China Strengthening Domain Name Registration

February.12.2010

Recently, China's domain name registration policy experienced big changes, and additional change is under review.  From the middle of December 2009, China Internet Network Information Center (CNNIC), the domain name registration authority of China, issued a series of new circulars to strengthen the administration of domain name registration to enhance the authenticity, accuracy and completeness of domain name registration information and to crack down on illegal websites providing "lewd, obscene and violent content" in response to the central government's clean-up campaign on the Internet. CNNIC's actions are aimed in part at reducing the amount of preemptive and bad faith domain name registration in China.  The most significant change from the previous policy is that after December 14, 2009, only businesses may register domain names.  Individual applicants will no longer be able to register domains.  Also, new applications must be made in writing with supporting documents.  The specific application requirements are as follows:

  1. While domain name registration applicants can still submit online applications through domain name registrars, they are now required also to submit the following documents:
    1. Original domain name registration application form affixed with a business seal;
    2. Duplicate business license or organization code certificate; and
    3. Duplicate ID of the applicant's liaison person.
  2. Domain name registrars will review any received application materials and forward them to the CNNIC via facsimile or email and keep copies of the original materials in their records.
  3. The domain name will be cancelled if, within five days from the submission, CNNIC has not received the required application materials or they are deemed inadequate.
  4. This policy went into effect on December 14, 2009.

The main purpose of this new policy is to avoid false registration information from online applications—a registration mechanism that has thus far not been monitored in any way, resulting in the registration and use of domain names to conduct illegal business activities.

In addition to this new application policy, the CNNIC also imposed penalties against some domain name registrars, including:

  1. Xinnet, one of the major domain name registrars in China, was ordered to stop providing ".CN" domain name registration services and to put in place corrective measures. This was due to its failure to examine sufficiently the authenticity, accuracy and completeness of registration information and its lack of supervision of its registration agency, Union Network Data Center (UNNDC), also known as "Da Huang".
  2. UNNDC was ordered to stop conducting business because it was found to have assisted applicants in filling out false registration information.
  3. Namerich, a domain name registrar in China, was ordered to stop providing ".CN" domain name registration services and to take corrective measures because of insufficient examination of applications similar to Xinnet.

The penalties imposed against these ISPs further demonstrate CNNIC's intent to increase its oversight and administration of the domain name registration process.  It also serves as a message to all domain name registrars that if they fail to live up to their examination duty, i.e. strictly reviewing domain name registration information, they may be subject to penalties similar to those imposed on Xinnet, Da Huang and Namerich.

Furthermore, CNNIC also required domain name registrars to review registration information for all existing domain names in order to filter out improper registrations and require domain name holders to bring them into compliance within five days.  Any domain name registrations not promptly brought into compliance are subject to cancellation.  This means, however, that a domain name registered by individual applicants before December 14, 2009, will remain valid as long as the registration information is deemed adequate.  At the current stage, CNNIC's review of existing domain names mainly focuses on undesirable use of domain names, such as delivering "lewd, obscene and violent content" or phishing websites.

To facilitate the implementation of these control measures, CNNIC has set up a National Domain Name Complaint Center to handle complaints against undesirable utilization of domain names and improper registration due to registrars' negligence on examination.  The complaints can be submitted by telephone, facsimile, email or online.

On December 24, 2009, the CNNIC further issued a notice reminding all existing domain name holders who have failed to register their websites with the Ministry of Industry and Information Technology ("MIIT") to complete recordation procedures, as CNNIC will stop mapping unrecorded domain names in the near future.

These measures and policies serve as part of China's increased control measures over the Internet.  In early November 2009, the government initiated an Internet cleanup campaign focused on video websites that provide "lewd, obscene and violent content" or that contain unauthorized copyrighted material.  Several popular video-sharing websites have been either shut down or asked to take self-disciplinary measures.  Some BitTorrent (BT) websites that have survived the first wave of government enforcement have been asked to delete links to unlicensed TV programs and movies by February 2010.

These changes demonstrate the Chinese government's intent to crack down on Internet abuse.  However, even in light of these new policies, there are still some remaining loopholes which may be used by bad faith applicants to circumvent the rules:

  1. Original documents and an ID of the applicant's liaison person are not required for verification when applicants submit a duplicate business license or organization code certificate.  This may reduce the effectiveness of the newly introduced review policy since "fake" duplicate copies may be obtained from illicit sources.  A business seal itself is not enough to guarantee the authenticity of the applicant's information.
  2. Any individual domain names that survive this Internet cleanup effort will likely become the targets of acquisition by those who intend to conduct illegal or immoral activities through the Internet.  Since these domain names were registered without any identification verification procedures, it may be impossible to trace the responsible person if illegal activities are conducted through these websites.  Thus, the new policy may have the unintended effect of driving up the price of the domain name registrations that could be used to continue illegal or immoral activities.
  3. Finally, applicants may register limited liability companies with a minimum registered capital of RMB ¥30,000 for the sole purpose of applying for a domain name.  Such companies typically have no real business address, and it is often impossible to trace the responsible party in the event of commercial disputes or lawsuits.

However, for purposes of promoting industrial development, these new measures have generated a heated debate as to whether they may harm China's nascent Internet industry, particularly the increasingly popular .CN domain.  It is possible the new domain name registration procedure and the prohibition against domain name registration by individuals will force Chinese applicants to turn to foreign domain registrars, such as ".com."  Interestingly, we recently learned CNNIC is considering introducing new regulations, fewer than two months after introducing its current regulations, to allow individuals to once again register .CN domain names under their true identity.  No schedule is set for issuance of the new regulation.