Act on a Regulatory Framework for Retail Trade Act 7/1996 of 15 January CLD No. 1996/148 CONTENTS

(Legislation in effect) Act on a Regulatory Framework for Retail Trade Act 7/1996 of 15 January CLD No. 1996/148 TRADE. Regulatory framework for retail trade THE CROWN Official State Journal 17 January 1996, No. 15 [p. 1243]; corrig. Official State Journal 17 February 1996, No. 42 [p. 5825] (Spanish) CONTENTS - Contents - PREAMBLE - TITLE I. General principles [Arts. 1 a 17] - CHAPTER I. Basic concepts[arts. 1 a 7] - Article 1. Object - Article 2. Retail premises - Article 3. Free enterprise - Article 4. Free movement of goods - Article 5. Freedom of commercial establishment - Article 6. Establishment of retail businesses - Article 7. Licensing procedures - CHAPTER II. Commercial offering [Arts. 8 a 12] - Article 8. Prohibited retail sales - Article 9. Obligation to sell - Article 10. Right of renunciation - Article 11. Contract formalities - Article 12. Guarantee and after-sales service - CHAPTER III. Prices [Arts. 13 a 15] - Article 13. Freedom of price - Article 14. Dumping prohibition - Article 15. Lower prices for special consumer communities - CHAPTER IV. Retailer purchases [Arts. 16 a 17] - Article 16. General regulations - Article 17. Payments to suppliers - TITLE II. Sales promotion activities [Arts. 18 a 35] 1

- CHAPTER I. General [Arts. 18 a 23] - Article 18. Concept - Article 19. Information - Article 20. Consistency in price reduction - Article 21. Determination of articles offered - Article 22. Multi-level sales - Article 23. Prohibition of pyramid scheme sales - CHAPTER II. End-of-season sales [Arts. 24 a 26] - Article 24. Concept - Article 25. End-of-season sales periods - Article 26. Quality of merchandise on sale - CHAPTER III. Promotional sales [art. 27] - Article 27. Concept - CHAPTER IV. Seconds [Arts. 28 a 29] - Article 28. Concept - Article 29. Duty of information - CHAPTER V. Clearance sales [Arts. 30 a 31] - Article 30. Concept - Article 31. Duration and y reiteration - CHAPTER VI. Complimentary gift sales [Arts. 32 a 34] - Article 32. Concept - Article 33. Delivery of complimentary gifts - Article 34. Prohibition of joint offers - CHAPTER VII. Direct-to-consumer sales offerings [art. 35] - Article 35. Veracity of the offer - TITLE III. Special sales [Arts. 36 a 62] - CHAPTER I. General [Arts. 36 a 37] - Article 36. Concept - Article 37. Authorisation - CHAPTER II. Distance sales [Arts. 38 a 48] - Article 38. Concept - Article 39. Contract proposal - Article 40. Prior information - Article 41. Need for explicit consent - Article 42. Prohibition of inertia selling 2

- Article 43. Fulfilment and payment - Article 44. Right of renunciation - Article 45. Exceptions to the right of renunciation - Article 46. Credit card payments - Article 47. Information - Article 48. Consumers rights - CHAPTER III. Vending machine sales [Arts. 49 a 52] - Article 49. Concept - Article 50. Mandatory information - Article 51. Refunds - Article 52. Liability - CHAPTER IV. Street or itinerant sales [Arts. 53 a 55] - Article 53. Concept - Article 54. Authorisation - Article 55. Identification - CHAPTER V. Public auction sales [Arts. 56 a 61] - Article 56. Concept - Article 57. Auction sale agreements - Article 58. Auction sale offer - Article 59. Relationship between auction house and bidders - Article 60. Documentation - Article 61. Effects of auction sale - CHAPTER VI. Franchise retailing [art. 62] - Article 62. Franchise regulation - TITLE IV. Infringements and penalties [Arts. 63 a 71] - CHAPTER I. General principles [art. 63] - Article 63. Enforcement - CHAPTER II. Types of infringements [Arts. 64 a 67] - Article 64. Minor infringements - Article 65. Serious infringements - Article 66. Very serious infringements - Article 67. Recurrence - CHAPTER III. Penalties [Arts. 68 a 71] - Article 68. Fines - Article 69. Scaling 3

- Article 70. Lapsing of infringements - Article 71. Temporary suspension of business activity - ADDITIONAL PROVISIONS - One - Two - Three - Four - Five - Six - Seven. Offsetting debt in the event of liability for non-compliance - Eight. Projects subject to environmental impact assessment - Nine. Accessibility - Ten. Urban planning for commercial use - Eleven. Legal system governing retail distribution contracts - TRANSITIONAL PROVISION - One - Two. System governing deferral of payments owed to retail establishment suppliers - ABROGATORY PROVISION - Sole provision - FINAL PROVISION - Sole provision Notes on implementation Supplemented by Constitutional Act 2/1996 of 15 January, Chronological Legislative Digest (CLD) No. 1996\146 [Date of entry into force (DEF) 07-02-1996] Applied in areas not covered by Regional Act 17/2001 of 12 July, Legislative Digest of Navarre [LDN] No. 2001\228[DEF 17-07-2001] Implemented under Decree 12/2000 of 8 March, Legislative Digest of Cantabria [LDCTB) No. 2000\56 [DEF 21-07-2004] PREAMBLE The profound change taking place in retail distribution in Spain, the adoption of new sales methods and the challenges of membership in the European Union, added to the dispersion of the existing legislation, have occasioned the need for a legislative effort to systematize, modernize and adapt such legislation to market realities. 4

To operate smoothly, the Spanish economy needs an efficient distribution system that can ensure an adequate supply of consumer goods with the highest level of service possible and at the minimum distribution cost. To reach this aim, the market must be able to guarantee optimum allocation of resources through free and fair competition. To reach this aim, the market must be able to guarantee optimum allocation of resources through free and fair competition. In this regard, the establishment of a framework of good commercial practice should provide for better performance by all the actors involved, the effects of which will signify more effective competition. This can be achieved by creating a legal framework of minimum standards, which may be supplemented with Codes of Conduct freely established by the industry for its own self-governance. Moreover, developments in recent years have led to the simultaneous operation of two complementary systems of distribution in Spain: the first consisting of modern enterprises and technologies and the second of traditional retailers who continue to render important service to Spanish society and play an instrumental role in the stability of the labour force, but who must upgrade and mechanise their businesses to successfully operate in an environment of free competition. The complementary relations between the two systems must also be taken into consideration by the law-maker. It is likewise essential to ensure the establishment, without delay, of a legal framework for the new retail formulas that have been arising, since the commercial nature of such formulas presently positions them within the scope of the principle of freedom of contract which, on more than a few occasions, has resulted in notorious abuse - to the detriment of the buyers -, a situation which needs to be remedied by the enactment of binding regulations and effective public intervention. Consequently, the Act not only intends to establish the rules of the game for distribution and regulate the formulas presently in use in contracting practice, but also aspires to lay the groundwork for the modernization of Spanish retail structures, contributing to correct the imbalance between small and large retailers and, above all, maintaining free and fair competition. There is little point in stressing the obvious, i.e., that the most immediate and tangible effects of such free and fair competition are ongoing improvements in terms of price, quality and other supply-side aspects of the goods and services provided to the public, which ultimately means that consumers benefit from a more efficient market. Lastly, attention is drawn to the fact that, as Constitutional Court case law has repeatedly shown, this is a domain characterized by a complex interweave of competencies, at both the central and regional government levels. TITLE I General principles CHAPTER I Basic concepts Article 1 Object 1. The primary purpose of the present Act is to establish a general legal framework for retail trade, and regulate as well certain special sales and commercial and 5

promotional activities, without prejudice to laws enacted by autonomous communities in the exercise of their competencies in the area. 2. For the intents and purposes of the present Act, retail trade is understood to be any activity conducted professionally for profit and consisting of the offer of any kind of articles for sale to final users, to which the existence of business premises is not requisite. Autonomous Community of Andalusia: par. 2, regulation homologous with Art. 3 of Act 1/1996 of 10 January, LAN No. 1996\20 [DEF 07-02-1996] Autonomous Community of Andalusia: par. 1, regulation homologous with Art. 1 of Act 1/1996 of 10 January, LAN No. 1996\20 [DEF 07-02-1996] Autonomous Community of Aragon: par. 2, regulation homologous with Art. 2 of Act 9/1989 of 5 October, LARG\1989\131 [DEF 01-01-1990] Autonomous Community of Aragon: par. 1, regulation homologous with Art. 1 of Act 9/1989 of 5 October, LARG\1989\131 [DEF 01-01-1990] Autonomous Community of Canarias: par. 2, regulation homologous with Art. 2, par. 1 of Act 4 /1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Autonomous Community of Canarias: par. 1, regulation homologous with Art. 1 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Autonomous Community of Catalonia: par. 2, regulation homologous with Art. 2, par. 1 of Legislative Decree 1/1993 of 9 March, LCAT No. 1993\253 [DEF 11-06-1993] Autonomous Community of Catalonia: par. 1, regulation homologous with Art. 1 of Legislative Decree 1/1993/ of 9 March, LCAT No. 1993\253 [DEF 11-06-1993] Community of Madrid: par. 2, regulation homologous with Art. 2 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] Community of Madrid: par. 1, regulation homologous with Art. 1 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] Autonomous Community of Cantabria: par. 2, regulation homologous with Art. 2, par. 3 of Act 1/2002 of 26 February, LCTB No. 2002\50 [DEF 07-03-2002] Autonomous Community of Cantabria: par. 1, regulation homologous with Art. 1 of Act 1/2002 of 26 February, LCTB No. 2002\50 [DEF 07-03-2002] Autonomous Community of Castile and Leon: par. 2, regulation homologous with Art. 3, par. 1 of Act 16/ 2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Castile and Leon: par. 2, regulation homologous with Art. 2 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Castile and Leon: par. 1, regulation homologous with Art. 1 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Extremadura: par. 2, regulation homologous with Art. 4 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Extremadura: par. 1, regulation homologous with Art. 1, par. 1 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Galicia: par. 2, regulation homologous with Art. 2, par. 3 of Act 10/ 1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] 6

Autonomous Community of Galicia: par. 1, regulation homologous with Art. 1, par. 1 of Act 10/ 1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Autonomous Community of the Balearic Isles: par. 2, regulation homologous with Art. 2 of Act 11/2001 of 15 June, LIB No. 2001\229 [DEF 29-06-2001] Autonomous Community of the Balearic Isles: par. 1, regulation homologous with Art. 1 of Act 11/2001 of 15 June, LIB No. 2001\229 [DEF 29-06-2001] Principality of Asturias: par. 1, regulation homologous with Art. 1 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] Region of Murcia: par. 2, regulation homologous with Art. 1, par. 2 of Act 11/ 2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Region of Murcia: par. 1, regulation homologous with Art. 1, par. 1 of Act 11/ 2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Article 2 Retail premises 1. Fixed and permanent, individual or shared premises and buildings or facilities used on a regular basis for commercial activities, either continuously or on certain days or in given seasons of the year, shall be considered to be retail premises. 2. Kiosks and, in general, any kind of facility that fulfils the purpose specified in the preceding paragraph, are included thereunder, provided they can be regarded to be real property under the terms of 334 of the Civil Code. Amended by Art. 1 of Act 1/2010 of 1 March, CLD No. 2010\510 Autonomous Community of Andalusia: regulation homologous with Art. 2, par. 1 of Act 1/1996 of 10 January, LAN No. 1996\20 [DEF 07-02-1996] Autonomous Community of Canarias: regulation homologous with Art. 13 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Community of Madrid: regulation homologous with Art. 16 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] Autonomous Community of Cantabria: regulation homologous with Art. 5 of Act 1/2002/of 26 February, LCTB No. 2002\50 [DEF 07-03-2002] Autonomous Community of Castile and Leon: regulation homologous with Art. 16 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Extremadura: regulation homologous with Art. 35, par. 3 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of the Balearic Isles: regulation homologous with Art. 12 of Act 11/2001 of 15 June, LIB No. 2001\229 [DEF 29-06-2001] Principality of Asturias: regulation homologous with Art. 14 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] 7

Region of Murcia: regulation homologous with Art. 7 of Act 11/2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Article 3 Free enterprise Commercial business is conducted under the free enterprise principle and in the context of a market economy, pursuant to the provisions of Article 38 of the Constitution. Autonomous Community of Aragon: regulation homologous with Art. 3 of Act 9/1989 of 5 October, LARG No. 1989\131 [DEF 01-01-1990] Autonomous Community of Castile and Leon: regulation homologous with Art. 5 letter b) of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Galicia: regulation homologous with Art. 3 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Article 4 Free movement of goods 1. The principle of free movement of merchandise is recognized on Spanish soil, pursuant to the provisions of Article 139.2 of the Constitution. 2. The public authorities shall adopt suitable measures to prevent distortion of the free movement of goods. Autonomous Community of Castile and Leon: regulation homologous with Art. 5 letter c) of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Article 5 Freedom of commercial establishment 1. The legitimate use of land for the establishment of places of commercial business is a right covered by the free enterprise principle stipulated in Article 3 of the present Act. 2. The public authorities shall protect free business initiative for the establishment and fitting of commercial establishments in the framework of the provisions of the existing legislation. Autonomous Community of Castile and Leon: regulation homologous with Art. 5 8

letter d) of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Galicia: regulation homologous with Art. 5 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Article 6 Establishment of retail businesses 1. As a general rule, the establishment of retail businesses shall not be subject to any system of commercial authorisation. That notwithstanding, the establishment of retail businesses may be subject to an authorisation granted indefinitely when, considering the principle of proportionality pursuant to Article 5 c) of Act 17/2009 of 23 November on free access to the provision of services, and the principle of non-discrimination, pressing, retail distribution-related reasons of general interest are found to concur, in accordance with the provisions of the following paragraph and sufficiently substantiated in the legislation establishing such a system. Further to the terms of paragraph 3 of this article, economic reasons shall under no circumstances constitute pressing reasons of general interest for the intents and purposes of the imposition of an authorisation system. 2. The requirements laid down for the establishment of retail businesses shall address pressing, retail distribution-related issues of general interest as well as concerns around the protection of the natural and urban environments, land management and the conservation of the historic and artistic heritage. In any event, the requirements and as appropriate the criteria for granting authorisation must be proportionate, non-discriminatory, clear and unambiguous, objective, made public in advance, predictable, transparent and accessible. 3. Under no circumstances may economic requirements be established that make authorisation contingent upon the proof of the existence of economic need, market demand or the evaluation of the real or possible economic effects of the activity, or upon the performance of an appraisal of whether the activity is in line with the competent authority s economic objectives or of an assessment of whether the products or services to be sold are of a given type or origin. The pressing reasons of general interest invoked may not constitute a cover for economic planning requirements. In addition, the establishment of retail businesses shall honour the provisions of Articles 10 and 11 of Act 17/2009 of 23 November on the Free Provision of Services. 4. It is incumbent upon the autonomous communities and the cities of Ceuta and Melilla to regulate the authorisation procedures for the establishment of retail businesses referred to in paragraph 2 of this article and to designate the regional or local authority competent to rule on applications for authorisation. Such procedures shall coordinate all the administrative processes required to establish retail businesses. Without prejudice to the regulations adopted by the autonomous communities in this regard, applications must be processed in no more than six months. The absence of explicit resolutions shall be interpreted to constitute an affirmative response except in the instances described in Article 6 of Act 17/2009 of 23 November on the Free Provisions of Services. Award of the authorisation may not be made contingent upon 9

direct or indirect competitor intervention in authorisation award procedures, even in advisory bodies, without prejudice to the channels established for inquiries open to the public at large. Authorisations may be freely transferred by their holders. The awarding authority must, however, be notified of such transfers for the sole purpose of information. Amended by Sole Art., 2 of Act 1/2010 of 1 March, CLD No. 2010\510 Autonomous Community of Andalusia: regulation homologous with Art. 23 of Act 1/1996 of 10 January, LAN No. 1996\20 [DEF: 07-02-1996] Autonomous Community of Aragon: regulation homologous with Art. 14 of Act 9/1989 of 5 October, LARG No. 1989\131 [DEF 01-01-1990] Autonomous Community of Canarias: regulation homologous with Art. 16 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Community of Madrid: regulation homologous with Art. 18 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] Autonomous Community of Cantabria: regulation homologous with Art. 6 of Act Autonomous Community of Castile and Leon: regulation homologous with Art. 18 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Extremadura: par. 2, regulation homologous with Art. 37 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Extremadura: par. 1, regulation homologous with Art. 37 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Galicia: regulation homologous with Art. 6 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Autonomous Community of the Balearic Isles: regulation homologous with Art. 13 of Act 11/2001 of 15 June, LIB No. 2001\229 [DEF 29-06-2001] Principality of Asturias: regulation homologous with Art. 21 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] Region of Murcia: regulation homologous with Art. 8 of Act 11/2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Article 7 Licensing procedures The award of the licences referred to in the preceding article shall be incumbent upon the respective Autonomous Community. 10

Repealed by Sole Abrogatory Provision of Act 1/2010 of 1 March, CLD No. 2010\510 Autonomous Community of Andalusia: regulation homologous with Art. 25, par. 2 of Act 1/1996 of 10 January, LAN No. 1996\20 [DEF 07-02-1996] Community of Madrid: regulation homologous with Art. 19 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] Autonomous Community of Castile and Leon: regulation homologous with Art. 20 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Principality of Asturias: regulation homologous with Art. 22 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] CHAPTER II Commercial offering Article 8 Prohibited retail sales 1. Retailing may not be conducted either by the natural persons or bodies corporate specifically prohibited to engage therein, or by sole proprietors or companies engaging in an activity governed by special legislation whereby their business is restricted to that activity only. 2. The display and sale of merchandise for sale to buyers is expressly prohibited when such goods are obtained from organisations engaging in a non-commercial activity and whose main purpose, resulting from the business in which they primarily engage, is to establish loans, deposits or similar operations associated with the commercial supply of the goods offered in a manner such that one activity could not be performed without the other. In any event, such circumstance shall be assumed to exist where the buyer is able to order or acquire merchandise in establishments run by such persons. 3. Violation of the provision in the preceding paragraph shall be punishable in accordance with the stipulations of the present Act, irrespective of any responsibilities deriving, as appropriate, from special legislation and without prejudice of whether subjecting the same event to double jeopardy is in order or otherwise. Autonomous Community of Cantabria: regulation homologous with Art. 12 of Act Autonomous Community of Castile and Leon: regulation homologous with Art. 9 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of the Balearic Isles: regulation homologous with Art. 7 of Act 11/2001 of 15 June, LIB No. 2001\229 [DEF 29-06-2001] 11

Article 9 Obligation to sell 1. The public sale or display of articles in commercial premises entails the obligation on the part of the holder of title thereto to proceed to sell such articles to anyone in a position to purchase them - attending, in the second case, to the order of receipt of requests. Objects expressly marked as not for sale or objects that clearly form a part of the premises or decoration, are not subject to this obligation. 2. Retailers may not limit the quantity of articles that may be purchased by each buyer or establish higher prices or eliminate discounts or incentives for purchase in excess of a certain volume. In the event that an establishment open to the public does not have sufficient stock to cover demand, the latter shall be met by order of request. Region of Murcia: regulation homologous with Art. 27 of Act 11/2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Article 10 Right of renunciation 1. When buyers, in the exercise of a previously acknowledged right, return a product, they shall be under no obligation to indemnify the seller for the wear or damage thereto caused simply by the trials necessary to reach a final decision on whether or not to purchase it, provided the condition of the product is not altered when returned. Sellers may not demand advance payment or security, which includes the acceptance of bills of exchange, to guarantee seller compensation should the merchandise be returned. Sellers may not demand advance payment or security, which includes the acceptance of bills of exchange, to guarantee seller compensation should the merchandise be returned. 2. If no deadline by which buyers may desist from the purchase commitment is established, the time allotted shall be seven days. Autonomous Community of Castile and Leon: regulation homologous with Art. 7 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Article 11 Contract formalities 1. The contracts and bills of sale referred in the present Act shall not be subject to any formality whatsoever other than as expressly laid down in the Civil Code and Code of Commerce and in this or other special acts. 12

2. That notwithstanding, when the agreement is not concluded simultaneously with delivery of the object or when the buyer is authorised to desist from the purchase, the retailer must issue an invoice, receipt or similar document specifying the buyer's specific rights or guarantees and any portion of the price that has been paid. 3. In any event, buyers may always demand a document specifying, at least, the object purchased, price and date of the transaction. Article 12 Guarantee and after-sales service 1. Sellers shall be accountable for the lack of conformity of the goods sold with the bill of sale, under the terms defined by the legislation in effect. 2. Products intended for sale may carry a commercial guarantee, which shall oblige the person offering it to honour the conditions laid down in the warranty and the respective advertising. Any such additional commercial guarantee offered by the seller must in any event meet legal requirements in respect of guarantees for consumer goods. 3. The producer or otherwise the importer shall in any event ensure the existence of suitable technical service for the durable goods they manufacture or import, as well as the supply of replacement parts for a period of at least five years from the date on which manufacture of the product is discontinued. 4. The recovery or right thereto of goods entrusted by the consumer or user to a retailer for repair shall expire three years after the date of deposit. The details that must be provided by a retailer entrusted with an object for repair and the manner in which custody may be substantiated shall be established under the respective regulations. Amended by Art. 1 of Act 47/2002 of 19 July, CLD No. 2002\2980 Notes on implementation 1 implemented under Sole Art., 2 of Royal Decree 1507/2000 of 1 September, CLD No. 2000\2072 [DEF 13-09-2000] 1 implemented under Annex II of Royal Decree 1507/2000 of 1 September, CLD No. 2000\2072. [DEF 13-09-2000] 2 implemented under Sole Art., 2 of Royal Decree 1507/2000 of 1 September, CLD No. 2000\2072 [DEF 13-09-2000] 2 implemented under Annex II of Royal Decree 1507/2000 of 1 September, CLD No. 2000\2072 [DEF 13-09-2000] 3 implemented under Sole Art., 2 of Royal Decree 1507/2000 of 1 September, CLD No. 2000\2072 [DEF 13-09-2000] 3 implemented under Annex II of Royal Decree 1507/2000 of 1 September, CLD No. 2000\2072 [DEF 13-09-2000] 13

Autonomous Community of Castile and Leon: regulation homologous with Art. 11 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] CHAPTER III Prices Article 13 Freedom of price 1. The selling price of articles shall be freely determined and offered for general sale pursuant to the legislation on defence of free and fair competition, with the exceptions established in special laws. 2. That notwithstanding, the central Government, after hearing the industries involved, may set the prices or mark-ups on certain products, or subject modification thereof to governmental control or prior authorization, in the following cases: a) in the event of products covering primary needs or strategic prime materials b) in the event of goods produced or marketed under monopoly arrangements or government franchise c) as a measure supplementary to production regulation policies or subsidies or other State aid to specific enterprises or industries d) exceptionally and for as long as the circumstances occasioning intervention persist, when a given industry is observed to lack effective competition, where there are serious obstacles to market operation or in the event of shortage of supply. Autonomous Community of Aragon: regulation homologous with Art. 5 of Act 9/1989 of 5 October, LARG No. 1989\131 [DEF 01-01-1990] Autonomous Community of Canarias: regulation homologous with Art. 9 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Autonomous Community of Canarias: regulation homologous with Art. 8 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Autonomous Community of Catalonia: regulation homologous with Art. 7 of Legislative Decree 9/1993 of 9 March, LCAT No. 1993\253 [DEF 11-06-1993] Autonomous Community of Castile and Leon: regulation homologous with Art. 10 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Galicia: regulation homologous with Art. 37 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Autonomous Community of Galicia: regulation homologous with Art. 36 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Principality of Asturias: regulation homologous with Art. 10 of Act 10/2002 of 19 14

November, LPAS No. 2002\311 [DEF 21-11-2002] Region of Murcia: regulation homologous with Art. 29 of Act 11/2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Article 14 Dumping prohibition 1. Notwithstanding the provisions of the preceding article, merchandise may not be sold to the public at a loss, outside of the circumstances regulated under Chapters IV and V of the present Act, unless the organisation selling under such terms does so to match the price of one or several competitors able to significantly affect its sales, or in the event of perishable goods approaching the end of their marketable life. In any event, the provisions of the Act on Unfair Competition must be honoured. 2. For the intents and purposes specified in the preceding article, a retailer shall be considered to be selling at a loss when the price applied to a product is lower than the purchase price computed as the price shown on the invoice, less the respective share of any discounts applicable to the product in question, or than the replacement price if lower than the foregoing or than the effective production cost if the article is manufactured by the retailer, plus any indirect taxes levied on the operation. Invoices and all the terms thereof shall be understood to be accepted and acknowledged by the consignees when they have not been challenged within twenty five days following issue. In the event they are not accepted, an additional period of ten days is granted for rectifying and re-issuing the duly corrected invoice. For the purposes of the provisions of this article, account shall not be taken of the modifications contained in invoices rectified and re-issued on dates subsequent to the deadlines specified. 3. For the intents and purposes of deductions on the price referred in the preceding paragraph, remuneration or any manner of discounts that involve consideration for services rendered shall not be computed. 4. Under no circumstances whatsoever may joint offers or complimentary gifts be used to circumvent the application of the provisions of the present article. Par. 2, indent 2 added by Art. 56.1.1 of Act 55/1999 of 29 December, CLD No. 1999\3245 Autonomous Community of Aragon: regulation homologous with Art. 39 of Act 9/1989 of 5 October, LARG No. 1989\131 [DEF 01-01-1990] Autonomous Community of Canarias: regulation homologous with Art. 32 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Community of Madrid: regulation homologous with Art. 40 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] 15

Autonomous Community of Cantabria: regulation homologous with Art. 13 of Act Autonomous Community of Castile and Leon: regulation homologous with Art. 12 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Extremadura: regulation homologous with Art. 26 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Galicia: regulation homologous with Art. 31 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Autonomous Community of the Balearic Isles: regulation homologous with Art. 35 of Act 11/2001 of 15 June, LIB No. 2001\229 [DEF 29-06-2001] Article 15 Lower prices for special consumer communities Commercial organisations created to supply products to certain consumer communities and which receive any manner of aid or subsidy for this purpose may not offer such products to the general public or persons other than the intended beneficiaries. CHAPTER IV Retailer purchases Article 16 General regulations The legal framework for retailer purchase of any kind of products shall be subject to civil and commercial law and the stipulations laid down in the following article. Article 17 Payments to suppliers 1. In the absence of an explicit payment period, merchandise received by retailers shall be understood to be payable within thirty days of delivery. 2. Retailers receiving the respective goods shall be obliged to immediately document delivery and receipt thereof, with explicit reference to the date. Similarly, suppliers invoices must specify the due date. Should all or any of the merchandise be covered by a retention of title clause, this shall likewise be specified on the invoice, which must, in any event, be the outcome of a duly substantiated agreement reached by supplier and retailer prior to delivery. Invoices must be forwarded to retailers within thirty days of delivery and receipt of the merchandise. 3. Payment for fresh and perishable foodstuffs may under no circumstances be deferred for over thirty days. Other foodstuffs and consumer goods shall be payable within sixty days except where explicitly covenanted otherwise, and subject to 16

financial compensation for the supplier for the extension. Under no circumstances may payment be deferred for more than ninety days. Fresh and perishable foodstuffs shall be understood to be groceries which, due to their natural characteristics, are apt for sale and consumption for less than thirty days or which require regulated temperatures during display and shipping. Consumer goods are consumables with a high shelf turnover rate, routinely and repeatedly purchased by consumers. The Government shall issue regulations within three months time defining the products referred to in the preceding paragraph. 4. When retailers agree with their suppliers to payment terms of over sixty days from the date of delivery and receipt for non-perishable, non-fresh, non-consumer merchandise, payment must be effected under an enforceable negotiable instrument, with explicit reference to the maturity date shown on the invoice. When the goods become payable in over ninety days, this instrument shall be endorsable. In any event, the instrument must be issued or accepted by retailers within thirty days of receipt of the merchandise, provided the invoice has been sent. The seller may make deferrals of over one hundred twenty days contingent upon submission of a surety or commercial bond or credit insurance. 5. Late payment interest shall always accrue automatically beginning on the day following the maturity date or, in the absence of an agreement on payment terms, the date on which payment should have been made further to the provisions of paragraph 1. In such cases, the rate used to compute the interest payable shall be the rate laid down in Article 7 of the Act Establishing Measured to Combat Late Payment in Commercial Transactions, unless the contract concluded by the parties stipulates some other rate, which may under no circumstances be less than 50 per cent over the legal interest rate. 6. For the intents and purposes of the provisions of the present article and with exclusive regard to consumables, the delivery date shall be understood to be the date on which delivery effectively occurred, even where, initially, the delivery slip differs from the purchase date, provided the merchandise is ultimately purchased by the recipient. Par. 5 amended by Final Provision 2.1 of Act 3/2004, of 29 December, CLD No. 2004\2678 Par. 4 amended by Final Provision 2.1 of Act 3/2004, of 29 December, CLD No. 2004\2678 Par. 3 amended by Final Provision 2.1 of Act 3/2004, of 29 December, CLD No. 2004\2678 Par. 1 amended by Final Provision 2.1 of Act 3/2004, of 29 December, CLD No. 2004\2678 Par. 2 amended by Art. 2 of Act 47/2002 of 19 December, CLD No. 2002\2980 Par. 2, indent 3 added by art. 56.1.2 of Act 55/1999 of 29 December, CLD No. 17

1999\3245 Par. 6 renumbered by Art. 56.1.5 of Act 55/1999 of 29 December, CLD No. 1999\3245 (formerly par. 5) Notes on implementation Par. 3 implemented under Royal Decree 367/2005 of 8 April, CLD NO. 2005\849 [DEF 28-04-2005] Community of Madrid: regulation homologous with Art. 42 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] Community of Madrid: regulation homologous with Art. 41 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] TITLE II Sales promotion activities CHAPTER I General Article 18 Concept 1. Sales promotion activities shall cover end-of-season sales, sales offers or promotions, seconds sales, clearance sales, complimentary gift sales and direct-tocustomer sales offerings. 2. The above terms may only be used to advertise sales in line with the regulations laid down in the present Act and the use of such terms or similar wording to advertise sales that do not conform to the respective legal concept is expressly prohibited. 3. The use of the aforementioned terms outside the regulatory context established hereunder for each type of sales promotion activity shall be regarded as unfair when concurrent with the circumstances set out in Article 5 of the Act on Unfair Competition. Para. 3, added by Art. 4.1 of Act 29/2009 or 30 December, CLD No. 2009\2633 Autonomous Community of Cantabria: regulation homologous with Art. 16 of Act Autonomous Community of Castile and Leon: regulation homologous with art. 29 of Act 16/2002 of 19 December [DEF 14-01-2003] Autonomous Community of Galicia: regulation homologous with Art. 14 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Principality of Asturias: regulation homologous with Art. 34 of Act 10/2002 of 19 18

November, LPAS No. 2002\311 [DEF 21-11-2002] Region of Murcia: regulation homologous with Art. 42 of Act 11/2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Article 19 Information 1. Advertising for the sales referred in the preceding article must specify the duration and any specific terms or conditions to which they may be subject. 2. When the special offerings do not include at least half of the articles for sale, the promotion in question may not be advertised as a store-wide sale, but referred only to the articles or sections actually involved. 3. Offerings of products with a prize or gift shall be regarded to be misleading when the consumer does not actually and effectively receive what may reasonably be expected under the terms of the offer. Autonomous Community of Cantabria: regulation homologous with Art. 17 of Act Autonomous Community of Castile and Leon: regulation homologous with Art. 30 letter c) of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Castile and Leon: regulation homologous with Art. 30 letter b) of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Castile and Leon: regulation homologous with Art. 30 letter d) of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Principality of Asturias: regulation homologous with Art. 36 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] Region of Murcia: regulation homologous with Art. 45 of Act 11/2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Article 20 Consistency in price reduction 1. Whenever articles are offered at a reduced price, the sales and former price must be clearly specified on each article, except for articles offered for the first time. The former price shall be understood to mean the price applied to identical products during at least thirty days in the last six months. 2. Notwithstanding the foregoing, where a whole set of articles is to be discounted at a given percentage, a general announcement to that effect shall suffice and in such cases the offer need not be specified on every article on sale. 19

Autonomous Community of Cantabria: regulation homologous with Art. 18 of Act Autonomous Community of Castile and Leon: regulation homologous with Art. 30 letter d) of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Region of Murcia: regulation homologous with Art. 47 of Act 11/2006 of 22 December, LRM No. 2007\4 [DEF 03-03-2007] Article 21 Determination of articles offered Where some articles are sold at the normal price and others at the sale price, they must be separated in a manner such that consumers cannot be reasonably expected to fail to distinguish between objects that are on sale from those that are not; and a distinction must also be made, as appropriate, between end-of season, leftover item, clearance, promotional and complimentary gift sales. Autonomous Community of Cantabria: regulation homologous with Art. 19 of Act Principality of Asturias: regulation homologous with Art. 38 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] Article 22 Multi-level sales 1. Multi-level sales is a special form of retailing in which a manufacturer or wholesale merchant sells its goods or services through a network of independent but networked retailers and/or dealers whose profits are obtained as a margin based on the retail price, allocated via variable percentages of the total turnover generated by all the sellers operating in the commercial network and in proportion to each component's sales. For the intents and purposes of the provisions of this article, independent retailers and dealers shall be regarded as entrepreneurs for the purposes of the General Act on Consumer and User Protection and supplementary legislation. 2. Marketing products and services under such arrangements is prohibited when: a) it is unfair to consumers further to the provisions of Article 26 of Act 3/1991 of 10 January on Unfair Competition b) suitable guarantees are not in place to ensure that either distributors are hired under due terms of employment or meet the legal requirements to conduct commercial activities c) new distributors are obliged to buy a minimum supply of the products distributed with no agreement for repurchase under the same terms. 4. Under no circumstances may the manufacturer or wholesaler managing the 20

network make access to the network contingent upon payment of a quota or cannon, except for sums equivalent to the cost of a packet including promotional, informative or training materials provided at a price similar to analogous items on the market, which sums may not be in excess of an amount stipulated in the regulations. Where a repurchase agreement is in place, the products must be returnable unless they are in a condition that clearly prevents subsequent sale. Amended by Art. 4.2 of Act 29/2009 of 30 December, CLD No. 2009\2633 Principality of Asturias: regulation homologous with Art. 39 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] Article 23 Prohibition of pyramid scheme sales Pyramid sales schemes are the procedures defined in Article 24 of Act 3/1991 of 10 January on Unfair Competition; contractual terms that run counter to the provisions of that precept shall be null and void. Amended by Art. 4.3 of Act 29/2009 of 30 December, CLD No. 2009\2633 Autonomous Community of Andalusia: regulation homologous with Art. 70 of Act 1/1996 of 10 January, LAN No. 1996\20 [DEF 07-02-1996] Autonomous Community of Aragon: regulation homologous with Art. 25 of Act 9/1989 of 5 October, LARG No. 1989\131 [DEF 01-01-1990] Autonomous Community of Canarias: regulation homologous with Art. 43 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Autonomous Community of Catalonia: regulation homologous with Art. 33 of Legislative Decree 9/1993 of 9 March, LCAT No. 1993\253 [DEF 11-06-1993] Autonomous Community of Castile and Leon: regulation homologous with Art. 31 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Extremadura: regulation homologous with Art. 27 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Principality of Asturias: regulation homologous with Art. 40 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] CHAPTER II End-of-season sales 21

Article 24 Concept 1. End-of-season sales entail selling the articles that are on sale in the same retail establishment that ordinarily sells such items, but at a price lower than the price in place prior to the sale. 2. The sale of products not previously for sale at an ordinary price, of flawed products or products specifically purchased to be sold at a lower than ordinary price may not be regarded as an end-of-season sale. Autonomous Community of Andalusia: regulation homologous with Art. 74 of Act 1/1996 of 10 January, LAN No. 1996\20 [DEF 07-02-1996] Autonomous Community of Aragon: regulation homologous with Art. 41 of Act 9/1989 of 5 October, LARG No. 1989\131 [DEF 01-01-1990] Autonomous Community of Canarias: regulation homologous with Art. 34 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Autonomous Community of Catalonia: regulation homologous with Art. 34 of Legislative Decree 9/1993 of 9 March, LCAT No. 1993\253 [DEF 11-06-1993] Community of Madrid: regulation homologous with Art. 34 of Act 16/1999 of 29 April, LCM No. 1999\246 [DEF 19-05-1999] Autonomous Community of Cantabria: regulation homologous with Art. 22 of Act Autonomous Community of Castile and Leon: regulation homologous with Art. 32, par. 1 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Extremadura: regulation homologous with Art. 20, par. 1 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Galicia: regulation homologous with Art. 15, par. 2 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Autonomous Community of Galicia: regulation homologous with Art. 15, par. 1 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Autonomous Community of the Balearic Isles: regulation homologous with Art. 25 of Act 11/2001 of 15 June, LIB No. 2001\229 [DEF 29-06-2001] Article 25 End-of-season sales periods 1. End-of-season sales may only be run twice a year: once at the beginning of the year and the other around the summer holiday season. 2. The duration of each seasonal sale shall be at least one week and at most two months, at the retailer's discretion, within specific dates to be established by the competent regional authorities. Autonomous Community of Cantabria: regulation homologous with Art. 23 of Act 1/2002 of 26 February, LCTB No. 2002\50 [DEF 07-03-2002] 22

Autonomous Community of Castile and Leon: regulation homologous with Art. 32, par. 3 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Castile and Leon: regulation homologous with Art. 32, par. 2 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Extremadura: regulation homologous with Art. 20, par. 4 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Extremadura: regulation homologous with Art. 20, par. 3 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Galicia: regulation homologous with Art. 15, par. 4 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Autonomous Community of the Balearic Isles: regulation homologous with Art. 28 of Act 11/2001 of 15 June, LIB No. 2001\229 [DEF 29-06-2001] Principality of Asturias: regulation homologous with Art. 43 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] Article 26 Quality of merchandise on sale 1. The articles on sale at the end of the season must have been included, for at least one month, in the normal sales offering and may not have been the object of any promotional activity whatsoever during the month preceding the starting date of the end-of-season sale. 2. The sale of flawed articles as part of the end-of-season offering is expressly prohibited. Autonomous Community of Aragon: regulation homologous with Art. 42 of Act 9/1989 of 5 October, LARG No. 1989\131 [DEF 01-01-1990] Autonomous Community of Canarias: regulation homologous with Art. 35 of Act 4/1994 of 25 April, LCAN No. 1994\96 [DEF 30-04-1994] Autonomous Community of Cantabria: regulation homologous with Art. 24 of Act Autonomous Community of Castile and Leon: regulation homologous with Art. 32, par. 5 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Castile and Leon: regulation homologous with Art. 32, par. 4 of Act 16/2002 of 19 December, LCyL No. 2002\628 [DEF 14-01-2003] Autonomous Community of Extremadura: regulation homologous with Art. 20, par. 2 of Act 3/2002 of 9 May, LEXT No. 2002\134 [DEF 13-06-2002] Autonomous Community of Galicia: regulation homologous with Art. 15, par. 3 of Act 10/1988 of 20 July, LG No. 1988\179 [DEF 16-09-1988] Principality of Asturias: regulation homologous with Art. 44 of Act 10/2002 of 19 November, LPAS No. 2002\311 [DEF 21-11-2002] 23