United States: EU And US Beat The Clock With Their Announcement Of The "Privacy Shield" A/K/A Safe Harbor 2.0

Last Updated: February 4 2016
Article by Philip L. Gordon

In a long-awaited and much-anticipated announcement, the U.S. Department of Commerce and the European Commission (the "Commission") declared on February 2, 2016, that they had struck a deal on a new cross-border data transfer framework.  The new framework will replace the U.S.-European Union ("EU") Safe Harbor Framework, invalidated by the European Court of Justice ("ECJ") on October 6, 2015.  As the details of the new framework remain sketchy, the implications for U.S. multinational employers remain unclear.  Nonetheless, U.S. multinational employers should consider the recommendations described below while awaiting more details.


Shortly after the ECJ issued its landmark decision invalidating the Safe Harbor, the group of European data protection regulators from each of the 28 Member States, known as the Article 29 Working Party (the "Working Party"), issued a veiled ultimatum.  If the Commerce Department and the Commission did not reach agreement on a replacement framework by January 31, 2016, the Working Party would consider enforcement actions against those U.S. organizations that had certified to the Safe Harbor but did not implement an alternative data transfer mechanism before that date.  In mid-January, the Working Party sent a message to negotiators by scheduling a meeting for February 2, 2016. 

During the period of extreme uncertainty between the ECJ's decision on October 6, 2015, and January 31, 2016, many U.S. multinational employers that are certified to the Safe Harbor scrambled to implement the one mechanism for lawful data transfers that could be implemented in such a short time period.  This mechanism is a form data transfer agreement previously approved by the Commission, known as the "standard contractual clauses" (the "Clauses").  Other U.S. multinational employers took a wait-and-see approach.

The January 31, 2016, quasi-deadline came and went, elevating stress levels for those responsible for data protection compliance.  Then, on February 2, 2016, before the Working Party could call for mass enforcement actions, the Commission and Commerce Department announced their deal.  The Working Party has not yet reacted publicly to the new framework, but it likely will soon release a public statement.

The Outlines of the New Framework

While U.S. multinational employers generally greeted the announcement with cheers and a sigh of relief, the Commission and Commerce Department have revealed only the following outline of the new framework:

  1. The new frame work is called the "Privacy Shield."
  2. U.S. companies certifying to the Privacy Shield "need to commit to robust obligations on how personal data is processed and individual rights are guaranteed."
  3. The Commerce Department will monitor that certifying companies publish their privacy commitments, and the Federal Trade Commission will enforce them.
  4. Certifying companies must attempt to resolve complaints from EU citizens within a specified time period.  EU citizens can submit unresolved complaints to EU data protection authorities and, if necessary, can demand binding arbitration at no cost to them.
  5. Certifying companies that rely on the Privacy Shield to transfer human resources data must agree to comply with decisions issued by European data protection authorities (DPAs).
  6. The U.S. provided written assurances that access to E.U. personal data by U.S. intelligence and law enforcement agencies will be tightly controlled and will be subject to annual joint review.
  7. An ombudsman will resolve complaints from EU citizens concerning alleged violations of their rights by U.S. intelligence and law enforcement agencies.

Recommendations for U.S. Multinational Employers

U.S. multinational employers should be cautiously optimistic.  Notwithstanding the new name, the Privacy Shield looks very similar to the Safe Harbor insofar as the transfer of EU employees' personal data within a corporate group is concerned.  That said, U.S. multinational employers should consider taking the following steps:

  1. Watch for Developments from the Commission:  While its rough framework is similar to the Safe Harbor, the Privacy Shield, in its details, may impose significantly greater compliance burdens or trigger materially increased enforcement risk.  Understanding the details of the Privacy Shield will be critical to assessing an organization's best course of action for lawfully transferring EU employees' personal data to the U.S.  The Commission likely will publish more details in the near future.
  2. Watch for Developments from the Working Party and European (local) Data Protection Authorities:  The Working Party could throw a wrench in the deal by declaring its view that the Privacy Shield does not adequately protect EU personal data and/or will issue guidelines how certain terms have to be interpreted.  Even if the Working Party embraces the outline of the Privacy Shield, it could set another deadline after which enforcement will commence to spur finalization of the Privacy Shield and will likely give the Privacy Shield a dynamic element by continuously issuing decisions as to the interpretation of certain terms. Also, European (local) DPAs may add their interpretations as well. US multinational employers will have to monitor compliance with the decisions of the European DPAs and adapt their data protection approach on a continuing basis.
  3. Continue to Comply with the Safe Harbor:  Employers who certified to the Safe Harbor have an ongoing obligation to handle EU employees' personal data in accordance with the Safe Harbor or more stringent privacy principles — even after the Safe Harbor is formally replaced.  In addition, the Privacy Shield likely will rely — at least initially — on the "old" Safe Harbor platform.  Relatedly, the Commerce Department likely will provide a simplified mechanism — again, at least initially — for organizations on the Safe Harbor list to transition to the Privacy Shield.
  4. Evaluate Standard Contractual Clauses:  Once its details are published, the Privacy Shield may turn out to be less business-friendly than the Safe Harbor.  As a result, the Clauses could end up being a more attractive method for legitimizing cross-border data transfers.  In addition, the Working Party or individual Member State data protection authorities may take the position that U.S. employers still must implement an alternative to Safe Harbor until the Privacy Shield goes into effect.  Consequently, U.S. multinational employers who have transitioned to the Clauses, or who are in the process of doing so, will not see their efforts go to waste.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Philip L. Gordon
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
Ogletree, Deakins, Nash, Smoak & Stewart
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
Ogletree, Deakins, Nash, Smoak & Stewart
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions