This is the English edition. The article body below is the publisher's English rendering of the original Chinese article; figures, license numbers and institutional names follow the original.

On February 27, 2024, the 8th Session of the Standing Committee of the 14th National People's Congress revised the Law of the People's Republic of China on Guarding State Secrets for the second time. Article 41 of the revised law provides: enterprises and public institutions engaged in businesses involving state secrets — such as the production, reproduction, repair, or destruction of state secret carriers, classified information system integration, weapons and equipment research and production, or construction of classified military facilities — must undergo review and approval and obtain a confidentiality qualification.

Refined Requirements in the Implementation Regulations

  • Qualified entities must not undertake other businesses requiring the qualification beyond the business categories covered by their confidentiality qualification;
  • They must not alter, sell, lease, or lend the qualification certificate;
  • They must not subcontract classified business to other entities, or assign it to entities without the corresponding confidentiality qualification;
  • An annual self-inspection system applies: each year they must submit the prior year's self-inspection report to the confidentiality administration department that granted the administrative license.

Requirements for the Commissioning Party

When government bodies and organizations procure or commission classified business from enterprises and institutions, they must verify the contractor's confidentiality qualification, sign a confidentiality agreement, specify confidentiality requirements, take confidentiality measures, and manage the whole process.

Practical Implication

This provision turns "qualification" into a precondition for engagement rather than a bonus: a commissioning party that fails to verify the qualification is itself in violation. Conversely, for qualified contractors, the qualification is a hard entry threshold in bidding and framework agreements, not a comparable commercial term.

Four Common Non-Compliant Situations

Applying Article 41 of the State Secrets Law and the implementing regulations to day-to-day operations, four situations cause the most trouble:

  • Selling as scrap — selling classified media to recycling stations or scrap dealers as ordinary waste is the most typical violation and a recurring focus of special inspections.
  • Entrusting destruction to unqualified entities — if the contractor lacks the confidentiality qualification, the commissioning party bears responsibility for failing to fulfill its verification duty, even if unaware.
  • Signing a contract without a confidentiality agreement — the commissioning party must sign a confidentiality agreement, state confidentiality requirements, and manage the whole process; missing any step constitutes a management failure.
  • Layered subcontracting — the implementation regulations explicitly prohibit subcontracting classified business or assigning it to entities without the corresponding qualification.

These four situations share one trait: all can be avoided with three steps — verify qualifications beforehand, sign agreements during the engagement, and collect proof afterwards.

Four Things a Commissioning Party Can Verify

  • Qualification scope — confirm that the grade of the other party's qualification matches the classification level and media type of the carriers to be destroyed.
  • Designated status — check whether the entity is on the list of designated classified media destruction units published by local confidentiality authorities.
  • Process documentation — whether the receiving, transport, storage, and destruction stages have traceable records and handover vouchers.
  • Destruction certificate — whether a written certificate stating carrier quantities, media types, destruction methods, and times can be issued upon completion.

These four items answer "who may destroy, what was destroyed, how it was destroyed, and what proves it" — the questions most frequently pressed in audits and regulatory inspections.

Sources

Implementation Regulations of the Law of the People's Republic of China on Guarding State Secrets: gjbmj.gov.cn; Law of the People's Republic of China on Guarding State Secrets (2024 revision): gov.cn.