What is China’s Personal Information Protection Impact Assessment (PIPIA)?
This article provides a comprehensive overview of China’s Personal Information Protection Impact Assessment, outlining what the PIPIA is, who needs to conduct it, when to conduct one, and how to do so.
What is PIPIA?
The Personal Information Protection Impact Assessment (PIPIA) is a systematic evaluation process required under articles 55 and 56 of China’s Personal Information Protection Law (PIPL) to assess the risks, impacts, and safeguards associated with personal information processing activities.
Why Do You Need to Conduct PIPIA?
PIPIA serves as a proactive risk management tool that helps organisations:
- Identify potential privacy risks before they materialise.
- Ensure compliance with PIPL requirements
- Protect individuals’ personal information rights
- Document due diligence in data protection practice
When is PIPIA Required?
According to article 55 of the Personal Information Protection Law of the People’s Republic of China, organisations must conduct a PIPIA when processing:
- Sensitive Personal Information (SPI): including biometric data, medical records, financial information, location data, etc.
- Cross-border data transfers: any transfer of personal information outside of China
- Large-scale personal information processing: significant volumes of personal data
- Personal information processing with significant impact: activities that could substantially affect individuals’ rights
It is worth noting that there are certain categories of business that are exempt from conducting the PIPIA. This depends on the business scope and the amount of data the company processes. Below are all of the scenarios in which a company is exempt from conducting the PIPIA:
Small-Scale Personal Information Transfers (Under 100k PI): Organisations transferring fewer than 100,000 personal information records are exempt from PIPIA requirements. This exemption applies to:
- Small businesses with limited data processing
- Pilot projects or testing phases
- Limited cross-border data sharing arrangements
- B2B operations with minimal personal information
Data Volume Thresholds for PIPIA:
- Under 100k PI: No PIPIA required
- 100k-1m PI or under 10k SPI: Standard Contract or Certification required
- Over 1m PI or over 10k SPI: Security Assessment (including PIPIA) required
Free Trade Zone (FTZ) Exemptions: Companies in designated FTZs may bypass PIPIA requirements if their data types fall outside locally defined negative lists:
- Shanghai FTZ: Negative lists and general data catalogs
- Zhejiang FTZ: Industry-specific negative lists
- Hainan Free Trade Port: Broader negative list coverage
- 17 industries currently covered, including automotive, pharmaceuticals, retail, civil aviation
General Data Transfers: Data classified as “general data” (excluding important and core data) can flow freely across borders without PIPIA requirements.
What Are The Key Contents of PIPIA?
1. Purpose and Legality Assessment
This section asks companies to clearly state the scope of their business, the reasons for collecting data and they are required to justify the reason for the scope of data collection. Key questions in this section include:
- Lawfulness: Is there a valid legal basis for processing this data?
- Legitimacy: Are the reasons for collecting data clearly defined?
- Necessity: Is the processing essential for the stated purpose?
- Proportionality: Is the scope of data collection proportionate to this purpose?
For Cross-Border Data Transfers (CBDT):
- Business necessity for international transfer
- Quantity and scope of data being transferred
- Classification of data (PI vs. SPI)
- Duration of processing
2. Risk Assessment to Individuals
This section focuses on the potential harm to individuals, likelihood of risk occurrence, and severity of potential consequences. Key aspects of this section include:
- Security risks: Data breaches, unauthorized access, system vulnerabilities
- Privacy risks: Excessive data collection, purpose creep, lack of consent
- Technical risks: System failures, data corruption, inadequate encryption
- Organizational risks: Insufficient staff training, unclear policies
- Legal risks: Non-compliance with PIPL or other regulations
3. Safeguards and Mitigation Measures
Technical safeguards:
- Encryption and data security measures
- Access controls and authentication
- Data minimization techniques
- Secure data transfer protocols
Organisational safeguards:
- Privacy policies and procedures
- Staff training programs
- Incident response plans
- Regular security audits
Legal safeguards:
- Contractual protections with third parties
- Data processing agreements
- Consent mechanisms
- Individual rights procedures
What are the PIPIA Report Requirements?
Article 56 of the Personal Information Protection Law of the People’s Republic of China indicates that a PIPIA report must include:
- Processing Justification
- Whether purposes and means are legitimate, justified, and necessary
- Legal basis for processing
- Alignment with stated business purposes
- Impact Assessment
- Effects on individuals’ rights and interests
- Potential risks to personal information subjects
- Broader societal implications
- Protection Measures
- Security safeguards implemented
- Effectiveness of protection measures
- Compatibility with identified risk levels
Documentation Requirements
All documentation is done internally, and no template is provided by relevant authorities. It is therefore imperative that companies are proactive with this.
- Retention period: Minimum 3 years
- Regular updates: When processing activities change significantly
- Accessibility: Available for regulatory review upon request
How Can I Implement PIPIA?
As aforementioned, there are three key areas that the assessment must include. It is therefore best practice to treat each section as a step-by-step process to completing a legitimate assessment.
Step 1: Scope Definition
- Start by identifying all personal information processing activities
- Determine which activities trigger PIPIA requirements
- Map data flows and processing purposes
Step 2: Risk Analysis
- Conduct systematic risk identification
- Assess likelihood and impact of identified risks
- Prioritize risks based on severity
Step 3: Safeguard Evaluation
- Review existing protection measures
- Identify gaps in current safeguards
- Develop additional mitigation strategies
Step 4: Documentation
- Prepare comprehensive PIPIA report
- Include all required elements per Article 56
- Establish ongoing monitoring procedures
Step 5: Implementation and Monitoring
- Deploy recommended safeguards
- Establish regular review cycles
- Update PIPIA when circumstances change
What Are Some PIPIA Best Practices?
- Proactive Approach: Conduct PIPIA before launching new processing activities
- Stakeholder Involvement: Include legal, IT, and business teams in assessments
- Regular Updates: Review and update PIPIA when circumstances change
- Documentation: Maintain detailed records of assessment process and decisions
- Training: Ensure staff understand PIPIA requirements and procedures
How Can AppInChina Help?
PIPIA is not just a compliance requirement but a valuable risk management tool that helps organisations protect personal information while enabling business operations. By understanding what PIPIA is, when it’s required, and how to implement it effectively, organisations can build robust data protection frameworks that comply with PIPL requirements while supporting business objectives.
Whether you’re conducting research in China, exporting data for business operations, or managing complex multinational data flows, AppInChina can help you navigate PIPIA requirements efficiently and effectively. Our expert team with over a decade of experience can help you:
- Assess your PIPIA obligations
- Develop a tailored compliance strategy
- Prepare and submit required documentation
- Ensure ongoing regulatory compliance
Contact us today to take your first stride towards data compliance in the world’s largest digital market and the second largest economy.