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New agreement signed under the framework of CEPA (27.11.2015)
2/3/2016

A new Agreement on Trade in Services under the framework of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) was signed between the Hong Kong SAR Government and Ministry of Commerce on 27 November 2015. The agreement is a subsidiary agreement relating to trade in services under the framework of CEPA.

Liberalisation measures for the Audiovisual Sector under the Agreement relating to the film industry are -

Videos, sound recording products

1. To allow Hong Kong service suppliers to provide videos and sound recording (including motion picture products) distribution services in the Mainland in the form of wholly-owned or equity joint venture operations.

2. To allow Hong Kong service suppliers to set up enterprises on a wholly-owned, equity joint venture or contractual joint venture basis in the Mainland to produce video and sound recording products.

3. To allow motion pictures produced by Hong Kong to screen the original sound track of the dialects spoken in the motion pictures when it is contextually required, on the condition that standard Chinese subtitles are provided on screen.

4. To allow contractual service providers employed by Hong Kong service suppliers, in the mode of movement of natural persons, to provide services under the specific liberalisation commitments of this sector or sub-sector in the Mainland.

Cinema theatre services

5. Hong Kong service suppliers are permitted to establish wholly-owned companies in the Mainland, each of which may construct or renovate more than one cinema theatre at more than one location for the operation of film screening business.

Chinese language motion pictures and motion pictures jointly produced

6. Chinese language motion pictures produced in Hong Kong after being vetted and approved by the relevant Mainland authority may be solely imported through the China Film Group Corporation and distributed in the Mainland by distributors possessing "Operation Licence for Film Distribution", without any restriction on import quotas.

7. Chinese language motion pictures produced in Hong Kong refer to those motion pictures made by production companies which are set up or established in accordance with the relevant laws of the Hong Kong Special Administrative Region, and which own more than 50% of the copyright of the motion pictures concerned. Hong Kong residents should comprise more than 50% of the total principal personnel in the motion pictures concerned.

8. Motion pictures jointly produced by Hong Kong and the Mainland are treated as Mainland motion pictures for the purpose of distribution in the Mainland. Translated versions of the motion pictures in languages of other Chinese ethnic groups and Chinese dialects, which are based on the Putonghua version, are allowed to be distributed in the Mainland.

9. For motion pictures jointly produced by Hong Kong and the Mainland, there is no restriction on the percentage of principal creative personnel from Hong Kong, but at least one-third of the leading artistes must be from the Mainland; there is no restriction on where the story takes place, but the plots or the leading characters must be related to the Mainland.

10. To allow motion pictures co-produced by Hong Kong and the Mainland to be processed outside the Mainland after obtaining the approval of the relevant authorities in the Mainland.

11. To allow Mainland motion pictures and motion pictures co-produced by Hong Kong and the Mainland to be processed in Hong Kong.

12. To allow Hong Kong service suppliers to establish wholly owned companies in the Mainland on a pilot basis to engage in the distribution of Mainland produced motion pictures after obtaining the approval of the relevant authorities in the Mainland.

13. To allow the dialect version of motion pictures co-produced by Hong Kong and the Mainland to be distributed and screened in the Mainland, after obtaining the approval of the relevant authorities in the Mainland, on the condition that standard Chinese subtitles are provided on screen.

14. To allow the dialect version of motion pictures produced by Hong Kong after being vetted and approved by the relevant Mainland authority to be solely imported by the China Film Group Corporation and distributed in the Mainland by distributors possessing "Operation Licence for Film Distribution", on the condition that standard Chinese subtitles are provided on screen .

15. To allow post production of domestic films (including co-productions) to be processed in Hong Kong after obtaining approval of the State Administration of Press, Publication, Radio, Film and Television on applications initiated by the principal production entity in the Mainland .

16. To allow contractual service providers employed by Hong Kong service suppliers, in the mode of movement of natural persons, to provide services under the specific liberalisation commitments of this sector or sub-sector in the Mainland.

The above measures will take effect from 1 June 2016.

Details of CEPA and the Agreement can be found at the website http://www.tid.gov.hk/english/cepa/index.html.