1. Introduction
The Advertisement (Regulation) Act, 2076 (2019) (the “Act”), published in the Nepal Gazette on 25 October 2019, is Nepal’s first dedicated statute regulating advertisements of goods, services, events, and programs. Subsequently, the Advertisement (Regulation) Regulation, 2077 (2020) was published in the Nepal Gazette on 19 October 2020. As the foundational legal framework governing advertisement standards, it seeks to enhance consumer protection, reinforce public decency, and regulate the burgeoning advertising industry.
This briefing summarizes the key provisions of the Act and analyses a critical gap within the statute, its silence on surrogate advertising, a practice that has increasingly proliferated across Nepal’s media landscape.
2. Scope of the Act
The Act regulates:
- All forms of advertisements, including print, electronic, online and outdoor displays.
- Obligations and liability of advertising agencies and advertisement providers.
- Permitted and prohibited content, including categories of products and messages that cannot be legally promoted.
Despite its broad scope, the Act does not explicitly regulate social media or digital advertising, nor does it define or prohibit surrogate advertising, thereby leaving regulators without clear procedural guidance or statutory authority to act.
3. Definition and Regulation of Advertisements
3.1 What Constitutes an Advertisement
The Act adopts a broad definition, where “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.
This definition effectively captures both traditional and online medium; textual, visual, audio, and audiovisual content disseminated through traditional and digital media, hoarding boards, balloons, and similar means.
3.2 Permitted Advertisements
Advertisements may be made to:
- Promote a product or service;
- Inform consumers about a product or service;
- Publicise programs or events; or
- Disseminate public information.
3.3 Prohibited Advertisements
The Act prohibits advertisements that directly or indirectly promote:
- Products banned for production, distribution, sale, or use under prevailing laws;
- Gambling and unauthorised betting activities;
- Weapons, explosives, and similar hazardous products;
- Prescription medicines or medical products requiring professional supervision;
- Products requiring prior regulatory approval where such approval has not been obtained;
- Products explicitly prohibited from advertisement by other applicable laws; and
- Educational advertisements inserted into school or university syllabi, except when the information serves a clearly educational purpose and is not promotional.
Additionally, the Act also prohibits any advertisement that:
A. Threatens National Integrity or Public Order
- Undermines Nepal’s sovereignty, geographical integrity, nationality, or federal relations;
- Disrupts public peace or harms international relations;
- Is against the State or in contempt of court; and
- Encourages or facilitates criminal conduct.
B. Violates Public Morality or Social Values
- Contains abusive, defamatory, or degrading content.
- Disrespects labour or promotes discrimination based on sex, caste, religion, language, or economic status.
- Hurts religious sentiments or cultural values.
C. Engages in Unfair Market Conduct
- Misleads consumers or spreads misinformation.
- Disparages or deteriorates the reputation of competing products.
- Demoralises domestic industries or harms fair competition.
D. Violates Intellectual Property Rights
- Uses trademarks, patents, designs, or other IPR-protected elements without the rights-holder’s consent.
These prohibitions aim to prevent the commercial promotion of harmful, restricted, unregulated or banned products and ensure that advertising activities do not undermine public interest or lawful market conduct.
3.4 Advertisement-Prohibited Areas
Local authorities may designate restricted zones, such as those related to religious, cultural, archaeological, educational, or health institutions.
3.5 Mandatory Disclosure Requirements
Advertisements must disclose:
- Name and address of the advertisement provider, and
- Warnings on harmful effects, where relevant.
Non-compliance triggers liability for publishers and media owners and may attract a fine of up to NPR 5 lakh.
4. Regulation of Specific Advertising Mediums
4.1 Hoarding Boards
Approval from the local level is required for any hoarding board placed in public view. Applications may be rejected for reasons including interference with transportation, aesthetic disruption, violation of cultural or religious values, or breaches of local law.
4.2 Television (Clean Feed)
The Act enforces Nepal’s clean feed policy, barring all foreign advertisements and prohibiting Nepali media from dubbing foreign ads.
4.3 Written Publications
Print advertisements remain partially governed by the Press and Publication Act but must also comply with the 2019 Act.
4.4 Social Media
The Act contains no explicit regulatory mechanism for advertisements on social media or online platforms, despite their growing role as primary advertising channels in Nepal.
Nepal Rastra Bank’s directive requires payments for online ads to be processed through banking channels for taxation purposes, but this does not regulate advertising content.
4.5 Email/SMS Advertising
Unsolicited email or SMS advertisements without the recipient’s consent are prohibited.
However, the Act is silent regarding unsolicited advertising via phone calls, creating another interpretive gap.
5. Advertisement Board
The Act establishes an eight-member Advertisement Board empowered to:
- Propose a national advertising policy,
- Examine advertisement content,
- Develop codes of conduct,
- Ensure compliance with standards,
- Coordinate among regulators and stakeholders,
- Distribute government advertisements proportionately,
- Conduct awareness programs, and
- Direct advertisers or media houses, where required.
6. State and Local Level Regulation
State-level committees monitor and supervise both print and electronic advertisements, including hoarding boards, based on statutory criteria.
7. Advertisement Agencies
Agencies must be enlisted with the Advertisement Board. Existing agencies at the time of enactment must register within one year.
8. Complaints, Compensation, and Appeal
- Complaints may be filed with the Board, committees, or local-level authorities. The action pursuant to the complaint filed should be informed to the complainant by the Advertisement Board, committee or local level.
- Compensation may be awarded after an investigation to check whether the harm has been caused or not by unlawful advertisements.
- Appeals of decisions must be filed within 35 days to the competent court (District Court or High Court, depending on the level of decision).
9. Offences and Penalties
Penalties include:
| Violation Type | Statutory Penalty | Notes |
| Hoarding board violations | Up to NPR 1,00,000 | Includes placement without approval & obstruction of public space |
| Clean Feed (TV) violations | Up to NPR 5,00,000 | Highest penalty category |
| Restricted area/hour violations | Up to NPR 1,00,000 | Applies to areas designated by local authorities |
| Missing disclosure (advertiser details) | Up to NPR 1,00,000 | Liability may shift to publisher |
| Unsolicited SMS/email ads | Up to NPR 1,00,000 | Act is silent on unsolicited calls |
| Violations without specified penalty | Up to 1 year imprisonment or NPR 10,000 fine | General clause |
Editors are protected from liability unless they are also media owners.
10. The Act’s Legal Silence on Surrogate Advertising
10.1. What is Surrogate Advertising?
Surrogate advertising involves promoting a permissible product or service using a name, logo, colour scheme, or brand identity identical or substantially similar to a product whose advertising is prohibited, creating a functional association in the minds of consumers without explicit reference to the prohibited item. The intention is to remind consumers of the prohibited product without explicitly advertising it.
Examples generally involve:
- Branding of music products, events, or merchandise using the visual identity of prohibited goods,
- Sponsorship arrangements where the surrogate brand closely mirrors a prohibited product’s brand identity,
- Use of digital channels to disseminate content indirectly associated with prohibited products.
10.2. Absence of Provisions in the Advertisement (Regulation) Act
While the Act clearly bans direct advertising of alcohol, tobacco, gambling, betting, and other restricted items, it does not prohibit surrogate advertising or provide criteria for determining when an advertisement indirectly promotes a banned product.
This legal omission creates not only an interpretive gap but a practical enforcement vacuum, leading to the following consequences:
- Enforcement agencies lack a legal basis to penalise surrogate advertising even when intent is evident.
- Brand owners can legally leverage near-identical branding through music labels, entertainment platforms, merchandise, or event sponsorships.
- Social media channels, which the Act does not comprehensively regulate, have become a primary space for such activities.
- Enforcement, where it occurs, tends to targetindividuals promoting a brand while being unable to act against corporate/beneficiary entities due to the absence of express statutory prohibitions.
10.3. Comparative Insight
Surrogate advertising is not inherently harmful. In other jurisdictions, it is permissible when the surrogate product is genuine and lawfully sold, and when marketing does not mislead consumers. Nepal currently lacks clear standards, leaving stakeholders uncertain about compliance thresholds and permissible brand resemblance.
Introducing clear legal standards, such as definitions, disclosure requirements, and limits on brand resemblance, would help Nepal distinguish between legitimate brand extensions and attempts to bypass statutory advertising restrictions. In the absence of such guidance, regulators, advertisers, and media houses face uncertainty, and enforcement remains inconsistent. Proper regulation would close existing gaps, promote fair competition, and align Nepal with international best practices without impeding legitimate commercial activity.
10.4. Regulatory Challenges
Without explicit statutory authority:
- The Advertisement Board may investigate, but cannot impose penalties solely for surrogate advertising.
- Complaints filed to regulators cannot result in sanctions unless the content independently violates other provisions (e.g., misleading, discriminatory, or immoral content).
- Enforcement appears inconsistent, especially where sponsorships by surrogate brands intersect with public events or government-linked organisations.
11. Conclusion
The Advertisement (Regulation) Act, 2076 (2019) and Regulations, 2077 (2020), are pioneering legal instruments that significantly advance Nepal’s advertisement governance framework. However, its silence on surrogate advertising, combined with underdeveloped digital advertising regulation, has created a legal vacuum that allows indirect promotion of restricted products to persist.
As a result, surrogate branding through events, merchandise, entertainment platforms and online media continues to thrive, exploiting the ambiguity. Regulators, though aware of the issue, remain constrained by the absence of express legislative authority.
A clearer statutory framework, potentially incorporating definitions, thresholds, and enforcement mechanisms for surrogate advertising, would strengthen regulatory capacity and provide much-needed legal certainty to advertisers, agencies, and media houses.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice, advertisement, personal communication, solicitation or inducement. No attorney-client relationship is created through this content. Gandhi & Associates assumes no liability for any consequences resulting from actions taken based on information contained herein.
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