75% of Legal Technology Professionals Are Not Familiar with China’s new Cybersecurity Law, Consilio Survey Finds

Global News

27
Feb
2017

Editor

According to a survey conducted by Consilio, a global leader in eDiscovery, document review and legal consulting services, 75 percent of legal technology professionals cited that they are not familiar with China’s new Cybersecurity Law, which was passed into law in December 2016. Furthermore, only 14 percent of respondents indicated that they are “very concerned” about this new law.

China’s new Cybersecurity Law, which will take effect in June 2017, will require foreign companies conducting business in the country to localize their data within mainland China which may contain sensitive privacy data or state secrets. Organizations that do not adhere to this provision will face potential financial penalties, including the possible loss of their ability to conduct business in mainland China. Individuals can face civil and criminal penalties, up to and including imprisonment and the death penalty for particularly egregious cases.

“China is now the world’s second largest economy, and for global corporations and those that aspire to be global, it is critical for them to have a full understanding of the data requirements and regulatory landscape of that region,” said Dan Whitaker, Managing Director of Consilio’s China operations, headquartered in Shanghai. “Since 2012, cyber walls have been going up in multiple regions around the world, and as countries continue to create new regulations, organizations must continually educate themselves on the quickly evolving nuances of data privacy laws in every jurisdiction, specifically as it relates to the ability to move data in and out of the countries in question.”

In addition, a majority of survey respondents (57 percent) indicated having at least one legal matter that touched China within the last two years (i.e. internal or government investigations, litigation, M&A, etc.). Meanwhile, more than a quarter of respondents (27 percent) said they knew of at least ten Chinese legal matters that their organizations were involved in over the same period.

Additional Survey Findings

In addition to China’s new Cybersecurity Law, when polled about other international compliance laws their organizations are most concerned about, respondents identified the Foreign Corrupt Practices Act, or FCPA as the most concerning (40 percent), with the General Data Protection Regulation, or GDPR (22 percent) and the UK Bribery Act (8 percent) as other regulations on their mind.

Despite limited knowledge about China’s new Cybersecurity Law, one-third of legal technology professionals said their organizations have at least 26 legal resources and/or individuals dedicated to compliance of international data privacy regulations.

Survey Methodology

The survey of 118 legal technology professionals, from in-house law departments, law firms and government affiliated entities, was conducted by Consilio at the Legalweek | Legaltech® New York 2017 conference held January 31 – February 2, 2017.