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Advertisement (Regulation) Act, 2019

1. Introduction of the act 

The Advertisement (Regulation) Act 2019 (the “Act”) was published in the Nepal Gazette on 25 October 2019. The Act is the primary legislation that regulates advertisement and marketing of goods, services, program or event in Nepal. The Act is the first of its kind, and aims to bring reform in the regime of advertisement in Nepal.  

A brief summary of the provisions on Advertisement Act have been briefly set out below:

 

2. Scope of the Act

The scope of the Act ensures the regulation of Advertisement sector. As the pioneer of the Advertisement related laws, this Act extends to ensure (a) regulation of different forms of Advertisement (b) authenticity and responsibility of Advertising Agency and Advertisement Provider (c) restrictions on content that may or may not be advertised.

However, the Advertisement through social media/internet has not been addressed in detail.

 

3. Provisions related to Advertisement

"Advertisement" means any word, sentence, drawing, image, symbol, poster, pamphlet, publication, sign, structure or any other audio, visual or audio-visual publication or prepared for publication in public regarding any product, service, event or occasion through the means including print, electronic media, online, social networks, hoarding board, balloon.

 

3.1. Permitted Advertisement

The Act provides person to advertise for the following purposes:

a. Promote a product or service,

b. Make aware and inform the consumers about a product or service,

c. Provide information about a program or event, or

d. Provide information with regards to public information, such goods, amongst others.

 

3.2. Advertisement that is not permitted

 Advertisement activity such as the following are restricted

The Act provides person to advertise for the following purposes:

  1. Products prohibited by the government for production, distribution, sales and use
  2. Gambling and unauthorized betting
  3. Advertising on inappropriate subject matter
  4. Weapons, explosives and similar products
  5. Medicines to be prescribed
  6. Products which need compulsory approval as per prevailing law for distribution or use and has not got such approvals
  7. Products for which advertisement is prohibited as per the prevalent law
  8. In the syllabus of schools and universities, however this does not include information provided for educational purposes.
  9. Advertising of blind faith.

 

In addition to that, the Act also prohibits advertisements of the following nature:

  1. Advertisements that create interruptions against Nepal's sovereignty, geographical integrity, nationality, independence of association between federal units, public peace & International relationship
  2. Advertisements that are against the state, in contempt of court or to aid in committing crime
  3. Advertisements that devaluate the National flag of Nepal, National Anthem, National Seal, National Personalities
  4. Advertisements that are abusive/ defamatory
  5. Advertisements against public value, fair market
  6. Advertisements that disrespect labor or discriminate on the basis of sex/ caste
  7. Advertisements that affect one's religion, gender, caste, financial status or language
  8. Advertisements without getting approval for using trademark, patent & design of the owner
  9. Advertisements demoralizing the local Industries
  10. Advertisements spreading misinformation, or that deteriorates the quality of others product
  11. Against the prevailing law.

 

3.3. Advertisement Prohibited Area

The Act provides authority to the local level to declare the restricted areas for advertisement. The areas that can be restricted are (a) Religious (b) Cultural Site (c) Archaeological Site (d) Educational institution (e) Health Institution and, (f) any place within distance from such site or institution. The information regarding such prohibited area must be made public.

 

3.4. Information of Advertisement Provider to be listed by Advertiser

There are certain details that are necessarily required while publishing or displaying an advertisement such as:

i. Name, Address of the Advertisement Provider. Under the Act, "Advertisement Provider" means individual or institution which publishes or broadcasts the Advertisment, including promotion and advertisement.   

ii. Warning details of the effect after consumption of goods

In absence of mentioning the abovementioned details, the liability of the content will shift on the publishers and owners of media outlets; both print and electronic. The act done against this provision would be charged with fine NPR 5 lakh. Depending on who has advertised the advertisement, the liability may be on either Advertisement Agency and/ or Advertisement Provider. 

 

4. Requirements and regulation of different kinds of advertisement

4.1. Hoarding Boards

"Hoarding Boards" means object used or kept to display advertisement or any kinds of external advertisement objects.

 

4.1.1. Approval for Hoarding Boards

The management of Hoarding Boards, banners, posters and wall paintings in public areas used to be handled by the concerned municipality. However, after the enactment of the Act, advertisements to be done through Hoarding Board that is in public display needs to get approval from the concerned Local Level Authority, which would be the relevant Ward Office or Village Development Committee.

The interested party should file an application to get permission in order to have the Hoarding Boards to Local Level Office. Such permission is given by the Local Level Office for a time period, and will contain terms and conditions to be abided by. The removal of advertisement materials (including Hoarding Boards) is mandatory once the approval expires.

However, Hoarding Boards that is kept within the premises of the home or office that is in relation to promoting such business, that does not disturb public road or land, will not be hampered.

 

4.1.2. Circumstances where Application may be rejected

An application for Hoarding Boards will rejected in the following circumstances:

  1. If it is in violation of Advertisement Act,
  2. If it provides discomfort or hindrance in transportation,
  3. If affects the natural beauty of city or locality,
  4. If it affects traditional values, religion or natural beauty,
  5. If it affects foot path or public places,
  6. Placing the hoard board on electronic or telephone pole,
  7. hoard board affects transportation,
  8. If it hinders any house's door, window or hinders ventilation or air or sunlight,
  9. If it violates any local law.

 

4.2. Television

In relation to advertisements in Television, the Act requires clean feed policy for foreign television channels in Nepal. This Act bars Television channels from broadcasting foreign advertisements, both in recorded and live feeds, so that the foreign channels are broadcasted without any advertisements in Nepal. For agreement(s) made with foreign channel in regards to broadcasting advertisement before the commencement of Act, such channels are to adopt a clean feed within a year after the commencement of the act. It is specifically provided that no Nepali media should dub the foreign advertisement and broadcast it.

 

4.3. Written Forms of Advertisement

Printing and Press is specifically dealt by Press and Publication Act, 1991 and Press and Publication Rules, 1992. However, the Advertisement through Press and Publication is regulated by Advertisement (Regulation) Act.

The Supreme Court had ordered to remove all types of business Hoarding Boards, advertising posters, pamphlets, flexes etc. After the commencement of the Act, Kathmandu Metropolitan has been steering work forces i.e. District Administration Office, Nepal Police, Nepal Electricity Authority and Nepal telecom in order to remove provided forms of Advertisement.

 

4.4. Social Media

Currently, there is no regulation prescribed particularly for advertisements in Social Media. The necessity of online advertisement regulation has also increased with the excess use of social media for advertising.Recently however, the Nepal Rastra Bank has published a directive mandating all payments for advertisements in Social Media to be made through the banking channel. Although the NRB has sought to bring all advertisement related transactions under the taxation regime, due to its evolving nature, advertisements in Social Media also needs to be covered under the ambit of laws and policies.

 

4.5. No email or SMS without consent for the purpose of advertisement

In relation to emails or messages, the Act provides that no one should circulate message to mobile phones or send an email without the consent of the concerned persons. The intention of the legislation appears to restrict sending unsolicited messages, thus, taking consent for text messages and push notifications is necessary. However, the Act is silent about the advertisement made through calls.

The Act allows federal government, provincial governments or local levels to circulate message of public service announcements or message of early warning through mobile phones or emails at the time of disaster. No consent is required for this matter.

 

5. Free or standard rate for advertisement

At the time of disaster, ministry, state government or local level can publish or broadcast notice or advertisement for the public service and information, for free or standard rate.

 

6. Advertisement Board

The Act provides for an eight member Advertisement Board which has the authoritative power to regulate the advertisement standard. The Advertisement Board checks the contents of advertisements and public service announcements. It also provides that the board will distribute government advertisements to media houses proportionally.

In addition, the Board also has power to determine the fixed time frame for publishing the notice that needs to be publish in public manner through radio, television or online or any similar electronic media.

 

6.1 Power, Function and Duty of Advertisement Board

The power, function and duty of the Advertisement Board as per the Act is as follows:

  1. Proposals in the Ministry regarding the national advertising policy,
  2. To examine the content of advertisements transmitted through the parameters based on the specifications.
  3. To make code of conduct for advertising, production, broadcasting and distribution.
  4. According to the requirement of nation, encouraging the publications and broadcasting of advertisement in relation to nation benefit and public benefit
  5. Investigates whether or not something is being done, promoted, discriminated against, or advertised against this Act
  6. Measuring the parameters of broadcasted advertisement from foreign channels and if found anything contrary to that, then shall be referred to Ministry for further action
  7. Coordinating among Government of Nepal, Advertising Agency, Advertiser, Media and Government Officials
  8. To conduct consumer awareness programs
  9. To prize the person doing excellence in advertising
  10. To provide necessary direction to producer, distributor or broadcaster
  11. The boards shall distribute the advertisement proportionately to Media House in relation to advertisement regarding public benefits made available by the Government of Nepal,
  12. Other work as prescribed.

 

7. Regulation of Advertisement through State and Local Level

For those who have taken permission or approval from state or local level to advertise through print or electronic communication are regulated by the Information and Communication Ministry from state level. Under the chairmanship of Secretary, Monitoring and Regulatory Committee of six members is formed. The Committee has the power to inspect and decide on the appropriateness of the advertisements (including Hoarding Boards) based on the abovementioned criteria.

 

8. Advertisement Agency

"Advertising Agency" means firm, institute or company producing and/ or distributing advertisements, established under the prevailing law with intention to run business of advertisements. 

Advertisement Agency must be enlisted in the Advertisement Board with prescribed details. The established agency operating before this Act should be enlisted within a year after the commencement of the Act.

 

9. Complaint Mechanism

Any complaint in relation to the Act or standard set by the Act can be filed to Advertisement Board or concerned Committee or Local Level Authority. If the Committee or Local Level Authority has the jurisdiction to take action then, they should proceed themselves or else should handover such complaints to the Advertisement Board, committee or local level who has jurisdiction to take further action. The action pursuant to the complaint filed should be informed to the complainant by Advertisement Board, committee or local level.

 

10. Jurisdiction of Court

The Act prescribes that the court procedure should take place as per the prevailing law. However, in absence of such law in the Act, one should file a case in District Court.

 

11. Compensation

Anyone affected by the actions done contrary to the Act or rules made under this Act can file an application to Advertisement Board claiming compensation. Such application should be investigated to check whether the harm has been done or not. If such harm is found then, applicant should be compensated reasonable amount by Advertiser.

 

12. Appeal

Any person being informed about the decision of the case, may file an appeal against the decision in the below mentioned Court within 35 days from the date of receiving of such decision;

  1. The decision made by District court should be appealed at High Court.
  2. The decision made by Board against District Court
  3. The decision made by Monitoring and Regulatory committee and Local Level against District court.

 

13. Offences and Punishment

The Act provide that if anyone advertise against the Act, it should be considered as offences pursuant to the Act. Offences committed contrary to the Act will be punished. The punishment will be in accordance to the existing law, provided that if there is no punishment for the offense then imprisonment not exceeding 1 year of term and fine not exceeding ten thousand rupees will be charged.

The punishments have been categorized as follows:

  1. If any person does or cause offences in relation to Hoarding Boards will be fine not exceeding one lakh rupees.
  2. If any person does or causes offences in relation to Clean Feed will be fine not exceeding five lakh rupees.
  3. If any person does or causes offences in relation to advertisement restricted area, fixed hours by board, details of advertiser, advertisement through E-mail and SMS etcetera will be fine not exceeding one lakh rupees.

 

The Act has provision of imposing fine ranging from NPR 1 Lakh to NPR 5 Lakh to anyone who publishes/broadcasts or causes to publish/broadcast advertisement in contravention of this law.  No editor of media shall be punished for publication or broadcast of advertisement in breach of law simply by virtue of such reason. However, if the editor is also the owner of the media, nothing in this law will prevent the authorities concerned from punishing him or her.

 

**DISCLAIMER: This document is prepared for general understanding and should not be taken for any legal purpose without consulting legal professionals. ** The copyright of the document is vested with PLA.

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Prakritee Yonzon

Prakritee Yonzon

Senior Associate