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Australia encryption laws causing customers to avoid Australian tech companies

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Vault Systems, an Australian cloud provider claims that Australian encryption laws have impacted its operations “materially and detrimentally”, even if it is just the perception of the laws that’s causing people to avoid interfacing with Australian tech companies.

Through submission to a review of the laws, Vault Systems said, like other Australian tech companies, that the company is in an unfortunate position wherein logical persuasion is not sufficient to counter the perception. This happens as foreign governments and customers assess against a media headline test. The situation has resulted in an exodus of data from Australia. These include physical, operational, and legal sovereignty.

Additionally, Vault Systems claims that it has seen multinationals blacklist Australia based on the size of the Australian market and its perceived compliance burden. This is true even if the same company has operations in China and Russia.

As a solution, Vault is calling upon the Australian government to create a Data Sovereignty Policy. The said policy will mandate that all sensitive data hosted in the cloud are sovereign and for all staff to undergo Australian clearance vetting if necessary.

“As multinational companies move physical, operational, and legal jurisdiction offshore, they easily side step the AA Act — in effect thwarting the AA Act,” Vault Systems said.

Vault also said that current Australia legislation does not prevent companies from continuing to provide services to Australian citizens, companies or government. These companies continue to earn as they elude the law causing Australian citizens to suffer the consequences.

The Australian Civil Society Coalition also reiterated its calls to repeal the encryption laws. The coalition said that there should be a federal human rights framework that will prevent Australia from becoming the weakest link in the Five Eyes Network. Repealing the law entirely will also protect whistleblowers in relation to the encryption laws. It will also prevent the use of warrants and judicial content for issued notices.

In addition, the coalition also emphasized the loophole that the encryption laws create. This loophole allows law enforcement to bypass a requirement that allows a warrant to track down the source by accessing a journalist’s metadata.

In defense of the encryption laws, Home Affairs Minister Peter Dutton said the following:

“”We have introduced multiple pieces of legislation, including the encryption laws last year which were questioned by some of those opposite on the front bench but which have directly resulted in Australian lives being saved.”

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