The Framework

In August 2024, Brazil’s National Data Protection Authority (ANPD) issued Resolution CD/ANPD No. 19/2024, formalizing mechanisms for cross-border data transfers under the General Data Protection Law (LGPD).[1] The resolution permits transfers only under specific legal bases, such as adequacy decisions, standard contractual clauses (SCCs), binding corporate rules (BCRs), or case-by-case contractual approval.[2] However, Brazil has not recognized any country, including the United States, as providing “adequate” protection, and SCCs must now follow a strict format approved by ANPD. ^[3] Companies have until August 2025 to bring their data transfer practices into compliance, creating a regulatory gap that leaves many global firms, particularly those based in the United States, operating in a state of legal uncertainty.

Implications for U.S. Technology Leadership

For U.S. tech firms, Brazil’s fragmented approach to data governance presents significant operational challenges. In the absence of a formal adequacy agreement or robust legal transfer mechanisms, U.S. companies must individually negotiate compliance pathways, which raises legal costs and slows innovation. This restricts the ability to deliver region-wide data-driven services, especially those requiring real-time analytics or integrated Latin American platforms. The lack of interoperability between the United States and Brazilian systems could also lead to data localization pressures, forcing companies to build expensive in-country data centers or risk market exclusion.

China and regional competitors are poised to benefit. Brazilian regulators have signaled alignment with European-style data sovereignty frameworks, creating regulatory affinity with jurisdictions like the EU and China, both of which already engage heavily in bilateral data cooperation agreements. Chinese firms that have adapted to similar constraints in other markets may find Brazil more navigable than U.S. companies committed to open data flows. Unless the United States and Brazil move toward a clear data transfer framework, American firms risk being edged out of Latin America’s fastest-growing digital economy.

Endnotes