THE ADVERTISING INDUSTRY REFORM PROCLAMATION
APCON Governing Council during its 132nd session held on September 26, 2012 approved the new advertising industry reform proclamation.
The new APCON proclamation which redefines the practice and business of advertising will take effect from January 1st, 2013.
- License Regime:
All categories of advertising organizations as listed in the APCON Code that engage in the business and practice of advertising for the purpose of gains/project shall be licensed by APCON (with the exclusion of Advertisers). All agencies will have to apply for and obtain practice license from APCON to legalise the operations of the advertising agency/organization. Without the license, the business of the agency will become illegal. The license shall be renewable every three years.
- Each Agency/Organisation shall have its area of specialization defined which shall be the basis and scope of license granted to such agency/organization. Media independence agencies will be granted license for media planning and buying only. Outdoor agency will be granted license to own and manage outdoor sites while full fledge agencies will be granted license for media planning and buying, creative and brand management. Licensed agency must operate within the scope of license granted to such organization.
- Where a firm decides to operate outside its licensed area of specialization, the concerned organization shall be required to set up a new firm and register the new firm that is intended to operate and offer the new designated services i.e. if an advertising agency intends to conduct the business of outdoor agency, such advertising agency must set up a new outdoor agency and obtain an outdoor business license from APCON to legally practice the outdoor business. If client/Advertiser XYZ Limited intends to buy media or own an in-house agency, such Advertiser must set up an independent organization for the specialized business either, Media planning & buying, full fledge agency/or outdoor business and obtain license for the operation of the newly set up organization. Operating an advertising services functions without corporate license will become illegal with effect from 1st January, 2013.
Advertising organizations are now classified as follows:
- National Agency
- Foreign Agency
Any shareholding of 74.9% and above (up to 100%) by Nigerians qualify an agency as a National Agency while 25.1% and above (up to 100%) by foreigners qualify an agency as a Foreign Agency. Foreign Agency shall practice advertising business targeted at a market outside the shores of Nigeria.
- APCON will operate two windows for business registration and licensing.
(a) Window 1
Member organisations of recognised sectoral groups shall be required to obtain a reference letter from the sectoral body recommending and confirming their suitability for the business licence. The letter of reference shall detail particulars showing compliance with requirements for practicing in the targeted field.
(b) Window 2
Where any of the advertising organisation is not a member or affiliated with any recognised sectoral group, then such an outfit or organisation which intends or already prior to this proclamation conducts advertising business in the specialised area being regulated; shall provide the following:
- Name and contact details of the applicant agency i.e. (this shall include but will not be limited to office address, telephone numbers, email address, website etc.).
- Copy of Registration documentations for the special purpose vehicle floated for the purpose of the specialised advertising business as well as comprehensive particulars of Owners/Promoters/Directors’ details as the case may be. This information/documentation must include amongst other details, and as the case may be:
(a) Copy of Certificate of Incorporation.
(b) Copy of Memorandum and Articles of Association.
(c) Evidence of share subscription and distribution.
(d) Copy of documents relating to particulars of directors in the case of a company.
- Names and details of management staff. This shall include but will not be limited to:
(a) Names and qualifications of management staff, including evidence of APCON registration and certificate.
(b) Details and evidence of working experience of management staff.
- Financial report. This shall include but will not be limited to the current Audited Report (where applicable).
- Tax Clearance Certificate where applicable.
(vi) Letter of compliance from the Nigeria Pension Fund on compliance with relevant sections of the Pension Act (for Company already in operation).
- Employee Benefits Insurance: Evidence of employees’ retirement saving plan, group insurance plan, workers compensation from relevant organisation and government agencies.
- In addition an organisation will be required to produce a bankers’ credit guarantee from a Nigerian bank acceptable to APCON in the sum of N200 million for a National agency and N500 million for a Foreign agency.
- National and Foreign categories applicants shall also be required to produce and submit an Agency Business Insurance to the tune of N200 million for a National agency and N500 million for Foreign agency from a Nigerian insurance company acceptable to APCON.
- Registered Practices
All employees engaged in the practice of advertising and advertising services must be registered and certified to practice by APCON. All illegal practitioners will be arrested and prosecuted with effect from January 1st, 2013.
- Individual Practice Fee
- Practitioners shall endeavour to renew their practice fee on or before March 31st of every year.
- Non renewal of practice fee is an offence and shall attract sanctions including delisting where appropriate and other sanctions.
- A practitioner shall not engage in a designated area of specialisation except the firm of practitioners in which he/she is engaged is licensed to carry on business in such area(s).
- Foreign Practitioners
Foreign practitioners shall be welcome to practice the profession in Nigeria; however such practitioners shall be certified and licensed by APCON. In addition to the requirement of the Membership Committee of APCON, such practitioners must show:
- Evidence of work permit obtained from the relevant agencies like the NIS, etc. relevant visa, etc.
- A letter of attestation from the organisation intending to employ the expatriate on:
(a) The genuineness of the offer.
(b) The remuneration package and conditions as comparable to those offered to Nigerians of the same status and position.
(c) The foreign practitioner is filling a labour shortage.
(d) The employment of foreigner will directly impact or create new job opportunities or help retain jobs for Nigerians.
(e) The employment of the foreign practitioner will assist in transferring new skills and knowledge to Nigerians.
(f) The hiring of foreigner will not affect the employment of Nigerians negatively.