SASAC releases provisional regulation over business secrets

15:55, April 27, 2010      

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China's Stated-owned Assets Supervision and Administration Commission of the State Council (SASAC) has recently released a provisional regulation on the protection of commercial secrets for central state-owned enterprises.

This regulation requires central SOEs involving both foreign and domestic processes of the issuance of securities, listing and information disclosure of listed companies should establish and improve confidential review procedures for business secrets. They should also impose confidentiality requirements on relevant departments, agencies and staff.

This regulation clearly indicates central SOEs should expand the scope of protected business secrets. These protections mainly include strategic planning; management; business models; restructuring and listing and mergers and acquisitions. Protections also include transactions of property rights, financial information, investment decisions, production purchases and sales strategy, resource reservation, client information, bidding and other business information; design, program, product formulations, production technology, production methods, technical knack and other technique information.

The regulation requires central SOEs to identify business secrets as state secrets according to legal procedures when the scope has been adjusted.

Meanwhile, central SOEs should sign labor contracts with employees containing confidentiality provisions and sign non-competition agreements with core secret staff according to secret level. Financial compensation should be contained in these agreements. Central enterprises should also sign confidentiality agreements with relevant parties involving business secret activities.

The regulation requests strengthening trade secret protection of major projects and important negotiations of central SOEs and establishing early access mechanism of confidentiality. Problems involving national security and interests should be reported immediately. Violations of commercial secrets of central enterprises should be penalized. Remedies under the regulation include ending infringement and rehabilitating reputation as well as compensation for damages.

The SASAC also requires central SOEs to attach great importance to the protection of commercial secrets and implement measures to protect trade secrets combined with actual conditions to effectively protect business interests free from infringement so as to promote the fast development of enterprises.

By People's Daily Online


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