PRC v US Policy
Implications for Hong Kong
New regulations in the People's Republic of China require foreign organizations and individuals using encryption products or equipment containing encryption technology in China to have applied for permission by January 31 2000. Certain disclosures had to be made that will make it easier for the Chinese government to monitor personal and commercial use of the Internet.
The new regulations also prohibit Chinese companies from buying products containing foreign encryption software and provide that "no organization or individual can sell foreign commercial encryption products".
In contrast to the tightening of controls over the Internet in China, the US government has issued regulations that relax the restrictions on the export of encryption technology. The aim of the new policy is to promote electronic commerce in the United States and enable US companies to be more competitive in the global marketplace.
In October 1999 an amendment to the Import/Export (Strategic Commodities) Regulations came into effect in Hong Kong. Encryption software employing a key length in excess of 56 bits now requires a permit to be imported to or exported from Hong Kong. Application to import the restricted software may be made to the Trade Department. Consequently Hong Kong companies may still benefit from the relaxation of the US regulations provided they obtain the necessary permit.
As yet Hong Kong companies will only be directly effected by the increased restrictions in China if they have a presence there and either employ or market encryption software. However, if the Chinese government continues to impose restraints on high-technology, there is growing concern that confidence in the opportunities available in China and the Hong Kong Special Administrative Region in the technology sector will be undermined.
For further information on this topic please contact Richard Fawcett at Bird & Bird by telephone (+852 2248 6000) or by fax (+852 2248 6011) or by e-mail ([email protected]).
The materials contained on this web site are for general information purposes only and are subject to the disclaimer