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China enshrined such a rule into its laws in 2017, and the European Union (EU) did so the following year. India, Russia, Saudi Arabia, Nigeria, and more have all followed suit.Data localization is sold as a privacy and cybersecurity boon for citizens, and perhaps it is. Companies put our data at risk by exporting it to who knows where, the argument goes, and forcing them to store it locally allows for better oversight. However, such laws have as much or more to do with power and economic development. Data is valuable, and by hoarding it, countries can stimulate their own economies instead of feeding others.A problem begins to arise, though, when companies operate in multiple countries — as they're wont to do — and each country has its own lucrative nationalist law enforced. In an upcoming talk at Black Hat Middle East and Africa in Riyadh, Ismail Ahmed, CEO and founder of Yalla Hack, will discuss how such laws engender not only compliance gaps, but also cyber ones.Related:Kenya Kicks Off 'Code Nation' With a Nod to CybersecurityCase Study: Saudi-Chinese Tech PartnershipsAs his case study, Ahmed will focus on the increasingly common case of companies crossing China and Saudi Arabia. The two countries have been growing closer than ever, economically and technologically, for a variety of reasons: China's Belt and Road Initiative, Saudi's chilled relations with the United States, power politics around the artificial intelligence (AI) bubble, their mirrored national modernization projects, etc."In the last, let's say, five years, there has been a huge investment of money by Chinese investors wanting to enter the Saudi Arabian and United Arab Emirates (UAE) markets, for example, when it comes to smart cities, when it comes to AI, when it comes to cloud computing, 5G technologies," explains Ahmed, a Saudi-born university student in China. Most visibly, major Chinese tech companies like Huawei and Alibaba have moved into the House of Saud, but he reports that more than 400 Chinese companies today play an important role in the Saudi economy. Also, Ahmed adds, "Saudi Arabia is not just importing, but they're working at the same time to co-create technologies in China."Upsides aside, the job of complying with both countries' strict data laws can be a headache, and introduce all kinds of unnecessary cyber-risks.Related:China Imposes One-Hour Reporting Rule for Major Cyber IncidentsConsider Alibaba, which entered the Saudi market in the form of the Saudi Cloud Computing Company (SCCC). Today, Ahmed points out, "they have two different platforms. If you open their website right now, they will give you a website for international users or the website for Chinese locals. They have separated [their systems] in order to comply with every country's needs, requirements, and regulations." It's not just logistically difficult to create and maintain parallel, distinct IT systems like this, Ahmed says. It's a recipe for cyber-risk.How Compliance Conflicts Create Cyber OnesIn a document shared with Dark Reading, Ahmed argued that tension between national data laws "can inadvertently (or intentionally) create vulnerabilities such as unmonitored data flows, lack of local audit rights, or reliance on third-party maintenance channels that act as de facto backdoors" thanks to legally ambiguous, conflicting, or unnecessarily complicated contractual arrangements and operational practices.Of course, different sets of IT systems require more systems and more personnel to protect them, and their distance stunts an organization's ability to perform centralized cybersecurity oversight or incident response. But more subtly, nationalist laws can also complicate a company's ability to establish clear lines of responsibility, procedures, and policies across teams and systems.Related:Prep is Underway, But 2026 FIFA World Cup Poses Significant Cyber ChallengesFor instance, awkward situations can arise when a company in one country has to rely on a company in the other to store their data, manage it in some way, or otherwise help it comply with local laws. Depending on the nature of those contracts, and the laws that govern them, the company entering that new territory may lack full and complete rights to audit and secure their own data.And while some sorts of data have to remain in one country or another, plenty of other data will still have to travel. Otherwise unnecessary third-party vendors and solutions might be required to help these data flows avoid running afoul of local requirements, in turn creating the need for even more systems to monitor, log, and secure that data in transit.In authoritarian countries, companies may need to partner with certain government-approved vendors. Those vendors might enjoy privileged access to sensitive systems without 100% of the concomitant security responsibilities a company might otherwise impose on chosen vendors.In this day and age, Ahmed says, international organizations need a road map to manage conflicting sets of national data laws. "Traditional perimeter security is insufficient. Organizations must adopt dual-jurisdiction assurance strategies that proactively audit for compliance conflicts, enforce data flow transparency, and build resilience against systemic risks arising from geopolitical and regulatory misalignment," he says. He calls his particular solution, set to be unveiled at Black Hat, a "dual-jurisdiction assurance and compliance" (DJAC) model."The real threat isn't just code," he emphasizes, "it's a backdoor in the contract."Read more about:DR Global Middle East & AfricaBlack Hat NewsAbout the AuthorNate Nelson, Contributing WriterNate Nelson is a writer based in New York City. He formerly worked as a reporter at Threatpost, and wrote "Malicious Life," an award-winning Top 20 tech podcast on Apple and Spotify. 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National data localization laws are increasingly creating significant cybersecurity risks for large organizations operating internationally. As highlighted by Ismail Ahmed, CEO and founder of Yalla Hack, these laws, enacted by countries like China, the EU, India, Russia, Saudi Arabia, and Nigeria, aren’t solely about data privacy and security; they often serve economic and geopolitical objectives. The core issue is the fragmentation of systems due to conflicting national regulations, leading to vulnerabilities that attackers can exploit.

When companies operate across jurisdictions with differing data localization requirements, they often find themselves managing parallel IT systems to comply. This is exemplified by Alibaba’s operations in Saudi Arabia, where the company established distinct platforms tailored to local regulations. However, maintaining such diverse infrastructures inherently increases complexity, introduces operational inefficiencies, and, crucially, creates cyber-security gaps. Ahmed argues that these gaps can manifest as unmonitored data flows, a lack of local audit rights, or reliance on third-party maintenance channels that act as potential backdoors.

The heightened complexity introduced by these divergent regulations can also complicate an organization’s ability to establish clear lines of responsibility and effective cybersecurity protocols. Standardized approaches to monitoring, logging, and securing data become more difficult when operating under different legal frameworks. The reliance on third-party vendors, often necessitated by these regulations, introduces another layer of risk, potentially granting privileged access without the associated security responsibilities.

Ahmed’s “dual-jurisdiction assurance and compliance” (DJAC) model underscores the need for a proactive, rather than reactive, strategy. This model emphasizes continuous auditing for compliance conflicts, the transparency of data flow, and the construction of resilience against systemic risks arising from geopolitical and regulatory misalignment. This approach moves beyond traditional perimeter security, recognizing that the primary threat is not simply code, but rather a vulnerability created by contractual ambiguities.

The situation is particularly pronounced in countries with authoritarian governments, where companies might be compelled to partner with government-approved vendors, potentially compromising security controls. Ultimately, Ahmed stresses the need for international organizations to adopt a strategic roadmap for managing conflicting national data laws and moving beyond traditional security measures.