Beijing's new data security laws that are in force for three months now, is another layer of regulatory complexity for businesses operating in China.
Foreign Policy in its review of the law said that these new restrictions paint a complicated picture for the future of data governance, continuing a trend toward more complex regulatory regimes, competing for legal frameworks, and increased restrictions on international data flow, reported The HK Post.
According to the American news publication, the addition of new data classifications, legal jurisdictions, and data storage requirements imposes "another layer of regulatory complexity for businesses operating in China".
Moreover, the foreign companies the world over are still trying to comprehend the nuances and hidden meanings of new data security laws, reported The HK Post.
The Personal Information Protection Law (PIPL) lays out ground rules around how data is collected, used, and stored. Companies based outside of China have to get security clearance for their data processing requirements.
What the foreign companies are wary of is the fact that while PIPL can help stop unauthorised data trading and data theft in China, it is closely linked to the government's national security priorities.
The foreign companies do not want to get caught in any security rigmarole. The PIPL rules clearly state that foreign companies can be blacklisted if they do not comply with the rules or "harm" China's national security. The companies can even be banned from processing Chinese personal data at colossal losses to business, reported The HK Post.
The PIPL which came into force on November 1 is China's first comprehensive data privacy law to fully protect hundreds of millions of Chinese consumers.
Another issue that concerns foreign companies and human rights organisations is that the new data law cannot stop the Chinese State from accessing the personal data of its citizens.
China is already considered among the most surveilled countries in the world. On top of that unbridled power to access data will mean a greater threat to personal privacy.
There is an array of monetary fines the new law can make foreign companies pay for violating rules. Companies in the breach may be issued an order for rectification or warnings. Chinese authorities also may confiscate any "unlawful income".
( With inputs from ANI )
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