Worldwide: Transferring Personal Data Overseas: EU - US Privacy Shield Will Create New Obligations

On February 2, 2016, EU and US authorities reached an agreement in principle on a new framework for transatlantic data transfers, dubbed the "Privacy Shield." In a nutshell, the Privacy Shield aims to create a higher level of protection for EU citizens' personal data, and to provide some legal certainty for companies engaging in transatlantic data transfers. While the details are still being worked out, there are important steps companies can take now to prepare for the changes. We'll run through the key elements of the Privacy Shield and let you know how to get ahead of the curve.

Background

The Privacy Shield agreement comes in the wake of the European Court of Justice's invalidation in October 2015 of the then-existing Safe Harbor data transfer agreement on the ground it failed to adequately protect the privacy rights of EU citizens, primarily in light of the Edward Snowden revelations. Shortly after the decision, the Article 29 Working Party, consisting of EU data protection authorities ("DPAs"), announced that if a new agreement wasn't reached by the end of January 2016, individual DPAs in Europe could initiate enforcement actions against companies that continued to rely on the invalidated Safe Harbor. In its latest press statement accompanying the release of the Privacy Shield documents, the European Commission confirmed that the new Privacy Shield framework satisfies European Court of Justice requirements. The deal now must be approved by the EU's College of Commissioners, with reports suggesting it could be adopted by June or early summer.

Key Elements of Privacy Shield

  • The Privacy Shield Principles. Key to the new Privacy Shield are seven principles with which US companies must agree to comply when handling Europeans' personal data: i) notice; ii) choice; iii) security; iv) data integrity and purpose limitation; v) access; vi) accountability for onward transfers; and vii) recourse, enforcement and liability.
  • Stronger Obligations, Monitoring, and Enforcement:

    • Companies must certify to the US Department of Commerce that they agree to and will comply with the Privacy Shield Principles.
    • The Department of Commerce will require companies to publish their Privacy Shield commitments via their privacy policies.
    • The FTC will have jurisdiction (as it does now) to enforce Privacy Shield representations made in company privacy policies.
    • There will be stricter conditions for onward transfers of data to agents and other third-party vendors.
    • Any company handling human resources data from Europe must comply with advice from the relevant European DPAs.
    • Companies must designate an independent dispute resolution body to investigate and resolve individuals' complaints.
    • As part of the certification process, the Department of Commerce will verify that the company complies with the Principles, and that it has designated an independent recourse mechanism.
    • Non-compliant companies (or public authorities) can be sanctioned or excluded from the benefits of the Privacy Shield.
  • Complaints about Possible Data Misuse: Aggrieved EU citizens will have several avenues for redress:

    • Companies. EU citizens may complain directly to companies, which will have 45 days to respond.
    • European DPAs. EU Citizens will be able to complain to European DPAs, who will coordinate with the Department of Commerce and the Federal Trade Commission.
    • Alternative Dispute Resolution Mechanism. Companies will be required to set up free alternative dispute resolution mechanisms. They can select either a private sector ADR mechanism or rely on a panel of EU DPAs to perform this function.
    • Privacy Shield Panel. There will be a newly created arbitration mechanism which can take binding action against US companies that have certified adherence to the Privacy Shield.
    • US National Security Ombudsman. US Under Secretary of State Catherine Novelli has been appointed to the newly created Ombudsman position, tasked with handling complaints related to possible access of EU citizens' data for alleged national security reasons.
    • Judicial Redress Act. Officially signed into law by President Obama on February 24, 2016, this law will give EU citizens access to US courts to enforce their privacy rights in matters arising from US law enforcement efforts.
  • Clear Limits on US Government Access and No Mass Surveillance:

    • The US has given the EU written assurances that the access to personal data by public authorities for law enforcement and national security will be subject to clear limitations, safeguards and oversight mechanisms.
    • The US also has indicated that it will not be conducting indiscriminate mass surveillance on the personal data transferred to the US under the new arrangement.
  • Annual Joint Review Process: The EU Commission and the US Department of Commerce will conduct an annual review of the new Privacy Shield framework, with the participation of national intelligence experts from the US and European DPAs.

Preparing for the Privacy Shield : What You Can Do Today

Remember, you cannot rely on the new Privacy Shield yet, and its legal sufficiency may well be challenged. But, assuming the Privacy Shield will be enacted substantially in its current form, businesses may begin taking some preparatory steps.

Here are our suggestions:

  • Until the Privacy Shield is enacted, companies relying on the existing Safe Harbor should proceed with caution as they could face enforcement action from local DPAs in the event of a privacy complaint.
  • Assess your company's ability to comply with the seven privacy principles. In particular, your company may need to:

    • Implement new consent and opt-out mechanisms when personal data is disclosed either to a third party or for materially different purposes than that for which it was collected;
    • Provide ways for EU citizens to access their personal data; and
    • Implement additional security measures to safeguard personal data.
  • Plan to update your privacy policy with required Privacy Shield information.
  • Talk to your subcontractors and other entities that receive onward data transfers. Note that certifying companies will have between two and nine months from certification to bring legacy subcontractors in line with Privacy Shield requirements.
  • Consider which independent dispute resolution mechanism to implement; the European Commission has encouraged companies to select the panel established by EU DPAs as the forum for complaint resolution.
  • Train company employees to appropriately handle and escalate privacy complaints received by the company directly.
  • Consider special circumstances that may apply to personal data collected by your company; for example, companies that collect HR data must cooperate and comply with local DPAs' advice with respect to that data.

We will keep you apprised of further developments as they unfold.

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

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.

Authors
S. Gregory Boyd
Jeremy S. Goldman
Similar Articles
Relevancy Powered by MondaqAI
Reed Smith
Lewis Brisbois Bisgaard & Smith LLP
Frankfurt Kurnit Klein & Selz
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Reed Smith
Lewis Brisbois Bisgaard & Smith LLP
Frankfurt Kurnit Klein & Selz
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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