Browse topics

• Governing law

  Name	Law or Code?
  Federal Law No. 5,768, of December 20, 1971 ('First General Regulation on Promotions')	Law
  Decree No. 70,951/72, of August 9, 1972 ('Decree 70.951') (provides specific regulations on Promotions)	Law
  Ordinance MF No. 41/2008, of February 19, 2008 ('Ordinance 41') Updated general regulation of promotions	Law
  Ordinance MF No. 422/2013 (related exclusively to Cultural Promotions)	Law
  Federal Law No. 13,756/2018, of December 18, 2018 (changes the competence authority to deal with matters relating to Promotions from CAIXA to SEFEL)	Law

  Last modified 10 Jan 2019

• Extra-territoriality

  Yes. The Brazilian laws/rules are considered to apply to prize promotions in Brazil, including promotions operated purely online.

  Prize promotions in Brazil require prior approval from the Ministry of Treasury, through its internal department named Secretariat for Fiscal, Energy and Lottery Accompaniment ("SEFEL").

  Although the laws are silent regarding prize promotions organized by entities operated abroad, the First General Regulation on Promotions set forth that promoter entities must perform commercial, industrial, service and/ or real estate activities, as well as being in compliance with all tax payment and social security obligations. For that purpose, prize promotions can only be organized by companies duly registered in Brazil with a valid Corporate Taxpayer Identification Number (CNPJ/MF), which means that foreign companies must run prize promotions through their Brazilian subsidiary or in partnership with a Brazilian company that is in compliance with said requirements.

  The only exceptions to the requirement for approval occurs in case of exclusively cultural promotions, in which no marketing purpose is involved, and prize promotions organized by public entities.

  The distribution of the prize may be based on three different formats of prize promotions: Prize Draws (Sorteio), Coupons (Vale-Brinde) or Contests (Concurso).

  Finally, with respect to language, the law is very protective towards consumers, and it is necessary to offer all information and content in Portuguese.

  Last modified 10 Jan 2019

• Skills competitions

  Yes.

  For the contest (Concurso) form of prize promotion, a contest occurs through intelligence tests, selection of predictions, calculations, or similar competitions of any nature. It is required that the conditions of promotions are applied uniformly, so as to guarantee equal treatment and opportunity for everyone interested in participating in the prize promotion.

  Promoters may provide that entry is subject to the participant presenting or delivering a label, wrapping, or packaging and/ or satisfying any requirements, preconditions or stipulations required by the promoter, relating to the products or commercial activity of the promoter, provided that said material does not constitute a series of multiple labels/wrappers/ packaging (see Other local requirements). 

  Last modified 10 Jan 2019

• Prize draws

  Yes.

  For the prize promotion formats known as Prize Draws and Coupons, winning is connected to chance.

  Firstly, with respect to Prize Draws, assigned numbers must be issued and distributed concomitantly, randomly and equitably.

  As regards to the Coupons format of prize promotion, the method of winning is instantaneous, as it occurs by the winning coupon or prize being discovered inside the product or its packaging. This must be done in accordance with rules set forth by government agencies responsible for public health and control of weights and measures. In this case, the maximum value of the prize cannot exceed R$400.00 (approx. US$100).

  Last modified 10 Jan 2019

• Selection of winners

  Promoters must guarantee that the prize promotion is conducted and the distribution of the assigned participation numbers are made in a concomitant, random and equitable way.

  The authorized entity will be the one responsible for identifying and notifying the winners. In case the winner does not collect its prize in up to 180 days, its right will be forfeited and the promoter must pay a corresponding sum as income to the state. Brazilian law does not allow the promoter to find an alternative winner.

  Last modified 10 Jan 2019

• Judges

  There is no provision in this regard under Brazilian Law.

  Last modified 10 Jan 2019

• Prizes

  Yes. The distribution of cash prizes and the conversion of prizes to cash is prohibited. Also, promoters may not distribute as prizes: medicines, weapons and ammunition, explosives, fireworks, tobacco and derivatives, alcoholic beverages above a certain alcoholic content.

  Furthermore, prizes must not:

  • Be related to or encourage gambling;
    
    
  • Generate an immoderate profit for promoters;
    
    
  • Impact negatively on the education of a child or adolescent;
    
    
  • Involve coupons or any other thing that imitates or resembles the national currency.

  General authorized prizes that are distributed in Brazil are:

  • Goods produced in Brazil or regularly imported;
    
    
  • Residential units, located in the country or in urban areas;
    
    
  • Tourism trips (encompassing the transport from the residence to the destination and from the destination to the residence of the winner, lodging and at least one meal);
    
    
  • Scholarships;
    
    
  • Tickets to concerts, parties and plays, along with a physical prize of any value.

  Last modified 10 Jan 2019

• Registration requirements and fees

  An Authorization Certificate permit must be obtained from SEFEL.

  The fee to apply for this Authorization will depend on the prize total value: 

  Prize Value	Fee
  Up to R$ 1,000.00 (Up to approx. US$250)	R$ 27 (US$7)
  From R$ 1,000.01 to R$ 5.000.00 (From approx. US$ 250 to US$ 1,254)	R$ 133 (US$ 33)
  From R$ 5.000,01 to R$ 10.000.00 (From approx. US$ 1,254 to US$ 2,507)	R$ 267 (US$ 67)
  From R$ 10,000.01 to R$ 50.000.00 (From approx. US$ 2,507 to US$ 12,536)	R$ 1,333 (US$ 334)
  From R$ 50,000.01 to R$ 100,000.00 (From approx. US$ 12,536 to US$ 25,072)	R$ 3,333 (US$ 836)
  From R$ 100,000.01 to R$ 500,000.00 (From approx. US$ 25,072 to US$ 125,360)	R$ 10,667 (US$ 2,674)
  From R$ 500,000.01 to R$ 1,667,000.00 (From approx. US$ 125,360 to US$ 417,951)	R$ 33,333 (US$ 8,357)
  Above R$ 1,667,000.01 (Above approx. US$ 417,951)	R$ 66,667 (US$ 16,715)

  Note: Fees as at 10 January 2019 and subject to change.

  Last modified 10 Jan 2019

• Other local requirements

  The maximum value of a prize will be fixed based on the operating income of the promoter or the nature of its economic activity, so as not to distort the market.

  The Authorisation certificate number must be included in all promotional material.

  The prize promotion must not allow the promoter(s) to use the promotion authorisation to exploit the promotion as a source of income.

  Promoters of prize promotions must not create an exaggerated expectation of obtaining prizes.

  The award of a prize cannot be conditional on the participant collecting a series of product-related items (eg cards, stickers, objects, labels, packaging, and wrappers).

  The distribution of prizes must not be linked to the results of the Sports Lottery. Promoters must ensure equal treatment for all competitors.

  Last modified 10 Jan 2019

• Timing

  It is required by the law that all requests for Authorisations must be filed within the minimum prior term of 40 days before the initial date of the promotion and/or its marketing campaign.

  Also, the execution period of the promotion may not exceed 12 months.

  Last modified 10 Jan 2019

• Translations

  All documents that are mandatory to request the Authorization Certificate must be presented in Portuguese, as well as all information disclosed to consumers / participants.

  Last modified 10 Jan 2019

• Penalties for non-compliance

  The main situations where Administrative Proceedings may be initiated and sanctions may be imposed are:

  • Promoting free distribution of prizes without prior authorization of SEFEL;
    
    
  • Non-compliance with the approved promotions terms and conditions;
    
    
  • Failure to deliver an accountability report to SEFEL, after the end of the promotion.

  In those scenarios, the Brazilian legislation provides for the possibility of the following penalties:

  • Cancellation of the authorization;
    
    
  • Prohibition of free distribution of prizes for a period of up to two years;
    
    
  • Fine up to 100% of the total value of the prizes;
    
    
  • Fine of 10 to 40 times the highest minimum wage in force in Brazil (this can be doubled in the case of recurrence).

  Such penalties may be applied independently or together, and may be combined with the suspension / cancellation of the Authorisation Certificate.

  Last modified 10 Jan 2019

• Restrictiveness of regulations

  Not very restrictive. While authorization is required, the authority is usually aiming to approve promotions and work alongside promoters in order to find a better way to enable the promotion to be run.

  In view of that, it is not likely that a prize promotion mechanic will be refused altogether.

  Last modified 10 Jan 2019

• Regularity of sanctions

  Fines are imposed, however not very often. There are no provisions for prison sentences.

  Last modified 10 Jan 2019

• Key contacts
  

  Paula Mena Barreto

  Partner Campos Mello Advogados [email protected] T +55 21 3262 3028

  

  Manoela Quintas Esteves

  Associate Campos Mello Advogados [email protected] T +55 21 3262 3042