Cross Border Discovery: The Case of China

Cross border discovery: The case of China appeared first on May, 2021 following eDiscovery case studies, a comparative analysis between countries. As we have seen Electronic Discovery in the Asia Pacific region is a growing trend, forcing Asian companies to follow U.S. obligations that entail extensive data gathering. The biggest driver of eDiscovery in China is the urge to enable compliance with cross-border data transfer rules that prevent certain information to go beyond the national boundaries.

The People’s Republic of China has seen a sudden rise in the establishment of Electronic Discovery (eDiscovery) services inside the Great Chinese Firewall. The procedures surrounding eDiscovery are developing as litigation and investigations are gaining popularity across the country.

The country’s latest CyberSecurity law applies to all individuals and organizations and imposes significant privacy and security obligations on suppliers and network operators.

China’s New CyberSecurity Law (CSL)

The Chinese government passed the Cyber Security Law bill on June 1st, 2017. The law regulates the operations, usage and maintenance of networks. It also lays down rules for network security supervision in mainland China. To avoid strict data privacy protection laws, many companies in China moved their operations and data related to litigations and investigations to Taiwan and Hong Kong.

Cross-Border Data Transfers

In 2018, some new pointers were added in the Cyber Security Law to help legal teams and eDiscovery service providers to adapt to more regional data and security laws because of the uncertainties affecting data privacy and cross border discovery. Some of these pointers are as follows:

  • When a cross border case involves Asian language data, companies must talk to a local technology and service provider with extensive knowledge and expertise in Asian language eDiscovery. Tools developed in Asia can best handle the challenges presented by the Asian language.
  • Each company needs to have a strong cross-border team with local counsels, business experts, global Electronic Discovery providers, and project managers. Such a team can help build technical and cultural gaps, keep translation to a minimum and achieve better results in a shorter time.

The Scope of eDiscovery in China

Unlike the discovery rules that provide litigation support in the West, the scope of eDiscovery in China is restricted. Even if they are not a party in a lawsuit, Chinese companies can be compelled to produce evidence that connects to litigation.

However, the Chinese Civil Procedure Law does not bind any third parties to collect and provide ammunition for a proceeding in which they do not have any interest. Chinese manufactures who send their goods to other parts of the world may become embroiled in cross-border litigation either as a party to the lawsuit or as a non-party subject to document requests during the eDiscovery phase.

The Chinese government has laid down stringent laws and is often unwilling to cooperate with requests about the transfer of particular information and documents until the security protocols are followed. Violating Chinese regulations can lead to severe penalties, including prison sentences.

Final Words

With the rise in cross border discovery in china and enforcement across jurisdictions, companies must take preventative measures to stay ahead. Senior company executives must take proactive measures to put strategies in place to avoid high non-compliance costs. Engaging with local, trusted partners can help prevent administrative penalties.

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