Complaint filed that Chung Yun Enterprises Ltd. failed to file a report with the Fair Trade Commission 30 days before implementing a multi-level sales scheme in violation of the Supervisory Regulations Governing Multi-Level Sales
Case:
Complaint filed that Chung Yun Enterprises Ltd. failed to file a report with the Fair Trade Commission 30 days before implementing a multi-level sales scheme in violation of the Supervisory Regulations Governing Multi-Level Sales
Key Words:
multi-level sales, reporting
Reference:
Fair Trade Commission Decision of May 3, 2000 (the 443rd Commissioners' Meeting); Letter (89) Kung Ts'an Tzu No. 8900007-002, and Disposition (89) Kung Ch'u Tzu No. 70
Industry:
Cosmetics Distribution Industry (5182)
Relevant Laws:
Articles 23-4 of the Fair Trade Law and Article 5(1) of the Supervisory Regulations Governing Multi-Level Sales
Summary:
1. A complaint was filed by one of the general public that Chung Yun Enterprises Ltd. ("Respondent") had failed to file a business charter 30 days before it implemented a multi-level sales scheme in violation of Article 5(1) of the Supervisory Regulations Governing Multi-Level Sales. 2. The Fair Trade Commission (the Commission) investigated and found that Respondent had reported to the Commission on 24 December 1999 that it would institute a multi-level sales scheme beginning on January 24, 2000. The main products sold through the scheme were beauty products. Respondent was established by a number of shareholders and officers from another multi-level sales company, Chiun Li Industrial Co., Ltd ("Chiun Li"). Since some participants in Chiun Li's multi-level sales scheme wanted to participate in Respondent's scheme, Respondent began executing contracts with former Chiu Li representatives on as early as December 14, 1999. By 31 January 2000, Respondent had signed up 198 participants. After executing contracts with participants, Respondent began selling its products in early January of 2000. Sales revenue totaled NT$232,070 as of January 23. 3. In sum, Respondent filed a report with the Commission on December 24, 2000. Pursuant to Article 5(1) of the Supervisory Regulations Governing Multi-Level Sales, a report should be filed 30 days before the Nonetheless Respondent began to conclude contracts with participants on December 14, 1999 and to sell products in early January 2000. These facts are enough for the Commission to determine that Respondent violated Article 5(1) of the Supervisory Regulations Governing Multi-Level Sales. Appendix: Chung Yun Enterprises Ltd.'s Uniform Invoice Number: 16804975 Summarized by Chi Hsuen Li; Supervised by Shu Hsu Hsin