Localizing data storage has been a contentious issue in the past, and it looks like Vietnam may be backing away from its pledge against it. Decree 53, which requires businesses to store user data inside the country, will come into effect on October 1st.
The regulation has been seen as a potential barrier to entry for international companies and Big Tech in particular, and some have already expressed their concerns.
Vietnam may be in breach
According to analysts, this decree may well put Vietnam in breach of its pledge against forced data localization. This pledge was made as part of the country’s commitments to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Vietnam is a signatory.
Article 14.13 of the CPTPP states that “no Party shall require a covered person to use or locate computing facilities in its territory as a condition for conducting business in its territory”. However, to force Vietnam to uphold this pledge, another CPTPP member would have to litigate the issue.
Nikkei Asia reached out to all six other members who have ratified the CPTPP. None of them have said whether or not they plan to use the pact’s enforcement tool. Nikkei Asia added that Japan and Canada are carefully monitoring the situation.
Specifically, Global Affairs Canada Spokesperson Lama Khodr said that Ottawa is “following the issue” and urged Vietnam to implement its laws in a way that is consistent with the CPTPP. Japan, for its part, said that it has “expressed concerns” about the decree.
The decree stipulates that if users violate the law on these platforms, and the companies don’t deal with the violations as ordered by Vietnam, then the data must be stored on local servers. Violations include anything that affects national security, propagandizes against the state, incites violence, or disrupts public order, among others.
Business groups in the US have also come out against the law. The US Chamber of Commerce, American Chamber of Commerce Hanoi, and Asia Internet Coalition wrote a joint letter to Vietnam’s Prime Minister Pham Minh Chinh, saying that the regulation impacts their ability to accurately assess the cost of doing business in Vietnam. The groups added that the new regulation could have a “considerable impact” on investment.