European Commission Adopts EU-US Privacy Shield to Protect Transatlantic Data Flows

privacy

The European Commission announced July 12 that it has adopted the EU-U.S. Privacy Shield, a new framework to protect the fundamental rights of anyone in the EU whose personal data is transferred to the U.S.

In addition, the framework will also bring legal clarity for businesses relying on transatlantic data transfers. The European Commission and the U.S. Government reached a political agreement on a new framework for transatlantic exchanges of personal data for commercial purposes in February, and the European Commission finalized the adoption procedure today.

The EU-U.S. Privacy Shield is based on the following principles:

  • Strong obligations on companies handling data: under the new arrangement, the U.S. Department of Commerce will conduct regular updates and reviews of participating companies, to ensure that companies follow the rules they submitted themselves to. If companies do not comply in practice they face sanctions and removal from the list. The tightening of conditions for the onward transfers of data to third parties will guarantee the same level of protection in case of a transfer from a Privacy Shield company.
  • Clear safeguards and transparency obligations on U.S. government access: The US has given the EU assurance that the access of public authorities for law enforcement and national security is subject to clear limitations, safeguards and oversight mechanisms. Everyone in the EU will, also for the first time, benefit from redress mechanisms in this area. The U.S. has ruled out indiscriminate mass surveillance on personal data transferred to the US under the EU-U.S. Privacy Shield arrangement. The Office of the Director of National Intelligence further clarified that bulk collection of data could only be used under specific preconditions and needs to be as targeted and focused as possible. It details the safeguards in place for the use of data under such exceptional circumstances. The U.S. Secretary of State has established a redress possibility in the area of national intelligence for Europeans through an Ombudsperson mechanism within the Department of State.
  • Effective protection of individual rights: Any citizen who considers that their data has been misused under the Privacy Shield scheme will benefit from several accessible and affordable dispute resolution mechanisms. Ideally, the complaint will be resolved by the company itself; or free of charge Alternative Dispute resolution (ADR) solutions will be offered. Individuals can also go to their national Data Protection Authorities, who will work with the Federal Trade Commission to ensure that complaints by EU citizens are investigated and resolved. If a case is not resolved by any of the other means, as a last resort there will be an arbitration mechanism. Redress possibility in the area of national security for EU citizens’ will be handled by an Ombudsperson independent from the US intelligence services.
  • Annual joint review mechanism: the mechanism will monitor the functioning of the Privacy Shield, including the commitments and assurance as regards access to data for law enforcement and national security purposes. The European Commission and the U.S. Department of Commerce will conduct the review and associate national intelligence experts from the U.S. and European Data Protection Authorities. The Commission will draw on all other sources of information available and will issue a public report to the European Parliament and the Council.

Since presenting the draft Privacy Shield in February, the Commission says it has drawn on the opinions of the European data protection authorities and the European Data Protection Supervisor, and the resolution of the European Parliament to include a number of additional clarifications and improvements.

The European Commission and the U.S. notably agreed on additional clarifications on bulk collection of data, strengthening the Ombudsperson mechanism, and more explicit obligations on companies as regards limits on retention and onward transfers, the Commission said.

The EU-U.S. Privacy Shield is based on the requirements set out by the European Court of Justice in its ruling on 6 October 2015, which declared the old Safe Harbour framework invalid, said the Commission.