The 8th ministerial meeting of Ministry of Commerce has approved the Measures for Administration on Establishment of Service Network of Direct Sales Industry on Aug 21, 2006, which is now announced and will take effect as from Oct 20, 2006.
Minister of Ministry of Commerce: Bo Xilai
Sep 20, 2006
Measures for Administration on Establishment of Service Network of Direct Sales Industry
Article 1. For purpose of regulating direct sales and enhancing supervision on direct sales activity, the Measures are formulated in accordance with Regulations on Administration of Direct Sales (hereinafter referred to as “Regulations”).
Article 2. Enterprise applicants shall submit applying materials covering the scheme of service network in the region where they plan to carry out direct sales business. The said scheme must conform to the following conditions:
(1). Be convenient for ultimate consumers and direct sellers to know about the quality and prices of commodities, and exchange and refund;
(2). Service network cannot be set up at residential building, school, hospital, the armed forces and government organs;
(3). Conforming to local requirements of people’s government above county level (including county level) on establishment of direct sales industry.
Article 3. Ministry of Commerce will consider city/county as the basic unit of direct sales business for approval. Enterprise applicants shall set up no less than 1 service network in prefecture-level city, and declare in accordance with the said Measures to carry out direct sales in other regions/counties of the city.
Commercial administrative departments above county level (including county level) shall examine the scheme of service network submitted by applicants in accordance with Article 10 Item 2 of the Regulations. In case of approval, the commercial administrative departments shall provide letter of confirmation (refer to appendix 1 for standard format) to provincial administrative commercial departments, clarifying that the said scheme of service network conforms to the related regulations of Article 2 of the Measures.
Article 4. When transmitting applying materials to Ministry of Commerce, provincial administrative departments shall issue letter of confirmation of scheme of service network (refer to appendix 2 for standard format) at the same time. The letter of confirmation shall include following contents:
(1). Local administrative commercial department above regions/county level (including county level) has approved the scheme of service network;
(2). The scheme of service network of direct sales business in the province conforms to requirements of Article 10 Item 2 of the Regulations.
Article 5. Enterprises that have legally obtained direct sales operation license shall complete the establishment of service network in accordance with the approved scheme within 6 months as from release of documents of approval. Those failling to complete the service network in 6 months cannot carry out direct sales business in regions where the service network is not fully completed. In case the enterprises plan to carry out direct sales business, they shall make another declaration separately.
Article 6. Related administrative commercial departments of province, autonomous regions and municipalities shall check and examine the established service network of direct sales enterprises together with local administrative commercial departments above regions/county level (including county level) in accordance with the Regulations and related rules, and report the result of examination to Ministry of Commerce for registration. After registration, Ministry of Commerce will publish the regions where the enterprises can undertake direct sales business and service network on website of direct sales industry management. Direct sales enterprises cannot carry out direct sales before the examination and registration.
Article 7. Direct sales enterprises may increase service network in line with requirements of business expanding. Enterprises needn’t to make declaration for increase of service network in approved regions of direct sales business, but required to register through provincial administrative departments. After registration, Ministry of Commerce will publish the added service network of the approved regions where the enterprises can undertake direct sales business on website of direct sales industry management.
Local administrative commercial departments may demand direct sales enterprises increase service network in line with Article 10 Item 2 of the Regulations after clarifying reasons.
In case of adjustment of scheme of service network or decrease of service network, direct sales enterprises shall report to the former departments of approval, and register in accordance with related regulations.
Article 8. Those who go against the Measures will be punished in line with Article 39 of the Regulations.
Article 9. Related administrative commercial departments and working staff shall be very conscientious in the performance of their duties, and carry out the work of administration on establishment of service network in line with related laws. Those who go against the Measures will be punished in line with Article 38 of the Regulations.
Article 10. Ministry of Commerce keeps the right of explanation of the Measures.
Article 11. The Measures will take effect as from Oct 20, 2006.
