A landmark data access agreement being negotiated between the United States and Australia to aid law enforcement is at risk because of Australian legislation targeting encrypted communications, according to the chairman of a US congressional committee responsible for reviewing the arrangements.

US Attorney-General William Barr and Home Affairs Minister Peter Dutton have kicked off negotiations for a deal to improve access to electronic data held by companies in the other country. The "executive agreement" would be struck under the Clarifying Lawful Overseas Use of Data (CLOUD) Act legislated in Washington last year.

Home Affairs Minister Peter Dutton has started data sharing negotiations with US Attorney-General William Barr. Credit:Alex Ellinghausen

In a statement with Mr Dutton, Mr Barr said the legislation was put in place to allow "close foreign partners who have robust protections for privacy and civil liberties, such as Australia, to enter into executive agreements" with the US.

However, Jerrold Nadler, chairman of the US House of Representatives judiciary committee, has written to Home Affairs Minister Peter Dutton to express concerns about Australia's "Assistance and Access" laws passed by Parliament last year, which give authorities greater powers to obtain the encrypted communications of criminal suspects.