CHAPTER FOUR SALES ACTIVITIES
|
Article 17
A multi-level sales enterprise may not engage in any of the following activities:
requiring a participant to pay any fee obviously incommensurate with the cost in the name of training, seminars, social activities, meetings, or other like activities; requiring a participant to pay or undertake any security deposit, breach penalty, or other liability, where such is obviously unreasonable; requiring a participant to purchase goods in a quantity that would obviously be impossible for an average person to sell out in a short period, unless it is agreed that the price shall be paid only after the goods are re-sold; unjustifiably withholding commissions, bonuses, or other economic benefit payable to a participant after rescission or termination of the contract; stipulating that a participant shall be paid greater benefits only after he pays training fees obviously incommensurate with the cost or pays other obviously unjustifiable consideration; giving specific persons preferential treatment in a manner contrary to the multi-level sales organization or plan, such that the commissions, bonuses, or other economic benefits that should be available to other participants would be diminished; improperly hindering a participant from returning goods arising from rescinding the contract or terminating the contract; requiring a participant to undertake obviously unfair obligations.
The provisions of the preceding paragraph shall apply mutatis mutandis to participants.
|
Article 18
For purposes of regulating the activities of its participants in respect of multi-level sales, a multi-level sales enterprise shall stipulate that the following are breaches of contract by the participant, and shall prescribe methods for handling such breaches and faithfully enforce them:
promoting or selling goods or services, or recruiting participants to the sales organization, by deceptive or misleading means; raising funds from other persons in the name of the multi-level sales enterprise or through its organization; engaging in sales activities by means that run counter to public order or good morals; affecting the market trading order or creating heavy losses to consumers by improper direct sales calls; engaging in sales activities that violate the Criminal Code or other laws or regulations governing industry and commerce.
|
Article 19
When recruiting participants by advertising or other means of communication to the public, a multi-level sales enterprise shall make it clearly known that it is engaged in multi-level sales activities; neither may it recruit participants under the guise of recruiting employees or on other pretense.
The provisions of the preceding paragraph shall also apply to participants.
|
Article 20
When promoting or selling goods or services or recruiting participants by means of declared cases of success, a multi-level sales enterprise or its participants shall concretely explain the time periods, benefits obtained, and course of development of such cases, and may not make false or misleading representations.
|
Article 21
After a participant joins the sales organization or plan of a multi-level sales enterprise, the enterprise shall educate and train the participant with respect to laws and regulations relevant to multi-level sales and to channels for filing complaints about infractions of law by enterprises.
|