by Yan Luo, Eric Carlson, Tim Stratford and Kurt Wimmer

On July 5, 2019, China’s Standing Committee of the National People’s Congress (NPC) published a new draft Encryption Law (“the draft Law”) for public comment.  The draft Law, if enacted as drafted, would bring significant new changes to China’s commercial encryption regime. 

The State Cryptography Administration (“SCA”) previously issued an initial draft of this law for public comment on April 13, 2017 (“the 2017 Draft”) (see Covington’s alert on the previous version here (PDF: 70 KB)).  After the release of the 2017 draft, the regulatory regime in China for commercial encryption products was revamped significantly (see Covington’s previous alert here (PDF: 88.3 KB)).  The State Council removed certain approval requirements for the production, sale, and use of commercial encryption products in late September 2017, and the SCA issued further notices reducing the burden imposed on manufacturers, distributors and users of commercial encryption products.  The draft Law proposes further changes to this revamped regime, including for example introducing different categories of encryption, and establishing license requirements for certain imports and exports, while carving out items in “general use.”

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