Estonia may ban Swedbank to move its servers to Stockholm
21.02.2012, 14:21Minister of the interior Ken-Marti Vaher is demanding legal amendments to make sure that providers of critically important services such as banking and telecom services cannot move their servers abroad.
The ministry has already drafted amendments to the Emergency Act that would make it more difficult for banks to move IT infrastructure administration operations completely off Estonian soil.
The move is targeted against largely Swedish-owned banks centralizing operations in their home country, including Swedbank that was planning to move its banking data operations to its native Sweden by 2015.
According to the ministry, the amendment is necessary to ensure that banks, for instance, ensure provision of critical services, such as cash circulation and functioning of domestic payments.
„If information systems that are used to provide critically important services such as card payments are physically located abroad, there could be major problems in ensuring their operability, in case of a breakdown of electronic communication network that links Estonia with a foreign country. If critical IT systems and their service teams are hundreds of kilometres from Estonia or depend directly on the functioning of international electronic communication, it may take hours and not days in restoration of the service,” says the bill.
The government considers the banks - which in Estonia can even issue PIN codes for electronic use of the primary national identity document - a vital public utility.
Ministry undersecretary Erkki Koort has said that the state needs the leverage to keep banks from repatriating the parts of their servers that ensure that money is available from ATMs and bank branches.
Koort has said the Estonia is an anomaly in the European sense, almost completely lacking domestically owned banks. "If we had our own banks, we would not be discussing this at all," Koort said.
According to statistics, about half a million card payments are made in Estonia every day and it accounts for 62 percent of all national payments in Estonia.
With regard to the bill, bank representatives have expressed concern that overly strict requirements regarding geographic location of servers will hurt competitiveness.