Control of Advertising Regulations Implementing Rules (Revised)

(Promulgated by the State Administration for Industry and Commerce on November 30 2004 and effective as of January 1 2005.)

Order of the SAIC No.18

Article 1: These Rules have been formulated pursuant to Article 21 of the Control of Advertising Regulations (the Regulations).

Article 2: The scope of control specified in Article 2 of the Regulations shall include:

(1) the publication of advertisements in newspapers, periodicals, books, directories, etc.;

(2) the broadcast or display of advertisements on or in radio, television, motion pictures, videos, slides, etc.;

(3) the installation of advertisements such as roadside billboards, neon signs, electronic displays, display windows, light boxes, wall advertisements, etc. on or in such buildings or spaces as roads, public squares, airports, stations, stops, piers, etc.;

(4) the placing or posting of advertisements in or outside such facilities as movie theatres, stadiums, gymnasiums, cultural centres, exhibition halls, hotels, restaurants, amusement parks, shopping malls, etc.;

(5) the installation, painting or posting of advertisements on such means of transportation as vehicles, vessels, aircraft, etc.;

(6) the mailing of any kind of advertisements and publicity materials through the post office;

(7) the carrying out of advertising and publicity through the gifting of physical goods; and

(8) the publication, broadcasting, installation or posting of advertisements using other media or in other forms.

Article 3: An enterprise that applies to engage in advertising business shall, in addition to satisfying the conditions for enterprise registration, etc., satisfy the following conditions:

(1) having an organization and professionals responsible for market surveying;

(2) having management personnel who are familiar with the statutes on the control of advertising, and advertisement design, production and copy editing personnel;

(3) having full-time financial and accounting personnel; and

(4) if an application is made to undertake, or act as an agent for, advertising in China for foreign business entities, having the capability to engage in advertising in China for foreign business entities.

Article 4: If a radio station, a television station, a newspaper or periodical publisher, an institution, or another work unit specified in laws and administrative statutes, wishes to be registered as having obtained permission to engage in advertising business, it shall satisfy the following conditions:

(1) having a medium or means to directly release advertisements;

(2) having a dedicated organization that engages in advertising business;

(3) having the equipment and a place of business to engage in advertising business; and

(4) having professional advertising personnel and advertisement vetting personnel familiar with advertising statutes.

Article 5: If a Sino-foreign equity joint venture, Sino-foreign cooperative joint venture or wholly foreign-owned enterprise intends to apply to engage in advertising business, matters shall be handled in accordance with the Administration of Foreign-invested Advertising Enterprises Provisions and with reference to the Regulations, these Rules and other relevant provisions.

Article 6: If a family proprietor intends to apply to engage in advertising, he or she shall, in addition to satisfying the conditions specified in the Administration of Urban and Rural Family Proprietors Tentative Regulations, personally have professional advertising skills and be familiar with the statutes on the control of advertising.

Article 7: Pursuant to Article 6 of the Regulations, the procedures for the registration of an advertising business operator shall be carried out as follows:

(1) When establishing an enterprise to be engaged in advertising business, an application for enterprise registration shall be made to the competent administration for industry and commerce, which shall issue a business licence.

(2) If the applicant is a radio station, a television station, a newspaper or periodical publisher, an institution, or another work unit for which laws or administrative statutes specify that its application to engage in advertising as a sideline should take the form of an application for registration as having obtained permission to engage in advertising business, it shall apply for registration to the administration for industry and commerce of the relevant province, autonomous region, municipality directly under the central government or city with independent development plans or the administration for industry and commerce at the county level or above authorized thereby, which shall issue an Advertising Business Permit.

(3) When a family proprietor intends to engage in advertising business, he or she shall apply to the administration for industry and commerce of the place where he or she is located, which shall register him or her in accordance with the law and issue him or her a business licence.

Article 8: If an advertising client applies to advertise cigarettes through a medium other than radio, television, newspapers or periodicals, such application shall be subject to the approval of the administration for industry and commerce of the province, autonomous region or municipality directly under the central government or the administration for industry and commerce of a city directly under the provincial government authorized thereby.

Article 9: Pursuant to Article 7 of the Regulations, when an advertising client applies to release an advertisement, he or she shall present the appropriate supporting documentation:

(1) an enterprise or family proprietor shall present its/his/her business licence for examination;

(2) a Party or government organization, an association or an institution shall present its own certification;

(3) an individual shall present certification issued by the village or town people's government, the neighbourhood office or the work unit to which he or she is attached; and

(4) a resident representative office of a foreign enterprise shall present for examination its Certificate of Registration of a Resident Representative Office in China of a Foreign Enterprise issued by the State Administration for Industry and Commerce.

Article 10: Pursuant to Item (1) of Article 11 of the Regulations, when applying to advertise merchandise, a quality certificate attesting to its compliance with state standards, ministry standards (or professional standards) or enterprise standards shall be presented for examination.

Article 11: Pursuant to Item (7) of Article 11 of the Regulations, when applying to advertise any of the following, the relevant supporting documentation shall be submitted:

(1) for advertisements for the publication and distribution of newspapers and periodicals, the registration certificate issued by the press and publishing authority of the province, autonomous region or municipality directly under the central government shall be presented for examination;

(2) for advertisements for the publication and distribution of books, proof of the press and publishing authority having approved the establishment of the publisher shall be submitted; and

(3) for advertisements for any type of arts performances, supporting documentation shall be submitted in accordance with relevant provisions.

Article 12: Pursuant to Item (8) of Article 11 of the Regulations, when applying to publish or broadcast advertisements with the following content, relevant supporting documentation shall be submitted:

(1) for advertisements for any kind of sales fairs, procurement fairs, trade fairs, etc., proof of the approval of the authority in charge of the organizer shall be submitted; and

(2) for advertisements containing personal notices, declarations, etc., supporting documentation issued by the work unit to which the individual is attached, the village (town) people's government or the neighbourhood office shall be submitted.

Article 13: When applying to publish, broadcast, install or post advertisements, the advertising clients shall submit the originals or valid photocopies of the various supporting documents.

Article 14: The rate for advertising agency fees is 15% of the advertising fee.

Article 15: When a domestic enterprise wishes to advertise abroad or when a foreign enterprise (or organization) or foreign national wishes to contract for advertising business and advertise in China, it/he/she shall appoint an agent therefor; such agent shall be an enterprise registered in China that has the qualifications to engage in advertising business. Anyone who violates this provision shall be fined not more than three times its/his/her illegal income, to a maximum of Rmb30,000; if there was no illegal income, it/he/she shall be fined not more than Rmb10,000.

Article 16: Pursuant to Article 12 of the Regulations, as concerns advertising agency work and the publication of advertisements, advertising agents and releasers of advertisements shall be responsible for vetting the contents of the advertisements and examining the relevant supporting documentation and shall have the right to require the advertising clients to submit other necessary supporting documentation. No one may act as an agent for, or release, an advertisement for which there is no lawful supporting documentation, or the supporting documentation for which is incomplete or the contents of which are false.

Advertising business operators must establish systems for the registration of the undertaking of advertising, the review of advertisements and the keeping of advertising business files. Advertising business files shall be preserved for not less than one year.

Article 17: If an advertising client violates Article 3 or Item (5) of Article 8 of the Regulations by deceiving users or consumers through false advertisements, he or she shall be ordered to release a corrected advertisement within the appropriate scope and, depending on the circumstances, a notice of criticism shall be circulated and/or he or she shall be fined not more than three times his or her illegal income, to a maximum of Rmb30,000, or if there was no illegal income, be fined not more than Rmb10,000; if users or consumers were caused to incur a loss, he or she shall be liable for damages.

If an advertising business operator assists an advertising client in disseminating falsehoods, then, depending on the circumstances, a notice of criticism shall be circulated, his or her illegal income shall be confiscated and/or he or she shall be fined not more than three times his or her illegal income, to a maximum of Rmb30,000, or if there was no illegal income, be fined not more than Rmb10,000; if the circumstances are serious, he or she may be ordered to suspend business for rectification or his or her business licence or Advertising Business Permit may be revoked; if users or consumers were caused to incur a loss, he or she shall be jointly and separately liable for damages.

The cost of advertising a correction shall be shared between the advertising client and the advertising business operator.

Article 18: Anyone that violates Article 4 or Item (6) of Article 8 of the Regulations shall, depending on the circumstances, be punished by circulation of a notice of criticism, confiscation of his or her illegal income, imposition of a fine of not more than Rmb5,000 or the ordering of suspension of business for rectification.

Article 19: If an advertising business operator violates Article 6 of the Regulations by engaging in advertising business without a licence or permit, he or she shall be punished in accordance with the relevant provisions of the Investigating, Handling and Shutting Down Unlicensed Business Operations Procedures. If an advertising business operator's engagement in advertising business exceeds his or her scope of business, he or she shall be punished in accordance with the relevant provisions of statutes on the administration of enterprise registration.

Article 20: An advertising client that violates Article 7 of the Regulations shall, depending on the circumstances, be punished by circulation of a notice of criticism and/or a fine of not more than Rmb5,000.

Article 21: If Item (1), (2), (3) or (4) of Article 8 of the Regulations is violated, the advertising business operator shall be punished by circulation of a notice of criticism, confiscation of his or her illegal income and imposition of a fine of not more than Rmb10,000; and the advertising client shall, depending on the circumstances, be punished by circulation of a notice of criticism and/or a fine of not more than Rmb10,000.

Article 22: If a press work unit violates Article 9 of the Regulations, it shall, depending on the circumstances, be punished by circulation of a notice of criticism, confiscation of its illegal and/or imposition of a fine of not more than Rmb10,000.

Article 23: If an advertising business operator violates Article 10 of the Regulations, he or she shall, depending on the circumstances, be punished by circulation of a notice of criticism, confiscation of his or her illegal income and/or imposition of a fine of not more than Rmb10,000.

Article 24: If an advertising client violates Article 11 of the Regulations by forging, altering, using without authorization or illegally reproducing an advertising certificate, he or she shall be punished by circulation of a notice of criticism and a fine of not more than Rmb5,000.

If an advertising business operator violates Item (3) of Article 11 of the Regulations, he or she shall be fined not more than Rmb1,000.

Anyone that issues illegal or sham supporting documentation for an advertising client shall be punished by circulation of a notice of criticism and a fine of not more than Rmb5,000 and shall bear joint and several liability.

Article 25: If an advertising business operator violates Article 12 of the Regulations, he or she shall, depending on the circumstances, be punished by circulation of a notice of criticism, confiscation of his or her illegal income and/or imposition of a fine of not more than Rmb3,000. If a false advertisement is released as a result of the violation, he or she must take responsibility for releasing a corrected advertisement. If users or consumers were caused to incur a loss, he or she shall be jointly and severally liable for damages.

Article 26: If anyone violates Article 13 of the Regulations by illegally installing or posting an advertisement, his or her illegal income shall be confiscated, he or she shall be fined not more than Rmb5,000 and a time limit shall be imposed for him to remove such advertisement. If the advertisement is not removed within the time limit, removal shall be enforced at the expense of the work unit or individual that installed or posted the advertisement.

Article 27: If anyone violates Article 14 or 15 of the Regulations, he or she shall, depending on the circumstances, be punished by circulation of a notice of criticism, imposition of a deadline for rectification, confiscation of his or her illegal income and/or imposition of a fine of not more than Rmb5,000.

Article 28: These Rules shall be effective as of January 1 2005.

1 Translation © Baker & MKenzie 2005