I don't know any country that outlaws modchips, but I do know that every Electronic Boutique will tell you they are illegal! They *WILL* however void any warrenty you have.
I remember when I went to a mall, and asked at an electronic boutique if they could install a modchip in my Playstation 1 (not PS1), they told me no, because it is illegal. So I went to the second floor almost right ontop of the E.B. store, and asked again at a place called Dreambase (mainly revolving around the Dreamcast). $50.00 (canadian) later and approx 24 hours and my Playstation was happily modded, and now I can play my japanese imports
(This was about 3 years ago)