Grotabyte
Governance, Risk & Compliance

Data Sovereignty Cross Border Transfer Schrems Ii

18 September 2025By Bilal Ahmed

Introduction

The Schrems II ruling by the European Court of Justice invalidated the EU-U.S. Privacy Shield, reshaping the landscape of cross-border data transfers. For enterprises managing archives that span multiple jurisdictions, this decision heightened the need for compliance with data sovereignty and privacy laws. This blog examines the implications of Schrems II and provides strategies for building compliant archiving solutions.

What is Schrems II?

  • In July 2020, the Court of Justice of the European Union (CJEU) invalidated the Privacy Shield framework, which many companies relied on to transfer personal data from the EU to the U.S legally.
  • The ruling emphasized that U.S. surveillance laws did not provide adequate protection under GDPR.
  • Organizations must now rely on Standard Contractual Clauses (SCCs) and conduct Transfer Impact Assessments (TIAs) to justify cross-border transfers.

Key Implications for Archiving

  1. Data Sovereignty Requirements Enterprises must ensure that archived data is stored in regions compliant with local regulations. EU data, for example, may need to stay within EU borders unless adequate safeguards are in place.

  2. Vendor Due Diligence Archiving vendors must provide transparency on where data is stored and how it is protected. Contracts should include SCCs and demonstrate adherence to GDPR.

  3. Operational Complexity Multinational organizations may need to maintain regional archives to comply with local privacy laws.

  4. Risk of Non-Compliance Failure to comply with Schrems II requirements can result in fines under GDPR and reputational damage.

Best Practices for Compliance

  • Data Residency Controls: Choose archiving solutions that allow data localization in specific regions.
  • Encryption & Key Management: Use strong encryption with customer-managed keys (BYOK/KMS) to reduce cross-border risks.
  • Contractual Safeguards: Implement SCCs and review vendor commitments to data protection.
  • Transfer Impact Assessments (TIAs): Assess risks of data transfers and document decisions for defensibility.
  • Hybrid Architectures: Consider regional storage nodes or multi-cloud strategies to balance compliance and scalability.

Outcomes of Schrems II Compliance

  • Regulatory Assurance: Demonstrable compliance with GDPR and Schrems II requirements.
  • Reduced Legal Risk: Lower likelihood of sanctions or fines.
  • Customer Trust: Transparency in data handling builds confidence with clients and regulators.
  • Operational Flexibility: Regionalized storage and multi-cloud approaches provide agility in adapting to new laws.

Conclusion

The Schrems II ruling highlights the significance of data sovereignty and compliance with cross-border data transfer in enterprise archiving. Organizations must adapt their strategies by localizing data, enhancing encryption, and implementing robust contractual and technical safeguards. By doing so, they can achieve compliance while maintaining the resilience and global reach of their information governance programs.