Legal Guidelines: Corporate promotion and advertising compliance

FOREWORD

Currently, facing a challenging economic situation and decrease of purchasing power of consumers, several enterprises in the retail industry are trying their best to overcome this difficult period. Among the solutions that enterprises are implementing, advertising and sales promotion can be seen as effective methods to reach potential customers. However, when carrying out these activities, they still struggle and encounter numerous obstacles in implementing the relevant procedures according to the regulations of the law. These are also the issues raised by our clients frequently in recent times.

Acknowledging the need for enterprises to understand the regulations when conducting sales promotion and advertising, HM&P Law Firm ("HM&P") has compiled this document to introduce various procedures that enterprises may need to carry out when engaging in sales promotion and advertising. In addition, it provides some guidance and corresponding answers for them when implementing these procedures. Specifically, this publication covers the following procedures:

• Promotion notification procedures;

• Promotion registration procedures;

• Functional foods advertising content registration procedures;

• Notification procedure for advertising product on billboards, banners.
  

This publication is made based on the process of providing services to our clients as well as on the practical experience of our lawyers in representing clients in the field of sales promotion and advertising. Through this publication, we hope to assist enterprises in facilitating the implementation of related procedures

However, due to the broad and unclear nature of the regulations, the enforcement of the law may depend on the discretion of the case handler. Therefore, when carrying out these procedures, enterprises should consider additional information from the relevant government authority where the application is submitted in order to expedite the related procedures in the most efficient and convenient manner.

A. PROMOTIONS

I. Promotion notification procedures

Note 1: Traders must submit a promotion notification at least 3 working days prior to conducting the promotion (based on the date of receipt indicated on postal receipts or equivalent valid forms in the case of postal submission, the date indicated on the document acceptance receipt in the case of direct submission, the time recorded in the email system for electronic submission, or the time recorded in the system for online public service submission).

Note 2: Currently, many Departments of Industry and Trade do not accept paper filings, but only receive and accept online filings through public service portals (either the national portal or local portals). Therefore, enterprises should check with their local authorities to determine the appropriate method of filing.

II. Promotion registration procedure

Picture: Result of promotion notification procedures

III. Frequently asked questions

1. If there is a collaboration in conducting a promotion program, who is required to complete the promotion notification procedure?

In practice, it is common for multiple traders to collaborate in conducting a promotion program. According to Point 1 Clause 5 Article 17 of Decree 81/2018/ND-CP, in cases where multiple traders jointly implement a sales promotion program, the notification must clearly state the names of the traders involved, the specific content of the participation, and the specific responsibilities of the trader based on a written agreement or contract between them. Therefore, one of the traders participating in the sales promotion program will be authorized by the other collaborating traders to carry out the sales promotion notification procedure.

2. If a trader runs a promotion program through both an e-commerce exchange and an e-commerce service application, is it required to follow the promotion notification procedure?

Point b Clause 2 Article 17 of Decree 81/2018/ND-CP stipulates for cases in which the promotion notification procedure is not required, specifically “Traders who only sell and promote products through e-commerce exchanges or online promotional websites”.

Therefore, if the trader only conducts sales promotions through e-commerce exchanges or online promotional websites, it is not required to conduct the promotion notification procedure. However, except for the cases specified in Clause 2 Article 17 of Decree No. 81/2018/ND-CP, the traders is still required to carry out the promotion notification procedure.  

However, if the trader also conducts the sales promotion program “through an e-commerce service application”, then the notification procedure must be carried out as required. Thus, the trader must notify the sales promotion for the promotion program conducted through the e-commerce service application. 

3. Can a trader cancel a notified sales promotion program due to internal problems?

The Clause 1 Article 22 of Decree 81/2018/ND-CP states that traders conducting sales promotions are not allowed to terminate the sales promotion program before the announced deadline or confirmed by competent state management authoritiess, except for: (1) force majeure events, or (2) in case the trader has exhausted the quantity of promoted goods or services, or goods or services used for sales promotions, or (3) the quantity of evidence of winning announced has been exhausted, or (4) confirmed by competent authorities, or (5) in case the state authority requests to stop the implementation of the whole or a part of the traders’ sales promotion program.

Based on these listed cases, it is possible to conclude that internal issues of traders can fall under force majeure events, or the exhaustion of promoted goods or services, or goods or services used for sales promotions, or exhaustion of proofs of winning announced or confirmed by competent authorities. In cases deemed as internal issues, traders should note that:

• In case of force majeure events, the termination of the promotional program must be publicly announced to customers and relevant competent state authorities.

• In the case of exhaustion of the quantity of promoted goods or services, or goods or services used for sales promotions or such proofs of winning or confirmed by competent authorities, the termination of the sales promotion can only occur after notifying the competent state management authority and ensuring the rights of participants in the sales promotion program.

Depending on the specific circumstances, the trader can follow the appropriate procedure accordingly.