In response to escalating national security concerns, the U.S. government has established a regulatory framework aimed at curbing the bulk transfer of sensitive personal data to specific nations identified as threats. Executive Order 14117, introduced on February 28, 2024, addresses the potential risks posed by certain countries, including China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia, and Venezuela. This initiative aims to limit access to sensitive personal and government-related data that could be exploited by foreign adversaries.
The U.S. government implements regulations to restrict sensitive data transfers to nations posing national security threats.
The Department of Justice (DOJ) has reinforced this Executive Order through a final rule, scheduled to take effect on April 8, 2025. This rule explicitly prohibits or restricts the bulk transfer of sensitive personal data, focusing particularly on American citizens’ information. Transactions classified as covering “bulk sensitive personal data” will face stringent compliance obligations, including due diligence, audits, and reporting requirements, which will commence on October 6, 2025. Additionally, this rule aims to restrict access to data based on types of transactions involving sensitive information regarding U.S. citizens. The aim of these restrictions aligns with Countries of Concern as outlined by the DOJ.
The intention behind these regulations is to mitigate risks associated with technological advancements in artificial intelligence and big data analytics. As data transfers to targeted countries may empower adversaries in areas such as cyber-espionage and surveillance, the government has prioritized safeguarding sensitive personal information.
Preventing the misuse of this information addresses broader issues of identity theft, blackmail, and surveillance. The regulatory framework additionally seeks to eliminate opportunities for adversaries to exploit U.S. data for military, political, or economic advantages.
Compliance mechanisms have been established for U.S. persons involved in covered data transfers, requiring significant adherence to protective protocols by April 2025. Entities failing to comply risk government investigation, sanctions, or penalties.
The DOJ will engage in active monitoring of industries with substantial cross-border data activities, asserting that suspicious data transactions will be subject to the new reporting obligations. Through these measures, the government aims to improve national security while preserving the integrity of American citizens’ personal data.
