Authorization for Prize Drawings in Brazil

Ana Gabriela Verotti Farah

Staff Writer
The Brazil Business

Updated

28 April 2014

In Brazil, it is necessary to ask for permission before performing any kind of activity that includes the distribution of prizes or giveaways. In this article, you will learn what the legal procedures are for this is.

The free distribution of prizes is regulated in Brazil by Caixa Econômica Federal, Brazilian federal savings bank. It not only authorizes this activity, but also inspects the commercial promotion that involves distribution that are a way to make propaganda for the companies performing commercial or industrial buying and selling of real property activities. The authorization is only conceded to the entities that have paid all federal, state and municipal taxes that are due.

The authorization can be requested from SEAE or Secretaria de Acompanhamento Econômico, the secretariat for economic monitoring, in the case of financial institutions performing drawings. If any irregularity is detected, the company has to pay a fine equivalent to the cost of the prizes, and may be prohibited from holding another drawing for up to two years.

Requesting Authorization

Entities have to request the authorization between 40 and 120 days prior to the occurrence of the drawing. In case, any additional information is requested, or any regularization necessary, there will be a suspension in the analysis term until the new documents are provided. The company has up to 15 days to fulfill the additional requirements.

The authorization is valid for a different period according to what is written in the authorization certificate, known in Portuguese as Certificado de Autorização. It can't be longer than 12 months.

Necessary Documents

There are different documents that must be presented depending on the nature of the promotion. If it’s an individual promotion - made by only one company -, the necessary documentation is the following:

• Requirement, which must be downloaded at Caixa's website
• Notarized copy of the constitutive acts of the applicant and their alterations registered in the Board of Trade or in the Civil Registry of Legal Entities, the Registro Civil das Pessoas Jurídicas
• Notarized copy of the Document of election current board of directors of the applicant institutions
• Original or copy of the power of attorney, containing name, RG, CPF, address, city, Federative Unit, ZIP code, telephone, fax number, and email of the principal and the grantee
• Statement of the operational revenue, of the applying company, signed by its legal representative and by an accountant of accountability technician. They must be fully identified with name, CPD and CRC (Conselho Regional de Contabilidade, the Accountant Regional Council) of the accountant.
• Operation plan, which is available for download
• Final art of the voucher and the rules for the drawing.
• Model of receipt attesting that the prizes were given, if necessary. The model is also available for download
• Copy of the proof of payment of the inspection fee
• Letter of commitment, in Portuguese Carta Compromisso, if necessary. There is a model available for download
• Statement of liability, if necessary. The model is available for download.
• Original or notarized copy of the negative certificates or the positive certificates with negative effects related to:

- Federal taxes and tax liability
- State or district taxes
- Municipal real estate taxes
- Social security contributions.

In case the draw is a collective promotion, made by a company and its partner(s), the necessary documentation is the following:

• Requirement, which must be downloaded at Caixa's website.
• Notarized copy of the constitutive acts of the applicant and their alterations registered in the Board of Trade or in the Civil Registry of Legal Entities, the Registro Civil das Pessoas Jurídicas.
• Notarized copy of the Document of election current board of directors of the applicant institutions
• Original or copy of the power of attorney, containing name, RG, CPF, address, city, Federative Unit, ZIP code, telephone, fax number, and email of the principal and the grantee
• Statement of the operational revenue, of the applying company, signed by its legal representative and by an accountant of accountability technician. They must be fully identified with name, CPD and CRC (Conselho Regional de Contabilidade, the Accountant Regional Council) of the accountant.
• Document of the mandatory, in Portuguese Termo da Mandatária. Available for download.
• Statement of acceptance, in Portuguese Termo de Adesão, also available for download.
• Operation plan, which is available for download.
• Final art of the voucher and the rules for the drawing.
• Model of receipt attesting that the prizes were given, if necessary. The model is also available for download.
• Copy of the proof of payment of the inspection fee.
• Letter of commitment, in Portuguese Carta Compromisso, if necessary. There is a model available for download.
• Statement of liability, if necessary. The model is available for download
• Original or notarized copy of the negative certificates or the positive certificates with negative effects related to:

- Federal taxes and tax liability
- State or district taxes
- Municipal real estate taxes
- Social security contributions.

Products Distributed

Medications, guns, ammunition, explosives, fireworks, alcoholic drinks, tobacco and similar items can't be promoted by the prize drawing. The only prizes which can be distributed in these situations are:

• National production items, or regularly imported ones public debt securities and other negotiable instruments admitted by the Ministry of Finance and Planning
• Residential units, situated in urban areas of the country
• Tourism trips, offering transport residency-destination-residency, accommodation and at least one meal)
• Scholarships.

The term to distribute the prizes drawn is 30 days counting from the day when the drawing was held. Prizes won through a giveaway voucher have to be delivered once the voucher is presented.

Fiscalization Fee

It's also necessary to pay a fee to hold the drawing. Entities have to send a request for the issuance of the fee document via email, to cepco@caixa.gov.br or by fax, in the numbers (61) 3448-1402 or (61) 3448-1403. The fee can be paid in:

• Any Caixa agency, regardless the amount
• Through Internet Banking
• At Caixa ATM machines
• Lottery retailers and Caixa Aqui correspondents, if the amount paid doesn't surpass BRL 1,000

Cost of the Fee

The cost of the inspection fee varies according to the amount in BRL of the prizes offered.

Fee's Restitution

The fiscalization fee will be restituted in case the entity decides not to hold the drawing anymore. In this case, the money will be returned after 5 workdays.

Philanthropic Drawings

Caixa is the one and only responsible for regulating philanthropic drawings in Brazil in order to raise funds for beneficiary institutions, with the purpose of keeping the social works happening.

The first step is to request authorization by sending the necessary documentation to the unit CN Promoções Comerciais, in the city of Brasília. When protocolizing the authorization request, it's necessary to provide all the documents related to the giveaways themselves, which must be available for examination.

Then it's time to start publicizing the drawings, which can be made the very same day the certificate of authorization is issued. The number of the certificate has to be written down legibly in every material used to divulge the drawing.

In the maximum term of 30 days after the drawing, the institution that benefits from the authorization must send the protocol with the accountability reports to CN Promoções Comerciais.

The address of CN Promoções Comerciais is the following:

CN Promoções Comerciais
Setor de Edifícios Públicos Norte – SEPN 512, Conjunto C, Térreo
Centro Empresarial José Alencar Gomes da Silva
CEP 70.760-500, Brasília/DF