With the recent development of the Shanghai Pilot Free Trade Zone to facilitate cross-border data transfers, data exports from China that have been hampered by the Cyberspace Administration of China’s (“CAC”) strict cross-border data In recent years, the legal framework and practical enforcement of cross-border data transfers in China is expected to bring greater flexibility to the There have been significant developments in terms of provisions. Lack of clarity on CAC’s strict rules regarding security assessment reviews has caused significant delays in the approval process for cross-border data transfers, raising concerns among international companies that regularly transfer data outside of China. It seems there is. However, it seems likely that the Shanghai government will take advantage of its vast free trade zone to allow international companies to transfer data overseas. For example, the city of Shanghai recently announced new measures aimed at accelerating cross-border data transfers.
On December 7, 2023, the State Council of China announced the overall plan ( (hereinafter referred to as the “Overall Plan”). ), set the direction for the Shanghai Pilot Free Trade Zone, giving Shanghai the goal of “building a model center for national system-based openness,” and promoting further relaxation of cross-border transfer regulations under a new framework.
In order to implement the pilot program of the “Overall Plan”, the Shanghai government will promote the high-level institutional opening of the China (Shanghai) Pilot Free Trade Zone through comprehensive cooperation with international high-level economies. announced the Shanghai Implementation Plan to implement the overall plan. and Trading Rules of February 3, 2024 (the “Implementation Plan”). On February 6, 2024, the Shanghai Municipal Government Information Bureau held a press conference to introduce key aspects of the implementation plan. The plan proposes a series of measures to regulate and facilitate cross-border data transfers.data catalog[1]is seeking to establish a legal, safe and speedy cross-border data transfer mechanism, and is considering establishing cross-border data service centers in free trade zones (including Lingang Special Zones).[2]) (“Free Trade Area”). The latter is a new government department with powers to pre-screen applications for cross-border data transfers. Specifically, the implementation plan provides that financial institutions will be permitted to transfer business data outside of China in accordance with applicable security policies and measures.
The implementation plan also outlines additional measures related to promoting data sharing and the development of digital trade in the free trade area. In accordance with the principles outlined in the implementation plan, the Rinko District will take the following actions:
Development of “General Data List” and “Important Data Catalog” for cross-border data transfer
As of February 2024, the Lingang Special Region Government has issued “Data Flow Operational Guidelines” that “conduct assessment and filing before transfer, perform backup and storage during transfer, and perform random checks and verification after transfer. We have established a comprehensive mechanism for implementation. ” His nearly 50 scenarios for making cross-border transfers convenient are being considered.
In addition, the Lingang Special Region Government recently announced administrative measures (trial) regarding the classification and grading of cross-border data transfers in the Lingang Special Region (the “Administrative Measures”). This control measure categorizes cross-border data into three levels: ) “Core Data”, (2) “Important Data”, (3) “General Data”. Transfer of Core Data outside of China is prohibited. Transfers containing “sensitive data” must go through an initial verification and application process at the Port Special Zone’s cross-border data service center, which then passes the transfer to the local cyberspace administration for security assessment. must be submitted to. “General Data” may be freely transferred provided that the relevant data protection control requirements are met.
The Lingang SAR government will develop industry (and potentially We have formed a working group consisting of stakeholders (of other types). export). The working group is tasked with creating a “general data” list and a “key data” catalog.
The establishment of a dedicated cross-border data service center aims to streamline the process of application submission, consultation and pre-screening of data transfers, allowing businesses in the Port Special Zone to expedite cross-border transfers. provides a means to potentially transform .
Mutual recognition of standard contracts and personal information protection certification
Rinko Special Zone is also developing a pilot project for mutual recognition of international data-related rules[3]proactively establish the Lingang Special Zone as a model site for DEPA cooperation, with the intention of strengthening cooperation with Digital Economic Partnership Agreement (“DEPA”) countries in the field of digital trade.[4], promote the introduction of new rules such as “paperless trade” in the special harbor area. In particular, the Port Special Zone is considering a pilot program to introduce standard contracts for cross-border data transfers and personal information protection certification.
Establishment of international data industrial complex
One of the objectives of the Lingang Special Zone is to accelerate the development of key industries such as data outsourcing, international cloud services, and data compliance. He also said that he is actively cultivating the offshore data industry, exploring new types of businesses such as offshore data processing, data analysis, and data storage, and promoting the establishment of a model center for digital transactions. The government appears to have realized that to facilitate such business in China, it needs to relax rules on cross-border data transfers.
[1] The “Significant Data Catalog” is a list of data elements that are subject to advanced evaluation requirements.
[2] The Shanghai Pilot Free Trade Zone is made up of several areas, one of which is the Lingang Special Zone.
[3] Specific data protection and data-related rules and regulations, as well as participating countries, had not yet been announced at the time of publication.
[4] The Digital Economic Partnership Agreement (DEPA) is currently in place between Singapore, Chile and New Zealand. China applied for membership on November 1, 2021.
