The Risks for International Business under the Hong Kong National Security Law
The headlines
National Security is no longer under the jurisdiction of Hong Kong courts but up to the interpretation of Beijing. Under the new framework, national security issues will be treated much in the same way that national defense and foreign affairs do; that is, matters of national security are outside the authority and jurisdiction of Hong Kong SAR (save for most criminal offenses committed in Hong Kong) and are exclusively within the power and authority of the Chinese Government.
National Security is a broad and wide-ranging concept in China. The HK NSL does not define “national security,” nor do the implementing regulations made under Article 43 of the HK NSL. The definition currently being applied by Hong Kong police and prosecutors is sufficiently broad as to encompass participation in journalistic activities and democratic primary elections. Following from the above analysis, understanding what constitutes “national security” within the PRC legal framework will be instructive for individuals and companies continuing to operate in Hong Kong and the PRC in light of the HK NSL. In other words, the HK NSL must be understood and interpreted within the context of the broader PRC legal framework. PRC law provides an expansive definition of national security and does not confine the concept to traditional topics such as acts of terrorism, separatism, or extremism. The PRC definition also encompasses “non-traditional security fields such as economic security, cultural security, societal security, science and technology security, cybersecurity, environmental security, resource security, nuclear security, and the security of overseas interests.”
The National Security Law will be applied to civil disputes and is likely to create fresh legal uncertainties and new politico-legal risks for businesses. International businesses with operations and interests in the PRC and Hong Kong face new risks and challenges because of the HK NSL. First, the extraterritorial reach of the law under Articles 37 and 38 means that individuals and companies can be criminally liable for documents, work, or activities conducted outside of Hong Kong that nevertheless “endanger” PRC national security. This could include receiving information about meetings if they fall within a key industry, purchasing documents that later become classified as state secrets, or hosting a website or server outside Hong Kong that contains content that violates the HK NSL. Similarly, given the breadth of industries subject to national security concerns by the PRC, disputed intellectual property claims over a piece of technology could amount to national security or state secrets
Read the full report at the Harvard Kennedy School Ash Center, where this article was originally published.