U.S. Subpoena for Information Stored in China: How Should Companies Respond?

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Summary

• U.S. courts will not set aside a subpoena just because a foreign blocking statute restricts the disclosure of information
• Companies should implement robust document retention policies and document hold protocols
• Whether a company should comply with a subpoena may depend on where the company is based and the type of data requested
• Companies can negotiate an extent of compliance with the issuer of the subpoena
• Lawyers strongly advise companies obtain approval from PRC authorities before responding to a U.S. subpoena
• Raising legal and procedural challenges against subpoenas is standard practice

Throughout the past decade, U.S. courts and administrative agencies have issued a growing number of subpoenas — formal legal orders that compel an entity to produce documentary or testamentary evidence relating to an investigation or litigation. China, meanwhile, has implemented blocking statutes such as its new data protection laws, which prohibit Chinese companies and companies handling Chinese data from turning over such information.

Multinational corporations with both a U.S. and Chinese presence currently face rising risks of being compelled to provide documents by a U.S. subpoena while being prohibited from doing so by PRC blocking statutes.