Seldia Newsletter November 2013

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November 2013
Newsletter

 

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Seldia visits future Greek EU Presidency 

On 18 and 19 November a Seldia delegation visited Athens in the framework of the rotating EU Council Presidency which will be chaired by Greece from 1 January until 31 June 2014. Seldia was warmly welcomed by the members of the Hellenic Direct Selling Association on Monday morning at a meeting which aimed at briefing Seldia on the domestic issues. Despite Greece still suffering under the consequences of the financial crisis, Members reported that their business have experienced further growth due to the industry’s popularity and its exceptional resilience to the crisis.

With Greek Ministry officials chairing the EU Council working groups in Brussels, it was important to meet with them beforehand to discuss several specific dossiers that Seldia actively advocates on at EU level. At the Ministry of Development and Competitiveness, Seldia met with the officials responsible for key Consumer policy dossiers such as the Consumer Rights Directive, the Unfair Commercial Practices Directive and the Directive on Alternative Dispute Resolution. At the Minsitry’s Trade section Seldia was welcomed by the Trade in Services team that will be chairing the Brussels-based Trade Policy Committees on the transatlantic trade agreement between the EU and the United States (TTIP). At the Ministry of Health, Seldia met with the relevant officials to  discuss the recent proposal for a new law that should partly liberalize the sale of food supplements outside of pharmacies. 

Seldia also met with specialists of the United States Embassy and the American Hellenic Chamber of Commerce to highlight to them the European and domestic issues faced by the Direct Selling industry. Very open and constructive talks were also held with the Green Consumer Ombudsman body, the European Consumer Centre and the main national consumer organization. While there have been some issues with rogue traders, these bodies all underlined the solid reputation and conduct of Seldia corporate members. Finally, Seldia also met with a postgraduate business school and a woman entrepreneurship organization to find ways in which to collaborate on projects where Direct Selling can be promoted in the framework of entrepreneurship and female entrepreneurship in particular.

Having won the Direct Selling Association of the Year Award in Brussels on 1 October, it was clear from the visit that the Direct Selling Industry in Greece is in strong hands. Thank you to all HDSA members for their warm welcome

Website of the Hellenic Direct Selling Association

Industry News

New Consumer Protection Act in Turkey
Turkey is one of the largest European markets, with over 830’000 persons having been involved in Direct Selling in 2012. On 7 November the Turkish National Assembly passed with unanimous consent a new law which introduces the new Consumer Protection Act (and revises the one that had been in effect since 1995). This can be considered as a milestone for the Turkish Direct Selling industry. The revised Act will come into effect six months after being published in the Official Gazette.

The new legislation is significant for the industry on several points. For the first time, provisions that clearly define what a pyramid scheme is, have been adopted. The law declares such schemes as illegal under any circumstances and specifies that those initiating or running a pyramid scheme will be prosecuted under Turkish Criminal Law. This new provision will aid combating pyramid schemes much more effectively, as in the past the lack of a specific wording in the law made it more difficult for authorities to effectively deal with pyramid schemes. 

The new law also increases the cooling-off period from seven days to fourteen days and thus adapts to the EU’s Consumer Rights Directive. Furthermore it is stipulated that, sales agreements can only be made by the sellers that have been authorized by the Ministry of Customs and Trade and have to be in written to be valid.

For a detailed overview of the changes that will affect Direct Selling companies please contact the Turkish Direct Selling Association or a Seldia staff member. 

Website of the Turkish DSA

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Swedish DSA celebrates Annual Gala Dinner
On 9 November the Swedish Direct Selling Association (Direkthandelns Förening) celebrated its annual gala event at the Grand Hotel in Stockholm. 

The gala event included the prestigious DF Awards ceremony. The Swedish DSA awards the best and most deserving sellers of many of its Member Companies, this year this prize was awarded to thirteen individuals. The Swedish DSA also awards the Academic Award and the DF’s Female Entrepreneurship prize which are both dotted with 50 000 Swedish crowns.

The Academic Award went to Erik Daniels and Adam Countryman for their study on “Codes of Conduct in the News Business Sector” – an exceptionally well-conducted study on companies and their Codes of Conduct. The study underlines the importance of codes of conduct but also the need to properly implement, monitor and applying them.

The Award ceremony was hosted by and presented by Anders Berglund, who this month was named Chairman and Executive Director of the Swedish DSA.

Website of the DF Gala Event
Website of the Swedish DSA

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XIV World Federation Congress in Brazil
The World Federation of Direct Selling Associations has chosen Brazil to be the host of the 14th World Congress. The event will be known under the motto: “Direct Selling: The Original Social Network”. The conference will be held in Rio de Janeiro between November 10th and 12th, 2014.

In the 14th WFDSA World Congress the following topics will be discussed:

  • New Technologies
  • Quality of relationships
  • Entrepreneurs and the new labor
  • Industry’s Advocacy
  • New markets, new opportunities

The WfDSA calls this up and coming event as one of the milestones in the history of Direct Selling. Apart from having the opportunity to learn more about the thriving Brazilian market, the WfDSA has also planned a comprehensive program of social and cultural activities. Registration will be opened soon.

The new website of the World Congress can be accessed here: www.wfdsa2014rio.com

Website of the World Federation (WfDSA)

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Direct Selling Facts 
The US DSA has created a new website called “Direct Selling Facts” which aims at explaining all that Direct Selling is about, particularly to persons who may have less knowledge of the industry. The website gives useful information on the benefits, the history, the ethics and values of Direct Selling and provides users with a resourceful online media library which includes legal texts, news articles and celebrity endorsements. 

The website comes as a result of American activist investors recently targeting segments of the industry and portraying a false image of Direct Selling. 

Direct Selling Facts also features a powerful video that explains what Direct Selling is, what its advantages are and why it is so successful. The video can be accessed on the first page of the site. 

For more information on “Direct Selling Facts” visit the website

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Opinion on prohibition of home sales in Belgium

On 26 November, the advocate general of the European Court of Justice rendered his opinion in the infringement procedure of the Commission against Belgium (C-421/12) for incorrect implementation of the Unfair Commercial Practices Directive (UCPD). The third part of the Commission’s claim is against the Belgian restriction on home sales with a value higher than EUR250 and the home sales of certain goods, which it believes is in violation of the UCPD.

The advocate general gave its opinion in which he recognizes the full-harmonization character of the UCPD. This means that Member States cannot introduce stricter measures, such as the Belgian home sales bans, other than under the conditions foreseen in the UCPD. One of these conditions is early notification of restrictive measures to the European Commission, which Belgium failed to do. For this reason, the home sales restrictions are in violation of the UCPD, according to the advocate general.

The opinion of the advocate general has no legal effect, but will be taken into account by the Court, who is expected to give a final ruling in this case early next year. The advocate general’s opinion is positive news for the direct selling sector, as it underlines the UCPD’s full harmonization effect and the limited possibilities of upholding any direct sales bans. Should the Court follow this opinion, Seldia will have a stronger case with respect to its actions against restrictions on direct sales in other member countries.  

The opinion can be found here.

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Article on the Future of Direct Selling
Seldia’s Chairman Magnus Brännström published an article on the Future of the Direct Selling industry in the Merc (Mercury Magazine), a Business review published by Uppsala University from where he graduated with a Law degree and an MBA.   

The article can be downloaded here.

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Amway Global Entrepreneurship Report 2013
The Amway Global Entrepreneurship report 2013 covers the period from 8/03 to 19/05 2013 and has been conducted among 26,009 women and men aged 14 to 99 from 24 countries from all over the world.  The goal of the report is to point out the economic potential of entrepreneurs in different national economies and to support the activation of potential entrepreneurs, by analyzing the attitudes of people to entrepreneurship. Here are some key findings:

● Two thirds of polled people have a positive attitude towards self-employment. For the European Union, the average percentage is relatively high, with 69% of positive attitude towards entrepreneurship (Denmark, Finland and the Netherlands have the highest percentage). Interestingly, the countries with the most negative attitude towards entrepreneurship are also found in the EU (Austria, Hungary, Portugal and Germany).

● There are clear North-South discrepancies within the European Union as far as entrepreneurship-friendliness is concerned: while northern countries are mostly entrepreneurship-friendly, southern countries struck by the crisis show strong entrepreneurship-unfriendliness.

● For Europeans, the most important aspects to start up a business are “independence from an employer” (46 %), “self-fulfillment, possibility to realize own ideas” (39 %) and “second income prospects“ (27 %).

● More than one third of the respondents in the EU could imagine to start their own business (36 %). However, there is an entrepreneurial gap of 28% between the self-employment potential (“I can imagine to start up my own business”) and the actual self-employment rate (“I am self-employed”). This entrepreneurial gap is almost as high as in the worldwide average (31 %).

● In the EU, on average, a total of 73% consider the fear of failure hindering entrepreneurial activity. The fear of financial consequences due to business failure clearly appears to be the biggest obstacle to become self-employed (43%). Social consequences such as disappointing family as well as psychological consequences like personal disappointment rank far behind financial consequences.

● Besides Japan (94%), the countries of the European Union are the most frightened of failing with an enterprise are Italy, Czech Republic (each 91%) and Greece (85%). On the contrary, the U.S. (37%), Mexico (47%) and Australia (53%) show relatively low percentages on being afraid of failing.

The report can be downloaded here.

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Did you know that…?  
In 1983 Seldia (formerly known as Fedsa) organized a European Parliament event at which the European Direct Selling Industry had dinner with the first elected President of the European Parliament, Ms. Simone Veil.

On the photo Simone Veil is portrayed next to Hans Gerber, the Association’s Chairman from 1982 to 1985.

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EU AT A GLANCE

Second Round of TTIP Negotiations concluded 

The second round of the Transatlantic Trade and Investment Partnership (TTIP) negotiations took place on 11-15 November in Brussels. During the joint EU Commission/USTR press briefing on 15 November, the EU and US TTIP Chief Negotiators (Ignacio Garcia-Bercero and Dan Mullaney) expressed that the round had been productive and both gave an impression of enjoying good relations. Although both underlined that the negotiations were still at an early stage, satisfaction was evident in the EU’s Trade Commissioner de Gucht praising the good and steady progress. 

The second round also covered services, including aspects of cross-border services, financial services, telecommunications and e-commerce. The negotiators also began setting out their respective market access interests in various services sectors. Seldia will be meeting a second time with the relevant negotiators at the European Commission before the end of the year to further re-reinforce its position and to receive feedback on the Direct Selling industry’s call for the TTIP agreement to formally recognize Direct Selling as a specific method of distribution. 

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The EU Council block Product Safety Proposal 
On 15 November, the EU Member States rejected the mandate for trialogue negotiations with the European Parliament and the European Commission on the product safety package. The Member States could not find a compromise on how to deal with mandatory origin labelling. The current Lithuanian Council Presidency will continue to find a compromise ahead of the Competitiveness Council on 2 and 3 December. If no compromise is found, it is likely that the Product Safety Package will not be adopted before the European Parliament elections next year.

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Revision of EU Small Claims Procedure 

On 19 November the European Commission published a new legislative proposal to reform the existing Regulation on a European Small Claims Procedure, which applies to cross-border litigation in civil and commercial matters where the claim does not exceed €2000. The proposal, based on the findings of a separate new report on the operation of the existing Small Claims Regulation, aims to make the following changes:

· Extension of the scope of the Regulation to cross-border claims for sums up to €10.000;
· Extension of the definition of “cross-border cases”;
· Improving the use of electronic communication, including for service of certain documents.

The proposal will be discussed by the European Parliament’s Legal Affairs (JURI) Committee and EU Justice Council over the coming months. The new Regulation is not expected to be adopted until after the European elections in May 2014, with a view to its entry into force by mid-2015. The Parliament’s JURI committee will appoint a Rapporteur in December this year after which a European Parliament draft report will be presented.

Proposal for a Regulation on the European Small Claims Procedure
Report on the European Small Claims Procedure

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EP Study on implementation of EU law

A recently published report from the European Parliament Policy Department sheds some light on what the current trends are regarding the transposition of EU law and what the reasons are for Member States’ failure to transpose on time. To improve monitoring and reduce the recourse to infringement procedures, the Commission has put in place measures to assist Member States with implementation. This report assesses these tools looking across the board at correlation tables, conformity checking, scoreboards and barometers, guidelines, implementation plans, networks and committees, inspection, package meetings, fitness checks, legal reviews, and reporting procedures.

To download the study click here

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Study on Discrimination of Consumers in the Digital Single Market

The University of Osnabrück conducted the study “Discrimination of Consumers in the Digital Single Market” on behalf of the European Parliament IMCO Committee. This study is analysing why consumers are discriminated when buying products cross-border online, if the discrimination is against EU legislation, what could be the solutions  for consumers to fully benefit of the digital single market, etc.

Three main practices have been identified which discriminate against consumers:refusal to sell, automatic re-routing and the unjustified application of different terms and conditions.

Art. 20  Services Directive, Brussels I Regulation, Rome I Regulation, competition and fundamental human rights provisions of the Treaty and IPR are the specific legislation being analysed. One of the conclusions is that a business is not infringing EU law by refusing to sell to a consumer in a specific country. The fundamental freedoms do not protect the consumer from the business which refuse to sell or only sells on less favourable terms.

Moreover, it mentions that you cannot force businesses to provide their services in all MS by enforcing Article 20 of the Services Directive, since this would lead to state intervention into the market which would lead to considerable limitation of the freedom of businesses.

Search engines and Price Comparison Websites play, according to the study, an important role for the creating of a non-discriminatory digital single market. Initiatives such as the Common European Sales Law and Online Dispute Resolution are seen as steps in the right direction.

The study can be downloaded here.

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Business calls for deal on Trade Facilitation
A few days ahead of the WTO Ministerial Conference in Bali, a large number of international Commerce and Retail Associations, amongst them EuroCommerce, signed a call upon the WTO members to finalise the deal on Trade Facilitation.

The simplification and harmonisation of customs procedures worldwide is a vital building block for economic growth and development. Trade Facilitation is the simplest, most regulatory efficient way to recover economic performance and generate wealth creation for the good of all societies, regardless of location or region.

In times of immense challenges, economic operators worldwide are waiting anxiously for negotiators to show leadership and demonstrate the ability of the World Trade Organisation to really deliver at the upcoming WTO Ministerial Conference in Bali.

The signatories of this call believe the consensus-driven negotiations and the progress made in the last weeks on the Draft Agreement on Trade Facilitation now have sufficient shape to be concluded and implemented, for the good of all economies. They call on all developed and emerging economies to take significant step to finalise the deal with the least possible derogations or transition periods and commit to help poorer countries in achieving their customs reforms.

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EVENTS

French DSA General Assembly & Press Conference
   18 December 2013, Paris (www.fvd.fr)
Releasing the potential of the 50+ generation
   18 December 2013, Brussels (Lunch organized by Amway Europe)
The new rules on Distance Selling in France and Belgium
   19 December 2013, Brussels (University of Leuven Seminar)To top      

 

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Troy Dooly is recognized internationally as an influencer in the areas of personal branding, leadership development, marketing campaigns, organizational expansion, and corporate launch strategies. Dooly is a speaker, results coach, and radio host. He is a founding member, show host (Beachside CEO) and News Director of the Home Business Radio Network. He is a founding member, and currently serves on the Board of the Association of Network Marketing Professionals