Sinn Féin's voter database, which is compiled from canvassing, is stored in Frankfurt in Germany, the party's president Mary Lou McDonald has said.
The system, known as Abú, was previously held on a server in London before Brexit.
Ms McDonald told Newstalk it had to change its location and is "legally stored" in the European Union.
The UK's data protection watchdog has confirmed it is looking into the matter.
The Information Commissioner's Office said: "We are aware of reports regarding a database operated by Sinn Féin and we will be making enquiries.
"Advice on the use of personal information by political parties, including the use of profiling techniques, is available on our website."
Last week, Ireland's data protection commission asked for more details about Abú.
The commission wanted information about how the party used the social media network Facebook to target voters on the electoral register and whether it was compliant with data protection laws.
The Sunday Independent had reported that people attending an internal party seminar were advised to engage with potential voters by cross-referencing data from Facebook with Abú.
On Thursday, the Sinn Féin leader said the party had responded to the commission's questions and suggested there had been efforts to "hype" up a particular spin on the story in the media.
She said there was "nothing nefarious" in the party's decision to store the database in Germany and that the electoral register was a "very public document" open to all politicians.
Asked why the information could not be stored in Ireland, Ms McDonald said that such a query was a "technical question", adding that it "doesn't really matter which jurisdiction it is held in, as long as it's held in the European Union".
"Every political party, every political candidate uses the electoral register to know who is registered to vote and then to come and canvass your vote and then to establish, in their judgement, the likelihood or otherwise of you voting for them," Mrs McDonald explained.
She added that Abú was a computer system for data which was previously recorded by "pen and paper".