China plans to strengthen protection of trade secrets, foreign companies may be banned from entering and investing in the country

ChinaMinistry of Commerce The “Special Regulations on the Protection of China’s Trade Secrets (Draft for Comment)” was announced today (26th), and plans to take measures against foreign entities that violate China’s trade secrets and threaten national sovereignty, security and development interests, including restricting new investment in China, engaging in import and export trade, restricting the entry of relevant personnel, and revoking work or residence qualifications, etc.

According to the official website of the Ministry of Commerce of China on the 26th, in order to safeguard national sovereignty, security and development interests, and to safeguard the legitimate rights and interests of Chinese rights holders, in accordance with the “Foreign Trade Law of the People’s Republic of China” and other laws and regulations, the Ministry of Commerce has studied and drafted the “Special Regulations on the Protection of China’s Trade Secrets (Draft for Comment)” and publicly solicited opinions from the public. Has asked for. The last date for feedback is 24 November.

The draft for comments contains 10 articles, which stipulate that these rules will apply to foreign entities that infringe China’s commercial secrets in international economic, trade and related activities, and that endanger China’s national sovereignty, security and development interests, or pose a real threat to the above interests. So-called foreign entities include foreign enterprises, other organizations or individuals.

The consultation draft states that if a foreign entity commits the above acts, the Ministry of Commerce may decide to take one or more measures, including restricting or banning it from engaging in the import and export of China-related goods, technology and international service trade activities, prohibiting the export of related goods; restricting or restricting its new investments in China; Restricting or restricting the entry of relevant personnel, means of transportation, etc., and restricting or revoking the work permits, stay or residency qualifications of relevant personnel in China.

Apart from this, the Commerce Ministry may also impose relevant penalty or take other necessary steps as per the seriousness of the case. Relevant measures will be implemented by the Ministry of Commerce together with relevant departments in accordance with law, and relevant enterprises, organizations and individuals should cooperate.

In terms of investigation, the consultation draft states that the Ministry of Commerce has the authority to investigate whether relevant behaviors of foreign entities threaten China’s national sovereignty, security and development interests. Foreign entities under investigation shall cooperate with the inquiry, provide truthful information, and may also make statements and defence; If they fail to cooperate or obstruct the investigation, the Commerce Ministry can take a decision based on the facts received.

The consultation draft also mentions that sanctioned foreign entities can apply to change or revoke the relevant measures if they take the initiative to correct, stop the violations and eliminate the threats, and compensate for the losses. The Commerce Ministry may also decide to maintain, suspend, change or revoke the measures based on the assessment results.

In addition, if Chinese companies, organizations or individuals really need to do business with restricted foreign entities under special circumstances, they can apply to the Ministry of Commerce and provide facts and reasons, and then carry out relevant transactions or provide relevant items with approval.

The draft for comments finally states that this provision will come into force from the date of promulgation. It is still in the public consultation phase.