Chapter I General Principles
Article 1 In order to strengthen the supervision and management of pyramid selling activities, maintain the market economic order and protect the legitimate rights and interests of consumers, these Measures are formulated in accordance with the provisions of national laws, regulations and relevant policies.
Article 2 MLM is a mode of operation in which production enterprises sell products directly to consumers without going through stores. Including multi-level marketing and single-level marketing.
Multi-level pyramid selling refers to a business model in which production enterprises sell products directly to consumers by developing more than two levels of pyramid selling personnel, rather than through store sales.
Single-level MLM refers to a business model in which production enterprises sell products directly to consumers by developing first-level MLM personnel, rather than through stores.
Article 3 Enterprises engaged in pyramid selling activities must be approved and registered by the administrative department for industry and commerce.
The administrative department for industry and commerce shall supervise and manage pyramid selling activities.
Article 4 Foreign (regional) enterprises and individuals are prohibited from directly engaging in pyramid selling activities in People's Republic of China (PRC).
Article 5 All enterprises and individuals engaged in pyramid selling activities within the territory of People's Republic of China (PRC) must abide by the provisions of these Measures.
Chapter II Approval and Registration of MLM Enterprises
Article 6 An enterprise engaged in pyramid selling shall meet the following conditions:
(1) Having the qualification of an enterprise legal person;
(2) The registered capital of the enterprise is more than 5 million yuan;
(3) Selling the products produced by the enterprise in China;
(4) The product quality has passed the inspection by relevant departments;
(5) Having a qualified MLM organization and a perfect management system for MLM personnel.
Article 7 An enterprise engaged in pyramid selling and its branches shall submit an application to the original administrative department for industry and commerce in advance, which shall be examined by the administrative department for industry and commerce of the province (autonomous region or municipality directly under the Central Government) where it is located. Those who pass the examination shall be reported to the State Administration for Industry and Commerce for approval.
Article 8 An enterprise applying for pyramid selling shall submit the following documents and materials to the examination and approval registration authority:
(1) An application signed by the legal representative;
(2) The business license of the enterprise as a legal person or the business license of the branch;
(3) Enterprise status, including investment scale, production site, technical conditions and branches, etc. ;
(4) MLM action plan, including the conditions and procedures for participating in MLM, the calculation method of remuneration for MLM personnel, the method of quitting MLM, the code of conduct for MLM personnel, training management measures and related materials;
(5) The area where the application for pyramid selling is made;
(six) the variety, model and trademark of pyramid selling products;
(seven) MLM product quality inspection certificate;
(8) The selling price of pyramid selling products is the cost price;
(nine) return, claim and after-sales service measures;
(10) A sample of the contract between the MLM enterprise and the MLM personnel and a sample of the certificate of the MLM personnel;
(eleven) other materials required by laws and regulations or the examination and approval registration authority.
The approval and registration authority mentioned in the preceding paragraph refers to the original registered administrative authorities for industry and commerce, the administrative authorities for industry and commerce of provinces (autonomous regions and municipalities directly under the Central Government) and the State Administration for Industry and Commerce (the same below).
Article 9 The State Administration for Industry and Commerce shall, in accordance with the relevant provisions of the State and these Measures, examine the enterprises that have passed the examination by the provincial (autonomous region or municipality directly under the Central Government) administrations for industry and commerce and make a decision on whether to approve or not. For approved multi-level MLM enterprises or single-level MLM enterprises, the Multi-level MLM Business Approval Certificate and Single-level MLM Business Approval Certificate shall be issued respectively.
Approved multi-level pyramid selling enterprises or single-level pyramid selling enterprises shall, within 15 days from the date of receiving the multi-level MLM business approval certificate or the single-level MLM business approval certificate, go through the change registration of business scope and business mode with the original registered administrative department for industry and commerce.
Article 10 Where an approved pyramid selling enterprise increases or decreases pyramid selling branches, changes the scope of pyramid selling products or terminates pyramid selling, it shall go through the relevant registration procedures in accordance with the procedures specified in Article 7 of these Measures.
An approved MLM enterprise that changes items (4), (8), (9) and (10) of Article 8 of these Measures shall file with the examination and approval registration authority within 30 days from the date of change.
Eleventh MLM enterprises shall not sublet or transfer the right to operate MLM.
Single-level pyramid selling enterprises are prohibited from engaging in multi-level pyramid selling activities.
Chapter III Participants in MLM Activities
Article 12 Citizens who have reached the age of 18 and have full capacity for civil conduct can be used as pyramid sellers.
The following personnel shall not serve as MLM personnel:
(1) functionaries of the organs;
(2) Servicemen;
(3) full-time students;
(four) other personnel who are not allowed to do business part-time according to laws and regulations.
The MLM personnel of a multi-level MLM enterprise must have permanent residence in the administrative area where the enterprise is engaged in multi-level MLM.
Thirteenth MLM enterprises shall truthfully inform the following matters before MLM personnel participate in MLM:
(1) Matters concerning the approval and registration of the business license of an enterprise as a legal person and the business license of its branches;
(2) The variety of pyramid selling products and pyramid selling areas approved by the administrative department for industry and commerce;
(3) Development status and planning of MLM;
(4) Operating rules and transaction instructions of the MLM enterprise;
(five) the price, performance, use and quality test results of MLM products;
(6) Conditions for participating in pyramid selling.
The matters notified in the preceding paragraph shall be confirmed in writing by MLM personnel.
Article 14 A pyramid selling enterprise shall sign a written contract with the pyramid selling personnel to clarify the rights and obligations of both parties. The main terms of the contract shall include:
(1) Rights and obligations of pyramid sellers;
(two) the conditions, calculation methods, payment procedures and methods for the individual income tax withheld and remitted by MLM personnel;
(3) product quality responsibility;
(four) the time limit, method and cost of product return;
(5) Methods for MLM personnel to quit pyramid schemes;
(six) the way to solve the dispute;
(seven) other matters stipulated by laws and regulations.
Fifteenth approved MLM enterprises shall not pay membership fees, deposits or subscribe for a certain number of products as a condition for participating in MLM; MLM personnel training fees, handling fees and other fees shall not be charged, and MLM personnel shall not be forced to purchase relevant materials.
Article 16 MLM personnel are free to withdraw from MLM activities. When the MLM personnel withdraw from the MLM activities, they can return the unsold products to the MLM enterprises, and the MLM enterprises shall accept the return. However, unless the product is damaged and has no resale value due to the fault of the pyramid seller.
If the MLM personnel quit the MLM organization within 30 days from the date of joining the MLM organization and return the unsold products to the MLM enterprise, the MLM enterprise shall refund the full payment.
If the MLM personnel withdraw from the MLM after 30 days from the date of joining the MLM activities and ask the MLM enterprise to return the unsold products, the MLM enterprise may deduct a certain fee when returning the payment, but the deducted fee shall not exceed 10% of the returned payment.
In the case of returning goods as stipulated in the second and third paragraphs of this article, the MLM enterprise may deduct the remuneration paid to the MLM personnel according to the returned products from the payment returned to the MLM personnel.
Article 17 MLM enterprises shall not force MLM personnel to develop the number of off-line employees, nor shall they calculate their remuneration according to the number of off-line employees.
Eighteenth MLM enterprises should strengthen the management of MLM personnel.
Approved MLM companies must train MLM personnel before they participate in MLM activities. The training content should include professional knowledge, relevant national laws and regulations and professional ethics education.
MLM personnel engaged in illegal pyramid selling activities, pyramid selling enterprises failed to fulfill their management responsibilities, pyramid selling personnel and pyramid selling enterprises shall bear corresponding legal responsibilities.
Article 19 When employing foreigners as employees, MLM enterprises shall abide by the relevant provisions of the state on the entry and exit of foreigners and the management of their work.
Business training teachers should have clear identities and no criminal records. Personnel from Hong Kong, Macao and Taiwan or foreigners serving as lecturers shall comply with the relevant provisions of the state.
The fourth chapter is the sales bank.
Article 20 MLM enterprises and pyramid selling personnel must engage in pyramid selling activities within the pyramid selling area approved by the State Administration for Industry and Commerce, and may not carry out pyramid selling activities beyond the administrative area where they were originally registered.
Article 21 MLM enterprises must sell their products within the territory of China according to the variety of MLM products approved by the State Administration for Industry and Commerce.
MLM enterprises shall not sell products that are prohibited or restricted by laws and regulations, or other products that the State Administration for Industry and Commerce considers unsuitable for pyramid selling.
Article 22 Anyone who damages the legitimate rights and interests of consumers due to the quality problems of pyramid selling products may ask the pyramid selling enterprise or pyramid selling agent for a refund or compensation, and the pyramid selling enterprise or pyramid selling agent must refund or compensate.
Consumers can make a return request at any time within 30 days from the date of purchase. MLM companies and distributors must accept the return, and consumers are not required to bear any expenses. However, unless the product is damaged due to the fault of the consumer and has no resale value.
After returning goods or compensating consumers, according to the contract signed with MLM company, if MLM company should bear the responsibility, it can claim compensation from MLM company.
MLM enterprises and MLM personnel who sell products to consumers shall immediately settle accounts and prohibit prepayment transactions.
Article 23 The price level of pyramid selling products shall not be significantly higher than the average market price of similar products in the same region, the same period and the same grade. Price fraud is prohibited.
Article 24 MLM enterprises shall not make false or misleading propaganda on the work nature and income of MLM personnel and the quality, use, origin and use effect of MLM products, so as to induce them to participate in MLM and buy products.
Advertising, training and assembly of MLM enterprises shall not involve contents that are not conducive to social stability and national security, and shall not carry out religious and superstitious propaganda.
Article 25 When selling products to consumers, MLM personnel shall abide by the following provisions:
(1) Show the MLM personnel certificates to consumers. The MLM personnel certificate shall be affixed with my photo, indicating my name, ID number, product variety and MLM area, and stamped with the official seal of MLM enterprise;
(two) when selling products, inform consumers of the contact address and contact information of pyramid selling enterprises and pyramid sellers themselves;
(3) Truthfully explain to consumers the quality, performance, use, expiration date, use method, use effect, matters needing attention and after-sales service of MLM products, and explain to consumers the conditions, time limit and methods of returning goods, and shall not make false or misleading explanations and publicity on the above matters;
(four) to demonstrate the use of products that should be demonstrated;
(5) Conducting pyramid selling activities within a reasonable time;
(six) when entering the consumer's residence to sell products, the consent of the consumer should be obtained in advance, and the consumer must quit when he signals to quit or expresses inconvenience;
(seven) to issue proof of purchase to consumers. The purchase voucher should have the official seal of the MLM enterprise and the signature of the MLM personnel.
Chapter V Supervision and Inspection
Article 26 MLM enterprises shall record the number of MLM personnel, the quantity and amount of products sold and the remuneration paid to MLM personnel within 0/5 days after the end of each quarter. Registration with the former administrative department for industry and commerce.
Article 27 The training scheme of pyramid selling enterprises shall be reported to the original registered administrative department for industry and commerce for the record. The training plan should include teaching content, venue, number of people, time and lecturers.
Article 28 The administrative department for industry and commerce may conduct on-site supervision and inspection on the sales training activities of pyramid selling enterprises. The administrative department for industry and commerce shall investigate and deal with acts found in violation of laws, regulations and the provisions of these measures according to law.
Acts under the jurisdiction of the relevant departments shall be transferred to the relevant departments for handling.
Article 29 In addition to keeping relevant materials in accordance with laws and regulations, MLM enterprises shall also keep the following materials for at least 5 years and accept the inspection by the administrative department for industry and commerce:
(1) Original vouchers, account books, bank bills, transportation and storage documents of product pyramid schemes;
(2) a register of names, addresses, ID numbers and numbers of MLM personnel;
(3) training MLM personnel;
(4) Records and vouchers for payment of remuneration to MLM personnel;
(5) Other materials related to pyramid selling.
Chapter VI Legal Liability
Thirtieth enterprises or individuals in violation of these measures, the administrative department for Industry and Commerce shall be punished according to the following provisions:
(a) in violation of the provisions of the first paragraph of Article 3 and Article 20 of these measures, the administrative department for industry and commerce shall ban it, confiscate the pyramid selling products, sales income and illegal income, and impose a fine in accordance with the provisions of the Law of People's Republic of China (PRC) on the Protection of Consumer Rights and Interests.
(two) in violation of the provisions of the second paragraph of Article 11 of these measures, the products, sales income and illegal income of multi-level pyramid schemes without authorization shall be confiscated, and a fine shall be imposed according to the provisions of the Law of People's Republic of China (PRC) on the Protection of Consumer Rights and Interests; If the circumstances are serious, the qualification of single-level pyramid selling shall be cancelled.
(3) Whoever, in violation of the provisions of Articles 8 and 10 of these Measures, submits false documents or obtains the registration of pyramid selling enterprises by other deceptive means shall be punished in accordance with Article 59 of the Regulations of the People's Republic of China on the Administration of Company Registration or Item (2) of Paragraph 1 of Article 66 of the Detailed Rules for the Implementation of the Regulations on the Administration of Enterprise Legal Person Registration.
(4) Those who violate the provisions of the first paragraph of Article 11 of these Measures shall be punished in accordance with the provisions of Article 59 of the Regulations of the People's Republic of China on the Administration of Company Registration or Item (6) of the first paragraph of Article 66 of the Detailed Rules for the Implementation of the Regulations on the Administration of Enterprise Legal Person Registration.
(five) in violation of the provisions of Article 21 of these measures, the pyramid selling enterprise shall be punished in accordance with the provisions of Article 71 of the Regulations of the People's Republic of China on the Administration of Company Registration or Item (4) of Paragraph 1 of Article 66 of the Detailed Rules for the Implementation of the Regulations on the Administration of Enterprise Legal Person Registration; Impose a fine of not less than 500 yuan but not more than 2,000 yuan on the pyramid seller, and order the pyramid selling enterprise to terminate the qualification of pyramid seller.
(six) in violation of the provisions of Article 12, Article 13, Article 14, Article 18, paragraph 2, Article 19, Article 22, paragraph 2, paragraph 4, Article 26, Article 27 and Article 29 of these measures, the MLM enterprise shall be ordered to make corrections within a time limit and be fined not more than 30,000 yuan; If the circumstances are serious, its MLM qualification will be cancelled.
(seven) in violation of the provisions of article fifteenth, article sixteenth and article seventeenth of these measures, the pyramid selling products, sales income and illegal income shall be confiscated, and a fine shall be imposed according to the provisions of the Law of People's Republic of China (PRC) on the Protection of Consumer Rights and Interests.
(eight) in violation of the provisions of the first and third paragraphs of article twenty-second, the pyramid selling enterprises shall be punished in accordance with the provisions of the Law of People's Republic of China (PRC) on the Protection of Consumer Rights and Interests; Impose a fine of not less than 500 yuan but not more than 2,000 yuan on the pyramid seller, and order the pyramid selling enterprise to terminate the qualification of pyramid seller.
(nine) in violation of the provisions of article twenty-third, the administrative department for Industry and Commerce for approval and registration shall order the MLM enterprise to make corrections within a time limit. If the enterprise refuses to implement it, the pyramid selling products, sales income and illegal income shall be confiscated, and a fine shall be imposed in accordance with the provisions of the Consumer Protection Law of People's Republic of China (PRC).
(ten) in violation of the provisions of article twenty-fourth, shall be punished in accordance with the provisions of the "People's Republic of China (PRC) Advertising Law" and "People's Republic of China (PRC) Anti Unfair Competition Law".
(eleven) in violation of the provisions of article twenty-fifth, the MLM personnel shall be fined not less than five hundred yuan but not more than two thousand yuan, and the MLM enterprise shall be ordered to terminate its MLM personnel qualification.
Chapter VII Supplementary Provisions
Article 31 The State Administration for Industry and Commerce shall be responsible for the interpretation of these Measures.
Article 32 These Measures shall come into force as of the date of promulgation.