June 16 , 2005

P R E S S   R E L E A S E

FOR IMMEDIATE RELEASE

RE: Implementation of New 2257 Regulations

Sweet Productions Inc., the production and content arm of Sweet Entertainment Group, wishes to put forward to the industry its position regarding the impending 2257 revised rule, set for implementation on June 23, 2005.

As many in the industry know, Sweet Productions Inc. is a Canadian based adult entertainment company. As such, it falls under the purview of Canadian law and those of its province, British Columbia.

In Canada, the right to privacy is a right taken very seriously. In order to align Canada with the European Union’s directive regarding the protection of data, the federal government enacted the Personal Information Protection and Electronic Documents Act (PIPEDA for short). Quebec has been a leader in fashioning privacy protection for its citizens, including constitutional protection for a right to respect for his private life in Section 5 of the Quebec Charter of Human Rights and Freedoms, RSQC, c-12, Section 5. The European community has developed, throughout the 1990's, a directive that was passed by the Council of Ministers in October 1995 and came into force in October 1998, obliging all member states to block the flow of personal data to states without adequate protection, subject to the derogations listed in Article 26. America maintained that self-regulation was a preferred approach to dealing with privacy issues. America is not in line with the European community on this subject.

In Canada, Federal legislation generally applies to federally regulated organizations and applies to provincial organizations where a province has not implemented its own equivalent protections. British Columbia has implemented the Personal Information Protection Act. That Act has been recognized as equivalent legislation by the Canadian government. Accordingly, Sweet Productions Inc.’s electronic data falls under the Personal Information Protection Act of British Columbia. As such, there are certain rights that adult entertainment performers have under that Act and certain obligations that SEG has pursuant to that Act as well.

Sweet Entertainment Group’s Canadian counsel, in consultation with US attorneys, is of the view that the new Regulations are unconstitutional under US law. As such, Sweet Entertainment Group has thrown its support behind the litigation we understand has been commenced by the Free Speech Coalition, which is filing for injunctive relief and a temporary restraining order in the State of California at this time. SEG is currently investigating legal avenues that would extend protection to its existing webmasters from the implementation of the new regulations.

The Tenth Circuit’s decision in Sundance Assoc., Inc. v. Reno, 139 F.3d 804 (10th Cir. 1998) held that the record keeping rule did not apply to secondary producers as it exceeded the Department’s statutory authority. It was held to be unconstitutional. Sweet Entertainment Group is of the view that this is the correct interpretation of the legislation and the Sundance case was decided on that particular point. In contrast, the American Library Ass’n v. Reno, 33 F.3d 78 (D.C. Cir. 1994) decision did not deal with the specific point. However that case is being interpreted as an implied endorsement of the approach taken by the drafters of the new 2257 Regulations.

Sweet Entertainment Group will not, at this time, be releasing any model identification based on the foregoing analysis. In addition Sweet Entertainment Group intends to honour its commitment to its adult entertainment models to respect and be vigilant in the protection of their right to privacy.

Sweet Entertainment has apprised the Canadian and British Columbia Privacy Commissioners of the new 2257 Regulations and is seeking their input and intervention in the matter. SEG’s legal counsel has offered an international perspective on the invasion of privacy that the new 2257 regulations present.

A further press release will be forthcoming once we receive clarification of position from the Federal and Provincial Privacy Commissioners and further consultation with our legal advisors. In the interim SEG appreciates the ongoing support of its webmasters. A leader in the fight for freedom of speech and civil liberties, SEG will continue to lead as it rises to meet this latest legal challenge.