If someone had told me five years ago that privacy teams would need to understand export control regulations, I would have laughed. Export controls were for defense contractors and semiconductor manufacturers, not for companies collecting email addresses and browsing behavior. That world ended in 2024 and now everybody needs to take privacy seriously.
The Department of Justice’s final rule on preventing access to bulk sensitive personal data by countries of concern, combined with the Protecting Americans’ Data from Foreign Adversaries Act (PADFA), fundamentally altered what it means to manage personal data. Your customer database isn’t just a privacy compliance issue anymore. It’s a dual-use technology subject to the same regulatory framework that governs missile guidance systems and encryption software.
This isn’t hyperbole. Personal data can now be weaponized for surveillance, espionage, blackmail, and influence operations in ways that threaten national security. The U.S. government has decided that bulk personal data requires the same scrutiny as technologies that could be used for both civilian and military purposes. For privacy professionals, this creates an entirely new compliance regime that sits uncomfortably alongside GDPR, CCPA, and the patchwork of state privacy laws we’re already juggling.
Understanding the Regulatory Shift: Two Rules, One Problem
The regulatory landscape changed dramatically with two major developments. First, Executive Order 14117 issued in February 2024 established the framework for restricting data broker transactions involving countries of concern. This wasn’t just presidential rhetoric; it directed the Attorney General to create enforceable regulations.
The DOJ delivered those regulations in October 2024 with the final rule establishing the first comprehensive federal restrictions on commercial data transactions with foreign adversaries. The rule targets six countries of concern: China, Russia, Iran, North Korea, Cuba, and Venezuela, along with entities controlled by or operating on behalf of these countries.
But the rule doesn’t just prohibit selling customer lists to Chinese companies. It establishes a complex framework of restricted transactions, covered data categories, security requirements, and exemptions that privacy teams must now navigate. The compliance obligations extend far beyond “don’t sell data to bad actors.”
Running parallel to the DOJ rule, PADFA represents Congress’s attempt to legislate similar protections with a focus on data brokers and foreign adversary access to bulk sensitive data. While PADFA faces ongoing legislative uncertainty, its framework largely aligns with the DOJ’s approach, creating a converging regulatory environment.
Together, these regulations establish that certain types and volumes of personal data constitute national security assets requiring controls similar to traditional dual-use technologies. Privacy professionals who spent careers thinking about individual rights and consent mechanisms must now think about geopolitical risk and national security threats.
What Makes Data “Bulk” and “Sensitive”?
The regulations don’t restrict all personal data transactions. They focus on bulk sensitive data, but understanding what triggers these restrictions requires parsing technical definitions that weren’t written by privacy professionals.
Sensitive data under the rule includes several categories that should sound familiar to privacy teams: precise geolocation data, biometric identifiers, human genomic data, personal health data, personal financial data, and certain government identifiers. These categories align broadly with sensitive data definitions in privacy laws, but the thresholds and specifics differ in important ways.
The “bulk” threshold is where things get interesting and concerning. For most data categories, bulk means information about more than 10,000 U.S. persons annually. That’s not a particularly high bar for modern digital businesses. A modest mobile app, a regional e-commerce platform, or a B2B marketing database could easily exceed this threshold.
Some categories have even lower thresholds. For genomic data, the threshold is just 100 individuals. For precise geolocation data exceeding 1,000 data points per device, the threshold is 1,000 U.S. persons. These aren’t theoretical numbers; they’re the daily reality for companies in specific sectors.
Here’s what makes this particularly challenging: the threshold applies to data maintained, collected, or accessible through systems, not just data actively processed or analyzed. Having access to bulk sensitive data triggers obligations, even if you’re not actively using it. This fundamentally changes how privacy teams must think about data retention, system access, and vendor relationships.
The Industries Facing Maximum Impact
While these regulations theoretically apply to any organization handling bulk sensitive data, certain industries face disproportionate compliance burdens and operational disruption.
Financial Services: Ground Zero for Dual-Use Controls
Financial institutions might be the single most impacted sector. They inherently collect and maintain bulk financial data on customers. Account numbers, transaction histories, credit information, payment credentials—these are the core data assets of banking and fintech.
The challenge extends beyond customer data. Financial institutions rely on global technology infrastructure, offshore development teams, and third-party service providers that may have foreign ownership or operation. Every vendor relationship, every cloud service contract, every outsourcing arrangement now requires export control analysis alongside traditional privacy and security assessments.
Consider a typical fintech company’s technology stack. They might use cloud infrastructure with data centers in multiple countries, employ customer service contractors with international staff, rely on payment processors with global operations, and engage development teams with offshore resources. Each of these relationships potentially creates access to bulk sensitive financial data that must be evaluated under the new framework.
Banks and financial institutions need sophisticated data governance technology that can track data flows across their entire ecosystem, identify when data crosses into prohibited transactions, monitor ongoing compliance with security requirements, and provide audit documentation for regulatory examination. Manual compliance processes simply cannot keep pace with the complexity and velocity of modern financial services operations.
Healthcare and Genomics: Where Biology Meets National Security
Healthcare organizations and genomic companies face unique pressures because their core data types health information and genomic data—are explicitly covered sensitive categories with stringent thresholds. A genetic testing company with 101 customers has potentially crossed into regulated territory for genomic data.
The healthcare industry already operates under HIPAA’s complex requirements, state health privacy laws, and FDA regulations for certain digital health products. Adding export control obligations creates a regulatory triple threat that requires careful coordination.
Healthcare organizations often rely on global clinical research networks, international patient populations, offshore medical transcription services, and multinational pharmaceutical partnerships. These global connections that enable medical advancement now create compliance complexity around data access and transfers.
The genomic sector faces particular challenges. Genetic data has obvious national security implications—it can be used for biological weapon development, population surveillance, or discrimination. But genetic research requires large, diverse datasets and international collaboration. The regulations create tension between scientific progress and security concerns.
Healthcare organizations need technology platforms that can enforce access controls based on user location and affiliation, maintain detailed audit logs of who accessed what data when, implement automated data minimization to reduce bulk data exposure, and integrate with existing HIPAA compliance frameworks. The operational burden of manual compliance would overwhelm already-stretched healthcare privacy teams.
Advertising Technology and Data Brokers: Direct Targets
If there’s a primary target for these regulations, it’s the data broker industry and the advertising technology ecosystem that enables it. The regulations explicitly define data brokerage transactions and place them under heightened scrutiny.
AdTech companies routinely traffic in precise geolocation data, browsing behavior linked to individuals, demographic profiling information, and purchase history across millions of users. This is exactly the type of bulk sensitive data that concerns national security officials.
The business model of programmatic advertising involves sharing data with dozens or hundreds of partners through real-time bidding systems, advertising exchanges, demand-side platforms, supply-side platforms, and measurement vendors. Tracking which entities have access to what data in this complex ecosystem is difficult enough for basic privacy compliance; adding national security export controls makes it exponentially more complex.
Data brokers who aggregate and sell consumer information face direct restrictions on transactions involving countries of concern. But the definition of data brokerage is broad enough to potentially capture companies that don’t self-identify as data brokers. Any company that sells, licenses, or transfers access to bulk sensitive data might trigger these obligations.
The advertising and data broker sectors need technology solutions that can map complex data flows through programmatic advertising ecosystems, identify and flag partners with potential connections to countries of concern, implement real-time blocking of prohibited data transactions, and maintain comprehensive records of data transfers for regulatory compliance. The alternative is manually tracking millions of data transactions across hundreds of partners—an impossible task.
Technology Companies: Building with Export Controls in Mind
Technology companies, especially those offering platforms, infrastructure, or software-as-a-service products, face compliance challenges from multiple angles. They collect bulk sensitive data on their own users while also providing infrastructure that customers use to process sensitive data.
Cloud service providers must ensure their platform doesn’t enable prohibited data transfers by customers. SaaS companies must evaluate whether their own data collection exceeds bulk thresholds. Platform companies must assess whether their APIs or data access tools could facilitate restricted transactions.
Technology companies often have globally distributed workforces, with engineers, support staff, and contractors located around the world. These employees may need access to production systems, customer data, or internal datasets that include bulk sensitive information. Managing access based on citizenship, location, or employer affiliation creates operational friction but may be necessary for compliance.
The technology sector needs access control systems that integrate citizenship and location data, monitoring tools that detect anomalous data access patterns, automated compliance checks built into development workflows, and comprehensive logging systems that support both security and regulatory needs.
The Security Requirements That Change Everything
Even when data transactions aren’t prohibited outright, the regulations impose security requirements that exceed what many organizations currently implement. These requirements apply to any organization that engages in data transactions involving countries of concern or their entities, even for transactions that fall under exemptions.
The security requirements include organizational measures like privacy and security training for employees, conducting due diligence on vendors and contractors, establishing incident response plans, and maintaining compliance documentation. These are familiar to mature privacy programs but must now be applied specifically to the export control context.
Technical measures required include data minimization to avoid collecting or maintaining bulk sensitive data unnecessarily, logical or physical access controls that restrict data access based on need, encryption for data at rest and in transit, and monitoring systems to detect unauthorized access or anomalous activity.
For many organizations, these security requirements will drive more immediate operational changes than the transaction prohibitions themselves. Implementing technical controls that specifically address bulk sensitive data access by foreign nationals or entities requires significant system architecture changes.
This is where compliance technology becomes absolutely critical. Manual implementation of these security requirements is error-prone and doesn’t scale. Organizations need automated systems that can enforce access controls based on complex criteria, continuously monitor for compliance violations, document security measures for regulatory audits, and adapt as regulatory interpretations evolve.
The Convergence with Existing Privacy Frameworks
Privacy professionals might hope that existing privacy compliance efforts would satisfy these new requirements. Unfortunately, while there’s overlap, the compliance frameworks don’t align perfectly.
GDPR focuses on lawful processing, individual rights, and transfers outside the European Economic Area based on adequacy decisions or transfer mechanisms. The dual-use export control framework focuses on national security risks from specific adversary nations accessing bulk sensitive data. These are related but distinct compliance regimes.
CCPA and state privacy laws establish requirements around disclosure, opt-out rights, data security, and sensitive data handling. The export control rules establish transaction-level restrictions based on the identity and location of data recipients. You can be fully compliant with CCPA while violating export control regulations.
Organizations need to think about compliance in layers. Privacy laws establish baseline data protection requirements. Export control regulations add national security restrictions on top. Sector-specific regulations like HIPAA, GLBA, or FCRA create additional obligations. Each layer requires different controls, different documentation, and different governance processes.
The complexity of managing multiple overlapping compliance frameworks exceeds what manual processes or basic privacy tools can handle. Organizations need sophisticated compliance platforms that understand the relationships between different regulatory requirements, identify gaps and conflicts, automate documentation and reporting, and provide unified visibility across the compliance landscape.
What Compliance Actually Requires Now
Let’s be concrete about what privacy teams must do differently. First, conduct a data inventory that specifically identifies bulk sensitive data in your systems. This isn’t just cataloging what data you collect; it’s calculating volumes across different sensitive categories and determining whether you exceed bulk thresholds.
Second, map data flows to identify where bulk sensitive data moves, who has access to it, and whether any of those access points involve countries of concern or related entities. This requires going beyond your direct service providers to understand subprocessors, infrastructure providers, and even employee access patterns.
Third, evaluate every vendor and contractor relationship for potential connections to countries of concern. This due diligence needs to consider ownership structures, operational locations, employee nationalities, and subcontracting arrangements. It’s not enough to know where your vendor’s headquarters is located; you need to understand their entire operational footprint.
Fourth, implement technical controls that enforce access restrictions based on the results of your due diligence. This might mean restricting production system access based on employee location or citizenship, implementing additional authentication for sensitive data access, or segmenting data to minimize bulk data exposure.
Fifth, establish ongoing monitoring to detect compliance violations, policy changes at vendors, new data transactions that might trigger restrictions, and regulatory guidance updates. Compliance isn’t a one-time project; it’s an ongoing operational requirement.
Sixth, maintain comprehensive documentation of your compliance efforts, including data inventories, due diligence records, security measures implemented, and decision-making processes for transaction evaluations. Regulatory examination will require demonstrating your compliance approach, not just asserting it.
The Technology Infrastructure Gap
Here’s the uncomfortable reality: most privacy teams lack the technology infrastructure to meet these requirements effectively. Privacy management platforms built for GDPR or CCPA compliance weren’t designed with national security export controls in mind.
Traditional privacy tools focus on data subject requests, consent management, privacy assessments, and vendor questionnaires. These are important, but they don’t address the specific requirements of dual-use technology controls. You can’t manage export controls with a consent management platform and a vendor risk spreadsheet.
Organizations need purpose-built technology capabilities for this new compliance regime. Automated data classification that identifies sensitive categories and calculates bulk thresholds across your systems. Real-time data flow mapping that tracks how data moves through your infrastructure and into third-party systems. Vendor intelligence that maintains up-to-date information on vendor ownership, operations, and potential connections to countries of concern.
Access control frameworks that can enforce restrictions based on complex criteria including citizenship, location, employer affiliation, and data sensitivity. Continuous monitoring that alerts compliance teams to potential violations before they become regulatory issues. Audit documentation systems that automatically maintain the records needed for regulatory examination.
The sophistication required exceeds what manual processes or basic tools can provide. Organizations that try to manage dual-use technology compliance manually will find themselves overwhelmed by the complexity, exposed to compliance gaps, and unable to demonstrate adequate controls to regulators.
The Strategic Response: Building Resilient Data Governance
Organizations facing these new requirements have two choices. They can treat export controls as a narrow compliance checklist—identify prohibited transactions, implement minimum required controls, document everything, and hope for the best. Or they can use this regulatory shift as a catalyst for building genuinely resilient data governance.
The strategic approach recognizes that dual-use technology controls are just the latest evolution in data regulation. They won’t be the last. Building infrastructure that can adapt to changing requirements provides long-term value beyond checking compliance boxes.
This means investing in flexible data governance platforms that can accommodate new regulatory frameworks without complete rebuilds. It means establishing data architecture principles that minimize bulk data accumulation and restrict access by default. It means creating vendor management processes that continuously evaluate risk across multiple dimensions, not just privacy or security but also geopolitical considerations.
It means training privacy and legal teams to think beyond traditional privacy frameworks and understand national security implications. It means collaborating with security teams, risk management, procurement, and business leaders to ensure data governance is integrated into operational decision-making.
Most importantly, it means recognizing that technology infrastructure is not an optional nice-to-have for these challenges. It’s the foundation that makes everything else possible. Without robust compliance technology, organizations are trying to navigate export controls with maps and compasses in a world that requires GPS and real-time traffic data.
The Stakes and the Path Forward
The consequences of getting this wrong are significant. Violations can result in civil penalties, criminal prosecution in certain circumstances, reputational damage from public enforcement actions, and operational disruption from having to unwind prohibited transactions. But perhaps more importantly, failure to properly manage bulk sensitive data creates genuine national security risks.
For privacy professionals and in-house counsel reading this, the message should be clear. These regulations are in effect now. The grace period for compliance is limited. The complexity exceeds what your current tools and processes can handle.
Your immediate priorities should be assessing whether you handle bulk sensitive data under the regulatory definitions, identifying any current transactions or access patterns that might be prohibited, evaluating whether your existing security measures meet the new requirements, and determining what technology infrastructure you need to maintain ongoing compliance.
This isn’t about privacy software vendors trying to create fear and sell products as the privacy vendor landscape has done an amazing job automating legal requirements and saving clients expensive fines & time from manually handling. This is about recognizing that the regulatory landscape has fundamentally shifted, and the operational burden now exceeds what manual compliance can manage. Organizations that invest in proper compliance technology now will find themselves ahead of competitors still struggling with spreadsheets and email chains.
The convergence of privacy compliance and national security export controls represents a new maturity in how governments think about data protection. Personal data isn’t just about individual rights anymore; it’s a strategic asset with geopolitical implications. Privacy professionals need to evolve accordingly, and that evolution requires investing in the technological capabilities that make complex compliance operationally manageable.
The question isn’t whether to invest in compliance technology for this new regime. It’s whether you invest proactively or reactively after a compliance failure. Given the stakes, there’s really only one reasonable answer.
