China: Cyber Security Law Adopted By The NPC Standing Committee

Last Updated: 5 January 2017
Article by Xiao (Marissa) Dong, Kemeng Cai and Jinghe Guo

After three deliberations over more than a year's time, the Standing Committee of the National People's Congress ("NPC Standing Committee") finally adopted the Cyber Security Law ("CSL") on November 7, 2016. The CSL is the first omnibus law in China governing cyber security issues and has incorporated a number of new legal concepts and requirements that may impact companies with business operations in China.

JunHe has been closely following the development of the drafts of the CSL, as well as a number of laws and regulations relevant to the CSL. If you are interested in understanding the background and evolution of the CSL drafts, please click the following alerts: Draft of Cyber Security Law Released for Public Comments, Key Changes in Second Draft Cyber Security Law, National Security Law includes Information Security Provisions, China Adopted the Counter-Terrorism Law

Below we will briefly introduce the CLS in terms of the context of its development, the applicable scope and legislative purpose, the major requirements, a brief comparison between the final CSL and the first and second drafts, and the potential practical impact.

1. Introduction

Background

The information and technology security related legislation and practice developed quickly in recent years due to the need for protecting China's national security. In April 2014, in response to various challenges of the new era, President Xi Jinping for the first time raised the "overall concept of national security". Thereafter, a series of legislations relating to national security were put on an accelerated track, including the Counter- terrorism Law, the National Security Law and the Cyber Security Law. These legislations all include provisions relating to information and technology security. Cyber security is currently a challenging matter both in China and around the world, and the CSL, in response to these challenges, represents major legislation with respect to cyber security issues. Meanwhile, as China has not enacted a unified data protection law, the CSL also incorporates several provisions related to the protection of personal information, which has also emerged as an issue of wide concern. Apart from some general provisions on personal information which were embodied in several existing regulations, the CSL also includes some new requirements on this issue.

Application Scope and Purpose

The CSL applies to the construction, operation, maintenance and use of networks as well as the supervision and administration of cyber security within the territory of the PRC. "Networks" include networks and systems that are composed of computers and other information terminals and the relevant facilities and used for purpose of collecting, storing, transmitting, exchanging and processing information in accordance with certain rules and procedures (Article 76). "Network operators", an important subject of legal obligations under the CSL, is broadly defined as "owners and administrator of networks and network service providers (Article 76)".

The CSL provides for "safeguarding the national cyberspace sovereignty" as a fundamental principle, and, for that purpose, includes provisions on, inter alia, the strategy, plan and promotion of cyber security, network operation security, network information security, and alarm and emergency response systems.

Responsible Authority

The national cyberspace administration authority, namely the Cyberspace Administration of China ("CAC"), is responsible for the coordination of cyber security protection activities and the relevant supervision and administration activities on a national level. It further provides that the Ministry of Industry and Information Technology, the Ministry of Public Security and other relevant government departments shall be responsible for the protection and supervision of cyber security within their respective authorities.

Transition Period

The CSL will become effective on June 1, 2017. Therefore, nearly a half year is provided for a transition period before its implementation.

2. Major Legal Requirements

Strengthened Network Operation Security Obligations

The CSL provides various security protection obligations for network operators, including, inter alia:

  • the compliance with a series of requirements of tiered cyber protection systems (Article 21);
  • the verification of users' real identity (an obligation for certain network operators) (Article 24);
  • the formulation of cyber security emergency response plans (Article 25); and
  • the assistance and support necessary to investigative authorities where necessary for protecting national security and investigating crimes (Article 28).

In addition, network products and service providers shall inform users about and report to the relevant authorities any known security defects and bugs, and furthermore shall provide constant security maintenance services for their products and services, not install malware with their products, and clearly inform users and obtain their consent if their products or services collect users' information (Article 22).

Key network facilities and special products used for protecting network security shall comply with the relevant national standards and compulsory certification requirements, and may only be offered for sale after being certified by the qualified security certification organization or passing the relevant security tests (Article 23).

It is notable that some requirements for network operators, such as retention of user logs for at least six months (Article 21) and regulations on the publication of cyber security information regarding system loopholes, computer viruses, cyber-attacks, cyber invasions, etc. (Article 26), are prescribed for the first time under PRC laws.

Heightened Protection of Critical Information Infrastructure

The CSL, for the first time under PRC law, clearly imposes a series of heighted security obligations for operators of critical information infrastructure ("CII"), including:

  • internal organization, training, data backup and emergency response requirements (Article 34);
  • storage of personal information and other important data must be secured within the PRC territory, in principle (Article 37);
  • procurement of network products and services which may affect national security shall pass the security inspection of the relevant authorities (Article 35); and
  • conduct annual assessments of cyber security risks and report the result of those assessments and improvement measures to the relevant authority (Article 38).

Protection of Personal Information

The CSL reiterates the obligations of network operators regarding the protection of personal information which appear across existing laws and regulations, including the mandate to observe the principle of lawfulness, necessity and appropriateness in the collection and use of personal information and to observe "the inform and consent requirements" (Article 41), to use personal information only for the purpose agreed upon by the relevant individual (Article 41), to adopt security protection measures for personal information (Article 42), and to protect the individual's right to access and correct personal information (Article 43). In addition, the CSL also incorporates some new rules on personal information protection, including data breach notification requirements (Article 42), and data anonymization as an exception for inform and consent requirements (Article 42), and the individual's right to request the network operators make corrections to or delete their personal information in case the information is wrong or used beyond the agreed purpose (Article 43).

3. Key Differences from the Second Draft

The Final Draft reflects the following key changes from the Second Draft.

  • CII is rephrased as information infrastructure in "public communication and information services, energy, traffic and transportation, irrigation, finance, public service, e-government and other key industries and sectors", as well as other information infrastructure, "the damage, malfunction and data leakage of which may seriously endanger national security, national welfare, people's livelihood, and public interest."The enumeration of industries and sectors, which was included in the first drafted of the CLS and removed in the Second Draft, is added back into the definition of CII under the final CSL (Article 31);
  • the scope of CII data subject to local storage requirements is expanded from "citizen's personal information and other important business data" to "personal information and important data" (Article 37);
  • the protected personal information is expanded from "citizen's personal information" to "personal information";
  • a special provision for minors which provides the State supports the research and development of network products and services that are helpful to the healthy development of minors, and imposes punishments upon any person who uses networks to carry out any activity endangering the physical and mental health of minors(Article 13);
  • an additional special provision on punishments and sanctions against overseas entities which endanger domestic CII(Article 75); and
  • higher monetary punishments imposed for violations.

4. Practical Impacts

The CSL is the first law in the PRC specially focused on cyber security matters. When the CSL takes effect on June 1, 2017, internet companies and other industries in China will be subject to a wide array of stricter and more comprehensive obligations and face more severe punishments for potential violations. As an omnibus law on cyber security issues, many provisions of the CSL are still very general and abstract, and the detailed requirements for implementation and enforcement depend on subsequent and more specific implementation regulations as well as the opinion of the relevant authorities. We may expect that the relevant regulatory authorities may promulgate a series implementation regulations to clarify certain requirements under the CSL, such as the regulations on tiered cyber security protection systems, the specific scope and protection measures of CII, the protection of minors on networks, the mandatory security certification and the test requirements for key network devices and special cyber security products, national security review on the network products and services procured by CII operators, etc. For example, as for the protection of minors on the internet, last month the CAC published a draft for public comment of Regulations on Protection of Minors Online.

Nearly half a year remains before the formal implementation of the CSL and companies may use this transition period to improve their understanding of the potential impacts of the CSL on their business. In particular, if companies are deemed operators of CII, the CSL may have a significant impact on its network security framework, procurement of security products, and data storage. Companies may consider whether they need to adjust their business and operation practices from these aforementioned aspects and enhance their cyber security protections so as to ensure fully compliance with the CSL. Given the specific implementation of the requirements in the CSL are not entirely clear, companies will also need to closely follow any subsequently released regulations and opinions of the relevant governmental authorities.

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
Clyde & Co
Clyde & Co
Fischer Behar Chen Well Orion & Co
 
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”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Clyde & Co
Clyde & Co
Fischer Behar Chen Well Orion & Co
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions