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Message: <blockquote data-quote="kosandpol" data-source="post: 8832939" data-attributes="member: 105851">Network marketing is illegal in Sri Lanka.ANTI PYRAMID LAWSPyramid Schemes have been made illegal in Sri Lanka in view of the potential danger they pose to the economy.The Banking Act No 30 of 1988 was amended by incorporating the following provision to prevent the operation of Pyramid Schemes. “No person shall directly or indirectly initiate,offer, promote, advertise, conduct, finance, manage or direct a scheme where benefits earned by the participants to such a scheme are largely dependent on (a) increase in the number of participants(b) increase in the contributions made by the participants in the Scheme”Any person who contravenes the above provision of the Banking Act is guilty of an offence and on conviction is liable to a fine not exceeding Rs.1,000,000 and/or a term of imprisonment not exceeding 3 years. Further, if the offence is committed willfully or knowingly, or with the knowledge that the act will cause damage or harm to any other person, the offender will be liable to rigorous imprisonment for a term not less than 3 years and not more than 5 years and to a fine of Rs. 2,000,000 or twice the aggregate amount in Sri Lanka currency revealed or divulged to havebeen received from the participants in the scheme, whichever is higher.Also, violation of the above provision of the Banking Act is specified as an “unlawful activity” under the Prevention of Money Laundering Act No. 5 of 2006 and the Financial Transactions Reporting Act No. 6 of 2006. Therefore, any funds earned by promoting Pyramid Schemes are liable to seizure and forfeiture, in the event such funds are used for the offence of Money Laundering or for financing terrorism. TYPES OF PYRAMID SCHEMESThere are basically two types of Pyramid Schemes – the Naked Pyramid Scheme and the Product-based Pyramid Scheme. The Naked Pyramid scheme is one in which no product is offered. The Product-based Pyramid Scheme is operated in most instances as a Multi-level or Network Marketing Scheme in which a participant is required to purchase a product at an inflated price in return for which he receives: (1) the right to sell a product and(2) the right to receive a return for recruiting other participants into the program.source : <a href="http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/pa/pamphlet/pl_4.pdf" target="_blank">http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/pa/pamphlet/pl_4.pdf</a></blockquote>

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