Global law firm Dentons is splitting from its Chinese operations to comply with impending data regulations, one of the more significant withdrawals by a Western company as Beijing intensifies a campaign to curb outflows of valuable information.
Dentons, a law firm with partners from the US to France, is separating this month from its Chinese-based arm in response to “government mandates” related to cybersecurity and data protection. It will become fully independent of Beijing Dacheng Law Offices, a local private firm it partnered with in 2015, Dentons said in a memo to clients.
The global agency becomes the latest Western firm to resort to drastic measures to comply with
Xi’s administration has tightened control over the hoard of information produced by the nation’s companies, considered critical for steering the economy as well as future technologies such as AI. But the broad and vague nature of new regulations has spurred concerns about compliance, and the penalties for falling short.
Morgan Stanley’s remaining staff on the mainland have started to build a standalone China system to comply with local regulations. The new infrastructure, which may cost hundreds of millions of dollars, will be incompatible with its legacy global platforms as the lender overhauls its Asia strategy of handling client records.
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Dentons’s split was first reported by the Financial Times. The law firm signed a deal in
Denton’s move was “in response to an evolving regulatory environment for Chinese law firms in China — including new mandates and requirements relating to data privacy, cybersecurity, capital control and governance,” the firm said. Dacheng “will instead operate as a separate and independent legal entity under a ‘preferred firm’ relationship with Dentons.”
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Edwin Chan, Vlad Savov
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