Ministry of Commerce bans networking and pyramid schemes, OMR 5,000 fine for violators

Ministry of Commerce announced on Sunday to ban the controversial pyramid scheme and network marketing and set a minimum of OMR 5,000 as fine for violators.

In a Ministerial decision issued by His Excellency Qais bin Mohammad Al-Yousef, Minister of Commerce, Industry and Investment Promotion, the government has prohibited selling, advertising, or promoting goods, products, and services through network marketing and pyramid schemes.

(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.

Many countries have banned this type of commercial practice in order to reduce commercial fraud, maintain the competition among enterprises and companies. As well as protecting individuals from engaging in such practices.

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”