Why aren't foreign VPN companies forced to keep logs?

Question

This link explains the inconsistency with what VPN services consider 'logging'. Certainly, there is no way for us to verify their claims without an extremely rigorous independent audit. But even that can be sabotaged.

Regardless though, many VPN service providers vehemently claim that they do not keep logs. An example is NordVPN, which is based in Panama and so there is no domestic legislation that forces it to keep logs:

NordVPN Privacy Policy:

"Our top priority is customer data security. Operating under the jurisdiction of Panama allows us to guarantee our no logs policy, which means that your activities while using the privacy solutions created by NordVPN.com are not monitored, recorded, logged, stored or passed to any third party."

What I do not understand is companies like NordVPN have hundreds of servers around the world, most of which are not in the country that they are originally based in. Surely, no-logging is impossible for most of their servers? Or are companies compelled to log depending on where they are based? So US legislation would not apply to a VPN server in the US which is run by a company based in Hong Kong - but this doesn't make sense - wouldn't US legislation apply to them regardless of where they are based?

This link says, again, that one of the pros of VPN servers being based in Hong Kong is that companies are not compelled to keep logs (I assume this is in contrast with servers in the US and other countries):

"There are no mandatory data retention laws in Hong Kong. Most Hong Kong-based providers offer a “no logs” service, and international companies are not required to keep logs relating to their Hong Kong servers (although some companies, notably US based ones, choose to do so)."

Surely legislation does not discriminate based on where a company is based? Eg. all companies that operate in the UK are forced to abide by the Data Protection Act (DPA). Whether or not they are based in the UK does not matter. As long as the data that that company possesses remains in the UK, it has to be treated in compliance with UK law.

Also, why would US companies with servers in Hong Kong willingly keep logs if the law is not forcing them to? Sounds like a great marketing tool if they were able to claim they intentionally choose not to log.

My assumption here is that any legislation regarding mass surveillance of private citizens is followed by companies the same as legislation regarding anything else (DPA, legislation about the treatment of employees, etc.). Chinese companies with offices in the UK cannot treat their employees according to Chinese law, so why does are they allowed to treat legislation pertaining to internet traffic differently?

As for who would do the forcing, the local governments. Eg. the US government, that passes mass-surveillance legislation. If the US government argues they need logs to keep track of the movements of criminals and especially terrorists, wouldn't a company saying "we do not keep logs by choice" be condemned as impeding government counter-terrorism efforts? If the law requires all VPN servers in the US to keep logs, wouldn't a company not keeping logs be in violation of the law and hence 'criminal'?

If it's a legal loophole, it sounds like a dumb loophole if politicians are trying to claim they need logs to track down criminals (including terrorists), while allowing VPN providers to not keep logs.

Answer 1

This is tied up in the concept of sovereignty - nation states have control over their territories and citizens and they recognise the right of other nation states to do likewise.

The USA, China (Hong Kong) and Panama are all sovereign states, they each decide what the law is within their own territory and they can’t tell each other what to do; they can ask, however, that’s what diplomats do.

If a HK domiciled company provides HK based servers then they have to comply with HK law irrespective of where their customers are located. The USA could pass a law requiring US companies (like ISPs) to keep logs of traffic to and from HK servers but they cannot force a HK company to do anything, unless and until it operates in a place where the US has jurisdiction which means both the right and the ability to enforce their law.

Answer 2

It all depends where the company is physically located or has physical offices. Having servers in the USA doesn't mean that a Panamanian VPN company keeps its records in the USA. On the contrary, it keeps its logs in Panama, if it keeps any logs at all. By "logs" I am referring to records of potentially personally identifiable info. I believe NordVPN acknowledges 24 hour records of IP addresses, then they are destroyed - they supposedly have no value to the VPN after they are analyzed for misuse.