An alternative mechanism for cross-border data transfer in China: certification

Another mechanism for cross-border knowledge switch in China: certification

An organization in China has the choice to depend on (i) the usual contract (see our article) or (ii) certification to switch private data exterior of China, if it’s not topic to the obligatory administration of the Chinese language our on-line world (CAC) security evaluation. The certification is, due to this fact, an alternate knowledge switch mechanism to the usual contract below the Private Information Safety Act (PIPL).

On December 16, 2022, the Chinese language Nationwide Data Safety Standardization Technical Committee launched an up to date version of the Sensible tips for data safety requirements – Technical specs for the certification of cross-border processing of non-public data (Particular). This establishes requirements and necessities for certifying brokers appointed to help their certification processes and offers steerage for knowledge originators in relation to their cross-border private data switch actions[1].

For a dialogue of the applying and key necessities for certification below the earlier version of the specification, see our article Necessary updates on cross-border knowledge transfers to China.

1. Main modifications within the up to date specification

1.1 Potential Change in Scope

Article 1 of the specification has been amended to supply that it applies to all cross-border processing of non-public data. This seems to increase its utility past the particular eventualities listed within the earlier version, with some practitioners commenting that the revised specification now applies to All cross-border processing actions. Nevertheless, the provisions of the “Certificates Applicant” Specification recommend that it (and the associated certification mechanism) continues to use solely to the restricted eventualities specified above, i.e. intra-group knowledge transfers and cross-border transfers of non-public knowledge data from international firms topic to the extra-territorial scope of the PIPL. We count on that additional clarification on the relevant scope of the specification might be supplied by the certification institutes sooner or later.

1.2 Further necessities for the doc between the originator and the recipient overseas

The info originator and recipient overseas should signal a legally binding doc to make sure that the rights and pursuits of the info topics concerned are protected. The specification units out further obligatory clauses to be included in that doc as follows:

  • the tasks and obligations concerning the safety of non-public data by the transferor and the recipient overseas, in addition to the technical and managerial measures to forestall safety dangers attributable to the cross-border processing of non-public data;
  • the rights of knowledge topics in relation to their private data, equivalent to the correct to have their private data deleted and the means to guard these rights;
  • aid for breaches of legally binding doc, termination of contract, legal responsibility for breach of contract, dispute decision (amongst different provisions); AND
  • commitments of the info originator and abroad recipient to imagine the civil tasks of the PRC for the infringement of non-public data rights and pursuits.

The specification doesn’t present mannequin clauses. Nevertheless, based mostly on these obligatory clauses, the doc is actually no totally different from the usual contract for the cross-border switch of non-public data. The info submitters can then use the usual contract as a foundation for getting ready the legally binding doc.

1.3 Function of the Private Data Safety Affect Evaluation

The PIPL requires {that a} private data safety influence evaluation be carried out for cross-border transfers of non-public data.

The CAC Security Evaluation Tips present a template for the self-assessment report (required earlier than making use of for the obligatory CAC security evaluation). Information transferers can use this template for the evaluation required by the certification mechanism, however it’s not essential to cowl all parts.

Private data safety influence evaluation reviews should be retained for at the very least three years, which is in keeping with the necessities of the PIPL.

The specification clarifies that PIA reviews should embrace at the very least the next parts:

  • the legality, legitimacy and necessity of the aim, scope and technique of processing private data by the info transferor and the recipient overseas;
  • the extent, scope, kind, sensitivity and frequency of cross-border processing of non-public data and the dangers associated to private data;
  • the international recipient has undertaken to satisfy its tasks and obligations, implement administration and technical measures; and has the flexibility to satisfy its tasks and obligations to make sure the safety of cross-border processing of non-public data;
  • the chance of loss, harm, tampering, misuse of non-public data (amongst different dangers) after cross-border processing and the channels by which people can shield their rights and pursuits; AND
  • the influence that the non-public data safety insurance policies and rules of the nation or area through which the abroad recipient is situated have on the success of non-public data safety obligations and on the safety of rights and pursuits regarding the knowledge private.

1.4 Further obligations for the transferor and the recipient overseas

The specification imposes quite a lot of further obligations on the info originator and recipient overseas as follows:

  • The abroad recipient should instantly notify the info originator and the certification physique if the legal guidelines or insurance policies of the nation or area the place the abroad recipient is situated change such that the abroad recipient is unable to satisfy the necessities of certification.
  • The international recipient should undertake to not present the non-public data acquired from the transferor to 3rd events.
  • The info originator and abroad recipient should register the cross-border processing of non-public knowledge, hold it for at the very least three years, and supply it to the competent Chinese language authority if requested.
  • In case of loss, tampering or lack of private data, the info transferor and/or abroad recipient shall instantly take corrective measures, notify the opposite social gathering, report the incident to the related authority of the Folks’s Republic of China , inform knowledge topics of non-public data and report and hold all related details and influence.
  • The events bear the burden of proof to show that the related obligations have been fulfilled (in case of any infringement or demand from the related Chinese language authorities).

A few of these obligations are imposed straight on abroad recipients, so they are going to be topic to the oversight of certifying brokers.[2]

1.5 Rights of the events and competent court docket

The Disciplinary offers that the events can take motion in opposition to each the transferor and the recipient overseas once they assert their rights in relation to their private data, additionally by requesting that one in all them takes measures to fulfill the requests of the social gathering and asking for compensation.

The specification offers that the courts decided in accordance with the Code of Civil Process of the PRC (as a substitute of the courts of the ordinary residence of the info topics) have jurisdiction. In follow, which means that knowledge topics also can carry proceedings earlier than the competent courts the place the defendant is domiciled or the place the info breach occurred.

2. When is certification potential?

Previous to any cross-border switch of non-public data, an information transferer should decide whether or not it’s topic to the obligatory CAC safety evaluation or whether or not every other cross-border mechanism (e.g. certification or normal contract) will be carried out. The next flowchart illustrates the primary figuring out elements.

3. Elements that require additional clarification

Additional clarifications are nonetheless wanted on the scope of the specification and on the connection between the legally binding doc below the specification and the usual contract for the cross-border switch of non-public data.

The China Cybersecurity Assessment Expertise and Certification Heart has introduced that it’s chargeable for certification. It has arrange a web based certification utility system and has posted a pattern utility type on its web site.

Whether or not certification will turn out to be a well-liked choice for transferring private data exterior of China over the usual contract stays to be seen.

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