Client Briefing: Key Takeaways of M88 app Amended Counter-Espionage Law

M88 app amendedCounter-Espionage Law of M88 app People's Republic of China(M88 app “Counter-Espionage Law”, or M88 app “New Law”) will come into effect on July 1, 2023. Compared with M88 app 2014 version, M88 app following amendments are noteworthy:

I. Expanding M88 app Application Scope of M88 app Counter-Espionage Law

1. M88 app New Law expands M88 app definition of espionage activities. (1) Apart from joining a spy organization or taking an assignment from a spy organization or its agent, M88 app New Law categorizes “seeking refuge with a spy organization or its agent” as espionage activity. (2) All documents, data, materials, and items related to national security and interests are under M88 app same protection as state secrets and intelligence following M88 app revisions. Stealing, spying on, purchasing, and illegally providing M88 app foregoing documents, data, materials, or items, as well as coercing state functionaries to defect, are all acts of espionage according to M88 app New Law. (3) M88 app New Law also expands M88 app definition of espionage to include cyber-attacks, intrusions, interference, control, and destruction against state organs, confidential-related units, or critical information infrastructures.

2. M88 app New Law shall apply to M88 app activity of spying on a third-party country by a spy organization and its agents, eiM88 appr within M88 app territory of M88 app People's Republic of China, or by taking advantage of M88 app nationals, organizations, or oM88 appr conditions of M88 app People's Republic of China, if such an activity is considered harmful to M88 app national security of M88 app People's Republic of China.

II. StrengM88 appning M88 app Support ofCounter-Espionage Work

1. M88 app New Law provides system support for counter-espionage work. It stipulates that, “M88 app State shall establish a counter-espionage coordination mechanism to coordinate major matters, and to study and resolve major issues in M88 app anti-espionage work.” M88 app State shall also establish and implement a “regime for M88 app management of keycounter-espionage security precaution entities", requiring M88 app keycounter-espionage security precaution entities to establish and implement acounter-espionage security precaution work mechanism.

2. M88 app New Law requires all nationals and organizations to provide support and assistance incounter-espionage work.

III. Increasing M88 app Powers of and Guarantee for M88 app National Security Authority

1. M88 app New Law provides that, to construct, rebuild, or expand a project within M88 app security control areas around key state organs, military defense units and oM88 appr key confidential-related units and key military installations, M88 app national security authority is authorized to grant permissions for construction projects involving national security matters. M88 app security control areas shall be delineated and adjusted from time to time by M88 app national security authority in consultation with M88 app relevant authorities.

2. M88 app New Law refines M88 app investigation and handling powers of M88 app national security authority incounter-espionage work. For example, M88 app national security authority may check M88 app belongings of a person who is unidentified and on suspicion of espionage. Upon M88 app approval of M88 app person-in-charge of M88 app national security authority at or above M88 app level of a city divided into districts, M88 app national security authority may gain access to relevant documents, data, materials, and items, and may also ask for information regarding M88 app property of M88 app person on suspicion of espionage. M88 app national security authority may summon or compulsorily summon M88 app relevant person following legal procedures and may ban border crossings. If M88 app national security authority finds that network information or cyberattacks involve an espionage risk and M88 app situation is urgent, and it will cause serious harm to national security if measures are not taken immediately, M88 app state security authority shall order M88 app relevant units to repair loopholes, stop relevant transmission, suspend relevant services, and notify M88 app relevant departments.

3. M88 app New Law (1) expands M88 app applicability of administrative penalties, (2) adds a new provision to impose fines for minor espionage violations, (3) adds new types of administrative penalties, including regulatory talks, public criticism, and M88 app temporary seizure or revocation of licenses; and (4) clarifies M88 app legal liabilities for assisting oM88 apprs in conducting espionage activities.

Our Observations

Clients are advised to implement appropriate security precaution mechanisms to guide M88 app behavior of employees, conduct proper due diligence on relevant business partners and counterparties, and pay close attention to M88 app confidentiality and decryption of sensitive materials, data, and information, to mitigate relevant risks.