By John Zhou

Hong Kong, 12 January 2024: A new scheme which enables easier cross-border data transfer within the Greater Bay Area (GBA) has just come into effect. The move is a significant milestone in the region’s long-term vision to become a global economic powerhouse.

The initiative allows individuals and organisations in the nine mainland cities in the GBA and their counterparts in Hong Kong to voluntarily enter a uniform contract which outlines the responsibilities and obligations of both parties in protecting personal information. It is being implemented in phases, beginning with the banking, credit referencing and healthcare sectors.

The so-called GBA Standard Contract is the first measure resulting from a Memorandum of Understanding signed last June by Hong Kong’s Innovation, Technology and Industry Bureau (ITIB) and the Cyberspace Administration of China (CAC). Not only does it streamline the process and reduce compliance costs surrounding cross-border data transfer requirements in comparison to those between mainland China and foreign nations – for example, lighter contractual obligations and more user-friendly internal review and filing requirements – it eases the restriction on the volume of data which can be transferred.

It is a move which has been widely welcomed by lawmakers, business leaders and entrepreneurs. There are myriad instances in which it will work. For instance, it is now easier for individuals and organisations to access their credit history or assessments when applying for loans or credit cards on the other side of the border, while patients can share their medical background when seeking treatment.

Hong Kong recipients of data are required to file the GBA Standard Contract within 10 working days from the date it takes effect with the Office of the Government Chief Information Officer (which has launched a thematic website with details of the scheme) or the Guangdong Provincial Internet Information Office. The parties are required to maintain the confidentiality of personal data, commercial secrets and business information. Further, they must not transfer the personal information to any organisation or individual outside the GBA.

The Hong Kong government has promised it will review the “early and pilot implementation” of the scheme in due course, with a view to extending it to other sectors. At the same time, the ITIB has stressed that the GBA Standard Contract is an “administrative measure” which does not affect the supervisory and regulatory roles of the Office of the Privacy Commissioner for Personal Data.

Implementation of the GBA Standard Contract comes as the development of the giant business hub gathers pace. Hong Kong’s Consumer Council recently hosted a forum designed to step up cross-border collaboration on consumer rights and protection. Last July, Hong Kong regulators and their Guangdong counterparts signed a Memorandum of Understanding on competition law. That same month, Mainland Minister of Justice He Rong led a delegation to Hong Kong where she signed a record of meeting with this city’s Secretary for Justice, Paul Lam SC, which focused in part on enhancing co-operation on legal services and cultivating legal talent in the GBA.

Later this month, a new era in cross-border legal co-operation will be ushered in when the long-awaited Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance comes into force. The new law will widen the scope of existing legislation which currently applies only to some monetary judgments. While the legislation is relevant to the entire Mainland, it is particularly important in the context of Hong Kong’s growing connectivity with the GBA.

In conclusion, the GBA Standard Contract is welcome news. Not only is easier flow of information, underpinned by robust regulation, crucial to the region’s success, but the initiative bolsters Hong Kong’s importance to the GBA’s grand vision as its bridgehead to the rest of the world and helps our city make better use of China’s overall development.

Finally, it is worth remembering that the cross-border legal landscape remains complex, thus sound advice is essential. Here at Boase Cohen & Collins, we have an accomplished team, many of them fluent in Putonghua, ready to offer assistance.

A Consultant for BC&C, John Zhou is admitted to practice law in Hong Kong, the Mainland and the New York State. He has dedicated his career to cross-border dispute resolution and has vast experience in complex commercial arbitration, litigation and compliance matters. He can be contacted at john@boasecohencollins.com.