Computers Abroad - Why Can’t Servers Simply Be Relocated Over The Border?

Time and again internationally operating enterprises are endeavouring to find the optimal location for their IT servers. They aim at establishing uniform standards, controlling subsidiaries better or simply saving costs. The server stores technical, commercial, balance sheet and tax relevant data, as well as personal data, i.e. the knowledge and resources of the enterprise. That the transfer of this data entails considerable legal risks, however, is a fact frequently overlooked, despite the threat of serious sanctions.

Under German law, enterprises violating the relevant provisions risk fines of up to EUR 500,000, not to mention forbearance or repatriation claims and damage suits and, for the managers personally, monetary fines or – in extreme cases – prison sentences.