Monday, August 24, 2015

Conducting Promotional Offers in Oman

Promotional offers in Oman are governed by regulations set out in Ministerial Decision No. 239/2013 (“Regulations”).  It is important for a commercial establishment to comply with the Regulations in order to conduct a promotional offer in Oman.  As such, this article sets out the main provisions as set out in the Regulations.

In accordance with Article 3 of the Regulations, a commercial establishment shall not conduct or advertise any promotional offer until it has obtained a licence from the Ministry of Commerce and Industry (“MOCI”).  The licence can only be granted to a registered Omani entity who has the registered commercial activity of “commercial agency” and therefore any foreign manufacturers wishing to sell their products via a promotion in Oman must have their local agent/distributor apply for such licence.  The licence application must be submitted along with the proposed terms and conditions for such promotion at least fifteen days before the start of the promotional offer.

Under Article 6 of the Regulations, promotional offers cannot be organised more than four times a year and the period for each promotional offer shall be a maximum of two months.  The MOCI, however, may grant one licence with runs for two concurrent periods (i.e., four months).  Following the initial period of four months, the licence may be renewed for up to a further four months. Therefore the longest period of time in which the promotion may run in Oman would be eight months in any twelve-month period.  It is important to be aware that licence renewal is not automatic and therefore the licensee must apply to the MOCI for each renewal.

There are a number of specific requirements on the licensee when conducting the promotional offer. Under Article 5 of the Regulations, the price of the commodity subject to the promotional offer shall not be more than it was immediately prior to the commencement of the promotional offer.  Under Article 9 of the Regulations, the licence, or a copy of the licence, to conduct the promotional offer must be placed in a conspicuous location in the shop in which the offer is being conducted.  Under Article 17 of the Regulations, the licensee and their relatives up to the fourth degree, the licensee’s employees and distributors of the product the subject of the promotional offer shall not participate in the offer.

Where a promotion takes the form of a raffle or a draw which produces a prize winner, the licensee is required to notify the MOCI of the names and addresses of the winners and the names of the winners should also be published in two daily newspapers, one of which is in Arabic.  A period of three months shall be given to the winners to claim their prizes starting from the date of announcement of winners’ names in the newspapers.  If a winner does not claim the prize during that period, the winner would no longer be entitled to it and the unclaimed prize should be allocated to the civil societies (i.e., charitable organisations such as Dar Al Atta) under the supervision of the MOCI.

The penalty under Article 19 of the Regulations for violating the provisions of the Regulations is the MOCI’s right to prohibit the violator from conducting promotional offers for a period of one year from the date the violation is proved to have occurred.