Secret trade treaty will undermine cloud data sovereignty rules

By Graeme Burton
20 Jun 2014 View Comments

A draft trade treaty being negotiated in secret will bar countries from making rules that prevent data held in the cloud being stored and processed outside their borders.

The rules, published in an annex to the Trade in Services Agreement (TISA), will have an impact on outsourcing and offshoring, as well as enabling offshore outsourcers to bring in as many staff as they require to support financial services industry clients.

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The draft text also highlights how, under the agreement, signing countries would be forced to allow financial service providers to import specialist computer services, or telecommunications services staff into the country to work for the financial provider.

TISA is currently being negotiated behind closed doors between representatives of Australia, the US, Canada, New Zealand, Japan and the European Union.

Article X.11 of the annex is explicitly clear that laws brought in following the revelations over far-reaching US National Security Agency (NSA) internet surveillance will be overruled by the new treaty.

"No Party shall take measures that prevent transfers of information or the processing of financial information, including transfers of data by electronic means, into and out of its territory, for data processing or that, subject to importation rules consistent with international agreements, prevent transfers of equipment, where such transfers of information, processing of financial information or transfers of equipment are necessary for the conduct of the ordinary business of a financial service supplier," the draft document states. 

The secret draft documents have been published by Wikileaks. It claims that the negotiations are being led by the US and UK, partly to assert the primacy of New York and London as financial centres - but also to encourage the ongoing flow of data into US data centres:

"The draft Financial Services Annex sets rules which would assist the expansion of financial multinationals - mainly headquartered in New York, London, Paris and Frankfurt - into other nations by preventing regulatory barriers. The leaked draft also shows that the US is particularly keen on boosting cross-border data flow, which would allow uninhibited exchange of personal and financial data," claimed Wikileaks in a press release.

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