Laws of the People's Republic of China

No. 18

The Measures for the Administration on Sales Promotion Acts of Retailers, which were adopted at the 7th executive meeting of the Ministry of Commerce on July 13, 2006 and were approved by the National Development and Reform Commission, the Ministry of Public Security, the State Administration of Taxation and the State Administration for Industry and Commerce, are hereby promulgated and shall enter into force as of October 15, 2006. Bo Xilai, Minister of the Ministry of Commerce

Ma Kai, Director of the National Development and Reform Commission

Zhou Yongkang, Minister of the Ministry of Public Security

Xie Xuren, Director of State Administration of Taxation

Wang Zhongfu, Director of State Administration for Industry and Commerce

September 12, 2006

Measures for the Administration on Sales Promotion Acts of Retailers

Article 1

With a view to regulating the sales promotion acts of retailers, ensuring the lawful rights and interests of consumers, maintaining the order of fair competition and the interests of the general public, and promoting the sound and orderly development of the retailing industry, the present Measures are formulated under the relative laws and regulations.

Article 2

The present Measures shall apply to the sales promotion acts conducted by retailers within the territory of the People's Republic of China.

Article 3

The term "retailer" as mentioned in the present Measures means the enterprises and their branches as well as the individual business households, which have registered in the administrative departments for industry and commerce and sell commodities to consumers.

The term "sales promotion" as mentioned in the present Measures refers to the marketing activities that retailers conduct in order to attract consumers and expand sales.

Article 4

A retailer, when undertaking sales promotion activities, shall follow the principles of lawfulness, fairness and good faith and observe the commercial ethics, and may not undertake any sales promotion activity in violation of social moralities, disturb the market competition order and the social public order or impair the lawful rights and interests of consumers and other business operators.

Article 5

A retailer, when undertaking sales promotion activities, shall have corresponding safety equipments and management measures and ensure the smoothness of the safe passages for fire control. As regards large-scale sales promotion activities such as business start, festival celebration or business anniversary, it shall set down an emergency scheme for safety so as to ensure good shopping order and prevent the sales promotion activity from causing any traffic jam, disorder, transmission of diseases, personal injuries or property losses.

Article 6

The contents of advertisements or any other propaganda for sales promotion of a retailer shall be authentic, lawful, explicit and understandable, in which the retailer shall not use any language, word, picture or image which is ambiguous or misleading. The retailer may not, under the excuse of retaining the final explanation right, impair the lawful rights and interests of consumers.

Article 7

A retailer, when undertaking sales promotion activities, shall show the promotion contents at an eye-catching place in its business site, which shall include the promotion reasons, form, rules, time limit, commodity scope and other restrictive conditions.

The retailer shall clearly indicate the counters or goods which are not under the sales promotion activities, and may not declare whole-store promotion. When clearly indicating the exceptional commodities or promotion rules with restrictive conditions or additional conditions, the relative characters or pictures shall be conspicuous and definite.

The retailer may not, unless the change is caused by any force majeure, change any of the promotion contents within the time limit as indicated after it has begun to undertake a promotion activity.

Article 8

A retailer, when undertaking a sales promotion activity, shall pay taxes on its promotion commodities (including the awards or complimentary gifts for sales with awards) according to law.

Article 9

A retailer, when undertaking sales promotion activities, shall establish a sound price management archives, faithfully, correctly and completely record the prices prior to and during the process of the promotion activity, and shall properly preserve them and accept supervision and inspection according to law.

Article 10

A retailer, when undertaking sales promotion activities, shall clearly mark the prices on the price tags with and complete pricing items, true, clear, and eligible price contents, corresponding goods and price tags and conspicuous marks. It shall not sell any goods by increasing the marked price, nor charge any fee that is not indicated clearly.

Article 11

A retailer, when undertaking sales promotion activities, may not cheat or induce the consumers to buy commodities by giving them a discount on the basis of a false original price or by marking a misleading price or by taking a misleading price method.

Article 12

A retailer, when undertaking sales promotion activities, may not decline the quality or after-sale service level of the promotion commodities (including the awards and complimentary gifts for sales attached with awards), or may not use any article which does not meet the quality requirements as awards or complimentary gifts.

Article 13

A retailer, when undertaking sales activities with awards, shall d isplay the awards or complimentary gifts, and may not mislead the consumers by the false values of awards or complimentary gifts or by ambiguous words.

Article 14

A retailer, when undertaking sales promotion activities within a time limit, shall ensure adequate supply of the commodities within the said time limit.

A retaile shall clearly indicate the concrete quantity of the promotion commodities when undertaking sales promotion activities within a certain quantity. Where the stores of a chain enterprise undertake sales promotion activities within a certain quantity, they shall clearly indicate the concrete quantities of the promotion commodities in their respective stores. As for a sales promotion activity within a certain quantity, a notice of termination of the sales promotion shall be given as soon as the promotion commodities are sold out.

Article 15

A retailer, when undertaking sales promotion activities through preferential cards of accumulative points, shall clearly indicate the method to obtain the accumulative points, the valid time period for the said accumulative points and the preferential items to be obtained for the purchase of goods.

After a consumer gets a preferential card of accumulative points, the retailer may not change any of the items as clearly indicated in the preceding paragraph, except for the changes that will add to the rights and interests of the consumer.

Article 16

No retailer may undertake any sales promotion activity by making up a reason such as rummage sale, store dismantlement and resettlement, termination of business, suspension of business or shifting to another business.

Article 17

Where a consumer asks the retailer to provide an invoice or purchase voucher for a promotion commodity, the retailer shall do so immediately and may not require the consumer to pay any extra fee.

Article 18

No retailer may, under the excuse of sales promotion, refuse to return or change any commodity or set any barrier for the consumers' return or change of commodities.

Article 19

Industrial associations shall be encouraged to establish credit archives on commercial retailing enterprises so as to intensify the self-discipline and guide the retailers to undertake sales promotion activities on the basis of law compliance, fairness and good faith.

Article 20

Where the single store of a retailer with a business area of more than 3, 000 square meters, if the retailer undertakes a sales promotion activity under the name of business start of any new store, festival celebration or store anniversary, it shall submit the clearly indicated promotion contents to the commerce administrative department of the place where the business site is located for archiving purpose within 15 days as of the end of the sales promotion activity.

Article 21

The departments of commerce, price, tax, and industry and commerce of all places shall, in accordance with the pertinent laws, regulations and provisions, supervise and manage the sales promotion acts under their respective functions. In case any sales promotion act is involved in any crime, it shall be investigated and punished by the public security organ.

Article 22

Any entity or individual may report any act in violation of the present Measures to the aforesaid entities which shall investigate and punish it after receiving the tip-off.

Article 23

Where any retailer's act is in violation of the present Measures, if it is subject to any other law or regulation, such law or regulation shall prevail. If it is not provided for in any law or regulation, the retailer shall be ordered to make corrections. In the case of any illegal gains, the retailer may be imposed upon a fine of 3 times of the amount of illegal gains or less, but not exceeding 30, 000 Yuan. In the case of no illegal gains, the retailer shall be imposed upon a fine of 10, 000 Yuan or less. In addition, an announcement may be made.

Article 24

All provinces, autonomous regions, and municipalities directly under the Central Government shall, in light of their respective actual circumstances, formulate relative provisions to regulate the sales promotion acts.

Article 25

The power to interpret the present Measures shall remain with the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Public Security and the State Administration for Industry and Commerce.

Article 26

The present Measures shall enter into force as of October 15, 2006.