China revises State Secrets Law – lawyers urge business to exercise caution

HONG KONG – In a Client Alert, lawyers Baker & McKenzie say business should expect Chinese offices or entities to become more cautious when delivering information to foreign parties following implementation of revised regulation covering the State Secrets Law, which are now in force.

B&M says the Regulations have left the definition of State Secrets broad and fairly general, but they nevertheless aim to strengthen the management of State Secrets within organs and entities, and seek to promote a clearer sense of State Secrets protection.

The new regulations provide rules for classifying, labeling and protecting State Secrets, and managing State Secrets-related business. They also clarify the responsibility and authority of administrative bodies in relation to the protection of State Secrets.

“Businesses involved in sensitive industries will need to exercise caution as they face the continued uncertainty of whether certain information will be caught under the definition,” B&M says.

“Documents which may not now be State Secrets can be retroactively deemed a State Secret. This created a substantial risk for any person or company handling China-sourced documents, particularly those relevant to sensitive industries and State-owned enterprises.

“Officials are obliged to report any potential leakage of State Secrets within 24 hours.

“Intermediaries who provide organs and entities with projects, goods and services involving State Secrets will need to comply with the State Secrets requirements and sign a confidentiality agreement. This affects foreign intermediaries in the business of providing service in State Secrets-related projects.”

Further information – gary.sieb@bakermckenzie.com  Anthony.poon@bakermckenzie.com  (ATI).