China Unveils Draft Standard Contract and Provides Clarifications on Cross-Border Data Transfer Mechanisms

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China’s CAC publishes guidance on cross-border data transfers, including draft standard contractual clauses and regulatory guidance on certification and security assessment.

Key Points:

..Security Assessment: Effective September 1, 2022, personal information processors (PI Processors) under the Personal Information Protection Law (PIPL) must file for a Security Assessment with the Cyberspace Administration of China (CAC) if any of the following circumstances apply: (i) important data will be transferred; (ii) personal information will be transferred by a critical information infrastructure operator (CIIO) or a PI Processor who processes personal information of more than 1 million individuals; or (iii) in each case, the personal information of more than 100,000 individuals or sensitive personal information of more than 10,000 individuals will be cumulatively transferred since January 1 of the previous year.

..Certification: A PI Processor may obtain a personal information security certification from agencies designated by the CAC. According to the certification specification, the certification is suitable for (i) intra-group data transfers, similar to the Binding Corporate Rules under the General Data Protection Regulation (GDPR); and (ii) cross-border data transfers by foreign PI Processors subject to the PIPL’s extraterritorial reach.

..Draft China SCCs: A draft of the China standard contractual clauses (China SCCs), a template contract for cross-border data transfers (similar to the EU standard contractual clauses under the GDPR), were released for public consultation. The China SCCs are intended for adoption for cross-border transfers of personal information, except those transfers subject to the Security Assessment.

Please see full Alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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