Oman bans selling goods via network marketing, pyramid schemes
Published: 08:08 AM,Aug 01,2021 | EDITED : 11:08 AM,Aug 01,2021
Muscat: Based on the Commerce Law promulgated by Royal Decree No. 55/90, Qais bin Mohammad Al-Yousef, Minister of Commerce, Industry and Investment Promotion
(MoCIIP), issued Ministerial Decision No (105/2021) to prohibit selling, advertising, or promoting goods, products, and services through network marketing and pyramid schemes.
The first article of the ministerial decision stipulates that, in applying the provisions of this decision, network or hierarchical marketing means any method used by the suppliers, advertiser, or promoter to invite the consumer to choose a list of other consumers in order to purchase a commodity or to get service in exchange for a benefit to be obtained by the first consumer, while placing all the targeted consumers in a hierarchical or network groups, in aim to collect money from the largest number of subscribers of the hierarchical or network group.
The second article of the ministerial decision points out that, it is prohibited to buy, sell, trade, advertise or promote any goods or service through hierarchical marketing activities via any electronic or non-electronic means.
The third article of the decision also emphasized the imposition of an administrative fine of RO (5,000) on anyone who violates the provisions of this decision, and the fine shall be doubled in case of repeating the violation.
Article four of the decision stipulates that this decision shall be enforced on the day following its publishing in the Official Gazette.
Mubarak bin Mohammed Al-Dohani, Director General of Commerce at the Ministry of Commerce, Industry and Investment Promotion, stated that: many countries have banned this type of commercial practice in order to reduce commercial fraud, maintain the competition among the enterprises and companies. As well as protecting individuals from engaging in such practices.
He added : “ The decision aims at preventing this type of trade, whereas, selling, advertising or promoting goods, products and services through hierarchical marketing activities considered as a part of the fraud commercial transactions ,that are criminalized under the Omani Commercial Law issued by Royal Decree No. 55/90 and by the Omani Penal Law promulgated by Royal Decree 7/74 ,while this type of sale has harmful negative implications to the economy, as it is based on fraud and deception in the transaction through exaggeration of the benefits of the promoted commodity, or through tempting new subscribers with the huge profits that they will gain from their participation into the network or hierarchical marketing circle, where it is easily possible for those who deal with this type of marketing is to commit fraud attitude without evidence criminalizing that, while the beginning of dealing through hierarchical marketing is by paying a sum of money to engage in the same network or in the hierarchical group”
Al-Dohani clarifies that the Network or hierarchical marketing activity begins with an individual practice or by a company at the top of the pyramid, whose work is to persuade people to buy a product or to subscribe to the group by paying a certain amount of money, with the promise of giving him services or a symbolic profit if he/she can convince others to join his /her list, where the biggest beneficiary is the one who at the top of the hierarchical group.
The Director-General of Commerce stressed that the negative defects of the hierarchical marketing activities include a negative impact on the Sultanate’s economy through unfair competition among the enterprises and companies operating in different sectors, violating the enforced standard specifications, which may cause collateral damage to the consumer, and increasing the transferring of funds abroad, while the concerned product is sold at an irrational price, where there is no end to hierarchical marketing practice.
(MoCIIP), issued Ministerial Decision No (105/2021) to prohibit selling, advertising, or promoting goods, products, and services through network marketing and pyramid schemes.
The first article of the ministerial decision stipulates that, in applying the provisions of this decision, network or hierarchical marketing means any method used by the suppliers, advertiser, or promoter to invite the consumer to choose a list of other consumers in order to purchase a commodity or to get service in exchange for a benefit to be obtained by the first consumer, while placing all the targeted consumers in a hierarchical or network groups, in aim to collect money from the largest number of subscribers of the hierarchical or network group.
The second article of the ministerial decision points out that, it is prohibited to buy, sell, trade, advertise or promote any goods or service through hierarchical marketing activities via any electronic or non-electronic means.
The third article of the decision also emphasized the imposition of an administrative fine of RO (5,000) on anyone who violates the provisions of this decision, and the fine shall be doubled in case of repeating the violation.
Article four of the decision stipulates that this decision shall be enforced on the day following its publishing in the Official Gazette.
Mubarak bin Mohammed Al-Dohani, Director General of Commerce at the Ministry of Commerce, Industry and Investment Promotion, stated that: many countries have banned this type of commercial practice in order to reduce commercial fraud, maintain the competition among the enterprises and companies. As well as protecting individuals from engaging in such practices.
He added : “ The decision aims at preventing this type of trade, whereas, selling, advertising or promoting goods, products and services through hierarchical marketing activities considered as a part of the fraud commercial transactions ,that are criminalized under the Omani Commercial Law issued by Royal Decree No. 55/90 and by the Omani Penal Law promulgated by Royal Decree 7/74 ,while this type of sale has harmful negative implications to the economy, as it is based on fraud and deception in the transaction through exaggeration of the benefits of the promoted commodity, or through tempting new subscribers with the huge profits that they will gain from their participation into the network or hierarchical marketing circle, where it is easily possible for those who deal with this type of marketing is to commit fraud attitude without evidence criminalizing that, while the beginning of dealing through hierarchical marketing is by paying a sum of money to engage in the same network or in the hierarchical group”
Al-Dohani clarifies that the Network or hierarchical marketing activity begins with an individual practice or by a company at the top of the pyramid, whose work is to persuade people to buy a product or to subscribe to the group by paying a certain amount of money, with the promise of giving him services or a symbolic profit if he/she can convince others to join his /her list, where the biggest beneficiary is the one who at the top of the hierarchical group.
The Director-General of Commerce stressed that the negative defects of the hierarchical marketing activities include a negative impact on the Sultanate’s economy through unfair competition among the enterprises and companies operating in different sectors, violating the enforced standard specifications, which may cause collateral damage to the consumer, and increasing the transferring of funds abroad, while the concerned product is sold at an irrational price, where there is no end to hierarchical marketing practice.