THE LEGAL CONSTRUCTION OF LICENSING AND SUPERVISION OF SHARIA MULTILEVEL MARKETING IN INDONESIAN TRADE LAW

Trade law in Indonesia has not accommodated Sharia Multilevel Marketing (Sharia MLM). The legitimacy of the Sharia status and supervision by the the National Sharia Council of the Indonesian Ulema Council (DSN MUI) does not have legal implications for the legality of the Sharia MLM company business entity. This article aims to explain the urgency of Sharia MLM regulation in trade law and provide input on the legal construction of licensing and supervision of Sharia MLM to maximize the achievement of trade law in Indonesia. This normative legal research uses statutory and conceptual approaches with a legal construction method. The legal materials were analyzed usingcontent analysis technique and prescriptive methodology. The results show that the legal construction of Sharia MLM in trade law is urgently carried out by the government using an integration-partnership model between DSN MUI and the Indonesian Ministry of Trade in the licensing and supervision system of Sharia MLM. The application of this model can legitimize the legal status of a Sharia MLM company so that it can become a locomotive for accelerating the Islamic economic ecosystem to advance the national economy.


Introduction
Indonesia's Multi-Level Marketing Syariah (Sharia MLM) industry has not developed significantly.Since the Fatwa of the National Sharia Council of the Indonesian Ulema Council (DSN MUI) Number 75/DSN-MUI/VII/2009 concerning The Guidelines of Sharia Tiered Direct Selling (Sharia MLM Fatwa) was issued, there have only been 11 (eleven) Shariah MLM companies on June 2022. 1The percentage of Sharia MLM companies is very small compared to the total of MLM companies that have direct selling business licenses and are registered as members of the association of direct selling companies in Indonesia.According to the Ministry of Trade's data as of December 31,  2021, there are 371 registered direct-selling companies.Among them are 106 companies which are members of the Indonesian Direct Sales Association (APLI) (update 15 June 2022), 2 and 178 companies which are members of the Association of Indonesian Direct Sales Companies (AP2LI). 3One of the reasons is that there is no specific regulation in trade law to support Sharia MLM business operations. 4Due to its voluntary characteristic, the Sharia MLM industry develops slowly.The legitimacy of sharia MLM is only through DSN MUI certification, Article 109 of Law Number 40 of 2007 concerning Limited Liability Companies (Limited Company Law),5 but the legal entity status is not a Sharia company as applicable in Sharia financial institutions. 6The legal vacuum of Sharia MLM in trade law creates uncertainty and results in the weakness of Islamic MLM institutions.
Sharia MLM carries Sharia principles, that it does not contain haram li dzatihi, haram li ghairihi, and haram because the contract is imperfect. 7Maximum profit in Sharia MLM is based on economic rationality of Islamic ethics,8 meanwhile conventional MLM refers to general business ethics, not relying on religious ideology.For this reason, it is necessary to have the legitimacy of the Sharia MLM institution specifically to confirm the identity and role of Sharia MLM in the country's economy.
This void of Sharia MLM legal norms shows that the state has not fully recognized the identity of the Sharia economy in Indonesia, which is not in line with the government's seriousness in using the sharia economic system as a pillar of the country's economy alongside the economic principles of Pancasila. 9The Indonesian government is focusing on advancing the economy through Islamic economic instruments by establishing KNEKS (National Committee of Islamic Economic and Finance) based on the Presidential Regulation (Perpres) No. 28 of 2020. 10 The aim is to increase the development of the Islamic economic and financial ecosystem to support national economic development. 11he existence of sharia economics in Indonesia is not only due to the support of political power, but logically it can also be a model that creates social justice for all Indonesian people.According to Chapra, justice in Islamic economics involves four things: a) the needs fulfillment; b) a respectable source of income; c) distribution of income and wealth; and d) growth and stability. 12Under the Islamic economic system, entrepreneurs have freedom and can produce whatever they want, as long as the economic activities are still in line with halal (permitted) and haram (prohibited) regulations.All activities have their own moral and ethical boundaries no one can cross.Islam does not respect immoral acts, such as greed, selfishness, badness, waste, injustice, corruption, and crime.Wealth should not be distributed among the rich only but for the whole society, especially for Muslims according to Allah's command.The priority should be the family members and then society, which eventually gives positive impact for all humanity.
Islam also instructs the believers on how they should manage their income and wealth and what kind of benefits they will receive from Allah.Their benefit is based not only on the rewards in this world but also in the hereafter (Al  Baqarah [2]: 261-262). 13All transactions must comply with the law given by Allah.Everyone has the same opportunity to get wealth and should not circulate within the groups of rich people.Islamic instruments such as zakat, the interestfree system, and inheritance law have unique implications for upholding social justice under the Islamic system.Furthermore, God rewards those who perform responsibilities towards their fellow Muslims.Especially when they channel aid, provide social security, guarantees, and insurance to beneficiaries in vulnerable environments and unforeseen circumstances.It is believed that if the state and society follow the rules and regulations given by Allah then a healthy and just society can be realized. 14n this case, Sharia MLM is one of the Islamic economic activities that can realize social justice based on sharia principles according to the DSN MUI fatwa.However, the power of political and legal configuration will definitely strengthen the existence and function of the sharia economy so that it can be implemented perfectly in the corridor of development and fostering national law.The desired law is undoubtedly one that functions not only as a means to change society (law as a tool of social engineering, Roscoe Pound)15 to be more obedient to Islamic business principles.The law can also function as social control for sharia MLM business players through an excellent licensing and supervision system. 16For this reason, this article intends to outline the urgency of regulating Sharia MLM in trade law and offer legal formulations that can be applied to Sharia MLM that are accommodative to the halal ecosystem.There are several previous normative studies on sharia multilevel marketing and the application of the DSN MUI Fatwa on Sharia multilevel marketing. 17Overall, no one has studied the legal void of Sharia MLM licensing and supervision in the trade law in Indonesia, especially with a legal construction approach.This article intends to describe the urgency of regulating Sharia MLM in trade law and offers legal formulations that can be applied in Sharia MLM that are accommodative to the halal ecosystem.

Research Methods
This article is a normative legal study examining legal materials.This research uses two approaches.First, the statutory approach reviews all laws and regulations related to the legal issues being handled.Second, the conceptual approach is to design a problem or idea that had no legal rule through the method of legal construction.The legal construction or exposition method is finding a law to fill a legal vacuum or due to the ambiguity of statutory regulation. 18This method is divided into verbal exposition (principal and complement) and non-verbal exposition (representation).The analysis of legal materials in this study uses the content analysis method and the prescriptive method.The content analysis method is a research technique to produce an objective, systematic and qualitative description of the substance of this research. 20Meanwhile, the prescriptive method combines insights from previous analyses to determine which actions should be taken to address the problem of the legal vacuum of Sharia MLM in national trade law.The practice of MLM is allowed in national commercial law as long as it does not contain a pyramid scheme that leads to money games.To ensure that there are no elements of money games and the practice of pyramid schemes, the government has the authority to check/verify the marketing plan and code of ethics primarily during the licensing process (Articles 8 and 9 of Permendag 70/2019 and Article 43 of PP 29/2021).Direct-selling companies are prohibited from doing several things that can lead to the practice of pyramid schemes or money games (Articles 48 and 51 of PP 29/2021).Hence, the government regulates a licensing system and strictly supervise MLM companies in Indonesia.In applying for a business license, the Ministry of Trade can involve direct sales associations to verify the marketing plan and code of ethics for direct selling companies, and field inspections (Article 8 paragraph (3), 9 paragraph (4), and 23 paragraph (4) of Permendag 70/2019). 21The elements of anti-pyramid schemes and money games are considered by the DSN MUI in determining the Sharia MLM Fatwa.

Discussion
Furthermore, there are substantive differences between Sharia and Conventional MLM that made Sharia MLM Fatwa is issued.Jauhari22 explained the essential difference between Sharia MLM and conventional MLM by referring to the 12 (twelve) requirements in the Sharia MLM Fatwa. 23The difference concerns the organization, products, bonuses, and marketing plans. 24First, the sharia MLM company must have a Sharia Supervisory Board (DPS) to oversee the company's business activities, including the products, promotion methods, marketing plans, and ceremonial activities carried out by the company.DPS also guides all company activities so it stays in line with Islamic teachings.Second, according to Islamic law, the products sold must be halal and good (thoyyib) to consume.For products in the form of food and beverages, they must obtain a halal certificate or label.Other than food and beverage products, it is sufficient to consult verbally or written with the DPS.While in conventional MLM, there is no affirmation of the prohibition on using/selling halal products.Third, the company must be free from forbidden things, especially the elements of gambling (maysir), fraud and obscurity (gharar), and usury (riba) in obtaining or distributing bonuses and the company's business marketing plan.Gambling and fraud are actually also prohibited in the conventional MLM, ruled in direct sales regulations, such as money game practices or pyramid schemes.However, they do not emphasize the prohibition of usury and immorality.
From the preceding explanation, three substantive things are not in the MLM regulation: the prohibition of usury, immorality, and the mandatory of halal products.This difference needs to be emphasized in the licensing and supervision system of Sharia MLM.When examined from the procedures for establishing and operating business licenses and MLM supervision as regulated in Permendag 70/1019 and PP 29/2021, it can be explained that, first, based on legal norms, requirements, and procedures for MLM licensing, organizationally there are no specific requirements and procedures for Limited Liability Company that runs a business with sharia principles.Likewise, in the verification process of the marketing plan, code of ethics, and cooperation contracts with supplier partners, products sold by MLM companies are not categorized between sharia and conventional.Second, structurally, DSN MUI is not involved in the national trade supervision system.The certification process by the DSN MUI and the supervision by the DPS are only voluntary but have no legal implications for the legal status of the Sharia MLM company under the Ministry of Trade.Therefore, it shows that there is a substantive legal vacuum related to the principle of prohibiting usury and immorality, and halal products in the licensing and supervision system of Sharia MLM, and the absence of legal force by the Shariah authority of the DSN MUI in the MLM regulation.

The Urgency of Sharia MLM Regulation in Trade Law
The existence of MLM Syariah shows a better change in the ideological order in the community's economic activities in accordance with Sharia guidelines.The DSN MUI fatwa regarding MLM Shariah which was issued in 2009, was the result of the fatwa request (istifta') from companies that run MLM-patterned businesses, namely AhadNet, UFO, and Exxer. 25According to Jauhari's investigation, the Sharia MLM Fatwa is a solution for the legal certainty of MLM businesses which are considered illegal according to the fatwas of scholars in the Middle East and other countries. 26The fatwa stating that MLM is haram retards the development of the said industry in Indonesia. 27SN MUI believes that any muamalah activity, including MLM, is basically permissible as long as it does not contain elements of maysir, gharar, and usury, which lead to tyranny, and other immoralities.According to Jauhari, the fatwa of DSN MUI and the Middle Eastern scholars have similarities in arguing that the haram MLM business violates syara's provisions.By issuing fatwa of DSN MUI, there will be guidelines for the MLM businessmen so the industry is not unlawful, moreover, DSN MUI will have the rights to provide Sharia conformity certification for MLM companies. 28he existence of the DSN MUI fatwa regarding Sharia MLM and Sharia MLM company certification shows that it is a new thing in the trading system.However, it has not been regulated in Indonesian Trade Law.The change in order should be followed by changes in the law that are accommodative and guarantee legal certainty for the Sharia MLM institution.The growth and development of the Sharia MLM industry require a new legal order within the national legal framework.According to Nonet-Selznick, the law is a means of responding to social provisions and public aspirations openly to achieve justice and public emancipation.Rahardjo explained that laws (systems and regulations) need to change so that they do not just become historical monuments that eventually fail to regulate effectively.The sharia MLM industry is not only able to be a practical solution in suppressing the practice of money games or pyramid schemes in national trading activities 29 but also has the potential to advance the halal industry promoted by the government through the sharia economic ecosystem.Sharia MLM can be an instrument and media to encourage the acceleration of the sharia economic ecosystem, which is also a government program, because its operations must use sharia financial institutions, halal products, sharia tourism (as a reward), and manage zakat, infaq, and alms. 30For this reason, it is crucial to construct Sharia MLM law in the trade law as has been done in previous Islamic financial institutions.This idea takes into account the following philosophical, sociological, juridical, economic, and political considerations: First, the philosophical foundation.The philosophy of national law development stems from the values embodied in the Pancasila and the 1945 Constitution, which contain the concept of the relationship between religion and the state with a tamyiz (segregation) pattern. 31This concept is the first principle of Pancasila and is reaffirmed in Article 29 of the 1945 Constitution that "the state is based on God the Almighty".This shows that Indonesia is not an Islamic state, and Islam is not the official religion in the country. 32However, the relationship pattern between Islam and Indonesia as a state has been practiced in the positivization of Islamic law, especially Sharia economic law, through legislation and regulation approaches.Sharia economic law aims to achieve falah (luck of the world and the hereafter) through consideration of the benefit of human life. 33n its axiology, sharia economics is attached to an ethical dimension that comes from the Quran and the Sunnah, both in terms of consumption, production, and distribution; everything must be done perfectly (kaffah) with the dimension of worship. 34Darmalaksana expresses that the Islamic ethical dimension in sharia economics contains the concept of tauhidullah which is ontologically built based on theological and philosophical arguments that underlie the politics of Islamic law in the regulation of the economic field. 35This Islamic ethical dimension is emphasized in the Sharia MLM Fatwa that the Sharia MLM requirements do not contain elements of gharar, maysir, usury, dharar, or dzulm and immorality.
The need for Sharia MLM regulation is basically to maintain the objectives of Islamic law (maqashid al-Shari'ah) which contains the value of maslahah, that the law must be oriented to the benefits of others. 36The value of maslahah in the context of institutionalizing sharia MLM in national law considers the primary rank in maqashid al-Shari'ah, namely maintaining religion (hifz al-dîn), soul (hifz an-Nafs), and property (hifz al-mâl). 37First, religion contains teachings related to creed, worship, and muamalah as commanded by Allah SWT to humans.Everything is summarized in the pillars of faith and the pillars of Islam.So, any muamalah practice, as long as it is under sharia guidance, is the embodiment of hifz al-dîn.With the constitutional guarantee of freedom to practice the religion, instituting Sharia MLM is an effort so that what business actors and consumers do will benefit their souls.Second, hifz an-nafs are closely related to the obligation of Muslims to consume and carry out muamalah activities that are not harmful both physically and mentally, avoiding non-halal sources.Sharia MLM regulation is an effort so that what is done by business actors and consumers provides benefits for their souls.Third, hifz al-mâl that for survive, humans need assets, one of which can be obtained through the Sharia MLM business.Through precise arrangements and holding sharia principles in this business, there will be no elements of zhalim, gharar, maysir, usury, and tadlis.Parties involved in muamalah transactions will get a fair profit.The moral values of Sharia MLM which are formalized in positive law will bind the community.If people are submissive and obedient to the law, do business without harm and create an economically independent society, the economy will run well under the objectives of establishing a national trade law.
The state must accompany religion in the same space, providing adequate legal political support for developing sharia economic law in Indonesia, especially for the Sharia MLM business.What is meant by a good political support is by formulating more straightforward and definite arrangements in national trade regulations, one of which is for legal certainty for Sharia MLM business entities in the form of regulating the statute of Sharia companies.There are some positive implications (mashlalah 'ammah) from this legal support: (a) strengthening the company's commitment to implement sharia MLM principles because they are legally bound by the statute they have agreed upon; and (b) the formation of a halal ecosystem that is expected in the KNEKS program through four subsystems: halal product guarantees, sharia finance industry, halal tourism, and zakat, infaq, alms, and waqf institutions.These four subsystems have been practiced in Sharia MLM but have not been integrated due to the absence of regulations. 38The opinion of al-Mawardi quoted by Abdul Qadim Zallum is that the state is a tool or means to create and maintain benefits.Islam has become a political ideology for society in a more concrete framework and Islam commands Muslims to uphold the state and implement rules based on Islamic laws. 39So, to achieve the objective of the falah, the DSN MUI fatwa on Sharia MLM is not sufficient as a basis for ethical norms, but must be transformed into a binding legal norm on all elements of society through state authorities.
Second, the sociological basis.Halal lifestyle has become a growing social reality globally. 40Various countries are trying to create an Islamic economic ecosystem.According to the Global Islamic Economy Indicator (GIEI) data in 2020-2021, Indonesia is in the fourth place in terms of the development of an Islamic economic ecosystem. 41The halal lifestyle is manifested through halal food, Islamic financial services, halal tourism, halal fashion, halal media, halal cosmetics and pharmacy, and sharia hospitals. 42For consumers/members, the legitimacy of sharia and halal label has become an urgent need of the Muslim community, along with the increasing awareness of inclusive benefit in sharia economic law.Consumers/members believe that Sharia MLM can guarantee a sharia-compliant marketing system, and the products traded must be halal because of the guidance and supervision of DPS. 43For Sharia MLM business actors, doing business through Sharia MLM is motivated by several reasons, including those relating to sociological factors: 44 (a) as Muslim, they must comply with Islamic guidance; (b) they have social responsibility to restore public trust of MLM business image which was previously considered to be contrary with the principles of mu'amalah maliyah, laws, and regulations; and (c) alternative media in doing business according to sharia and getting halal products for Muslims who are the majority compared to other religions.For these reasons, Sharia MLM businessmen expect regulatory support from the government so that the standardized tools are available, especially for internal Sharia MLM companies.Additionally, they want the government to accommodate and encourage and develop more Sharia MLM businesses in Indonesia. 45n this case, it is crucial to have a law that responds to the socio-economic changes that occur dynamically and rapidly.According to Nonet-Selznick, the law is dedicated to overcoming tension and adapting selectively, responsibly, and not haphazardly.Law is a means of responding to social provisions and public aspirations openly to achieve justice and general emancipation. 46For this reason, special legal formulation is needed as a form of state recognition toward Sharia economic law and the government's responsiveness to the halal lifestyle for social change.Sharia MLM businessmen hope that there will be government support through legal construction to build a paradigm that sharia MLM is allowed and different from the conventional one. 47The desired law is certainly a dual function, first, as a means to change society to be more obedient to Islamic business principles which was stated in the theory of "law as a tool of social engineering" by Roscoe Pound; 48 second, as social control for sharia MLM businessmen if it has been enforced in the form of legislation. 49hird, the juridical basis.Based on the amendments to Article 1 paragraph (3) of the 1945 Constitution, Indonesia is a legal state (rechtsstaat) that adheres to legal positivism. 50According to Jimly Ashshiddiqie, Article 1 paragraph (3) of the 1945 Constitution contains the consequence that all problems in this country must be resolved by law as the highest guideline. 51The law will have binding power for its citizens when it has become a written legal product determined by state authorities which are internally authorized to issue and enforce what is called positive law.Legal positivization aims to realize one of the requirements of one of the legal principles/objectives, namely legal certainty.According to Mahfud MD, legal certainty is to ensure the existence of justice. 52Sudikno Mertokusumo argues that legal certainty exists because of the coercive power from the state authorities.Hence, he emphasized that it does not refer to sanctions, but legal certainty is defined as orientation certainty.Orientation here means the clarity of the formulation of norms so that it can be used as a guide for the people affected by the regulation. 53Based on the said opinions, sharia MLM institutions are in need of regulations so they have legal certainty.A legal certainty is a form of clarity in legal norms that determine the boundaries of the rights and obligations of each individual or group in social life; there is also consistency in implementing these rules.In the theory of law development, Mochtar Kusumaatmadja stated that law, as a rule, has a function to direct human activity in the way expected by such development or renewal.Therefore, we need facilities in the form of written legal and regulations within society. 54The conception of law as a means of renewal emphasizes that adequate law should not be seen as a set of rules and principles governing human life in society, but must also include the needed institutions and processes to actualize the law. 55he formation of laws and regulations must be based on the constitution's mandate.As explained in the sociological basis above, the construction of the existing national trade law has yet to be responsive to the Sharia MLM industry.Legally, the trade law is not in line with the mandate of the Constitution, especially Article 28D paragraph (1), Article 29 paragraphs (1) and ( 2), and Article 33 paragraphs (4). 56Islamic economic development needs to be supported by public laws, which are generally procedural, namely the procedures for establishing business entities, licensing, converting taxes to zakat, and monitoring them.The substantive legal differences between Sharia MLM and Conventional MLM (related to the prohibition of usury, immorality, and must be halal products) must be distinguished from the beginning when a Sharia business institution starts its business legally through a licensing system.For this reason, the state's recognition, existence, and role are very decisive as holders of public authority, especially in the field of trade.
Fourth.The economic foundation.The presence of the Sharia MLM business is an alternative, as well as the rights of citizens to run a business and to consume products that comply with Sharia principles.With the halal lifestyle promotion and the government's political will in accelerating the Islamic economic ecosystem through KNEKS, it is necessary to pay close attention to the potential contribution of Sharia MLM to the program, namely: first, the Sharia MLM Fatwa prohibits usury transactions.Therefore, companies must use sharia bank accounts, and the same applies to Islamic banking and all the members.For this reason, the Sharia MLM business can potentially strengthen the Islamic finance industry in Indonesia.Second, accelerating the halal product guarantee system because Sharia MLMs can only sell halal-certified products.Third, accelerating the improvement of the halal tourism industry by providing rewards/bonuses to leaders/members who have achieved the sales targets expected by the company. 57ourth, the integration of sharia social fund management, as has been done by PT.Herba Penawar Alwahida Indonesia (PT.HPAI). 58or the macroeconomy scale, the existence of Sharia MLM also effectively empowers the people's economy in the form of (a) business opportunities for anyone and the chance to earn margins; (b) reviving MSME entrepreneurs from small to large scale.For example, at PT. HPAI, the products are supplied by MSMEs, so with more members (because they are customer based), there will be more opportunities to market products through this network. 59The Sharia MLM business can also strengthen resilience to the national economic crisis because it runs an anti-usury management system as has been practiced by Islamic banking.Islamic banking has survived the economic crisis that hit Indonesia in 1998, which caused several national banks to collapse, except for Islamic banks.Externally, the support for sharia banking regulations contributed to strengthening Islamic banks to survive during the national economic crisis at that time. 60ifth.The political foundation.The rapid development of the Islamic finance industry and philanthropy cannot be separated from the contribution of Sharia economic law politics so far.Satjipto Rahardjo stated that law is an instrumentation of political decisions or wills to make laws with specific interests.Thus, the making of laws becomes a field of clashes and struggles of interests. 61According to Mahfud MD, the law cannot only be seen as imperative articles or das sollen requirements.It must be seen as a subsystem which in a statement (das sein) is not impossible to be determined by politics both in the formulation of material and its articles as well as in the implementation of its enforcement. 62The legal vacuum of sharia MLM in the national trade law requires the government's attention as the policyholder through legal political instruments.The government basically has the political will to promote the halal industry through the landscape of the Indonesian halal market. 63It includes: first, industry players consisting of value-added producers (food, pharmaceuticals and cosmetics, modest clothing), retailers, and distributors; and second, ecosystem actors comprised of service providers (logistics industry, Islamic finance, travel, and halal media), as well as governments and regulators. 64However, the Sharia MLM Industry has not been included in the halal market landscape.For this reason, with the above philosophical, sociological, juridical, and economic considerations, the legal construction of Sharia MLM will be easier to carry out with the support of the existing legal politics.The DSN MUI fatwa on Sharia MLM can be used as legal material and adopted in formulating Sharia MLM regulations so that the fatwa has binding legal force. 65Sharia MLM Mutiara Dwi Sari, Zakaria Bahari, and Zahri Hamat, "History of Islamic Bank in Indonesia: Issues Behind Its Establishment," International Journal of Finance and Banking Research 2, no. 5 (September 6, 2016): 178, https://doi.org/10.11648/j.ijfbr.20160205.13.61 Satjipto Rahardjo, Sosiologi Hukum, Perkembangan, Metode Dan Pilihan Masalah (Surakarta: Muhammadiyah  University Press, 2002), 126.62 Moh.Mahfud MD, Politik Hukum Di Indonesia (Jakarta: Rajawali Press, 2011), 16.  63 "Indonesia Halal Market Report," Indonesia Sharia Economic Festival (blog), accessed December 1, 2022, https://isef.co.id/indonesia-halal-market-report/.64 Based on data from the Indonesia Halal Market Report for 2021/2022, Indonesia is the largest halal consumer market in the world with a consumption value of halal products reaching US$184 billion in 2020.Meanwhile, the export value of Indonesian halal products reaches US$8 billion.Sri Niken Handayani, "Potensi Industri Halal Di Indonesia," SWA.Co.Id (blog), April 12, 2022, https://swa.co.id/swa/trends/potensi-industri-halal-di-indonesia.65 Fatwa institutions in the Middle East such as Saudi Arabia, Egypt, Yemen, Qatar, and other countries that officially declare as Islamic countries such as Malaysia and Brunei Darussalam, are generally institutions within the government system so that the decisions of the fatwa institutions have legal force or binding on its citizens.Unlike the case in Indonesia, the authority to determine fatwas can be held by Islamic organizations such as Muhammadiyah, Nahdhatul Ulama, and MUI.The fatwa issued by the DSN MUI is not binding on every Muslim in Indonesia because of the position of the regulation can also strengthen the position of the DSN MUI as the provider of Sharia conformity certification and the supervisor of the Sharia MLM business in the licensing process and formal juridical supervision of MLM in national trade regulations.With the state authority carrying out public functions, it will encourage individual compliance with the institutional structure of the Sharia MLM business as a form of public benefit.It is in accordance with the rules of fiqhiyyah, namely tasharrufu al-imâm 'alâ al-ra'iyyatihi manûthun bi al-mashlahah (the leader's policy towards his people depends on the benefit). 66ased on the substantive differences between Sharia and conventional MLM, it is necessary to formulate licensing norms (including the conditions for the establishment of the company) and special supervision for Sharia MLM as a manifestation of state recognition of the citizens' rights to carry out their religious obligations perfectly (kaffah).This is following the rules of fiqhiyyah, Mâ lâ yatimmu al-wâjib illâ bihî fahuwa wâjib (A case that completes an obligatory case is an obligation).Providing clear and definite legal instruments is the government>s responsibility as state administrators to facilitate business actors and the Muslim community to complete the obligation to maintain Sharia principles in Sharia MLM business.The five foundations above are expected to be able to realize the idea of this Sharia MLM legal construction well.In Bagir Manan>s opinion as quoted by Yuliandri, a law must contain good legal norms that form the basis for the validity of the law, which contains at least three foundations: philosophical, sociological, and juridical. 67So, departing from the five foundations for the legal construction of Sharia MLM above, in its formation, it is necessary to pay attention to the effectiveness of a legal system that can study the interaction of three factors, namely the legal structure (institutional: Ministry of Trade and DSN MUI), legal substance with Sharia principles (appropriate legal principles and norms), and legal culture (Sharia MLM business actors, consumer society, and policy authorities: DPS-DSN MUI and the Ministry of Trade).
Integration-Partnership Pattern of Sharia MLM Licensing and Supervision Authority to Support the Islamic Economic Ecosystem The legal vacuum in licensing and supervision of Sharia MLM in national trade law and the existence of legal problems demand the need to explore legal models and formulations that can provide legal certainty regarding the authority of the DSN MUI.In line with Karni's opinion, for the long-term progress of the Sharia economy in Indonesia, there is a need for a model of Sharia authority.That is not only independent of legal politics but also legitimate in the legality and binding power of legal products, as well as credible from the competence aspect.The Sharia Authority includes (a) the authority for fatwa products; (b) the fatwa transformation process in positive law; and (c) the Sharia compliance mechanism.Karni views the model of Sharia authority in Indonesia, especially in the transition period, as a form of compromise that puts forward the principle of independence from the state and strengthens the practice of living law.So, the sharia compliance monitoring mechanism does not run as effectively and efficiently as sharia banking. 68Efforts to formulate the ideal model have been carried out in the Islamic finance sector, including Islamic Banking and Sharia Insurance.There has been a political dynamic of the DSN MUI institution in the legislative and regulatory process until the formation of a clear and strong Sharia authority in Islamic banking, 69 as well as in the field of Sharia insurance until the government formed a particular regulation regarding the licensing and supervision of the two Islamic financial institutions. 70haria Banking and Sharia Insurance apply an integration-partnership pattern between DSN MUI and the Financial Services Authority (OJK).The DSN MUI has the authority to provide DPS ratification as one of the requirements for a business license.The DSN MUI requires internal supervision through DPS to be reported to the OJK.This integration-partnership pattern is clearly regulated in Sharia banking regulations and Sharia Insurance, so DSN MUI is the holder of Sharia authority with legal force.Even in Sharia Insurance, OJK can provide administrative and criminal sanctions to DPS who violate their obligations as supervisors (Article 74 paragraphs (1 and 2) of the Insurance Law).With this, Sharia Compliance supervision can run more optimally.71 This integration-partnership pattern can be applied in the licensing and supervision system of Sharia MLM while still functioning DSN MUI as an independent institution.Association and Bylaws which contain provisions with sharia nuances, including aims and objectives, business activities, capital, DPS, management and financial reports.Second, companies that are already engaged in conventional MLM business and want to transform into Sharia MLM must make changes to the Articles of Association by containing provisions under Sharia principles.These two things are mandatory requirements in applying for a direct selling business license (SIUP) at the Ministry of Trade.Furthermore, Sharia compliance supervision is carried out internally (Sharia compliance) by DSN MUI through DPS, and the Ministry of Trade carries out external control.DSN MUI is tasked with submitting the results of internal supervision to the Ministry of Trade.For example, if some companies violate Sharia compliance which also means violating the provisions of the law, DSN MUI submits a recommendation to the Ministry of Trade to review and even revoke the business license of the Sharia MLM company.
In the theory of development law, Mochtar Kusumaatmadja states that law, as a rule, has a function as a means to direct human activities in the direction expected by development or renewal.For this reason, facilities are needed in the form of written legal regulations by the laws that live in society. 72The conception of law as a means of renewal emphasizes that adequate law should not be seen as a set of rules and principles governing human life in society, but must also include the needed institutions and processes to actualize the law. 73The construction of Sharia MLM regulations not only adopts the provisions of the MUI DSN fatwa but also regulates the authorized institutional system to regulate and supervise the movement of Sharia MLM.The completeness of regulations and legal certainty for Sharia MLM can be one of the critical factors in realizing the vision of making Indonesia a global Islamic finance and economic center.With the regulation, Sharia MLM companies will gain legitimacy so that all their activities will become one of the locomotives of the real sector in the Islamic economic ecosystem in Indonesia.

Conclusion
The construction of Sharia MLM legal norms in national trade law is necessary to provide legal certainty for the legitimacy of Sharia MLM institutions.Legal construction is carried out by formulating legal norms for licensing and supervision of Sharia MLM with a partnership pattern between DSN-MUI and the Ministry of Trade based on philosophical, sociological, juridical, economic, and political arguments.With the trade regulations that accommodate Sharia MLM, the industry will grow and develop rapidly and will support the Islamic economic ecosystem to maximally achieve the goals of national trade law.
Regulation of MLM in the Trade Law and Its Relevance to Sharia MLM Principles MLM business is regulated in Law Number 7 of 2014 concerning Trade (Trade Law), and Regulation of the Minister of Trade (Permendag) Number of 2019 concerning Direct Distribution of Goods which was amended to the Government Regulation (PP) Number 29 of 2021 concerning the Implementation of Trade.