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The CLOUD Act: Clarifying Lawful Overseas Use of Data

Published: 6th June 2019

Published in: Commercial eSpeaking

Some possible implications for this country

The Clarifying Lawful Overseas Use of Data Act was enacted in the United States in 2018. It enables federal law enforcement to force US-based electronic communications or remote computing service providers to disclose requested data in their possession, custody or control, whether or not that data is stored in the US or a foreign country. This is a game-changer for global data sovereignty.

The legislation was a response to the case of Microsoft v United States (1) where it was ruled that the FBI, undertaking a drug trafficking investigation, could not compel the US-based Microsoft Corporation to turn over data stored in Ireland. The only way for US law enforcement to access overseas data had been to form a Mutual Legal-Assistance Treaty with the country where the data is stored.

Even though the 2018 Act was passed in the US, it could have serious implications for businesses and individuals in New Zealand.

You may think your sensitive data is safe if it is stored at a data centre located in New Zealand, but that data could be accessed and disclosed if stored through a US-based service provider.

(1)  United States v. Microsoft Corporation, 253 F.3d 34 (D.C. Cir. 2001).

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