The Framework

South Korea’s Cloud Security Assurance Program (CSAP), governed by the Korea Internet and Security Agency (KISA), imposes a series of regulatory conditions that effectively limit foreign cloud service providers’ access to the public sector cloud market.^[1] As of the January 2023 update, even the “low-tier” certification now requires that cloud operations and management personnel be physically located within Korea.^[2] Additionally, data—including customer and technical data, backup systems, and administrative functions—must be stored and processed locally.^[3] This creates significant compliance burdens for foreign firms and diverges from global cloud architectures that rely on distributed and cross-border data management. Furthermore, CSAP mandates the use of Korea-specific encryption standards and discourages logical (software-based) network separation for moderate-tier workloads, instead favoring physical separation even when it is not technically necessary.^[4] Although recent reforms opened a path to alternative certifications, ambiguity remains about their suitability for modern cloud environments.^[5]

Implications for U.S. Technology Leadership

Korea’s CSAP regime imposes some of the most restrictive public sector cloud requirements among developed economies, effectively barring U.S. cloud providers from competing in a strategically important digital market. By mandating the physical separation of infrastructure, the exclusive use of Korean encryption standards, and full domestic data residency, Korea has engineered a procurement system where only domestic firms can qualify, despite international norms favoring technical (logical) separation and the mutual recognition of standards, such as the Common Criteria.[6]

These barriers not only undermine U.S. firms’ market access but also restrict Korean public institutions from accessing globally leading cloud, cybersecurity, and AI capabilities. U.S. providers, who typically operate on multi-tenant architectures and leverage global-scale innovation, are excluded from serving even low-tier public workloads. As Korea considers extending CSAP-like rules to healthcare and education, this creates a ripple effect that could entrench a protectionist cloud ecosystem across critical sectors. The result is a fragmentation of the digital economy that sidelines U.S. leadership and weakens prospects for trusted transnational cloud infrastructure.

Endnotes