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New data transfer rules pursued to keep out China and Russia

Japan, U.S. and South Korea seek alternative to APEC framework

The U.S. and Japan see data transfer frameworks reaching their limits with the involvement of Russia and China.

TOKYO -- Japan, the U.S., South Korea and four other APEC members have agreed to make personal data transfer rules independent of the regional forum's current framework in a move to exclude China and Russia.

With Russia and China as members of the Asia-Pacific Economic Cooperation forum, there were concerns about the flow of personal data. The new rules create a framework among members with a shared sense of trust. Plans call for the inclusion of non-APEC members, including South American countries.

APEC's Cross-Border Privacy Rules, which have served as a unified standard, will be reassessed. Companies are required to comply with each country's regulations in handling personal information, and the numerous procedures involved in transfers across borders can be a burden. Once certified, companies can smoothly transfer data among APEC markets, making it easier to do business.

Nine APEC members participate in the CBPR: Japan, the U.S., South Korea, Canada, Taiwan, the Philippines, Singapore, Australia and Mexico. Excluding Australia and Mexico, the other seven members agreed to establish a new global CBPR framework. It will be independent of APEC and actively accept participation by non-APEC members.

The U.S. has sought to expand the CBPR to such non-APEC countries as Brazil for years, proposing in 2020 for the framework to become independent.

Japan introduced the Data Free Flow with Trust concept in 2019, aiming to create an environment where data can be exchanged among countries with mutual trust. There has been a growing shared recognition between the U.S. and Japan that data transfer frameworks had reached their limits with the involvement of Russia and China.

The seven APEC members will build on the existing CBPR and establish a new corporate certification system. If Brazil and the U.K. are added, it may grow into a new data transfer framework similar to that of the European Union.

This initiative was independently promoted by the seven APEC members but without involving the regional forum. The existing CBPR and the new framework are likely to coexist for the time being. Coordination with APEC will also need to be addressed.

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