Finally, after leaving companies and individuals involved in the advertising business in limbo, on April 23, 2014, the administrative resolution establishing the new procedures and conditions to be met before the National Superintendence for the Defense of Socio-Economic Rights (SUNDDE) approve promotions came into force.
Following the general principles of the Law for the Defense of People's Access to Goods and Services (superseded), the new regulation maintains the authorization system for activities qualifying as promotions and develops aspects of general interest, in some cases, rightly (at least for individuals to understand the rules more clearly), and in others, deepening into concepts of concern, as they directly infringe the notion of free enterprise based on ideological foundations beyond the Venezuelan society. Aside from the long list of supporting documents and formalities to be fulfilled by those concerned, the following are of special interest:
- Use of generic concepts without definition - As in the Law of Indepabis (Institute for the Defense of People's Access to Goods and Services), the resolution, in its short statement of reasons, affirms being justified by the Government's obligation to protect the interests of consumers against ..."subliminal... advertising to coercive methods... to induce consumerism," terms that are NOT subsequently defined. That leaves again at the officer's discretion whether to classify given material or advertising initiative as "subliminal" or "consumerism-inducing," which are matters steeped in dangerous subjectivity within the necessary social balance that must exist between the rights and duties of the persons involved in the advertising business, including consumers.
- Definition of "advertising material" – Now understood as "any form or mean used to launch the promotion, advertising through radio or television, brochures, flyers, banners, displays, press, posters, vouchers, coupons, or the like."
- Relevant exclusion of assumptions NOT subject to the
authorization system - Activities not subject to the
resolution are included (although some are confusingly worded),
thus, clarifying doubts that dated back years ago, namely:
- Promotion of a product
- Delivery of free samples
- Mere product and/or service advertising actions
- Companies subject to additional
- Hotels, inns, and other enterprises providing tourist accommodation services must attach a copy of the notice of the promotional price, sealed by the Ministry of Tourism.
- The system for companies offering products for weight loss or cellulite reduction, among others, which are of more interest, must attach the previous study that demonstrates the effectiveness and safety of the products. As in many other cases, the rule is incomplete, as it does not clarify the characteristics, or the entities that must issue the studies referred to, thus, leaving the matter at the discretion of the officer on duty again.
- If the promotion is to take place in establishments located in the two Freeport zones in the country, the processing of the permit must be made separately from the processing required for the premises of the same company that are subject to the standard tax system.
- Duration of the Promotions - They may not exceed three (3) consecutive months, from the effective date. However, the applicable penalty in the event the established term is exceeded is not provided for, something which the Law of Indepabis did specify.
- Response Time - Within no more than five (5) business days, SUNDDE shall give a response to approve or reject the promotion. We expect this time the deadlines are met to respect the dynamics of business planning and the defined efforts arising out of specific circumstances that make the promotion interesting for both the advertiser and the consumer or user groups.
- Special Consumer Rights - It is worth
mentioning that failure to comply by the person responsible for the
promotion, drawing, or raffle, may result in the following remedies
for the consumer, in addition to the imposition of penalties:
- Require fulfillment of benefits or prizes.
- Terminate the agreement, if there had been advance payment (entry fee) to participate in the activity.
- Request refund of total amount paid, if there is good reason in terms of dissatisfaction with the service rendered or product acquired.
In short, and even though it is far from being perfect, the resolution has a significant bureaucratic burden, and maintains gaps from the previous law, leaving excessive discretion to the regulatory agency at least it represents the reintroduction of moderately clear rules to which the advertising business is subject.
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.