Promotions and Sweepstakes in Mexico


Promociones y SorteosRequirements to Perform Sweepstakes in Mexico

The following documents and or information will have to be filed before the Ministry of Interior prior to the sweepstakes:

A. If the applicant is a Mexican company:

1. Original or certified copy of the articles of incorporation and by-laws of the applicant that will have to expressly include the performance and or preparation of sweepstakes and promotions. In the event the applicant does not have this activity included within its corporate purpose it will be required to amend its by-laws.

2. Each applicant will only be entitled to perform one sweepstakes and/or promotion at the time, therefore only one authorization may be obtained every time.

3. Original bond granted by the Mexican applicant covering the total value of the prizes that will be awarded.

B. If the applicant is a foreign company:

1. Original certificate of good standing of the applicant.

2. Copy of the permit and/or authorization obtained by the foreign applicant in its country of origin to perform the corresponding sweepstakes and/or promotion on an international basis. If no permit or authorization are required, it will be necessary to file a legal opinion giving the reasons and the applicable legal provisions that establish that a permit and/or authorization are not required.

3. Copy of the guarantee or bond placed by the foreign applicant to guarantee delivery of the prizes (only if required by the applicable foreign laws).

In both cases the following information will have to be submitted:

1. Value of the prizes in Mexican pesos.
2. Mechanics used to select the winners.
3. Term provided to the participants to claim prizes.
4. Time and date in which the prizes will be awarded within the Mexican Republic if there are any winners within Mexico.
5. Include a statement whereby the applicant agrees to pay all transportation expenses of the winner from its domicile to Mexico City. All prizes shall be delivered in Mexico City at the domicile indicated in the application.

Unless all of the above mentioned requirements have been met, no sweepstakes and/or promotion nor any advertising related thereto may be held.

In general, in addition to the foregoing requirements, it is always necessary to submit prior to the making of any such sweepstakes and promotions: (i) a writ with all the information concerning the terms and conditions of the same; (ii) description of the prizes that will be granted to the winners; (iii) general information about the promoter; (iv) all rules and advertising of sweepstakes and promotions shall be in Spanish, and abbreviated rules are forbidden; (v) although there are no restrictions on the type or nature of the prizes that may be awarded, the advertised value of the prizes may not be higher than their retail price; (vi) the Ministry of Interior always requires the placing of a bond, issued by a Mexican Bonding Company in an amount equal to the total retail value of the prizes when the sweepstakes and/or promotions take place within Mexico, (vii) the computerized selection of winners is only permitted if the authorities have: (y) a list of the participants and they have verified that it is true and correct; and (z) a description of the software used for selecting the winners; (viii) Promoters shall publish the list of winners once in two domestic news papers, and (ix) agree to deliver prizes won by Mexican residents at a domicile within Mexico.

On the other hand the following is an excerpt of a Mexican Standard that is in full force and effects in Mexico and that has an important connection with promotions:

Norma Oficial Mexicana, (Official Mexican Standard) NOM-028-SCFI-2000. “commercial practices. Information elements in regard to collectible promotions and/or trough raffles, contests and sweepstakes”. (The Standard)

On July 19th 2000 the Standard was enacted. Within the most important points of this Standard we could mention the following:

1.- Purpose and Application Field:

The Standard specifies the characteristics of commercial information that should be given to the consumer and the Procuraduría Federal del Consumidor (Federal Consumers Protection Agency) (PROFECO) to suppliers that participate in collectible promotions and/or raffles, contests and sweepstakes within the national territory, with the intent to avoid any kind of practice that can damage the consumers interests.

2.- Promotions Through Raffles, Contests and Sweepstakes:

General Dispositions

a) Any advertisement used by the suppliers to publicize the promotions mentioned in the Standard, shall be concise, precise, and identifiable, and not induce the consumer to any error or confusion.

b) If the case, of as monetary value is indicated and offered in the promotions, it shall be offered in national currency, with no prejudice of being able to express it in other currencies, in accordance to the Banco the Mexico’s dispositions.

c) The suppliers are forced to render the goods or services offered in this promotions, in the terms and conditions specified in the corresponding advertisement.

d) The suppliers that develop promotions through raffles and contests, requires previous authorization from the Ministry of the Interior (this issue shall be later considered), in compliance to the applicable dispositions.

3.- Information for the Consumer:

a) Name and address of supplier offering the promotion

b) Good or service purpose of the promotion/sweepstakes

c) Incentive offered in the promotion.

d) Validity and limits for the promotion, specifying starting dates, as well as conclusion dates, amount of goods, services or incentives offered in the promotion/sweepstakes. If no amount is specified it will be considered with no limit.

e) Promotion’s/sweepstakes coverage, stating, if local, regional or national.

f) Warrantee that the incentives are offered within the promotion. Said warrantees shall comply with the Ley Federal de Protección al Consumidor.(Consumers Law)

g) Permit number granted and issued by the Ministry of the Interior.

h) Total Number of tickets, coupons etc. issued.

i) Total number of prizes.

j) Mechanics and conditions so as to grant the consumer the ticket, coupon, etc.

k) Raffle, contest or sweepstakes procedure, as well as date and place of execution.

l) Media and dates to acknowledge the results and to deliver the prizes.

m) Term to claim the prizes.

n) Date and schedule to claim the prizes.

o) Telephone number for questions and information stating the service hours.

4.- Information that shall be given to the profeco.

a) The supplier that offers collectible promotions and/or through raffles/sweepstakes/promotions/contests shall previously notify the PROFECO. Said notification shall be filed at least 5 (five) calendar days before the date of the promotion. This notification shall be in writing and shall contain the description of the collectible promotions and/or through the raffles, contests or sweepstakes mentioning all the elements of information mentioned in point number 4 herewith, including the Ministry of Interior authorization.

b) In no case shall any of the changes provided or performed by the supplier shall be in detriment or prejudice to the consumer and any and all changes shall be subject to:

• Notification to PROFECO for any changes in the promotions/sweepstakes at least one calendar day before they are implemented.

• Broad advertisement of the changes made in the promotions/sweepstakes through the media (TV, Radio, Newspapers, etc.)

On the other hand, it shall be necessary to grant a letter of authorization in favor of Luis Legarreta Cantú and/or Mariana Tovar Azuela, for each of the clients that participate in this type of promotions/sweepstakes (neither notarization nor legalization shall be required).

The cost for the preparation, presentation and follow-up of the applications that will be filed before the DJS and PROFECO in normal conditions is of U.S. $2,500.00, plus expenses, if any and we request for each case that you send the instructions at least 15 days before the contest and/or promotions will take place to be on time with the dates and be able to do the necessary paperwork with both administrative offices.

On the other hand and considering the characteristics of the contests that the companies that we normally represent perform: (i) luck is not part of them, (ii) skill-based; (iii) several countries participate (pan regional), and (iv) winner’s selection is done outside of Mexican territory, if the mentioned characteristics are met, we will only need to file and get an approval from the PROFECO and for such purpose: (i) we do not need a power of attorney, (ii) the writs has to be filed 10 days before the commencement of the promotion, and (iv) the issuance of the permit shall be obtained promptly. Our fees in these kind of cases are of about US$ 850.00, including government fees.

If you have any questions or comments in connection with the foregoing, please do not hesitate to contact us.

Yours,

Legarreta y Asociados, S.C.

Note: the present document does not intent to establish a legal opinion, if there is any question or comment please call us.