China: Personal Information Protection Will Be Comprehensively Strengthened By Four Chinese Legislations

In recent years, along with continuous vigorous development of the internet, positive impacts produced therefrom have gradually penetrated into various sectors of society and every walk of life. However, problems of hacker attack, data leakage, and cyber fraud in regard to personal information of citizens are highlighted at the same time, which have been criticized much by the public. Currently, internet-related legislation, represented by the promulgation of the Cyber Security Law as well as the drafting of the General Rules on the Civil Law, is exactly a positive response by the legislators to such problems, which has shown the determination of China to further strengthen the comprehensive protection of personal information.

I. The Cyber Security Law Promulgated Formally with A Highlight of Emphasis on Personal Information Protection

On November 7, 2016, adopted by vote at the 24thSession of the Standing Committee of the Twelfth National People's Congress ("NPC"), the Cyber Security Law of the People's Republic of China ("Cyber Security Law") was promulgated formally in China. The Cyber Security Law, which contains seven chapters and 79 articles, shall come into force on June 1, 2017.

Pursuant to Article 76(5) of the Cyber Security Law, "personal information shall refer to various types of information recorded electronically or by other means that can be used separately or in combination with other information to identify the person, which includes without limitation the name, date of birth, identity card number, personal biological identification information, address, telephone numbers, etc. of the person". Therefore, a significant feature of personal information is that it can be used to "identify the person". Though, there are provisions in regard to the protection of personal information in some laws and regulations (for example, the Criminal Law), the Cyber Security Law explicitly elaborates the important concept of "personal information" for the first time at the level of law.

The Cyber Security Law is the first basic law for the field of cyber security in China, of which the relatively comprehensive provision on personal information protection is a major highlight, and especially in Chapter 4, several articles are adopted to stipulate the protection of personal information. For example, Article 41(1) provides that, "when collecting or using personal information, internet operators shall comply with the principles of legality, justification and necessity, make public the rules for the collection and use, clearly indicate the purposes, methods and scope of the information collection and use, and obtain the consent of those whose information is collected."Article 44 provides that, "no individuals or organizations may steal or otherwise illegally obtain personal information, or illegally sell or provide personal information to others."It is noteworthy for enterprises operating in China that, such provisions put forward higher requirements for compliance to relevant enterprises, when focus on strengthening the protection of personal information.

Besides, the Cyber Security Law stipulates the cross-border transfer of data for the first time at the level of law, which may present a great challenge for the compliance of multinational enterprises operating in China. However, there is limitation for the restriction on cross-border transfer of data as well, which is specifically provided in Article 37 of the Cyber Security Law, "operators of key information infrastructures shall store within the People's Republic of China the personal information and other important data collected and generated in operation in China; if it is truly necessary for business to provide overseas, security assessment shall be conducted in accordance with the measures formulated by the Cyberspace Administration of China ("CAC") in conjunction with relevant departments of the State Council. Where there are special provisions under laws and administrative regulations, such provisions shall prevail."Such provision involves complicated issues with significant impacts, though there are not many words. For instance, the identification of the operators of key information infrastructures; the connotation and denotation of important data; the criteria for the determination on the business necessity to provide overseas; the security assessment on cross-border transfer; relevant procedures issues, etc. However, the resolution of above issues is subject to further elaboration by relevant legislation and observation of subsequent enforcement practice by competent authorities.

II. The General Rules on the Civil Law (Draft for the Second Review) Supplements Provisions of Personal Information Protection

The Civil Code, as the fundamental law in national civil area, is closely related to every citizen, while the draft and formulation of the General Rules on the Civil Law occupy a pivotal position in the compilation of the Civil Code. After the first deliberation on June 27, 2016, the General Rules on the Civil Law (Draft for the Second Review)("Draft for the Second Review") has been formulated based on the draft for the first review. So far, the Draft for the Second Review has been deliberated at the 24thSession of the Standing Committee of the Twelfth NPC.

Compared with the draft for the first review, the Draft for the Second Review has a major highlight, providing that "personal information of people shall be protected by law. No organizations or individuals may illegally collect, use, process or transfer personal information, or illegally provide, make public or sell personal information". Such provision proposes to adopt the protection of personal information as a civil right in basic civil law for the first time. Though, the provisions concerning the protection of personal information remain to be elaborated with potential further revision, the introduction of the personal information protection in the Draft for the Second Review shows the great importance attached by the legislators, as well as their positive interaction with the public concerns. Moreover, the basic spirit and legal value of the personal information protection are expected to be defined in the General Rules on the Civil Law promulgated in the future.

III. Draft of the Electronic Commerce Law Regulates the Collection and Use of Personal Information in E-commerce

China's e-commerce transactions are now enjoying a rapid growth, with an average growth rate of more than 35% in the past five years. While E-commerce has greatly promoted the economic development, problems including leakage of personal information, unfair competition, harm on rights and interests of consumers come out one after another in e-commerce activities, therefore leading to increasing appeals of special legislation in e-commerce. By 2013, the Electronic Commerce Law has been formally included in the legislation agenda of Financial and Economic Committee and Legislative Affairs Commission of NPC. It is one of the important tasks of e-commerce legislation to strengthen the security of personal information in the process of enactment process of the Electronic Commerce Law. In electronic transactions, the personal information of citizens, including the key information such as name, telephone number, home address, transaction/payment record and bank card information can be easily obtained. In reality, the abuse and illegal transaction of such information are more frequent. Thus, special protection on personal information in e-commerce activities has been extremely urgent.

By August 2016, the drafting work of the Electronic Commerce Law (Draft) has been completed and submitted to the NPC for deliberation. The fourth chapter on the e-commerce transaction protection devotes to the provisions on collection, processing, use, sharing, etc. of e-commerce data. The provisions of such chapter on personal privacy and data protection basically follow the internationally accepted principles of data protection. Article 45 introduces the concept of the "right of personal information in e-commerce" and defines that e-commerce users have the right to make decisions on their own personal information. Bank card information, transaction records, payment records, express and logistics records shall fall into the personal information in accordance with Electronic Commerce Law, given it is formally formulated.

It is noteworthy that the Electronic Commerce Law (Draft) provides, "E-commerce operators shall not force users to agree to their collection, processing, use of personal information by refusing to provide services to such users... ... E-commerce operators may not modify rules on the collection, processing and use of personal information without the consent of the users." At present, the policies on privacy protection or personal information protection of many e-commerce enterprises go against the Electronic Commerce Law (Draft). For example, according to the policy of some e-commerce platforms, the users shall no longer use their service if they refuse to accept any provision of the privacy policy. That is to say, e-commerce platforms force users to accept all provisions in its privacy policy, which in fact deprives the users' right to decide on one's own. There is no doubt that once the Electronic Commerce Law is formulated, it will be necessary for the e-commerce enterprises to develop or adjust the privacy policy in accordance with the Electronic Commerce Law, with particular attention on the compliance in this regard.

IV. Regulations of Internet Protection on Minors (Draft for Comments) Provides Special Rules on Information Collection and Use of Minors

On September 30, 2016, the State Internet Information Office issued the Regulations on Internet Protection on Minors (Draft for Comments) ("Draft for Comments") and solicit comments from the public from then to October 31, 2016. The Draft for Comments will be the first legal document to specially protect legitimate rights and interests of minors in cyber space. The Draft for Comments include the provision "protecting the online personal information of minors" into General Principles, showing the importance of such provision.

Pursuant to Article 16 of the Draft for Comments, "any collection or use of personal information of minors by internet shall be prominently marked with warning signs, indicating the source, content and use of information collected, with the permission of a minor or its guardian."In addition, according to relevant provisions of the Draft for Comments, internet information service providers should also develop a policy specifically for the protection on personal information of minors, which requires a higher standard of protection on personal information of minors collected and used through the internet. If the minors or their guardians request to delete and shield the personal information related to the minors in cyberspace, the internet information service provider shall delete and shield such information. However, the Draft for Comments has not defined whether such deletion and shield shall be irreversible and de-identified. Any collection and use of personal information of minors in violation of the Draft for Comments shall be punished by relevant departments, including the CAC and the Ministry of Industry and Information Technology, in accordance with law.

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