The revised PRC Counter-Espionage law – what has really changed?
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On April 26, 2023, China’s legislature approved revisions to the Counter-Espionage Law of the People’s Republic of China (PRC Counter-Espionage Law). A draft version of the law had been released for public comment in December 2022. This alert highlights the significant changes to the law.
The law redesign can be viewed as an aspect of the current administration’s focus on national security and concerns over the flow of data across China’s borders. China has indicated an emphasis on building a more comprehensive legal system for national security with perhaps broader ramifications for legal reform and efforts at greater transparency in national security legal developments. In terms of the legislative history of the revisions to the PRC Counter-Espionage Law, legislative planning for revisions to the law were disclosed in China’s 2022 version of the Legislative Work Plan of the Standing Committee of the National People’s Congress (NPCSC Legislative Plan) (approved in December 2021 and publicly released in or about May 2022). The proposal for revising the law appeared in section 3 of the plan as a preparatory legislative item. Proposed revisions to the law were not suggested in either the 2021 or the 2020 NPCSC Legislative Plans, but that is not particularly unusual in legislative planning in China.
Official commentary suggest that at some point in 2021/2022, revisions to this law became a Central Government policy and legislative priority and the first draft of the revision was publicly released in December 2022. In the 2023 NPCSC Legislative Plan (approved in December 2022, amended in April 2023, and released in or about May 2023), revisions to the PRC Counter-Espionage Law were slotted for further reading by the legislators in April 2023. The revised law was adopted and promulgated on April 26.
The revised law is set to become effective on July 1, 2023. The law:
- Brings under one heading various disparate counter-espionage rules that have been enacted since the first counter-espionage law in 2014.
- Provides express penalties, including fines and cancellation of business licenses, for foreign-invested and other domestic companies engaged in non-criminal espionage.
- Expands the scope of espionage activities to include cyber-intrusion.
- Cautions that the provision to parties abroad of unmarked items that concern national security or interests in various forms is illegal.
- Provides more detail on the investigative powers of state security organs, but with additional balancing language to suggest some legal restraints on those powers.
For a deeper dive into the weeds on the changes to the new law, please see below.