Implementation of cybersecurity law delayed, as foreign companies complain
June 6, 2017 Category Foreign investment, Weekly
China will delay enforcement of part of its controversial cybersecurity law for 19 months, after complaints from foreign businesses. The Cybersecurity Law takes effect from June 1, but the Cybersecurity Administration said a grace period would be given for businesses to comply with cross-border data transfer regulations. That period starts on June 1 and continues until the end of next year. One of the biggest concerns is the requirement that all critical data and the data from “critical information infrastructure” be stored in China, and be examined and assessed before being transferred out of the country. A draft of the supporting regulations was released for public comment in April, while another draft measure on the definition of “critical information infrastructure” was released on May 27. It is also not clear how such infrastructure will be protected. The Cyberspace Administration met international stakeholders on May 19 and discussed the cross-border data movement regulations, offering the grace period, according to the South China Morning Post. Chen Jihong, Partner at the Beijing-based Zhonglun Law Firm, said the decision to have a grace period might have been prompted by the absence of supporting regulations; the need for internal communication within relevant ministries and government departments; and the companies’ demands for more time to make the necessary changes. The supporting regulations, including the cross-border data transfer rules, would probably be finalized later this year.
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