Hot on the heels of SASAC's rules on commercial secrets, China has amended the PRC Law on State Secrets, a much more significant piece of legislation. It was issued by the national legislator, the Standing Committee of National People's Congress. The new version of the law will take effect on 1 October 2010.
The Amendments, announced on 29 April, 2010, attempt to reinforce protection of state secrets on the one hand and claim to balance citizen's rights to access information on the other. The definition of state secrets has been narrowed considerably from the all-encompassing scope that formed the basis of this law since 1988, which is cheering news for those of us who deal with this issue frequently. Indeed, the national government clearly wants to reassure ordinary Chinese that access to information is a recognised right, and has said so in much of its public commentary on this law.
Less cheering news is that the redrafted law requires internet and telecommunications companies to inform on users who share 'state secrets' which will cause a headache for foreign-invested telecoms companies in China.
Again, this legislation is clearly influenced by the Stern Hu case, in particular by the initial allegation, which was later withdrawn, that Rio Tinto workers had stolen state secrets. What, the international and Chinese business and legal communities asked, is a state secret?
Revised definition
This old definition simply provided, in Article 2, that a state secret is a "matter that has a vital bearing on state security and national interests and, as specified by legal procedure, is entrusted to a limited number of people for a given period of time."
The revised law has not changed this clause (other than a minor syntactical change), but it has added more wording into Article 9, to provide that to be a state secret, the matter concerned must be "information concerning state security and national interests which, if leaked, would damage state security and interests in the areas of politics, economics and national defence."
In our view, this narrows the scope of application significantly, which is a positive sign.
Local authorities can no longer decide that their information is a state secret
As mentioned above, unlike the previous law, the revised version provides that only central State Secret Administration (SSA) and the SSA above county-level have the authority to administrate state secret affairs.
This is part of an attempt to address the concerns of ordinary Chinese, that local-level governments had been using 'state secrecy' as an excuse to cover upevidence of their own wrongdoing. This particular loophole has been closed by allowing only city-level governments to determine the scope of secrecy.
Indeed, much of the state media coverage deals with people's "right to information", and how the law will seek to prevent unnecessary restrictions on this right.
Classification levels
Under the Amendments, central SS, provincial SS and authorities or unit authorized by them have the power to determine the classification level:
- topsecret (the highest level, with the toughest penalties attached to it)
- secret (the second level)
- confidential (the lowest and least secure level).
The SSA at city level can determinate the scope of state secrets - but not "topsecret". The power and scope of authorization should be determined by the central SSA.
Powers of the SSA
The Amendments also expressly grant the SSA the following powers:
- to carry out protection education, protection check, technology protection, and case investigation, guidance and supervision relating to state secret;
- to notify relevant authorities and units who improperly determine, change the scope of state secret, or improperly disclose state secrets, to make correction;
- to order relevant authorities and units to take measures or make corrections within a fixed period if there is any potential leaks of state secrets or suggest relevant authorities and units to dismiss employees seriously violating state secret measures or to carry out an investigation in the event of any leaks of state secrets; and
- to confiscate any state secret media which are illegally acquired or held.
Minimizing staff with access to secrets
As in any good confidentiality agreement, the Amendments require staff with access to state secrets to be kept at a minimum level. In the case of personnel outside the original agreed scope that need access to the information, approval from the SSA must be obtained.
A letter of undertaking should be signed by staff with access to state secrets, and such staff must not accept a job opportunity 'in violation of the state secret measures.'
Must be marked 'secret'
The state secret symbol must be marked out in the paper media, optical media or electromagnetic media containing state secrets.
Internet service providers' obligations
Under section 28, internet service providers and telecommunication service providers are required to cooperate with the SSA, national security authority and the public security authority in case investigation, to immediately cease transmitting information involving state secrets, keeprecords for them and report to the abovementioned authorities, or delete leaking state secret information at the request of the above authorities.
Hot on the heels of SASAC's rules on commercial secrets, China has amended the PRC Law on State Secrets, a much more significant piece of legislation. It was issued by the national legislator, the Standing Committee of National People's Congress. The new version of the law will take effect on 1 October 2010.
The Amendments, announced on 29 April, 2010, attempt to reinforce protection of state secrets on the one hand and claim to balance citizen's rights to access information on the other. The definition of state secrets has been narrowed considerably from the all-encompassing scope that formed the basis of this law since 1988, which is cheering news for those of us who deal with this issue frequently. Indeed, the national government clearly wants to reassure ordinary Chinese that access to information is a recognised right, and has said so in much of its public commentary on this law.
Less cheering news is that the redrafted law requires internet and telecommunications companies to inform on users who share 'state secrets', which will cause a headache for foreign-invested telecoms companies in China.
Again, this legislation is clearly influenced by the Stern Hu case, in particular by the initial allegation, which was later withdrawn, that Rio Tinto workers had stolen state secrets. What, the international and Chinese business and legal communities asked, is a state secret?
Revised definition
This old definition simply provided, in Article 2, that a state secret is a "matter that has a vital bearing on state security and national interests and, as specified by legal procedure, is entrusted to a limited number of people for a given period of time."
The revised law has not changed this clause (other than a minor syntactical change), but it has added more wording into Article 9, to provide that to be a state secret, the matter concerned must be "information concerning state security and national interests which, if leaked, would damage state security and interests in the areas of politics, economics and national defence."
In our view, this narrows the scope of application significantly, which is a positive sign.
Local authorities can no longer decide that their information is a state secret
As mentioned above, unlike the previous law, the revised version provides that only central State Secret Administration (SSA) and the SSA above county-level have the authority to administrate state secret affairs.
This is part of an attempt to address the concerns of ordinary Chinese, that local-level governments had been using 'state secrecy' as an excuse to cover upevidence of their own wrongdoing. This particular loophole has been closed by allowing only city-level governments to determine the scope of secrecy.
Indeed, much of the state media coverage deals with people's "right to information", and how the law will seek to prevent unnecessary restrictions on this right.
Classification levels
Under the Amendments, central SS, provincial SS and authorities or unit authorized by them have the power to determine the classification level:
- topsecret (the highest level, with the toughest penalties attached to it)
- secret (the second level)
- confidential (the lowest and least secure level).
The SSA at city level can determinate the scope of state secrets - but not "topsecret". The power and scope of authorization should be determined by the central SSA.
Powers of the SSA
The Amendments also expressly grant the SSA the following powers:
- to carry out protection education, protection check, technology protection, and case investigation, guidance and supervision relating to state secret;
- to notify relevant authorities and units who improperly determine, change the scope of state secret, or improperly disclose state secrets, to make correction;
- to order relevant authorities and units to take measures or make corrections within a fixed period if there is any potential leaks of state secrets or suggest relevant authorities and units to dismiss employees seriously violating state secret measures or to carry out an investigation in the event of any leaks of state secrets; and
- to confiscate any state secret media which are illegally acquired or held.
Minimizing staff with access to secrets
As in any good confidentiality agreement, the Amendments require staff with access to state secrets to be kept at a minimum level. In the case of personnel outside the original agreed scope that need access to the information, approval from the SSA must be obtained.
A letter of undertaking should be signed by staff with access to state secrets, and such staff must not accept a job opportunity 'in violation of the state secret measures.'
Must be marked 'secret'
The state secret symbol must be marked out in the paper media, optical media or electromagnetic media containing state secrets.
Internet service providers' obligations
Under section 28, internet service providers and telecommunication service providers are required to cooperate with the SSA, national security authority and the public security authority in case investigation, to immediately cease transmitting information involving state secrets, keeprecords for them and report to the abovementioned authorities, or delete leaking state secret information at the request of the above authorities.
This could also present problems to other types of media that are transmitted via shared channels with the internet.
Providing secret information to foreigners
When state secrets need to be provided in 'foreign cooperation', an approval from provincial SSA or above must be obtained, and a confidentiality agreement should be signed by the parties.
Disclosure period
Under the Amendments, the 'guarding term' of a state secret must be defined. In general, the maximum guarding term of topsecret information is thirty years, and the maximum guarding term of for classified state secret twenty years, and for confidential state secrets, ten years.
The Amendments also provide that a state secret should be declassified if the guarding term expires; whether it is no longer considered as national state secret or if it's declassified would not undermine national security interest.
Liability
In addition to criminal sanctions, a unit or staff violating the Amendments will be subject to administrative penalty, and where such penalty is inapplicable, subject to disciplinary actions. Internet service providers and telecommunication service providers will also be subject to sanctions by Ministry of Information and Industry Technology.
Conclusion
State secrets have a clearer definition in the amended law (although still very broad). Part of the Chinese government's publicity campaign surrounding the legislation this week has focussed on citizens' obligations, as well as their rights. For example, with a Xinhua cartoon showing an office worker telling her gormless colleague not to connect a computer marked "secret" to the internet. However, the government is also, seemingly for the first time, attempting to strike a balance between the need for freedom of information and the need to maintain security.
It is very unlikely that the underlying mentality of the Chinese government, which is often to assume secrecy by default, will change overnight. And the provisions in this new law regarding obligations of internet service providers might cause concern for international investors in this sector. Not only might they cause concerns for international investors in this sector, but they might motivate domestic carriers to make more effort to regulate the flow of information over the internet, for fear of missing the transmission of a state secret. Arguably, they have this obligation already under existing rules, but the revised law might increase their vigilance.
Disclaimer
The views set out in this publication are based on our experience as international counsel representing clients in their business activities in China. As is the case for all international law firms licensed in China, we are authorised to provide information concerning the effect of the Chinese legal environment. However we are not admitted to practice Chinese law and so are unable to issue opinions on matters of Chinese law. The content of this article is intended to provide a general guide to the subject matter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
