Yan Luo advises clients on a broad array of regulatory matters in connection with cybersecurity and data protection rules in China. With previous work experience in Washington, DC and Brussels before relocating to Beijing, Yan has fostered her government and regulatory skills in all three capitals. She is able to strategically advise international companies on Chinese regulatory matters and represent Chinese companies in regulatory reviews in other markets.

Over the past two years, Yan has provided practical advice to clients on nearly all aspects of China’s Cybersecurity Law. She continues to help them navigate the complex and quickly evolving regulatory regime, including on issues arising out of personal information protection, cross border data transfers, and various cybersecurity requirements.

What provisions of China’s Cybersecurity Law have caused the greatest concern for U.S. companies? What advice do you have for these companies when it comes to compliance?
Continue Reading National Cybersecurity Awareness Month Q&A with Yan Luo

In the past three weeks, China’s State Council and the State Cryptography Administration (“SCA”) issued two documents that reveal a major change in the regulatory regime governing commercial encryption products in China, potentially paving the way for the draft Encryption Law to establish a uniformed encryption regime. This development and its practical implications will be important to multinationals that manufacture, distribute, or use commercial encryption products in China.

On September 29, 2017, the State Council released the Decision on Removing a Batch of Administrative Approval Requirements (the “State Council Decision”) (official Chinese version available here), which removed some approval requirements for the manufacturing, sale, and use of commercial encryption products. On October 12, 2017, the SCA further released a notice (“Notice”) to instruct local Bureaus of Cryptography Administration (“BCA”) on the plan to implement the State Council Decision.  (The official Chinese version can be found here.)

The State Council Decision and the Notice reveals a major change in the regulatory regime governing commercial encryption products in China, potentially paving the way for an Encryption Law that would establish a uniform encryption regime. (Our previous alert describing the draft Encryption Law can be found here.)
Continue Reading China Revises Proposals on Regulation of Commercial Encryption

On July 26, four Chinese agencies, the Cyberspace Administration of China (“CAC”), the Ministry of Industry and Information Technology (“MIIT”), the Ministry of Public Security (“MoPS”), and the National Standards Committee, announced their plan to begin the government’s campaign to improve the protection of personal information, according to Xinhua News Agency (link is in Chinese).  The campaign, called “Action Plan to Improve Personal Information Protection,” will start with the audit of privacy policies of the ten most popular online services in China.

Officials from CAC’s Cybersecurity Coordination Bureau indicated that the privacy policy audit is an important step to implement China’s new Cybersecurity Law, which took effect on June 1, 2017.  Through this process, the regulators will balance the protection of personal information with the use of data to improve services for Chinese users.

This development signals the government agencies’ increased focus on companies’ data protection practices.  Companies operating in China should consider reviewing their privacy policies and data practices in country to conform with legal requirements and best practices.
Continue Reading Chinese Agencies Announce Plan to Audit Privacy Policies of Ten Popular Online Services

Today, the Cyberspace Administration of China (“CAC”) released the final version of the Measures on the Security Review of Network Products and Services (Trial) (“the Measures”), with an effective date of June 1, 2017 (official Chinese version available here).  The issuance of the Measures marks a critical first step toward implementing China’s Cybersecurity Law (“the Law”), which was promulgated on November 7, 2016 and will take effect on June 1, 2017 (the same date as the Measures).

More specifically, the long-anticipated Measures offer guidance on how CAC is planning to conduct cybersecurity reviews of network products and services procured by entities in a range of key sectors and other operators of Critical Information Infrastructure (“CII”), if the procurement “may affect China’s national security.”

A draft form of the Measures was released in February 2017 for public comment (see Covington’s alert on the draft Measures here).  Since then, international stakeholders have been submitting comments to the CAC and changes in the final version reflect some of these comments.  The Measures, however, still lack clarity with respect to certain aspects of the review process, both in terms of substantive criteria and procedure.  Companies that may be subject to such reviews will likely need further guidance from the agencies once the Measures take effect.

This post identifies two key changes in the final version.
Continue Reading China Releases Final Regulation on Cybersecurity Review of Network Products and Services

On April 11, 2017, the Cyberspace Administration of China (“CAC”) released a draft of the Measures on Security Assessment of Cross-border Data Transfer of Personal Information and Important Data (“the Draft Measures”) for public comment (official Chinese version available here).  The comment period ends on May 11, 2017.

The issuance of the long-anticipated Draft Measures is another critical step toward implementing China’s Cybersecurity Law (“the Law”), which is set to take effect on June 1, 2017 (see our alert on the Law here).  Importantly, the Draft Measures, if enacted in its current form, would mandate all “network operators” to self-assess the security of their cross-border data transfers and significantly broaden the scope of entities that potentially need to undergo security assessments for such transfers by the Chinese government.  Companies that fall into the scope of “network operators,” but may not qualify for “operators of Critical Information Infrastructure” (“CII”), could see their cross-border data transfers regulated under the Draft Measures.  
Continue Reading China Seeks Public Comments on Draft Regulation on Cross-Border Data Transfer

When China’s new Cybersecurity Law takes effect on June 1, 2017, China will become another important jurisdiction to watch in the international data transfer space.

Before the new Cybersecurity  Law officially was promulgated on November 7, 2016, cross-border data transfer of data from China was largely unregulated by the government.  While many Chinese laws and regulations governed the collection, use and storage (including localization) of data, no binding laws or regulations contained generally applicable legal requirements or constraints on the transfer of data across Chinese borders.
Continue Reading Cross-Border Data Transfer: A China Perspective

In our previous post, we discussed seven draft cybersecurity and data protection national standards released by China’s National Information Security Standardization Technical Committee (“NISSTC”), a standard-setting committee jointly supervised by the Standardization Administration of China (“SAC”) and the Cyberspace Administration of China (“CAC”), on December 21, 2016.

Information Security Technology – Personal Information Security Specification” (“the Standard”) is the most significant standard being proposed.  Although not legally binding and lacking the force of law, such a national standard, drafted by CAC, is likely to serve as a reference point for CAC and other regulators to judge corporate data protection practices in China.  It may also reflect the direction in which China’s data protection regime is evolving.

In this post, we discuss the background of this draft Standard, its structure, and the general principles it proposes.  In a follow-up post, we will discuss key requirements for data controllers and data processors, as well as rights and protections for data subjects.
Continue Reading China’s New Draft National Standards on Personal Information Protection

By Tim Stratford and Yan Luo

China’s National Information Security Standardization Technical Committee (“NISSTC”), a standard-setting committee jointly supervised by the Standardization Administration of China (“SAC”) and the Cyberspace Administration of China (“CAC”), released seven draft national standards related to cybersecurity and data privacy for public comment on December 21, 2016.  The public comment period runs until February 2, 2017.

These new draft standards are:

  • Information Security Technology – Personal Information Security Specification
  • Information Security Technology – Implementation Guide for Cybersecurity Classified Protection
  • Information Security Technology – Security Capability Requirements for Big Data Services
  • Information Security Technology – Guide for Security Risk Assessment of Industrial Control Systems
  • Information Security Technology —Security Technique Requirements and Test Evaluation Approaches for Industrial Control Network Monitoring
  • Information Security Technology — Technique Requirements and Testing and Evaluation Approaches For Industrial Control System Vulnerability Detection
  • Information Security Technology – Testing and Evaluation Methods for the Security of Hardcopy Devices

Continue Reading China Seeks Comment on Seven Draft Cybersecurity and Data Privacy National Standards

By Ashwin Kaja* and Yan Luo

Close on the heels of a sweeping new National Security Law, the Standing Committee of the National People’s Congress released last month for public comment a very significant draft Network Security Law (“Draft Law”), also referred to as the draft Cybersecurity Law.

Since it came into power in 2012, China’s current leadership has attached an unprecedented level of attention to network security, which it sees as a core aspect of national security. Marking the establishment of a new Central Leading Group for Cyberspace Affairs in 2014 that he himself would lead, President Xi Jinping declared that “network security and informatization are key strategic issues related to national security and development,” and that “national security no longer exists without network security.” President Xi went on, in those remarks, to call for the development of a legal infrastructure for the administration of cyberspace, with particular emphasis on the protection of “critical information infrastructure” (see further discussion below). The resolution of the Fourth Plenum of the Central Committee of the Chinese Communist Party in October 2014 echoed this theme.

The focus on network security appears to stem from the explosive development and extensive usage of network and information technologies, made more pressing by Edward Snowden’s disclosures in 2013 regarding activities of the US National Security Agency (NSA). Since the Snowden leaks, it has been repeatedly reported that the Chinese government is working actively to wean government networks and financial systems off of IT products and services from foreign companies. The Draft Law is the government’s latest effort to consolidate existing security-related requirements and grant government agencies more security-related powers. On its face, the Draft Law does not discriminate against foreign products and services. However, designed to “safeguard cyberspace sovereignty and national security,” it could be implemented to become an additional hurdle for foreign companies seeking to access China’s vast market if and when it comes into effect.
Continue Reading China Issues Draft Network Security Law