Order No. 444 of the State Council of the People's Republic of China is an order issued by Premier *** of the State Council on August 23, 2005.

Order No. 444 "Regulations on Prohibition of Pyramid Selling" was formulated to prevent fraud, protect the legitimate rights and interests of citizens, legal persons and other organizations, maintain the order of the socialist market economy, and maintain social stability. Basic introduction Chinese name: Order of the State Council of the People's Republic of China (No. 444) Date of adoption: August 10, 2005 Date of issue: August 23, 2005 Date of implementation: November 1, 2005 Document number: National Issuing authority of Order No. 444: Issued by the State Council, full text, issued Order No. 444 of the State Council of the People's Republic of China, the "Regulations on the Prohibition of Pyramid Selling", which was adopted at the 101st executive meeting of the State Council on August 10, 2005, and is hereby announced. Effective from November 1, 2005. Prime Minister ***

Full text of the Regulations Prohibiting Pyramid Selling on August 23, 2005 Chapter 1 General Provisions Article 1 In order to prevent fraud, protect the legitimate rights and interests of citizens, legal persons and other organizations, and safeguard society This regulation is formulated to maintain the socialist market economic order and maintain social stability.

Article 2 The term “pyramid selling” as mentioned in these Regulations refers to the way in which organizers or operators develop personnel and calculate and pay remuneration to the people being developed based on the number of people they directly or indirectly develop or their sales performance. Or require the persons being developed to obtain membership qualifications on the condition of paying a certain fee to seek illegal benefits, disrupt economic order, and affect social stability.

Article 3 Local people’s governments at or above the county level shall strengthen their leadership in investigating and handling pyramid schemes, and support and urge all relevant departments to perform their supervisory and management duties in accordance with the law.

Local people’s governments at or above the county level should establish a coordination mechanism for investigating and handling pyramid schemes as needed, and coordinate and resolve major issues in the investigation and handling of pyramid schemes in a timely manner.

Article 4 The industrial and commercial administrative departments and public security organs shall investigate and deal with pyramid schemes within the scope of their respective duties in accordance with the provisions of these regulations.

Article 5 When investigating and punishing pyramid schemes in accordance with the law, the industrial and commercial administrative departments and public security organs shall adhere to the principle of combining education and punishment, and educate citizens, legal persons or other organizations to consciously abide by the law.

Article 6 Any unit or individual has the right to report pyramid schemes to the industrial and commercial administrative departments and public security organs. After receiving a report, the industrial and commercial administrative departments and public security organs shall immediately investigate and verify the report, investigate and deal with it in accordance with the law, and keep the whistleblower confidential; if the investigation is found to be true, the whistleblower shall be rewarded in accordance with relevant national regulations. Chapter 2 Types of MLM Behaviors and Investigation and Punishment Agencies Article 7 The following behaviors are classified as pyramid schemes:

(1) The organizer or operator, through the development personnel, requires the development personnel to develop other personnel to join, and the development personnel Calculate and pay remuneration (including material rewards and other economic benefits, the same below) to personnel based on the number of people they directly or indirectly develop on a rolling basis, and seek illegal benefits;

(2) Organizers or operators Through developing personnel, requiring the developed personnel to pay fees or pay fees in disguised form by subscribing for goods, etc., to obtain the qualifications to join or develop other personnel to join, and seek illegal benefits;

(3) Organizers or operators The developer, through developing personnel, requires the developed personnel to develop other personnel to join, form an upline and downline relationship, and calculate and pay upline remuneration based on the sales performance of the downline, and seek illegal benefits.

Article 8 The industrial and commercial administrative department shall, in accordance with the provisions of these Regulations, be responsible for investigating and handling the pyramid schemes specified in Article 7 of these Regulations.

Article 9 Anyone who uses the Internet or other media to publish pyramid scheme information containing the provisions of Article 7 of these Regulations shall be investigated and dealt with by the industrial and commercial administration department in conjunction with telecommunications and other relevant departments in accordance with the provisions of these Regulations.

Article 10 Anyone who deceives others into leaving their place of residence to illegally gather and restrict their personal freedom in the name of introducing work or engaging in business activities in a pyramid scheme shall be investigated and dealt with by the public security organs in conjunction with the industrial and commercial administration departments in accordance with the law.

Article 11 Relevant departments and units such as commerce, education, civil affairs, finance, labor security, telecommunications, and taxation shall cooperate with the industrial and commercial administration departments, public security agencies, etc. in accordance with their respective responsibilities and the provisions of relevant laws and administrative regulations. The authorities investigate and deal with pyramid schemes.

Article 12 Rural villagers committees, urban residents committees and other grassroots organizations shall, under the guidance of the local people’s government, assist relevant departments in investigating pyramid schemes.

Article 13 When the industrial and commercial administrative department investigates and handles pyramid schemes, those suspected of committing crimes shall be transferred to the public security organs for filing and investigation in accordance with the law. The industrial and commercial administration department shall investigate and deal with the matter.

Chapter 3 Investigation and Punishment Measures and Procedures Article 14 When the industrial and commercial administrative departments at or above the county level investigate and punish suspected pyramid schemes, they may take the following measures:

(1) Order the cessation of relevant activities;

(2) Investigate and understand relevant situations from organizers, operators and individuals suspected of pyramid schemes;

(3) Enter suspected pyramid schemes’ business premises and training, gathering and other activity venues, and conduct on-site inspections ;

(4) Inspect, copy, seal up and detain relevant contracts, bills, account books and other materials suspected of pyramid schemes;

(5) Seize and detain products suspected of being specially used for pyramid schemes (commodities), tools, equipment, raw materials and other property;

(6) Seize business premises suspected of pyramid schemes;

(7) Inquire about the accounts of organizers or operators suspected of pyramid schemes and accounting vouchers, account books, statements, etc. related to deposits;

(8) If there is evidence to prove that illegal funds have been transferred or concealed, you can apply to the judicial authority for freezing.

When the industrial and commercial administrative department takes the measures specified in the preceding paragraph, it shall report in writing or orally to the principal person in charge of the industrial and commercial administrative department at or above the county level and obtain approval. In the event of an emergency requiring on-the-spot measures stipulated in the preceding paragraph, a report shall be made immediately afterwards and the relevant procedures shall be completed; among them, the sealing and detaining stipulated in the preceding paragraph, as well as the measures stipulated in Items (7) and (8), shall be implemented. It must be approved in advance by the principal person in charge of the industrial and commercial administrative department at or above the county level.

Article 15 When the industrial and commercial administrative department investigates and handles suspected pyramid schemes, there shall be no less than 2 law enforcement officers.

Law enforcement officials who have a direct interest in the parties should recuse themselves.

Article 16 When investigating and punishing suspected pyramid schemes, law enforcement officers of the industrial and commercial administrative departments shall present their certificates to the parties or relevant persons.

Article 17 When the industrial and commercial administrative department implements sealing or detaining, it shall deliver to the parties on the spot a decision on sealing or detaining and a list of the property and materials to be seized or seized.

If the case is in an area with inconvenient transportation or failure to implement sealing or detaining in a timely manner may affect the investigation and handling of the case, the sealing or detaining may be implemented first, and a supplementary sealing or detaining decision shall be issued within 24 hours and served to the parties.

Article 18 The period for sealing and detaining by the industrial and commercial administrative department shall not exceed 30 days; if the case is complicated, it may be extended by 15 days with the approval of the principal person in charge of the industrial and commercial administrative department at or above the county level.

The industrial and commercial administrative department shall properly keep the property that has been sealed or detained and shall not use or damage it; if any loss is caused, it shall be liable for compensation. However, losses caused by force majeure are excluded.

Article 19 When the industrial and commercial administrative department implements sealing or detaining, it shall promptly find out the facts and make a decision on handling during the period of sealing or detaining.

If it is investigated and verified that it is a pyramid scheme, the illegal property that has been sealed up or detained shall be confiscated in accordance with the law; if it is investigated and verified that there is no pyramid scheme or it is no longer necessary to seal or detain, the illegal property shall be confiscated immediately after the decision is made. Lift the seal and return the seized property.

If the administrative department for industry and commerce fails to make a decision within the time limit, the seized items shall be deemed to have been released from the seizure, and the seized property shall be returned. If the refund is refused, the party concerned may file an administrative lawsuit with the People's Court.

Article 20 If the industrial and commercial administrative department and its staff violate the provisions of these regulations by using or damaging sealed or impounded property, causing economic losses to the parties concerned, they shall be liable for compensation.

Article 21 When the industrial and commercial administrative department investigates and handles suspected pyramid schemes, the parties concerned have the right to make statements and defend themselves.

Article 22: When investigating and punishing suspected pyramid schemes, the industrial and commercial administrative departments shall prepare on-site transcripts.

The on-site transcript and the list of seizures and seizures shall be signed or stamped by the parties, witnesses and law enforcement officers. If the party is not present or the parties or witnesses refuse to sign or seal, the law enforcement officers shall include it in the on-site transcript. Note.

Article 23 For any conduct that is verified to be a pyramid scheme, the industrial and commercial administrative departments and public security organs may publicly issue warnings and reminders to the public.

The public release of warnings and reminders to the public must be approved by the principal person in charge of the industrial and commercial administrative department at or above the county level or the principal person in charge of the public security organ. Chapter 4 Legal Responsibilities Article 24 If any person engages in the conduct specified in Article 7 of these Regulations and organizes and plans pyramid schemes, the industrial and commercial administrative department shall confiscate illegal property and illegal gains, and impose a fine of not less than 500,000 yuan but not more than 2 million yuan; If a crime is constituted, criminal liability shall be pursued in accordance with the law.

Anyone who commits the acts specified in Article 7 of these Regulations and introduces, deceives, or coerces others into participating in pyramid schemes shall be ordered by the industrial and commercial administration department to stop the illegal behavior, confiscate illegal property, confiscate illegal gains, and impose a fine of more than 100,000 yuan A fine of not more than RMB 500,000 shall be imposed; if a crime is constituted, criminal liability shall be pursued in accordance with the law.

Anyone who engages in pyramid schemes or participates in pyramid schemes as stipulated in Article 7 of these Regulations shall be ordered by the industrial and commercial administration department to stop the illegal conduct and may be fined not more than 2,000 yuan.

Article 25 When the industrial and commercial administrative department imposes penalties in accordance with the provisions of Article 24 of these Regulations, it may order the company to suspend business for rectification or revoke the business license in accordance with the provisions of relevant laws and administrative regulations.

Article 26: Anyone who provides business premises, training venues, supply of goods, custody, warehousing and other conditions for pyramid selling activities stipulated in Article 7 of these Regulations shall be ordered by the industrial and commercial administration department to stop the illegal activities and confiscate the illegal activities. income, a fine of not less than 50,000 yuan but not more than 500,000 yuan will be imposed.

Anyone who provides Internet information services for pyramid schemes stipulated in Article 7 of these Regulations shall be ordered by the industrial and commercial administration department to cease illegal activities and notify relevant departments to take action in accordance with the "Internet Information Services Management Measures" punishment.

Article 27 If a party uses, exchanges, transfers, or damages the sealed or impounded property without authorization, the industrial and commercial administrative department shall order him to stop the illegal act and dispose of the value of the used, exchanged, transferred, or damaged property 5 % and not more than 20% of the value of the property; those who refuse to make corrections will be fined not less than 1 time but not more than 3 times the value of the property used, exchanged, transferred or damaged.

Article 28 If any person commits the acts specified in Article 10 of these Regulations or refuses or obstructs the law enforcement personnel of the industrial and commercial administration department from investigating and handling pyramid schemes in accordance with the law, which constitutes a violation of public security management, the public security organs shall conduct public security management in accordance with the law. The laws and administrative regulations provide for penalties; if a crime is constituted, criminal liability shall be pursued in accordance with the law.

Article 29: The industrial and commercial administrative departments, public security organs and their staff abuse their power, neglect their duties, engage in malpractice for personal gain, fail to investigate and deal with pyramid schemes in accordance with the duties and procedures stipulated in these regulations, or discover that pyramid schemes are illegal If a crime is constituted, the directly responsible person in charge and other directly responsible persons shall be held criminally responsible in accordance with the law; if it does not constitute a crime, administrative sanctions shall be imposed in accordance with the law. Chapter 5 Supplementary Provisions Article 30 These Regulations shall come into effect on November 1, 2005.