Analysis On Several Issues Of Identifying The Crime Of Pyramid Selling Activities

On Feb 28^th2009,the Standing Committee of the National People's Congress released the Amendment VII to the Criminal Law of the People's Republic of China,which inserted the crime of pyramid selling activities into the Criminal Law as Article224?A?,meaning the legalization of crime of pyramid selling activities and terminating the condition in which pyramid selling activities were only regulated by Regulation on Prohibition of Pyramid Selling,Regulation on Direct Selling Administration and other administrative rules and provisions related to crime of illegal business operation.In consequence of unavoidable ambiguity and special perniciousness of this crime causing from person universality,academic and practical discussions on identifying the organizers,leaders and other participants and also other dimensions of this crime itself have never ceased.Although laws and regulations on the crime of pyramid selling activities are large in quantity,still there exists many barriers as for identification of this crime.In the Opinions on Issues relating to the Application of Laws in the Handling of the Crime of Organizing and Leading Pyramid Schemes?“Opinions”?issued on Nov 14^th2013,methods for identifying“level and number”,“organizer and leader”,“defrauding of property”,“serious conditions”,“renumeration calculation by number of persons recruited”and etc.,doing much favor to reasonably identify this crime,yet there exist many controversial matters on identification of this crime resulting from natural Hysteresis and ambiguity of this Opinions.Given that,this paper will discuss and analyze the identification matters from three dimensions as follows:On identification of“calculating renumeration by number of persons recruited”.In the crime of pyramid selling activities,it is the precondition to ascertain the crime with the status of objective constituent elements.Weakening the effect of“commodities or service”shall be the direct reason why pyramid selling activities lack economic operational essence with negative influence to market economics.All provisions under current legal framework have not stipulated the definition and scope of“commodities and service”,but we should note the property of“commodities and service”is not closely related to ascertain the crime but only sentencing.When identifying this crime,we should focus on investigating whether the operational model accompanied with“commodities and services”has the outward manifestation that defrauding properties through inducing or coercing people to join in and requiring the participants to pay fees in the name of selling commodities,providing services or other business operation.The forms of this constituent element cover“commodities or services possess authenticity and value”,“commodities or services possess no authenticity and value”and“no commodities or service”.We may judge this constituent element from operational purpose,income composition and property of commodities or services.On identification of“defrauding property”.“Defrauding property”shall be regarded as the nature characteristics of the crime of pyramid selling activities.On the basis of insisting the argument of“determining penalties under charges”,there shall be overlap relation of article between this crime and the crime of fraud,in contrast with the later crime,the special points of the former shall be undertaking the pyramid selling activities as a tool and establishing organization of pyramid selling to fraud the property.Theories and doctrines relevant to the crime of fraud can be referred in the process of identifying“defrauding property”.As for the type of constitutive elements of crime,“defrauding property”shall be the external constitutive element.In accordance with relevant judicial interpretations,satisfaction of“level and person quantity”shall be the premise of prosecuting this crime.Contradiction may occur in event of classifying it as the substantial constitutive element.We may cognize this constituent element from three ways including extent of fraud,outflow of defrauded properties and subjective purposes.On identification of subject of crime.This chapter discusses the matters related to identifying the subject of the crime of pyramid selling activities from three prospective covering identification of organizers and leaders and its special conditions and criminal liabilities to imposed on participants excluding the aforesaid organizers and leaders.Considering requirements of“level and person quantity”shall always be the precondition and subsequently other judicial interpretation or relevant standards shall be referred to.Fulfilling the requirements of“level and person quantity”shall not be the necessary and sufficient condition of constituting this crime.Three dimensions may be considered when identifying this constituent element including practically organizing and leading pyramid selling activities,actual capacity of controlling other participants,dependent purpose for illegal profit-making and capacity to dispose defrauded properties.As for the IT support staff who demonstrate increasing importance influenced by frequent development of online pyramid selling activities,if only performing obligations to provide IT support services subject to agreements entered into by them and pyramid selling organization,they shall be identified as committing the crime of assisting the crime of information and internet activities rather than the crime of pyramid selling activities.Although subject of the crime of pyramid selling activities has been limited to organizers and leaders who have main effect in the crime,yet there exists necessity to separate principal criminal and accessory.Participants apart from the organizers and leaders shall not hold the status of absolute victim,in event of not being classified as the crime of pyramid selling activities but demonstrating serious perniciousness,shall be penalized under the provisions of the crime of illegal business operation.