Regulatory-News-300x163BIIA’s editor observed a number of recent comments made by information suppliers about the legal aspects of collecting credit information in China, which could give the impression that certain suppliers may have obtained information illegally or haphazardly.

William F.M.J. Baastian, Board member at Creditreform China, advises readers of the Creditreform Magazine only to buy credit information from reliable sources.  He also pointed out that the collection of reliable information on Chinese companies is cumbersome and awkward because information has to be obtained from different government organization.

CRIF announced recently the expansion of its Hong Kong office to provide business information on Chinese companies stressing the point that the information was obtained from legally-compliant up-to-date data sources.

Both announcements could imply that there are information suppliers who may procure information illegally or haphazardly.  This may have been a practice in the past, but the Chinese came down hard on such companies and shut them down.  In the meantime credit information companies must have a license to operate in China.  There is a stringent inspection regime concerning competence, data security and compliance to local privacy laws.  Under the new law it is forbidden to process Chinese credit information outside China’s borders. Therefore anybody feeding data in bulk to databases outside China is in violation of the law.

Generally speaking commercial credit information has never been subject to regulations (apart from privacy provisions on sole proprietors) worldwide; however that period is coming to an end.  China was the first country which regulated commercial credit information.  Malaysia has now followed suit with more stringent restrictions. Others are expected to follow their lead.

The golden rule for anyone buying credit information from China and Malaysia should be:  “Show me your operating license and I shall buy your information.”