“Enterprises conducting acts of violation while engaging in promotional activities may face administrative penalties and/or additional sanctions, requirement to take remedial measures, or suspension of promotional activities depending on the severity of such acts.“
1. Administrative penalties
According to Decree No. 185/2013/ND-CP providing the penalties on administrative violations in commercial activities, production of and trading in counterfeit or banned goods and protection of consumer rights, fines ranging from 10 million to 50 million VND shall be imposed on the violating enterprises, contingent on the levels of violations. Specifically:
The aforementioned fines shall increase by 2 times in case the violations are carried out in two or more provinces or cities under central authority.
Representative offices, who independently conduct sales promotions or hire another company to do so, shall be fined with 10 million to 20 million VND if violating sales promotion regulations.
A financial penalty from 60 million to 80 million VND shall be imposed on enterprises whose promotional activities are implemented for the purpose of unfair competition, specifically:
The fine mentioned above shall be increased to between 80 million and 100 million VND if the violations are committed in two or more provinces or cities under central authority. Simultaneously, exhibits, means used to commit acts of violation, and profits earned from such acts shall be confiscated from the breaching enterprise; a public rectification must also be filed.
2. Suspension of promotional activities and confiscation of exhibits
Part of or the entire promotion may be suspended when a violation is committed, including implementation of prohibited acts or failed or insufficient compliance with the promotion’s rules registered with competent authorities.
Even when their promotional activities are suspended, enterprises are still obliged to fulfill all commitments made with customers who joined such activities; except for the following cases, in which the entire promotion is required to be suspended and all exhibits are confiscated:
3. Remedial measures
Forced destruction of promoted goods or goods used to promote other goods and services banned or restricted from business, goods not permitted to circulate, services not permitted to be supplied, or unqualified goods as provided for by law.
Forced cancellation of previously drawn prizes and re-organization of a new prize draw in case the former ones weren’t held in public or held without the presence of customers or weren’t informed to competent authorities when the total value of prizes of the promotion was worth 100 million VND or more.
Forced submission of illegal profits gained from collecting fees when providing customers with sample products or trial services and from failure to remit 50% of the announced prizes’ value to the State Budget in case no winner is found.
PLF Law Firm