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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II OPERATING ENTITIES CHAPTER III OPERATION AND MANAGEMENT CHAPTER IV LEGAL LIABILITIES CHAPTER V SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. The present Measures are enacted in accordance with the relevant provisions in the "Regulation on the Administration of Audio and Video Products" with a view to strengthening the administration of wholesale, retail and lease of audio and video products, promoting the development and flourishing of the career of audio and video products, enriching the cultural life of the masses and promoting the construction of socialist material civilization and spiritual civilization. Article 2. The present Measures shall apply to activities such as wholesale, retail, and lease, of audio and video products such as audio tapes, video tapes, gramophone records, compact discs and laser discs, on which contents are recorded. Article 3. People engaging in the wholesale, retail and lease of audio and video products shall abide by the Constitution and the relevant laws and regulations, adhere to the orientation of serving the people and serving socialism, and disseminate ideas, morals and scientific, technical and cultural knowledge beneficial to economic development and social progress. Article 4. The state prohibits the operation of audio and video products recorded with any of the following contents: (1) that which defies the basic principles determined in the Constitution; (2) that which endangers the unity of the nation, sovereignty or territorial integrity; (3) that which divulges secrets of the state, endangers national security or damages the honor or benefits of the state; (4) that which incites nationality hatred or discrimination, undermines the solidarity of nationalities, or infringes upon nationality customs and habits; (5) that which propagates evil cult or feudalistic superstition; (6) that which disturbs the public order or destroys the public stability; (7) that which propagates obscenity, gambling, violence or instigates crimes; (8) that which insults or slanders others, or infringes upon the lawful rights and interests of others; (9) that which endangers public ethics or the fine folk cultural traditions; or (10) that which contains any content prohibited by laws, administrative regulations, or provisions of the state. Article 5. The Ministry of Culture shall be responsible for the supervision and administration of wholesale, retail and lease of audio and video products nation-wide. The administrative department of cultural affairs under the local people's government at or above the county level shall be responsible for the supervision and administration of the wholesale, retail and lease of audio and video products within its own jurisdiction. Article 6. The state shall apply a licence system in respect of the wholesale, retail and lease of audio and video products. No entity or individual shall, without permission, be engaged in the wholesale, retail and lease of audio and video products. The licenses or approval documents distributed in accordance with the present Measures shall not be leased, lent, sold, or transferred in any other form. Article 7. The Ministry of Culture shall formulate the development programming on the market of audio and video products nationwide, and control the market of audio and video products nationwide macroscopically. The administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government shall, in light of the development programming on the market of audio and video products nationwide and the economic and social development in its own region, formulate development programs on the market of audio and video products in its own region, and lead such a market to develop healthily. Article 8. Neither the administrative department of cultural affairs nor any of the functionaries thereof shall, directly or in a disguised form, undertake the business activities in respect of wholesale, retail and lease of audio and video products, or participate in the business activities of the audio and video product wholesaling, retailing or leasing entities. CHAPTER II OPERATING ENTITIES Article 9. To establish an audio and video product wholesaling entity, the applicant shall meet the following conditions: (1) having the name and articles of association of the audio and video product wholesaling entity; (2) having a well-defined scope of business; (3) having a fixed business site with the area for operation no less than 100 square meters; (4) having no less than 1 million Yuan of registered capital; (5) having an organization adapted to the needs of its scope of business and 5 or more full-time employees; and (6) other conditions provided for in laws and administrative regulations. The administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government may, in light of the actual situation, set forth the conditions provided for in Items (3), (4) and (5) of Article 1 more strictly. Article 10. The application for the establishment of an audio and video product wholesaling entity shall be submitted to the administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government for examination and approval. The administrative department of cultural affairs shall, within 30 days as of the receipt of the application, make a decision on approving or not approving the application. If the application is approved, a "Licence for Operating Audio and Video Products" shall be issued to the applicant, and be submitted to the Ministry of Culture for record. The applicant shall obtain the business licence in accordance with the law in the administrative department of industry and commerce with the "Licence for Operating Audio and Video Products". If the application is not approved, the reason thereof shall be stated. The application shall clearly state the following contents: (1) name and address of the audio and video product wholesaling entity; (2) name and domicile of the legal representative or principal person-in-charge of the audio and video product wholesaling entity; (3) the sources of funds of the audio and video product wholesaling entity, and its legitimate proof, the amount of funds; (4) the information on the business site of the audio and video product wholesaling entity and the proof on the use right thereof; and (5) information on employees. Article 11. Whoever applies to establish an audio and video product retailing or leasing entity, or any individual who applies to engage in the business of retailing or leasing audio and video products, shall meet the following conditions: (1) having the name of the retailing or leasing entity or the business name of the individual; (2) having a well-defined scope of business; (3) having a fixed business site, with the operation area of which no less than 40 square meters if the business site is in the urban area of a municipality directly under the Central Government, provincial capital city, or city directly under state planning; (4) having the registered capital adapted to the needs and scale of its scope of business; (5) having full-time employees adapted to the needs of its scope of business; and (6) other conditions provided for in laws and administrative regulations. The administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government may, in light of the actual situation, set forth specific provisions regarding the conditions provided for in Items (3), (4) and (5) of Paragraph 1 of the present article. Article 12. Whoever applies to establish an audio and video product retailing or leasing entity, or any individual who applies to engage in the business of retailing or leasing audio and video products, shall report to the administrative department of cultural affairs under the local people's government at or above the county level where the applicant is located for examination and approval. The administrative department of cultural affairs shall, within 30 days as of the receipt of the application, make a decision on approving or not approving the application. If the application is approved, a "Licence for Operating Audio and Video Products" shall be issued to the applicant, and be submitted to the local people's government at the next higher level fore record. The applicant shall obtain the business licence in accordance with the law in the administrative department for industry and commerce with the "Licence for Operating Audio and Video Products". If the application is not approved, the reason thereof shall be stated. The application shall clearly state the following contents: (1) name and address of the audio and video product retailing or leasing entity, or business name and address of the individual engaging in the business of retailing or leasing audio and video products; (2) name and domicile of the legal representative or principal person-in-charge of the audio and video product retailing or leasing entity, or name and domicile of the individual engaging in the business of retailing or leasing audio and video products; (3) the sources and amount of funds and legitimate proof of the audio and video product retailing or leasing entity or the individual engaging in the business of retailing or leasing audio and video products; (4) the information on the business site for the retail and lease of audio and video products and the proof on the use right thereof; and (5) the information on employees. Article 13. An audio and video product publishing entity may, in accordance with the relevant provisions of the state, wholesale and retail the audio and video products of its own publication. If it intends to engaged in the business of wholesaling or retailing audio and video products not of its own publication, it shall go through the formalities of examination, approval and registration in accordance with Articles 9, 10, 11 and 12 of the present Measures. Article 14. To establish a chained operation entity of audio and video products, the applicant shall meet the following conditions: (1) having the name and articles of association of the chained operation entity of audio and video products; (2) having a well-defined scope of business; (3) having no less than 5 million Yuan of registered capital, or no less than 30 million Yuan of registered capital if engaging in nationwide chained operation; (4) having 10 or more chained stores of audio and video products; (5) having an organization adapted to the needs of its scope of business and 15 or more full-time employees; (6) having the capacity to provide the chained stores with operational guidance and to distribute audio and video products; and (7) other conditions provided for in laws and administrative regulations. Article 15. A chained operation entity of audio and video products shall be organized, established and operated in accordance with the requirements in the "Company Law". Article 16. An audio and video product wholesaling entity that meets the following conditions may apply to establish chained operation entities of audio and video products: (1) having the independent status as a legal person, and having engaged in the business of wholesaling audio and video products for 2 years or more with good operational performance; and (2) having no records of violation of law during the 2 years before application. Article 17. Whoever applies to establish a chained operation entity of audio and video products shall report to the administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government where the applicant is located for examination and approval. The application for the establishment of nationwide chained operation entities of audio and video products shall be examined and consented to by the administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government where the applicant's headquarters is located before it is submitted to the Ministry of Culture for examination and approval. The administrative department of cultural affairs shall, within 30 days as of the receipt of the application, make a decision on approving or disapproving the application. If the application is approved, a "Licence for Operating Audio and Video Products" shall be issued to the applicant, who shall have itself registered and obtain the business licence in accordance with the law in the administrative department for industry and commerce with the "Licence for Operating Audio and Video Products". If the application is not approved, the reason thereof shall be stated. The application shall clearly state the following contents: (1) name and address of the chained operation entity of audio and video products; (2) name and domicile of the legal representative or principal person-in-charge of the chained operation entity of audio and video products; (3) the sources of funds of the chained operation entity of audio and video products and legitimate proof thereof, the amount of funds; (4) organizational structure and articles of association of the chained operation entity of audio and video products; (5) the information on the business site of the headquarters of the chained operation entities of audio and video products and the proof on the use right thereof; (6) information on the management members of the headquarters of the chained operation entity of audio and video products and chained stores; and (7) information on the distributing departments, distribution means and systems of distribution management of the chained operation entity of audio and video products. Without approval or registration, no one shall use the characters of "chained operation" in the name of an entity, or engage in the business activities of wholesale, retail and lease of audio and video products by means of chained operation. Article 18. A chained operation entity of audio and video products may choose either the means of direct chained operation or that of chained operation in the form of franchise, or may operate by both means, provided that it shall have one year or more of experience in direct chained operation and be approved by the original approving department if it choose the chained operation in the form of franchise. Direct chained operation shall refer to the uniform operation which is directly managed by the headquarters, and under which all the chained stores are opened by the headquarters in wholly-owned form or shareholding form. Chained operation in the form of franchise shall refer to that the chained stores are set up by the headquarters through participation of shares or, have no asset relationship with the headquarters but, through conclusion of contracts with the headquarters, are authorized the right to franchise of using the trademark, name, operational techniques of the headquarters and of selling commodities of headquarters. Article 19. Whoever applies to establish an entity engaging in the business of operating audio and video products through information network, shall go through the formalities of examination and approval with reference to the relevant provisions in Articles 9 and 10 of the present Measures. Where an audio and video product publishing entity operates the audio and video products of its own publication through information network, or an audio and video product wholesaling entity operates audio and video products through information network, it shall, before the operation, prepare its "Licence for Operating Audio and Video Products", the name of its website or the websites linked to it, its email address, and other materials, and report to the administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government where it is located for approval. CHAPTER III OPERATION AND MANAGEMENT Article 20. The audio and video product wholesaling, retailing and leasing entities and the individuals engaging in the business of retailing and leasing audio and video products shall not operate the following audio and video products: (1) the audio and video products reproduced by an entity that does not engage in the reproduction of audio and video products or by an entity that does not engage in the publication of audio and video products; (2) the audio and video products imported without approval from the Ministry of Culture; (3) the audio and video products imported for reference in research or teaching or for exhibition or display; (4) the audio and video products that infringe upon other's copyright. Article 21. The audio and video product wholesaling, retailing and leasing entities and the individuals engaging in the business of retailing and leasing audio and video products shall not exceed the approved scope of business to undertake the activities of operating audio and video products. Article 22. The audio and video product wholesaling, retailing and leasing entities and the individuals engaging in the business of retailing and leasing audio and video products shall purchase audio and video products from the audio and video product publishing and wholesaling entities for operation. Article 23. The stores of chained operation entities of audio and video products shall, under the management of their headquarters, unify their operation rules, and sell the audio and video products uniformly purchased and distributed by their headquarters. The distributing center and the direct-operation chained stores of the chained operation entities of audio and video products shall use the shop name of their headquarters in their own names. Franchised chained stores may, upon consent by their headquarters, also use the shop name of their headquarters. The headquarters of chained operation entities of audio and video products may use the characters of "chained operation" in its name. Article 24. The audio and video products published by audio and video product publishing entities and those imported by finished audio and video product import entities shall be affixed with the anti-forgery marks produced under the supervision of the Ministry of Culture. Article 25. An audio and video product wholesaling, retailing and leasing entity or an individual engaging in the business of retailing and leasing audio and video products shall hang up its/his "Licence for Operating Audio and Video Products" on an eye-catching position in its/his business site. Article 26. An entity engaging in the business of operating audio and video products through information network shall indicate the serial number and issuance department of the "Licence for Operating Audio and Video Products" on its website or web page. For the audio and video products in operation, the name, publishing entity, and the code of the audio and video products under Chinese standards shall be indicated. If the audio and video products are imported ones, the document number of the approval certificate for import shall meanwhile be indicated. Article 27. An audio and video product wholesaling, retailing and leasing entity shall submit the address, area of its warehouse for audio and video products and other information to the approval and registration departments for record. Article 28. No entity or individual shall consign, mail or carry the audio and video products prohibited by Article 4 or Article 20 of the present Measures from operation. Article 29. Where an audio and video product publishing or wholesaling entity wholesale audio and video products, it shall issue the consignment list in accordance with the relevant provisions of the state. An audio and video product wholesaling and retailing entity or an individual engaging in the business of retailing audio and video products shall, when selling audio and video products, issue an invoice, on which the name, price and amount of the audio and video products shall be indicated. An audio and video product leasing entity or an individual engaging in the business of leasing audio and video products shall register particulars such as the time, name and quantity of the leased audio and video products. The relevant documents, lists and registration materials shall be preserved for at least two years for inspection. Article 30. Where an audio and video product publishing or wholesaling entity holds an order-placing meeting or fair of audio and video products, it shall, 15 days before the opening, report to the administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government where the order-placing meeting or fair is held for record. The holder of an international order-placing meeting or fair of audio and video products shall, 30 days before the opening, report to the Ministry of Culture for record. In the submitted materials for record, the name of the holder of order-placing meeting or fair, the address, time, participants and catalogue of products, shall be stated. Article 31. The audio and video product reproducing entities shall not engage in the business of wholesaling, retailing or leasing audio and video products. Article 32. The administrative department of cultural affairs under the local people's government at or above the county level shall accept the application for testing whether the audio and video products are illegal, and shall, within 10 days as of the acceptance of the application, issue the written test report. The applicant shall file the application to the administrative department of cultural affairs under the local people's government at the county level at the place where the audio and video products are acquired, and shall, at the time of application, submit the application letter, the audio and video products and the relevant documents. The application letter shall state the source, name, quantity, date of acquisition of the audio and video products and the purpose of expertise. Where the party concerned has any objection to the test results, he may, as of the day when he receives the written test report or within 15 days as of the day when he knows the test results, request the administrative department of cultural affairs at a higher level for re-check, and the administrative department of cultural affairs at the higher level shall, within 15 days as of the day when it receives the application for re-check, issue the written conclusion on re-check. Article 33. The audio and video product wholesaling, retailing and leasing entities and the chained operation entities of audio and video products shall go through the formalities of check and registration once every two years. The check shall be done by the original department that issued the licence. Article 34. Where an audio and video product wholesaling, retailing or leasing entity or a chained operation entity of audio and video products intends to modify its name, scope of business, or to merge another audio and video product wholesaling, retailing or leasing entity or chained operation entity of audio and video products, or establishes a new audio and video product wholesaling, retailing or leasing entity or chained operation entity of audio and video products due to merger or division, it shall, in accordance with the "Regulation on the Administration of Audio and Video Products", the present Measures and the relevant provisions on administration of enterprise registration, go through the formalities of examination, approval and registration. Where an audio and video product wholesaling, retailing or leasing entity or a chained operation entity of audio and video products intends to change its address, legal representative or principal person-in-charge or to terminate its business activities, or where an individual engaging in the business of retailing or leasing audio and video products intends to modify his scope of business, address or to terminate his business activities, it/he shall go through the modification registration or cancellation registration in the administrative department for industry and commerce that handled the original registration, and shall, within 30 days as of the date of registration, report to the administrative department of cultural affairs that granted the original approval for record. However, if the modification of the address exceed the scope of jurisdiction of the original organ that issued the licence, it/he shall go through the formalities of examination, approval and registration in accordance with the preceding paragraph. CHAPTER IV LEGAL LIABILITIES Article 35. Where the administrative department of cultural affairs or any functionary thereof, by taking advantage of its/his office, accepts the properties or benefits from others, and approves an audio and video product wholesaling, retailing or leasing entity which does not meet the legal conditions for establishment, or does not implement its/his supervision duties, or does not investigate the illegal acts it/he has found, thus causing severe consequences, the person in charge held responsible and other persons held to be directly responsible shall be subject to criminal liabilities in accordance with the provisions in the Criminal Law on the crime of accepting bribes, of abusing power, of neglecting duty or other crime; where the case is not severe enough for him to be imposed upon criminal punishments, he shall be imposed upon an administrative sanction of demotion or dismissal from his post. Article 36. Where any functionary in the administrative department of cultural affairs is engaged in business activities of wholesaling, retailing or leasing audio and video products directly or in a disguised form, or participate in the business activities of an audio and video product wholesaling, retailing and leasing entity directly or in a disguised form, he shall be imposed upon an administrative sanction of dismissal from his post or dismissal in accordance with the law. Where the administrative department of cultural affairs has any of the acts enumerated in the preceding paragraph, the person in charge held responsible and other persons held to be directly responsible shall be punished in accordance with the preceding paragraph. Where the administrative department of cultural affairs refuses to accept an application for testing whether the audio and video products are illegal without a justifiable reason, the person in charge held responsible and other persons held to be directly responsible shall be imposed upon an administrative sanction. Article 37. Whoever, without being approved and without authorization, establishes an audio and video product wholesaling, retailing or leasing entity or engages, without authorization, in the business of wholesaling, retailing or leasing audio and video products, shall be banned by the administrative department of industry and commerce; its audio and video products under illegal operation, its illegal proceeds and special instruments and equipment used in the illegal activities shall be confiscated. If the amount of illegal operating fund is no less than 10,000 Yuan, it shall be imposed upon a fine of not less than 5 times but not more than 10 times the amount of illegal operating fund in addition. If the amount of illegal operating fund is less than 10,000 Yuan, it shall be imposed upon a fine of not more than 50,000 Yuan in addition. If he commits a crime, he shall be subject to criminal liabilities in accordance with the law. Where an audio and video product wholesaling, retailing or leasing entity or an individual engaging in the business of wholesaling, retailing or leasing audio and video products exceeds the approved scope of business to undertake the business activities of audio and video products, it shall referred by the administrative department of cultural affairs to the administrative department for industry and commerce and be punished in accordance with Paragraph 1 of the present article. Article 38. Where an audio and video product wholesaling, retailing or leasing entity operates the audio and video products containing any content prohibited by Article 4 of the present Measures, its audio and video products under illegal operation and its illegal proceeds shall be confiscated by the administrative department of cultural affairs. If the amount of illegal operating fund is no less than 10,000 Yuan, it shall be imposed upon a fine of not less than 5 times but not more than 10 times the amount of illegal operating fund in addition. If the amount of illegal operating fund is less than 10,000 Yuan, it shall be imposed upon a fine of not less than 10,000 Yuan but not more than 50,000 Yuan in addition. If the case is severe, its licence shall, in addition, be revoked by the original organ that issued it. If he violates the "Regulation on Administrative Penalties for Public Security", he shall be referred to the public security department for punishment in accordance with the law. If he commits a crime, he shall be subject to criminal liabilities in accordance with the law. Article 39. Where an audio and video product wholesaling, retailing or leasing entity modifies its name, address, legal representative or principal person-in-charge, scope of business, etc. without going through the formalities of examination, approval and record in accordance with the present Measures, it shall be ordered by the administrative department of cultural affairs to get right, and be imposed upon a warning. If the case is severe, it shall be ordered to cease its business for rectification or its licence shall be revoked by the original department that issued the licence. Article 40. Where an audio and video product wholesaling, retailing and leasing entity or an individual engaging in the business of retailing or leasing audio and video products operates the audio and video products published by an entity that is not engaged in the publication of audio and video products or reproduced by an entity that is not engaged in the reproduction of audio and video products, or operates the audio and video products imported without the approval from the Ministry of Culture or audio and video products imported for reference in research or teaching or for exhibition or display, with the quantity no more than 100 discs, it/he shall be ordered by the administrative department of cultural affairs to cease the illegal acts, be imposed upon a warning, be confiscated of its/his illegal audio and video products and illegal proceeds, and be imposed upon a fine of not less than 10,000 Yuan but not more than 50,000 Yuan in addition. If it/he operates illegally for a second time, its/his licence shall be revoked by the original organ that issued it in addition. Where an audio and video product wholesaling, retailing and leasing entity or an individual engaging in the business of retailing or leasing audio and video products operates the above said audio and video products with the quantity at or more than 100 discs, it/he shall be ordered by the administrative department of cultural affairs to cease the illegal acts, be confiscated of its/his illegal audio and video products and illegal proceeds, and its/his licence shall be revoked by the original organ that issued it. If the amount of illegal operating fund is no less than 10,000 Yuan, it/he shall be imposed upon a fine of not less than 5 times but not more than 10 times the amount of illegal operating fund in addition. If the amount of illegal operating fund is less than 10,000 Yuan, it/he shall be imposed upon a fine of not less than 10,000 Yuan but not more than 50,000 Yuan in addition. If the case is severe, its/his licence shall, in addition, be revoked by the original organ that issued it. If it/he commits a crime, it/he shall be subject to criminal liabilities in accordance with the law. Article 41. In case of consignment, mail, carriage, storage or packing of the audio and video products prohibited by Article 4 or Article 20 of the present Measures from operation, the audio and video products shall be confiscated by the administrative department of cultural affairs, and the responsible persons shall be punished in accordance with the relevant laws and regulations. Article 42. Where an entity's licence is revoked, its legal representative or principal person-in-charge shall not act as the legal representative or principal person-in-charge of an audio and video product wholesaling, retailing or leasing entity within 10 years as of the revocation of the licence. Where an individual engaging in the business of retailing or leasing audio and video products is imposed upon the administrative penalty of revocation of his licence, he shall not engage in the business of retailing or leasing audio and video products within 10 years as of the revocation of his licence. CHAPTER V SUPPLEMENTARY PROVISIONS Article 43. The "Licence for Operating Audio and Video Products" shall be uniformly printed and produced by the administrative department of cultural affairs under the people's government of the province, autonomous region or municipality directly under the Central Government according to the format provided by the Ministry of Culture. A licence includes an original and a copy. The former is in a hanging style, and the latter in a folding style. Article 44. Where there are otherwise provisions in laws or administrative regulations regarding the administration of Chinese-foreign cooperative audio and video product distributing enterprises, of the import of audio and video products and of the operative projecting activities of audio and video products, such provisions shall be abided by. Article 45. The power to interpret the present Measures shall remain with the Ministry of Culture. Article 46. The present Measures shall come into force on April 10, 2002. The "Measures on the Administration of Wholesale, Retail, Lease and Projection of Audio and Video Products" promulgated by the Ministry of Culture on January 30, 1996 shall be abrogated simultaneously. |
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