1. Application for benefits under the Agreement for any co-production must be made simultaneously to both authorities at least thirty (30) days before shooting begins. The authorities will provide the applicant no later than five (5) working days before shooting with a statement of their decision. Documentation submitted in support of an application shall consist of the following items, drafted in Chinese and/or Dutch and English, as requested by the respective Competent Authorities:
a. The final script;
b. A document providing proof that the copyright for the production has been legally acquired;
c. A copy of the co-production contract signed by the two co-producers.
The contract shall include in any case:
i. The title of the Co-Production;
ii. The name of the producer, author of the script or that of the adaptor if it is drawn from a literary source;
iii. The name of the director (a substitution clause permitted to provide for his/her replacement if necessary);
iv. The budget, including the financing plan;
v. International distribution estimates;
vi. The respective shares of the co-producers in any over or under expenditure, which shares shall in principle be in proportion to their respective contributions, although the minority co-producer’s share in any over expenditure may be limited to a lower percentage or to a fixed amount providing that the minimum proportion permitted under section B.8 of this Annex is respected;
vii. A clause recognizing that admission to benefits under the Agreement does not bind the Competent Authorities in either country to permit public exhibition of the Co-Production;
viii. The period when shooting is to begin;
ix. A clause stipulating that the majority co-producer shall take out insurance policy covering at least “all production risks” and “all original material production risks”;
d. The distribution contract, where this has already been signed;
e. A list of the creative and technical personnel indicating nationalities and role, and in the case of performers, the roles they are to play;
f. The production schedule;
g. The detailed budget, identifying the expenses to be incurred in each country by each producer;
h. The synopsis.
The Competent Authorities of the two countries can demand any further documents and all other additional information deemed necessary.
Amendments, including the replacement of a co-producer, may be made in the original contract but they must be submitted for approval by the Competent Authorities of both countries before the Co-Production is finished. The replacement of a co-producer may be allowed only in exceptional cases and for reasons satisfactory to both the Competent Authorities.
The Competent Authorities will keep each other informed of their decisions as set out under 1.
2. The contract or contracts governing the making of the Co-production Films will provide that a co-producer may assign or dispose of the benefits referred to in Article 2 of the Agreement only to a Co-producer who is a National or Resident of or established in that co-producer’s country.
3. The Competent Authorities will satisfy themselves that conditions of work in the making of Co-production Films under the Agreement in each of the countries of the participating co-producers are in broad terms comparable and that in the event that location shooting of the film takes place in a country other than that of a co-producer, conditions will be, in broad terms, no less favorable.
4. None of the co-producers will be linked by common management, ownership or control, save to the extent that it is inherent in the making of the Co-production Film itself.
5. Co-production Films will be made and processed up to the creation of the first release print in China or the Netherlands, and when there is a third party co-producer, in that co-producer’s territory. Re-voicing of co-production films may be carried out in China or the Netherlands, and when there is a third party co-producer, in that co-producer’s territory.
The majority of this work will normally be carried out in the country of the co-producer which has the major financial participation but the Competent Authorities may mutually approve other arrangements. The Competent Authorities may also mutually approve location filming in a country other than the countries of the participating co-producers.
6. Individuals participating in the making of Co-production Films, i.e. the main cast and crew, will be Nationals or Residents of China or the Netherlands or of a member state of the European Union or the European Economic Area, or, where there is a third party co-producer, citizens of that co-producer’s territory.
In circumstances, where script or financing dictates, personnel (cast or crew) from other countries may be engaged. The engagement of such personnel will be in accordance with the applicable laws and regulations of the Contracting Parties.
Where the competent authorities have approved location filming in a country other than that of the participating co-producers, citizens of that country may be employed as crowd artists, in small roles, or as additional employees whose services are necessary for the location work to be undertaken.
7. The performing, technical and craft contribution (being the “creative” contribution) and the financial contribution of each co-producer will be agreed by the co-producers, provided that the performing, technical and craft contribution of each co-producer to a Co-production Film will be in reasonable proportion to each of the co-producer’s financial participation. When assessing the financial contribution of each co-producer, the Competent Authorities may mutually approve “in kind” contribution (including, but not limited to, the provision of studio facilities) as part of the financial contribution. The Competent Authorities encourage the exchange of industry personnel and students.
8. Each co-producer will have a financial and creative contribution of not less than twenty per cent (20%) of the total financial and creative contribution for the Co-production Film, and not more than eighty per cent (80%) of the total. In circumstances, the Competent Authorities may agree to different limits, but subject to new minimum and maximum limits of 10% and 90%, respectively.
9. Any music specially composed for a Co-production Film will, subject to any departure from this rule which is approved by the Competent Authorities, be composed by Nationals or Residents of China, the Netherlands or of a member state of the European Union or, where there is a third party co-producer, by citizens of that co-producer’s territory. The engagement of such personnel will be in accordance with the laws and regulations of the Contracting Parties.
In circumstances, where script or financing dictates, music composers from other countries may be engaged. The engagement of such personnel will be in accordance with the applicable laws and regulations of the Contracting Parties.
10. At least ninety per cent (90%) of the footage included in a Co-production Film will, subject to any departure from this rule which is mutually approved by the competent authorities, be especially shot for that film.
11. The contracts between the co-producers shall:
a. provide that a sufficient number of copies of the final protection and reproduction material used in the production be made for all the co-producers. Each co-producer will be the owner of a copy of the protection and reproduction material and will be entitled to use it to make the necessary reproductions. Moreover, each co-producer will have access to the original production material in accordance with the conditions agreed upon between the co-producers which at least will contain a clause stating that each co-producer is co-holder of the tangible elements of the film and guarantee that all materials are copyright protected and that any exploitation can only be conducted with agreement of both co-producers;
The material should be registered to the joint names of the co-producers in a jointly agreed upon laboratory to which each co-producer should have access.
b. set out the financial liability of each co-producer for costs incurred:
i. in preparing a project which is refused conditional approval as Co-production Film by the Competent Authorities;
ii. in making a film which has been given such conditional approval and fails to comply with the conditions of such approval; or
iii. in making an approved Co-production Film, permission for whose public exhibition is withheld in any of the countries of the co-producers;
c. set out the arrangements regarding the division between the co-producers of the revenues from the exploitation of the film, including those from export markets; the sharing of revenues should, in principle, be proportional to the total contribution of each of the co-producers and shall be subject to approval by the Competent Authorities of both countries. This sharing consists of either a sharing of revenues or a sharing of markets or a combination of both formulas.
d. specify the dates by which their respective contributions to the production of that film will have been completed.
12. Each Co-production Film will include either a separate credit title indicating that the film is either a “Chinese-the Netherlands Co-production” or a “the Netherlands-Chinese Co-production”, or where relevant, a credit which reflects the participation of China, the Netherlands and the territory of the third party co-producer and will carry the logos of the Competent Authorities.
13. Over each period of four years commencing on the date that the Agreement enters into force, an overriding aim of the Agreement, monitored by the Competent Authorities, will be to ensure that an overall balance is achieved as regards:
a. the contribution of each country to the production costs of all Co-production Films;
b. the usage of studios and laboratories;
c. the employment of all performing, craft and technical personnel; and
d. the participation in each of the major performing, craft and technical categories and in particular, that of the writer, director and lead cast.
14. The Competent Authorities will inform each other of new Agreements set up with other countries, in order to increase the effectiveness of the Agreement.