Certain Provisions on the Prohibition against
Unfair Competition Acts in Activities of Sales with Attached Prizes
Promulgated by Order No. 19 of the State Administration of Industry and Commerce
on December 24,1993

Article 1

In order to prevent unfair competition acts in activities of sales with attached prizes and according to relevant provisions of the Law of the People's Republic of China for Countering Unfair Competition (hereinafter referred to as the Law for Countering Unfair Competition), the Provisions are formulated.

Article 2

The sale with attached prizes referred to in the Provisions refers to acts practised by an operator to provide buyers with supplementary articles, money or other economic interests for sale of goods or supply of services, including the sale with attached prizes in the form of supplementary gifts for all buyers and sale with attached prizes in the form of lottery for part of buyers.

All ways of chances such as by using drawing lots and rocking numbers, etc. to decide whether a buyer will win the prize shall fall within the form of lottery.

The Provisions shall not apply to the solicitation of contributions with attached prizes and other lottery ticket sale activities approved by the government or government department in accordance with the Law.

Article 3

The following fraudulent acts to make sales with attached prizes shall be forbidden:

1. Falsely claiming that the sale is attached with prizes or making deceptive representation on the kind of the set-out prizes, probability for winning the prizes, value of the top prizes, total value, and types, quantities, qualities, ways of presenting the prizes, etc.
   
   
2. Adopting unfair means to cause previously chosen people to win the prizes intentionally.
   
   
3. Intentionally keeping the goods or lottery tickets with marks for winning the prizes from being released to the market, or not releasing them simultaneously with the goods and lottery tickets; intentionally releasing the goods or lottery tickets with different prize values or prize marks at different times.
   
   
4. Other fraudulent acts of sales with attached prizes.

Acts mentioned in item 4 of the preceding paragraph shall be ascertained by the administrative authorities for industry and commerce at the provincial level or above. The ascertainment made by the administrative authorities for industry and commerce at the provincial level shall be reported to the State Administration of Industry and Commerce for record.

Article 4

Making sales with prizes attached in the form of a lottery, the amount for the highest prize shall not exceed RMB���5,000 yuan.

Non-cash articles or other economic interests used as prizes shall be converted according to normal prices of the goods or services of the same kind on the market for the same period of time.

Article 5

The operator shall not promote the sale of inferior but high-priced goods by offering prizes.

The so-called "inferior but high-priced goods" mentioned in the preceding paragraph shall be ascertained by the administrative authorities for industry and commerce, if necessary, together with other relevant departments, on the basis of the price and quality of the same kind of goods on the market for the same period of time, and the complaint from buyers.

Article 6

When holding a sale with attached prizes the operator shall expressly inform buyers of the type of the prize to be set out, probability of winning the prize, value of the prize or articles for the prize, time and way of honoring the prize, etc. Matters so informed shall also include the time, place and way of opening the prize and time and way of informing prize winners for sale with attached prizes in the form of lottery which is not to be opened on the spot.

The operator shall not change matters specified in the preceeding paragraph of which it/he has expressly informed the public.

For sales with attached prizes opened on the spot, the operator shall expressly inform buyers at all times of the performance of honoring prizes in excess of the value of RMB���500.

Article 7

The operator who violates Articles 3 and 4 and paragraph 1 of Article 5 of the Provisions shall be punished by the administrative authorities for industry and commerce in accordance with provisions of Article 26 of the Law for Countering Unfair Competition.

Those who conceal the truth in violation of Article 6 of the Provisions shall be deemed as having committed fraudulent sales with prizes attached and shall be dealt with in accordance with the provision of the preceding paragraph.

Article 8

In case of a party concerned suffering injuries owing to the unfair competition act in the activity of the sale with prizes attached, it/he may institute proceedings in the people's court for compensation in accordance with the provision of Article 20 of the Law for Countering Unfair Competition.

Article 9

All acts of sales with attached prizes which occurred before the implementation of the Law for Countering Unfair Competition and fell into the scope of acts of sales with attached prizes prohibited by the Law for Countering Unfair Competition shall not be continued after the implementation of the Law for Countering Unfair Competition. Nevertheless, if the opening were previously scheduled and the time of honoring of the prize are set after December 1, 1993, the operator shall still perform its/his obligation to open and honor the prize at the previously scheduled time in accordance with matters previously set out.

Article 10

The Provisions shall enter into force as of the date of promulgation.