As a company licensed by the Nigerian Communications Commission (NCC) to operate in the telecommunications industry in Nigeria, you should expect the NCC to periodically assess your compliance with license terms, conditions and regulatory obligations through monitoring exercises. Sections 66 and 89(1) of the Nigerian Communications Act 2003 authorize the NCC to carry out such reviews.
During a compliance monitoring visit, they will evaluate many facets of your business. Thus, it is prudent to be prepared when the NCC comes to examine regulatory adherence. This article explores the main compliance requirements for Nigerian telecom licensees and the legal foundations supporting each one. A proper understanding of both can help ensure readiness for a monitoring visit by the industry regulator.
What does Compliance look like for NCC Regulated Companies?
The NCC monitors all licensees through compliance reports published annually. It carries out enforcement actions like facility closures and prosecutions for violations found during monitoring/inspections.
Licenses can be suspended/revoked for breaches of license terms/conditions or regulations. The NCC issues notices outlining reasons/dates and allows representations/remedies. Failure to remedy breaches within allotted timelines results in suspension then revocation.
The Licensing Regulations and Communication Act provide the compliance framework. However, individual license terms may contain additional obligations. Licensees must thoroughly understand specific license requirements to ensure ongoing regulatory compliance. Non-compliance can severely disrupt business operations and attract harsh penalties.
1. Annual Audited Financial Report Submission
Telecom companies must submit audited annual financial reports to the NCC within 180 days of the fiscal year end. The reports must be in the prescribed format and include standard self-assessment documents and proof of Annual Operating Levy (AOL) payment to the NCC. This requirement is based on Section 70 of the Nigerian Communications Act and Articles 7 & 8 of the 2022 AOL Regulations. Failure to comply could incur penalties up to NGN3 million plus NGN300,000 daily for delays as stated in Article 10.
2. Annual Operating Levy Payment
Telecom companies are obligated to pay an Annual Operating Levy of 1% of net revenue (after approved deductions) within timelines under Article 4 of the AOL Regulations. The Nigeria Communications Act, AOL Regulations, and company licenses provide the legal basis. Payment should be made within 30 days of submitting annual audited accounts as Section 4(1)(b) mandates. Calculate levies accurately and submit financials on time to meet this deadline.
3. Technical Standards Compliance
Telecom providers must adhere strictly to technical standards specified in their licenses. They are prohibited from using unauthorized equipment. Section 130 of the Communications Act, related regulations, and license terms outline required standards. Noncompliance could lead to fines, license suspension or revocation.
4. License Renewal
Companies must start the renewal process at least six months before expiration dates listed on licenses. All applicable fees and levies under the license and regulations must be paid before deadlines. Section 43 of the Nigeria Communications Act establishes this framework. Begin preparations early to address any issues well ahead of the 6 month cutoff.
5. Annual Ownership Report
By March 1st each year, telecom companies must submit an ownership report providing shareholder and director details to the NCC. This is mandated by Sections 64-66 of the Communications Act. Corporate affairs documents will usually satisfy this requirement but confirm with the NCC. Noncompliance may incur administrative fines.
6. Shareholding Structure Changes
Notify the NCC in writing at least 90 days prior to share transfers exceeding 10% of total capital as Article 42(1) of the Licensing Regulations requires. Submit board resolutions and pay determined fees. Follow up for final NCC approval before proceeding to prevent license problems.
7. Industry Statistics Submission
Telecom providers must submit the Year End Questionnaire by the requested deadline, usually in the first quarter. This is required by Sections 64-66 and 89 of the Communications Act and NCC.
8. Address Change Notification
Within 7 days of any change, companies must notify the NCC in writing of address modifications, including headquarters and major offices. Article 47 of the Licensing Regulations mandates this.
9. Equipment Type Approval
All telecom equipment used in Nigeria must undergo type approval certification ensuring safety and quality standards as Sections 132 of the Communications Act and the 2008 Type Approval Regulations require. Maintain and provide approval records to the NCC upon request to remain compliant. Noncompliance risks fines and, in serious cases, seizures.
10. Consumer Code of Practice
Submit the Consumer Code of Practice in the format specified by the NCC. Publish the approved version publicly. The 2007 Consumer Code of Practice Regulations provide the legal basis. Adapt the NCC template appropriately, submit for approval, and publish to comply. Noncompliance could lead to penalties.
Staying Compliant with AutoComply
AutoComply was created to transform compliance into a company’s superpower, eliminating the burden of managing compliance tasks on spreadsheets.
Below are AutoComply’s features:
1. Discovery Dashboard
The initial step in grasping compliance involves identifying the specific requirements for your company. AutoComply’s discovery dashboard accomplishes this by displaying obligations relevant to your company based on its country of incorporation, company type, and industry. It also supports multiple company discovery, allowing users to switch between companies or view all obligations at once through the obligation planner view.
2. Automated Task and Sub-task Tool
Government-imposed obligations typically require the submission of forms or documents. Assigning a single team member to collect and maintain the specifics for each obligation can lead to human errors and missed deadlines over time. AutoComply addresses this issue by enabling collaborative document completion.
Admins can assign specific tasks for obligations to team members, and AutoComply automatically generates the necessary documents for submission to regulatory authorities or government agencies.
3. Alerts via Email, Slack, and Teams
Timely compliance is essential, and AutoComply helps teams stay informed about upcoming obligations with real-time alerts delivered via email, Slack, and Microsoft Teams. Users also receive email summaries of all pending obligations.
4. Document Management System
As demonstrated by the features mentioned earlier, compliance obligations generate various documents. AutoComply assists teams in managing these documents by automatically archiving them in smart folders matching the obligation, reference, and the month of generation. Users can also create their own folders and upload external documents.
5. Ancillary Features like PEP and Sanction Screening
In addition to standard compliance obligations, some companies may need to handle specific tasks such as Politically Exposed Persons screening or monitoring sanction watch lists for their customers. AutoComply offers the capability to perform these functions through a third-party integration with a global Know-Your-Customer (KYC) provider as part of its comprehensive suite of services.
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