DRAFT DOMAIN NAME REGULATION
Aug. to Nov. 2014 China Bulletin

In 2012, the Chinese Ministry of Industry and Information Technology (MIIT) began drafting revisions (Draft Measures – see June-July 2013 Bulletin), to its 2004 ( (2004 Measures), which regulate domain name service suppliers in China. A key driver for the revisions is the approval by the Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit organization responsible for regulating top-level domains (TLDs), of hundreds of new applications for TLDs beginning in 2014. The Draft Measures reportedly require non-Chinese Internet registries to set up a subsidiary registry in China or entrust a Chinese-based registry to qualify and operate their TLDs inside China.

The new TLDs approved by ICANN include internationalized domain names in non-Latin scripts (IDNs). Domain names under IDNs in Chinese characters, such as .商标 and .机构, are already readily available on the Internet. Both Chinese and foreign-based registries are applying to operate new Chinese character IDNs in China, requiring an updated regulatory system to examine and approve them.

Although MIIT has not formally issued a draft of the revised measures, the China Academy of Telecommunications Research (CATR), a government research institution supporting the ministry, held a meeting with interested TLD operators in July of this year to initiate the process to establish and qualify companies in China, including foreign-invested companies, to offer IDN and other TLD name registry services. Applications to establish registries and finalization of the Draft Measures that set out requirements for approval of the registries will thus proceed in tandem.

The proposed revisions to the Draft Measures require all registries, including non-Chinese registries, to obtain a license from MIIT in order to operate in China. They reportedly require registries to be established within China as a condition to granting the license and to undertaking activities in China such as operating TLDs and resolving and using domain names. They are also likely to require each registry to maintain a TLD name management system within China, including a shared registration system, shared database, resolution system and WHOIS system (the WHOIS system has information on each registration).

These changes in fact merely expand on provisions in the 2004 Measures and would likely not cause substantial concern in themselves, but the Draft Measures also include enforcement measures. They reportedly prohibit registrars from selling registrations to Chinese retail customers for domain names under TLDs managed by any registry established outside China, and further prohibit anyone in China from providing access services to a China-based website with a TLD name that is not managed by a registry in China. The ministry is even rumored to be considering adding an article that would require all domain names for websites operated by Chinese owners to be managed by Chinese registrars, which of course would not be able to market domain names under TLDs not meeting the requirements of the Draft Measures.

When MIIT promulgates these revisions (and barring any last-minute amendments), they will substantially change the status quo for non-Chinese registries in China. While users in China will continue to be able to access websites outside China (subject to passing through the Great Fire Wall“), in order to promote and serve Chinese customers, a non-Chinese registry will be required to set up a subsidiary registry or entrust a China-based registry to operate its TLDs in China. Failure to do so will likely result in Chinese registrars refusing to sell domain names under the non-Chinese registries TLDs and preventing resolution of any websites that are already registered under those TLDs.

If the revisions are successfully implemented, they may have a knock-on effect, changing the status quo for foreign registries in other countries as well. As a general proposition, it has proven quite difficult to regulate registries based outside a country for both technical and legal reasons. Consequently, Internet laws in many countries simply do not cover private or commercial registries, or, where such registries are regulated, as in China, the relevant laws have not been applied rigorously in order to ensure that websites under key international top-level domains remain accessible. As a consequence, foreign registries typically operate in some countries from offshore, selling the right to register domain names through onshore registrars.

In the future these registries may be required to establish a subsidiary or entrust a local registry to operate their TLDs in China and other countries.

Questions?  Please contact Allan Marson at china.desk@ishimarulaw.com or +1 408-738-0592 #719 for a complimentary consultation.