In Cashing in on Internet Censorship, CNN News writes how business for Virtual Private Network (VPN) companies is booming these days, thanks largely to China and Iran. The article discusses how “foreign companies are profiting from software that allows circumvention of government internet controls.”
The article quotes one of my law firm’s international attorneys on how businesses that offer firewall avoidance software in China are violating Chinese law:
Steve Dickinson, a China-based lawyer with Harris Bricken, an international business law firm, said that “companies supplying VPN products in China are technically breaking Chinese law.” But then Steve points out how this hardly matters because those doing the violating are not in China:
“China has no jurisdiction over such persons. As long as they do not physically enter China, there is no risk,” he said in an email to CNN.
Completely true and more relevant than people realize.
There are a number of internet businesses that are legal in their country of operation but illegal in one or more countries in which they do business. Many years ago, there were internet businesses selling medications from countries in which a prescription was not required into countries (like the United States) where a prescription was required. The US government tricked some of the people behind these companies to come to the United States, where they were arrested.
Not saying the same thing is going to happen to people at the companies selling illegally into China over the internet, but it might.
Let’s just say that if I were CEO of a VPN company, I would not go to China or Iran. I might even want to know which countries might or might not extradite me to China. Because of my law firm’s long history representing Russian companies and companies that do business with Russia, we have many times been retained to map out extradition risks for clients, some of which left where they were for somewhere else based on our report to avoid being extradited
Our best advice on all this is to be mindful of the laws of all of the countries to which your company’s operations reach and be careful about visiting those countries that may have a legal beef with your company or you.