Trevor Little

The Chinese government has announced that registries and registrars will have to meet a number of conditions and obtain the approval of the Ministry of Industry and Information Technology (MIIT) before being allowed to engage in commercial and operational activities in China. With just 14 top-level domains (TLDs) approved to date, it means that the race is on to ensure that offerings are not shut out of the Chinese market. Crucially, the rules also apply to existing TLDs such as ‘.com’, which has not yet been approved.

According to an official document (translation supplied by Brandma.Co), titled ‘Policy interpretation of special operation to regulate domain name registration service market’, the six-month special operation will “regulate and clean the violations of laws and regulations such as providing domain name registration services without licence or beyond the permissible scope, failing to meet the requirements of real-name registration of domain names and adopting improper means like fraud and coercion to sell domain names”.

The move means that organisations have to meet a number of conditions and obtain the approval of MIIT before being allowed to engage in registrar and registry activities. Amongst the requirements are:

  • a series of application conditions, such as offering safeguard measures on network and information security and a market withdrawal mechanism;
  • that registries and registrars shall abide by relevant state laws, administrative laws and regulations;
  • that registries have in place rules to guarantee the safe and reliable operation of domain name system and to provide secure and convenient domain name services to registrars in a fair and reasonable manner; and
  • that registrars sign a ‘user registration agreement’ with domain name applicants to ensure the domain name registration information submitted by applicants is authentic, accurate and complete.

In terms of the timings of the special operation, the current stage - which runs to mid-July - is one of ‘self-inspection and investigation’, in which the communication management bureaus of all provinces, autonomous regions and municipalities liaise with the registrars under their jurisdiction for self-inspection. The bureaus will simultaneously be conducting investigations to ascertain whether the entities within their jurisdiction currently provide domain name registration services within the “permissible range”. The second stage (late July to late August) is titled ‘field inspection’, which will consist of further field inspections. The rectification stage will then consist of action on those providing domain name registration services outside the permissible range. In October comes the ‘summarisation and elevation’ stage, in which special operation summaries will be presented.

The upshot is that registry operators will have to overcome a number of hurdles before being able to bring their TLDs to the Chinese market and the move could have a significant impact on domain name registrations.

While the policy document notes that currently registered domain names will not be retrospectively impacted (it does recommend that users transfer registered domains to “legal domain name registration service institutions”, although it makes no mention of whether renewals will be accepted from non-compliant registrars), in a release issued yesterday Brandma.Co confirmed that registrars in China have been notified of the new rules “and have started to voluntarily remove the domain name extensions that were not approved by the MIIT”.

As it stands, just eight domestic companies and 14 TLDs have been approved, including ‘.cn’, ‘.wang’, ‘.citic’, ‘.top’ and a number of Chinese-script TLDs. Significantly, ‘.com’, ‘.net’ and ‘.org’ and country codes such as ‘.co’ and ‘.me’ are not yet approved and will have to comply with the new regime or face being shut out of the Chinese market for new registrations. 

Mr Ching Chiao, CEO of Brandma.Co, therefore advises registries to quickly develop strategies for engagement with the Chinese market, noting that the most frequently asked question from Chinese registrars to a new TLD operator will be whether they hold an MIIT licence. However, getting a licence won’t be easy, with Brandma's Cathy Peng adding: "Getting the licence requires an understanding on how the regulatory system works and how one should respond as it evolves. It's also like a mini ICANN application process, but this time in Mandarin."

Only time will tell how impactful the policy is. For trademark counsel, the move to ensure that the registration information submitted by applicants is authentic, accurate and complete will be welcomed. In terms of legacy TLDs, it would be a surprise if these did not obtain an MIIT licence, the main challenge to new registrations then being that Chinese applicants are restricted to approved registrars (which at present number 93). The biggest likely impact, then, is on new gTLD applicants, who risk being shut out of the Chinese market if they do not obtain approval.

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