The Ukrainian government has approved a draft law envisaging a ban on pyramid schemes in Ukraine, the press service of the Cabinet of Ministers has reported.
A respective decision was taken at a government meeting on Monday.
The press service said that, unfortunately, cases of fraud through
pyramid schemes had increased in Ukraine in recent years. However, the
current legislation does not protect citizens enough from such
transactions.
In particular, the law on the protection of consumers’ rights cannot
be applied in this case, because according to its provisions, citizens
who invest their money cannot be considered consumers.
Moreover, in practice such pyramid schemes function without the
registration of legal entities or individuals. Thus the provisions of
this law cannot be applied to pyramid schemes, as their participants are
not subjects to whom the provisions of the law apply.
Therefore, the government approved a bill aimed at banning the
activities of pyramid schemes in Ukraine and determining responsibility
for the organization of such fraud with the funds of citizens. In
particular, it is planned to define at the legislative level the notion
of “pyramid schemes,” introduce a ban on their creation, promotion of
their activity and distribution of the relevant advertising.
It is also planned to establish criminal liability for organizing or facilitating the work of pyramid schemes.
“By the way, the maximum penalty for the intentional creation of
pyramid schemes by a group of individuals is envisages in the form of
imprisonment for up to eight years with confiscation of property,” the
press service said.
