TL;DR
European AI and cloud sovereignty standards, such as SecNumCloud, rely on ownership caps like the 24% rule to ensure legal sovereignty. However, these certifications mainly test control and practice, not legal jurisdiction, raising questions about their effectiveness.
European sovereignty standards for AI and cloud services, such as France’s SecNumCloud, rely on a unique ownership cap of 24% to determine legal sovereignty. This development highlights a fundamental limitation: certifications primarily assess control and security practices, not legal jurisdiction or immunity from foreign laws. This distinction is critical for organizations handling sensitive data in regulated European industries, where legal sovereignty is paramount.
SecNumCloud, created by France’s ANSSI, is a government-backed qualification that assesses providers against over 360 criteria, including legal sovereignty measures such as EU data residency, audited key custody, and immunity from non-EU extraterritorial laws. The key feature is the ownership cap of 24%, which restricts control by non-EU entities, aiming to ensure legal sovereignty.
However, certifications like ISO 27001, SOC 2, and BSI C5 focus on operational security controls—access management, encryption, incident response—rather than legal control or jurisdiction. They do not address whether a provider can be compelled by foreign governments, such as through the CLOUD Act or similar legislation.
Despite the rigorous security standards, U.S.-based hyperscalers can obtain European certifications while remaining subject to U.S. law. To circumvent ownership restrictions, U.S. cloud giants have established joint ventures with European control, such as Thales–Google S3NS or Capgemini–Orange Bleu, which meet the 24% ownership threshold but still fall under U.S. jurisdiction.
Implications of the 24% Control Limit for Data Sovereignty
This analysis demonstrates that current European sovereignty certifications primarily test control and operational security, not legal immunity. As a result, organizations relying solely on these badges may overestimate their legal sovereignty, risking exposure to foreign legal processes. The 24% ownership rule, while a clear arithmetic measure, does not guarantee immunity from extraterritorial laws, which remains a significant challenge for European data sovereignty efforts.
European data sovereignty certification
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Limitations of Existing Certifications in Enforcing Sovereignty
European and German certifications such as SecNumCloud and BSI C5 are designed to verify operational security controls and transparency about jurisdiction. SecNumCloud, in particular, emphasizes legal sovereignty through ownership caps and legal domicile requirements, but it does not eliminate the influence of non-EU laws. Many providers, especially U.S.-based hyperscalers, can meet certification criteria by restructuring control via joint ventures or ownership arrangements, without changing their legal jurisdiction or exposure to foreign laws.
This approach reveals a fundamental gap: certifications focus on practice and control, not on the legal protections against foreign legal claims. The 24% rule is a blunt arithmetic measure that does not account for the complex legal landscape surrounding data access and sovereignty.
“The 24% ownership cap in SecNumCloud is a simple, checkable arithmetic that aims to limit foreign control, but it does not guarantee immunity from extraterritorial laws like the CLOUD Act.”
— Thorsten Meyer
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Unresolved Questions About Effective Sovereignty Measures
It is still unclear how effectively the 24% ownership rule prevents foreign legal intervention in practice, especially given the ability of U.S. firms to establish control through joint ventures. The actual legal immunity of providers meeting the ownership cap remains untested in court or operationally proven, raising questions about the real-world strength of these sovereignty standards.
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Future Developments in European Data Sovereignty Certification
Expect ongoing refinement of sovereignty standards, possibly including more explicit legal immunity criteria beyond ownership caps. European regulators may also increase scrutiny of joint ventures and control structures, and legal challenges could test the enforceability of sovereignty claims. The debate over certification effectiveness is likely to intensify as data security and legal sovereignty become more intertwined.
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Key Questions
Does a certification like SecNumCloud guarantee legal immunity from foreign laws?
No, certifications primarily verify operational security and control measures. The 24% ownership rule aims to limit foreign control but does not guarantee immunity from laws like the CLOUD Act.
Why is the 24% ownership cap considered a blunt measure?
Because it is an arithmetic threshold that can be met through restructuring control arrangements, without necessarily changing the provider’s legal jurisdiction or exposure to foreign laws.
Can U.S. cloud providers achieve European sovereignty standards?
Yes, by establishing joint ventures or control arrangements that keep ownership below 24%, U.S. providers can meet the control criteria but still remain subject to U.S. law.
What are the limitations of current European sovereignty certifications?
They mainly assess operational security and control but do not fully address legal immunity from extraterritorial laws, which remains a significant challenge.
What might change in future sovereignty standards?
Standards may evolve to include explicit legal immunity criteria, and regulators could increase scrutiny of control structures to better ensure sovereignty.
Source: ThorstenMeyerAI.com
