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After much anticipation, the Chinese legislature finally passed the Cybersecurity Law (“CSL“) on 7 November 2016, and the CSL will come into legal effect on 1 June 2017. The CSL is the last of the trio of laws focusing on cybersecurity, after the National Security Law (which came into effect on 1 July 2015) and the Anti-Terrorism Law (which came into effect on 1 January 2016).

The CSL is significant because of its broad scope and potentially far reaching effect. While much still hinges on implementing regulations and standards to be issued by the State Council, the Cybersecurity Administration of China (“CAC“) and the Ministry of Industry and Information Technology, it has the potential to create significant disruption to business operators in China, in particular foreign business operators with significant online/digital presence and/or operations reliant on telecommunications network and/or the constant cross-border movement and sharing of business, employee and consumer data. In a worst-case scenario, many foreign business operators may be required to carve-out China from their global or regional technology, infrastructure/backbone, and/or become mired in time-consuming regulatory approvals for the export or sharing of data with entities outside China.

Businesses are advised to follow legal and regulatory developments in this area closely, and start internal/external discussions and analysis on their technology and data configurations to prepare for the possibility of stringent local data residency requirements.

We are pleased to attach our client alert. Please feel free to share with your colleagues who might also be interested in the topics raised in this newsletter.

If you have any questions in relation to the issues raised, please do not hesitate to get in touch with your usual contact at Baker & McKenzie or any of the lawyers listed below.

Sincerely, Information Technology and Communications Group Baker & McKenzie

Author

Howard Wu is the chief representative of the Shanghai office of Baker McKenzie. He practices mainly in the areas of mergers and acquisitions, covering the information technology and major projects sectors. Chambers Asia Pacific ranks him among the leading lawyers for corporate/M&A as well as technology, media & telecommunications, while IFLR 1000 recommends him for mergers and acquisitions as well as private equity. Mr. Wu graduated from the University of California at Berkeley with a B.A., Columbia University with an M.A. and Fordham University School of Law with a J.D. He is admitted to practice law in California and is a foreign registered lawyer in Hong Kong.

Author

Author

Nancy Leigh is a partner in the Mergers & Acquisitions Practice Group in Baker McKenzie's Hong Kong office. She is frequently hailed as a leading practitioner in her field by PLC Which Lawyer? and Chambers Asia. Ms. Leigh is admitted as a solicitor in Hong Kong, England and Wales, as well as in Singapore and the Australian Capital Territory.

Author

Eugene Lim is the head of the Tax and Wealth Management practice in Singapore and the co-head of Baker & McKenzie's Asia Pacific Trade & Commerce practice. He has extensive experience relating to the structuring of supply chain and distribution strategies in the Asia Pacific region. Mr. Lim’s practice focuses on international trade, international tax planning, tax controversies, indirect tax, customs and excise, export controls, trade sanctions matters in Singapore, China and the Asia Pacific region. He also covers trade law developments in the WTO, APEC, ASEAN and under the various free trade agreements in the Asia Pacific region