___________________________________________________________________________2008/SMEWG26/004

Agenda Item: 17.5

Progress Report: SME Consumer Education and Protection Initiative (CEPI)

Purpose: InformationSubmitted by: United States

26th Small and Medium Enterprises Working Group Meeting

Kaohsiung, Chinese Taipei2– 4 April 2008

PROGESS REPORT OF ON-GOING APEC SME PROJECT:Consumer Education and Protection Initiative (CEPI) (United States)

Title of Project: APEC Consumer Education and Protection InitiativeEconomy: United States of AmericaProject Started: 1999Duration: ContinuousFunding: Self-fundedProject Overseers: Ms. Tamuna Gabilaia, WFDAS Executive Director,

Ms. Bettie L. Smith, DSEF Senior Program Director, andMrs. Brenda J. Fisher, U.S. Government Project Overseer

Objective of the APEC Consumer Education and Protection Initiative (CEPI):

CEPI’s overall objective is to facilitate SME growth and contribute to economic stability,revitalization and long term growth in APEC economies. The Initiative endeavors to doso through “capacity building.” A key focus of CEPI is promoting enhanced skillsdevelopment for new entrepreneurs and expanding consumer confidence throughconsumer education. The Initiative uses conferences, workshops, publications, and otherprograms to educate consumers, businesses, and government officials on a range ofconsumer protection issues such as: consumer rights and responsibilities; fraudulentbusiness practices; developing a consumer friendly regulatory environments; consumer re-dress options; and meeting the challenges presented by advances in technology.CEPI programs are tailored to match the specific needs of the various APEC economies.Ultimately the Initiative will provide an environment that supports active microenterprisedevelopment, which is critical for the region’s long-term economic well being.

CEPI’s “capacity building” efforts complement ongoing work within the APEC SME Working Group as well as other APEC fora, including the HRD working group. The Initiative overlaps with the ongoing work on several projects to promote entrepreneurship and SME development. Further, CEPI responds to the recommendations of the private sector voiced through ABAC to encourage micro-enterprise development and address consumer protection and education issues. The Initiative has been private sector-driven from the onset, via the World Federation of Direct Selling Associations and Direct Selling Associations in various APEC member economies. Consumer protection and education and their link to small business development were identified by the private sector as key issues to be addressed in APEC. Consumer protection organizations, local direct selling associations, and academia work closely with government officials to develop economy-specific CEPI programs.

The APEC CEPI program was launched in 1998 and formally endorsed by the APEC SME Ministerial at the April 1999 meeting in Christchurch, New Zealand. The APEC CEPI is a public-private partnership between APEC economies and business. Programs and follow-up programs have been launched in Thailand (1999-present), Philippines (2000-present), Malaysia (2001-present), Russia (2000-present), Mexico (2002-present), Korea (2005-present); and Vietnam (2007-present). Work on bring CEPI to Peru is underway (2008). Updates on each of these CEPI activities follow.

VIETNAM:

CEPI Project Objectives: The fist APEC Consumer Education and Protection Initiative (CEPI) planning meeting among the Vietnamese government officials, consumer group representatives, the World Federation of Direct Selling Association (WFDSA) and the Direct Selling Education Foundation (DSEF) was held in March 2007 in Hanoi, Vietnam. The main objective of the meeting was to identify consumer education and protection initiatives in Vietnam and tailor the first CEPI program to the needs of the Vietnamese market. Participants in the CEPI planning meeting included the Assistant to the Prime Minister Responsible for Anti-Counterfeiting and Anti-Smuggling Department, Office of the Prime Minister, the Director General of Vietnam Competition Administration Department, the Chairman of the Vietnam Association for Anti-Counterfeiting and Trade Mark Protection (VATAP), the Vice Chairman and General Secretary of the Association of Standards and Consumer Protection, the Director of the Customer Protection Division of the Ministry of Trade, Ministry of Planning and Investment, the Commercial Attaché of the U.S. Embassy in Hanoi, Ms. Tamuna Gabilaia of WFDSA and Ms. Bettie Smith of DSEF.

MOT official Mr. Hoang described the main goals and objectives of the CEPI program and stated that MOT will act as a coordinator of the program. He stated that after consultation with all the major stakeholders, counterfeiting and trademark protection were identified as key issues which need to be addressed. Counterfeiting represents a very urgent problem for the intellectual property legal system and its economic and financial consequences are huge. The availability of counterfeit goods poses problems not only to intellectual property and trade, but also to public health. In particular, children and adults are experiencing injuries and harm from the counterfeit goods such as drugs, alcohol, cigarettes, food and personal care items.

Infringement of trademarks is another increasing critical issue in Vietnam. This situation causes many difficulties for consumers in distinguishing between real goods and the counterfeit ones, seriously damaging consumers, and adversely impacting the prestige of the legitimate owners of trademarks registered in the country. Mr. Hoang stated the CEPI program in Vietnam should address the above-mentioned issues. VATAP Chairman Mr. Bao stated that unless all major stakeholders join forces in dealing with the counterfeit goods and trademark protection issues, the effort will not be as fruitful as desired. It is equally important to raise not only the seller’s social responsibility but also consumer awareness regarding the damage they cause to legitimate businesses. Mr. Bao concluded that strengthening the capacity of trade and consumer associations to deal with the above-mentioned problems is essential.

The CEPI program may focus on supporting this group of stakeholders. The CEPI program can enhance the capacity of trade and customer associations, especially VATAP, to address the issues related to counterfeiting and trademark infringement.

WFDSA/DSEF can support the associations in designing and carrying out campaigns aimed to educate consumers about their rights and responsibilities, about the differences between the real products and the counterfeit ones and the good business practices. This ultimately will result in the improved competitiveness of good businesses and increased customer confidence.

Mr. Bao identified the following major priorities for 2007-2009:

- Organization of a local conference with the participation of customer and trade associations, businesses, Ministries, Office of Government and others. The conference will focus on the rights and obligations of sellers and buyers, infringements of customers’ interests and possible solutions, etc.

- Exhibitions aimed at raising the public awareness about counterfeiting issues and educating local consumers to differentiate between genuine and fake products.

- Establishment of Consulting Hotline Centers which will provide information about trademark promotion, anti-counterfeiting, consumer rights, etc.;

- Workshops for the various government, consumer and business representatives;- Pages in the existing Products and Trademark Magazine issued by VATAP- Coordination with administrative organization to enforce relevant legal regulations.

Ms. Gabilaia and Ms. Smith stated that WFDSA and DSEF were excited about the opportunity to partner with the Vietnamese to develop public education initiatives in Vietnam. As Vietnam expands its market economy, it is important that business increases its role in helping to educate consumers about their rights and responsibilities in a market economy. They reiterated that a key focus of CEPI as endorsed at the APEC SME Ministerial Meeting in Christ Church, New Zealand is to expand consumer confidence in the marketplace, thus contributing to economic stability, revitalization, and long term growth in APEC economies. Therefore, the CEPI is not a one-time deal but a multi-year effort and WFDSA/DSEF provides follow-up funding for three years. Ms. Smith stated that during Spring 2007 WFDSA/DSEF will be meeting with the U.S. and international experts in the area of counterfeiting and trademark protection in order to identify the potential partners for the CEPI program.

CEPI Program: The first CEPI conference titled “Fighting Against Counterfeit and Imitative Goods Is Essential to Protect Consumers and Good Enterprises” was held in Ho Chi Minh City on October 17-18, 2007. The conference was organized by VATAP, with the support of the Ministry of Industry and Trade, WFDSA and DSEF. The conference was attended by over 235 participants from various Vietnamese cities and provinces. Participating agencies included: Vietnam Competition Council, Ministry of Culture, Government Office, Vietnam Competition Management Office, Market Control Office, Ministry of Police, Anti-Trafficking, Counterfeit and Imitative Goods and Anti-Corruption Department of the Government Office, Vietnamese National Office of Intellectual Property, General Office of Vietnamese Customs, Market Control

Department, regional representatives from 27 provinces and cities, journalists and entrepreneurs, U.S. Patent and Trademark Office, Direct Selling Committee of Vietnam, Country of Los Angeles Department of Consumer Affairs, WFDSA and DSEF.

The Deputy Ministry of Industry and Trade provide the keynote speech at the event. He stressed the importance of fighting against the counterfeit goods and copyright violation in the framework of Vietnam’s WTO commitment. The Deputy Minister stated that in order to tackle the problem, all interested parties should closely cooperate with each other and follow the Government’s direction. Ms. Tamuna Gabilaia of WFDSA and Ms. Bettie Smith of DSEF gave an overview of the direct selling industry, its Code of Ethics, the benefits of the APEC CEPI program and its results in other countries as well as various consumer protection issues. Mr. Rigoberto Rays of Los Angeles Department of Consumer Affairs gave a presentation about the intellectual property enforcement issues in the United States.

Representatives from the various Vietnamese enterprises stated that infringement of trademarks causes many difficulties for consumers in distinguishing between real goods and the counterfeit ones, seriously damaging consumers, and adversely impacting the prestige of the legitimate owners of trademarks registered in the country. Everyone emphasized a necessity of expanding and promoting an APEC CEPI program throughout Vietnam. Mr. Bao, Chairman of VATAP, stated that while in the past it took approximately one year to produce and sell the counterfeit goods on the market, currently it only takes one month to do it and it is impossible to distinguish between a real product vs. counterfeit product. Copyright violations and pirated software are also prevalent.

After extensive discussions the following recommendations were made to the Government: a) Continue to further develop and amend legal documents in the abovementioned field; b) Continue to enhance the executing agencies’ capabilities; c) Encourage enterprises to take an active role in the fight against the counterfeit goods in order to better protect themselves against such goods;d) Set up a direct retail network for consumers and conduct consumer education and awareness campaigns in urban and rural areas;e) Expand APEC CEPI program throughout Vietnam and educate the public about eight fundamental consumer rights which were adopted by the United Nations in 1985;f) Educate the public and enhance their awareness about their rights and responsibilities and the international practices, through TV and media campaigns.

A one-day training workshop for 50 government officials from provinces throughout Vietnam was held on October 18, 2007. Mr. Rigoberto Reyes from the LA County of Consumer Affairs shared his agency's investigation techniques and made recommendations on how Vietnamese counterparts can

enhance their consumer protection efforts.  Ms. Jennie Ness of the U.S. Patent & Trademark Office shared with the audience the responsibilities of the USPTO in helping U.S. businesses set up business in Vietnam.  Ms. Ness offered to do additional training on intellectual property and trademark issues for the government officials, as well as helping them produce consumer education materials for business and consumers. Vietnam Consumer Association reported on the current consumer protection issues and stated that it plans to amend and supplement an ordinance on consumer protection.

WFDSA and DSEF reiterated that the CEPI is not a one-time deal but a multi-year effort and WFDSA/DSEF and the Direct Selling Committee of Vietnam are looking forward to close cooperation with the Vietnamese authorities in the coming years.

Following the conference, VATAP submitted a statement to the Prime Minister suggesting naming November 29, 2007 as an official day against “ Preventing and Fighting Against Counterfeit Goods”.

Next Steps: The APEC CEPI follow-up program is tentatively scheduled for June 2008.

SOUTH KOREA:

CEPI Program Objectives: The South Korean Direct Selling Association (KDSA) held an APEC CEPI planning meeting in Seoul on July 20, 2004. Participating in the event were representatives from Korea Fair Trade Commission (KFTC), Korea National Council of Consumer Organization, US Embassy in Korea, Direct Selling Mutual Aids Cooperative, KDSA, World Federation of Direct Selling Associations and Direct Selling Education Foundation. In addition to discussing direct selling issues, the participants identified consumer problems involving E-commerce and Internet transactions, telemarketing fraud, food safety and credit card use and abuse.

CEPI Program: An international conference “How to Protect Consumers in the Korean Marketplace” was held on December 16, 2005 in Seoul, Korea. The conference was jointly organized by the Direct Selling Association of Korea (KDSA), Korea Fair Trade Commission KFTC, World Federation of Direct Selling Associations (WFDSA) and the US Direct Selling Education Foundation (DSEF). The main purpose of the conference was to promote consumer rights and to discuss the role of business in promoting consumer education and protection and to develop a model consumer education and empowerment program. Participating in the event were also representatives from the US Embassy in Korea, Organization of Consumer Affairs Professionals in Business, Korea National Council of Consumer Protection Organizations and Direct Selling Mutual Aids Cooperative.

Keynote speaker, Ms. Linda Golodner, President of the U.S. National Consumers’ League (NLC) gave a presentation on the corporate social responsibility and ethics.

Ms. Golodner explained the consumer protection policy in the U.S. marketplace and stressed the importance of consumer education, consumer rights and responsibilities and corporate social responsibility and ethics. Ms. Golodner stated that every consumer is unique and should have access to such basic rights as information, education, choice, health and safety, right to be heard and redress. She stated that NLC partners with the direct selling industry as well as other industries on issues of mutual concerns, holds open discussions about consumers and the marketplace and joins efforts to oppose fraud and deception in the marketplace.

Mr. Jai Yn Yu, Director of the Consumer Protection Bureau, KFTC, discussed the consumer protection issues in the Korean marketplace and announced the new consumer protection policy. He stated that as part of the policy plan, KFTC will provide consumers with accurate and sufficient information which will help to educate consumers, strengthen consumer safety, develop and implement the Consumer Complaints Management System (CCMS) as well as address the consumer issues of global importance.

MEXICO:

CEPI Program Objectives: The planning meeting for the fifth APEC CEPI was held May 23, 2002 in Mexico City, Mexico. Participants agreed to undertake a campaign designed to enhance the Mexican consumer’s knowledge and understanding of consumer protection regulations, and their rights and responsibilities in the consumer marketplace. It was noted that sufficient consumer protection legislation exists in Mexico, as well as numerous consumer education publications from both government and non-government agencies.

CEPI Program Outcome: One million copies of the brochure designed to educate consumers on their rights and responsibilities was developed and printed. The brochure includes text outlining the eight consumer rights adopted by the United Nations in 1985 with a brief explanation of each one. The text was prepared by Mr. & Mrs. Lomeli (Mexican Association for the Consumers Defense) with input from the Federal Consumer Protection Agency and the Mexican Direct Selling Association (AMVD). The final art design was done by Zermat, (Ing. Adelfo Enriquez Rios). The brochure was distributed via AMVD’s member companies’ independent sales force to consumers and additionally to government, consumer groups, academics and other businesses outside direct selling. The objective is to educate consumers about their rights and to promote the image of the direct sales industry.

In addition to developing the brochure, a “Consumers Day” was held on November 26, 2003 at the Accounting School of the Mexican National University (MNV). Professor Antonio Castro Martínez of MNV organized the event. The focus was on Consumer Education and Consumer Rights.

Follow-Up Program: CEPI Mexico follow-up program is being discussed.

RUSSIA:

CEPI Program Outline: The 2nd International “Entrepreneur and Consumer – Steps Towards Each Other” was held in Moscow, Russia on March 11-12, 2003. This is the fifth in a series of APEC CEPI programs designed to provide a forum for the exchange of information about consumer and business issues and concerns. Over 40 representatives from business, government agencies, and consumer organizations from Astrakhan, Volgograd, Voronezh, Ekaterinburg, Moscow, Nizhniy Novgorod, Novosibirsk, Omsk, Roston-on-Don, Samara, Saint Petersburg, Tula and Tyumen participated in the conference.

The conference was organized by the Russian Direct Selling Association (RDSA), the RF Ministry of Anti-Monopoly and Entrepreneurship Support (MAP), the RF Ministry of Economic Development and Trade (MEDT), and the International Confederation of Consumers’ Societies (CONFOP). Prior to the conference a press meeting was held on March 6, 2003 to promote the APEC CEPI program. Journalists representing fourteen newspapers, magazines and radio channels attended the press briefing.

The conference focused on three issues:(1) Additional measures protecting consumer rights in the area of new selling methods and

introduction of amendments to the Russian “Consumer Rights Protection” Law;(2) Initial results of Small Business Tax Reform; and(3) Draft legislation on self-regulation organizations

Keynote speaker, Mr. Sergey Dudkin, MAP Deputy Minister, opened the conference. He discussed government policies relating to public consumer organizations, entrepreneur associations, and government agencies responsible for consumer protection. He stressed the importance of maintaining an integral economic environment, free from overpriced products and false advertising. Regarding consumer protection, Mr. Dudkin said one of the main problems is “insufficient customer information and enlightment.” He further stated that his agency, in compliance with priority trends of national policy, is doing considerable work in informing consumers of their rights in a competitive marketplace.

Mr. Dudkin concluded, “I believe that, following the tradition of the first conference and after careful consideration and discussion, you will introduce new and interesting proposals. These proposals will contribute to a certain correction in our activities, and help us to find the right direction. On our behalf, we are open for cooperation and dialogue.”

Mr. Sergey Shtogrin, Vice-Chairman of the RF State Duma Budget and Tax Committee, said it was good to see continuity in APEC CEPI the program. He pointed out that discussions held in the previous conference facilitated the adoption of a whole range of laws related to small business. He further stated, “We managed to drastically reduce the tax burden to individual workers who are engaged in direct selling outside of permanent outlets, and who work directly with the end consumer. I think that it will facilitate the development of business and, if business is developing, then higher quality services will be rendered to our population.” Mr. Shtogrin acknowledged problems with the entrepreneur’s social insurance and tax administration, and encouraged participants to share their comments on tax reform, and interrelations between tax payers and the State.

CONFOP Chairman, Mr. Dmitry Yanin, discussed the role self-regulation organizations in protecting consumer rights. He said self-regulation organizations play an important role in that they could constitute an alternative to courts; and reduce the workload of municipal and state bodies regarding consumer rights and consumer societies. Russian consumers face a host of problems when seeking redress that includes a lack of access to courts and inexperienced judges. Mr. Yanin noted that the internal control systems that exist in self-regulation organizations are more effective than government control.

Round Table Discussion: “Consumer Rights Protection in New Selling Modes”

At the beginning of the Round Table the following presentations were made:

“Amendments to Consumer Rights Protection Law”, speaker Sergey Batkaev, Head of Department, RF Ministry of Anti-Monopoly and Entrepreneurship Support

“Technical Regulations, Voluntary Certification”, speaker Marina Glazatova, Deputy Head of Department, RF Ministry of Economic Development & Trade

Representatives from government and the consumer organizations had different views regarding the introduction of cooling-off period and anti-pyramid provisions into legislation. For example, MEDT representatives believe the cooling-off period provision should be stipulated in the RF Civil Code. MAP and CONFOP representatives feel the cooling-off provision should be included in the Consumer Rights Protection Law. All representatives, however, pointed to the positive role of the RDSA member-companies that voluntarily implement provisions to protect consumers.

Regarding anti-pyramid legislation, CONFOP representatives believed this provision should have been added to the Consumer Rights Protection Law. Government officials were of the opinion that the issue of pyramid schemes counteraction should be transferred to the area of criminal legislation.

Other issues discussed during the roundtable included the responsibility of foreign manufacturers; regulations related to product warranties and customer information, amendments to legislation on new selling modes such as distant selling, direct sales and e-commerce. Also discussed were technical regulations and current legislation relating to goods and services and, most important, product safety. Participants were in agreement that the Technical Regulation laws should not decrease the degree of consumer protection, and that the provisions of the law should comply with the Consumer Rights Protection Law.

Business representatives advised against using provisions of the given law with regard to voluntary standardization as a tool to pressure business, and as an unfair competition method.

Round Table: “Initial Results of the Small Business Taxation Reform”

Mr. Andrey Tsyganov, Deputy Minister of MAP, remarked that he was glad that the APEC CEPI program continues to progress. He said it was very important to discuss changes that were taking place in the Russian economy, and in the area of legal regulations, and compare the tax issues discussed a year ago to current concerns in the Russian Federation. Mr. Tsyganov mentioned that he attended a Minister’s meeting in 2002 on small business of APEC member-states where the Russian APEC CEPI, and the international APEC CEPI project as a whole, received complete support and approval.

He concluded by summarizing the results and changes made as a result of the 2002 tax reform law, and outlined the position of the RF MAP regarding further improvements to taxation procedures relating to the simplified taxation system, and the unified tax on the imputed income.

Following Mr. Tsyganov’s presentation, a video produced and shown at the 1st APEC CEPI conference in Moscow was again presented to the participants, several of whom appeared in the video. During discussions it was pointed out that the small business tax system that came into force at the beginning of 2003 simplified considerably business activities, and reduced the entrepreneur’s tax burden. However, a number of problems remained unresolved. In order to improve the tax system, participants recommended:

To retain two options of the simplified taxation system: one – on the revenues (6%), and the other one – on the difference between revenues and expenses (15%). At the same time the checklist of possible expenditures should be specified and extended for the second option.

To develop a clear system of computing the amount of tax on imputed income due. The system should take into account regional differences in the level of income. It is also necessary to continue and complete the activities on the development of the land cadastre.

To provide entrepreneurs which are transferred to the unified tax on imputed income with an opportunity to use a simplified taxation system for other types of activities as well.

To make changes to the small business state support system: funds allocated for these purposes should be directed to the development of educational and information activities, and to the establishment of consulting centers where entrepreneurs can obtain information on registration, taxation, reporting requirements, and credit issues.

There are problems within the State tax administration, particularly in the area of communication between tax inspectors and entrepreneurs. It is necessary to develop a more efficient reporting system where legitimate taxpayers are protected against the tyranny of inspectors.

At the request of Andrey Tsyganov and Sergey Shtogrin, recommendations from the roundtable discussions were submitted to the RF Ministry of Antimonopoly Policy and Entrepreneurship Support, and to the Tax and Budget committee of the RF State Duma for consideration in further discussions on tax reform and small business support.

CEPI Program Outcome: The amendments proposed by RDSA and CEPI program participants were recently incorporated into the Duma's tax reform legislation, which was adopted by the State Duma and the Federal Council.

The adopted amendments mean that: Entrepreneurs that are transferred to the unified tax on imputed income tax are provided with

an opportunity to use a simplified taxation system for other types of activities as well. Since January 1, 2005 entrepreneurs are allowed to continue using one of those two options

of the simplified taxation system: one - with unified tax at the rate of 6% from the revenues, and the other one - with a unified tax at the rate of 15% from the difference between revenues and expenses. At the same time the checklist of possible expenditures will be specified and extended for the second option.

The other important change in the RF taxation system, introduced by the given Law is the reduction of the VAT rate to 18%.

Round Table: “Law on Self-Regulation Organizations”

Participants in this discussion included Ms. Marina Glazatova, Deputy Head of Entrepreneurial Activity Regulation Department, RF Ministry of Economic Development and Trade, and Ms. Diana Sork, Vice-Chairman, International Confederation of Consumers’ Societies.

Ms. Bettie Smith of Direct Selling Education Foundation gave an overview of the history of the development of the industry’s Code of Ethics. She highlighted the important work undertaken

between industry leaders, government regulators and consumer leaders to write a Code that would protect both consumers and business.

Following Ms. Smith’s presentation, participants discussed the draft legislation on Self-Regulation Organizations. Participants pointed out a number of provisions that were not connected to the goals of self-regulation that could potentially lead to abuses. Specific areas of concern included audit inspections of self-regulation organization members, disclosure of information including financial data, mutual insurance of civil liability towards consumers, as well as the possibility of obligatory membership in self-regulation organizations. The provisions could also contribute to unfair competition techniques in the marketplace, and alienate many companies from participation in a self-regulation organization. Specific outcomes from the conference included radio broadcasts of conference presentations by “Radio Russia”, the appointment of the President of the Russian Direct Selling Association to the Interdepartmental Council for Consumer Rights, revisions to the consumer protection act and inclusion of anti-pyramid and cooling-off provisions, and small business tax reform will include SME and consumer recommendations. Participants concluded discussion on self-regulation organizations by recommending a three-tier structure: (1) amendments to the Law on Non-Profit Organizations, (2) adoption of a general self-regulation legislation, and (3) adoption, if necessary, of legislative acts describing self-regulation principles in other types of activities.

The developers of the draft law expressed gratitude to the participants for a constructive discussion and assured them that their comments will be reflected in the final review of the draft law. They also stated that some provisions (mutual insurance) that were opposed by participants had already been suppressed in the draft law.

CEPI Follow-Up Program: The 3rd International conference "Entrepreneur and Consumer - Steps Towards Each Other" was held in Moscow, Russia on November 23-24, 2005. This is the seventh in a series of APEC CEPI programs designed to provide a forum for the exchange of information about consumer and business issues and concerns. Over 100 representatives from business, government agencies and consumer organizations from Astrakhan, Barnaul, Novgorod, Volgograd, Voronezh, Dagestan, Yekaterinburg, Kaluga, Magnitogorsk, Moscow, Nizhniy Novgorod, Novosibirsk, Omsk, Orel, Penza, Perm, Rostov on the Don, Ryazan, Samara, Saratov, St. Petersburg, Tver,

Tula, Tiumen, Khabarovsk, Khanty-Mansiisk, as well as Byelorussia, Kazakhstan, Tajikistan and Ukraine participated in the conference.

The conference was organized by the Russian Direct Selling Association (RDSA), WFDSA and the International Confederation of Consumers' Societies (CONFOP). The conference focused on the following issues:

Rights of the consumers in the sphere of new methods of trade; Amendments to the Russian "Consumer Rights Protection Law" and other legislative acts of

the Russian Federation; Problems of introduction of the system of technical regulation and accreditation; Prospects of small business development.

Sergey I. Shtorgin, Vice-president of the Committee for the budget and taxes of the State Duma of the Russian Federation, noted with satisfaction the continuity of the APEC CEPI program. He stated that "We have established a constructive dialogue, and the main thing is that after each conference at least one, two or three problems you raise before me find their positive solution in the relevant laws". Shtorgin informed the conference participants of the legislative acts passed and considered by the State Duma of the Russian Federation in the area of tax law. Specifically, he noted the changes in the legislation concerning the tax on the imputed income. Concluding his speech, Shtorgin mentioned the 2005 budget and the fact that 1.5 billion rubles were allotted for the support of small business in comparison to the 100 millions allotted in former years.

MALAYSIA:

CEPI Project Outline: “Building Consensus Towards Consumer Empowerment” was the theme of the third APEC Consumer Education and Protection Initiative (CEPI) program, held in Kuala Lumpur, Malaysia on August 23, 2001. The key goal of the Malaysia APEC CEPI Forum was to develop a model consumer education and empowerment program that can be replicated throughout the Malaysian states. The purpose of this consumer education module is to provide background information and ideas to assist in the training and education of ordinary consumers, the business community, and product manufacturers in order to create awareness and motivate all groups to play a more responsible role in ensuring consumer protection as part of national development initiatives. Thirty-five participants representing the government, business, consumer and academic sectors participated in the APEC CEPI Forum. In his opening remarks, keynote speaker Syed Mestaddin Bin Syed Abdullah, Director of the Consumer Affairs Division of the Malaysia Ministry of Domestic Trade and Consumer Affairs (MDTCA) stated that the APEC CEPI program compliments Malaysia’s vision of obtaining developed country status by 2020. In order to achieve this economic vision,

Malaysia must move forward quickly to ensure that consumers understand their rights, responsibilities and purchasing power in the marketplace. The APEC CEPI is one example of cooperative efforts between government, business, and consumer sectors on a national and international basis.

CEPI Project Outcomes: A key objective of the APEC CEPI forum was to build a consensus on the content of the draft consumer education module. The draft consumer education module is comprised of three parts: consumer rights and responsibilities, business ethics and product labeling. The module is structured so that additional topics could be added to the existing framework. It was acknowledged that free trade and globalization provide greater choices, but also result in greater risks, so consumers must have a greater awareness than in the past.

With respect to product labeling, consumers must be properly informed about product content, safety and price and future action should focus on labeling requirements and enforcement activities. In terms of business ethics, business must maintain standards of ethical practices. APEC CEPI activities continue in Malaysia with the publication and distribution of a consumer education module titled "Consumer Education on Consumer Rights & Responsibilities, Code of Conduct for Ethical Business and Importance of Product Labeling. The publication is available in both English and Bahasa and will be distributed to consumers, educators, businesses and government officials. The purpose of the module is to provide background information to assist in the training and education of consumers, the business community and product manufacturers. The aim is to create awareness and to motivate all three groups of our society to play a more responsible role in ensuring consumer protection as part of the national development initiatives. The module was produced by Bishan Singh, Executive Director of the Management Institute for Social Change (MINSOC) for the Direct Selling Association of Malaysia. It was produced in collaboration with the Ministry of Domestic Trade and Consumer Affairs (MDTCA), Federation of Malaysian Consumer Associations (FOMCA), Education and Research Association for Consumers Malaysia (ERA) and the Muslim Consumers Association of Malaysia (PPIM).

In November 2006, in line with the Malaysia Ministry of Domestic Trade and Consumer Affairs (MDTCA) mission to encourage the development of domestic trade and to increase an efficiency of consumer protection in the country, DSAM entered into agreement with MDTCA to produce a series of press articles in the newspapers nationwide on such topics as multilevel marketing vs. the pyramid schemes, the different types of direct selling, direct selling from a global perspective, what is DSAM and WFDSA and what they do, DSAM Code of Ethics, etc. The publication of the articles coincided with the Malaysian consumer awareness campaign and featured the Ministry’s logo along with DSAM logo. Readers were able to write or email their questions to DSAM had their responses featured in the follow-up publications.

Next Steps: The Malaysian Direct Selling Association in partnership with Federation of Malaysia Consumer Associations (FOMCA), Education and Research Association for Consumers Malaysia (ERA), the Malaysian Ministry of Domestic Trade and Consumer Affairs, World Federation of Direct Selling Associations (WFSDA) and the Direct Selling Education Foundation (DSEF) met on July 16, 2004 to discuss the second phase of the CEPI follow-up program. In the first phase, a consumer education module was produced in the English and Bahasa languages. In the second phase, the manual will be used to carry out training sessions targeting teachers in Selangor and the Federal territory. The module will also be translated into Chinese and Tamil.

A two-day workshop to train teachers on how to maximize the use of the existing consumer education module was held. This training focused on creating trainers that are capable of disseminating accurate information about consumerism to school consumer clubs and others. A handbook on consumer education for community based organizations, colleges, schools and consumer associations will be produced. The proposed manual will consist of 120 pages and will be printed in English, Bahasa, Chinese and Tamil.

The follow-up program occurred in 2007.

PHILIPPINES:

CEPI Program: A multi-sector CEPI conference was held on October 9, 2000 to coincide with Philippine National Consumer Awareness month. The conference, entitled Tri-Sectoral Conference on Consumer Welfare, was jointly organized by business, government and consumer organizations, including the Direct Selling Association of the Philippines (DSAP), the Philippines Department of Trade and Industry, Consumer Federated Groups of the Philippines (CFGP), the National Federation of Women’s Clubs (NFWC) and the Philippines Marketing Association (PMA). The CEPI was sponsored by the World Federation of Direct Selling Associations (WFDSA), with the support of the Direct Selling Education Foundation (DSEF), the Philippine National Consumer Affairs Council (NCAC) and the Philippine Chamber of Commerce (PCCI).

In addition to providing a forum for exchange, the objectives of the conference included identifying the consumer welfare roles and responsibilities and formulating action plans for implementation by each of the three sectors, jointly or separately. The keynote presentation was given by former Philippine Secretary of Trade and Industry (DTI) MAR Roxas, who emphasized the importance of tri-sectoral cooperation, which is consistent with the APEC objective of utilizing “cooperative efforts to solve the challenges of change.” Secretary Roxas stressed the virtues of good corporate governance, which include the responsibility to deliver “value for money” to consumers. He added that consumer welfare can only be successfully promoted in a free and competitive market, in an environment in which information is easily accessible to consumers.

Philippines - CEPI Project Outcomes: Action plans for implementation by the three sectors –business, government and consumer. The World Federation of Direct Selling Associations is assisting with follow-up work in the Philippines through funding and technical support. The Philippines Department of Trade & Industry (DTI) and the National Consumer Affairs Council (NCAC) are primarily responsible for coordinating and or implementing many of the actions plans identified at the initial CEPI conference. An outcome from the CEPI conference was the Presidential appointment of Direct Selling Association of the Philippines (DSAP), as one of two private groups, to the National Consumer Affairs Council (NCAC). DSAP also developed a self-help manual for use at “Help Desks” in the business place nationwide.

The project was coordinated with DTI. Undersecretary Ordonez, who also served as Chairman of the NCAC, reported that provincial consumer affairs councils were set up and formalized following the CEPI conference. The councils operate similarly to the NCAC. The primary function of the councils is to handle consumer complaints throughout the provinces. Each council is comprised of representatives from four consumer organizations, two business groups and four government agencies.

DTI coordinated and implemented several activities that included: improving existing and or establishing new consumer “hot lines”. Specific attention was given to delivery of services. DTI developed a tracking system that, among other things, enables staff to determine the exact length of time it takes to resolve consumer complaints. Also consistent with APEC objectives, the DTI strengthened linkages with local and international agencies. The emphasis was on improving communication among the agencies on specific issues that include consumer laws, arbitration procedures and policy issues. DSAP Chairman Mr. Joey Sarmiento gave a lecture on “Direct Selling/Network Marketing vs. Pyramiding” during the seminar organized by the DTI for the Consumer Welfare Month in October, 2003. The lecture focused on the difference between a legitimate network marketing business from a pyramid scheme. Mr. Sarmiento tackled the Department Administrative N

8, the pending bills on pyramiding, presented case studies and the actions to effectively fight pyramiding.

Follow-Up Program: The Direct Selling Association of Philippines in partnership with the Department of Trade and Industry (DTI) launched an anti-pyramid education campaign in 2003. On July 16, 2004 Ms. Gabilaia of WFDSA and Ms. Smith of DSEF met with Undersecretary Adrian Cristobal, Jr. of DTI and several members of DSAP to discuss the follow-up campaign. The purpose of this project was to help the public, especially consumers in rural areas, distinguish legitimate multilevel marketing companies from companies engaged in pyramid schemes. Educational materials, training modules in English and Filipino language and flyers warning the public about pyramid scams were developed and distributed to the public. A public forum was conducted. DTI regional directors helped to conduct training workshops with business leaders. Press releases on the direct selling industry were circulated throughout the Philippine regions.

THAILAND:

CEPI Program Outline: The first CEPI seminar was held in Thailand in August 1999. The Conference was held in Bangkok on August 16-20 and was organized jointly by the Thai Government and the Thai Direct Selling Association. The conference was extremely successful, attracting more than 150 participants and speakers. Thailand used the CEPI conference as a backdrop to launch new consumer protection efforts and has subsequently has launched further nation-wide efforts on consumer education.

Subsequent follow up to the August 1999 CEPI program has included work by the Thai Direct Selling Association (DSA) with Thailand's Consumer Protection Board and other non-governmental organizations in Thailand to create a model of consumer protection advocacy in Asia and specifically within the APEC CEPI program.

CEPI Program Outcome: Following the Bangkok CEPI conference that they helped organize, the Thai Consumer Protection Board created a "Consumer Protection Youth Club" whose purpose is to educate Thai youth about consumer protection concepts. More than 1,000 students from secondary schools and colleges in all 76 provinces nationwide are required to take a compulsory curriculum on consumer protection. The curriculum will be run through Boy Scout Clubs and during summer vacation.

Supporting the initiatives of the government, the Thai DSA teamed up with a Thai direct selling periodical to create a "Mobile Consumer Protection Program" to educate people about consumer protection in four of Thailand's provinces: Chiengmai, Nakornratchasima, Udonthani and Songkhla. The speakers in the mobile consumer protection company are members of the Thai DSA and include representatives of Amway, Avon, Nutri-Metics and Suprederm. The program was conducted in1999. The specific topics include fundamentals of consumer protection and how to identify and avoid pyramid schemes. Nearly 900 people participated in the program when it was launched. Follow-up activities in 2003 included the reunion of the students and advisors of the consumer protection club. Top clubs participated in the reunion. The four-day reunion activities included the training, workshops, exhibition and presentations by consumer leaders

CEPI Follow-Up Program: The Thai Consumer Protection Board (OCPB) organized the two-day training seminar on June 10-11, 2004 in Bangkok and on July 26- 27 in Chieng Mai province. Specific objectives included: Expansion of the OCPB’s efficient and sustainable consumer protection network in the schools by

encouraging the Thai teachers and students to take an active role in consumer protection; Supporting the consumer protection initiatives run by key government agency in consumer

protection (OCPB);

Promoting the World Codes of Ethics in direct selling business related to the consumer protection.

About 780 teachers, students and advisors to Thai Student Protection Clubs throughout Thailand participated in the two-day event designed to educate them on current consumer protection issues that included advertising, consumer scams, product labeling and pyramid schemes. The general sessions included presentations on Word Federation of Direct Selling Associations (WFDSA) and its Code of Ethics, general direct selling issues in Thailand and the Direct Selling Education Foundation. Ms. Smith of DSEF and Ms. Gabilaia of WFDSA were honorary guests of Mr. Anuwat, Secretary General of OCPB.

Thailand continues implementing activities under APEC CEPI umbrella.