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China Delays Cross-Border
Data Transfer Rules amid
Trade War Talks

what do you know China has delayed the implementation of cross-
about China's border data transfer rules that were set to go into
cybersecurity law? force at the end of 2018, according to a report from the
Financial Times.
The Cybersecurity Law of the People’s Republic
of China (“the Cybersecurity Law” or “the Law”) The cross-border data transfer rules are part of
officially came into force on June 1, 2017. The China’s sweeping Cybersecurity Law, which came into
Law and its rules and regulations attracted effect on June 1, 2017. Regulators, however, had given
heated discussion since adoption. businesses until December 31, 2018 to comply with the
cross-border data transfer components of the law.
The Cybersecurity Law is a milestone for
cybersecurity legislation in mainland China According to the Financial Times, China has further
and serves as a “Basic Law” in its field. The delayed the implementation of the rules over concerns
Law is an evolution of the previously existent that they could trigger a backlash from the US amid
cybersecurity rules and regulations from trade deal negotiations.
various levels and fields, assimilating them to
create a structured law at the macro-level. These rules have come under scrutiny from the US
and foreign business groups, who fear that sensitive
The Law offers principle norms on certain issues data could be accessed by the Chinese state and that
that are not immediately urgent, but are of the rules are a de facto protectionist barrier that
definite long-term importance. These norms will prevent internet and cloud companies from competing
serve as legal reference when new issues arise. in China.

The Law also provides elaborate regulations As China seeks to finalize an agreement with the US,
and definitions on legal liability. For different it appears as though the leadership does not want to
types of illegal conduct, the Law sets a variety start enforcing the data localization rules, given how
of punishments, such as fines, suspension for controversial they are.
rectification, revocation of permits and business
licenses, and others. The Law accordingly grant What is being delayed?
cybersecurity and administration authorities
with rights and guidelines to carry out law The Cybersecurity Law and associated guidelines and
enforcement on illegal acts. measures put forward strict regulations about what
type of data must be stored within mainland China and
how data can be transferred abroad.

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