Management and Control on Commercial Password Products within China

As the pace of economic activities speeds up, the trade products in the international market are wide varieties progressively, meanwhile, due to the deepening of international cooperation and communication, merchants in different countries become more closed, and China are also opening to businessmen in various countries. However, for protecting the national interests, Chinese government set corresponding limits on special foreign investment and importing goods. Commercial password products are listed in the limits. It will be introduced specifically as followed:

1.Provisions on developing , manufacturing and selling commercial password products

Commercial password refers to the password techniques and products used for protecting the information which is involving state secrets, or used for security certification. In China, "The commercial password techniques belong to state secrets. The scientific research, production, selling and use of the commercial password products shall be under the special control and administration of the state."1 Therefore, the researching and manufacturing tasks of commercial password are designated to the appointed organ by the State Password Administration Institution. The qualities sand models must be approved by State Password Administration Institution and the production department cannot manufacture commercial password beyond the extent of approval." 2

In addition, the sales of the commercial password products shall adopt the administrative licensing, that is to say, only the appointed units have the rights to sell commercial password products. Any units or personnel cannot sell commercial password products without permits. One has to file an applicant to the State Password Administration Institution, and shall meet the following conditions:

(1) Having the personnel who knows the knowledge of the commercial password products and bears the after services;

(2) Having perfect sales service and the safety management regulations;

(3) Having independent legal person qualification.

The units examined to be qualified shall be issued with a Selling License of the Commercial Password products by the State Password Administration Institution.

2.Limits on importing commercial password products

China adopts strict approval system on the importing of commercial password products, and sales of password products produced overseas neither are not allowed. Regulations on Management of Commercial Password regulates: "To import the password products and the equipments containing the password techniques must be approved by State Password Administration Institution; any corporation or individual shall not sell the password products produced overseas."

3.Regulations on the use of commercial password products

According to the article 14 in Regulations on Management of Commercial Password, "any unit or personnel can only use the password products authorized through the State Password Administration Institution, and no one can use the password products self-made or manufactured overseas.

Above all, the scientific research, production, selling and use of the commercial password products shall be under the strict control and administration of the government agencies. Therefore, foreign businessmen's intentions to exploit china's password products market currently are impossible to realize. The only way is that the foreign businessmen transfer all the intellectual property rights involved in the commercial password products to Chinese enterprises with the developing qualifications, and thus get the manufacturing license. Even so, risks of being investigated or punished still exist.

1. Refers to Article 3 in Regulations on Management of Commercial Password
2. Refers to Article 5.6.7 in Regulations on Management of Commercial Password