United States: Executive Order Does Not End Privacy Shield, But Raises Questions

Among the executive orders signed by President Trump in his first week in office, the January 25, 2017 order entitled "Enhancing Public Safety in the Interior of the United States" appeared to remove the Privacy Act protections for personally identifiable information of persons who are not US citizens or lawful permanent residents. This raised alarms as to whether the president's action would undermine the EU-U.S. Privacy Shield , a self-certification process by which personal data can be transferred from the European Union to the United States. This concern appears to be unfounded, for the reasons discussed here, but a continued monitoring of executive actions is recommended as the Trump administration rolls out its policies that have an impact on cross-border data transfers and privacy rights.

The Executive Order

As we have previously discussed, increased surveillance and data collection by the US government appear likely under the Trump administration.[1] Within a few days in office, on January 25, 2017, President Trump signed an executive order entitled "Enhancing Public Safety in the Interior of the United States"[2] (the "Order"). Section 14 of the Order seeks to exclude persons who are not US citizens or lawful permanent residents from protections under the Privacy Act of 1974.[3] The section provides, in its entirety: 

Sec. 14. Privacy Act. Agencies shall, to the extent consistent with applicable law, ensure that their privacy policies exclude persons who are not United States citizens or lawful permanent residents from the protections of the Privacy Act regarding personally identifiable information.

The Order Is Not Immediately Detrimental to the Privacy Shield

Initial reactions to the Order raised concerns that Section 14 could derail the EU-U.S. Privacy Shield, a program that allows for the transfer of personal data from the EU to private entities in the US,[4] because the Order would eliminate protections for personal data of EU citizens, which the Privacy Shield is designed to safeguard.[5] For several reasons, it appears that these concerns have been overstated. 

First, executive orders do not have the same force of law as legislation passed by Congress. The president may use executive orders to direct actions or practices of the executive branch of the US government, including administrative agencies, but executive orders must work within laws enacted by Congress and cannot undo or contravene those laws. If individuals – citizens or non-citizens – are granted certain rights by statute, the executive branch is bound to follow the statute and cannot simply take away those rights. This is implicitly recognized in the Order, including Section 14, as actions are to be taken "to the extent consistent with" or "to the extent permitted by" applicable law. 

Second, the Privacy Act does not provide protections for persons who are not citizens of the US or lawful permanent residents. The Privacy Act establishes certain requirements for the collection and maintenance of information about individuals, restricts disclosure of such information and grants certain rights, e.g., of access and amendment, to individuals regarding information about them.[6] However, the term "individual" is defined under the Privacy Act as "a citizen of the United States or an alien lawfully admitted for permanent residence."[7] Thus non-citizens and persons who are not permanent legal residents are excluded by definition from those protections and rights under the Privacy Act. Admittedly, remedies established under the Privacy Act have been extended to EU citizens through the Judicial Redress Act of 2015 in order to implement the Privacy Shield.[8] The Order does not address the Judicial Redress Act and does not undo the availability of those remedies. 

Third, the Privacy Shield is in large part directed toward private entities – corporations and other organizations subject to Federal Trade Commission jurisdiction. Companies may opt into the Privacy Shield by agreeing to adhere to a set of principles that ensure safeguards and proper treatment for personal data transferred from the EU, as well as means of redress available to individuals in the EU. The Order does not change obligations under the Privacy Shield for companies that have volunteered to participate in the program and comply with its data protection requirements. Companies that elected to join the Privacy Shield must continue to follow the Privacy Shield Framework in order to maintain its benefit as a means of transferring personal data from the EU to the US. In addition, private entities are not subject to the Privacy Act, which is directed to federal agencies.[9]

However, even if the Privacy Shield is not immediately affected by the Order, it is prudent to monitor executive actions moving forward to see how the Order is implemented, as well as any changes to agency interpretations of existing laws and US surveillance policies. Even if there is no immediate impact from such actions, there may be later effects. Since the Privacy Shield was adopted in August 2016, two legal challenges have been filed by privacy rights organizations, questioning whether the new Framework sufficiently protects the privacy rights of European citizens.[10] We expect that Section 14 will be cited in support of legal challenges to the Privacy Shield, along with any subsequent actions of the Trump administration that may be perceived to curb privacy protections. 

What Does Section 14 Do?

Because persons who are not citizens or not permanent lawful residents of the US have never been protected by the Privacy Act, the practical effect of Section 14 is not clear. 

If we step back and consider the Order more broadly, as a general matter it directs agencies to more forcefully and strictly enforce immigration laws against "removable aliens."[11] In furtherance of this goal, the Order includes several provisions that require data gathering and reporting, with a particular focus on criminal and potentially criminal actions by aliens, as well as failures to enforce immigration laws.[12] Viewed in this context, one potential reading is that Section 14 may have been included to facilitate sharing such data among federal agencies. 

European Commission Response

The European Commission (the "Commission") has recognized that the Order does not immediately undermine the Privacy Shield. The Commission has provided the following statement:

We are aware of the executive order on public safety. The U.S. Privacy Act has never offered data protection rights to Europeans. The Commission negotiated two additional instruments to ensure that EU citizen's data is duly protected when transferred to the U.S.

In its statement, the Commission clarified that the Privacy Shield is implemented through the EU-U.S. Data Protection and Privacy Agreement (referred to as the "Umbrella Agreement") and the Judicial Redress Act. The Commission also noted that the Privacy Shield "does not rely on the protections under the Privacy Act."[13] 

Although the Commission's statement makes it clear that the Privacy Shield is not in imminent danger, it is also clear that stakeholders in the EU are not fully mollified. EU Justice Commissioner Vera Jourova has called for reassurance from the Trump administration and will seek meetings with Trump administration appointees to discuss this issue.[14] In addition, the Commission's statement on the Order concludes on a cautious note: "We will continue to monitor the implementation of both instruments [the Umbrella Agreement and the Judicial Redress Act] and are following closely any changes in the U.S. that might have an effect on European's data protection rights." 

Key Takeaways

  • The EU-U.S. Privacy Shield remains in effect.
  • However, for companies that are relying on the EU-U.S. Privacy Shield to transfer personal information from the European Union to the United States, it is recommended that US executive actions and legal challenges to the Privacy Shield Framework are monitored closely.
  • The Trump administration is expected to implement policies that further expand law enforcement powers to collect and use data, especially targeting non-US citizens. 
  • Companies that handle personal information should review their data collection and handling policies and be ready to respond to such agency requests.

[1]   Richard Hsu and Jeewon Serrato, Government Surveillance Under a Trump Administration (Dec. 19, 2016), available at http://www.shearman.com/en/newsinsights/publications/2016/12/govr-surveillance-under-a-trump-administration.

[2]  Available at https://www.whitehouse.gov/the-press-office/2017/01/25/presidential-executive-order-enhancing-public-safety-interior-united.

[3]   5 USC § 552a. For further information, see Department of Justice, Overview of the Privacy Act of 1974 (2015 ed.), available at https://www.justice.gov/opcl/overview-privacy-act-1974-2015-edition.

[4]  For further information regarding the EU-U.S. Privacy Shield, you may wish to refer to Jeewon Serrato, et al., European Commission Adopts the EU-U.S. Privacy Shield (July 13, 2016), available at http://www.shearman.com/en/newsinsights/publications/2016/07/european-commission-adopts-eu-us-privacy-shield

[5]  See, e.g., Andrew Tarantola, Trump Signs Executive Order Stripping Non-Citizens of Privacy Rights (Engadget, Jan. 26, 2017), available at https://www.engadget.com/2017/01/26/trump-signs-executive-order-stripping-non-citizens-of-privacy-ri/; Jason Bloomberg, The Anti-Business Implications of Trump's Xenophobic Privacy Policies (Forbes, Jan. 29, 2017), available at http://www.forbes.com/sites/jasonbloomberg/2017/01/29/the-anti-business-implications-of-trumps-xenophobic-privacy-policies/#3f910e9f7e9c; Amberhawk Training, Has President Trump's Executive Order on "Public Safety" Killed Off Privacy Shield? (The Register, Jan. 30, 2017), available at https://www.theregister.co.uk/2017/01/30/trump_executive_order_public_safety_privacy_shield/; Daniel L. Farris and Amanda Katzenstein, Trump Executive Order Puts Privacy Shield's Future in Doubt (National Law Review, Jan. 31, 2017), available at http://www.natlawreview.com/article/trump-executive-order-puts-privacy-shield-s-future-doubt

[6]  See 5 USC § 552a(b), (c), (d) and (e).

[7]  5 USC § 552(a)(2).

[8]  Pub. L. 114-126 (Feb. 24, 2016); see also Department of Justice Notice, Judicial Redress Act; Attorney General Designations, 82 FR 7860 (Attorney General Order No. 3824-2017, Jan. 23, 2017). For further information, see https://www.justice.gov/opcl/judicial-redress-act-2015.

[9]  See 5 USC §§ 552(a)(1) and 552(f).

[10]  Digital Rights Ireland v. Commission, Case No. T-670/16; La Quadrature du Net and Others v Commission, Case No. T-738/16; see also Julia Fioretti and Dustin Volz, Privacy Group Launches Legal Challenge Against EU-U.S. Data Pact (Reuters, Oct. 27, 2016), available at http://www.reuters.com/article/us-eu-dataprotection-usa-idUSKCN12Q2JK; Julia Fioretti, EU-U.S. Personal Data Pact Faces Second Legal Challenge from Privacy Groups (Reuters, Nov. 2, 2016), available at http://www.reuters.com/article/us-eu-dataprotection-usa-idUSKBN12X253.

[11]  See the Order, at Sections 1, 2, 4, 5, 6, 7 and 8.

[12]  See the Order, at Sections 9(b), 13, 15 and 16.

[13]  See Kieren McCarthy, Trump Signs "No Privacy for Non-Americans" Order – What Does That Mean for the Rest of Us? (The Register, Jan. 26, 2017), available at https://www.theregister.co.uk/2017/01/26/trump_blows_up_transatlantic_privacy_shield/; Peter Sayer, Trump's Executive Order Won't Destroy Privacy Shield, Says EU (PC World, Jan. 27, 2017), available at http://www.pcworld.com/article/3162236/internet/trump-s-executive-order-won-t-destroy-privacy-shield-says-eu.html.

[14]  Nikolaj Nielsen, Trump's Anti-Privacy Order Stirs EU Angst (EU Observer, Jan. 27, 2017), available at https://euobserver.com/justice/136699

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.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
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