CORRECTED-UPDATE 4-China to delay bank tech restrictions, US Treasury official says

Tue Mar 31, 2015 12:02am EDT
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(Corrects wording in headline and para 3 of March 30 story to make clear that China is delaying, not suspending bank tech rules)

BEIJING, March 30 (Reuters) - China has agreed to delay implementing new bank technology restrictions that Washington has complained represent unfair regulatory pressure on foreign firms, a senior U.S. Treasury official said in Beijing on Monday.

China said this month work was ongoing on a draft anti-terrorism law that would require foreign companies to hand over encryption keys and otherwise facilitate Beijing's ability to bypass security measures, triggering U.S. protests. Another set of financial sector regulations would push China's state-owned banks to buy technology from domestic vendors.

Beijing is now delaying the regulations that applied to the banks, according to the official, speaking after meetings between U.S. Treasury Secretary Jack Lew and senior Chinese officials, including Premier Li Keqiang.

There was no immediate comment from China, but U.S. industry groups, which have been lobbying hard on the issue, cautiously welcomed the move.

"We are encouraged that there seems to be a delay; what we now need is a transparent, open consultation process with stakeholders and we're hopeful that will be part of the next steps," said U.S. Chamber of Commerce executive director for China Jeremie Waterman.

BSA The Software Alliance, whose members include Adobe Systems, Apple Inc, IBM, Microsoft Corp and Oracle Corp, and the Software and Information Industry Association, which represents financial institutions and tech companies including Google Inc and Thomson Reuters, also found the news encouraging.

SIIA senior director for international public policy Carl Schonander said the delay was a positive development, noting the industry asked for the rules to be suspended.

"We have to see what this means in practice," he said. "We definitely would like to see the draft bank regulations published and we'd like to have the opportunity to provide input to this."   Continued...