Article 23, Paragraph 1, of the Fair Trade Law, enacted and implemented on February 4, 1991, prescribes that, “No multi-level sale shall be conducted if the participants thereof receive commissions, bonuses or other economic benefits mainly from recruiting others to join, rather than from the marketing or sale of the goods or services at reasonable market prices.”　The terms, “mainly” and “reasonable market price”, used in the foregoing quoted paragraph are ascertainable by judging the sources of participant’s economic benefits and the prices of participants’ marketing or sale of the goods or services.　Besides, since the management plan, structure, and coordination of sales are mostly set up by the enterprises conducting multi-level sales, those who engage in illegal multi-level sales are aware of the economic benefits mainly coming from recruiting others to join rather than from the marketing or sale of the goods or services at reasonable market prices, and such facts are not unforeseeable to them, according to their professional knowledge and common sense.　Thus, the standards provided by the foregoing quoted paragraph are subject to judicial review as they are provided for the courts to ascertain and judge against the facts, and hence the foregoing quoted paragraph is consistent with the principle of clarity and definiteness of law.　Moreover, under Article 35 of the same law, those who violate the regulations of the foregoing quoted paragraph are subject to criminal punishment fitting the nature of the crime [as Article 23, Paragraph 1, becomes the element of the crime prescribed The meaning of this clause is unclear].　Article 35 is consistent with the principle of clarity and definiteness of law and the principle of the punishment fitting the crime, both derived from nullum crimen sine lege, nulla poena sine lege, and is necessary to maintain social transactional orders, to enhance market functions and to facilitate economic stability and prosperity.　Accordingly, Article 23, Paragraph 1, and Article 35 are neither in contravention to Article 23 of the Constitution, nor to the constitutional guarantees of personal freedom and property rights under Articles 8 and 15 of the Constitution.

　　On the other hand, Article 23, Paragraph 2, of the Fair Trade Law provides that, “Regulations governing the supervision of multi-level sales are to be promulgated by the central governing authority.”　According to this statutory authorization, the central governing authority, the Fair Trade Commission of the Executive Yuan (hereinafter “the Commission”), promulgated and implemented the Supervisory Regulations Governing Multi-level Sales on February 28, 1992 (hereinafter the “Supervisory Regulations”).　Article 5 of the Supervisory Regulations, now deleted, touches upon the rights and obligations of people who withdraw from multi-level sale plans or structures and is not simply a supervisory regulation promulgated by the administrative organization exercising public authority. Thus, it is clear that Article 5 of the Supervisory Regulations exceeds the statutory authorization of the foregoing Article 23, Paragraph 2, of the Fair Trade Law, is in contravention to the doctrine of reservation to law under Article 23 of the Constitution, and hence shall no longer be applicable.

　　I. Article 23, Paragraph 1, and Article 35 of the Fair Trade Law, enacted and implemented on February 4, 1991 (hereinafter the “former Fair Trade Law”), are not in contravention to Articles 8, 15 and 23 of the Constitution.

　　Articles 8 and 15 of the Constitution guarantee people’s personal freedom and property rights.　However, such constitutional guarantees are subject to restrictions of law prescribing concrete elements of crimes and legal effects to prohibit anti-social behavior, provided such law is in accordance with Article 23 of the Constitution. (See J. Y. Interpretations Nos. 476, 551, and 594)　Moreover, the requirement of clarity and definiteness of law does not merely require the statutory languages to be concrete and comprehensible; they must also be prescribed and their application must be appropriate in individual cases. The lawmakers may, taking into account the complexity of modern society, utilize indefinite concepts of law to enact law [Note: I hope the changes reflect the intent of this passage.-Ed.].　According to nullum crimen sine lege, nulla poena sine lege, criminal punishments are imposed by statutory law.　The statutory law nature of crimes is indivisibly associated with the clarity and definiteness of the crimes’ elements.　If their meanings are comprehensible, and people can foresee whether their behaviors are subject to the prohibitions, and the standards provided are subject to judicial review as they are provided? for the courts to ascertain and judge against the facts in individual cases, the abstract concepts utilized by the lawmakers to prescribe people’s behavior and to impose criminal punishments for violations are hence consistent with the principle of clarity and definiteness of law. (See J. Y. Interpretations Nos. 432, 521, and 594).

　　A multi-level sale refers to a selling or a marketing plan, or an organization in which a participant pays a certain consideration fee in exchange for the right to sell or to promote the sale of goods or services and the right to recruit other persons to join the plan or organization, and therefore obtains a commission, monetary award or other economic benefits. (See Article 8, Paragraph 1, of the former Fair Trade Law; see also, Article 8, Paragraph 1, of the Fair Trade Law, as amended on February 6, 2002.)　A multi-level sale becomes condemnable when participants’ commissions, monetary awards or other economic benefits are mainly derived from recruiting others to join rather than from the marketing or sale of the goods or services at reasonable market prices.　It is so because such a profit sharing scheme provides strong incentives to participants to endeavor to recruit others to join, and causes the number of participants to increase exponentially.　Eventually, participants will suffer economic losses because the entire scheme fails to meet the needed number of newly introduced “dummies” in order to maintain an operational cash flow.　The founders or promoters of such a scheme, on the other hand, are risk free and enjoy excessive profits.　They also distort the market function and seriously impair economic stability and prosperity.　Therefore, Article 23, Paragraph 1, of the former Fair Trade Law prescribed that, “No multi-level sale shall be conducted if the participants thereof receive commissions, bonuses or other economic benefits mainly from recruiting others to join, rather than from the marketing or sale of the foods or services at reasonable market prices.”　Moreover, Article 35 of the same statute made it a criminal offense for anyone who violates the foregoing quoted Article 23, Paragraph 1, to be subject to imprisonment of not more than three years, a detention, and/or a fine of not more than one million New Taiwan dollars.　Thus, it is clear that Article 35 was properly enacted with a view to maintain social transactional orders, to enhance market functions, and to facilitate economic stability and prosperity.　The legislative branch may consider the organizers, promoters, and/or coordinators of the condemnable multi-level sales enterprises to have infringed on participants’ benefits, social transactional orders and economic stability and prosperity and impose criminal punishments on them, and at the same time take into account the degrees and kinds of legitimate legal interests thus infringed to determine the means and measures of criminal punishments taken to limit personal freedom and private property rights.　Accordingly, the criminal punishment prescribed thereunder is consistent with the principle of clarity and definiteness of law and the principle of the punishment fitting the crime under nullum crimen sine lege, nulla poena sine lege, and does not exceed the scope of necessity mandated by Article 23 of the Constitution, and is not in contravention to the constitutional guarantees of personal freedom and property rights under Articles 8 and 15 of the Constitution.

　　The terms, “mainly” and “reasonable market price”, used in Article 23, Paragraph 1, of the former Fair Trade Law are judged by the sources of participant’s economic benefits and the prices of participants’ marketing or sale of the goods or services.　Their scopes are ascertainable.　Besides, since the management plan, structure, and coordination of sales are mostly set up by the enterprises conducting multi-level sales, those who engage in illegal multi-level sales are aware of their economic benefits mainly coming from recruiting others to join rather than from the marketing or sale of the goods or services at reasonable market prices, and such facts are not unforeseeable to them, based on their professional knowledge and common sense.　Thus, the standards provided by the foregoing quoted paragraph are subject to judicial review as they are provided for the court to ascertain and judge against the facts, and hence the foregoing quoted paragraph is consistent with the principle of clarity and definiteness of law.　Moreover, with respect to the interpretation of the terms, “mainly” and “reasonable market price”, used in Article 23, Paragraph 1, of the former Fair Trade Law, Fair Trade Commission Interpretation Kung-Yen-Hse-Tze No. 008 of March 23, 1992 provides that, “I. ‘MAINLY’: A. If the Sources of Participants’ Profits of a Multi-Level Sale Can Be Clearly Divided into Two Areas, Those Purely Coming from Recruiting Others to Join and Those Coming from the Marketing or Sale of the Foods or Services: The Commission shall first ascertain participants’ sources of profits.　If the profits come from recruiting others to join, then there will be a violation of Article 23, Paragraph 1, of the former Fair Trade Law.　With regard to how to interpret the term “mainly”, the U.S. courts treat it as a synonym of “apparently”, apply the fifty percent rule, and then come to a reasonable conclusion in accordance with the participant’s state of mind and the degree and extent of the harm he or she caused in individual cases.　B. If the Sources of Participants’ Profits of a Multi-level Sale Can Not Be Clearly Divided into Two Areas, Those Purely Coming from Recruiting Others to Join and Those Coming from the Marketing or Sale of the Foods or Services; i.e., Those Two Areas Are Commingled: The Commission shall ascertain whether　the goods or services are marketed or sold at ‘reasonable market prices’.　II. ‘REASONABLE MARKET PRICE’: A. If the Same or Similar Competing Goods or Services Are Available in the Market: The Commission shall rely on the prices of the same or similar goods or services of the same or similar quality sold in domestic or international markets.　Besides, the Commission may rely on and compare with the earning ratios of a multi-level sale enterprise and its competitor in the same market not involving any multi-level sale.　The Commission may also take into account other factors such as costs, special skills, and quality of service.　B. If the Same or Similar Competing Goods or Services Are not Available in the Market: When the same or similar goods or services are not available in the market, it is relatively difficult to ascertain whether the goods or services of a multi-level sale enterprise are sold at ‘reasonable market prices’.　However, if a multi-level sales enterprise follows a set of rules for handling its participants’ requests for returning goods following the Commission’s Supervisory Regulations and implements those rules faithfully, its selling prices for goods and services are basically presumed to be ‘reasonable market prices’”.　With regard to the first part of the foregoing Interpretation of the Commission in interpreting the term “mainly”, it is consistent with Article 23, Paragraph 1, of the former Fair Trade Law.　Nevertheless, with regard to the second part of the foregoing Interpretation stating that a multi-level sales enterprise’s selling prices for goods and services are basically presumed to be ‘reasonable market prices’ as long as it follows a set of rules for handling its participants’ requests for returning goods following the Commission’s Supervisory Regulations and implements those rules faithfully, this part may be viewed as a partial interpretation of the term “reasonable market price” and is not consistent with Article 23, Paragraph 1, of the former Fair Trade Law.

　　II. Article 5 of the Supervisory Regulations promulgated on February 28, 1992, is in contravention to the doctrine of reservation to law and shall no longer be applicable.

　　Article 23, Paragraph 2, of the former Fair Trade Law provided that, “Regulations governing the supervision of multi-level sales are to be promulgated by the central governing authority.”　According to this statutory authorization, the central governing authority, the Commission, issued the Fair Trade Commission Ordinance Kung-Mi-Fa-Tze No. 003 of February 28, 1992, to promulgate and implement the Supervisory Regulations.　Article 5 of the Supervisory Regulations (now deleted and added into Articles 23-1, 23-2 and 23-3 of the Fair Trade Law, as amended on February 3, 1999) stated that, “The contents required under Article 4, Paragraph 1, Subparagraph 8, of the Supervisory Regulations (namely, the conditions and rights of withdrawal of participants of a multi-level sales enterprise, about which the participants shall be informed before joining the multi-level sales enterprise or organization) shall include the following: (i) any participant in a multi-level sales enterprise may rescind his or her participation agreement by giving the multi-level sales enterprise a written notice within fourteen days after entering into such an agreement; (ii) within a period of thirty days after the rescission of the participation agreement takes effect, the multi-level sales enterprise shall accept the application from the participant for return of goods, collect or accept goods returned by the participant, and refund all payments for the goods made upon purchase and any other fees paid upon participation accumulated from the date of rescission to the participant; (iii) in refunding the payments made by the participant according to the preceding subparagraph, the multi-level sales enterprise may deduct upon the time of return of goods the value decreased due to the damage or loss attributable to the participant, and any bonus or remuneration already paid to the participant for his or her purchase of such goods; if the returned goods as referred to in the preceding subparagraph are collected by the multi-level sales enterprise, the enterprise may deduct the necessary shipping costs for such collection; (iv) after the statute of limitation charge of participant’s right of contract rescission as prescribed in subparagraph (i) of this Article, the participant may still terminate his or her participation agreement in writing and withdraw himself or herself from the multi-level sales enterprise; (v) within thirty days from the termination of the participation agreement in accordance with the subparagraph (iv) of this Article, the multi-level sales enterprise shall buy back all goods in the participant’s possession at ninety percent of the original purchasing price, but the multi-level sales enterprise may deduct the bonuses or other remuneration paid to the participant for the purchase as well as the amount of the decreased value of the goods; and (vi) when the participant exercises the right of contract rescission and the right of contract termination conferred by the foregoing subparagraphs (i)-(iv), the multi-level sales enterprise may not claim damages or levy penalties against the participant for such rescission and termination. (Paragraph 1)　Subparagraphs (ii), (iii) and (v) of the foregoing paragraph prescribing the return and refund of the sale goods shall be mutatis mutandis applicable to the supply of services. (Paragraph 2)”　The participant’s right of contract rescission, the multi-level sales enterprise’s obligations to accep and collect the returned goods and refund the original purchasing price and participation fees, participant’s right of contract termination, the multi-level sales enterprise’s obligations to buy back the sold goods and the prohibition against claiming damages and levying penalties due to the participant’s contract rescission or termination as so conferred and prescribed by the foregoing quoted Article 5 of the Supervisory Regulations create a contracting party’s right of contract rescission freely exercisable upon a written notice within fourteen days after entering into a contract, which can not be found anywhere in the Civil Code (See Articles 254-56, 359, 362 and 363 of the Civil Code).　This procedure is the same as that of the right of contract termination at will by written notification fourteen days after entering into a participation contract as so created by Article 5 of the Supervisory Regulations; Article 5 not only conferred upon a contract party a right which can not be found anywhere in the Civil Code but altered the legal effects of contract rescission and contract termination prescribed by the Civil Code. (See Articles 259, 260, and 263 of the Civil Code.　See also, Article 250 of the Civil Code, enacted on November 22, 1929, and implemented on May 5, 1930.)　Therefore, Article 5 of the Supervisory Regulations touches upon the rights and obligations of people to withdraw from multi-level sale plans or structures, and these are not simply supervisory regulations promulgated by the administrative organization exercising public authority.　It is clear that Article 5 of the Supervisory Regulations exceeds the statutory authorization of the foregoing Article 23, Paragraph 2, of the Fair Trade Law, is in contravention to the doctrine of reservation to law under Article 23 of the Constitution, and hence shall no longer be applicable.