PYRAMID SELLING PROHIBITION ORDINANCE

PYRAMID SELLING PROHIBITION ORDINANCE

LAWS OF HONG KONG

PYRAMID SELLING PROHIBITION ORDINANCE

CHAPTER 355





CHAPTER 355

PYRAMID SELLING PRORMITION

To prohibit the promotion of pyramid selling schemes and to provide
for connected matters.

[1 September 1980.]

1. This Ordinance may be cited as the Pyramid Selling Prohibition
Ordinance.

2. In this Ordinance, unless the context otherwise requires

'goods' includes all chattels personal and things in action;

'promote' means establish, advertise, manage or assist in the
management of a pyramid selling scheme;

'pyramid selling scheme' means a scheme whereby

a)a participant in the scheme is granted a licence or right to
introduce another participant into the scheme who is also
granted such licence or right and who may further extend the
chain of persons who are granted such licence or right,
notwithstanding that there may be a limitation to the number
of participants or that there may be any further conditions
affecting eligibility for such licence or right; and

(b)a participant receives a reward on, or at any time after, the
introduction into the scheme by him of another participant
which reward is based, whether wholly or in part, otherwise
than on the fair market value of goods or services actually sold
by him or by or through that other participant;

'reward' includes refund, commission, discount or allowance but does
not include payment for sales demonstration equipment and
materials supplied at not more than their fair market value and not
resold.

3. Any person who knowingly promotes a pyramid selling scheme
commits an offence and is liable on conviction upon indictment to a fine
of $100,000 and to imprisonment for 3 years.

4. (1) Where an ofrence under this Ordinance has been committed
by a body corporate or member of a body unincorporate, any person
who at the time of the offence
(a)in the case of a body corporate, was a director, secretary,
principal officer or manager of that body corporate; or

(b)in the case of a member of a body unincorporate, was a
partner or office holder in or a member or manager of that
body unincorporate,





or who, in either case, was acting or purporting to act in any such
capacity commits a like offence.

(2) Where any person referred to in subsection (1) is charged with
an offence under this Ordinance it shall be a defence for him to prove
that the offence was committed without his consent or connivance and
that he exercised such diligence to prevent the commission of the
offence as he ought to have exercised having regard to the nature of his
functions and to all other circumstances.

5. (1) Notwithstanding any provision in any other Ordinance, where
a person is convicted of an offence under this Ordinance the court may,
in addition to passing such sentence as may otherwise be passed by
law, order the person so convicted to pay to any person who has
suffered financial loss resulting from that ofrence, such amount as
compensation as it thinks reasonable.

(2) An amount ordered as compensation under subsection (1) shall
be recoverable as a civil debt by the person in whose favour the order is
made.

6. Nothing in this Ordinance shall prejudice the enforcement by any
person of any right or claim against any person ceasing to promote a
pyramid selling scheme by reason of this Ordinance.
Originally 25 of 1980. L.N. 196/80. Short title. Interpretation. Offence of promoting a pyramid selling scheme. Liability of directors, partners etc. Power to award compensation. Saving of rights and claims.

Originally 25 of 1980. L.N. 196/80. Short title. Interpretation. Offence of promoting a pyramid selling scheme. Liability of directors, partners etc. Power to award compensation. Saving of rights and claims.

https://oelawhk.lib.hku.hk/items/show/3313

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