Prize Competitions

Generic Surety Bonds: Prize Competitions

Regulatory Framework
Law 27/12/1997 n. 449
D.P.R. 26/10/2001 n. 430
Ministry of Productive Activities Circular 28 March 2002, n. 1/AMTC

General Overview
Prize competitions are promotional initiatives that involve promises of rewards to the public, aimed at increasing awareness of specific products, services, or brands.

These initiatives are divided into two main categories:

Promotional Operations

Duration: Not exceeding five years.
Nature: Participation requires the mandatory purchase of the promoted product. Unlike competitions, rewards are given to all participants under the conditions specified in the regulations.
Prize Competitions

Duration: Maximum of one year.
Nature: Prizes are awarded based on a random draw or skill-based games, and are only given to select participants.
Promotional activities can only be organized by:

Producers or commercial entities providing or distributing the goods or services being promoted.
Representative organizations established as consortia or cooperative societies.
A key change introduced by D.P.R. 430/2001 is the shift from an authorization regime to a simpler requirement of prior notification and preparation of specific regulations for the initiative.

Surety Bond Requirements
The promoter must also establish a surety bond for the Ministry of Productive Activities to ensure the actual distribution of prizes. The bond amount is as follows:

For Prize Competitions: Equal to the total value of the prizes.
For Promotional Operations: 20% of the total prize value.
No bond is required if the prize is delivered at the time of purchase of the product or service being promoted.

Content and Scope of the Guarantee
The surety bond must be valid for a minimum period of one year from the conclusion of the promotional initiative.
For prize competitions, the surety is released early (after 180 days) from the date of submission to the Ministry of Productive Activities of the closing report, which must be drafted by a notary or a responsible consumer protection official.
Technical Documents Required
For Prize Competitions:

Copy of the notification sent to the Ministry, prepared using specific forms, and the regulations of the competition.
For Promotional Operations:

Copy of the regulations, certified with a substitute declaration signed by the legal representative of the promoting entity in the presence of a public official.