21 April, 2015
China will reconsider planned regulations that encouraged the use of Chinese technology in the banking industry, and said it will conform to World Trade Organisation (WTO) rules, according to a Financial Times report.
The China Banking Regulatory Commission (CBRC) and the Ministry of Industry and Information Technology sent a notice to banks to say that the regulations would be reassessed and reissued after feedback, the Financial Times said.
"Based on opinions received from various parties, the relevant Chinese agencies are revising and perfecting the guidelines. The Chinese government’s commitment to openness and fulfilling World Trade Organisation (WTO) rules won’t change, and promoting information security in the banking industry is completely necessary," the CBRC told the Financial Times.
The recent proposed banking security rules would have demanded that banks buy "secure and reliable" IT equipment in order to operate in China.
Business organisations in Europe and the US had protested against the proposed rules and asked their governments to intervene, the Financial Times reported in February.
Banks were due to submit plans on how to convert their IT systems by 15 March and to begin installation of new systems by 1 April, the Financial Times said in March. They would have been given four years to ensure that at least 75% of equipment met the criteria.
Banks were also being asked to supply encryption keys protecting data, and to allow testing by the Chinese authorities, The Wall Street Journal reported.
In 2012, a WTO panel ruled that China had breached commitments by offering preferential treatment to a Chinese electronic payments firm. The decision upheld competition complaints from the US which were also supported by the EU.
The 2012 panel said that China should change its "measures" in order to conform to its "obligations" under the WTO's General Agreement on Trade in Services (GATS) after finding that China had "nullified or impaired benefits accruing to the United States under that agreement."
For further information, please contact:
Marc Dautlich, Partner, Pinsent Masons
marc.dautlich@pinsentmasons.com
John Salmon, Partner, Pinsent Masons
john.salmon@pinsentmasons.com
