Telstra Will Keep Its Hong Kong Data Centre Despite New National Security Laws

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Telstra has confirmed it will continue to operate a data centre in Hong Kong despite concerns over new national security laws introduced by the Chinese government.

The Australian telco has a number of data centres placed around the world, including in Singapore and Hong Kong in the Asia-Pacific region. It’s the latter data centre that raised eyebrows after sweeping new national security laws were passed in Hong Kong, a special administrative zone of China once considered independent of the national government’s tough censorship and security laws.

Telstra to remain in Hong Kong for now

Despite speculation surrounding whether the Chinese government could now compel foreign companies to hand over data, Telstra has said, at least for the time-being, it will continue to operate in the region as it’s key to its customers in Asia.

“Telstra, like many of its customers with operations in the territory (including U.S. MNCs), remains committed to Hong Kong and we stand by our service and solution commitments,” a Telstra spokesperson said to Gizmodo Australia in a statement.

“Our business in Hong Kong predominantly serves global enterprise and wholesale (other telco) customers in Asia. We are not a domestic ISP and we are not a social media company.”

The national security laws, passed by the Chinese government and bypassing Hong Kong’s Legislative Council, came into effect on June 30. They make things such as secession from China, state subversion, terrorism and collusion with enemy foreign agents illegal, and punishable under Chinese law.

It means that foreign companies, according to Associate Professor Jeanne Huang, an expert on international law at the University of Sydney, may be compelled to hand over financial or email information if it will aid in a related investigation.

Telstra admitted it anticipated those requests would come but it suspected they would be focused on local companies.

“We anticipate that requests for co-operation with authorities under the new law will be focused on local retail telcos, ISPs and social media companies and the associated data held by them,” a Telstra spokesperson said.

“We comply with multiple legislative requirements across the world including many security laws, like any other global telco.

“We assess requests from law enforcement agencies and regulators on a case-by-case basis, taking into account all relevant legal and regulatory obligations.”

Legal loophole in Australia’s Free Trade Agreement with Hong Kong causing confusion

In January, Australia and Hong Kong entered into a Free Trade Agreement. Professor Huang pointed to a specific legal loophole that allowed the mutual exchange of financial information between each country’s financial regulatory bodies.

Given this loophole could hypothetically provide the Chinese government with information on Australian financial data under the new laws, Professor Huang said it deserved attention from the Australian government.

“The Australian government should insist on a narrow definition and exclude national security violations from the scope,” she said to Gizmodo Australia in a phone call earlier this month.

“The Australian government may refuse to provide access to financial data processed in Australia to the Hong Kong financial regulatory authority for legitimate public policy objective [but it] may need to clarify whether supporting the democratic movement in Hong Kong is a legitimate public policy objective … so as to provide certainty to Australia data centres and financial institutions who do business with Hong Kong.”

Given the new laws have been in effect for less than a month, the world will be watching to see how those living and operating in Hong Kong respond to the changes.