What you need to know about China's Cybersecurity Law

In June 2017, the People’s Republic of China is implementing its controversial Cybersecurity Law. The government is becoming more involved with data protection and strengthening enforcement. Up until now, its current rules have not been clearly defined or regularly enforced, so it is important to keep up with developments or risk getting caught off guard.

Unlike Japan’s focus on protecting data, China turns its attention to the network operators managing data. Below are some key facets to its new policy.

1. Data stored in mainland China: The new law insists that Chinese citizens’ “personal information” and “important data” be stored on servers within its borders. Any companies claiming an exception that is “truly necessary” must undergo a security assessment before information can be released.

2. Law applies to network product and service providers: The majority of the new law’s provisions apply to “Critical Information Infrastructure Operators” (CIIO) possessing data critical to China’s security. Industries predominantly targeted in this new definition include financial, transportation, health care, utilities and telecommunications.

3. Stronger data protection provisions: Supplementing existing data privacy guidelines in China, network operators must first obtain their clients’ consent before collecting and disclosing personal information, including the reason for the disclosure, and take measures to ensure the security of personal information.

4. Security examinations: All network providers must pass a “network security examination.” This includes specific requirements that network operators must follow when purchasing new network systems.

5. Severe consequences for noncompliance: While specific penalties are unknown at this time, cancellation of a business license is part of the current regulations. Additionally, the new regulations require CIIO’s to establish violation reporting mechanisms, suggesting that China is taking the new law very seriously.

As legal and technology professionals in law firms and corporations prepare for the data protection implications of the EU GDPR, do not disregard important changes afoot in Asia. Most importantly, seek guidance from local, in-country experts, prepared to help you collect, host and transport data in investigations, litigation or regulatory matters around the world.