Worldwide: "Privacy Shield" Is Proposed To Replace Invalidated U.S. – EU Safe Harbor Agreement And Keep Data From Europe Flowing

The Safe Harbor agreement between the European Union and the United States permitted American businesses to import personal data of EU citizens based on self-certification of compliance with EU data protection laws. Safe Harbor was widely criticized in Europe as being too easily circumvented, too infrequently enforced and offering too little protection to the personal data of EU citizens.

Edward Snowden's 2013 claims that the U.S. National Security Agency was collecting vast quantities of personal data of foreign nationals provided to it by Internet companies dramatically escalated EU criticisms of Safe Harbor. Snowden's revelations led European data processing authorities ("DPAs") and EU representatives to insist on negotiations to strengthen Safe Harbor if termination of that agreement by the EU was to be avoided. While those negotiations slowly proceeded, the EU Court of Justice ("EUCJ") heard a claim by an Austrian activist, Max Schrems, alleging that Facebook - a Safe Harbor participant - violated the privacy rights of EU citizens by giving their personal data to the NSA. On October 6, 2015 the EUCJ concluded in its Schrems decision that the Safe Harbor agreement failed to protect Europeans from unlimited and indiscriminate collection, storage and review of their private information, and thus was invalid.

The EUCJ also declared that a national DPA is obliged to challenge decisions of the European Commission that approve agreements such as Safe Harbor, and now the Privacy Shield, when their investigations lead them to believe that an agreement with a non-EU country fails to protect privacy rights of their citizens. With that holding, the EUCJ's ruling removes the legal certainty that Commission approval of agreements negotiated with key trading partners can be relied upon before expensive practices and procedures are implemented to comply with their terms.

Response to Safe Harbor's Demise – The Privacy Shield

The Schrems decision caused great concern among the U.S. businesses that were relying on Safe Harbor for their flow of data from Europe, and created political pressure on the U.S. and EU agencies already negotiating revisions to that agreement. Moreover, the Article 29 Working Party ("Working Party")– an independent and enforcement-oriented advisory body on data protection comprised of representatives of the data protection regulators of all 28 of the member states – had adopted an aggressive posture on the effect of Schrems on the mission of national DPAs. The Working Party declared that the focus of the Schrems ruling on the purported overreach of the NSA and complicit businesses, at the expense of privacy rights of Europeans, would prompt it to reassess the efficacy of all of the tools previously authorized for the transfer of personal data to the U.S. It ominously added that the DPAs within the EU were prepared to commence "coordinated enforcement actions" and any other "necessary and appropriate actions" if EU and U.S. negotiators failed to reach an appropriate accord by January 31, 2016.

On February 2, EU and U.S. negotiators announced that they had agreed on "a new framework for transatlantic data flows." Dubbed the "Privacy Shield," the agreement has not yet even been committed to paper, such was the urgency to announce a resolution. The information made available by the negotiators consists only of an outline of broad principles to which EU and Commerce Department officials agreed. According to a EU press release, the Privacy Shield will include:

  • "Strong obligations" on U.S. companies on how personal data of Europeans is processed and privacy rights are guaranteed.
  • "Robust enforcement," to include monitoring by the Commerce Department of the publication of privacy commitments to allow the FTC to enforce breaches as unfair trade practices.
  • Undefined special treatment of human resources data from Europe, which obliquely will require employers to comply with decisions of European DPAs.
  • Clear safeguards, limitations and oversight mechanisms applicable to access by public authorities to personal data transferred from Europe to the U.S.
  • Effective protection of the privacy rights of EU citizens with eight channels for redress of their complaints and deadlines for their resolution, including free alternative dispute resolution and a referral mechanism from DPAs to the Department of Commerce and the FTC. Binding arbitration for injunctive relief will be available as a mechanism of last resort.
  • An Ombudsman embedded within the U.S. State Department will be appointed to investigate claims of inappropriate monitoring by U.S. national security agencies.

The sketchy details provided have failed to relieve the uncertainty created by the Schrems decision, much less provide information necessary to begin planning. Given the vital connection the flow of data has to international trade, the lack of certainty is unsettling to business and regulators alike. Meanwhile, the Article 29 Working Party has declared that its approval will be necessary before the Privacy Shield can go forward, and it expects to be provided with the relevant documents by the end of February. It announced that its analysis would focus particularly on whether the Privacy Shield respects four essential guarantees: (i) clear, precise and accessible rules for processing personal data; (ii) an appropriate balance between national security objectives and privacy rights; (iii) an independent oversight mechanism to review the surveillance activity; and (iv) an effective remedy for excessive processing activity. The Working Party expressed its concern over satisfaction of the four guarantees, especially with respect to items (ii) and (iv) immediately above.

Next Steps as Confusion Reigns

After the requisite documents are presented to the Working Party, purportedly by the end of February, the Privacy Shield will have to be approved by the College of Commissioners, which consists of EU commissioners from all 28 member states. However, before this body decides the commissioners first must obtain the advice of the Article 29 Working Party. That step could prove to be an obstacle.

The head of the Working Party recently announced that the DPAs will not bring enforcement actions until March or April against companies that are reliant on the now-invalid Safe Harbor.

Tips for Navigating Through Uncertainty

Businesses continue to need to transfer and process data in today's global economy. As we wait for the details of the Privacy Shield to come together, here are some suggestions towards how to manage EU-U.S. data transfer:

  • Art. 26 of the EU Directive provides several exceptions. Assess the nature and purpose of the data you seek to transfer with counsel to determine if any of the exceptions apply.
  • Obtain consent for the data transfer. However, note that employee consent may not be considered "freely given."
  • Consider implementing model contract clauses or binding corporate rules.
  • Employ technology to cull and cleanse the data set so that records are not identifiable.
  • Where possible, process the data in-country and seek to transfer a narrow, limited set of data.

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

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

Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
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
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 (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

To Use 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