Legal Problems with Data Localization Requirements: The Case of the Russian Federation

Abstract

In times of turbulence for international trade, some issues stand out as ‘cutting-edge’. Trade in data, and data-related services are a part of those ‘frontier’ conversations. To this end, a peculiar kind of measure has emerged since 2013: data-localization requirements (DLRs) mandate that only domestic service suppliers can process data of the citizens of a particular country. Several prominent players in the trading landscape, including the United States and China, have imposed such measures. Similar legislation has been enacted by the Russian Federation (RF), which is analysed herein. Before assessing measures imposed by the RF, the authors set out the landscape of the General Agreement on Trade in Services (GATS), particularly the obligations relating to Market Access under Article XVI. Drawing heavily on WTO jurisprudence, the authors demonstrate that the RF measures in question fall within the scope of the GATS and violate the RF’s obligations under Article XVI; and further, that such violation cannot be justified under ArticlesXIV or XIVbis. To this end, the authors contribute to the existing literature on a subject which is becoming exponentially significant as time moves on. World Trade Organization; General Agreement on Trade in Services; Market Access; Cross-border Supply; National Treatment; General and Security Exceptions; Personal Data, Processing of Personal Data, Data Localization Requirements; and Russian Federation