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TPP has changed the view of cross-border financial data

THE 05.05.2017  Source:
For cross-border data flow, TPP agreement has a prominent significance. At least for the United States, this is the first time that it has incorporated restrictions on data localization in the text of trade agreements. The specific terms are mainly in Chapter 14 - "E-Commerce".
 
Article 14.11 requires that the parties should allow cross-border movement of data (including personal information) for commercial purposes. However, the parties may take restrictive measures to achieve legitimate public policy objectives as long as such measures do not constitute arbitrary, unfair grounds for discrimination, and more than those required to achieve policy objectives.
 
Article 14.11: Cross-Border Transfer of Information by Electronic Means
    1. The Parties recognise that each Party may have its own regulatory requirements concerning the transfer of information by electronic means.
    2. Each Party shall allow the cross-border transfer of information by electronic means, including personal information, when this activity is for the conduct of the business of a covered person.
    3. Nothing in this Article shall prevent a Party from adopting or maintaining measures inconsistent with paragraph 2 to achieve a legitimate public policy objective, provided that the measure:
        (a) is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade; and
        (b) does not impose restrictions on transfers of information greater than are required to achieve the objective.
 
Article 14.13: Location of Computing Facilities
    1. The Parties recognise that each Party may have its own regulatory requirements regarding the use of computing facilities, including requirements that seek to ensure the security and confidentiality of communications.
    2. No Party shall require a covered person to use or locate computing facilities in that Party’s territory as a condition for conducting business in that territory.
    3. Nothing in this Article shall prevent a Party from adopting or maintaining measures inconsistent with paragraph 2 to achieve a legitimate public policy objective, provided that the measure:
        (a) is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade; and
        (b) does not impose restrictions on the use or location of computing facilities greater than are required to achieve the objective. 
 
 
Just a little familiar with the US government and the financial industry strong lobbying ability, will certainly be surprised: why the US government in the TPP negotiations failed to fully protect the interests of the US financial industry?
 
The reason lies in the inside of the US government. In February 2016, former US Treasury Secretary Jack Lew said the TPP was in the language, mainly the Federal Reserve and the Federal Securities and Exchange Commission. These two institutions need to obtain financial data in real time, especially during the 2008 financial crisis. However, due to the fact that these data are distributed around the world, it is very difficult and cumbersome to seriously delay the supervision work.

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