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  • Governing law
    NameLaw or Code?
    The Anti-Commercial Fraud Law and Regulations ('ACFR') Law

    Last modified 10 Feb 2017

  • Extra-territoriality

    The ACFR does not expressly distinguish between prize promotions operated outside or within Saudi Arabia. This will depend upon the specific circumstances of the promotion/competition, the nexus with persons resident in Saudi Arabia and whether any activities can be deemed to be being executed in Saudi Arabia.

    Last modified 10 Feb 2017

  • Skills competitions

    Yes, the introduction of an element of skill in a prize promotion is not prohibited under the ACFR. An application explaining the elements of the prize promotion must be submitted to the competent authorities in Saudi Arabia in order to obtain a license for conducting and/or advertising the promotion (please refer to Registration requirements for further information).

    Last modified 10 Feb 2017

  • Prize draws

    Yes, the ACFR does not expressly prohibit prize draws where there is an element of chance in the selection of the winner. However, there are a number of requirements and restrictions under the ACFR that must be complied with in relation to any prize promotions/competitions. For example, there is a requirement that, amongst others, purchasing (a ticket, product or anything else) must not be set as a condition for participation.

    Last modified 10 Feb 2017

  • Selection of winners

    There are various requirements under the ACFR related to the selection of winners and award of prizes. For example, amongst others:

    • It is not permitted under the ACFR for certain 'connected' persons to participate in the prize promotion (including the beneficiary of the licence to hold the prize promotion, children, spouse, parents and/or employees), and

    • The ACFR requires that prizes must be given to winners within seven days from the date of sorting the results

    Last modified 10 Feb 2017

  • Judges

    No, the ACFR does not stipulate any requirements in relation to judges or judging specifically for skills competitions (eg a minimum number of judges, independence, qualifications, etc). The competent authorities will likely, as part of granting a licence for undertaking the competition, require details of the criteria and mechanism for judging entries.

    Last modified 10 Feb 2017

  • Prizes

    The competition, including prizes, must not violate the principles of Shari’a and customs in Saudi Arabia. For example, the consumption of alcohol is forbidden under Shari’a, and a prize such as the supply of wine would not be permitted. As part of the licence application process for a promotion/competition, the competent authorities will require details of the prizes to be awarded.

    Last modified 10 Feb 2017

  • Registration requirements and fees

    Registration Requirements

    The ACFR provides, amongst other things, that commercial entities may not conduct or advertise a promotion/competition unless it has first obtained a license from the Director-General of the Anti-Commerce Fraud Department or the competent branch of the Ministry of Commerce and Investment (in practice, via the Chamber of Commerce).

    Fees / Taxes Payable

    The ACFR does not stipulate the license fees for a license an application. This should be confirmed with the competent authorities before at the time of making any application.

    Any tax implications in relation to prize promotions should be confirmed directly with specialist tax advisors.

    Last modified 10 Feb 2017

  • Other local requirements

    There are a number of requirements and restrictions under the ACFR, and relevant authorities may also stipulate additional requirements that may apply as part of the granting of a license.

    Last modified 10 Feb 2017

  • Timing

    The ACFR provides that the application for a license must be reviewed within seven days from the date of its submission, and in the instance where the conditions are deemed to be satisfied, the license is to be issued. If the application is rejected, the applicant is required under the ACFR to be notified of the rejection, with reasons for the rejection, within 10 days from the date of submission of the application.

    However, in our experience these types of processes with the authorities are not always straightforward and may involve multiple submissions which can take considerably longer than the guidelines stipulated by the law. This does not include the time required to prepare and execute the necessary submissions for a license application, and any additional requirements that may subsequently be required by the competent authorities.

    Therefore, it is advisable that preparations for any application are initiated as soon as possible (preferably months) in advance of the proposed promotion/competition. We would be able to advise on the likely process, requirements, documents and timings depending upon the specific promotion/competition envisaged.

    Last modified 10 Feb 2017

  • Translations

    The ACFR does not stipulate that the terms of the promotion/competition must be in Arabic. We usually recommend that dual-language terms and conditions (Arabic and English) are provided.

    Submissions to the competent authorities for a license are also to be submitted in Arabic, and in any event such authorities may require that the terms and conditions of the promotion/competition include an Arabic translation.

    Last modified 10 Feb 2017

  • Penalties for non-compliance

    The ACFR Regulations provide that, where a commercial contest is launched without the appropriate license, the following penalties shall be applicable:

    • A fine of up to ﷼ 50,000 (approx. US$13,333), or

    • Imprisonment of up to six months, or

    • Both of these penalties

    In addition, there are a number of other penalties for violations of the ACFR that are more generally applicable, including a prohibition of sale and/or withdrawal and/or disposal of violating products, shop closures, travel bans, deportation of expats with no return, investigations by government authority officers and the public prosecutor, and publication of violations in the local newspaper.

    The ACFR Regulations further provides that, the seller, whoever the product is distributed to on its behalf, managers of companies, cooperatives and establishments as well as the shops shall be liable for all violations of the ACFR, and each shall be subject to the penalties prescribed for violators. If any of them proves that the violation occurred due to reasons beyond its control, the penalty may be inflicted solely on the violator.

    Last modified 10 Feb 2017

  • Restrictiveness of regulations

    There is generally no system of precedent in Saudi Arabia, and government officials/authorities have a broad discretion when considering matters on a case by case basis. The law is drafted in general and non-prescriptive terms, and this places greater emphasis on consultation with the competent authorities to confirm current local practice (which can differ from to time), and also the specific particulars of any proposed promotion/competition. These factors, coupled with the requirement under the ACFR to obtain a license before undertaking and/or advertising a promotion/ competition, means that this is not necessarily a straightforward process relative to some other jurisdictions.

    Last modified 10 Feb 2017

  • Regularity of sanctions

    There are reports of competent authorities implementing the provisions of the ACFR, and imposing penalties on a number of companies for violation of its promotion/competition requirements. However, full details of such cases are not published, and in any event specific details of all cases are not publicly available.

    More generally, it is important to note that competent authorities are becoming increasingly active in ensuring that local laws are complied with and actively encouraging consumers to report violating promotions/competitions.

    Last modified 10 Feb 2017

  • Key contacts
    Mohamed Moussallati
    Mohamed Moussallati
    Legal Consultant DLA Piper Middle East LLP [email protected] T +966 11 201 8997
    Paul Allen
    Paul Allen
    Partner DLA Piper Middle East LLP [email protected] T +971 4 438 6295 View bio
    Eyad Reda
    Eyad Reda
    Managing Partner DLA Piper Middle East LLP [email protected] T +966 11 201 8989 View bio

Governing law

What are the applicable governing laws or codes for prize promotions?

Saudi Arabia

Saudi Arabia

NameLaw or Code?
The Anti-Commercial Fraud Law and Regulations ('ACFR') Law