Since the government of Argentina dissolved the National Lottery early in 2018, chance-based promotions have had the "green light". Prior to the dissolution, all promotions/contests in which the winners were totally or partially determined by chance needed to be registered with National Lottery and had to meet with all applicable requirements.
Even when registration is not required -at least for now-, there are still some requirements all Sponsors need to meet in order to avoid sanctions. Here are the 10 basic things you should know before launching a Promotion in Argentina:
- The organization of promotions, contests or raffles of any nature in which participation is totally or partially subject to the purchase of a product or the hiring of a service, is prohibited by law. A non-purchase method of entry must be offered in order to avoid such prohibition. Besides, the organizer must guarantee free entrants the same chances to win as purchase entrants.
- Cash prizes are allowed
- Information about the conditions, prizes and territorial scope of the Contest must be published on a website and/or a toll-free hotline indicated in the corresponding advertisement.
- The Official Rules must conform to local law, namely: Fair Trading Act, Consumer Protection Act, and amendments.
- The Official Rules, Releases and other related documents must be translated into Spanish.
- Argentina is subdivided into twenty-three provinces (provincias) and one autonomous city, the City of Buenos Aires. Even though the provinces and the City of Buenos Aires exist under a federal system, they have their own constitutions, and local regulations. Some provinces of Argentina regulate chance-based promotions at a local level. A possible solution to avoid registration is to exclude those provinces from the scope of the promotion territory.
- The Official Rules must include the information required by Resolution 915/2017 and Decree 961/2017 of the Secretariat of Commerce.
- A tax of 31 % on 90 % of the amount of the prize is applicable to chance-based contests. The winner, if resident in Argentina, shall report the amount received from the sponsor to the Argentine tax authorities and pay income tax on it. If the sponsor is not a resident of Argentina, it will not be required to act as a withholding agent for the Argentine government. Only residents in Argentina may be required to act as such.
- The list of winners must be published by the same means used to advertise the Promotion within 10 days counted as from the ending date.
- The Official Rules must include a reference to section 14 of the Data Protection Act, referring to the rights of the data owners.
If you are planning a promotion or sweepstakes in this far-away land, be sure to complete the above "safety checklist". However, since each situation is unique, always remember to obtain guidance from an experienced lawyer.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.