Compliance legal services refer to the consulting services provided by lawyers to help enterprises prevent, identify, evaluate, report, and respond to compliance risks based on their understanding of relevant domestic and foreign laws and regulations, international organization rules, regulatory regulations, compliance requirements, business practices, and ethical norms in the industry and business field of the enterprise, as well as the articles of association and rules and regulations formulated by the enterprise in accordance with the law Special legal services and advisory services such as agency. The compliance team of the Firm continues to discuss how lawyers can provide compliance legal services to film, television, cultural and entertainment enterprises.

1、 Differences between compliance legal services and traditional legal advisory services

Traditional legal advisory services are relatively passive, and lawyers typically provide targeted answers and solutions when clients have questions that require consultation. Compliance legal services have the characteristics of initiative, and generally require active involvement in the operation of enterprises or projects.

The traditional content of legal counsel focuses on controlling and reducing the legal risks of the enterprise, and only focuses on protecting the unilateral rights and interests of customers. The main goal of compliance legal services is not to control legal risk alone, but to control the overall compliance risk of the enterprise, while paying attention to the protection of the enterprise and its stakeholders.

3. Traditional legal advisers do not excessively intervene in the business and operation of enterprises, mainly providing legal services. Compliance legal services have a higher level of control over enterprises, and the depth and support of compliance legal services in enterprise management and business development are far greater than traditional legal advisers.

4. Compliance legal services require lawyers to have an industrial perspective and have high requirements for lawyers. Lawyers need to pay attention to not only laws and regulations, but also international organization rules, regulatory regulations, industry standards, business practices and ethics, as well as the bylaws and rules formulated by enterprises according to law. Lawyers need to focus not only on the enterprise itself, but also on its stakeholders, including local regulatory agencies, communities around the enterprise, employees of the enterprise, counterparties to contracts, consumers, and so on. In addition, in the process of providing compliance legal services to enterprises, lawyers should also pay attention to the cultivation of compliance awareness among all members of the enterprise and the cultivation of the enterprise's compliance culture, which requires long-term communication and investment.

2、 Types of Compliance Legal Services

There are many types of compliance legal services, mainly including compliance regulatory responses, compliance investigations, business partner compliance management, compliance training, compliance evaluation, compliance consultants, and construction of compliance management systems. However, in practice, the above types of compliance legal services are not completely independent, and often cross conducted according to the needs of the enterprise itself or the requirements of relevant regulatory authorities.

3、 Workflow for compliance supervision and response in the field of "qualification compliance" for film, television, cultural and entertainment enterprises

"Compliance regulatory response" refers to the response legal services entrusted by an enterprise to lawyers when the enterprise or its personnel have committed violations and have been or may be subject to supervision by domestic and foreign administrative organs, judicial departments, and international organizations, in order to achieve the goal of stable handling and risk control.
The need for compliance legal services by film and television cultural and entertainment enterprises often comes from the compliance supervision of regulatory authorities. Therefore, "compliance supervision response" compliance legal services are a relatively common type of film and television cultural and entertainment enterprises. The following is an example of the compliance regulatory response in the key area of "qualification compliance" to explore the working methods and processing processes of the compliance legal service business.

For example, the agent company of artist Cai Moumou, Shanghai Moumou Cultural Development Co., Ltd., did not obtain a "Business Performance License", and used its exclusive artist resources to actually take charge of business performance management activities such as performance content, performance ticketing, and revenue settlement during the performance activities of the artist's touring concert Beijing Station. The Beijing Municipal Bureau of Culture and Tourism shall impose a fine on those who engage in commercial performance business activities without permission. In this situation or similar situations, enterprises can entrust lawyers to provide "compliance regulatory response" compliance legal services. The main process of lawyers can be conducted with reference to the following content.

（1） Establish a delegation relationship

Sign a special legal service contract with customers to clarify the service content and scope. For example, the service content of the above case can be described as "providing special compliance legal services for compliance regulatory responses to the (Beijing) Document Enforcement Penalty [2021] No. 2000 * * Administrative Penalty Decision issued by the Beijing Municipal Bureau of Culture and Tourism"; The scope of services can include: conducting due diligence, issuing a Compliance Investigation Report, assisting the client in cooperating with regulatory authorities in their investigations, assisting the client in releasing information to the outside world, assisting the client in handling and rectifying violations, and so on.

（2） Conduct due diligence work

The content of due diligence mainly includes: investigating whether there is any violation of the enterprise's "unauthorized engagement in commercial performance business activities", the specific facts involved in the violation, the employment and other personal information of the violator, the enterprise's management regulations, and the business processes related to the violation.
Based on relevant practical experience, lawyers can divide the work of due diligence into the following steps:

1. Assist enterprises in establishing internal investigation teams

The investigation team should have senior management personnel from the enterprise, who can comprehensively lead the investigation team and make decisions at any time.

The investigation team should have personnel from the audit internal control department to demonstrate the possible adverse consequences of violations from the perspective of financial and risk control and whether violations can be avoided.

The investigation team should have specific business department personnel to demonstrate from the perspective of actual business operations.

The investigation team should have corporate lawyers or legal personnel to assist in the management, analysis, and judgment of the investigation project, collect and improve evidence, plan, and implement interviews.

The investigation team can also engage other necessary relevant personnel, such as external lawyers, auditors, and so on, based on the actual situation.

2. Assist enterprises in conducting investigation work

First, an investigation plan and objectives should be formulated.

Then, conduct an internal investigation to collect business contracts, financial vouchers, payment and receipt records, email, electronic receipt information, and background information about relevant parties related to violations.

Secondly, conduct interviews with relevant parties, relevant witnesses, relevant contacts, relevant business personnel, and other personnel to obtain information, clues, and evidence related to the investigation project.

Thirdly, conduct external investigations, including querying public information on the network, such as the enterprise credit information inquiry system, the people's court judgment document website, the information of the person who has been executed due to breach of trust, and social media information; It also includes conducting interviews with partners, sending confirmation letters, collecting transaction information, and so on; It may also include undercover visits, field investigations, and so on.

3. Assist the enterprise in forming a phased summary report of the investigation work

The investigation work has reached a stage of backwardness. The investigation team will be led by corporate legal advisers or legal personnel, assisted by lawyers, to form a phased summary report of the investigation work, which will be submitted to the enterprise leadership and relevant departments for review. Based on the opinions of leaders or other relevant departments, we will discuss and determine whether additional investigations are needed based on the available investigation data.

（3） Sort out compliance rules

After the due diligence is completed, lawyers can start sorting out the compliance rules and legal provisions related to violations. Taking the business activities of engaging in commercial performances without authorization as an example in this article, the first things that need to be sorted out are the "Regulations on the Management of Commercial Performances" issued by the State Council, the "Detailed Rules for the Implementation of the Regulations on the Management of Commercial Performances" issued by the former Ministry of Culture, as well as the normative documents on commercial performances issued by local administrative departments, the industry norms and ethical norms of the literary and artistic performance industry, and the articles of association and rules formulated by the enterprise according to law.

（4） Issue a Compliance Investigation Report

The lawyer issued a due diligence list to the enterprise, requesting the enterprise to provide corresponding information and the above investigation work files according to the list, and then drafted and issued a Compliance Investigation Report. The content of the Compliance Investigation Report includes detailed facts about the violation, relevant compliance rules and legal provisions, analysis of the nature of the violation, and suggestions for handling the violation.

The above process (II) conducts due diligence to solve the problem of "the factual process of the violation", and process (III) combs the compliance rules to solve the problem of "compliance rules and legal provisions".

"The analysis of the nature of violations" in the compliance investigation report requires lawyers to identify compliance obligations and risks, and identify violations and possible legal liabilities arising from violations based on the facts of the violation, the government's compliance regulatory treatment, and various compliance rules and legal provisions

In the above case, in accordance with relevant compliance rules and legal provisions, a performance brokerage institution applying to engage in commercial performance business activities should have at least three full-time performance brokerage personnel and funds appropriate to their business, and submit an application to the cultural and administrative departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government. The competent cultural department shall make a decision within 20 days from the date of accepting the application. If approved, a commercial performance license shall be issued; "If the application is not approved, the applicant shall be notified in writing and reasons explained.". Only those who have legally obtained a commercial performance license can engage in business related to performance brokerage, performance organization, and ticket sales. Failure to comply with the above compliance rules and legal provisions will result in significant compliance risks.

According to the normal concert approval execution process, the agent company of artist Cai Moumou, Shanghai Moumou Cultural Development Co., Ltd., has not obtained a "Business Performance License", and can entrust a company with business performance qualifications as the sole entity responsible for performing content, performance ticketing, revenue settlement, and other business performance activities. However, according to the relevant punishment results, although the concert was submitted for approval by XXX (Beijing) Culture and Entertainment Co., Ltd., it is still XXX (Shanghai) Culture Development Co., Ltd. that is actually responsible for a series of work related to commercial performance and business activities such as performance content, performance ticketing, and revenue settlement. This is a very typical violation, and it is bound to bear corresponding legal responsibilities.

The "suggestions for handling violations" in the compliance investigation report can include the following aspects: (1) punishment suggestions for violators and their relevant leadership; (2) conducting a review of violations, summarizing lessons learned from compliance supervision, and recommending that enterprises develop or improve corresponding compliance norms, guidelines, and systems; (3) It is recommended that enterprises conduct compliance training and cultural publicity for this violation.

（5） Assist enterprises in handling violations

Distinguish the different situations of violations, as well as the relevant opinions of the enterprise on the handling of violations, and assist the enterprise in handling labor discipline, civil litigation, or criminal reporting of violations. This is similar to the requirements of traditional legal advisory services, and will not be covered in detail in this article.

（6） Assist enterprises in publishing compliance regulatory response information

Assist customers in releasing information related to compliance supervision. Including the fact of violation/non violation, the situation of compliance supervision, the attitude of the enterprise, and the handling of violation facts. In particular, it is necessary to promptly communicate with regulatory authorities, sincerely admit mistakes, actively make up for them, strive for their understanding, resolve conflicts, and take legal and effective measures to reduce the impact on the reputation of the enterprise and brand.

（7） Cooperate with regulatory authorities for investigation and rectification

Assist the customer in cooperating with the investigation work of the regulatory department, and guide the customer to carry out rectification according to the requirements of the regulatory department. Although this work is listed at the end, it is often carried out in an overlapping manner with the previous work. When carrying out this work, special attention should be paid to the regulatory authorities' time limit requirements. In addition, it is also important to assist customers in responding to on-site investigations by regulatory authorities:
1. Prepare daily response plans, and conduct training and publicity on "how to respond to regulatory investigations" for the company's front desk receptionists, business departments, legal departments, and senior executives.

2. Standardize the company's reception process, The front desk warmly and courteously receives the investigators - verifies and registers the investigators' ID cards - promptly notifies the relevant department heads - guides and accompanies the investigators to an independent reception area - the business heads come forward to communicate with the investigators - promptly notifies the company leaders and legal personnel of the information obtained from the investigators - accompanies the investigation throughout the process and keeps records - promptly reports the investigation to the company.

3. Remind the normative points of reception work, for example, it is best to have a lawyer or legal staff accompany the investigation work; Mainly refer to the scope of information and do not actively provide additional information; If you cannot provide materials, explain them in a timely manner, and do not avoid them.

It should be noted that "compliance investigation" refers to the legal services that the company entrusts external lawyers to provide investigation and handling when internal personnel of the company commit violations, in order to punish relevant personnel and correct violations. "Compliance investigation" does not originate from the compliance supervision of regulatory authorities, but mainly from the discovery by the business department itself, or from the work of the internal control department of enterprise audit, or from reports received from people from all walks of life. The workflow of providing internal "compliance investigation" compliance legal services by lawyers is similar to that of the "compliance regulatory response" compliance legal services discussed in this article, which also includes processes such as "establishing a client relationship, conducting due diligence work, sorting out compliance rules, issuing a Compliance Investigation Report, and assisting enterprises in handling violations.".

Our compliance team will continue to explore relevant legal issues such as "how lawyers provide compliance legal services" in key areas of the film, television, cultural and entertainment industry. We welcome your continued attention.