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With only days left to act and Rand Paul threatening a filibuster, Senate Republicans remain deeply divided over the future of the PATRIOT Act and have no clear path to keep key government spying authorities from expiring at the end of the month. Crucial parts of the PATRIOT Act, including a provision authorizing the government’s controversial bulk collection of American phone records, first revealed by Edward Snowden, are due to lapse May 31. That means Congress has barely a week to figure out a fix before before lawmakers leave town for Memorial Day recess at the end of the next week. Story Continued Below The prospects of a deal look grim: Senate Majority Leader Mitch McConnell on Thursday night proposed just a two-month extension of expiring PATRIOT Act provisions to give the two sides more time to negotiate, but even that was immediately dismissed by critics of the program.

The nation’s top technology firms and a coalition of privacy groups are urging Congress to place curbs on government surveillance in the face of a fast-approaching deadline for legislative action. A set of key Patriot Act surveillance authorities expire June 1, but the effective date is May 21 — the last day before Congress breaks for a Memorial Day recess. In a letter to be sent Wednesday to the Obama administration and senior lawmakers, the coalition vowed to oppose any legislation that, among other things, does not ban the “bulk collection” of Americans’ phone records and other data.

We know that there are some in Congress who think that they can get away with reauthorizing the expiring provisions of the Patriot Act without any reforms at all,” said Kevin Bankston, policy director of New America Foundation’s Open Technology Institute, a privacy group that organized the effort. “This letter draws a line in the sand that makes clear that the privacy community and the Internet industry do not intend to let that happen without a fight.” At issue is the bulk collection of Americans’ data by intelligence agencies such as the National Security Agency. The NSA’s daily gathering of millions of records logging phone call times, lengths and other “metadata” stirred controversy when it was revealed in June 2013 by former NSA contractor Edward Snowden. The records are placed in a database that can, with a judge’s permission, be searched for links to foreign terrorists.They do not include the content of conversations.

That program, placed under federal surveillance court oversight in 2006, was authorized by the court in secret under Section 215 of the Patriot Act — one of the expiring provisions. The public outcry that ensued after the program was disclosed forced President Obama in January 2014 to call for an end to the NSA’s storage of the data. He also appealed to Congress to find a way to preserve the agency’s access to the data for counterterrorism information.

The USA PATRIOT Act granted the government powerful new spying capabilities that have grown out of control—but the provision that the FBI and NSA have been using to collect the phone records of millions of innocent people expires on June 1. Tell Congress: it’s time to rethink out-of-control spying. A vote to reauthorize Section 215 is a vote against the Constitution.

On June 5, 2013, the Guardian published a secret court order showing that the NSA has interpreted Section 215 to mean that, with the help of the FBI, it can collect the private calling records of millions of innocent people. The government could even try to use Section 215 for bulk collection of financial records. The NSA’s defenders argue that invading our privacy is the only way to keep us safe. But the White House itself, along with the President’s Review Board has said that the government can accomplish its goals without bulk telephone records collection. And the Privacy and Civil Liberties Oversight Board said, “We have not identified a single instance involving a threat to the United States in which [bulk collection under Section 215 of the PATRIOT Act] made a concrete difference in the outcome of a counterterrorism investigation.” Since June of 2013, we’ve continued to learn more about how out of control the NSA is. But what has not happened since June is legislative reform of the NSA. There have been myriad bipartisan proposals in Congress—some authentic and some not—but lawmakers didn’t pass anything. We need comprehensive reform that addresses all the ways the NSA has overstepped its authority and provides the NSA with appropriate and constitutional tools to keep America safe. In the meantime, tell Congress to take a stand. A vote against reauthorization of Section 215 is a vote for the Constitution.

The House of Representatives has passed the USA Freedom Act, which represents a significant down payment on broader government surveillance reform. We need as many people as possible speaking up to make sure that the Senate says YES to the USA Freedom Act.

A new study says that the U.S. tech industry is likely to lose more than $35 billion from foreign customers by 2016 because of concerns over government surveillance.“In short, foreign customers are shunning U.S. companies,” the authors of a new study from the Information Technology and Innovation Foundation write.ADVERTISEMENT“The U.S. government’s failure to reform many of the NSA’s surveillance programs has damaged the competitiveness of the U.S. tech sector and cost it a portion of the global market share,” they said.The think tank’s report found that the cost to the tech sector associated with ongoing concerns over surveillance programs run out of the U.S. was likely to “far exceed” $35 billion by 2016, an earlier estimate set by the group.

The group said that lawmakers must enact additional reforms to surveillance policy if they wish to help the tech sector regain the trust of foreign customers. That includes opposing “backdoors,” which allow law enforcement to access otherwise encrypted data, and signing off on trade agreements, including the controversial Trans-Pacific Partnership, that “ban digital protectionism.”The study’s authors found that the revelations about broad U.S. surveillance programs acted as a justification for foreign policymakers to enact protectionist policies aimed at aiding their own domestic technology sectors.Foreign companies have also used the information about U.S. surveillance programs to their advantage.“Some European companies have begun to highlight where their digital services are hosted as an alternative to U.S. companies,” the authors write.

American companies, they found, have lost contracts to foreign competitors over fears about mass surveillance.Earlier this month, President Obama signed the USA Freedom Act, a bill that reformed the three Patriot Act provisions that authorized the bulk, warrantless collection of Americans’ phone records. The bill was widely supported by technology companies, including giants like Apple and Google.

When the premiere surveillance reform bill of 2014 is reintroduced in the current Congress, it can count on antipathy and even opposition from many of the civil libertarian activists who pushed it to the brink of passage last year. The USA Freedom Act, a bill that aims to stop the National Security Agency (NSA) from its daily collection of US phone records in bulk, is set for a 2015 revamp after failing in the Senate last November. Supporters pledge to unveil it late this week or early next week.

This time, as reported by the Guardian, the bill is shaping up to be the preferred piece of legislation to extend the lifespan of a controversial part of the Patriot Act, known as Section 215. The NSA uses Section 215 to justify its domestic mass surveillance. The FBI considers it critical for terrorism and espionage investigations outside typical warrant or subpoena channels. Section 215 expires on 1 June. The bill’s architects consider the USA Freedom Act the strongest piece of legislation to roll back the domestic reach of US surveillance that Congress will pass. But a new coalition of civil libertarian groups on the left and the right is already looking past the bill, in the hopes of broadening what is possible – something they consider realistic, thanks to the intelligence community’s fervent desire to avoid the expiration of Section 215.

The American Civil Liberties Union (ACLU) has filed a motion to reveal the secret court opinions with “novel or significant interpretations” of surveillance law, in a renewed push for government transparency. The motion, filed Wednesday by the ACLU and Yale Law School’s Media Freedom and Information Access Clinic, asks the Foreign Intelligence Surveillance Act (FISA) Court, which rules on intelligence gathering activities in secret, to release 23 classified decisions it made between 9/11 and the passage of the USA Freedom Act in June 2015. As ACLU National Security Project staff attorney Patrick Toomey explains, the opinions are part of a “much larger collection of hidden rulings on all sorts of government surveillance activities that affect the privacy rights of Americans.” Among them is the court order that the government used to direct Yahoo to secretly scanits users’ emails for “a specific set of characters.” Toomey writes: These court rulings are essential for the public to understand how federal laws are being construed and implemented. They also show how constitutional protections for personal privacy and expressive activities are being enforced by the courts. In other words, access to these opinions is necessary for the public to properly oversee their government.

Although the USA Freedom Act requires the release of novel FISA court opinions on surveillance law, the government maintains that the rule does not apply retroactively—thereby protecting the panel from publishing many of its post-9/11 opinions, which helped create an “unprecedented buildup” of secret surveillance laws. Even after National Security Agency (NSA) whistleblower Edward Snowden revealed the scope of mass surveillance in 2013, sparking widespread outcry, dozens of rulings on spying operations remain hidden from the public eye, which stymies efforts to keep the government accountable, civil liberties advocates say. “These rulings are necessary to inform the public about the scope of the government’s surveillance powers today,” the ACLU’s motion states.

Toomey writes that the rulings helped influence a number of novel spying activities, including: The government’s use of malware, which it calls “Network Investigative Techniques” The government’s efforts to compel technology companies to weaken or circumvent their own encryption protocols The government’s efforts to compel technology companies to disclose their source code so that it can identify vulnerabilities The government’s use of “cybersignatures” to search through internet communications for evidence of computer intrusions The government’s use of stingray cell-phone tracking devices under the Foreign Intelligence Surveillance Act (FISA) The government’s warrantless surveillance of Americans under FISA Section 702—a controversial authority scheduled to expire in December 2017 The bulk collection of financial records by the CIA and FBI under Section 215 of the Patriot Act Without these rulings being made public, “it simply isn’t possible to understand the government’s claimed authority to conduct surveillance,” Toomey writes. As he told The Intercept on Wednesday, “The people of this country can’t hold the government accountable for its surveillance activities unless they know what our laws allow. These secret court opinions define the limits of the government’s spying powers. Their disclosure is essential for meaningful public oversight in our democracy.”

The Obama administration has asked a secret surveillance court to ignore a federal court that found bulk surveillance illegal and to once again grant the National Security Agency the power to collect the phone records of millions of Americans for six months. The legal request, filed nearly four hours after Barack Obama vowed to sign a new law banning precisely the bulk collection he asks the secret court to approve, also suggests that the administration may not necessarily comply with any potential court order demanding that the collection stop.

But Carlin asked the Fisa court to set aside a landmark declaration by the second circuit court of appeals. Decided on 7 May, the appeals court ruled that the government had erroneously interpreted the Patriot Act’s authorization of data collection as “relevant” to an ongoing investigation to permit bulk collection. Carlin, in his filing, wrote that the Patriot Act provision remained “in effect” during the transition period. “This court may certainly consider ACLU v Clapper as part of its evaluation of the government’s application, but second circuit rulings do not constitute controlling precedent for this court,” Carlin wrote in the 2 June application. Instead, the government asked the court to rely on its own body of once-secret precedent stretching back to 2006, which Carlin called “the better interpretation of the statute”.

But the Fisa court must first decide whether the new bulk-surveillance request is lawful. On Friday, the conservative group FreedomWorks filed a rare motion before the Fisa court, asking it to reject the government’s surveillance request as a violation of the fourth amendment’s prohibition on unreasonable searches and seizures. Fisa court judge Michael Moseman gave the justice department until this coming Friday to respond – and explicitly barred the government from arguing that FreedomWorks lacks the standing to petition the secret court.

The head of the National Security Agency on Thursday told Senate lawmakers that preventing his agency from collecting Americans’ information in bulk would make it harder to do its job.Under questioning before the Senate Intelligence Committee, Adm. Michael Rogers agreed that ending bulk collection would “significantly reduce [his] operational capabilities.”ADVERTISEMENT“Right now, bulk collection gives us the ability ... to generate insights as to what’s going on,” Rogers told the committee.The NSA head also referenced a January report from the National Academy of Sciences that concluded there is “no software technique that will fully substitute for bulk collection” because of the ability to search through the storehouse of old information. “That independent, impartial, scientifically-founded body came back and said no, under the current structure there is no real replacement,” Rogers said.Rogers was questioned on Thursday by Sen. Ron Wyden (D-Ore.), a member of the Intelligence Committee who has become its most vocal privacy hawk.

In response to the NSA head’s comments, Wyden pointed to a 2013 White House review group, which found that one controversial NSA bulk collection program “was not essential to preventing attacks” and that the information obtained by the NSA “could readily have been obtained in a timely manner using” other means.The debate follows on a congressional clash earlier this year over the NSA’s bulk collection of records about the phone calls of millions of Americans. The records contained information about whom people called and when but not what they talked about.

After a brief lapsing of some portions of the Patriot Act, Congress eventually reined in the NSA by forcing it to go through the courts to search private phone companies’ records for a narrower set of records. Many privacy advocates treated the new law, called the USA Freedom Act, as a significant victory, through national security hawks worried that it would make it harder for the NSA to track terrorists.Under the new system — which has not gone into effect yet — the amount of time it takes to obtain those records “is probably going to be longer I suspect,” Rogers said.Though the phone records database has been the NSA’s most prominent bulk collection program, it is not the only one. The agency’s collection of vast amounts of Internet data has alarmed many privacy advocates and is the target of a current lawsuit from Wikipedia and the American Civil Liberties Union. 

April 21, 2015 Dear Chairman Goodlatte, Ranking Member Conyers, Chairman Grassley, and Ranking Member Leahy: We urge you to end mass surveillance of Americans. Among us are civil liberties organizations from across the political spectrum that speak for millions of people, businesses, whistleblowers, and experts. The impending expiration of three USA PATRIOT Act provisions on June 1 is a golden opportunity to end mass surveillance and enact additional reforms. Current surveillance practices are virtually limitless. They are unnecessary, counterproductive, and costly. They undermine our economy and the public’s trust in government. And they undercut the proper functioning of government. Meaningful surveillance reform entails congressional repeal of laws and protocols the Executive secretly interprets to permit current mass surveillance practices. Additionally, it requires Congress to appreciably increase transparency, oversight, and accountability of intelligence agencies, especially those that have acted unconstitutionally.

A majority of the House of Representatives already has voted against mass surveillance. The Massie-Lofgren amendment to the National Defense Authorization Act [i] garnered 293 votes in support of defunding “backdoor searches.” Unfortunately, that amendment was not included in the “CRomnibus"[ii] despite overwhelming support.  We urge you to act once again to vindicate our fundamental liberties.

The first (and thus far only) roll-back of post-9/11 surveillance authorities was implemented over the weekend: The National Security Agency shuttered its program for collecting and holding the metadata of Americans’ phone calls under Section 215 of the Patriot Act. While bulk collection under Section 215 has ended, the government can obtain access to this information under the procedures specified in the USA Freedom Act. Indeed, some experts have argued that the Agency likely has access to more metadata because its earlier dragnet didn’t cover cell phones or Internet calling. In addition, the metadata of calls made by an individual in the United States to someone overseas and vice versa can still be collected in bulk — this takes place abroad under Executive Order 12333. No doubt the NSA wishes that this was the end of the surveillance reform story and the Paris attacks initially gave them an opening. John Brennan, the Director of the CIA, implied that the attacks were somehow related to “hand wringing” about spying and Sen. Tom Cotton (R-Ark.) introduced a bill to delay the shut down of the 215 program. Opponents of encryption were quick to say: “I told you so.”

But the facts that have emerged thus far tell a different story. It appears that much of the planning took place IRL (that’s “in real life” for those of you who don’t have teenagers). The attackers, several of whom were on law enforcement’s radar, communicated openly over the Internet. If France ever has a 9/11 Commission-type inquiry, it could well conclude that the Paris attacks were a failure of the intelligence agencies rather than a failure of intelligence authorities. Despite the passage of the USA Freedom Act, US surveillance authorities have remained largely intact. Section 702 of the FISA Amendments Act — which is the basis of programs like PRISM and the NSA’s Upstream collection of information from Internet cables — sunsets in the summer of 2017. While it’s difficult to predict the political environment that far out, meaningful reform of Section 702 faces significant obstacles. Unlike the Section 215 program, which was clearly aimed at Americans, Section 702 is supposedly targeted at foreigners and only picks up information about Americans “incidentally.” The NSA has refused to provide an estimate of how many Americans’ information it collects under Section 702, despite repeated requests from lawmakers and most recently a large cohort of advocates. The Section 215 program was held illegal by two federal courts (here and here), but civil attempts to challenge Section 702 have run into standing barriers. Finally, while two review panels concluded that the Section 215 program provided little counterterrorism benefit (here and here), they found that the Section 702 program had been useful.

There is, nonetheless, some pressure to narrow the reach of Section 702. The recent decision by the European Court of Justice in the safe harbor case suggests that data flows between Europe and the US may be restricted unless the PRISM program is modified to protect the information of Europeans (see here, here, and here for discussion of the decision and reform options). Pressure from Internet companies whose business is suffering — estimates run to the tune of $35 to 180 billion — as a result of disclosures about NSA spying may also nudge lawmakers towards reform. One of the courts currently considering criminal cases which rely on evidence derived from Section 702 surveillance may hold the program unconstitutional either on the basis of the Fourth Amendment or Article III for the reasons set out in this Brennan Center report. A federal district court in Colorado recently rejected such a challenge, although as explained in Steve’s post, the decision did not seriously explore the issues. Further litigation in the European courts too could have an impact on the debate.

Amid reports that Moscow is considering handing over NSA whistleblower Edward Snowden as a “gift” to U.S. President Donald Trump, a Russian government spokesperson said Monday that the Kremlin and the White House have not discussed the matter, Russia’s state TASS agency reported. “No, this issue (Snowden’s fate) was not raised,” presidential spokesperson Dmitry Peskov told reporters Monday, adding that Russian officials have not taken a position on whether Snowden should be extradited to the U.S. or granted Russian citizenship. “The issue was not raised (during the Russian-US contacts),” Peskov said. “At the moment it is not among bilateral issues.” The statement comes after Snowden — who has lived in Russia since 2013, first with one-year temporary asylum then a residence permit — revealed in recent days that he is “not afraid” of being handed over to the United States, where he faces espionage charges for his explosive 2013 leak of documents on secret U.S. mass surveillance programs.

However, Snowden also said in an interview with Yahoo News that talk of a possible trade between Moscow and Washington makes him feel “encouraged” because it vindicates him in the face of accusations that he has been a spy for Russia by laying bare the fact that he has always been independent and “worked on behalf of the United States.” “Finally: irrefutable evidence that I never cooperated with Russian intel,” he tweeted on Friday. “No country trades away spies, as the rest would fear they’re next.” In the U.S., Snowden faces charges of theft of government property and violation of the Espionage Act on two counts, which each carry a maximum sentence of 10 years.

“What I am proud of,” Snowden told Yahoo News, “is the fact that every decision that I have made I can defend.” Snowden is set to be eligible to apply for Russian citizenship next year, according to his lawyer. Last month, Moscow extended his residence permit, which is now valid until 2020.

The Senate narrowly rejected expanding the FBI's surveillance powers Wednesday in the wake of the worst mass shooting in U.S. history.  Senators voted 58-38 on a procedural hurdle, with 60 votes needed to move forward. Majority Leader Mitch McConnellMitch McConnellOvernight Finance: Wall Street awaits Brexit result | Clinton touts biz support | New threat to Puerto Rico bill? | Dodd, Frank hit back The Trail 2016: Berning embers McConnell quashes Senate effort on guns MORE, who initially voted "yes," switched his vote, which allows him to potentially bring the measure back up. 

The Senate GOP proposal—being offered as an amendment to the Commerce, Justice and Science appropriations bill—would allow the FBI to use "national security letters" to obtain people's internet browsing history and other information without a warrant during a terrorism or federal intelligence probe.  It would also permanently extend a Patriot Act provision — currently set to expire in 2019 — meant to monitor "lone wolf" extremists.  Senate Republicans said they would likely be able to get enough votes if McConnell schedules a redo.

Asked if he anticipates supporters will be able to get 60 votes, Sen. John CornynJohn CornynSenate to vote on two gun bills Senate Dems rip GOP on immigration ruling Post Orlando, hawks make a power play MORE (R-Texas) separately told reporters "that's certainly my expectation." McConnell urged support for the proposal earlier Wednesday, saying it would give the FBI to "connect the dots" in terrorist investigations.  "We can focus on defeating [the Islamic State in Iraq and Syria] or we can focus on partisan politics. Some of our colleagues many think this is all some game," he said. "I believe this is a serious moment that calls for serious solutions."  But Democrats—and some Republicans—raised concerns that the changes didn't go far enough to ensure Americans' privacy.  Sen. Ron WydenRon WydenPost Orlando, hawks make a power play Democrats seize spotlight with sit-in on guns Democrats stage sit-in on House floor to push for gun vote MORE (D-Ore.) blasted his colleagues for "hypocrisy" after a gunman killed 49 people and injured dozens more during the mass shooting in Orlando, Fla. "Due process ought to apply as it relates to guns, but due process wouldn't apply as it relates to the internet activity of millions of Americans," he said ahead of Wednesday's vote. "Supporters of this amendment...have suggested that Americans need to choose between protecting our security and protecting our constitutional right to privacy." 

Four months from now, at the same time that the National Security Agency finally abandons the massive domestic telephone dragnet exposed by whistleblower Edward Snowden, it will also stop perusing the vast archive of data collected by the program. The NSA announced on Monday that it will expunge all the telephone metadata it previously swept up, citing Section 215 of the U.S.A Patriot Act. The program was ruled illegal by a federal appeals court in May. In June, Congress voted to end the program, but gave the NSA until the end of November to phase it out. The historical metadata —  records of American phone calls showing who called who, when, and for how long — will be put out of the reach of analysts on November 29, although technical personnel will have access for three more months. The program started 14 years ago, and operated under rules requiring data be retained for five years, and then destroyed.

The only possible hold-up, ironically, would be if any of the civil lawsuits prompted by the program prohibit the destruction of the data. “The telephony metadata” will be “preserved solely because of preservation obligations in pending civil litigation,” the Office of the Director of National Intelligence announced. “As soon as possible, NSA will destroy the Section 215 bulk telephony metadata upon expiration of its litigation preservation obligations.” ACLU staff attorney Alex Abdo told The Intercept his organization is “pleased that the NSA intends to purge the call records it has collected illegally.” But, he added: “Even with today’s pledge, the devil may be in the details.”

Director of National Intelligence James Clapper this morning released a report detailing new rules aimed at reforming the way signals intelligence is collected and stored by certain members of the United States Intelligence Community (IC). The long-awaited changes follow up on an order announced by President Obama one year ago that laid out the White House’s principles governing the collection of signals intelligence. That order, commonly known as PPD-28, purports to place limits on the use of data collected in bulk and to increase privacy protections related to the data collected, regardless of nationality. Accordingly, most of the changes presented as “new” by Clapper’s office  (ODNI) stem directly from the guidance provided in PPD-28, and so aren’t truly new. And of the biggest changes outlined in the report, there are still large exceptions that appear to allow the government to escape the restrictions with relative ease. Here’s a quick rundown.

Retention policy for non-U.S. persons. The new rules say that the IC must now delete information about “non-U.S. persons” that’s been gathered via signals intelligence after five-years. However, there is a loophole that will let spies hold onto that information indefinitely whenever the Director of National Intelligence determines (after considering the views of the ODNI’s Civil Liberties Protection Officer) that retaining information is in the interest of national security. The new rules don’t say whether the exceptions will be directed at entire groups of people or individual surveillance targets.  Section 215 metadata. Updates to the rules concerning the use of data collected under Section 215 of the Patriot Act includes the requirement that the Foreign Intelligence Surveillance Court (rather than authorized NSA officials) must determine spies have “reasonable, articulable suspicion” prior to query Section 215 data, outside of emergency circumstances. What qualifies as an emergency for these purposes? We don’t know. Additionally, the IC is now limited to two “hops” in querying the database. This means that spies can only play two degrees of Kevin Bacon, instead of the previously allowed three degrees, with the contacts of anyone targeted under Section 215. The report doesn’t explain what would prevent the NSA (or other agency using the 215 databases) from getting around this limit by redesignating a phone number found in the first or second hop as a new “target,” thereby allowing the agency to continue the contact chain.

National security letters (NSLs). The report also states that the FBI’s gag orders related to NSLs expire three years after the opening of a full-blown investigation or three years after an investigation’s close, whichever is earlier. However, these expiration dates can be easily overridden by by an FBI Special Agent in Charge or a Deputy Assistant FBI Director who finds that the statutory standards for secrecy about the NSL continue to be satisfied (which at least one court has said isn’t a very high bar). This exception also doesn’t address concerns that NSL gag orders lack adequate due process protections, lack basic judicial oversight, and may violate the First Amendment.

China’s new draft anti-terror legislation has sent waves across the U.S. tech community. If there is a brewing tech war between U.S. and China over government surveillance backdoors and a preference for indigenous software, China’s new draft terror law makes it clear that Beijing is happy to give the United States a taste of its own medicine. The law has already drawn considerable criticism from international human rights groups, including Amnesty International and Human Rights Watch for its purported attempts to legitimize wanton human rights violations in the name of counter-terrorism. Additionally, China has opted to implement its own definition of terrorism, placing  “any thought, speech, or activity that, by means of violence, sabotage, or threat, aims to generate social panic, influence national policy-making, create ethnic hatred, subvert state power, or split the state” under the umbrella of the overused T-word. The problematic human rights issues aside, the draft anti-terror law will have important implications for foreign tech firms within China. According to Reuters’ reporting on the draft anti-terror law, counter-terrorism precautions by the Chinese government would essentially require foreign firms to “hand over encryption keys and install security ‘backdoors’” into their software. Additionally, these firms would have to store critical data — certainly data on Chinese citizens and residents — on Chinese soil. The onerous implications of this law could have lead to an immediate freeze to the activities of several Western tech companies in China, the world’s second largest economy and a booming emerging market for new technologies.

On the surface, the most troublesome implication of this law is that in order to comply with this law, Western firms, including non-technical ventures such as financial institutions and manufacturers, will be forced to give up a great deal of security. In essence, corporate secrets, financial data — all critical data — would be insecure and available for access by Chinese regulators. The new law would also prohibit the use of secure virtual private networks (VPNs) to get around these requirements.

The U.S. diplomatic response to Beijing’s new draft law is perhaps best captured in the fact that a whopping four cabinet members in the Obama administration, including Secretary of State John Kerry and U.S. Trade Representative Michael Froman, wrote the Chinese government expressing “serious concern.” China, for its part, seemed unfazed by U.S. concerns. Foreign Ministry spokesperson Hua Chunying told the press that she hoped the United States would view the new anti-terror precautions in “in a calm and objective way.” Indeed, following Edward Snowden’s revelations regarding the extent of the United States’ surveillance of private firms both within and outside the United States, Beijing likely views U.S. concerns as hypocritical. One U.S. industry source told Reuters that the new law was ”the equivalent of the Patriot Act on really, really strong steroids.”