Can our data stay in Australia? AWS, APRA and your spec

“Can our data stay in Australia?” comes up in almost every AWS conversation we have with an Australian organisation. On AWS the short answer is yes. The useful answer is which parts, under which rules, and how you write it down so someone can check it. Below: what stays, what still leaves, what APRA and the Privacy Act ask for, and wording for your spec. It reflects the rules as at November 2026 and is not legal advice.

Can our data stay in Australia on AWS?

Yes. AWS runs two Australian Regions, Sydney (ap-southeast-2) and Melbourne (ap-southeast-4), and commits not to move your content out of the Regions you choose without your agreement. The catch is the word content. Account details, some service configuration and anything sent through a global service can still leave.

Each Region has three Availability Zones. Sydney is switched on by default. Melbourne opened in January 2023 and is opt-in, so someone has to enable it in your AWS account before you can use it. AWS’s data privacy FAQ separates customer content, which stays where you put it, from account information such as billing and contact details, which doesn’t.

Residency, sovereignty and what the law actually requires

Residency is where data sits. Sovereignty is whose laws can reach it. For most Australian organisations, no law says personal information must stay onshore. The firm onshore rules are narrower: My Health Record data, some government information, and whatever your regulator or contracts demand.

• The Privacy Act makes you accountable, not onshore. Under APP 8 you must take reasonable steps before disclosing personal information overseas, and section 16C keeps you accountable for what the overseas recipient does with it. Keeping it in Australia avoids the question.

• A new obligation starts on 10 December 2026. Privacy policies must describe automated decisions that use personal information and could affect people’s rights or interests. That matters if AI shapes decisions in your platform.

• Sovereignty is a separate argument. Whether a US-owned cloud is reachable by US law is a legal judgement for your organisation. Residency settings don’t settle it.

The law mostly asks you to be accountable. “Must stay in Australia” usually comes from a regulator or a contract.

What APRA expects from cloud in 2026

APRA’s standards don’t require data to stay in Australia. They require you to know which providers your critical operations rely on, contract them properly, test their controls and tell APRA before you offshore anything material. Since 1 July 2026 the amended CPS 230 applies, and APRA’s 2018 cloud information paper no longer does.

CPS 230 is the cloud rule now

CPS 230 Operational Risk Management came into force on 1 July 2025, replacing CPS 231 Outsourcing and CPS 232 Business Continuity Management. In February 2025 APRA rescinded its 2018 paper on cloud outsourcing and said it expects entities to apply CPS 230 when they use cloud. If your RFP or risk template still cites the 2018 paper or CPS 231, update it.

What CPS 230 asks of a cloud arrangement

A material service provider is one you rely on for a critical operation, or one that exposes you to material operational risk. APRA treats core technology services as material unless you can justify otherwise. A material arrangement needs a legally binding agreement that, among other things, gives APRA access to documentation, data and information about the service, requires the provider to tell you about its own material service providers, and lets you end all or part of the arrangement.

You must notify APRA within 20 business days of entering or materially changing an agreement for a critical operation, and before you enter any material offshoring arrangement. A disruption to a critical operation beyond your tolerance must be reported within 24 hours.

What changed on 1 July 2026

Amended versions of CPS 230 and its guide, CPG 230, released in April 2026, took effect on 1 July 2026. They add limited exemptions from some contractual requirements for certain categories of provider, so check the standard’s attachment before assuming any apply to you. APRA gave pre-existing contracts until their next renewal or 1 July 2026, whichever came first, so every material arrangement should now meet the standard.

CPS 234 still applies alongside it

CPS 234 Information Security has applied since 2019 and covers information assets that third parties manage for you, including cloud and software suppliers. You must assess their security capability and make sure their controls are tested. Material information security incidents go to APRA within 72 hours, and material control weaknesses you can’t fix in time within 10 business days. AWS publishes a guide mapping APRA’s standards to AWS, written before the 2026 amendments; CPG 235 on data risk is still current too.

APRA cares less about where the data sits than whether you can show who runs it, how you’d know it failed and how you’d get out.

What leaves the Region even when you choose Sydney or Melbourne

Your content can stay put while some things about it travel. Five places to check:

• Global services. IAM, AWS Organizations, Route 53 and CloudFront are managed from US East. Keep personal information out of resource names, tags, DNS records and role names.

• Edge caching. CloudFront caches content at edge locations worldwide. Decide which responses may be cached, and keep personalised or signed-in pages out of the edge cache unless that has been signed off.

• Single-Region services. Some services run in one Region only. AWS HealthScribe, for example, is US East only. Check every service on the architecture diagram, not just the big ones.

• Your own configuration. Replication and backups go only where you send them. Enforce that with a service control policy that denies every Region except the Australian ones.

• Tools around the platform. Monitoring, error tracking, email, analytics and support desk tools often store data overseas by default. Check each one.

The AWS part is usually the easy part. The tools bolted on around it are where data quietly leaves.

Does AI on AWS keep prompts in Australia?

It can, if you choose the right inference profile. Claude models on Amazon Bedrock are reached from Sydney or Melbourne through Australian (au.) profiles that route requests only between those two Regions. Global profiles cost about 10% less but can process requests in any commercial AWS Region. The difference is one line of configuration.

Bedrock offers in-Region, geographic cross-Region (such as au.) and global inference. As at November 2026, current Claude models such as Claude Sonnet 5 have au. profiles but aren’t offered in-Region in Sydney or Melbourne on Bedrock’s standard endpoint, so au. is how you keep Claude onshore.

AWS’s own advice is not to rely on the prefix alone. GetInferenceProfile shows where a profile can route, CloudTrail records the Region that served each request, and a service control policy can block global profiles. Our open-source AI agent starter kit for AWS uses the au. profile by default when it is deployed in Sydney or Melbourne, and its automated tests reject a global profile in its evaluation settings.

For AI, residency comes down to a model ID, so put the model ID in the spec.

Government and health: IRAP, My Health Record, Ahpra and state laws

Government work usually asks for services assessed under IRAP and a provider certified under the Hosting Certification Framework. Systems that hold My Health Record data must not hold or process those records outside Australia at all.

AWS’s IRAP assessment is at PROTECTED level and covers the Sydney and Melbourne Regions. It covers AWS’s side only, service by service: your system still needs its own assessment. Under section 77 of the My Health Records Act 2012, registered operators and their contracted service providers must not hold, process or handle My Health Record information outside Australia. Other health information is sensitive information under the Privacy Act.

For health practitioners using AI, Ahpra puts the question on the clinician. Its guidance on AI in healthcare asks practitioners to understand where data is located and how it is stored, and whether patient data is used to train the model. Its case studies warn that generative AI tools may store data outside Australia and lead to unintentional breaches of privacy law. On Amazon Bedrock, an Australian inference profile keeps processing in Sydney and Melbourne, and AWS says model providers have no access to customer prompts and completions.

State health records laws add their own transfer rules. Victoria’s Health Records Act (HPP 9) and NSW’s Health Records and Information Privacy Act (HPP 14) let health information go outside the state only on set grounds, such as the recipient being bound by substantially similar privacy rules or the person consenting. NSW Health’s own guidance says that test is generally met within Australia, so in practice these rules bite on transfers overseas.

An assessed platform is not an assessed system. The buyer still owns the second half.

What to write in the spec

Write residency as requirements someone can test, not as a promise. A partner should be able to show each one.

• Regions. “All customer content, including backups, logs and replicas, is stored and processed only in ap-southeast-2 and/or ap-southeast-4.” Ask for a data-flow diagram and the Region-deny policy.

• Global services. “The only global services used are IAM, Route 53 and CloudFront. No personal information appears in resource names, tags, DNS records or identity metadata.” Ask for the service list and the tagging policy.

• AI inference. “Generative AI requests use in-Region or Australian (au.) inference profiles only. Global profiles are not permitted.” Ask for the configured model IDs and a sample of CloudTrail records.

• Third parties. “The supplier lists every third-party service that stores or processes our data, with its storage location, before go-live and whenever it changes.” Ask for the register.

• People. “Production access from outside Australia needs our written approval, and all access is logged.”

• APRA, if you’re regulated. “The agreement gives us and APRA access to documentation, data and information about the service, requires notice of material subcontractors, allows termination of all or part of the service, and commits the supplier to timeframes that let us meet our CPS 230 and CPS 234 notifications.” Ask for the contract schedule.

• Exit. “On termination, data is returned in an agreed open format within 30 days and deleted from all Regions, with written confirmation.” Ask for the exit plan before go-live.

If a requirement can’t be shown in a policy, a config file or a log, it isn’t a requirement yet. That is the point of writing it into the spec at the start: in spec-driven development, the spec is what the build is tested against.

How Honest Fox handles residency

We put data flows and residency into the spec at the start of a project, alongside users and outcomes, so they are designed in rather than retrofitted. We build in both Australian Regions, including Melbourne. PeopleSense, the online employee assistance platform we built with Altius, connects people to mental health and wellbeing support and has strict residency requirements.

Product, design and engineering sit in one team, so choices that usually break residency, such as which analytics, chat or AI tools to add, are made with it in view. Moving an existing platform? Residency belongs in the migration assessment. More on how we work on AWS.

Common questions

Does APRA allow cloud services hosted offshore?

Yes, under CPS 230. An APRA-regulated entity must treat core technology services as material unless it can justify otherwise, put a compliant agreement in place, and notify APRA before it enters a material offshoring arrangement.

What is the difference between CPS 230 and CPS 234?

CPS 230 covers operational risk, critical operations and the service providers they rely on, including how those arrangements are contracted and monitored. CPS 234 covers information security, including the security of information assets that third parties manage for you.

Can health practitioners use AI tools that store data overseas?

Ahpra doesn’t ban it, but the practitioner stays responsible. Its AI guidance asks them to know where patient data is stored and whether it trains the model, and to get informed consent. Overseas storage also engages APP 8 and state health records laws, so an onshore option is the simpler answer.

Is Claude on Amazon Bedrock available in Australia?

Yes. As at November 2026, current Claude models are available from Sydney and Melbourne through Australian (au.) inference profiles, which process requests only in those two Regions. Global profiles are also available but can process requests in any commercial AWS Region.