Cross-border health data transfer rules around the world

Alona Chumak

9 months ago

As borders are becoming increasingly permeable in the digital sphere, the exchange of health data across countries has emerged as a critical issue. When individuals traverse international boundaries for work, travel, and healthcare, the seamless transfer of health information has become indispensable for effective medical treatment. However, the rules governing cross-border health data transfer are far from uniform, presenting both challenges and opportunities. From stringent privacy regulations to evolving technological concepts, understanding these rules is essential for healthcare professionals, policymakers, and business leaders alike.

This article will review cross-border health data transfer rules you should be aware of and how InCountry’s Data Residency-as-a-Service helps you stay compliant with all applicable data privacy laws in the countries in which your health company operates.

Current state of health data restrictiveness around the world

Regarding cross-border data flow restrictions, three key concepts seem to stand out as major influencers, and they are as follows:

Data residency
Data localization
Data sovereignty

The interpretation and implementation of these three factors are responsible for the cross-border data restrictions a country may adopt to meet their requirements regarding any of these factors. We will discuss each of these factors in detail below:

Data residency

Data residency focuses on the physical or geographic location where an organization stores or processes its clients’ private data. In reaction to this, some countries mandate that the private data of their residents be stored within their country, and they place strict restrictions on how that data can be transferred. This point accounts for most of the data privacy restrictions that can be seen in most countries today.

A significant challenge organizations encounter regarding data residency is the dynamic nature of residency laws. They are ever-changing, as they are amended periodically to meet the exigencies of the moment. As a business leader in the healthcare industry, you must be familiar with the data residency guide for the healthcare industry.

Data localization

Data localization involves storing or processing data within specific geographic boundaries or locations, often mandated by local regulations or policies. This approach is driven by concerns related to data sovereignty, security, and compliance with data protection laws.

By localizing data, governments aim to exert control over the information generated within their jurisdiction, safeguarding it from potential risks and ensuring that it complies with relevant privacy standards. However, this practice can present challenges for businesses, particularly those operating globally or relying on cloud services, as they must navigate a complex landscape of varying data localization requirements across different regions. Striking a balance between regulatory compliance and operational efficiency remains crucial in the ongoing discussions surrounding data localization.

A 2021 white paper from the Information Technology & Innovation Foundation (ITIF) outlines a rather bleak scenario regarding the consequences of overly restrictive data policies. The document suggests that for every 1-point increase in a country’s data restrictiveness, there is a corresponding 7 percent reduction in gross trade output and a 2.9 percent slowdown in productivity.

The health sector is not left out of this situation. Although specific data may not be available on the full impact of cross-border health data flow restrictions, the ongoing global development of regulations addressing data privacy, residency, sovereignty, and localization underscores the need to assess these laws and policies. Such evaluations can contribute to a deeper understanding of the challenges associated with international health records cross-border transfers.

Data sovereignty

Data sovereignty refers to the concept that data is subject to the laws and governance of the country or jurisdiction in which it is located. This principle emphasizes the control and ownership of data by the nation in which it resides. Governments implement data sovereignty regulations to assert authority over information generated within their borders, driven by national security, privacy, and legal jurisdiction concerns.

However, this practice can pose challenges for multinational businesses and cloud service providers, as compliance requires navigating a complex landscape of diverse and sometimes conflicting data sovereignty requirements across different regions. Striking a balance between respecting local regulations and maintaining operational flexibility becomes crucial in addressing the multifaceted implications of data sovereignty.

Cross-border health data requirements

In this section, we will review the cross-border health data requirements in the following Countries/Regions:

The European Union.
China.
The Kingdom of Saudi Arabia.
The United Arab Emirates.

Cross-border health data requirements European Union (the EU)

The European Union (EU) has implemented various regulations and initiatives to promote a secure and smooth exchange of health data across borders within the region. These efforts encompass specific requirements and approaches to facilitate cross-border health data sharing effectively.

Directive 2011/24/EU on Cross-border healthcare

Directive 2011/24/EU on Cross-border Healthcare establishes core principles for accessing medical services in other European Union (EU) countries. This directive emphasizes the importance of providing clear information to patients, setting minimum standards for medical prescriptions, and creating National Contact Points (NCPs) to aid both patients and healthcare providers. By delineating these guidelines, the directive aims to facilitate and regulate cross-border healthcare within the EU, ensuring a cohesive and standardized approach to healthcare access across member states.

General Data Protection Regulation (GDPR)

The General Data Protection Regulation (GDPR) is a pivotal regulatory framework governing the cross-border handling of health data within the European Union (EU). Enacted in May 2018, the GDPR is designed to uphold stringent standards for protecting personal data, including information related to health. In the context of cross-border health data, organizations operating within the EU must adhere to the GDPR’s provisions, which encompass obtaining explicit consent for the processing of health data, ensuring the secure and confidential transmission of such data, and limiting transfers to countries or entities that guarantee an adequate level of data protection. The GDPR plays a critical role in establishing a robust and uniform approach to managing health data across EU borders, prioritizing individual privacy, and reinforcing measures to enhance data security.

Here are some of the key features of the GDPR:

Personal data definition: It broadens the definition of personal data to include any information that can be used to directly or indirectly identify an individual. Such information includes names, addresses, identification numbers, etc.
Principles of data processing: It establishes principles for the lawful processing of personal data, including the necessity of processing, transparency, and the limitation of data collection to what is relevant and necessary.
Consent: It emphasizes the necessity of obtaining clear and affirmative consent from the data subject before processing their data. Consent must be specific, informed, and freely given.

Data subject rights: The GDPR specifies the rights of individuals whose data is collected, processed, and stored by health organizations. These rights include the right to access, rectify, erase, and object to the processing of their data.
Data Protection Officers (DPOs): All organizations involved in public health activities, like hospitals, national health insurance schemes, or public health agencies, must appoint a DPO. Health organizations that process a large amount of health data annually are also mandated to appoint a DPO.
Data breach notification: Health organizations must notify relevant authorities and affected individuals of data breaches whenever they occur, especially when it is likely to result in a high risk to their rights and freedoms.
Cross-border data transfers: The GDPR provides appropriate safeguards, such as Standard Contractual Clauses (SCCs) and Binding Corporate Rules (BCRs), to facilitate the lawful transfer of personal data outside the EU. SCCs are pre-approved contracts between the data exporter and importer, detailing data protection obligations. Meanwhile, BCRs are self-binding data protection rules for multinational health organizations approved by a data protection authority.
Fines and penalties: The regulation introduces substantial fines for non-compliance, with penalties reaching up to 4% of the global annual revenue of an organization or €20 million, whichever is higher.

Cross-border health data requirements for China

The primary requirements for medical cross-border data transfers in China are contained in the PIPL and the ongoing draft of the Cross-Border Data Transfer Rules. We will review them in this section.

China’s Personal Information Protection Law (PIPL)

The Personal Information Protection Law (PIPL) is a comprehensive data protection regulation enacted by the People’s Republic of China. Effective from November 1, 2021, the PIPL is designed to safeguard the privacy and rights of individuals by regulating the collection, processing, and transfer of personal information.

It introduces principles similar to those found in the GDPR, such as obtaining explicit consent for data processing, providing transparency in data practices, and empowering individuals with the right to access and control their personal information. The PIPL also obligates organizations to appoint a dedicated person responsible for protecting personal information, conducting risk assessments, and implementing security measures to prevent data breaches. This legislation reflects China’s commitment to healthcare data compliance and aligning its regulatory framework with international standards.

China’s draft of cross-border data transfer rules

In September 2023, China unveiled its preliminary regulations on cross-border data transfers. It was designed to create a structured framework to govern and enhance the movement of personal information outside China. Although these rules are currently in the evaluation phase and may undergo modifications, they provide a preview of the evolving landscape of data mobility within China. They also offer insights into how it could influence global partnerships, notably within the healthcare sector. Below are some key features of these drafts:

Data classification: Data is categorized based on its “importance” and “sensitivity.” Data with higher importance or sensitivity, such as healthcare data, has stricter transfer requirements.
Simplified procedures: For less sensitive data, the transfer procedures are simplified and transferred via designated channels.
Security assessment: For “important data” exceeding certain thresholds, a rigorous security assessment by the Cyberspace Administration of China (CAC) remains mandatory.
Standard Contractual Clauses (SCCs): SCCs approved by the CAC are a more accessible option for transferring some categories of data
Certification: Data processors can opt for security certification from CAC-approved institutions to facilitate data transfers.
Pilot free trade zones: These zones may experiment with “negative lists,” defining data that can be transferred freely without specific procedures.

Potential implications for healthcare

Challenges for important data: The transfer of sensitive health information, such as patient records, faces challenges as it necessitates strict security assessments, which may create delays and hindrances in certain collaborative efforts.
Streamlined transfers: Streamlined procedures have the potential to simplify the transfer of less sensitive health data.
The evolving nature of the rules might pose challenges for long-term planning and data-sharing agreements.

Cross-Border Health Data Requirements in the Kingdom of Saudi Arabia (KSA)

In 2021, the introduction of the Personal Data Protection Law (PDPL) marked a significant milestone for the Kingdom of Saudi Arabia, addressing the imperative to protect individual privacy in the era of digital advancements. This landmark legislation intricately outlines guidelines that govern the acquisition, utilization, and secure management of personal data by organizations operating within the Kingdom. We will focus on the key requirements for cross-border data transfers outside Saudi Arabia.

General principles

The general principles governing cross-border data transfers here are as follows:

Data minimization: The transfer must be limited to the minimum personal data necessary for the specified purpose.
Purpose limitation: The data to be transferred must only be used for the specific purpose for which it was collected unless further consent is given.
National security and vital interests: The transfer must not impact the national security or vital interests of the KSA.
Data subject rights: Individuals have the right to access, rectify, erase, and restrict the processing of their personal data.

Transfer mechanisms:

Adequacy decision: When transferring data, an adequacy decision is crucial; if the destination country boasts a data protection regime equivalent to the standards outlined in the PDPL, the data can flow freely. Currently, Saudi Arabia has yet to officially recognize any country as meeting its adequacy standards.
Appropriate safeguards: In the absence of an adequacy decision, the transfer of data is still possible by implementing appropriate safeguards. These safeguards must ensure the following:
Security of the data: Adequate technical and organizational measures to protect the data from unauthorized access, disclosure, alteration, or destruction.
Enforceable rights: Data subjects in the Kingdom must have enforceable rights and effective legal remedies against the receiving entity in the destination country.
Data Protection Officer (DPO) involvement: The DPO of the organization transferring the data must be involved in assessing and implementing appropriate safeguards.
Authorization: For sensitive data such as healthcare data, prior authorization from the Saudi Data Protection Authority may be required.

Cross-border health data requirements in the United Arab Emirates (UAE)

The Personal Data Protection Law (PDPL) of the UAE provides direction for cross-border data transfer requirements. Launched in January 2022, the PDPL stands as the inaugural and all-encompassing data protection legislation in the UAE. Its primary objective is to safeguard individual privacy by establishing regulations governing the collection, utilization, and storage of personal data.

Applying to every organization engaged in processing personal data within the UAE, irrespective of their geographical location, the PDPL holds a broad scope. It introduces a framework to ensure that the handling of personal information aligns with specified standards, marking a significant step forward in the UAE’s commitment to enhancing data protection and privacy practices. Here are some key aspects regarding health cross-border data transfer:

General principles

The PDPL explicitly restricts the transfer of personal data to nations that lack an “adequate level of protection.” Thus, requiring foreign countries to demonstrate comparable data protection laws and practices to those established in the UAE.
Despite the existence of an adequacy decision for a specific country, health organizations are obligated to adhere to additional PDPL prerequisites for data transfer, including the necessity to obtain informed consent from individuals.
In cases where the destination country does not possess an adequacy decision, the PDPL provides avenues for data transfer through specific “appropriate safeguards.” These encompass;
- Standard Contractual Clauses (SCCs): These are predefined contracts between the data exporter and importer, outlining explicit data protection obligations.
- Binding Corporate Rules (BCRs): These self-imposed data protection regulations are designed for multinational corporations to receive approval from a data protection authority.
- Codes of Conduct and Certification Mechanisms: Currently in the developmental phase, these tools are emerging as a means of showcasing adherence to data protection standards.
Irrespective of the selected method, organizations are obligated to perform a transfer impact assessment (TIA), systematically evaluating the potential risks associated with transferring data to a particular country.
Simultaneously, organizations are required to notify data subjects about the planned data transfer, outlining the employed safeguards, and obtaining consent when deemed necessary.
Finally, it is imperative for health organizations to institute stringent security measures, ensuring the comprehensive protection of data throughout the entire transfer process.

HIPAA rules in cross-border health data transfers

While various regions have implemented distinct regulations for cross-border health data transfers, it is crucial to recognize the significance of complying with the Health Insurance Portability and Accountability Act (HIPAA) rules when involving healthcare organizations and individuals governed by U.S. law.

HIPAA is a U.S. legislation that sets the standards for the protection of sensitive patient health information. While HIPAA primarily governs healthcare practices within the United States, its rules can have implications for cross-border health data transfers, especially when healthcare entities or individuals outside the U.S. are involved.

Key provisions of HIPAA include:

Privacy Rule: The Privacy Rule establishes national standards for protecting individuals’ medical records and other personal health information. It sets limits on the use and disclosure of such information without patient authorization.
Security Rule: The Security Rule sets standards for the security of electronic protected health information (ePHI). Covered entities must implement measures to safeguard the confidentiality, integrity, and availability of ePHI.
Security Measures: HIPAA requires the implementation of security measures to safeguard electronic protected health information (ePHI). When transferring health data across borders, additional precautions may be necessary to ensure the security and integrity of the information during the transfer process.
Patient Consent: In some cases, patient consent may be required for the cross-border transfer of health information. HIPAA places a strong emphasis on patient privacy and their rights to control their health data. Ensuring that patients are informed and have given appropriate consent is crucial.
Breach Notification Rule: Covered entities are required to notify affected individuals, the Department of Health and Human Services (HHS), and, in some cases, the media, in the event of a breach of unsecured PHI.
HIPAA Enforcement: The Office for Civil Rights (OCR) within HHS is responsible for enforcing HIPAA rules. Violations can result in significant penalties, including fines and legal consequences.

In the context of cross-border health data transfers, healthcare organizations operating under HIPAA must ensure that any international data sharing complies with these regulations. This includes obtaining appropriate consent, implementing secure data transfer mechanisms, and assessing and mitigating potential risks associated with cross-border data transfers.

When engaging in global collaborations or partnerships involving healthcare data, organizations subject to HIPAA should conduct thorough due diligence to ensure that their international counterparts adhere to comparable data protection standards. Additionally, organizations should establish clear agreements and protocols to maintain HIPAA compliance throughout the entire cross-border data transfer process.

How InCountry helps healthcare institutions stay compliant with cross-border data transfer

Managing data privacy laws can be overwhelming for healthcare organizations, as it does not contribute to the bottom line. At InCountry, we understand this and offer a solution to ease this burden through our Data Residency for healthcare services. With this service, we can help store your healthcare data in the location where it was collected, while also providing access to that data from anywhere in the world.

Our segregated data environments significantly minimize the likelihood of unauthorized access or breaches, thereby guaranteeing the confidentiality of data and alignment with regulatory frameworks such as GDPR, PIPL, PDPL, etc. Additionally, we employ sophisticated security protocols, including anomaly detection and intrusion prevention, to proactively identify and address potential data threats.