Pyramid selling banned

Wednesday, May 7, 2008
Issue 336, Page 1 & 4
Word count: 488
Published in: Macau Daily Times

By Poyi (Natalie) Leung

The Legislative Assembly yesterday saw lawmakers approve unanimously the incrimination of pyramid selling in Macau which will be in effect 30 days after the bill is being officially published.

After the deliberation carried out by the Assembly’s Second Standing Committee since December of 2007, the updated version of the bill which was to amend the 6/96/M law decree to ban pyramid selling schemes was presented at the Assembly’s plenary meeting yesterday for voting.

Lawmakers were in favour of incriminating such selling activities which have already been outlawed in neighbouring countries and regions such as mainland China, Singapore and Hong Kong.

According to the bill, “pyramid selling” refers to “transactions of goods or services that are contributed by chain networks or similar forms”, “profit is gained in accordance to how many new participants a member can bring to the scheme, instead of the quantity of goods or services participants can sell”, and “a fixed number of goods are purchased by participants in a much higher market price or without a fair return policy”.

Yesterday’s ban will allow authorities to prosecute anyone organising pyramid selling in Macau to a maximum of three-year’s imprisonment or an equivalent fine.

According to the Second Standing Committee, the amendment came after pyramid selling schemes had become prevalent in the SAR but the existing Penal Code and Commercial Code did not contain specific regulations to tackle such activities.

As the only regulation that could best apply to such “irregular selling activities” was in relation to fraud, it was always difficult for prosecutors to cite evidence proving the sellers had the intention to con the buyers which was one of the constituting elements to fraud, the committee said.

For offences that result in a total loss of assets worth 30,000 patacas or more, the organisers or ringleaders will be subject to a maximum of five years in prison or an equivalent fine.

As for losses worth more than 150,000 patacas, there will be a prison sentence of two to 10 years or an equivalent fine.

In addition, new clauses had been added to the amendment bill in which anyone who deliberately introduces other people to join the pyramid selling scheme could be sentenced for six months in prison or a fine.

However, offenders who were proved as having no knowledge of the criminal selling activity will be subject to a fine with no prison sentence levied.

Director of the Legal Affairs Bureau (DSAJ), Cheong Weng Chon, told the Assembly criminal records could be kept although the persons were not liable to any prison sentences.

Although the criminal records will be removed after five years, Mr Cheong said after the first two years if any of the persons wished to apply for government positions, they could lodge an application to the court requesting such kind of offences not to be shown in the criminal records.

Macau’s judicial system does not record penalties of less than a year.

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