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Law on Fake Goods Officially Goes on Duty

A new set of measures governing the marketing and renting of audio-visual products becomes effective today, bringing stronger restrictions against the pirating and smuggling of these products.

The measures, issued by the Ministry of Culture on April 4, have strengthened actions against illegal audio-visual products and activities.

Retailers and renters of these pirated and smuggled products will have their licences revoked and not be permitted into the business again for 10 years, said Tuo Zuhai, an official with the ministry.

They will also be fined a much higher penalty than before. Profits of illegal sales over 100,000 yuan (US$12,000) for example, can lead to penalties five to 10 times that amount.

The new measures have also lifted previous restrictions on ownership for audio-visual businesses but at the same time call for restrictions in other areas, said the official.

Through licences issued by administrative departments, individuals are allowed to sell and rent retail audio-visual products.

The easing of restrictions is unlikely to cause a new spree of shop openings however, since other requirements on business standards such as size, registered capital and management systems are tighter. For example, an audio-visual retail and renting shop must have an area of at least 40 square metres for conducting business, and a nationwide chainstore group should have a registered capital of 30 million yuan (US$3.6 million).

Insiders say the regulations were a wise decision, since they will help the development of a genuine audio-visual market.

"Thirty million yuan (US$3.6 million) is the lowest requirement for running chainstores. Without this restriction, just like in the past when people with several million yuan could open a chainstore group, it is hard to ensure a non-pirated product chainstore," said Wang Qiuhui, deputy general manager of the Xinhua Audio-Visual Renting and Distribution Co Ltd.

(China Daily April 10, 2002)

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