Laws of the People's Republic of China

the State Administration for Industry and Commerce

Order of the State Administration for Industry and Commerce of People's Republic of China

No.18

The revised Detailed Implementing Rules for the Regulation on the Administration of Advertising, which were adopted at the executive meeting of the State Administration for Industry and Commerce, are promulgated hereby and shall go into effect as of January 1, 2005.

Director General of the State Administration for Industry and Commerce Wang Zhongfu

November 30, 2004

Detailed Implementation Rules for the Regulation on the Administration of Advertising

Article 1

The present Detailed Implementing Rules are formulated in accordance with the provisions of Article 21 of the Regulation on the Administration of Advertising (hereinafter referred to as the Regulation).

Article 2

The administrative scope as prescribed in Article 2 of the Regulation shall include:

(1)

advertisements that are published in newspapers, periodicals, books, directories, etc.;

(2)

advertisements that are broadcast on radio or television or shown in films, videos, slide shows, etc.;

(3)

advertisements made by way of road signs, neon lights, electronic display boards, show windows, lanterns, walls, etc. by using the buildings or space of streets, public squares, airports, stations, wharves, etc.,;

(4)

advertisements that are displayed or posted inside or outside such places as theatres, stadiums, cultural centers, exhibition halls, hotel, restaurants, pleasure grounds, marketplaces, etc.;

(5)

advertisements that are displayed, drawn or posted on automobiles, vessels, airplanes or other vehicles;

(6)

various types of advertising propaganda materials which are sent by mail;

(7)

advertising propaganda made by means of giving complimentary objects;

(8)

advertisements that are published, broadcasted, displayed or posted by other media or means .

Article 3

Any enterprise that applies for the approval to engage in advertising business, in addition to meeting such conditions as enterprise registration etc., shall also meet the following conditions:

(1)

Having established an institution responsible for the market survey and having the relevant specialized personnel thereof;

(2)

Having managerial personnel who have good knowledge of advertising administrative legislation and the personnel who are able to undertake the design, production and editing of advertisements;

(3)

Having full-time accounting personnel;

(4)

Having the ability to deal in the advertisements of foreign businessmen when applying to contract on or to act as an agent in operating the advertisement of foreign businessmen.

Article 4

Broadcasting stations, TV stations, newspaper or periodical offices, public institutions, and other institutions as prescribed by laws and administrative regulations shall meet the following conditions in their registration of permit for advertising operations:

(1)

Having the media or means to directly publish advertisements;

(2)

Having established a special organization for advertising operations;

(3)

Having the equipment and place for advertising operations;

(4)

Having specialized advertising personnel and censors familiar with the advertising laws and regulations.

Article 5

In case a Sino-foreign equity joint venture, a Sino-foreign cooperative enterprise or a foreign-funded enterprise applies for engaging in advertising business, it shall be handled in accordance with the Provisions on the Administration of Foreign-funded Advertising Enterprises and with reference to the Regulation, these Detailed Implementing Rules and other relevant provisions.

Article 6

In case an individual industrial and commercial household applies for engaging in advertising business, in addition to meeting the conditions as prescribed in the Provisional Regulations on the Administration of Individual Industrial and Commercial Household Operations in Towns and Villages, the individual shall have advertising professional skills and good knowledge of the advertising laws and regulations.

Article 7

In accordance with Article 6 of the Regulation, the advertising operator registration procedure shall be handled as follows:

(1)

An enterprise to engage in advertising business shall apply to the administration for industry and commerce with jurisdiction for enterprise registration and shall be issued a business license.

(2)

Broadcasting stations, TV stations, newspaper or periodical offices, public institutions and other institutions as prescribed by laws and administrative regulations, when applying for concurrently engaging in advertising business and being subject to registration of permits for advertising operations, shall apply to the administration for industry and commerce of the province, autonomous region, municipality directly under the Central Government and city under separate State planning or the authorized administrative body at or above the county-level and shall be issued an Advertising Operation Permit.

(3)

An individual industrial and commercial household who engages in advertising operations shall apply to its local administration for industry and commerce and shall be issued a business license after being registered with the local administration for industry and commerce in accordance with the law.

Article 8

Any advertiser, who applies for cigarette advertising by means of such media as broadcasting, television, newspaper and periodical, shall be subject to the approval of the administration for industry and commerce of his province, autonomous region, municipality directly under the Central Government or the authorized municipal administrative body under provincial jurisdiction.

Article 9

In accordance with Article 7 of the Regulation, any client who applies for publishing an advertisement shall present the corresponding certificates as follows:

(1)

An enterprise or an individual industrial and commercial household shall present its business license for inspection.

(2)

An administrative organ, social group or public institution shall present the certificate of its respective entity.

(3)

An individual shall present a certificate issued by its local township government, subdistrict office or the entity where he works.

(4)

A resident representative office of a foreign enterprise shall present for inspection its Registration Permit of Resident Representative Office of Foreign Enterprise in China.

Article 10

In accordance with the provisions of item (1) of Article 11 of the Regulation, whoever applies for publishing an advertisement of commodities shall present for inspection a quality certificate certifying that the commodity is up to State standards, ministerial standards (specialized standards) or enterprise standards.

Article 11

In accordance with item (7) of Article 11 of the Regulation, relevant certificates shall be represented where anyone applies for publishing any advertisements of the following types:

(1)

Whoever advertises on the publication of a newspaper or periodical shall present for inspection the registration certificate approved by the press and publication organ of his province, autonomous region or municipality directly under the Central Government.

(2)

Whoever advertises on the publication of a book shall present a certificate of approval for the establishment of the publishing house issued by the press and publication organs.

(3)

Whoever advertises by means of any of the various types of artistic and cultural performances shall present certification documents in accordance with relevant provisions.

Article 12

In accordance with item (8) of Article 11 of the Regulation, relevant certificates shall be presented where anyone applies for carrying and broadcasting advertisements of the following content:

(1)

Whoever advertises any of the various commodity fairs, order-placing meetings, trade fairs, etc., shall present a certificate of approval issued by the competent authority of the sponsor.

(2)

Whoever advertises by means of notices or announcements concerning individual persons shall present a certificate issued by the institution that he works for, township people's government or subdistrict office.

Article 13

In case an advertiser applies for the publishing, broadcasting, displaying or posting of an advertisement, it shall present the original copies of certificates as required or effective photocopies thereof.

Article 14

Agency fee for undertaking advertising work shall be 15% of the advertising expense.

Article 15

In case a domestic enterprise publish advertisements abroad, or if a foreign enterprise (organization) or a person of foreign nationality undertakes and publish advertisements within the Chinese territory, it shall entrust an enterprise as an advertising agent who is registered in China and authorized to provide advertising services. The violator shall be imposed on a fine of no more than three times the illegal earnings but no more than 30,000 Yuan at the maximum, or a fine of no more than 10,000 Yuan if no illegal gains were generated.

Article 16

In accordance with Article 12 of the Regulation, when acting as an agent for or as the issuer of an advertisement, the agent or issuer shall be responsible for censoring the content of the advertisement and examining relevant certificates and shall be entitled to require the advertiser to provide any other necessary certificates and documents. An advertising agent or issuer shall not be permitted to act as an agent of or issue an advertisement if the certificate is found to be illegal or incomplete or if the content of the advertisement is found to be false.

An advertising operator shall establish a system of keeping records for and reexamining the advertising businesses undertaken and service filing for advertisements. An advertising service file shall be kept for no less than one year.

Article 17

Where an advertiser violates the provisions of Article 3 or item (5) of Article 8 of the Regulation by using an advertisement to mislead or cheat users or consumers, the advertiser shall be ordered to publish a corrected advertisement within a corresponding area. In light of the seriousness of the case in question, a notice of criticism may be circulated and the advertiser may be imposed a fine of no more than three times the illegal gains but no more than 30,000 Yuan at the maximum, or a fine of no more than 10,000 Yuan if there are no illegal gains and shall be liable to pay compensation if the advertiser have caused any damage to users or consumers.

Where an advertising operator assists a advertiser to practice fraud, in light of the seriousness of the case in question, a notice of criticism may be circulated, the illegal gains, if any, may be confiscated and the advertising operator may be imposed on a fine of no more than three times the illegal earnings but no more than 30,000 Yuan at the maximum, or a fine of no more than 10,000 Yuan if there is no illegal gains. When the case is serious, the advertising operator may be ordered to suspend business operations for rectification and its business license or Advertising Operation Permit may be revoked. Joint and several liabilities shall be borne by the operator if damage results to users or consumers.

The costs of issuing an amended advertisement shall be borne jointly by the advertiser and the advertising operator.

Article 18

Where the provisions of Article 4 or item (6) of Article 8 of the Regulation are violated, a notice of criticism may be circulated, the illegal gains, if any, may be confiscated, and a fine of no more than 5, 000 Yuan may be imposed on the violator or an order may be given to suspend business operations for rectification in light of the seriousness of the case in question.

Article 19

Where an advertising operator violates the provisions of Article 6 of the Regulation by engaging in advertising business without a necessary license, it shall be punished in accordance with the relevant provisions of the Measures for Investigating into, Punishing and Banning Permitless Business Operations. Where an advertising operator violates the provisions by exceeding its approved business scope, it shall be punished according to relevant provisions of the laws and regulations on the administration of enterprise registration.

Article 20

Where an advertiser violates the provisions of Article 7 of the Regulation, in light of the seriousness of the case in question, a notice of criticism may be circulated and a fine of no more than 5,000 Yuan may be imposed.

Article 21

Where any provision of items (1), (2), (3) or (4) of Article 8 of the Regulation is violated, a notice of criticism shall be circulated regarding the advertising operator involved, the illegal gains, if any, shall be confiscated and a fine of no more than 10,000 Yuan shall be imposed on. As for the advertiser involved, a notice of criticism may be circulated and a fine of no more than 10,000 Yuan may be imposed, in light of the seriousness of the case in question.

Article 22

Where a news organization violates the provisions of Article 9 of the Regulations a notice of criticism may be circulated, the illegal gains, if any, may be confiscated and a fine of no more than 10,000 Yuan may be imposed in light of the seriousness of the case in question.

Article 23

Where an advertising operator violates the provisions of Article 10 of the Regulation, a notice of criticism may be circulated, the illegal gains, if any, may be confiscated and a fine of no more than 10,000 Yuan may be imposed, in light of the seriousness of the case in question.

Article 24

Where an advertiser violates the provisions of Article 11 of the Regulation by forging, altering, fraudulently using or illegally copying an advertising certificate, a notice of criticism shall be circulated and a fine of no more than 5,000 Yuan shall be imposed on the advertiser.

Any advertising operator who violates the provisions of items (3) of Article 11 of the Regulation shall be fined up to 1,000 Yuan.

Where an advertising operator provides an advertiser with illegal or false certificates, a notice of criticism shall be circulated, a fine of no more than 5, 000 Yuan shall be imposed and the operator shall bear joint and several liabilities.

Article 25

Where an advertising operator violates the provisions of Article 12 of the Regulation, a notice of criticism may be circulated, the illegal gains, if any, may be confiscated and a fine of no more than 3,000 Yuan may be imposed, in light of the seriousness of the case in question. In the event of incurrence of a fraudulent advertisement, the operator shall be responsible for issuing an amended advertisement. Whoever brings damage or losses to users or consumers shall bear joint and several liabilities.

Article 26

If anyone violates the provisions of Article 13 of the Regulation by illegally displaying or posting advertisements, the illegal gains, if any, shall be confiscated, a fine of no more than 5,000 Yuan shall be imposed and a time limit shall be specified for the dismantling and removal of the offending advertisements. In the event of failure to dismantle and remove such an advertisement within the specified time limit, the dismantling and removal of the advertisement shall be enforced coercively, and the costs incurred thereby shall be borne by the party who displayed or posted the advertisement.

Article 27

Where the provisions of Articles 14 or 15 of the Regulation are violated, a notice of criticism may be circulated, an order may be issued to rectify the situation within a specified time limit, the illegal gains, if any, may be confiscated and a fine of no more than 5,000 Yuan may be imposed, in light of the seriousness of the case in question.

Article 28

The present Detailed Implementing Rules shall go into effect as of January 1, 2005