The advertising of products and services has been recently expanding into a myriad of advertising means including showcasing advertisements on vehicles. Such means of advertisement was not regulated, which lead to the risk of advertisement of products from unknown or unlicensed sources. A new law was enacted to control and regulate this new means of advertising in an attempt to curb the issues that were facing the Egyptian society in light of the absence of any governing regulations.
The Law No. 161 for 2021 (the “New Law”) introduced amendments to the Law No. 66 of 1973 regulating traffic (the “Traffic Law”) and was published in the Official Gazette on 27 December 2021. The New Law entered into force on 28 December 2021.
We will delve into the key highlights of the legislation as follows:
Advertising Licensing Requirements
The New Law prohibits the use of vehicles for advertisement purposes by any means including fliers, posters or 3D models put on vehicles unless after obtaining a license from the competent traffic department.
In order to obtain the license, the applicant company must submit a form to the competent traffic department along with the required documents. The license is issued for a period of three years at most. The application fee should not exceed EGP 10,000. The licensing procedures will be further regulated by the Executive Regulations of the Traffic Law.
Qualified Licensees
The Companies qualified to obtain a license are divided into two categories:
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- advertising companies undertaking advertising in favor of third parties, which must be joint stock companies certified by the Ministry of Interior, have marketing and advertising as one of their corporate activities, as well as an issued capital of at least EGP 30 million. These companies can represent corporate and natural person vehicle owners in applying for advertisement licenses relating to their vehicles.
- other corporate persons such as manufacturers and owners of commercial shops that directly advertise their commercial name, activities or type of commerce using their own vehicles.
Exemptions and Sanctions
The Minister of Interior may exempt certain companies or legal persons from the licensing requirements or conditions due to public interest considerations and based on a justified decision.
Violations of the licensing requirements are subject to sanctions including a fine ranging from EGP 1,000 to EGP 5,000 per violation.
The competent traffic department may cancel the license at any given time based on traffic regulation requirements (i.e. even in the absence of a breach).
Market Reaction
The New Law was welcomed by the market as it was perceived as a positive step to regulate the issue of advertisements on vehicles in Egypt. We await the practical implementation of the New Law, particularly in light of any clarificatory provisions in the Traffic Law’s Executive Regulations in order to ascertain the advantages of the New Law.
