Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...
The preliminary U.S.-Mexico trade deal would prevent both countries from requiring financial institutions to store data locally, as long as regulators can reach the information they need.
The deal would prohibit data localization rules when a “financial regulator has the access to data that it needs to fulfill its regulatory and supervisory mandate,” according to an Aug. 27 Trump administration fact sheet.
Data localization requirements have increased globally in recent years. Russia, China, and Vietnam have adopted versions, while Germany and Canada have applied them to specific sectors. Banks and companies in other sectors forced to keep citizens’ data stored within a country’s borders see the rules as trade barriers that can inhibit their growth into new markets.
The prohibition in the U.S.-Mexico deal “makes a clear delineation to protect the banking sector from unwanted and risky data localization requirements,” Norma Krayem, senior policy adviser and chair of Holland and Knight’s global cybersecurity and privacy regulation group, told Bloomberg Law. “If the regulator has the ability to access what it needs for its oversight, then data localization cannot be used as an excuse,” she said.
The U.S. government has long sought prohibitions on such mandates, William Reinsch, senior adviser of international business at the Center for Strategic and International Studies, a nonprofit think tank, told Bloomberg Law.
“I do think it’s good policy, particularly for financial services, where the growth of localization requirements has been a problem,” Reinsch said.
The prohibition may also serve as a warning to nations that have imposed their own data localization laws, Krayem said.
The data localization prohibition is a “sign to other nations that the U.S. will no longer stand for unwarranted access into U.S. companies systems,” Krayem said.
The deal also would “guarantee that enforceable consumer protections, including for privacy and unsolicited communications, apply to the digital marketplace,” according to the administration’s fact sheet.
Privacy advocates are awaiting more details, but said Aug. 27 they’re pleased the deal included such language.
“It is at least encouraging that the U.S. is willing to commit to the principle of enforceable consumer protections for privacy the digital marketplace,” Eleni Kyriakides, international counsel at the Electronic Privacy Information Center, told Bloomberg Law. But “without additional transparency about the content of the tentative deal it is too soon to tell what this promise could mean in practice,” she said.
The U.S. Trade Representative’s office did not immediately respond to Bloomberg Law’s request for further details on the privacy language.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)