China: Who Has The Keys? China's New Anti-Terrorism Law And Its Implications For Technology Services

Last Updated: 10 June 2016
Article by Todd Liao and Judy Wang

The Standing Committee of the PRC National People's Congress ("NPC") passed a new Anti-Terrorism Law (the "ATL") on December 27, 2015, which took effect on January 01, 2016.  As terrorist-related activities impacting Chinese citizens, domestically and abroad, have spurred an increased focus on the topic by China's leaders, the ATL represents China's first attempt to create a unified anti-terrorism law and codify previous provisions scattered in criminal law and administration regulations. The ATL creates the first definition, if extremely broad, of terrorism under Chinese law, as follows: any proposition or activity that creates social panic, endangers public safety, or violates personal and property rights; or, coercion of national organs or international organizations through violence, destruction, intimidation, so as to achieve political, ideological or other objectives. Already, commentators note that this ambiguous language leaves authorities sweeping discretion to label activities as terrorism.  

Of particular import to the international business community has been the ATL's provisions related to technology and information services.  Chinese leaders have struggled in balancing security interests with privacy concerns when addressing the access allowed to law enforcement agencies to emails, texts, etc.  An initial draft released in November 2014  (the "November 2014 Draft") sparked protests from throughout the international community because of requirements that technology companies provide the Chinese government with proprietary data from users and requirements that Chinese authorities have access to personal information.  The final version of the ATL removed most provisions from the November 2014 Draft that had caused significant concern, but the ATL retains provisions requiring that telecommunications service providers(电信业务经营者)and internet service providers ("互联网服务提供者")("ISP") cooperate with government authorities in investigating terrorism activities, with the degree of cooperation required by such companies unclear in the ATL, creating potential concerns regarding data privacy and security for companies operating in China.

Though the ATL's scope is broad, this article focuses on these provisions of the ATL that address ISPs, and their potential impact on data privacy and security for companies operating within China.

Requirements for Telecoms Service Providers and Providers of Internet Services (ISP)

The ATL's provisions regarding ISPs are contained in Articles 18, 19 and 21.  Together, these articles require that ISPs comply with the following rules relating to terrorism investigations:

  • ISPs must provide their encryption keys to government authorities: Article 18 requires ISPs to "provide technical interfaces, decryption and other technical support and assistance" to the public security and state security agencies "when they are following the law to avert and investigate terrorist activates".  ISPs are also required to use their technical skills to decipher encrypted documents and other materials shared online by suspected terrorists, when so instructed by public security authorities.
  • Enhanced censorship and oversight of Chinese internet: Article 19 of the ATL directs ISPs must adopt monitoring, reporting, early detection, censorship, and emergency response measures to prevent dissemination of any information with terrorist or extremist content. Specifically, if an operator of network and information system discovers "information with terrorist content," then it shall immediately cease transmission of the offending information, record all details related to its transmission, and report the matter to the public or national security authorities. These requirements mirror censorship requirements under current telecommunications regulations, simply expanding these rules to include "terrorist content." 
  • Real-name registration: the ATL stipulates that ISPs operating networks and information systems (as well as the lodging, long-distance transportation, financial and car rental service provides)  must require the real names of all registered users. Under the ATL, ISPs are required to verify the identity of their clients and deny services to any individual whose real identity is unclear.  Such requirements have long existed for ISPs providing services related to blogs and messaging, and the ATL essentially expands such requirements further to all other services.  

The penalties of ISPs for non-compliance are significant, including monetary fines greater than RMB500,000 for companies and similar monetary fines and detention for individual managers of ISPs.

Changes between November 2014 Draft and ATL

The ATL omits additional requirements that had generated the most furor, including that (i) ISPs file with authorities their password and cryptographic information with encryption authorities, and (ii) installation of so-called backdoors allowing PRC authorities access to encrypted information and communications.  In their place, Article 18 of the ATL offers a more narrowly crafted requirement for assistance in terrorism-related investigations.  While such assistance conceivably includes similar activities contemplated in the November 2014 Draft, authorities appear to have narrowed the instances in which such services will be requested to make concessions regarding privacy concerns.    

The ATL also omits the November 2014 Draft's requirement that ISPs place all relevant equipment and customer data within China.  However, notwithstanding removal of this provision in the ATL, other provisions of Chinese law, already in existence and pending, contain similar requirements.  Such rules require that customer data relating to various industries, including e-banking, e-insurance, credit reporting and network-based payment services, be stored and maintained within China.  Furthermore, the Draft Cyber Security Law issued on July 6, 2015, also requires key information infrastructure operators to store citizen' personal information and other important data onshore within China, though the draft is currently narrower than that contemplated under the November 2014 Draft.  

Finally, China's so-called "Great Firewall" already causes significant impediments for internet users in China to connect with any servers located outside China, which has already compelled many businesses to shift servers to China for local customers.

"Assistance" and censorship by ISPs under the ATL

Notwithstanding the removal of some of the most controversial provisions from the November 2014 Draft, the ATL's requirement that ISPs provide technical assistance regarding encryption are nonetheless troubling.  It is unclear whether such "assistance" might entail measures contemplated under the November 2014 Draft, such as handing over encryption keys and creating backdoors, even if more narrowly applied.  

Another practical problem faced by ISPs is the requirement that they adopt measures to exercise self-censorship.  Presumably, the major ISPs will utilize specialized filter software looking for keywords, but concerns remain whether this is feasible or burdensome. The ATL does not specify specific standards or requirements.

Chinese authorities defend these measures as reasonable and necessary in the current international climate.  As with many other states, Chinese leaders are concerned about the scope of monitoring by Western governments (as revealed by Edward Snowden) and wish similar capabilities, and recent moves by Apple, Google, Microsoft and others to further encrypt communications has caused concerns about the Chinese government's ability to effectively monitor communications. In this context, China continues to defend these measures as reasonable and necessary.  

Implications for Non-ISP Foreign Companies

While the ATL has sweeping implications for ISPs and other technology companies providing services within China, other foreign companies should face more limited impact for the following reasons: 

(i) the major subject of the new law is internet service providers or telecom operators. There are no provisions directly addressing other types of foreign invested enterprises. Commentators note, however, that the expression " Providers of Internet Services " is not defined under the ATL, and a broad interpretation by authorities could conceivably impact operators of non-commercial websites in China.  Nonetheless, PRC legislator's specifically stated that the ATL is not intended to impact multinational businesses conducting "ordinary business" in China; 

(ii) the ATL targets potential cybercrime or terrorism, and there are no provisions addressing business secrets or intellectual property. In this regard, officers of the NPC Standing Committee stated on numerous occasions that the ATL "will not install backdoors to infringe intellectual property rights."; and

(iii) the ATL only grants the Public Safety Bureau and National Security Bureau with the right to request the cooperation of Telecoms Service Providers and Providers of Internet Services in examining encrypted information.  Additionally, the ATL requires a "strict approval process" for such requests. However, it is worth noting that the legislators have yet to offer further specifics of this approval process. 

Looking Forward

While the ATL represents something of an improvement from the November 2014 Draft, its ambiguities remain a cause for concern with international businesses.  While Chinese authorities have clearly stated that their intention has not been to impact international businesses or intellectual property, the ATL's ambiguities nonetheless leave Chinese authorities with the discretion to impact such activities.  Further implementation rules or enforcement actions will be necessary to understand the full impact of the ATL on international businesses and their operations in China.  

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Webinar, Washington, United States

Join Dentons government contracts lawyers for a Public Contracting Institute (PCI) webinar series involving the most current industry analysis in government contract cost accounting from a team of leaders in the field with unparalleled experience

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.