On December 2, 2020, China’s Ministry of Commerce (“MOFCOM”), State Cryptography Agency (“SCA”), and the General Administration of Customs (“Customs”) jointly issued three documents (here) related to import and export of commercial encryption items:

  • List of Commercial Encryption Subject to Import Licensing Requirement (“Import List”);
  • List of Commercial Encryption Subject to Export Control (“Export List”); and
  • Procedural Rules on [Applications for] Licenses for the Import and Export of Commercial Encryption (“Procedural Rules”).

The issuance of these lists and procedural rules marks a key step forward implementing both the commercial encryption import and export framework established under the Encryption Law, which took effect on January 1, 2020, and the export control regime under the new Export Control Law, which took effect on December 1, 2020.  (Our previous client alert on the Encryption Law can be found here, and our alert on the Export Control Law can be found here.)  The consolidation of previously separate regulatory frameworks under the commercial encryption rules and export control rules could also show a future trend of implementing a more unified system to control the import and export of sensitive data and technologies to and from China.


Continue Reading China Publishes Lists and Rules Related to Import and Export of Commercial Encryption

Senators Lindsey Graham (R-S.C.), Tom Cotton (R-Ark.) and Marsha Blackburn (R-Tenn.) have introduced the Lawful Access to Encrypted Data Act, a bill that would require tech companies to assist law enforcement in executing search warrants that seek encrypted data.  The bill would apply to law enforcement efforts to obtain data at rest as well as data in motion.  It would also apply to both criminal and national security legal process.  This proposal comes in the wake of the Senate Judiciary Committee’s December 2019 hearing on encryption and lawful access to data.  According to its sponsors, the purpose of the bill is to “end[] the use of ‘warrant-proof’ encrypted technology . . . to conceal illicit behavior.”

The bill has three main provisions:
Continue Reading Lawful Access to Encrypted Data Act Introduced

On May 11, 2020, the State Cryptography Administration (“SCA”) and the State Administration for Market Regulation jointly issued the Commercial Encryption Product Certification Catalogue (First Batch) (“Product Catalogue”) and the Commercial Encryption Product Certification Measures (“Certification Measures”) (the announcement is available here), taking effect immediately.

Prior to the adoption of the Encryption Law (see our post on the Encryption Law here), manufacturers of commercial encryption products were required to apply to the SCA for the “Commercial Encryption Products Type and Model Certificate.”  The Encryption Law removed this approval requirement by establishing a voluntary certification scheme, which encourages manufacturers to voluntarily apply to qualified agencies for the testing and certification of their commercial encryption products.  The release of the Product Catalogue and the Certification Measures marks a critical step forward in implementing such a voluntary certification scheme under the Encryption Law.
Continue Reading China Issued the Commercial Encryption Product Certification Catalogue and Certification

On October 26, 2019, China enacted a landmark Encryption Law, which will take effect on January 1, 2020.  The Encryption Law significantly reshapes the regulatory landscape for commercial encryption, including foreign-made commercial encryption products, but leaves many questions to be answered in future implementing regulations.  In this blog post, we provide a few highlights of the new Encryption Law as enacted.
Continue Reading China Enacts Encryption Law

On July 5, 2019, China’s Standing Committee of the National People’s Congress (NPC) published a new draft Encryption Law (“the draft Law”) for public comment.  The draft Law, if enacted as drafted, would bring significant new changes to China’s commercial encryption regime.

The State Cryptography Administration (“SCA”) previously issued an initial draft of this law for public comment on April 13, 2017 (“the 2017 Draft”) (see Covington’s alert on the previous version here).  After the release of the 2017 draft, the regulatory regime in China for commercial encryption products was revamped significantly (see Covington’s previous alert here).  The State Council removed certain approval requirements for the production, sale, and use of commercial encryption products in late September 2017, and the SCA issued further notices reducing the burden imposed on manufacturers, distributors and users of commercial encryption products.  The draft Law proposes further changes to this revamped regime, including for example introducing different categories of encryption, and establishing license requirements for certain imports and exports, while carving out items in “general use.”

The comment period ends on September 2, 2019.


Continue Reading China Releases Updated Draft Encryption Law for Public Comment

In August 2018, the Government of Australia unveiled a new proposed bill that would grant the county’s national security and law enforcement agencies additional powers when confronting encrypted communications and devices. The text of the draft Telecommunications and Other Legislation Amendment (Assistance and Access) Bill 2018 (the “Assistance and Access Bill” or the “Bill”) states that the purpose is “to secure critical assistance from the communications industry and enable law enforcement to effectively investigate serious crimes in the digital era.”

The Assistance and Access Bill, if enacted, could affect a wide range of service providers both in and outside of Australia.
Continue Reading Australia Proposes New Encryption Legislation

On July 20, 2018, the U.S. Department of Commerce’s National Telecommunications and Information Administration (“NTIA”) published comments it received from a wide array of tech and telecom companies, trade groups, civil society, academia, and others regarding its “international Internet policy priorities for 2018 and beyond.”  NTIA’s Office of International Affairs (“OIA”) had requested comments and recommendations from interested stakeholders in four broad categories: (1) free flow of information and jurisdiction; (2) the multistakeholder approach to Internet governance; (3) privacy and security; and (4) emerging technologies and trends.  NTIA plans to harness the comments it received to help it identify “priority” issues, and to leverage its resources and expertise to effectively address stakeholders’ interests.  
Continue Reading NTIA’s International Internet Policy Priorities for 2018 and Beyond

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

In a speech delivered at the United States Naval Academy on October 10, Deputy Attorney General Rod Rosenstein waded into the public debate between data privacy and law enforcement interests.  As part of a discussion moderated by former Covington cybersecurity attorney Jeff Kosseff, Rosenstein’s remarks discussed cyber issues facing law enforcement with a particular focus on the advent of “warrant-proof” encryption.  In his view, warrant-proof encrypted data and devices are unable to be intercepted or unlocked by law enforcement, even with a court order.

Noting that “[p]rivate sector entities are crucial partners” in the fight against cyber threats, Rosenstein expressed concerns about the role played by tech companies in advancing warrant-proof encryption.  While recognizing the need to balance important privacy interests against law enforcement priorities, Rosenstein argued that “[w]arrant-proof encryption defeats the constitutional balance by elevating privacy above public safety.”  He emphasized the threat posed to public safety when technology developers deprive law enforcement of “crucial investigative tools.”  Rosenstein advocated for “responsible encryption,” recognizing that this approach would not be one-size-fits-all and that solutions would likely look different depending on the company and technology at issue. 
Continue Reading Deputy Attorney General Rod Rosenstein Warns Against Warrant-Proof Encryption

Last week, Tennessee Governor Bill Haslam (R) signed S.B. 2005 into law, amending Tennessee’s breach notification law to broaden the scope of information covered and require quicker notifications of the state’s residents.  Most notably, when the amendments enter into force on July 1, 2016, Tennessee will become the only U.S. state that could require notification of affected individuals following breaches of encrypted information.  The amendments will also require businesses to notify Tennessee residents within 45 days after the business discovers the breach.

Continue Reading Tennessee Amends Breach Notification Law to Cover Breaches of Encrypted Information