China to waive security checks for some data exports

By Brenda Goh and Josh Ye

SHANGHAI/HONG KONG (Reuters) -China on Thursday proposed relaxing some rules concerning the transfer of data abroad in a move likely to bring some relief to foreign and Chinese companies in the country who trade overseas.

The Cyberspace Administration of China (CAC) said it was considering waiving data export security assessments for activities such as international trade, academic cooperation, cross-border manufacturing and marketing that do not contain personal information or important data.

It also intends to cancel the need for data export security assessments in certain circumstances, including ones involving cross-border shopping, hotel reservation or visa processing activities that require personal information to be transferred abroad, and also for employment purposes.

China’s tightening data laws have vexed several companies over their lack of clarity and long processes, leaving them worried they may step over the line. A European Commission official said last week that European businesses were particularly concerned.

In March, Reuters reported that Chinese regulators eased some deadline pressure on multinational companies struggling to comply with new rules requiring them to seek approval to export user data as the extensive disclosures made the target date unattainable for many.

The proposed rules are open to the public for comment until Oct. 15, it added.

In an email to Reuters, the European Union Chamber of Commerce said, “The release of the draft is seen as a signal from the Chinese Government that it is listening to businesses’ concerns and is ready to take steps to address them, which is a positive.”

It said the draft regulation would bring relief to companies in China as it specifies a list of exemptions to relevant obligations and provides more clarity on what qualifies as “important data”.

“The European Chamber will continue its engagements with the relevant authorities to provide constructive recommendations,” it added.

Alex Roberts, a Shanghai-based lawyer at Linklaters, said the new rules are “a great signal for foreign investment and trade into China”.

“There will be questions about the scope of ‘necessity’ to qualify for some of the exceptions,” he said, “but I think a lot of big and small foreign companies are going to be very happy if the rules pass in the current form.

You Yunting, a lawyer with Shanghai-based DeBund Law Offices, said the new rules “represents a certain degree of relaxation in data export regulation” in China.

He added that the new rules could keep the cross-border transfer of human resources data low for companies. The previous rules were causing consternation among international businesses in China as some fear they could be cut off from assessing their human resources data from within China.

(Reporting by Brenda Goh in Shanghai and Josh Ye in Hong Kong; Editing by Christina Fincher and Alison Williams)