Import Regulations Expose Legal Contradictions

BEIJING --- In May 1999, the Ministry of Culture (MOC) joined the State General Administration of Customs (SGAC) in drafting new "Import Regulations on Audiovisual Products", but did not put the regulations into effect. After China and the US finally completed talks on China's entry to WTO in November, many insiders expected the government to re-draft more relaxed import regulations.

However, according to sources at the MOC, at the end of last year it was decided that audiovisual products belong to the field of ideology and still need to be administered strictly. Even if China joins WTO, the source said, the culture market will not be opened up in the short term and the original regulations on imported audiovisual products will still be enacted.

Indeed, the MOC maintains that their " Regulations on Importing Audiovisual Products" are necessary to standardize the culture market. But, study of the six chapters and forty-two articles reveal many contradictions with other regulations that are also currently in force.

For example, Article 4 stipulates that the MOC is responsible for the national import of audiovisual products and for verifying the contents of imported products while Article 17 says distribution licenses for audiovisual products will be provided only to units validated by the MOC.

But, Article 27 of the "Regulations Governing Audio and Video Products" issued by the State Council in 1994 stipulates that the contents of imported audiovisual products should be verified by audiovisual products verifying organizations, not MOC.

In fact, the State Council regulations state that after verification, successful applicants will be issued distribution licenses respectively by MOC administration departments and radio, film and TV administration departments, before reporting to the State Press & Publication Administration (SPPA) departments. Only then can products be copied and sold.

In claiming responsibility for the entire process, the MOC would seem to be attempting to bypass existing regulations.

As if this is not complicated enough, the SPPA also has its views on the matter which it formalized in its "Provisions Governing Electronic Publications" issued in December 1997. Article 58 of that document stipulates that "importers of finished products of electronic publications (including FD, CD-ROM, CD-I, DVD-ROM etc.) need to report the contents to SPPA for approval and only then can be imported.

The question here is whether electronic publications are audiovisual products and, if not, what is the difference between the two?

Regulations should aim to be objective, specific, rigorous and logical if they are to retain their credibility, but multiple conflicts between the "Regulations on Importing Audiovisual Products" decreed by MOC and the related regulations decreed by the State Council, MRFT and SPPA show that not to be the case.

What is clear is that China has not successfully divided the jurisdictions of the MOC, SARFT and SPPA, has failed to clarify the definitions of audiovisual products and fallen well short of determining the legal boundaries and business limits required by a mature market.

The jurisdiction problem among the three sides hasn't been settled for many years and each organization has its own version of events. But, the fact remains that the SGAC is currently facing a choice of regulations to enforce. As we have seen in many cases, regulatory uncertainty tends to benefit only smugglers, pirates and corrupt officials.

And what about foreign companies that are even now preparing to enter the Chinese market? Can they be expected to understand this regulatory madness and excessive red tape? Are these various regulations actually helping or hindering the market?

Ironically, in their efforts to hold on to their power, at least two of the protagonists may well end up losing it as the State Council is forced to push through more modern and streamlined trade provisions. At the moment, insiders are tipping the SARFT to disappear completely and SPPA to withdraw into the Propaganda Bureau.

This would leave the MOC in a central position that is made all the more uncertain by the increasing use of new delivery methods that make "passing customs" largely irrelevant anyway. It will also have to deal with the "ideology" issue as WTO accession approaches. Nevertheless, the regulations do affect many CMM subscribers and a summary of the key points can be found in 'Ministry of Culture Sticks with AV Import Regulations'.