The ECJ ruling invalidating Safe Harbor has spurred a move to store data within the EU. Data localization can mitigate EU privacy compliance risk- if properly implemented. It’s likely that any type of access from outside the EU will be regarded as a transfer under EU law. It’s also likely to give access to U.S. law enforcement and regulators.
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In addition to impacting operations, data localization is likely to increase some types of risk, particularly for financial institutions with anti-money laundering requirements.