Washington has asked Beijing to refrain from enforcing a new cybersecurity law that would require foreign and domestic companies to store user data in China and submit to security checks, saying such measures would damage global trade.
The Cybersecurity Law was passed by China in November 2016, and went into effect in June 2017. The law states that any “network operators” in China, including any local or international firms that gather data, must store all user data within mainland China.
In the two-page document submitted for debate at the World Trade Organization (WTO) Council for Trade in Services on Tuesday, the US raised concerns over provisions requiring companies to submit to a “security assessment” and prove that the “purpose of the transfer meets standards of legitimacy, necessity, and justification” before they transfer data out of China.
These companies would also be required to undergo security checks from “critical information infrastructure operators” at least once a year.
“China’s measures would disrupt, deter, and in many cases, prohibit cross-border transfers of
information that are routine in the ordinary course of business,” said the US document, according to a copy obtained by the Register. “These conditions would restrict even routine transfers of information, fundamental to any modern business.”
Any “network operator” would need to obtain permission from each individual before they could transfer their user data across the border, the US document noted, describing as “very troubling” that China would require businesses to demonstrate the necessity of transfers.
“This is an extraordinarily burdensome requirement that could disrupt business operations without contributing to privacy protections,” the US document said.
Speaking at the WTO on Tuesday, China’s Ambassador Zhang Xiangchen said that trade protectionism was a major problem.
“There’s no definition of protectionism and each member has his own legitimate right to adopt a trade policy legally in the WTO system. But we have to be cautious to say which one is (legal within the (WTO) … and which is illegal,” Xiangchen told Reuters.
Washington has requested from Beijing to “refrain from issuing or implementing final measures until such concerns are addressed.” China has yet to respond to the request.