Cross-Border Data Transfers & Cybersecurity

Cross-border data transfers are critical to cybersecurity in part because they allow for cybersecurity tools to monitor traffic patterns, identify anomalies, and divert potential threats in ways that depend on global access to real-time data. Additionally, companies may choose to store data at geographically diverse locations to obscure the location of data and reduce risk of physical attacks, to enable companies to reduce network latency, and to maintain redundancy and resilience for critical data in the wake of physical damage to a storage location. Conversely, when governments mandate localization or restrict the ability to transfer and analyze data in real-time, they create unintended vulnerabilities, as summarized below:
  • Data Transfers & Integrated Cybersecurity Planning. Data transfer restrictions and localization requirements force organizations to adopt a siloed approach to data, often restricting the locus of certain data, but not others. This differentiation creates unnecessary technical complexity without any corresponding benefit to security. Simply put: artificial requirements to store data within borders strain the people, processes, and technologies an organization needs to manage its cybersecurity risk.
  • Data Transfers & Cybersecurity Awareness. Data transfer restrictions and localization requirements impede visibility of cybersecurity risks, not only at the intra- and inter-organizational levels, but also at national and international levels. If cyber defenders cannot access threat indicators or other cybersecurity data collected in one jurisdiction, it becomes harder to address malicious cyber activity in other jurisdictions.
  • Data Transfers & Cybersecurity Collaboration. Data transfer restrictions and localization requirements can impede cross-border collaboration, information sharing, and other coordinated network defense. When such restrictions and requirements isolate network defenders from each other, they cannot adopt a unified and coordinated defensive posture against malicious actors that do not respect national borders. In short, data transfer restrictions can give malicious actors that do not respect local legal requirements a lasting structural advantage over cyber defenders that do.
  • Data Transfers & Third-Party Cybersecurity Services. Many organizations amplify their own cybersecurity risk management through third-party cybersecurity service providers. Best-in-class services depend on access to cyber data from around the globe. Without this access, these services and their users become more vulnerable to compromise.
  • Data Transfers & Cybersecurity Resiliency. Whether a particular geographic area is at high risk for a natural disaster or in a potential future war zone, having data efficiently distributed is a crucial component of resiliency. The misconception that keeping data only within national boundaries will increase its security can actually create significantly more risk.
  • Data Transfers & Protectionism in the Name of Cybersecurity. Localizing data within a country—or blocking its transfer—has no functional cybersecurity benefit. Security is determined by the technical and operational protections that accompany the data, not the location. Transfer restrictions and localization requirements are often used to advance other objectives. Perhaps the most systemic problem with using cybersecurity laws to require localization, then, is that it diminishes the role of laws and policies that are truly designed to improve security.