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Apart from legal stuff though, there are things to consider like:<br />
<br />
-company or stakeholder embarassment<br />
-loss of sensitive info or trade secrets<br />
-loss of data could mean having to recreate the work, which has a cost of its own<br />
<br />
All but the third one would be protected with encrypted keys. &nbsp;I know they government does this with their removable media. &nbsp;Its a risk they are willing to take. &nbsp;USB drives are very convenient. <br />
<br />
If ONLY company owned and encrypted keys are allowed, IMO it is acceptable risk.<br />
<br />
Check out Iron Key
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Apart from legal stuff though, there are things to consider like:

-company or stakeholder embarassment
-loss of sensitive info or trade secrets
-loss of data could mean having to recreate the work, which has a cost of its own

All but the third one would be protected with encrypted keys.  I know they government does this with their removable media.  Its a risk they are willing to take.  USB drives are very convenient.

If ONLY company owned and encrypted keys are allowed, IMO it is acceptable risk.

Check out Iron Key

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I am in the unenviable position of having to remove USM Flash Memory support on our domain, but (as usual) those that think they are important enough demand the right to continue using USB Keys.<br />
<br />
Can anyone tell me the implications of doing this if they were to lose company or personal data.<br />
<br />
We are considering having serial numbered totally encrypted keys but there is always a risk I assume.
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I am in the unenviable position of having to remove USM Flash Memory support on our domain, but (as usual) those that think they are important enough demand the right to continue using USB Keys.

Can anyone tell me the implications of doing this if they were to lose company or personal data.

We are considering having serial numbered totally encrypted keys but there is always a risk I assume.

USB Key Data Loss Consequences

A vulnerability is a weakness which allows an attacker to reduce a system's information assurance. Vulnerability is the intersection of three elements: a system susceptibility or flaw, attacker access to the flaw, and attacker capability to exploit the flaw. To exploit a vulnerability, an attacker must have at least one applicable tool or technique that can connect to a system weakness, known as the attack surface. Vulnerability management is the cyclical practice of identifying, classifying, remediating, and mitigating vulnerabilities. Other vulnerabilities include security risks, security defects and constructs in programming languages that are difficult to use properly.

Vulnerabilities

Quality assurance (QA) is a way of preventing mistakes or defects in products and systems, and avoiding problems when delivering solutions or services to customers. QA is applied to software to verify that features and functionality meet business objectives, and that code is relatively bug free prior to shipping or releasing new software products and versions. Quality assurance comprises administrative and procedural activities implemented in a quality system so that requirements and goals for a product, service or activity will be fulfilled. Two principles included in quality assurance are: "Fit for purpose" (the product should be suitable for the intended purpose); and "right first time" (mistakes should be eliminated).