国办发（1995）50号
（September 22， 1995）
颁布日期：19950922 　实施日期：19950922 　颁布单位：国务院办公厅

In August of 1994， the State Administration for Industry and Commerce， in accordance with State Council directives， issued the Circular Concerning the Curbing of Illegal Activities within Pyramid Retailing. The localities have not conscientiously implemented this， failing to put in order and examine the pyramid retail industry， and some localities are still developing some pyramid retail enterprises， allowing illegal pyramid retailing activities to spread once again. In view that China's laws and regulations concerning pyramid retail operations remain as yet incomplete， that the standardization and management of pyramid retailing is very difficult， and that the consumer psychology of the vast majority of consumers is not fully mature， conditions are not yet present for the development of the pyramid retail industry. A minority of lawbreaking merchants have taken advantage of this to engage in deceitful practices which seriously infringe on the legal rights and interests of the consumers， constituting unfair competition towards legal operators， resulting in financial losses to the majority of retailers engaged in pyramid retailing， arousing social problems， and disturbing the economic order. In order to halt unfair pyramid retailing activities， strike out against the deceitful behavior of lawbreaking merchants， protect the rights and interests of the consumers， protect fair competition， and preserve the order of the socialist market economy， the State Council has decided to halt the opening and development of all pyramid retail enterprises， in accordance with the provisions below：

1. Immediately cease approving and establishing pyramid retail enterprises. From the date of promulgation of this circular， the industrial and commercial administrative organs and other relevant administrative organs in every locality shall cease to approve and register any enterprise or private industrial or commercial outlets which intends to operate through pyramid retail.

2. Inspect and rectify already existing pyramid retail enterprises. Pyramid retail enterprises which are already registered must， within one month， report step-by-step to the State Administration for Industry and Commerce for re-inspection by passing evaluation and approval by the original office which issued the registration； those enterprises which do not pass evaluation shall have their retail business licenses revoked by the office of industrial and commercial administration in that locality. During the period of evaluation， pyramid retail enterprises must stop developing retail personnel and may not expand business activities. For those retail personnel who have handed over money but have not yet received goods from the pyramid retail enterprise， the pyramid retail enterprise shall return their money under the supervision of the office of industrial and commercial administration. Pyramid retail enterprises which passe valuation shall develop only within the administrative area of the original place of registration； trans-regional pyramid retailing is strictly forbidden； pyramid retailers developing operational activities must be approved by the office of industrial and commercial administration， be subject to supervision， and pay taxes according to law. Foreign businesses may not engage in pyramid retail operational modes for professional commercial retailing. Registered pyramid retail enterprises which do not pass evaluation shall conscientiously clean up their operational mess and settle any credit and debt obligations.

3. Enterprises which have not been approved by the office for industrial and commercial administration and which have developed without authorization pyramid retail operations， or which have violated the Circular Concerning the Curbing of Illegal Activities within Pyramid Retailing or any of the above regulations shall be resolutely suppressed by office of industrial and commercial administration in that region， have the retail commodities and any illegal gains from the sale thereof confiscated， and be subject to a fine according to the Consumer Protection Law and other relevant stipulations. Any individual in a pyramid retail enterprise or group participating in pyramid retailing who withholds or evades taxes， engages in the smuggling or sale of contraband goods， manufactures or sells counterfeit or shoddy goods， or engages in other illegal activities shall be dealt with according to law by the relevant law enforcement offices； actions which constitute crimes shall be transferred to offices of justice administration in accordance with the law.

4. The people's governments at all levels shall strengthen practical leadership work in stopping the development of pyramid retail enterprises； the industrial and commercial administrations， public security offices， tax offices， customs， domestic trade administrations， and other offices shall work in close coordination to handle all problems arising from this work.

5. The State Administration for Industry and Commerce and related offices， in the spirit of this circular， shall quickly draw up examination and approval guidelines for pyramid retail enterprises and methods of supervision for pyramid retail personnel.