Companies that distribute illegal adverts inside newspapers and magazines - a problem plaguing many local newspaper subscribers - could face fines of at least 5,000 yuan (US$660), according to new draft regulations.

The draft, which is under discussion at the Shanghai People's Congress session, bans companies or individuals from distributing illegal handouts and adverts containing fake or pornographic information inside legal publications.

Violators who gain illegal profits of less than 10,000 yuan will be ordered to pay a fine of 5,000 yuan to 20,000 yuan.

Those who make profits of 10,000 yuan or more will have all their earnings confiscated, plus pay a penalty up to 10 times the amount of profit.

"The new draft is expected to regulate the city's publication distribution practice and prevent hidden political and social security hazards brought by illegal ads and handouts," said Sun Yong, director of the Shanghai Press and Publication Bureau.

In recent years, growing numbers of readers report that newspapers carry flyers inside for weight-loss products, drugs, medical services and pornographic materials.

"Some of the ads and handouts even deliberately imitate the layout of the newspaper and can be mistaken for part of the newspaper. It's very annoying," said Liu Biqin, 52, a local subscriber.

Shanghai Morning Post, one of the most popular daily newspapers, has issued statements repeatedly since last year to clarify that ads and posters inside the paper were not authorized.

(Shanghai Daily August 15, 2007)