MUSCAT: With Oman banning the controversial network and pyramid scheme marketing, a top official at the Ministry of Commerce, Industry and Investment Promotion (MOCIIP) said the decision will help in reducing commercial fraud in the country.

On Sunday, 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. The Ministry said it will impose a minimum fine of OMR 5,000 against violators.

“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,” said Mubarak bin Mohammed Al-Dohani, Director General of Commerce at MOCIIP.

“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 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,” he explained

What is pyramid scheme marketing?
“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,” Al Dohani said.

Al Dohani said 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.