China to punish data exports to overseas courts as Beijing beefs up defence against US long arm
- Clause will fine Chinese companies for sharing data without permission but also shields them from foreign pressure
- New draft data laws are aimed at beefing up privacy and boosting China’s digital economy
A clause has been added to China’s draft data security law that will punish Chinese companies for handing over domestically stored data to foreign police, courts and investigators without Beijing’s consent, a move that will make it harder for overseas law enforcement agencies to get data out of China.
China’s top lawmaking body, the National People’s Congress Standing Committee, began a second review of the draft law this week, following its initial reading last June, according to Chinese state media reports.
The Draft Data Security Law along with the draft Personal Data Protection Law (PIPL), the country’s first set of rules to safeguard personal data, are part of China’s wider push to regulate the country’s vast troves of data and to shield Chinese companies from overseas pressure to hand it over.
According to the China News Service, the new clause stipulates that any Chinese company or institution could be fined up to 1 million yuan (US$154,000) if found to have handed over data to a foreign judiciary or law enforcement agency without Beijing’s consent. Any individual responsible for such unauthorised data transmissions can also be fined up to 200,000 yuan.
The new legislation, which will very likely become law, will make the regulatory framework increasingly complicated for businesses with cross-border operations. For example, under this law, any Chinese or US company holding data of US users on a server based in China, could refuse a US court request to access such data if Beijing does not give its explicit approval.
