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This is a Bill, not an Act. For current law, see the Acts databases.
2002
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Trade
Practices Amendment Bill (No. 1)
2002
No. ,
2002
(Treasury)
A Bill
for an Act to amend the Trade Practices Act 1974, and for related
purposes
Contents
A Bill for an Act to amend the Trade Practices Act
1974, and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the Trade Practices Amendment Act
(No. 1) 2002.
This Act commences on the day on which it receives the Royal
Assent.
Each Act that is specified in a Schedule to this Act is amended or
repealed as set out in the applicable items in the Schedule concerned, and any
other item in a Schedule to this Act has effect according to its
terms.
1 Section 61
Repeal the section.
2 After Division 1 of
Part V
Insert:
This Division sets out the meanings of a pyramid selling
scheme and other related concepts. A corporation is prohibited from
engaging in certain conduct in relation to a pyramid selling scheme (see
sections 65AAC and 75AZO).
In this Division:
new participant, in a pyramid selling scheme, includes a
person who has applied, or been invited, to participate in the scheme.
participant, in a pyramid selling scheme, means a person who
participates in the scheme.
participate, in a pyramid selling scheme, means:
(a) establish or promote the scheme (whether alone or together with
another person); or
(b) take part in the scheme in any capacity (whether or not as an employee
or agent of a person who establishes or promotes the scheme, or otherwise takes
part in the scheme).
participation payment has the meaning given by
paragraph (a) of the definition of pyramid selling scheme in
subsection 65AAD(1).
payment, to a person or received by a person,
means:
(a) the provision of a financial or non-financial benefit to or for the
benefit of the person; or
(b) the provision of a financial or non-financial benefit partly to or for
the benefit of the person, and partly to or for the benefit of someone
else.
pyramid selling scheme has the meaning given by
section 65AAD.
recruitment payment has the meaning given by
paragraph (b) of the definition of pyramid selling scheme in
subsection 65AAD(1).
(1) A corporation must not participate in a pyramid selling
scheme.
(2) A corporation must not induce, or attempt to induce, a person to
participate in a pyramid selling scheme.
(1) In this Act:
pyramid selling scheme means a scheme with both the following
characteristics:
(a) to take part in the scheme, some or all new participants must make a
payment (a participation payment) to another participant or
participants in the scheme;
(b) the participation payments are entirely or substantially induced by
the prospect held out to new participants that they will be entitled to a
payment (a recruitment payment) in relation to the introduction to
the scheme of further new participants.
(2) A scheme may be a pyramid selling scheme:
(a) no matter who holds out to new participants the prospect of
entitlement to recruitment payments; and
(b) no matter who is to make recruitment payments to new participants;
and
(c) no matter who is to make introductions to the scheme of further new
participants.
(3) A scheme may be a pyramid selling scheme even if it has any or all of
the following characteristics:
(a) the participation payments may (or must) be made after the new
participants begin to take part in the scheme;
(b) making a participation payment is not the only requirement for taking
part in the scheme;
(c) the holding out of the prospect of entitlement to recruitment payments
does not give any new participant a legally enforceable right;
(d) arrangements for the scheme are not recorded in writing (whether
entirely or partly);
(e) the scheme involves the marketing of goods or services (or
both).
(1) To decide whether a scheme that involves the marketing of goods or
services (or both) is a pyramid selling scheme, a court may have regard to the
following matters in working out whether participation payments under the scheme
are entirely or substantially induced by the prospect held out to new
participants of entitlement to recruitment payments:
(a) the extent to which the participation payments bear a reasonable
relationship to the value of the goods or services that participants are
entitled to be supplied under the scheme (as assessed, if appropriate, by
reference to the price of comparable goods or services available
elsewhere);
(b) the emphasis given in the promotion of the scheme to the entitlement
of participants to the supply of goods and services by comparison with the
emphasis given to their entitlement to recruitment payments.
(2) Subsection (1) does not limit the matters to which the court may
have regard in working out whether participation payments are entirely or
substantially induced by the prospect held out to new participants of
entitlement to recruitment payments.
3 Section 75AZO
Repeal the section, substitute:
(1) A corporation must not participate in a pyramid selling
scheme.
Penalty: 10,000 penalty units.
(2) A corporation must not induce, or attempt to induce, a person to
participate in a pyramid selling scheme.
Penalty: 10,000 penalty units.
(3) Subsections (1) and (2) are offences of strict
liability.
Note 1: Chapter 2 of the Criminal Code sets out
the general principles of criminal responsibility.
Note 2: For strict liability, see
section 6.1 of the Criminal Code.
(4) In this section:
participate has the meaning given by
section 65AAB.
pyramid selling scheme has the meaning given by
sections 65AAD and 65AAE.
4 Application
The amendments made by items 1 to 3 apply only to conduct engaged in
after the commencement of this Schedule.
5 Paragraphs 85(1)(a) and
(b)
Repeal the paragraphs, substitute:
(a) that the contravention in respect of which the proceedings were
instituted was caused by a reasonable mistake of fact, including a mistake of
fact caused by reasonable reliance on information supplied by another person;
or
6 Subsection 85(1A)
Omit “(1)(b)”, substitute “(1)(a)”.
7 Application
The amendments made by items 5 and 6 apply only to a contravention
of a provision of Part VC of the Trade Practices Act 1974 that
occurs after the commencement of this Schedule.
8 Subsection 155(6A)
After “20 penalty units”, insert “or imprisonment for 12
months”.
9 Application
The amendment made by item 8 applies only to a contravention of
subsection 155(5) or (6) of the Trade Practices Act 1974 that occurs
after the commencement of this Schedule.