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In just a few weeks, U.S. companies that do business in China are going to confront a host of challenges related to the enactment of a fresh batch of cybersecurity rules that could also force open the locks on trade secrets and other sensitive information.

Most U.S. companies that operate in China were already wary of losing their grip on intellectual property assets, said David Katz, a partner at Nelson Mullins Riley & Scarborough in Atlanta who specializes in privacy and data security. Now, in light of the new, far-reaching rules, doing business in China is likely to be “more challenging and potentially perilous,” he said.

The latest regulations are set to take effect Nov. 1 and would give Chinese authorities the power to peruse a company’s records and remotely access corporate networks that may endanger Chinese national security, public safety, network security risks or social order. Under the rules, which are part of sweeping new cybersecurity regulations that were enacted earlier this year, any information that is collected during a search is supposed to be “strictly confidential.”

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Phillip Bantz

Phillip Bantz is a reporter for Corporate Counsel. Follow him on Twitter @PhillipBantz.

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