there where debentures are issued are subject to the Securities Commission.

Foreign investment into New Zealand is monitored by the Ministry of Economic Development and the Internal Affairs Department. There is no legislation prohibiting levels of investment or the nature of investments with the exception of foreign ownership of land, which requires approval when in excess of NZ$10 million or is farming land. Land (including commercial buildings) adjacent to waterways is also subject to approval.

The general economy of New Zealand is a highly deregulated economy, although the legislation that does apply can carry heavy penalties should failure to comply be found.

Direct Selling Legislation
The only specific legislation for Direct Selling in New Zealand is the Door to Door Sales Act 1968.

Enacted in 1968 and covers home sales above $50 and hire purchase home sales with a right of cancellation period of 7 days for the hire purchase sales.

Distance selling is not covered by a specific legislation however the Telecommunications Act 1986 does provide for prevention of harassment and this has been interpreted in some case law to mean distance sellers who routinely call the same recipient when they have expressed a desire not to receive such calls. There is a voluntary system only for removal from telemarketing lists through the Direct Marketing Association. This law is scheduled to change late 2012 under the Consumer Law Review which will see the Door to Door Sales Act repealed and a new section included under the Fair Trading Act to cover “Uninvited Direct Sales”.

The amendments will capture telemarketing and has a wider scope however the compliance proposed is less than required under the DSA Code of Practice.

Penalties will increase with the Commerce Commission able to seek fines of up to $12,000 for offenses of the new section.

Consumer laws applicable to all sellers including Direct Sellers are:

• The Fair Trading Act 1986
• The Consumer Guarantees Act 1987
• The Commerce Act 1984
• The Privacy Act 1993
• The Human Rights Act 1993
• The Medicines Act (1998 revision)
• Finance Act 1995
• Credit Repossession’s Act 1997
• The Personal Properties Securities Act
• The Employment Relations Act 2000

All of the common consumer laws have seen amendments since enactment although the Door to Door Sales Act was last amended in 1974.

General Laws
There are general laws which also govern some product types and control what is acceptable or to cover issues such as packaging, storage, handling, labelling and advertising.

These are:

• The Hazardous Substances and New Organisms Act 1996
• The Transport of Dangerous Goods Regulations 2000
• The Dietary Supplements Regulations 1985
• The Electricity Regulations 1997
• The Films Video and Publications Act 1993

Some areas of law are harmonised or are in the process of harmonisation with Australia but may have some exclusions.

These include:

• Food legislation governed under the NZ Food Safety Authority
• Therapeutic Products (under development)
• The Fair Trading Act (aligns with the Australian Trade Practices Act)
• Skills recognition (most qualifications are mutually recognised)
• MSDS requirements for toxic substances (both countries are moving to the 16 heading EU standard)

A number of products are also covered by mandatory standards which are focused on safety. These are usually established in the Fair Trading Act but may also fall under other legislation like Food, Electricity or Gas Regulations where appropriate.

A number of laws cover a range of areas from consumer activity to employment however some specifically have an application to employment and contractors and independent contractors. These are:

• The Employment Relations Act 2000
• The Fair Trading Act 1986
• The Privacy Act 1993
• The Human Rights Act 1993
• Health and Safety in Employment Act 1992

Employment and Independent Contractor Agreements need to be checked against these laws in particular.

Changes to the Health and Safety in Employment may bring some level of coverage to dependant contractors and may in unique circumstances coverage independent contractors.

Codes of Practice are recognised under the Fair Trading Act and can be used as a demonstration of compliance as a defence should an action be commenced by the Commerce Commission.

Statutory Authorities
The Commerce Commission is the consumer and companies, watchdog and prosecutor. It prime powers are under the Commerce Act, the Companies Act, the Fair Trading Act and the Consumer Guarantees Act, The Telecommunications Ombudsman Act.

Prime issues affecting Direct Sellers dealt with by the Commerce Commission are:

• Price Fixing and Collusive activities (Anti-Trust) – Commerce Act 1986
• False advertising – Fair Trading Act 1986
• Pyramid Schemes – Fair Trading Act 1986
• Referral Selling – Fair Trading Act 1986
• Working from Home Income Promotion – Fair Trading Act 1986
• Unsafe products – Fair Trading Act. 1986

Medsafe currently controls Direct Sellers involved in nutritional products, weight loss and mineral supplements are covered by the Medicines Act (and the May 1999 regulations). At present many products are exempt but moves are under way to see “Therapeutic Products” brought under “the Natural Products Bill” with a New Zealand agency similar to the Australian Therapeutic Goods Authority and would cover both topical and ingested therapeutic products and not just “natural” products in spite of the laws name. Therapeutic devices from surgical to band aids are already regulated and require listing on the Medsafe register prior to sale.

The Privacy Commissioner deals with complaints under the Privacy Act 1993 and has powers to censure and prosecute companies or individuals who use information gathered for one purpose and use it for another or request information that is irrelevant to the purpose. This only relates to personal information gathering and does not cover business information that might be gathered. It may be argued that an Independent contractors information is business however if it is used for personal targeting it may still breach the Act.

The Human Rights Commissioner deals with complaints under the Human Rights Act 1993 and has the same level of powers as the Privacy Commissioner. He or she will investigate complaints of discrimination on the basis of Age, race, gender, religious belief and sexual preference whether it relates to employment, consumer dealings, advertising or in fact anything where discrimination can be proved. Penalties can include fines and imprisonment for severe cases.

The Environment Protection Authority (EPA) regulates all hazardous substances and New Organisms and while the later part is unlikely to affect Direct Sellers the hazardous substances regulation does impact on a wide range of product sold.

Under the Hazardous Substances and New Organisms Act 1996, the EPA has developed a range of “Group Standards” that cover broad categories of products such as Cosmetics, Cleaning Products and Inks and Paints. These “Group Standards” are given the status of regulations under the act and must be complied with.

Each standard sets down rules on what must be complied with for the product type and includes labelling, advertising and packaging.

The DSA New Zealand has available a disk of all group standards, regulations and for more common products like cosmetics guide material on what is necessary to comply with the Group Standards.

Dangerous goods rules fall under this act and any large volumes being stored will require specific compliance if they are defined as a dangerous good.

The “Transport of Dangerous Goods” fall under the Transport of Dangerous Goods regulation 2005 which sets the transportation and handling for hazardous goods over 5 litres and specifies a range of requirements in the transportation process for goods that are deemed hazardous.

There are a number of other statutory bodies which have little impact if any on Direct Sellers and are not mentioned for that reason.

Disputes & Legal Recourse
Disputes by consumers that cannot be resolved with the seller are (with the exception of financial products/services) able to be lodged with the Disputes Tribunal to be heard in front of an Arbitrator without lawyers. The cost to the claimant starts at $50 to lodge the case with the District Court administration and a hearing is held within 3 months. The fee scale goes up to $200 for the maximum level of claim The Disputes Tribunal may hear cases up to $20,000 NZ. Amounts over this must be heard in the District Court or High Court. Decisions of the Disputes Tribunal are binding although they may be overturned by High Court Act and Appeal Court Actions.

Complaints related to privacy may be lodged to the Privacy Commissioner who may rule on the use of personal information and censure or prosecute a company or individual for misuse of the information under the Privacy Act 1993.

Complaints related to human rights are dealt under the Human Rights Commissioner who may censure or prosecute a company or individual under the Human Rights Act 1993.

The Environmental Protections Agency (EPA) will accept complaints that a substance is unsafe and should have tighter controls placed on it and when it accepts such complaints places the onus on companies to argue why the tighter controls should not be imposed under the Hazardous Substances and New Organism Act 1996. The EPA does not investigate complaints or breaches itself but delegates the responsibility to the most appropriate authority such as Department of Labour, Health Department, Police or Customs.

Self-Regulation
Code Acceptance
The New Zealand DSA has developed its Code of Practice in conjunction with the Ministry of Consumer Affairs and has received formal recognition of the Code from the Ministry. The repeal of the Door to Door Sales Act and the addition of a new section in the Fair Trading Act for “Uninvited Direct Sales” will see penalties increase from $200 to up to $12,000 and allow enforcement by the Commerce Commission. Compliance with the DSA Code will be permissible to use as a legal defence under the Fair Trading Act in relation to that section of the Act.

The DSANZ has a defined procedure which sets out acknowledgment periods, action and response periods under the Code of Practice. The Code Administrator is recognised as a legitimate arbitrator for DSA members and the first recourse for consumers dealing with a DSA member dispute. The consumer still has the right to take their case directly to the Disputes Tribunal but weaken their case as they have not utilised all reasonable means of resolution before lodging the case.

Good Market Practice
The New Zealand DSA Code of Practice was first adopted in 1988 and was aligned to the WFDSA World Code in 1993 with the Government negotiated amendment ratified in December 3rd 1997. The current version was last amended in May 2010 in line with the World Federation Code of Practice.

The New Zealand Code of Practice has two main component parts.

• The Consumer Code
• The Code towards Direct Sellers (distributors/agents).

The DSA has working relationships with key regulatory authorities however, this is no protection for bad practices and while the DSA will support member companies in compliance, it will not support unethical or illegal behaviours.

Checking that your practices and products conform is the responsibility of the Direct Selling Company and failure may see a prosecution by the relevant authority. Such prosecutions have heavy penalties both for the individuals involved and the company.

Norway
The environment for direct selling in Norway is very favourable and there are very few regulations or laws controlling the market.

Peru
Peru is based with CODE OF ETHICS CAPEVEDI (CE) and CODE OF CONSUMER PROTECTION AND DEFENSE (CPDC). Private and Public, both are very important to developed the Direct Selling in pur country.

Emits guidelines to orient the actions of state and market actors.

Set Public Policy and the principles for the governing system and to guide all its members: the state, unions and citizens.

It has allowed to unify, update and strengthen the legislation.

It becomes a tool of economic development: encouraging consumption successful transactions benefiting both the consumer and the supplier and the market generally by clear rules.

Philippines
No information.

Poland
Until 1990, direct selling did not exist in Poland and therefore there was no direct selling legislation.

Since the introduction of direct selling, the legal situation has not changed and no laws have been introduced. However, a number of direct selling companies are operating successfully in Poland and a Polish DSA was founded in 1994.

The government is preparing a large number of new laws. Regulations on economic issues will probably follow the lines of existing directives and laws of the European Union as Poland aims to become a member of the EU as soon as possible.

Portugal
In Portugal there are four main important laws that deal with direct selling (please see below the Decree-Law and the Portuguese legal full text web site link).

There is no Consumer rights code.

1. Decree-law 143/2001, dated 26th April – http://dre.pt/pdf1sdip/2001/04/097A00/23602367.pdf
2. Decree-Law 82/2008, dated 20th May – http://dre.pt/pdf1sdip/2008/05/09700/0287102879.pdf
3. Decree-Law 166/2013, dated 27th December – http://dre.pt/pdf1sdip/2013/12/25100/0698506990.pdf
4. Decree-Law 24/2014, dated 14th February – http://dre.pt/pdf1sdip/2014/02/03200/0139301403.pdf

Russia
There are no any additional requirements to general incorporation procedure necessary to setup Direct Selling and MLM company in Russia.
The direct selling industry in Russia is regulated on the basis of the following:

• The Civil Code of the Russian Federation;
• The Law of the Russian Federation “On Consumer Rights’ Protection”;
• The Resolution of the RF Government “Rules of Selling of Specific Types of Goods”;

“Rules of Selling Specific Types of Goods” determine the following requirements to the direct selling:

• A direct seller must wear his/her personal badge with the photograph, name, information about the direct seller.
• A seller’s representative must have a properly certified price-list indicating prices of goods.
• During the transfer of a good to the consumer the seller must provide the consumer with a receipt signed by the seller’s representative and displaying the good’s name, information about seller, date of sale, quantity and price of the good.

Singapore
Direct selling in Singapore is governed by the Multi-level Marketing and Pyramid Selling (Prohibition) Act (Chapter 190) and the Multi-level Marketing and Pyramid Selling (Excluded Schemes and Arrangements) Order 2000.
The Consumer Protection (Fair Trading) Act (CPFTA) came into effect 1 March 2004.

Slovak Republic
Direct Selling in Slovak Republic means purchase of contractual goods with subsequent sale of the same goods on the basis of remotely concluded contracts or contract concluded outside working premises of the seller.

This type of sale includes also telephone sales, direct mailing, catalogues, electronic mail sales, distance sale, doorstep sale, sale actions, etc.

Generally, the entrepreneur is defined in the Commercial Code (see “General Legal Framework”. The status of entrepreneur is also defined in Act No. 455/1991 Coll. on Trade License Enterprising, as amended. Obligations of direct sellers are regulated by consumer protection laws, e.g. e.g. Act No. 250/2007 Coll. on consumer protection, as amended, Act No. 102/2014 Coll. on consumer protection at sale of goods or provision of services on basis of remotely concluded contract or contract concluded outside working premises of seller, as amended

Slovenia
In the EU, legal harmonization among the Member States is achieved through directives which normally lay down the minimum terms required by the EU, particularly when it concerns consumer protection issues. Once adopted by the EU, directives must then be introduced into the legal system of each Member State within a prescribed period a time. The foregoing information sets out details of the principal directives affecting direct selling, but reference should further be made to the information given in this Guide for each Member State as they may incorporate conditions more stringent than those prescribed in a directive.

South Africa
The Direct Selling Industry is regulated by the Consumer Protection Act as well as the Companies Act, In addition there is also a strong degree of self- regulation by the DSA and its registered Code of Conduct which is closely aligned to the abovementioned Acts of law. A requirement of membership is written acceptance of the DSA Code of Conduct.

South Korea
All Door to Door sales (DDS), Multi-level sales (MLM), and Sponsoring Door to Door Sales (SDDS) in Korea are subject to the Door-to-door sales, etc. act (referred to throughout as ‘the Act’), the purpose of which, as stated in Article 1, is :

“To protect interests and rights of consumers and raise the market credibility by prescribing matters concerning the fair transaction of goods and services involving door-to-door sales, phone-soliciting sales, multi-level sales, Sponsoring door-to-door sales, continuous transaction and business-soliciting transaction, etc., and thereby to contribute to the sound development of the national economy.”
The act was totally revised on Feb 17, 2012 and came into effect on Aug 18, 2012. The Act’s regulating authority is Korea Fair Trade Commission. For this revision, a task force formed under the commission with the participation of non-governmental experts has discussed it. The watchdog plans to tighten regulations against MLM companies and keep them under closer observation.

* “Door-to-Door Sales” means a transaction in which a seller of goods or a person engaged in the business of supplying a service for a charge sells goods or supplies services by soliciting consumers and then receives an offer for contract or executes a contract (including cases where a seller induces a consumer at a place other than a business place, etc.) and then receives an offer for contract or executes a contract at a business place at a other than a business office, agency or any other place . The participation of the distributors shall not be expanded by more than 3 stages.

* “Multilevel Sales” means the sale of the goods and services (“goods, etc.”) made through the Multilevel Sales Organization (including sales organizations whose levels of distributors is two (2) or less, but have been managed and operated as a sales organization whose levels of distributors are virtually three (3) or more) where a distributor proposes to specific person to be his/her downline distributor, and the participation of the distributors expands by stages (where the levels of the distributors participated shall be expanded by three (3) or more).

* “Sponsoring Door-to-Door Sales” means the case corresponded to “Door-to-Door Sale” and “Multilevel Sales”, but the commission influence only one immediately above distributor.

Spain
Spain is a country of 45 million people, whose political structure is very close to that of a federal country. In addition to a bicameral parliament: Congress and Senate, there are seventeen “autonomous communities” or regions, each one with its own regional parliament and government.

Some matters belong exclusively to the central parliament and government whereas others are handled exclusively by the regions.

In the case of direct selling, there is legislation promulgated by the central parliament and also legislation promulgated by some of the regions.

Spain is one of the European Union countries that adopted the “euro” as its new currency.

Sweden
The direct selling in Sweden is since July 1st 2000 regulated by the law (2000:274) regarding distance selling and direct selling. The law was enacted as the implementation of EU directive 1997 on distance contracts. The information given below is given for direct selling and with respect to distance selling only in case of deviations. The law is a consumer protection law and is generally applicable when a consumer purchases or leases movable property and services from a commercial body.

By distance selling contract is understood a contract concluded without a personal meeting between the seller and buyer. Contact can be taken via telephone, internet, mail order, TV shop, e-mail etc.

By direct selling contract is understood a contract concluded in the home of the consumer or in the home of another consumer, at the work place of the consumer, at hospitals, on trains or other places away from fixed retail locations, where the consumer is not staying only occasionally. The law is also applicable on contracts concluded in connection with an excursion arranged by the seller.

Direct selling does not apply to the following activities:

• transactions below a value of SEK 300 (approx. EUR 34)
• buildings or other fixed assets on land or water
• financial instruments and insurance services;
• food
• contracts in connection with visits made at the express request of the consumer

In addition distance selling does not apply to the following activities:

• credits
• automats for purchase of goods
• transactions concluded with a telephone operator by the use of a public telephone
• transactions concluded in connection with auctions, excluding internet auctions

Please note that members of the Swedish DSA may not apply above-mentioned exceptions.

Taiwan
Multi-Level Marketing Supervision Act (MLMSA , effective 29 January 2014) and the Consumer Protection Law (CPL, effective 13 January 1994) contain wide ranging provisions covering trade generally, some of which are of particular relevance to DS and MLM.

Thailand
Thai Direct Selling Association has reported directly to the Office of Consumer Protection Board where is under the command of Ministry of Prime Minister. The Act to conduct the business had initiated since 2002 shall be called “Direct Sales and Direct Marketing Act B.E. 2545 (2002)
In this act states that;

“Direct sales” refers to the marketing of goods or services made directly to the consumer at his/her home or workplace or the home or workplace of others or any other place which is not an ordinary place of business, through the direct sales representative or uni-level or multi-level independent distributors but not including transactions specified in the Ministerial Regulation.

Turkey
No information.

Ukraine
The direct selling activity is governed by general laws: Civil Code of Ukraine, Commercial Code, Tax Code Law of Ukraine “On consumer rights protection”, Resolution of Cabinet of Ministers of Ukraine from August 23, 2000 N 1336 “On list of specific forms and conditions of activity in trade, catering and services, permitted to carry out payment transactions without the use of cash resister using the accounting books”.

There is no specific legislation on direct selling. However activity of concluding trade contracts outside of point-of-sale or office premise is governed by Article 12. Law of Ukraine “On consumer rights protection”

Rights of consumer in the case of concluding trade agreements (deals) outside of trade or office premises.

1. This regulation not applicable to the contracts concluded outside of point-of-sale or office premise, and which are up to:
   1. contracts of consumer credit;
   2. deals with the real estate;
   3. deals with securities;
   4. insurance contracts.
2. In the case of realization of products outside of point-of-sale or office premise a salesman shall be obliged to give to the consumer a document which certifies the fact of conclusion of contract. Such document must contain information about:
   1. date of conclusion;
   2. name and location of salesman;
   3. name of products;
   4. price;
   5. term of implementation of works;
   6. other substantial conditions of the contract;
   7. rights and duties of sides of contract.In the case of no grant of such information the subject of manage carries the responsibility set by the articles 15 and 23 of this Law.
3. In the case of realization of products outside of shops or office premises an consumer has rights to terminate a contract informing a about it a salesman within fourteen days from the date of receipt of document which certifies the fact of sale outside of point-of-sale or office premise or acceptance of products or its first delivery.
4. In the case of realization of products outside of trade or office premises a salesman (performer) must return the prepaid money without a hitch not later than thirty days from the moment of report by an consumer about dissolution of agreement. An consumer has a right not to return products or job or favour performances to the moment of returning him the sum of money prepaid by him.
5. In the case of realization of products outside of shops or office premises a salesman shall return the prepaid money without a hitch not later than thirty days from the moment of customer’s notice about contract termination. A customer has rights keep the product till money return takes place.
6. In the case of termination of a contract concluded outside of point-of-sale or office premise, a customer shall inform the salesman about a place, where products can be returned.It can be stipulated by the contract that in case of its termination the products or results of works, which were sent via post office shall also be returned by post.Charges related to return of big products are at the salesman expense.In the case of termination of contract, concluded outside of point-of-sale or office premise, a customer shall keep the products for sixty days after its receipt. If a salesman does not take measures for returning the products within the noted period, such products shall be remained with the customer without arising of obligation of payment for it.
7. In the case there is no document or confirmation of sales is given to the customer this fact does not arise any contractual obligations for him/her.In case of failure to provide a document or confirmation of sales a customer notifies the seller on nullification of the contract. The seller within thirty days of receipt of such notice shall return the funds received and reimburse expenses incurred by the consumer in connection with the return of products.
8. For the right to cancel the contract the consumer shall keep obtained products without any change to it.Destruction, damage or spoilage of products that was not made by the fault of the customer, does not deprive the consumer of the right to terminate the contract. Reducing the cost of production due to open packaging, inspection or test product does not deprive the consumer’s right to terminate the contract.
9. If the seller (agent) or a third party provided a credit to the consumer in the amount of funds under a contract concluded outside of point-of-sale or office premise, this credit time shall lapse the time of termination.
10. If violation of this Article within the prescribed time seller does not refund money for products in the event of termination of the contract, the consumer shall be paid with a penalty in the amount of 1% of the cost of production for each day of delay of refund.

United Kingdom
The main items of legislation specifically related to direct selling are:

• Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013.
• Fair Trading Act 1973 sections 118-120 (apply to MLM operations).
• Trading Schemes Regulations 1997 (apply to MLM operations).
• Some parts of the Consumer Protection from Unfair Trading Regulations 2008.

United States
The United States is a constitutional republic. There are laws of relevance to business at both the federal, state and local levels.

Uruguay
No information.