China Cybersecurity Law

Posted on: 01/12/2016

After much anticipation, the Chinese legislature finally passed the Cybersecurity Law (CSL) on 7 November 2016, and the CSL will come into legal effect on 1 June 2017. The CSL is the last of the trio of laws focusing on cybersecurity, after the National Security Law and the Anti-Terrorism Law. 

The CSL is significant because of its broad scope and potentially far reaching effect. While much still hinges on implementing regulations and standards to be issued by the State Council, the Cybersecurity Administration of China (“CAC“) and the Ministry of Industry and Information Technology, it has the potential to create significant disruption to business operators in China, in particular foreign business operators with significant online/digital presence and/or operations reliant on telecommunications network and/or the constant cross-border movement and sharing of business, employee and consumer data. In a worst-case scenario, many foreign business operators may be required to carve-out China from their global or regional technology, infrastructure/backbone, and/or become mired in time-consuming regulatory approvals for the export or sharing of data with entities outside China.

The law drew criticism from foreign business groups due to the expansive list of sectors that are defined as part of China’s “critical information infrastructure,” making sectors including telecommunications, energy, transportation, information services and finance subject to security checks. China’s lawmakers described the law as necessary to bolster its data security at a time of multiplying threats. 

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