The Recently Modified Anti-Spionage Law in China

Concerns have been expressed about how China's recently modified security law, which went into force on July 1, may affect companies doing business there. The National People's Congress (NPC) Standing Committee passed the counter-espionage law with the intention of protecting national security by tackling espionage and spying activities. However, international businesses, journalists, scholars, and researchers now face uncertainty and possible risks due to the law's broad application and ambiguities.

Knowing the Modified Law

The new law defines acts of espionage, including launching cyberattacks against vital information infrastructure, sensitive organs, or state institutions. All records, information, materials, and items pertaining to national security and interests are now included in the definition of targets of espionage. Concerns regarding the government's ability to request access to private information and the labelling of research or due diligence as espionage have arisen as a result of this growth.

Business Risks and Uncertainties

Foreign companies doing business in China may be subject to legal risks and uncertainties, according to the US National Counterintelligence and Security Centre (NCSC). Any papers, data, materials, or products could be susceptible to the law's ambiguities and be deemed significant to China's national security, posing difficulties for businesses undertaking research or due diligence. Businesses are exposed to potential legal repercussions because there is no clear definition of what constitutes espionage, which raises further problems.

Business Risks and Uncertainties

Foreign companies doing business in China may be subject to legal risks and uncertainties, according to the US National Counterintelligence and Security Centre (NCSC). Any papers, data, materials, or products could be susceptible to the law's ambiguities and be deemed significant to China's national security, posing difficulties for businesses undertaking research or due diligence. The uncertainty surrounding the definition of espionage makes matters worse and exposes companies to potential legal repercussions.

Observations involving Foreign Businesses

Concerns about the effects of the law have been heightened by recent occurrences involving foreign companies. The raid on the Shanghai office of consulting company Bain & Co., the detention of Chinese employees of the Mintz Group, and the arrest of a Japanese employee of Astellas Pharma Inc. on suspicion of espionage are just a few examples of the dangers encountered by companies doing business in China.