EBU Level 4 says:
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1NT overcall of a natural non-forcing opening bid of [1 suit]
A 1NT overcall may, instead of a meaning allowed by 7E2, be played as any one of the following:
(a) Any single meaning permitted for an opening bid of 1NT (see 7B3), or
(b) A take-out bid (similar to a take-out double) of any agreed strength, or
© *Either a hand with at least 14 HCP that would be permitted to open a natural 1NT or a weak hand with a long suit, or
(d) *A weak hand with a long suit.
The relevant bits of 7E2 (overcalls of natural 1 suit):
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Any bid which shows at least four cards in a specified suit is permitted. The quality of the suit and the strength of the hand must conform to the standards generally played for a natural call at the minimum possible level (bids showing at least 5-5 in two suits may traditionally be made on very weak hands).
Any bid which shows a hand with no singleton, void or seven-card suit of at least 11 HCP is permitted.
The relevant bits of 7B3:
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1NT may be played as any one of the following:
(i) Natural, non-forcing with a continuous defined range. A ‘natural’ 1NT opening has no more than nine cards in two suits, no void, and does not have seven hearts or seven spades. The range must be the same when holding a singleton
(ii) Any meaning or meanings as long as they all show a strong hand (16+ HCP or 12+ HCP with at least 5 controls)
So it looks like, at least at Level 4 (open games), as long as their agreement is 16 high or 5 controls, they can do it on any shape they want - but they'll have to Alert them, and explain them carefully (10 cards in two suits, or void, mean they aren't even 'natural'-in-quotes). If it could be 15, then it's an illegal agreement. If they argue these are just "obvious deviations" (I don't think this is gross enough to be a psychic, but it's definitely a deviation), then if it's obvious to both partners, it's part of their implied agreement and that agreement is illegal.
System regulators take a dim view of players playing the agreement they want, explaining it as a legal agreement, and "deviating" on the ones that would make the agreement illegal, for some reason (although in this case I'm almost certain they have no clue what is legal for 1NT O/C).
When I go to sea, don't fear for me, Fear For The Storm -- Birdie and the Swansong (tSCoSI)
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I agree that most pairs are economical with the truth. Here they would alert 1N as 15-18 BAL with a stop in opps suit. And defend that as an adequate explanation. If challenged, they would explain that a singleton honour is OK (or at worst a deviation). IMO, the hand is also too strong and the 7-card suit is more than a deviation. Furthermore, regular undisclosed deviations constitute a concealed partnership understanding. But, in my experience, more blatant examples are commonplace and rarely attract a director-call or adverse ruling. IMO ...