Telemedicine is the delivery of healthcare services remotely using information and communication technologies which allow real-time audio or audio-visual patient-health provider communication, diagnosis and treatment through laboratory tests and drug prescriptions. With the expansion of internet penetration in Nigeria, telemedicine has become an emerging business in Nigeria and has begun to experience significant growth. This is partly driven by the increasing need for accessible healthcare, the advancement of technology, the outbreak of Covid-19 which resulted into limited physical consultations with healthcare providers and the mass exodus of health care professionals from Nigeria in the last few years. Telemedicine also provides accessibility and thereby bridges the gap in healthcare access, especially in rural and underserved areas where medical facilities and professionals are scarce. Recently, there has been an increased interest in telemedicine business from both local and foreign players in that space.

Presently, there is no single substantive law regulating the operation of telemedicine in Nigeria. However, the operation of a telemedicine business is subject to the specific requirements of certain laws which include the Companies and Allied Matters Act, 2020 (CAMA), Nigeria Data Protection Act, 2023, Medical and Dental Practitioners Act, 1988, the National Health Act 2014, Pharmacists Council of Nigeria (Establishment) Act, 2022, Nursing and Midwifery (Registrations, etc) Act, 1979, Constitution of the Federal Republic of Nigeria, 1999, etc.

This article highlights the regulatory requirements necessary for the operation of telemedicine business in Nigeria.

Regulatory Requirements

Although there is no specific law regulating telemedicine in Nigeria, telemedicine is not unregulated. There are certain regulatory requirements which broadly apply to the operation of a telemedicine (business) in Nigeria. These requirements include:

1. Company incorporation: One of the requirements for the operation of any business in Nigeria, is the incorporation of a local company as required by the CAMA. Thus, to operate a telemedicine business in Nigeria, a local company has to be incorporated with the Corporate Affairs Commission (CAC). There are different share capital requirements which apply depending on whether the business is locally or foreign owned. In addition to incorporating a local company, a company with foreign participation is also required to be registered with the Nigerian Investment Promotion Commission (NIPC) and also obtain a business permit from the Federal Ministry of Interior.

2. Registrations and Licensing: Healthcare providers must possess the necessary qualifications, professional licenses and registrations to provide healthcare services to patients in Nigeria. These registrations and licenses are provided by the Medical and Dental Practitioners Act, 1988, Nursing and Midwifery (Registrations, etc) Act, 1979 and the Pharmacists Council of Nigeria (Establishment) Act, 2022. Depending on the model of operation, it may also be necessary to obtain certain licenses/registrations from the Federal Ministry of Health, National Agency for Food and Drug s Administration and Control (NAFDAC), etc.

In Lagos state, health facilities including telemedicine are to be registered with the Health Facility Monitoring and Accreditation Agency (HEFAMAA) pursuant to the Lagos State Health Sector Reform Law, 2006 with the registration renewable annually. 

3. Data Privacy and Protection: The Nigerian Constitution, 1999 guarantees and protects the privacy of citizens and to that extent, the Nigeria Data Protection Act, 2023 (NDPA) which amplifies the constitutionally guaranteed right to privacy, is the regulatory framework applicable to the collection, processing and storage of (patients’) data. Telemedicine providers are required to process patients’ data in accordance with the requirements of the NDPA. The NDPA regulates the cross-border transfer of patients’ data and also provides for security measures to be adopted by telemedicine businesses to ensure the security and protection of patients’ data.

The NDPA also provides for the obligation to register as a data processor/controller. Since telemedicine businesses collect and process patients’ data including health records, they are required to register with the Nigeria Data Protection Commission (NDPC) as data controller/processor.

4. Technology Transfer: The National Office for Technology Acquisition and Promotion Act 1979 (NOTAP Act) regulates the transfer and acquisition of foreign technology by companies in Nigeria by making the contracts and agreements to transfer technology registrable with NOTAP. Invariably, the transfer of foreign healthcare technologies such as patents to a telemedicine company would be subject to registration with NOTAP.

5. Confidentiality: Patients’ health information is to be obtained and held confidentially by telemedicine providers without disclosing it or allowing access to it by unauthorized third parties as required by the National Health Act, 2014. Thus, there is an obligation to put in place measures to ensure that unauthorized persons do not have access to the medical information and health records of patients. Failure to comply attracts sanctions which include monetary penalties and terms of imprisonment.

Other Legal Considerations

To ensure seamless operation in Nigeria, telemedicine operators should pay particular attention to the following:

1. Records System: It is required as a matter of best practice and in line with the requirements of applicable laws and regulations for telemedicine providers to develop and maintain a robust records system for the management of the health records of patients. These records enable the providers to easily keep records of consultations, diagnoses, prescriptions, hospital referrals, etc. provided to patients.
2. Privacy policy: Developing a privacy policy which elaborately provides for the essence of the collection and retention of patients’ information and health records. The privacy policy should be in compliance with the requirements of the Nigerian Data Protection Act, 2023 and its subsidiary regulations.
3. Data Security: Telemedicine operators should have a robust data security system capable of protecting the information and health records of patients from data breaches and violations. Some of the data security measures that could be adopted include anonymisation, pseudonymisation, encryption, etc. which ensures the integrity and protection of patients’ sensitive information and health records.
4. Licence Renewals: Attention must be paid to licenses and registrations renewal deadlines to ensure that providers continuously comply with legal requirements regarding renewal of licences. It is very important that health practitioners including doctors, nurses and pharmacists’ licenses and registrations are up to date.
5. Regulatory Filings: Appropriate returns should be filed with the relevant regulatory authorities to ensure continuous regulatory compliance. Company annual returns should be filed with the Corporate Affairs Commission (CAC) as at when due to avoid the payment of penalties. There is also the obligation to conduct and file data impact assessment reports with the Nigerian Data Protection Commission (NDPC) relating to processing of data that may pose high risk to the confidentiality of patients’ data.
6. Tax Returns: Telemedicine companies are required to pay tax and file tax returns with the Federal Inland Revenue Service (FIRS). In particular, telemedicine companies are obliged to pay companies income tax (CIT) on their profits and file their returns with the FIRS usually within six months from the end of their financial year.

Conclusion

Driven by the increasing need for accessible healthcare, the advancement of technology and the mass exodus of healthcare professionals from Nigeria in the last few years, there has been a marked increase in the provision of telemedicine in Nigeria.  The operation of a telemedicine business in Nigeria is regulated by various laws relating to the incorporation of businesses, licensing and registrations, data processing and protection, confidentiality, etc. Telemedicine providers must ensure that their healthcare professionals’ licenses and registrations are up to date in compliance with applicable laws and regulations.  Contracts and agreements for the transfer of healthcare technologies are required to be registered with NOTAP.

Telemedicine providers are to ensure compliance with applicable laws and regulations relating to data security, regulatory and tax filings with the CAC, NDPC and FIRS, license and registrations renewals and keeping and maintaining robust health record systems that guarantees the confidentiality of patients.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Navigating the Regulatory Requirements for Telemedicine Business in Nigeria first appeared on Goldsmiths Solicitors.

With Nigeria being a leading Fintech hub in Africa, we have in last few years witnessed a surge in online money lending service. The operation of money lending business in Nigeria is regulated by the Money Lenders Laws of the various states in Nigeria, the Federal Capital Territory (FCT) and the Federal Competition and Consumer Protection Commission (FCCPC). There are 36 states and a Federal Capital Territory (FCT) in Nigeria and an operator must obtain the money lenders license from the regulatory authority in the relevant state(s) in which they wish to operate or the FCT before commencing operations. It is important to note that where the money lending business is to be carried on in more than one state, a money lenders license must be obtained in each state in which the money lending business is to be carried on. It is a criminal offence to engage in the business of money lending without a money lenders license.

In Lagos State, the money lender’s license is granted by the Lagos State Ministry of Home Affairs. Using Lagos State as a case study, this article explains how to obtain the money lenders license in Lagos State and the digital money lenders registration with the FCCPC. The processes and procedures are similar in other states.

Requirements for Money Lenders License in Lagos State

The Lagos State Money Lenders Law is the principal law which regulates money lending in the state and the regulatory authority responsible for issuing licenses is the Lagos State Ministry of Home Affairs. Money lenders license can only be issued to corporate entities in Lagos state. Thus, any potential investor interested in money lending business is required to first incorporate a company in Nigeria.

The requirements for processing and obtaining a money lenders license in Lagos state are as follows:

1. Incorporation documents including company certificate of incorporation, Memorandum and Articles of Association, etc. of the applicant company issued by the Corporate Affairs Commission (CAC).
2. The minimum share capital of the applicant company is N20,000,000 (Twenty Million Naira). However, where the company has foreign participation, the minimum share capital requirement is N100,000,000 (One Hundred Million Naira).
3. Police Clearance Certificate of two directors of the applicant company.
4. Three (3) years Tax Clearance Certificate (TCC) for the company and for at least two (2) directors.
5. Reference letter from the applicant’s bankers in Nigeria.
6. Proof of payment of the application and processing fees.

The Procedure for Obtaining Money Lender’s License in Lagos State

The procedure for obtaining the money lenders license in Lagos State is initiated with an application to the Chief Magistrate of the Magistrates Court within the magisterial district where the lending company is located and ends with the issuance of a money lenders license to the applicant. The procedure for obtaining the license is highlighted below:

1. An application in the prescribed form is made to the Chief Magistrate of the Magisterial District where the applicant company is located.
2. The Chief Magistrate issues a Money Lenders Certificate (Form B) and a letter addressed to the Permanent Secretary of the Lagos State Ministry of Home Affairs to the applicant company confirming due diligence of the applicant company and recommending the issuance of a money lenders license.
3. An application is made to the Nigerian Police for the issuance of Police Clearance Certificates for two directors of the applicant company.
4. A formal application is made to the Lagos State Ministry of Home Affairs for money lender’s license accompanied with the following documents:
5. Form B and the Letter of Recommendation issued by the Chief Magistrate.
6. Incorporation documents of the applicant company.
7. Three years Tax Clearance Certificate (TCC) of the applicant company and of at least two directors.
8. Police Clearance Certificates for two directors of the applicant company.
9. A reference letter from a commercial bank being the bankers of the applicant company in Nigeria.
10. Proof of payment of the application and processing fees.
11. A physical inspection of the applicant company’s place of business will be carried out by the Lagos State Ministry of Home Affairs upon submission of the application.
12. A Money Lenders License is issued to the applicant company by the Lagos State Ministry of Home Affairs where it is satisfied that all the statutory requirements have been met and the applicant company is considered fit and proper to act as a money lender.

Validity and Renewal of Money Lender’s License in Lagos State

Money lenders license is valid in Lagos State for a period of one year and therefore subject to renewal every subsequent year. To process the renewal of the license, the licensed operator is required to obtain a new Money Lenders Certificate (Form B) from the Chief Magistrate accompanied with the expired license, updated tax clearance certificate and evidence of payment of the renewal fee. Upon being satisfied that the requirements continue to be met, a renewed license is issued.

Registration with the Federal Competition and Consumer Protection Commission (FCCPC)

In 2022, the Federal Competition and Consumer Protection Commission (FCCPC) issued the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 (“the Guidelines”). The Guidelines require digital money lenders to register with the FCCPC before the commencement of business operations. The process of registering with the FCCPC is summarized as follows:

1. The digital money lender is to obtain an Audit Trust Mark from the Nigerian Data Protection Commission.
2. Obtain a compliance Audit Report and Privacy Impact Assessment Report from a duly registered Data Protection Compliance Organisation (DPCO).
3. Obtain and complete the requisite digital money lender’s registration form from the FCCPC. The completed form is to be accompanied with some documents which include:
4. Incorporation documents of the applicant.
5. The company’s terms of use and privacy policy
6. The company’s code of conduct
7. Brief description of the business and details of its groups, subsidiaries and affiliates.
8. Evidence of feedback and complaint resolution mechanism
9. Evidence of payment of the registration fee
10. Obtain and complete the requisite declaration form from FCCPC.

The application is to be submitted to the FCCPC together with the required documents. In practice, the FCCPC allows some flexibility in the registration process by allowing applicants to begin the digital money lender’s registration process while waiting for the Audit Trust Mark and the Compliance Report and Privacy Impact Assessment Report.

Failure to register with the FCCPC may lead to the permanent blacklisting of the digital money lender’s business and the removal of its digital apps from online platforms such as Google Play Store and Apple Store, etc. which will make the money lender unable to transact its business in Nigeria.

Conclusion

With the growth of FinTechs in Nigeria, there has been tremendous growth in the Nigerian online money lending space in the last few years. The business of money lending is regulated in Nigeria by the state governments, the FCT and the FCCPC. An operator is required to obtain a money lenders license in any of the 36 states of Nigeria in which it wishes to carry on business. Individual licenses must be obtained in every state in which an operator seeks to do business. Any company desirous of providing money lending services through any digital platform is required to register with the FCCPC before commencing business in Nigeria failing which its business and digital apps could be permanently blacklisted.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post How to Obtain Money Lenders License in Lagos State, Nigeria first appeared on Goldsmiths Solicitors.

This article highlights the requirements, processes and practical considerations to consider when registering imported products with NAFDAC in Nigeria.

Requirements for the Registration of Imported Products with NAFDAC

The requirements for the registration of imported products with NAFDAC will usually include the following:

A. Power of Attorney or Contract Manufacturing Agreement: A power of Attorney is required to authorize a local agent to act on behalf of the foreign manufacturer of the products. The Power of Attorney must be signed by either the Managing Director, General Manager, Chairman or President of the manufacturing company and it should also state the names of the products to be registered. If the foreign manufacturer does not wish to use a local agent, it may set up its own local company in Nigeria in order to register its products in its name, in which case, a Contract Manufacturing Agreement required.

B. Certificate of Manufacture and Free Sale: This is a document that provides evidence that the manufacturer is licensed to manufacture the products in its country of origin and the sale of the products does not contravene the laws of the manufacturer’s own country. It is issued by the relevant health or regulatory authority in the country of manufacture.

C. Comprehensive Certificate of Analysis: The Certificate of Analysis is issued by a quality control laboratory that has evaluated the products to be registered. It must state the brand name and batch number of the products and must also be signed by the laboratory analyst who evaluated the products in the country of manufacture.

D. Certificate of Incorporation: An applicant is expected to submit evidence of company incorporation with the Nigerian Corporate Affairs Commission (CAC). There are two approaches that may be adopted here. The first approach is that a local agent may be engaged and as such the local agent submits its company information and documents to NAFDAC for the product registration. The second approach is that the applicant may incorporate its own local company in Nigeria for the purpose of registering its imported products with NAFDAC.

E. Evidence of Trademark Registration: Trademark registration certificate or acceptance letter issued by the trademark office showing that an application has been made to register the trademark in in Nigeria in the name of the manufacturer.

F. Letter of Invitation for Good Manufacturing Practice: The manufacturer is required to write a letter of invitation addressed to NAFDAC, inviting its officials to visit and inspect the factory of the manufacturer abroad.

G. Labels/artworks: A print out of the label and artwork for the product to be registered is required. There must be a provision for NAFDAC registration number on the label and there must also be provisions for batch number, date of manufacture and expiry date together with other usage and storage instructions.

Product Registration Processes

The imported product registration processes usually involve the application, import permit, laboratory analysis, factory inspection and approval stages.

1. Application

NAFDAC Application form for the product registration is to be obtained and completed with the required information relating to the applicant and the product to be registered. Upon completing the application form, an application letter for the registration of the imported product on the applicant’s letterhead is addressed to NAFDAC. The application letter is to be submitted with the required documents outlined above together with the completed NAFDAC application form.

2. Import Permit

When an application has been successfully submitted and all supporting documents reviewed, an import permit is issued by NAFDAC for the importation of the samples of the product The imported of the sample is to enable NAFDAC conduct laboratory analysis on the products as outlined below. The import permit is usually valid for a period of 12 months. NAFDAC would usually specify how many samples they require.

3. Laboratory Analysis

The imported samples are submitted to NAFDAC laboratory for evaluation. The submission of the samples is accompanied with payment receipt of the official application and processing fee, certificate of analysis and a copy of the import permit. The laboratory analysis may not be successful if the outcome of NAFDAC analysis shows that there are any discrepancies in the information contained in the certificate of analysis. Where this happens, NAFDAC may issue a query for compliance directive. The compliance may involve importing new samples of the products together with an updated certificate of analysis of the products and resubmitting it for a fresh laboratory analysis. This will inevitably affect the times lines for approval discussed below.

4. Factory Inspection

Further to the letter invitation for Good Manufacturing Practice (GMP) and the payment of the required GMP fees, NAFDAC would usually visit the manufacturing facility in the country of origin to inspect it for Good Manufacturing Practice. In practice this visit does not always take place but the fee is still required to be paid.

5. Approval

The application for imported product registration is approved where NAFDAC is satisfied with the documentations provided, the samples provided and the Good Manufacturing Practice of the manufacturer in the country of origin. Upon the approval of the product, notice of registration is issued to the applicant. A unique NAFDAC registration number is also issued to the manufacturer. The registration is valid for 5 years from the date of registration and has to be renewed thereafter for another period of 5 years.

Product Registration Timelines

Depending on the product to be registered, the timelines for registration of imported products could vary between a period of 90 days or 120 days. The timeline is usually 90 days for food products and 120 days for drugs. In practice this is not always possible and registrations have been known to take longer than this due to a combination of factors.

Practical Considerations

In practice, it is not always possible to obtain registration in the timeline stated above. One of the reasons of this is the issuance of compliance directives by NAFDAC. Once a compliance directive is issued by NAFDAC, the clock stops ticking and time begins to count afresh from the period of when the compliance is remedied.  It is immaterial whether or not the compliance was done the same day or a within reasonable period thereafter.

Another possible cause of delay is that upon the submission of samples to NAFDAC, you would have to visit NAFDAC offices several times in person in order to obtain the result of the laboratory analysis as this is not usually communicated by email.

A further factor that may affect the registration is that during the application, the form together with all supporting documents are required to be uploaded online as part of the NAFDAC application process. In practice however, you are also required to submit the hard copies of these documents to NAFDAC offices.

An applicant that decides to register his own local company for the purpose of submitting an application to NAFDAC will have to company with other law relating to company registration in Nigeria including the requirement of obtaining tax registration with the Federal Inland Revenue Services (FIRS) and ensuring that the company is profiled on Taxpro-max for the purpose of validating the company’s profile with NAFDAC. In our experience, this usually takes some time to achieve and may further extend the registration time beyond the timeline provided by NAFDAC for product registration. The company is also required to file its annual returns to the CAC and file its monthly VAT returns whether or not it is trading.

Strike action by NAFDAC officials may sometimes also affect the timelines for the registration of a product with NAFDAC. We have experienced strike action from NAFDAC officials in the past which led to delayed product registration especially at the laboratory analysis stage.

In order to mitigate against most of these factors, it is advisable to ensure that from the outset, you have all your documents, samples, etc. ready and thoroughly reviewed before any application is made. It is also very important to promptly respond to any queries raised by NAFDAC so as to minimize the time between compliance and approval.

Conclusion

NAFDAC is the regulatory agency responsible for the registration of imported food, drugs, cosmetic products and medical devices. The application for imported product registration is made to NAFDAC with the supporting documents and the payment of official fees. NAFDAC approves the application for the product registration upon being satisfied with the applicant’s documentations and Good Manufacturing Practice. In practice however, it is not always possible to register a product within the time frame published by NAFDAC due to a variety of factors which are mostly internal.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

The post Practical Considerations on Registering Imported Products with National Agency for Food and Drugs Administration and Control (NAFDAC) first appeared on Goldsmiths Solicitors.

EEL Amount and Payment Cycle

An annual sum of $15,000.00 (Fifteen Thousand USD) is payable for each director and an annual sum of $10,000 (Ten Thousand USD) is payable for other categories of expatriates. This payment applies to any expatriate that is employed for 183 days or more.

Liability to pay the EEL

There appears to be no distinction on the size of the company and any company which employs expatriates (defined as non-Nigerians citizens) within Nigeria are liable to pay the EEL. This includes multinational companies, small and medium size enterprises (SMEs).

EEL Coverage

The EEL applies to private sector companies utilizing foreign workforce or relying on expatriate labour. These companies include but not limited to construction, agriculture, oil and gas, telecommunication, maritime and shipping, etc. It should be noted that the coverage of the EEL is in no way limited to the aforementioned industries as the coverage covers all industries engaging expatriate talent.

Duration of Residency/Employment

To be liable to pay the EEL, an expatriate worker must have been employed for a period not less than 183 days within a year. The 183 days may be calculated and spread across a period exceeding one fiscal year.

An employer would still be liable to pay the EEL in a situation where the expatriate is temporarily seconded or assigned to work in a foreign country provided the concerned expatriate occupies a Quota Position in a company operating in Nigeria.

Exemption from the EEL

The EEL does not apply to all accredited staff of diplomatic missions and government officials.

The Role of the Nigerian Immigration Service (NIS)

The NIS is responsible for determining the expatriates which fall within the purview of EEL. It is also responsible for enforcing the EEL in line with the provisions of the Nigerian Immigration Act, 2015 and the applicable Nigerian Visa Policies.

Reporting and Compliance

The Government is required to provide online platforms for employers of expatriates in Nigeria to report employment details of expatriates electronically.

Both the employers and expatriate employees have reporting and compliance obligations. Employers are required to maintain comprehensive records which include salary details, work permits, etc. on expatriate employees. The employers are also mandated to provide timely reports to government and notify any change in expatriate employment circumstances to the appropriate government agencies. There is also a need for employers to comply with filing deadlines.

The expatriate employee has the responsibility to ensure that accurate personal information and employment details are reported to employers and government.

Compliance Audits

The government agencies responsible for EEL enforcement may conduct compliance audits for accuracy of information provided to it and may also crosscheck the information provided with data from other sources such as immigration records and tax filings.

Offences, Sanctions and Penalties

Sanctions and penalties have been provided for various infractions relating to the EEL as follows:

1. Providing false information, returns, statements or representations to an immigration officer is punishable with imprisonment for a term of five years or a fine of N1,000,000 or both.
2. Failure to file EEL within 30 days attracts a fine of N3,000,000
3. Failure to register new employees within 30 days attracts a fine of N3,000,000.
4. Submission of forged or falsified information attracts a fine of N3,000,000.
5. Failure to renew EEL within 30 days to the expiry date attracts a fine of N3,000,000.

Conclusion

The EEL has been introduced to regulate and balance the benefits of expatriate employment with the protection of Nigeria’s local labour markets. The EEL is payable by any company employing expatriate employees in Nigeria. The EEL is enforced by the NIS and there are reporting and compliance obligations imposed on employers and expatriate employees. Sanctions and penalties also apply where there is a failure to comply with obligations imposed by the EEL handbook.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post What you Need to Know about the New Nigeria Expatriate Employment Levy first appeared on Goldsmiths Solicitors.

2023 was election year in Nigeria. It therefore was no surprise that we saw a lot of activities in the legal space in Nigeria, not least in the enactment of new laws, handing down of judicial decisions and the like. In our 2023 legal recap, we have highlighted some of the major legal, regulatory, and judicial changes that occurred.  This recap is divided into four parts representing four quarters of the year. In each quarter, we deal with all the major legal changes that occurred therein.

1^st Quarter (January – March 2023)

A remarkable and significant part of the first quarter was the signing into law of the Business Facilitation (Miscellaneous Provisions) Act 2023 and the Copyright Act 2023. The courts also handed down judgements on important issues surrounding which court should be the court of first instance for investments matters and the power of the Federal Inland Revenue Service (FIRS) on tax collections.

• On 20 January 2023, the Federal High Court sitting in Lagos declared in the suit between Wheatbaker Investment and Properties Limited v. EFCC and FIRS, that the Economic and Financial Crimes Commission (EFCC) lacked the statutory power to assume the power for the assessment, collection and enforcement of payment of taxes in Nigeria. The court held the appropriate agency with the power to do so is the Federal Inland Revenue Services (FIRS).
• The Supreme Court in the case between Mufutau Ajayi v. SEC and Ors., declared that the Investment and Securities Tribunal (IST) is the court of first instance for the resolution of capital market issues and not the Federal High Court.
• On 13 February 2023, former President Muhammadu Buhari assented to the Business Facilitation (Miscellaneous Provisions) Bill 2022. The Business Facilitation Bill was aimed at ensuring the ease of doing business in Nigeria.
• On 7 March 2023, the CBN issued the Operational Guidelines for Open Banking in Nigeria. It provides a framework that defines the principles for data sharing across the banking and payments system to promote innovations and broaden the range of financial products and services available to bank customers.
• The former President, Muhammadu Buhari signed the Fifth Alteration to the Nigerian Constitution, 1999 Bills into law. One of the significant changes made by this was for the financial independence of States House of Assembly and States Judiciary. Another of the bills which is the Fifth Alteration (Bill) No.33, allows states to generate, transmit and distribute electricity.
• On 17 March 2023, former President Muhammadu Buhari signed the Copyright Act 2023 which repealed the extant Copyright Act. The new Copyright Act aims to bring Nigerian copyright in tandem with 21^st century developments and protect the rights of authors among other innovative provisions.

2^nd Quarter (April – June 2023)

The second quarter saw the enactment of laws and the issuance of key financial regulations and guidelines by the Central Bank of Nigeria. Some of the laws enacted in this quarter include the Data Protection Act and the Electricity Act. The government also issued and launched national policies such as the National Dairy Policy to ensure the stability and sustainability of the sector. The courts also handed down some important judgements. Below are some of the highlights of the 2^nd quarter:

• On 5 April 2023, former President Muhammadu Buhari inaugurated the National Council for Digital Innovation and Entrepreneurship, a body established by the Startup Act 2022 and tasked with the responsibility of implementing the provisions of the Nigerian Startup Act, 2022.
• On 18 April 2023, the Federal High Court delivered judgement in Emmanuel Ekpenyong v. National Assembly & Ors which nullified sections 839, 842. 843, 844, 845, 846,847, 848 and 851 of the Companies and Allied Matters Act (CAMA) 2020 for being inconsistent with the provisions of the Constitution of Nigeria, 1999 particularly sections 36 (1), 38 and 40. The court held that the power granted to the Corporate Affairs Commission (CAC) to administer incorporated trustees under the above-mentioned sections of the CAMA infringed on the applicant’s right to freedom of thought, conscience and religion and the right to peaceful assembly.
• On 3 May 2023, the CBN issued the Guidelines for the Regulation of Representative Offices of Foreign Banks in Nigeria. The guidelines provide for the permissible and non-permissible activities of approved representative Offices of Foreign Banks in Nigeria and the licensing requirements.
• On 10 May 2023, the Federal High Court sitting in Abuja decided in the Incorporated Trustees of Media Rights Agenda v. National Broadcasting Commission (NBC), that the NBC lacked the power to impose fines on broadcast stations. The court also set aside the fines imposed on 45 broadcast stations on 1 March 2019.
• On 16 May 2023, the Federal Government launched the National Agricultural Seed Policy 2022. The policy revised the 2015 policy and it is aimed at ensuring that farmers have access to improved quality seeds among other important objectives.
• On 28 May 2023, the Federal Government announced the introduction of the Brown Card which is the legal instrument to confer permanent residency on non-Nigerians and also enabling them to live and work in Nigeria.
• On 29 May 2023, Nigeria sworn in a new president, Bola Tinubu, who on 8 June 2023 signed the Constitution of the Federal Republic of Nigeria, 1999 (Fifth Alteration) (No. 37) Bill, 2023 raising the retirement age for High Court judges from 65 years to 70 years.
• On 9 June 2023, President Bola Tinubu signed the Electricity Act 2023 into law which repealed the Electric Sector Reform Act, 2005. The Act now recognizes the power of federating states to regulate their electricity markets by issuing licenses to private investors to operate mini-grids and power plants within the states.
• On 12 June 2023, the president, Bola Tinubu signed the Student Loan Act 2023 which sets the conditions to provide financial support to indigent students in the form of interest-free loans.
• On 12 June 2023, the president, Bola Tinubu signed the Data Protection Act 2023. The Act established the Nigerian Data Protection Bureau, the regulatory authority responsible for enforcing the provisions of the Act. It also provides the legal basis for the processing of data, cross-border transfer of data, general obligations of data controllers and processors, rights of data subjects and penalties for violations among other salient provisions.
• On 14 June 2023, the CBN announced the operational changes to the foreign exchange market in Nigeria. The CBN by the announcement abolished segmentation, collapsed all segments into the Investors and Exporters (I&E) window, re-introduced the “willing buyer, willing seller” model at the I&E window. The RT200 Rebate Scheme and the Naira4Dollar Remittance Scheme were also stopped with effect from 30 June 2023.
• On 27 June 2023, the CBN issued the Guidelines on Contactless Payments in Nigeria. The guidelines provide the minimum standards and requirements for the operation of contactless payments in Nigeria and also specify the roles and responsibilities of stakeholders such as issuers, payment and card schemes, merchants, etc.

3^rd Quarter (July – September 2023)

This quarter saw a lot of policy and regulatory activities by the regulators in Nigeria. The Federal Inland Revenue Service (FIRS) directed all international shipping lines to settle their tax liabilities no later than 31 December 2023 or risk legal actions. The Nigerian Civil Aviation Authority also directed compliance with the regulations requiring mandatory valid insurance covers for airlines and allied service providers. The President, Bola Tinubu, also signed executive orders some of which changed the commencement date for some tax laws. Below are some of the highlights of the 3^rd quarter:

• The President, Bola Tinubu signed four Executive Orders. Some of the Executive Orders include the Finance Act (Effective Date Variation) Order 2023 which deferred the commencement date of the changes contained in the Finance Act 2023 from May 2023 to 1 September 2023 in line with the National Tax Policy; and the Customs, Excise Tariff (Variation) Amendment Order, 2023 which deferred the commencement date from 27 March 2023 to 1 August 2023.
• On 12 July 2023, the Federal Government disclosed its intention to amend the Cybercrime Act 2015 to address the threats posed by Artificial Intelligence and other emerging technologies.
• The Court of Appeal delivered judgement in Federal Road Safety Commission (FRSC) v. Darlington Ugo Ehikim to dismiss the appeal filed the FRSC. The Court of Appeal upheld the judgement of the Federal High Court that ruled that the FRSC can only operate on federal roads and do not have the right to operate on state and local government roads.
• On 25 July 2023, CAC announced that it shall discontinue manual submissions for winding up and dissolution, receivership, company voluntary arrangements, administration and netting with effect from 7 August 2023.
• On 31 July 2023, CAC disclosed its plan to strike off the names of 100,000 companies from its register for failure to file annual returns for a period of 10 years. Further to this disclosure, on the same day, CAC published the names of the 94,581 companies to be struck off its register.
• On 2 August 2023, the Court of Appeal in the case of Minister of Interior & Ors v. Eti-Osa Local Government & Ors, set aside the judgement of the Federal High Court which stopped the Federal Government from further registering marriages within some Local Government Councils. The Court of Appeal held that both the Federal Government and Local Government Councils have the legal authority to celebrate, contract and register marriages.
• On 11 August 2023, the Nigerian Civil Aviation Authority (NCAA) directed all airlines and allied service providers in the aviation industry to comply with the Nigerian Civil Aviation Regulations (Nig. CARs) 2022 which became effective from 10 July 2023. The regulations require airlines and allied service provides not to operate unless they have adequate and valid insurance cover.
• On 21 August 2023, the Federal Inland Revenue Service (FIRS) directed international shipping companies operating within Nigeria’s territorial waters to settle any pending tax liabilities by 31 December 2023 failing which the FIRS may commence legal actions against non-complying international shipping companies.
• On 20 September 2023, the Central Bank of Nigeria (CBN) announced that manual applications for Microfinance Bank licence would end by 31 December 2023. The CBN also unveiled a new platform for the submission of Microfinance Bank licence applications known as the CBN Licensing, Approval and Other Requests Portal (CBN LARP).

4^th Quarter (October – December 2023)

This quarter was remarkable especially as Nigeria won the case against Process and Industrial Development Limited (P&ID) at the Business and Property Court in London effectively putting an end to a long running legal case which had the potential of enforcing an $11 billion arbitration award against Nigeria. There were also important decisions handed down by the local courts. One such case is the decision of the Federal High Court which declared portions of the tax appeal rules as unconstitutional for constraining the right of appeal of a taxable person. The regulators also issued guidelines and regulations that apply to various sectors. Below are some of the highlights of the 4^th quarter:

• On 4 October 2023, the Nigerian Minister of Interior, disclosed that the Federal Government has started taking steps to review Nigerian visa on arrival and passport policies.
• On 7 October 2023, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issued and presented the first Wholesale Gas Supply Licence pursuant to section 142 of the Petroleum Industry Act 2021 to Ohuru Trading Limited.
• The Nigerian Communications Commission (NCC) issued the Conditions for Offering Closed user group (CUG) Services in the Nigerian Telecom Industry to regulate the provision of CUG services in Nigeria. The conditions were scheduled to come into operation on 1 November 2023 and would remain valid until reviewed by NCC.
• On 10 October 2023, the National Health Insurance Authority (NHIA) launched the National Health Insurance Act Operational Guidelines 2023 which clarifies the roles, responsibilities and obligations of various stakeholders and facilitates the implementation of health insurance in Nigeria.
• On 23 October 2023, Nigeria won the long running dispute in the Business and Property Court in London in the suit against Process & Industrial Developments Limited (P&ID) in a judgement delivered by Justice Robert Knowles. The court also stopped the enforcement of the $11 billion arbitration award by P&ID on the ground that the process that led to the award of the contract to P&ID was manifestly fraudulent.
• On 1 November 2023, Enugu state government stated that courier operators in the state must obtain the requisite licence to operate no later than 1 December 2023. The directive would see courier operators keep and maintain pickups and delivery records and see their riders abide with strict regulations.
• On 2 November 2023, CAC issued the Public Notice on the Full Application of Penalties for Failure to File Annual Returns by Companies and Recovery of Penalties Against Company Directors and Officers. By the public notice, CAC advised companies to file their annual returns as CAC shall commence the enforcement of the strict penalties prescribed by the Company Regulations 2021 by 1 January 2024.
• On 9 November 2023, in the case of Joseph Bodunrin Daudu SAN v. Minister of Finance, Budget and National Planning & 2 Ors, the Federal High Court nullified certain sections of the Tax Appeal Tribunal (Procedure) Rules 2021, the Federal High Court of Nigeria (Federal Inland Revenue Service) Practice Directions 2021, and the Federal High Court of Nigeria (Tax Appeals) Rules 2022 which require the payment of fifty percent of disputed assessed tax before appeal as unconstitutional by constraining the constitutional guaranteed right of appeal.
• On 14 November 2023, in the case of Maritime Workers Union of Nigeria v. Incorporated Trustees of Freight Forwarders Transport Association & Ors, the National Industrial Court of Nigeria sitting in Port Harcourt, Rivers State declared that the Corporate Affairs Commission does not have the power to register trade unions.
• On 5 December 2023, CAC announced that it shall begin the implementation of the N100,000 million minimum paid-up capital for the incorporation of companies with foreign participation in Nigeria. It also directed existing companies with foreign participation with less than N100,000 million minimum paid-up capital to increase it to meet the threshold within 6 months beginning from 5 December 2023 failing which they shall be met with compulsory winding up proceedings at the instance of CAC. The CAC subsequently noted that reference should have been to “issued capital” and not “paid-up capital” and stated that it shall issue an amended notice to reflect minimum issued capital.

Conclusion

2023 has been an interesting year in the Nigerian legal and regulatory landscape. The regulators were actively issuing important rules and regulations to address and provide guidance on financial, corporate, tax, insurance matters, etc. New laws such as the Electricity Act, Data Protection Act and Copyright Act were also enacted. The courts handed down important decisions which put a finality to some of the assumed powers of certain government agencies such as the FIRS and CAC. Importantly, Nigeria won the case against Process and Industrial Developments Limited (P&ID) for the enforcement of the $11 billion arbitration award in London in what was described as a manifestly corrupt contract.

We use this opportunity to wish all our clients a very Merry Christmas and best wishes for the New Year 2024. Thank you all for your support.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Goldsmiths Solicitors – Legal Recap for the Year 2023 first appeared on Goldsmiths Solicitors.

Like in all common law jurisdictions, relationships between employers and employees in Nigeria are primarily governed by their contracts of employment and any applicable employment laws for the time being in force. Contracts of employment would typically deal with issues such as nature of work, hours of work, emoluments, holidays, sickness, termination, notice period, disciplinary procedures, etc. Despite the provisions of the contracts, disputes still arise between the parties. Some of the issues that lead to disputes in employment include termination without notice, failure to follow laid down procedure/policies, non-payment of termination benefits, failure to give notice of termination, withholding or deduction of salaries, etc. When this happens, the aggrieved party mostly the employee would usually issue proceedings against the employer at the National Industrial Court after making demands of the employee. The court with exclusive jurisdiction to deal with employment disputes in Nigeria is the National Industrial Court.

Legal Considerations for Employers

Prior to any termination of employment, it is very expedient that employers carry out some house-keeping with respect to important issues that may arise in the course of termination. Importantly, some of the legal issues which employers are expected to consider in the termination of any employment contact can be categorized into pre-termination, during termination and post-termination.

Pre-termination

The legal issues which employers should avert their minds to and effectively consider before the termination of the employment of an employee includes:

1. Review of Employment Contract: Prior to terminating any employment, it is important for the employer to thoroughly review the terms and conditions of the employee’s engagement and familiarize themselves with the provisions of the contract. Particular attention should be paid to issues like notice period, payment in lieu of notice, outstanding benefits including bonuses, return of company assets, etc.
2. Review of the Employment Laws: In addition to the review of the contract, employers should ensure they review the relevant laws governing their relationship and specific industry. Some local laws protect certain industries and it is important that any termination complies with the provisions of industry specific laws, like local content laws.
3. Compliance with Company’s Policies: Most organizations would have company policies usually contained in the staff handbook. The handbook would typically deal with issues such as disciplinary procedure, warnings, suspensions, definition of (gross) misconduct, payment in lieu of notice and the like. It is very important that prior to any termination an employer familiarizes itself with these policies and ensure that due process is followed and that the letter and spirit of the policies are complied with.
4. Disciplinary Hearing: Some terminations would be as a result of breach of company policy such as conflict of interest, insubordination, habitual lateness to work, misuse of employer’s resources, absence without authorization, etc. In such situations, employers are also expected to conduct disciplinary hearings for any employee that breaches any of the employer’s policies. The essence of the disciplinary hearing is to ensure that the employee is given the opportunity to explain themselves and for the employer to consider the next step of action which is either to accept the employee’s explanation, warn, suspend, or dismiss the employee. Whatever is the case, employers must ensure that they comply with their own laid down disciplinary procedure. Contemporaneous notes must be kept of the proceedings and any decision made during the disciplinary process must be in writing. Any person subjected to any such proceedings must be given a fair hearing. The courts are likely to find that the employee was not given a fair hearing if the laid down procedure was not followed.

During Termination

Having followed some or all of the steps outlined above and satisfied that the employment should be terminated, it is important that the employer considers the issues discussed below during the termination process.

1. Termination Letter: In the course of terminating employment employers are required to issue termination letter to the employee. The termination letter would inform the employee of the reason for the termination of the employment. If the termination was due to a breach of policy resulting in a disciplinary hearing, it is important to set out the allegations against the employee and the findings made as part of the termination process. The letter will also inform the employee whether or not the termination is immediate and without notice, the effective date of termination, any payments in lieu of notice, any accrued benefits, return of company assets, including ID cards, etc.
2. Payments to the Employee: Further to the termination letter issued to the employee, the employer is required to pay any outstanding benefits including the salary of the employee for the period already worked. Except in cases of gross misconduct, in the event that, the termination is immediate, the employer is required to pay the employee’s the required salary in lieu of notice as set out in the contract. Other earned entitlements such as bonuses and allowances are also to be paid to the employee within reasonable time upon termination.
3. International Best Practices: Employers have an obligation to ensure that every action taken with respect to the termination or dismissal of employees complies with international labour best practices. Over the years, the National Industrial Court of Nigeria has departed from mere compliance with local laws and provisions of contract and decided that the processes leading to the termination or dismissal of employees must comply with international labour best practices. For example, it used to be the practice in Nigeria to simply state in a termination letter that an employee’s services ‘were no longer required’. The NIC has held over several cases that an employer cannot now terminate the employment of an employee without stating the reason for such termination. It is therefore very important that employees look beyond the mere provisions of the contract of employment and local laws when considering terminations.

Post-Termination

Despite following the above steps, an employee who is terminated could still be aggrieved by the termination and take steps to claim compensation after the termination. If this occurs, some of the steps to be taken by the employer are highlighted below.

1. Letter Before Action: It is usual for an employee who is dissatisfied by the termination of his employment to issue letter before action to his employer. This is usually done through the employee’s lawyers but it is not unusual for the employer to receive one directly from the employee. A letter before action would typically contain the purported ways in which the former employees say they are dissatisfied, proposed claims and demands of the employee and an ultimatum that the employer meets the demands of the employee within a particular time. It would usually end with a threat that if the demands are not met within the time stated, legal action shall commence.

2. Seek Legal Advice: An employer that has received a letter before action is expected to seek legal advice immediately with respect to the proposed claims and demands of the employee in order to determine how best to respond to the notice before legal action. It is best to proceed on the basis that legal action shall be commenced if there is no response by the employer within the time stated in the letter before action.

3. Respond to Notice before Legal Action: Having assessed the demands made in the letter before action and the all the processes leading up to the termination of the employment, the employer is expected to respond appropriately to the letter before action. There are several ways to respond to a letter before action. First, the employer could effectively respond by rejecting the claims and demands of the employee where employer is of the view that the termination has fully complied with the employee’s contract, the company policies and the law. The employer could also respond by paying the demands made in the letter before action in full or they could respond by making an offer or calculating what they say is the former employee’s entitlement following their termination. Whatever the case, the general advice is never to ignore a letter before action when received.

4. Legal Action: It could be the case that an employee commences legal action against his employer despite the employer’s response to the employee’s letter before legal action. The legal action by the employee will set out the case of the employee and his demands before the court. The employer is required to promptly seek legal assistance in defending the legal action commenced by the employee.

Conclusion

The relationship between employers and employees in Nigeria are mostly governed by their contracts of employment and the applicable employment laws. Employers are expected to have regard to some legal considerations before, during and post-termination of employments. Before the termination, employers are required to have adequately reviewed the contract of the employee, company’s policies and the law. It is also important that disciplinary hearing is conducted before termination where applicable.

During termination, the employer is required to issue termination letter which details the allegations and reasons for the termination. The employer is also required to make appropriate payments such as earned bonuses, salaries, payment in lieu of notice etc., to the employee. Employers are expected to go beyond the provisions of the contract and local laws and comply with international labour best practices. After termination, an aggrieved employee may issue letter before legal action to the employer. The employer is required respond to the letter before legal action. Finally, an aggrieved former employee may commence legal action at the National Industrial Court against the employer in which case the employer is required to seek legal assistance to defend the legal action.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Termination of Employment in Nigeria: Legal Considerations for Employers. first appeared on Goldsmiths Solicitors.

The most recent attempt prior to this Act, was the Fifth Alteration (No. 33) Bill 2022 (The Electricity Constitutional Amendment), which was signed in the last days of the previous administration and altered the Constitution of the Federal Republic of Nigeria to empower states to enact laws with respect to the generation, transmission, and distribution of electricity in areas covered by the national grid system within their state.

Overview

The Electricity Act 2023 repeals the Electric Sector Reform Act, 2005. The primary objective of the Act is  to provide a comprehensive legal and institutional framework to guide the operation of a privatized, contract and rule-based competitive electricity market in Nigeria, and to attract private sector investments in the entire power value chain of the Nigerian Electricity Supply Industry (NESI).

Applicability of the Act: The Act applies throughout the country with respect to all aspects and segments of the power sector value chain in Nigeria, but nothing in the Act invalidates any law passed by the House of Assembly of any state with respect to all aspects of generation, transmission, system operation, distribution, supply, and retail of electricity within the state. What this means is that states still have the liberty to enact laws through their state Houses of Assembly to regulate state electricity market, create power stations for generation of electricity for supply, transmission and distribution to rural unserved and underserved areas.

Creation of Integrated National Electricity Policy and Strategic Implementation Plan: To further guide the overall development of the electric power sector in Nigeria for optimal utilization of resources like coal, natural gas, nuclear substance, and materials, as well as renewable energy sources for the generation, transmission and distribution of electricity, the Act mandates the Federal Government to create an Integrated National Electricity Policy and Strategic Implementation Plan. This new strategic policy implementation plan is to be initiated through the ministry in charge of power, within one year of the commencement of the Act upon approval of the Federal Executive Council (FEC) and may be reviewed periodically but not later than every five years.

Validity of the pre-privatization and post-privatization of the Nigerian Electricity Supply Industry (NESI): The Act recognizes the validity of the pre-privatization and post-privatization of the Nigerian Electricity Supply Industry (NESI) which resulted in the unbundling of the defunct National Electric Power Authority (NEPA), into 18 distinct Power generation, transmission, and distribution companies, which emerged from the Power Holding Company of Nigeria (PHCN) which was the initial holding company. The Act also provides for the regulation and supervision of competition in the substantially privatized electricity market, by ensuring that the federal minister in charge of power exercise supervisory powers and functions.

Creation of the Nigerian Electricity Regulatory Commission (NERC): The Act creates the Nigerian Electricity Regulatory Commission (NERC) as the apex regulator of the NESI. It empowers NERC to among other things, license and regulate persons engaged in the generation, transmission, system operation, distribution, supply and trading of electricity, create market rules and grid codes, safety, security, reliability and quality standards, establish consumer rights and obligations regarding the provision of electricity services, monitor the general operation of the electricity markets, and place sanctions as necessary in deserving circumstances. Any grievance with the decisions or actions of the NERC by any person with respect to the cancellation of a licence, refusal to issue or renew a licence, etc.  is subject to a review first by NERC upon an application made to it and it may give a final decision rescinding or varying its earlier decision. Any further grievance with the final decision given by NERC pursuant to its review is subject to an appeal at the Federal High Court. The Act further states that a person shall not institute and maintain a suit against NERC without first initiating and exhausting the internal dispute resolution with NERC.

Compulsory installation of meters for distribution of electricity to consumers. The Act makes it mandatory for electricity distribution licensees to install meters for distribution of electricity to consumers. There is also a corresponding mandatory obligation on all consumers of electricity to allow the installation of meters in their premises and pay bills chargeable to the electricity distribution licensees. The Act provides that where a consumer fails to pay bills, the electricity distribution licensee may cut off the consumer’s connection to power after giving notice in the manner prescribed by the NERC.

Establishment of the Power Consumer Assistance Fund: The Act establishes a Power Consumer Assistance Fund (PCAF), which shall be used to subsidize electricity supply to underprivileged power consumers. This category of underprivilege power consumers shall be determined by the Minister in charge of power in consultation with the NERC.

Creation of the Rural Electrification Agency: The Act creates the Rural Electrification Agency with the objectives of coordinating corporate bodies, private investors using renewable energy sources for rural electrification in the rural, unserved, underserved areas, thereby promoting universal access to affordable and sustainable electricity, and improving the quality of life and economic opportunities of rural, unserved, and underserved communities in Nigeria.

Key Highlights

• The Electricity Act, 2023 repeals the Electric Power Sector Reform Act, 2005, the Nigerian Electricity Management Services Agency Act, 2015, the Hydroelectric Power Producing Areas Development Commission (Establishment Act, Etc.) and its various amendment Acts
• Under the Act, the Federal Government shall support the development and utilization of renewable energy sources for the generation, transmission, system operation and distribution of electricity.
• The Transmission Company of Nigeria (TCN) is obliged to incorporate a company to be known as Independent System Operator (ISO) upon a written directive of NERC which is to be licensed by NERC to carry out the market and system operation functions such as generation scheduling, commitment and dispatch, transmission congestion management, administration of wholesale electricity market, etc. which were hitherto being exercised by TCN.
• A licence is required for electricity generation (excluding captive generation), transmission, distribution, supply trading and system operation.
• The construction, ownership and operation of an undertaking for generating electricity not exceeding 1 megawatt (MW) or an undertaking for distribution for electricity with a capacity not exceeding 100 kilowatts (KW) does not require a licence.
• The Act encourages private sector investments in the generation, transmission, distribution, and supply of electricity from renewable sources such as solar, wind or water.
• The Act provides for the introduction of tax incentives as are necessary to incentivize, promote and facilitate the generation and consumption of electric power from renewable energy sources.
• The Act recognizes the power of federating states to regulate their electricity markets by issuing licenses to private investors to operate mini-grids and power plants within the state. Interstate and international electricity delivery from such mini grids is however prohibited to state as it is within the remit of the Federal Government.
• The NERC maintains its status as the apex regulator of electricity sector in Nigeria, and until the federating states pass their own electricity laws, the NERC shall continue to regulate electricity business and markets within the federating states.
• The Act creates a Power Consumer Assistance Fund (PCAF), which shall be used to subsidize electricity supply to underprivileged power consumers.
• The Act creates the Rural Electrification Agency with the objectives of coordinating the use of renewable energy sources for rural electrification and promoting universal access to affordable and sustainable electricity, which improve the quality of life and economic opportunities.
• The Act creates offences and imposes penalties. Offences such as theft of electricity, theft of electric lines and materials, receiving stolen electricity, interference with meters or works of licensees, negligently breaking or damaging, intentionally disrupting power supply, damage to public street lightings, obstruction and impersonation, general contravention of orders and regulations and their penalties are specifically provided for under the Act.

Conclusion

The deficiency in power transmission in Nigeria has been attributed to inadequate power transmission infrastructure. The decentralization of power generation and distribution under the Electricity Act 2023, which gives states the power to develop legislations to create local markets for generation and transmission of power to all areas within their boundaries is anticipated to enhance affordable and sustainable electric power to all areas. Indeed, with the introduction of a parallel electricity market in the states, customers within the states can decide to remain connected to the national grid or opt for a mini-grid operator licensed by the state within which they reside in. The shift from fossil-based systems of energy production and consumption to renewable energy sources will create a market for renewable energy and stimulate private sector investments.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post What the Electricity Act 2023 Means for the Electricity Market and Stakeholders in Nigeria. first appeared on Goldsmiths Solicitors.

This article provides an overview of the new law, it considers the objectives, application, principles guiding the processing of personal data, cross-border transfer of personal data and other key provisions.

Application of the Nigeria Data Protection Act

The Act applies to data controllers or data processors domiciled, resident or operating in Nigeria and the processing of personal data that occurs within Nigeria. It also applies to situations where the data controllers or data processors are not domiciled, resident or operating in Nigeria but are processing the personal data of data subjects in Nigeria.

The Act does not apply to the processing of personal data which is done solely for personal or household purposes by one or two more persons. The Act also does not apply to the processing of personal data necessary for the investigation, detection or prosecution of crimes or the prevention or control of a public health emergency, etc.

Objectives of the Act

The Act seeks to achieve the following objectives:

1. Safeguard the fundamental rights, freedoms and interest of data subjects as guaranteed under the Constitution.
2. Regulate the processing of personal data and ensures that personal data is processed in a fair, lawful and accountable manner.
3. Protect data subjects’ rights and provide means of recourse and remedies in the event of breach.
4. Ensure that data controllers and data processors fulfill their obligations to data subjects.
5. Establish an impartial, independent and effective regulatory Commission to superintend over data protection and privacy issues and supervise data controllers and data processors.

Establishment and Functions of the Nigeria Data Protection Commission

The Act established the Nigeria Data Protection Commission (“the Commission”) for the purposes of achieving the objectives of the Act. Thus, the Commission has the core functions of regulating the deployment of technological and organizational measures to enhance personal data protection, accredit, licence, and register suitable persons to provide data protection compliance services, register data controllers and data processors, receiving complaints relating to violations of the Act or any subsidiary legislations.

Principles of Processing Personal Data

Data controllers and data processors process personal data on the basis of care and accountability to data subjects. Accordingly, data controllers and data processors must act in a fair, lawful and transparent manner, collect data only for specified and legitimate purpose, hold and retain the data accurately, not longer than necessary, and generally ensure appropriate security measures are taken to secure the personal data.

Consent and Lawful Basis for the Processing of Personal Data

Consent of a data subject is very important for processing personal data. A data subject is a person whose information or data is being processed or sought to be processed. A data controller or data processor must obtain the consent of a data subject before processing his/her data, and it lies on the data controller or processor to prove that the data subject has given consent. The request for consent must be in a clear simple language and format with information that the data subject reserves the right to withdraw the consent at any time.  The consent must be freely and intentionally given either in writing, orally or through electronic means. Silence or inactivity does not amount to consent. In the case of a child, or person lacking legal capacity), the consent of a parent or guardian will suffice. The need to obtain consent of parent or guardian, may however not apply where the processing of personal data is necessary to protect the vital interests, or for the purpose of the education, medical or social care of such child or person lacking legal capacity, or where it is necessary for proceedings before a court.

The consent must be given for the specific purpose(s) for which personal data is processed, or where the processing is necessary for the following purposes:

1. For the performance of a contract to which the data subject is a party
2. For compliance with a legal obligation to which the data controller or data processor is subject
3. To protect the vital interest of the data subject or another person
4. For the performance of a task carried out in the public interest or in the exercise of official authority vested in the data controller or data processor
5. For the purposes of the legitimate interest pursued by the data controller or data processor, or by a third party to whom the data is disclosed.

Obligations of a Data Controller

• Obligation to Provide Information: A data controller has the obligation to provide certain necessary information to a data subject before collecting his personal data. The information which the data controller must provide to the data subject include the following:

1. Identity, residence or place of business and means of communication with the data controller and its representative.
2. Recipients or categories of recipients of the personal data
3. Existence of the rights of the data subject
4. Retention period for the personal data, etc.

The data controller shall make this information available by means of a privacy policy which should be expressed in a clear, concise, transparent, intelligible and easily accessible format.

• Data Privacy Impact Assessment Obligation: The assessment is a process designed to identify the risks and impact of processing personal data. A data controller is required to conduct a data privacy impact assessment where the processing of personal data may result in high risk to the rights and freedom of a data subject. This is to be conducted before the processing of personal data.
• Obligation to Erase Personal Data: A data controller has the obligation to erase the personal data of a data subject without undue delay where it is no longer necessary or where the data controller has no other lawful basis to retain the personal data.

Obligations of a Data Processor

Data controllers are engaged by data processors to process personal data. These data processors are also mandated to comply with the principles for the processing of personal data, assist the data controller to fulfill its obligation, implement appropriate technical and organizational measures to ensure the security, integrity, and confidentiality of personal data. Where a data processor engaged by a data controller further engages another data processor, the data processor directly engaged by the data controller is obliged to notify the data controller of its engagement with another data processor.

Data Protection Officers

Data controllers that process significant personal data are required to designate a person as a Data Protection Officer (DPO). The DPO may be an employee of the data controller or a person engaged by a service contract and must possess expert knowledge on data protection laws and practices. A DPO advises data controller, monitors compliance with the Act and related data protection policies of the data controller. The DPO also act as the contact point for the Commission on data processing issues.

Rights of Data Subjects

A data subject has the following rights with respect to the processing of his personal data by a data controller.

1. Right to Confirmation from a Data Controller. A data subject has the right to obtain from a data controller without constraint or unreasonable delay, confirmation as to whether the data controller or a data processor operating on its behalf is storing or otherwise processing personal data relating to the data subject and if so, the purpose of the processing, the recipients or categories of recipients to whom the personal data have been disclosed or will be disclosed, etc.
2. Right to receive a copy of his personal data in a commonly used electronic format.
3. Right to correction or deletion of the data subject’s personal data where correction is not possible where the personal data is inaccurate, out of date, incomplete or misleading.
4. Erasure of personal data of the data subject without undue delay
5. Right to restrict the processing of personal data
6. Right to withdraw consent to the processing of personal data at any time.
7. Right to object to the processing of personal data relating to the data subject.
8. The right to reject being subject to a decision based solely on automated processing of personal data.
9. The right to receive personal data in a structured, commonly used and machine-readable format and be able to transmit it to another data controller without any hindrance.

Data Security

Data controllers and data processors are required to implement appropriate technical and organisational measures to ensure the security, integrity and confidentiality of personal data in the possession. They must ensure that personal data are protected against accidental or unlawful destruction, loss, misuse, alteration, unauthorized disclosure or access.

The security measures that may be implemented to ensure personal data security include encryption, periodic assessments of risks to processing systems and services, regular testing, assessing and evaluation of the effectiveness of the measures, regular updating of the measures and introducing new measures to address shortcomings, etc.

Personal Data Breaches

Personal data breach is the breach of the security of a data controller or data processor which leads to or may lead to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to personal data transmitted, stored or processed.

Data processors are required to notify data controllers or engaging data processors of personal data breaches which the data processors store or process upon becoming aware of it by describing the nature of the personal data breach and the number of data subjects and personal data records concerned and also respond to all information requests from the data controllers or the engaging data processors.

Data controllers should also notify the Commission of personal data breaches which are likely to result in a risk to the rights and freedoms of individuals within 72 hours of becoming aware of such breach. Data controllers are also to communicate the personal data breach to the data subjects in a plain and clear language including measures that could be taken by the data subjects to mitigate any possible adverse effects.

Data controllers and data processors are also required to keep a record of all personal data breaches, facts relating to the breaches, its effects and remedial actions taken.

Cross-border Transfers of Personal Data

Data controllers and data processors are not allowed to transfer or permit the transfer of personal data from Nigeria to another country unless:

1. The recipient is subject to a law, binding corporate rules, contractual clauses, code of conduct or certification mechanism that affords an adequate level of protection.
2. meets one of the lawful basis for transfer of personal data outside Nigeria.

The level of protection considered adequate must uphold the principles that are substantially similar to the conditions for processing personal data provided by the Act. An adequate level of protection is assessed by taking into account the existence of an effective data protection law, access of public authority to personal data, existence of an independent supervisory authority, etc.

Registration of Data Controllers and Data Processors

Data controllers and data processors of major importance are mandated to register with the Commission within six months after the commencement of the Act or upon becoming a data controller or data processor of major importance. Data controllers or data processors of major importance are data controllers or data processors that process personal data of particular value or significance to the economy, society or security and are resident or operating in Nigeria.

The Commission is required to maintain and publish a register of duly registered data controllers and data processors of major importance on its website. A data controller or data processor of major importance shall be removed from the register where it ceases operation.

Enforcement and Penalties

A data subject who is aggrieved by the action, inaction or decision of a data controller or processor may lodge a complaint with the Commission and it may investigate the complaint where it is not vexatious or frivolous.

The Commission may also issue a compliance order once it is satisfied that any requirement of the Act or subsidiary legislation has been violated or likely to be violated by a data controller or data processor. The order may be a warning, order to comply with the request of a data subject or a cease-and-desist order. The Commission may also issue an enforcement order or impose a sanction for violation of the Act or a subsidiary legislation.

The penalty or remedial fee for violation of the Act or subsidiary legislation is:

1. Higher maximum amount, which is the greater of N10,000,000 and 2% of its annual gross revenue in the preceding financial year, in the case of a data controller or data processor of major importance.
2. Standard maximum amount, which is the greater of N2,000,000 and 2% of its annual gross revenue in the preceding financial year, in the case of a data controller or data processor not of major importance.

Conclusion and Remarks

The Nigeria Data Protection Act, 2023 is an important piece of legislation and has been long in coming. It provides for the basic principles and the lawful bases for the processing and transfer of personal data in Nigeria and applies to both resident and non-resident data processors. It provides for the responsibilities of data controllers and data processors while also providing for the rights of data subjects. The processing of sensitive personal data and the personal data of children and persons lacking legal capacity to consent must follow the applicable principles as provided by the Act. Data security measures which are robust are expected to be put in place by data controllers and data processors to protect against the risk of personal data breaches. The Act creates the Nigerian Data Protection Commission which has the overall responsibility to ensure compliance and impose penalties where necessary. Both resident and non-resident data processors are advised to pay particular attention to this new legislation as they are now required to take specific steps to ensure compliance with the Act.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Better Late than Never: Nigeria Finally Passes the Data Protection Act first appeared on Goldsmiths Solicitors.

A Trademark is a unique sign or mark that distinguishes the goods and services of one business from another. A mark can either be a device, brand, heading, label, ticket, name, signature, word, letter, numeral, or any combination thereof. Most businesses, companies or organizations have distinctive marks that sets them apart from other businesses.

The relevant law that governs Trademark in Nigeria is the Trademarks Act, Laws of the Federation of Nigeria 2004 (LFN 2004). This article explains the procedure for the registration of trademarks, enforcement, and remedies for the infringement of trademarks in Nigeria.

Requirements for Registration of Trademark:

1. Applicant’s details (i.e., name, signature, nationality, and address).
2. Details of the trademark.
3. A representation of the mark.
4. The classification of goods and/or services (Nigeria uses the Nice Classification of Goods and Services).
5. A signed Power of Attorney

Procedures for Registering a Trademark:

1. Availability search: The first step is to conduct an availability search at the Trademark Registry to ensure that there are no marks similar or in conflict with the proposed mark.
2. Application: If there are no conflicts, an application for trademark registration is filed at the Trademark Registry. After submission of the application form and payment of the necessary fees, the Registrar issues an Acknowledgement Letter confirming receipt of the application.
3. Acceptance: Where the application is approved on the grounds that the mark is distinctive, a Letter of Acceptance will be issued within one to three months by the Registrar of Trademarks.
4. Publication and Certification: Upon the acceptance of the application, the Registrar ensures the notice of the application is published in the Nigerian Trademark Journal. The purpose of this publication is to notify interested parties who may have objections to the application. The opposition period is two months from the date of publication. Where there are no objections or where an objection raised has been upheld, the Applicant may proceed to make an application for the issuance of Certificate of Registration and subsequently, a Certificate of Registration would be issued by the Registrar of Trademarks.

A trademark once registered is valid in Nigeria for an initial period of 7 years in the first instance and subsequent renewals are valid for 14 years.

Trademark Infringement

A trademark is infringed when a person without consent from the trademark owner uses the mark or an identical mark in a way that is likely to deceive the public or cause confusion. Where such rights are infringed upon, the proprietor can institute an action in court for the infringement of such trademark. The court with jurisdiction for trademark proceeding in Nigeria is the Federal High Court. The burden of proof lies on the Proprietor of the trademark to show that his right has been infringed upon. Section 5 (2) Trademarks Act provides that:

“without prejudice to the generality of the right to the use of a trade mark given by such registration as aforesaid, that right shall be deemed to be infringed by any person who, not being the proprietor of the trade mark or a registered user thereof using it by way of the permitted use, uses a mark identical with it or so nearly resembling it as to be likely to deceive or cause confusion, in the course of trade, in relation to any goods in respect of which it is registered.”

The owner of an unregistered trademark on the other hand may institute an action for passing off where there is an infringement.

Enforcement of Rights and Available Remedies

The owner of a registered trademark can enforce his rights through the any of the following options:

1. Filing an opposition within 60 days of the publication in the Trademark journal against the registration of an identical or similar trademark. This is done by filing a Notice of Opposition, the Respondent is required to file a counter statement and the matter will be determined by the Registrar as to whether registration of the mark will be entertained or not. The notice must be in writing and must contain the grounds for the opposition.
2. Making a formal application to the Trademark Registrar for the cancellation of the trademark. This however should be supported with evidence of prior registration of the mark by the proprietor.
3. Sending a cease and desist letter to the infringer to inform him of the trademark that is being infringed and warning him to stop further violations of the mark. Where such infringer refuses, a legal action can be instituted.
4. Apply for a search and seize order where the infringement is known to the proprietor of the Trademark. It allows the owner the opportunity to enter the premises of the infringer without notice to seize all infringing goods.

Where the owner of a trademark commences legal action for the enforcement of his exclusive right to a trademark, the following remedies may be available through the courts:

1. The owner of the trademark can seek damages for compensation for losses suffered in relation to infringement of the trademark especially when such infringement impacts negatively on the owner’s business. The evidence must show a direct causal relationship between the infringement and actual harm.
2. Injunctive reliefs may be sought and granted. The court could prevent the infringer from further using the mark or may restrict usage of the mark to certain areas or impose certain conditions for its usage.
3. An Anton Pillar order can be sought to give access to the owner to enter the premises where the infringed goods are kept and take possession of it.
4. The court can also grant an order of account of profit to recover all the profits made by the infringer from the unauthorized use of the Trademark where such act amounts to gross loss of profit on the part of the owner.

Conclusion

The benefits of trademark registration generally and in Nigeria cannot be overemphasized. The certificate of trademark registration issued by the Registrar, is irrefutable evidence of registration of a mark and confers a right on the owner to use the trademark to the exclusion of others. Not only is a registered trademark protected under the law, but it also protects the identity and goodwill of the brand. The owner of a registered trademark can equally assign or transfer his trademark to an individual or corporate entity and generate revenue from it. Any infringement of the registered trademark could be met by an enforcement action and the registered trademark owner could get injunctive order or damages against the infringer.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post Trademarks in Nigeria: Registration, Infringement and Enforcement first appeared on Goldsmiths Solicitors.

A Payment Solution Service Providers (PSSP) licence is a financial licence within the payments system which is issued by the Central Bank of Nigeria (CBN). A PSSP licence authorizes the licensee to provide and operate payment processing gateway and portals, solution/application development, and merchant service aggregation and collections services. A  PSSP license does not provide the authorization to hold customers’ funds or create and issue wallets. PSSPs are predominantly Financial Technology (FinTech) companies that enable  and facilitate  online and offline payments solutions which include collections, check-out, biller aggregation and payout services.

The CBN is the regulatory authority that issues PSSP licenses in Nigeria. The CBN also provides constant regulatory oversight over the activities of PSSP licensees in Nigeria.

Who can Apply for a PSSP Licence in Nigeria

Only a company that is duly registered with the Corporate Affairs Commission (CAC) in Nigeria and also meets the minimum share capital requirements and other regulatory requirements of the CBN can apply for a PSSP licence in Nigeria.

The Process of Obtaining a PSSP Licence from the CBN in Nigeria

A PSSP licence is processed in two stages viz:

• Approval-in-Principle (AIP): This is the preliminary stage of obtaining a PSSP license. During this stage, an application is to be made to the CBN for the grant of the license and they are expected to give an Approval-in-Principle or reject the application. Where an AIP is given, it is only valid for a period of six months. The AIP does not authorize the applicant to commence operation but only allows the applicant to take steps towards obtaining the final licence.
• Final Licence: The applicant is required to consolidate the AIP stage by taking steps to ensure its readiness for commencement of operation, notifying the CBN of its readiness to commence operation, by paying and applying for final licence. Upon the grant of the final licence, the applicant can commence its operations.

The process of obtaining a PSSP licence from the AIP stage to the final licence stage involves the following:

1. Write an application letter for a PSSP license which is addressed to the Director, Payments Systems Management Department of the CBN.
2. The application letter is accompanied with the required documents which include:

• Certificate of incorporation of the company with the Corporate Affairs Commission (CAC), with a share capital of N100,000,000 (One Hundred Million Naira)
• Memorandum and Articles of Association of the company
• Form CAC 2A (Return of Allotment of shares)
• Form CAC 7A (Particulars of Directors)
• Tax Clearance Certificate (TCC) and Tax Identification Number (TIN) of the Company
• Company’s profile
• Details of ownership
• Board structure
• Business plan
• Information Technology policy
• Dispute resolution framework
• Necessary certifications such as Payment Card Industry Data Security Standard (PCIDSS), Payment Terminal Service Aggregator (PTSA), etc.
• Evidence of payment of the non-refundable application fee of N100,000 (One Hundred Thousand Naira).
• Evidence of the deposit of the refundable minimum capital of N100,000,000 (One Hundred Million Naira). This is required to be made in full (one lump sum) and in the name of the applicant.

3. The CBN assesses the application for the PSSP licence and the accompanying documents and if it is satisfied with the application, it proceeds to grant an Approval-in-Principle.

4. Upon obtaining AIP from the CBN, the applicant then makes payment of the licence fee of N1,000,000 (One Million Naira) to the CBN designated account and proceeds to apply for a final licence within six months of obtaining AIP.

5. The CBN inspects the registered place of business of the applicant company and its readiness to commence operation and proceeds to issue the final licence if it is satisfied with the outcome of its inspection.

Validity and Renewal of PSSP Licence

PSSP licence validity period is as determined by the CBN and renewable if the operations of the PSSP licensee is satisfactory to the CBN. Recently, CBN renewed Cellulant’s PSSP licence and this shows the satisfaction of the CBN with the services of the company in providing payment solutions in Nigeria. Thus, the renewal of a PSSP licence by the CBN is a vote of confidence on the operation of a PSSP licensee.

Conclusion

A Payment Solution Service Providers (PSSP) licence is an important licence within the Nigerian payment systems which enables the provision of financial services such as the operation of payment processing gateway and portals which is utilized by merchants to accept debit or credit card purchases from customers. A PSSP licensee provides both online and offline payment solutions. A PSSP licence is obtainable from the CBN by submitting an application to the CBN and paying the required application and license fees within the stipulated timelines.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The post How to Obtain a Payment Solution Service Providers Licence in Nigeria first appeared on Goldsmiths Solicitors.