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Article 1.The present Measures are enacted in accordance with the Law of the People's Republic of China on Sino-foreign Cooperative Enterprises, the Regulations on the Administration of Audio-visual Products and other laws and regulations with a view to enlarging foreign cultural exchanges and economic cooperation as well as strengthening the administration of Sino-foreign cooperative audio-visual product distribution enterprises. Article 2. The present Measures shall be applicable to the Sino-foreign cooperative audio-visual product distribution enterprises established inside the territory of the People's Republic of China. Sino-foreign cooperative audio-visual product distribution enterprises mentioned in these Measures refer to the enterprises that are, upon the approval of relevant departments of the Chinese government, established inside the territory of China in compliance with the principles of equality and mutual benefits in the form of cooperation between foreign enterprises, economic organizations or individuals (hereinafter referred to the foreign cooperators) and Chinese enterprises and economic organizations (hereinafter referred to the Chinese cooperators) to engage in the business of wholesaling, retailing or leasing audio-visual products. Audio-visual products mentioned in these Measures refer to audio tapes, video tapes, gramophone records, laser audio discs and laser video discs, on which contents are recorded. Article 3. Sino-foreign cooperative audio-visual product distribution enterprises must abide by the relevant laws and regulations, and disseminate thoughts, ethics, science technologies and cultural knowledge that are beneficial to economic development and social progress. Article 4. The due business activities of Sino-foreign cooperative audio-visual product distribution enterprises and the legitimate rights and interests of the cooperators shall be subject to the protection of Chinese law. Article 5.The Ministry of Culture and the Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to the MOFTEC) shall be responsible for the examination, approval, supervision and administration of Sino-foreign cooperative audio-visual product distribution enterprises. The administrative department of culture and the administrative department of foreign trade and economic cooperation of each local people's government at the county level or above shall, on the basis of their respective duties, be responsible for the daily supervision and administration of the Sino-foreign cooperative audio-visual product distribution enterprises within their own jurisdictions. Article 6. The establishment and development of Sino-foreign cooperative audio-visual product distribution enterprises must be in conformity with the development planning of the audio-video market. Article 7. Both the Chinese and foreign cooperators who apply for establishing a Sino-foreign cooperative audio-visual product distribution enterprise shall have the corresponding capabilities; shall be able to bear civil liabilities independently, and shall have no record of illegal acts during the consecutive three years before the establishment. Article 8. A Sino-foreign cooperative audio-visual product distribution enterprise shall meet the following conditions: (1) to have the independent status as a legal person; (2) to meet the requirements of the State on the establishment of audio-visual product distribution enterprises; (3) to have fund adapted to its operational scale; (4) to have no less than 51% of equity owned by the Chinese cooperator; and (5) not to exceed 15 years of cooperation period. Article 9. Where a Sino-foreign cooperative audio-visual product distribution enterprise applies to engage in the chained operation of audio-visual products or to operate audio-visual products by using information networks, it shall go through the procedures for approval in accordance with the provisions of the State on chained operation of audio-visual products and on operating audio-visual products by using information networks. Article 10. Where a Chinese cooperator uses State assets as a means of cooperation, it shall obtain the approval of the administrative department of State assets at its next upper level, and the State assets involved shall be valuated by a valuation institution confirmed by the administrative department of State assets in accordance with the relevant provisions on valuation and administration of State assets. The valuation result shall be confirmed by the administrative department of State assets at the provincial level or above. Article 11. The establishment of a Sino-foreign cooperative audio-visual product distribution enterprise shall be in compliance with the following procedures: (1) The Chinese cooperator shall apply to the administrative department of culture of the province, autonomous region or municipality directly under the Central Government where the planned Sino-foreign cooperative audio-visual product distribution enterprise is located. The said administrative department of culture shall, after examining and approving the application, submit the application to the Ministry of Culture for project initiation and approval. The Ministry of Culture shall make a decision on whether or not approving the application within 60 working days. If the application is not approved, the reason thereof shall be stated in writing; (2) The Chinese cooperator shall, within 6 months as of the date when the project initiation is approved by the Ministry of Culture, apply to the administrative department of foreign trade and economic cooperation of the province, autonomous region and municipality directly under the Central Government where the planned Sino-foreign cooperative audio-visual product distribution enterprise is located for establishment of the said enterprise. The said administrative department of foreign trade and economic cooperation shall, after examining and affirming the application, submit the application to the MOFTEC for approval. The MOFTEC shall make a decision on whether or not to approve the application within 60 working days. If the application is approved, an "Approval Certificate for Foreign-Funded Enterprise" shall be issued to the applicant. If the application is rejected, the reason thereof shall be stated in writing; (3) The Chinese cooperator shall, within 30 days as of receipt of the "Approval Certificate for Foreign-Funded Enterprise" issued by the MOFTEC, apply on behalf of the planned Sino-foreign cooperative audio-visual product distribution enterprise to the Ministry of Culture for an "Operation Permit for Audio-visual Products" with the approval documents on project initiation which are issued by the Ministry of Culture and the "Approval Certificate for Foreign-Funded Enterprise" issued by the MOFTEC; and (4) The Chinese cooperator shall, within 30 days as of obtaining the "Operation Permit for Audio-visual Products" issued by the Ministry of Culture, in accordance with the law and the provisions on industrial and commercial administration, go through the registration procedures with the "Operation Permit for Audio-visual Products" and the "Approval Certificate for Foreign-Funded Enterprise", and shall obtain the "Business License of Enterprise Legal Person". Article 12. The Chinese cooperator shall, when applying to the administrative department of culture for the project initiation, submit the following documents: (1) the application for project initiation, which shall clearly state the name, address, business scope, sources and amount of the invested funds of the planned Sino-foreign cooperative audio-visual product distribution enterprise; (2) the project proposal or feasibility study report prepared or admitted by both/all cooperators; (3) both/all cooperators' business licenses or registration certificates, credit certificates and valid certificates of the legal representatives; (4) (if the Chinese cooperator uses State assets as a means of cooperation) the confirmation documents issued by the administrative department of State assets on the appraising report of State assets to be used as investment by the Chinese cooperator; and (5) other documents required by the Ministry of Culture to be submitted. Article 13. The Chinese cooperator shall, when applying to the administrative department of foreign trade and economic cooperation for the establishment, submit the following documents: (1) an application for establishment; (2) a project proposal or feasibility study report prepared or admitted by both/all cooperators and approved by the Ministry of Culture; (3) the approval documents by the Ministry of Culture on the initiation of the project under cooperation; (4) the contract and articles of association of the planned Sino-foreign cooperative audio-visual product distribution enterprise, which are executed by the representatives authorized by both/all cooperators; (5) (if the Chinese cooperator uses State assets as a means of cooperation) the confirmation documents issued by the administrative department of State assets on the appraising report of the State assets to be used as investment by the Chinese cooperator; (6) both/all cooperators' business licenses or registration certificates, credit certificates and valid certificates of the legal representatives; (7) the notification on pre-approval of the name of the planned cooperative enterprise; (8) a name list of chairman, vice chairman and members of the board of directors or the joint management committee of the cooperative enterprise, which are negotiated and determined by both/all cooperators; and (9) other documents required by the MOFTEC. Article 14. In case of any important modification with a Sino-foreign cooperative audio-visual product distribution enterprise, such as change of any investor, adjustment of interest proportion of the investors, change of investment amount or means of cooperation, change of scope of business, change of operational period, or establishment of branches, the enterprise shall go through the procedures for approval in accordance with Article 11 of these Measures. In case of any modification with a Sino-foreign cooperative audio-visual product distribution enterprise other than those provided in the preceding paragraph, the enterprise shall, in accordance with the relevant provisions on foreign-funded enterprises, report to the MOFTEC for approval or record. Where a Sino-foreign cooperative audio-visual product distribution enterprise changes its legal address, legal representative, main responsible person, or terminates its business activities due to expiry of operational period, it shall report to the Ministry of Culture for record within 30 days in addition. Article 15. Sino-foreign cooperative audio-visual product distribution enterprises must engage in the business activities of audio-visual products within the approved scope of business. Article 16. The "Operation Permit for Audio-visual Products" of a Sino-foreign cooperative audio-visual product distribution enterprise shall be verified by the Ministry of Culture once every two years. Article 17. Sino-foreign cooperative audio-visual product distribution enterprises shall, in accordance with the relevant provisions of the State on operating audio-visual products, accept the supervision and administration by the administrative department of culture. Article 18. Sino-foreign cooperative audio-visual product distribution enterprises shall, in accordance with the relevant provisions of the State on foreign-funded enterprises, accept the supervision and administration by the relevant departments of China. Article 19. No Sino-foreign cooperative audio-visual product distribution enterprise may operate any audio-visual product which contains any content prohibited by the State from being disseminated, is not published by audio-visual product publishing entities or not reproduced by audio-visual product reproducing entities, or is imported without the approval of the Ministry of Culture, or infringes the copyright of others. Article 20. No Sino-foreign cooperative audio-visual product distribution enterprise may engage in the business of importing audio-visual products. Article 21.Whoever, without the approval of the Ministry of Culture and the MOFTEC, unauthorizedly establishes a Sino-foreign cooperative audio-visual product distribution enterprise or uses foreign funds by other means to engage in the business of distributing audio-visual products, shall be punished by the relevant department of the State in accordance with the law, and the liability of the relevant liable person shall be investigated. Article 22.When investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Region establish audio-visual product distribution enterprises in other provinces, autonomous regions and municipalities directly under the Central Government, the present Measures shall be applicable by reference. Article 23. The power to interpret the present Measures shall remain with the Ministry of Culture and the MOFTEC. Article 24. These Measures shall come into force on January 10, 2002. |
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