Following the announcement of enhanced anti-spying regulations by the administration of Chinese leader Xi Jinping, which left businesses confused of their rights, Mintz Group was one of a number of international consultants that were raided beginning in April.
Mintz Group engaged in “foreign-related statistical investigation activities without obtaining approval,” according to a notification posted on the Beijing Municipal Bureau of Statistics’ website on July 14th. It did not provide information regarding the breach but did state that Mintz Group was fined 10.7 million yuan ($1.5 million).
For corporate clients, Mintz Group conducts background checks on personnel and business partners in addition to gathering additional data.
The Communist Party’s grip on the economy and society has been reinforced during Xi’s administration, especially through enforcing stricter data security laws and limiting the transfer of information outside.
That has alarmed international businesses at a time when President Xi’s administration is working to pique foreign investors’ interest in China in an effort to stop the country’s worsening economic downturn.
The Mintz Group reported that five employees were detained after a police raid on its Beijing office in April. According to Bain & Co., authorities in Shanghai questioned members of its staff. According to state media, the foreign intelligence service raided Capvision headquarters in Beijing, Shanghai, and at least two other cities in May.
Before making fresh investments, businesses want “greater clarity” about how recently enhanced anti-spying and other policies would be enforced, according to a May study, according to the British Chamber of Commerce in China.
Due to changes in data protection and cybersecurity regulations, one of the largest law firms in the world, Dentons, said this month that it was severing ties with a Chinese firm that has been a part of its global network for eight years.
Chinese businesses have been subject to harsher sanctions for breaches in data security.
The ride-hailing company Didi Global was penalised by the internet watchdog more than 8 billion yuan ($1.2 billion) in 2020 for allegedly inappropriately collecting and processing data on millions of users.