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Self-Regulation in China
Edward Lehman
LEHMAN, LEE & XU
16 November 2007
Overview of China’s
Advertising Regulatory
Structure
Before & Now
Business Revenue of China’s
Advertising from 1990-2006
[Unit: one hundred million Yuan (RMB)]
[Source: State Administration of Industry & Commerce]
2000
1500
1000
500
0
0
1990
1995
2000
2005
2006
25.017
273.27
712.66
1416.05
1573
Global Advertising Market
Share 2004
[Source: iReserachGroup]
Others 25.8%
USA 42.6%
South
Korea 1.8%
China 2.4%
Italy 2.7%
France 3.3%
Germany 5.3%
UK 5.4%
Japan 10.7%
Functions of Advertising
Administrative
Organs
Formulate Administrative Rules
Qualification Examination
and
Approval of
Operation of Advertising
Guide Organizations within the Industry
Administration,
Law Execution
and
Supervision
Administrative Investigation
and
Disposal of Illegal Advertising
Development Planning
for
the Advertising Industry
Prior Examination
of
Special Advertising
Advertising Administrative Structure
State Administration for Industry and Commerce (SAIC)
AIC of Provinces and Municipalities directly
under Central Government
Prefecture AIC
County AIC
Dept. of AIC
Prefecture AIC
County AIC
Dept. of AIC Dept. of AIC
County AIC
Dept. of AIC Dept. of AIC
Dept. of AIC
Prior Examination of Ads By
Chinese Governmental Departments
Ministry of
Health
State Administration for
Industry & Commerce
General Admin.
of Press &
Publication
Food & Drug
Administration
Ministry of
Info. Industry
Administration
of Radio, Film
& TV
Ministry of
Agriculture
Local AIC
Supervision over Advertising Industry
Roles & Functions of AICs

Department of Advertising Regulation of
SAIC is the competent authority directly
under the State Council in charge of
drafting and enforcing regulations and the
implementation rules thereof.

AICs are in charge of market
supervision/regulation and related law
enforcement through administrative
means.
 Any
person, either natural or legal,
who alleges that the advertising
operators have infringed their
legitimate rights and caused damages
to their properties or other rights may
report the case to the competent AIC
who will grant an administrative
decision upon the case. Either party
may appeal to the AIC at the next
higher level or bring a suit directly to
the people’s court if they are not
happy with the decisions.
Additional Approvals for
Special Products
Approvals are needed for the
advertisements of health foods,
pharmaceuticals and medical
equipment from the Administration of
Foods and Pharmaceuticals.
 Approvals are needed for the
advertisements of tobaccos and
outdoor advertisements from the AIC.
 Approvals are needed for the
advertisements of pesticides and
animal drugs from the government
agencies of agriculture.

Self-Regulation in China
China Advertising
Association (CAA)

It is a self-regulatory entity, but to a
certain extent, supervised by SAIC

Its main mission is to provide
consultation and legal opinions to
advertising operators and agencies set
up under supervision of SAIC

Their opinions are not final but are
accepted by competent government
agencies more often than not in view of
their experience and connection with
SAIC
Advertising Consultation Procedure
Advertising Agency, Media, Advertiser
Certifying
Documents
Advertisement
Production
Agreement to
produce & Notice
of Prelim. Exam.
Advertisement
Presentation
Examination of
characters & images
Idea
Product
Notice of Preliminary
Examination &
comments
Certificate of
Substantial
Examination
Advantages of Consultation
Process

CAA has close connection with
Department of Advertising Regulation of
SAIC and is abreast of legal
development and new guidelines

Consultation process is voluntary

CAA adopts a two-pronged examination
process

CAA is responsible for rectifying
problems that arise after consultation &
authentication
Ways To Improve Efficiency of
Advertising Self-Regulation

Entrust more powers and responsibilities
to Legal Consultative Commission of CAA

Extend the scope of self-regulation

Increase transparency and awareness of
self-regulation

Establish advertising dispute settlement
and complaint resolution mechanisms
Edward E. Lehman
Lehman Lee & Xu
Chinese Law Firm with a Global Perspective
Beijing, China
[email protected]
www.lehmanlaw.com