Category: International Data Transfers

UK’s new data protection clauses now in force

31. March 2022

After the British government announced reforms to UK’s data protection system last year, the Secretary of State submitted on February 2nd, 2022, a framework to the Parliament to regulate international data transfers and replace the EU Standard Contractual Clauses (SCC). As no objections were raised and the Parliament approved the documents, they entered into force on March 21st, 2022.

The set of rules consists of the International Data Transfer Agreement (IDTA), the International Data Transfer Addendum to the European Commission’s SCC for international data transfers (Addendum) and a Transitional Provisions document. The transfer rules are issued under Section 119A of the Data Protection Act 2018 and take into account the binding judgement of the European Court of Justice in the case commonly referred to as “Schrems II”.

The documents serve as a new tool for compliance with Art. 46 UK GDPR for data transfers to third countries and broadly mirror the rules of the EU GDPR. The UK government also retained the ability to issue its own adequacy decisions regarding data transfers to other third countries and international organizations.

The transfer rules are of immediate benefit to organizations transferring personal data outside the UK. In addition, the transitional provisions allow organizations to rely on the EU SCC until March 21st, 2024, for contracts entered into up to and including September 21st, 2022. However, this is subject to the condition that the data processing activities remain unchanged and that the clauses ensure adequate safeguards.

European Commission and United States agree in principle on Trans-Atlantic Data Privacy Framework

29. March 2022

On March 25th, 2022, the United States and the European Commission have committed to a new Trans-Atlantic Data Privacy Framework that aims at taking the place of the previous Privacy Shield framework.

The White House stated that the Trans-Atlantic Data Privacy Framework “will foster trans-Atlantic data flows and address the concerns raised by the Court of Justice of the European Union when it struck down in 2020 the Commission’s adequacy decision underlying the EU-US Privacy Shield framework”.

According to the joint statement of the US and the European Commission, “under the Trans-Atlantic Data Privacy Framework, the United States is to put in place new safeguards to ensure that signals surveillance activities are necessary and proportionate in the pursuit of defined national security objectives, establish a two-level independent redress mechanism with binding authority to direct remedial measures, and enhance rigorous and layered oversight of signals intelligence activities to ensure compliance with limitations on surveillance activities”.

This new Trans-Atlantic Data Privacy Framework has been a strenuous work in the making and reflects more than a year of detailed negotiations between the US and EU led by Secretary of Commerce Gina Raimondo and Commissioner for Justice Didier Reynders.

It is hoped that this new framework will provide a durable basis for the data flows between the EU and the US, and underscores the shared commitment to privacy, data protection, the rule of law, and the collective security.

Like the Privacy Shield before, this new framework will represent a self-certification with the US Department of Commerce. Therefore, it will be crucial for data exporters in the EU to ensure that their data importers are certified under the new framework.

The establishment of a new “Data Protection Review Court” will be the responsible department in cases of the new two-tier redress system that will allow EU citizens to raise complaints in cases of access of their data by US intelligence authorities, aiming at investigating and resolving the complaints.

The US’ commitments will be concluded by an Executive Order, which will form the basis of the adequacy decision by the European Commission to put the new framework in place. While this represents a quicker solution to reach the goal, it also means that Executive Orders can be easily repealed by the next government of the US. Therefore, it remains to be seen if this new framework, so far only agreed upon in principle, will bring the much hoped closure on the topic of trans-Atlantic data flows that is intended to bring.

Google to launch Google Analytics 4 with aim to address EU Data Protection concerns

24. March 2022

On March 16, 2022, Google announced the launch of its new analytics solution, “Google Analytics 4”. Among other things, “Google Analytics 4” aims to address the most recent data protection developments regarding the use of analytical cookies and the transfers tied to such processing.

The announcement of this new launch comes following 101 complaints made by the non-governmental organization None of Your Business (NOYB) complaints with 30 EEA countries’ data protection authorities (DPA). Assessing the data transfer from the EU to the US after the Schrems II decision of the CJEU for the use of Google Analytics, the French and Austrian DPAs ruled that the transfer of EU personal data from the EU to the U.S. through the use of the Google Analytics cookies is unlawful under the GDPR.

In the press release, Google states that “Google Analytics 4 is designed with privacy at its core to provide a better experience for both our customers and their users. It helps businesses meet evolving needs and user expectations, with more comprehensive and granular controls for data collection and usage.”

However, the most important change that the launch of “Google Analytics 4” will have on the processing of personal data is that it will no longer store users’ IP addresses. This will limit the data processing and resulting transfers that Google Analytics was under scrutiny for in the EU, however it is unclear at this point if the EU DPAs will change their opinion on the use of Google Analytics with this new version.

According to the press release, the current Google Analytics will be suspended starting July 2023, and Google is recommending companies to move onto “Google Analytics 4” as soon as possible.

EDPS sanctions European Parliament for unlawfully transfered data to the US

25. January 2022

The European Data Protection Supervisor (EDPS) ruled that the European Parliament (EP) offended against a judgement of the European Court of Justice (ECJ) by transferring data to the US using US origin tech tools on their website for COVID-19 tests. This judgement relies on a complaint that involves misleading cookie banners, uncertain data privacy statements and unlawful data transfers from the EU to the US.

The ECJ makes clear that the transfer of personal data from the EU to the US is topic of strict conditions. Websites can only transfer data to the US if a certain security level is given. In this case there was not such a security level available.

The misleading cookie banners were so vague that the cookies were not listed in total and some differences between language options became appearent. Therefore, the website users could not give their valid consent.

Furthermore, the data privacy information were not clear and transparent, in that they refer to an incorrect legal basis for the processing. The given references were also in violation of transperency and requests of information.

Even during the process the EP tried to improve the technical deficits.

The EDPS issued a caution because in contrast to national data protection authorities it can only sentence under certain conditions, which were not given in this case. In result, it imposed a cease and desist order with a one month deadline for the EP to adjust the compliance.

European Commission adopts South Korea Adequacy Decision

30. December 2021

On December 17th, 2021, the European Commission (Commission) announced in a statement it had adopted an adequacy decision for the transfer of personal data from the European Union (EU) to the Republic of Korea (South Korea) under the General Data Protection Regulation (GDPR).

An adequacy decision is one of the instruments available under the GDPR to transfer personal data from the EU to third countries that ensure a comparable level of protection for personal data as the EU. It is a Commission decision under which personal data can flow freely and securely from the EU to the third country in question without any further conditions or authorizations being required. In other words, the transfer of data to the third country in question can be handled in the same way as the transfer of data within the EU.

This adequacy decision allows for the free flow of personal data between the EU and South Korea without the need for any further authorization or transfer instrument, and it also applies to the transfer of personal data between public sector bodies. It complements the Free Trade Agreement (FTA) between the EU and South Korea, which entered into force in July 2011. The trade agreement has led to a significant increase in bilateral trade in goods and services and, inevitably, in the exchange of personal data.

Unlike the adequacy decision regarding the United Kingdom, this adequacy decision is not time-limited.

The Commission’s statement reads:

The adequacy decision will complement the EU – Republic of Korea Free Trade Agreement with respect to personal data flows. As such, it shows that, in the digital era, promoting high privacy and personal data protection standards and facilitating international trade can go hand in hand.

In South Korea, the processing of personal data is governed by the Personal Information Portection Act (PIPA), which provides similar principles, safeguards, individual rights and obligations as the ones under EU law.

An important step in the adequacy talks was the reform of PIPA, which took effect in August 2020 and strengthened the investigative and enforcement powers of the Personal Information Protection Commission (PIPC), the independent data protection authority of South Korea. As part of the adequacy talks, both sides also agreed on several additional safeguards that will improve the protection of personal data processed in South Korea, such as transparency and onward transfers.

These safeguards provide stronger protections, for example, South Korean data importers will be required to inform Europeans about the processing of their data, and onward transfers to third countries must ensure that the data continue to enjoy the same level of protection. These regulations are binding and can be enforced by the PIPC and South Korean courts.

The Commission has also published a Q&A on the adequacy decision.

EDPB publishes draft Guidelines regarding data transfer clarifications

25. November 2021

On November 19th, 2021, the European Data Protection Board (EDPB) published a new set of draft Guidelines 05/2021 on the interplay between the EU General Data Protection Regulation’s (GDPR) territorial scope, and the GDPR’s provisions on international data transfers.

The EDPB stated in their press release that “by clarifying the interplay between the territorial scope of the GDPR (Art. 3) and the provisions on international transfers in Chapter V, the Guidelines aim to assist controllers and processors in the EU in identifying whether a processing operation constitutes an international transfer, and to provide a common understanding of the concept of international transfers.”

The Guidelines set forth three cumulative criteria to consider in determining whether a processing activity qualifies as an international data transfer under the GDPR, namely:

  • the exporting controller or processor is subject to the GDPR for the given processing activity,
  • the exporting controller or processor transmits or makes available the personal data to the data importer (e.g., another controller, joint controller, or a processor and
  • the data importer is in a third country (or is an international organization), irrespective of whether the data importer or its processing activities are subject to the GDPR.

If all three requirements are met, the processing activity is to be considered an international data transfer under the GDPR, which results in the requirements of Chapter V of the GDPR to be applicable.

The Guidelines further clarify that the safeguards implemented to accommodate the international data transfer must be tailored to the specific transfer at issue. In an example, the EDPB indicates that the transfer of personal data to a controller in a third country that is subject to the GDPR will generally require fewer safeguards. In such a case, the transfer tool should focus on the elements and principles that are specific to the importing jurisdiction. This includes particularly conflicting national laws, government access requests in the receiving third country and the difficulty for data subjects to obtain redress against an entity in the receiving third country.

The EDPB offers its support in developing a transfer tool that would cover the above-mentioned situation.

The Guidelines are open for public consultation until January, 31st, 2022.

New EU SCC must be used as of now

29. September 2021

In June 2021, the European Commission published the long-awaited new Standard Contractual Clauses (SCC) for the transfers of personal data to so-called third countries under the General Data Protection Regulation (GDPR) (please see our blog post). These new SCC modules replace the three 10-year-old SCC sets that were adopted under the EU Data Protection Directive 95/46/EC and thus could not meet the requirements of the GDPR for data transfers to third countries, nor the significant Schrems II ruling of July 16th, 2020 (please see our blog post). The transfer of data to third countries has not only recently become problematic and a focus of supervisory authorities.

As of Monday, September 27th, 2021, these new SCC must be used for new contracts entered into after September 26th, 2021, and for new processing activities that begin after September 26th, if the contract or processing activity involves the transfer of personal data to so-called inadequate third countries. These are countries outside of the European Economic Area (EEA) not deemed to have an adequate level of data protection by an adequacy decision of the European Commission.

Contracts signed before September 27th, 2021, based on the old SCC will still be considered adequate until December 27th, 2022. For these contracts, the old SCCs already signed can be maintained in the meantime as long as the processing of personal data that is the subject of the contract in question does not change. The SCC used for these contracts must be updated to the new SCC, or other data transfer mechanisms in accordance with the GDPR, by December 27th, 2022. As of that date, all SCC used as safeguards for data transfers to inadequate third countries must be the new SCC.

EU Commission publishes Draft Adequacy Decision for South Korea

25. June 2021

On 16 June 2021, the European Commission published the draft adequacy decision for South Korea and transmitted it to the European Data Protection Board (EDPB) for consultation. Thus, the Commission launched the formal procedure towards the adoption of the adequacy decision. In 2017, the Commission announced to prioritise discussions on possible adequacy decisions with important trading partners in East and South-East Asia, starting with Japan and South Korea. The adequacy decision for Japan was already adopted in 2019.

In the past, the Commission diligently reviewed South Korea’s law and practices with regards to data protection. In the course of ongoing negotiations with South Korea, the investigative and enforcement powers of the Korean data protection supervisory authority “PIPC” were strengthened, among other things. After the EDPB has given its opinion, the adequacy decision will need to be approved by a committee composed of representatives of the EU Member States.

The decision of an adequate level of protection pursuant to Art. 45 of the General Data Protection Regulation (GDPR) by the Commission is one of the possibilities to transfer personal data from the EU to a third-country in a GDPR-compliant manner. The adequacy decision will serve as an important addition to the free trade agreement and a strengthening of cooperation between the EU and South Korea. Věra Jourová, the Commission’s Vice-President for Values and Transparency, expressed after launching the formal procedure:

“This agreement with the Republic of Korea will improve the protection of personal data for our citizens and support business in dynamic trade relations. It is also a sign of an increasing convergence of data protection legislation around the world. In the digitalised economy, free and safe data flows are not a luxury, but a necessity.”

Especially in light of the Schrems II decision of the Court of Justice of the European Union, the adequacy decision for South Korea will be an invaluable asset for European and South Korean companies conducting business with each other.

CJEU ruling on One-Stop-Shop mechanism

On June 15th, 2021, the Court of Justice of the European Union (CJEU) ruled that “under certain conditions, a national supervisory authority may exercise its power to bring any alleged infringement of the GDPR before a court of a member state, even though that authority is not the lead supervisory authority”. It grants each supervisory authority the power to bring matters within its supervisory area before the courts. If a non-lead supervisory authority wishes to bring cross-border cases to court, it can do so under the so-called emergency procedure under Article 66 of the GDPR.

The General Data Protection Regulation (GDPR) provides that the data protection authority of the country in which a company has its principal place of business in the EU has primary jurisdiction for cross-border proceedings against such companies (the so-called one-stop-shop principle). Facebook and a number of other international companies have their EU headquarters in Ireland. The Irish data protection authority has been criticised several times for dragging out numerous important cases against tech companies. The CJEU’s ruling is likely to lead to more enforcement proceedings by local data protection authorities.

In 2015 – before the GDPR came into force – the Belgian data protection authority filed a lawsuit in Belgian courts against Facebook’s collection of personal data via hidden tracking tools. These tracking tools even tracked users without Facebook accounts. After the GDPR came into force, Facebook argued that lawsuits against data protection violations could only be filed in Ireland. A court of appeal in Brussels then referred the question to the ECJ as to whether proceedings against Facebook were admissible in Belgium. This has now been confirmed by the ECJ. The Belgian court is now free to make a final decision (please see our blog post).

The CJEU has now ruled that, in principle, the lead data protection authority is responsible for prosecuting alleged GDPR violations if they involve cross-border data processing. The data processing must therefore take place in more than one Member State or have an impact on individuals in several member states. However, it is also specified that the “one-stop-shop” principle of the GDPR obliges the lead authority to cooperate closely with the respective local supervisory authority concerned. In addition, local data protection authorities may also have jurisdiction pursuant to Art. 56 (2) and Art. 66 GDPR. According to the CJEU, if the respective requirements of these provisions are met, a local supervisory authority may also initiate legal proceedings. The CJEU has clarified that actions by non-lead data protection authorities can still be upheld if they are based on the Data Protection Directive, the predecessor of the GDPR.

The EU consumer association BEUC called the ruling a positive development. BEUC Director General Monique Goyens said:

Most Big Tech companies are based in Ireland, and it should not be up to that country’s authority alone to protect 500 million consumers in the EU.

While Facebook’s associate general counsel Jack Gilbert said:

We are pleased that the CJEU has upheld the value and principles of the one-stop-shop mechanism, and highlighted its importance in ensuring the efficient and consistent application of GDPR across the EU.

EDPB adopts final Recommendation 01/2020 on Supplementary Measures for Data Transfers to Third Countries

22. June 2021

On June 21st, 2021 during its 50th plenary session, the European Data Protection Board (EDPB) adopted a final version of its recommendations on the supplementary measures for data transfers.

In its recent judgment C-311/18 (Schrems II) the Court of Justice of the European Union (CJEU) has decided that, while the Standard Contractual Clauses (SCCs) are still a valid data transfer mechanism, controllers or processors, acting as exporters, are responsible for verifying, on a case-by-case basis and where appropriate, in collaboration with the importer in the third country, if the law or practice of the third country impinges on the effectiveness of the appropriate safeguards contained in the Article 46 GDPR transfer tools. In the cases where the effectiveness of appropriate safeguards is reduced due to the legal situation in the third country, exporters may need to implement additional measures that fill the gaps.

To help exporters with the complex task of assessing third countries and identifying appropriate supplementary measures where needed, the EDPB has adopted this recommendation. They highlight steps to follow, potential information sources as well as non-exhaustive examples of supplementary measures that are meant to help exporters make the right decisions for data transfers to third countries.

The recommendations advise exporters to follow the following steps in order to have a good overview of data transfers and potential supplementary measures necessary:

1. Know the data transfers that take place in your organization – being aware of where data flows is essential to identify potentially necessary supplementary measures;

2. Verify the transfer tool that each transfer relies on and its validity as well as application to the transfer;

3. Assess if a law or a practice in the third country impinges on the effectiveness of the transfer tool;

4. Identify and adopt supplementary measures that are necessary to bring the level of protection of the data transferred up to the EU standard;

5. Take formal procedural steps that may be required by the adoption of your supplementary measure, depending on the transfer tool you are relying on;

6. Re-evaluate the level of protection of the data you transfer at appropriate intervals and monitor any potential changes that may affect the transfer.

The EDPB Chair, Andrea Jelinek, stated that “the effects of Schrems II cannot be underestimated”, and that the “EDPB will continue considering the effects of the Schrems II ruling and the comments received from stakeholders in its future guidance”.

The recommendations clearly highlight the importance of exporters to understand and keep an eye on their data transfers to third countries. In Germany, the Supervisory Authorities have already started (in German) to send out questionnaires to controllers regarding their data transfers to third countries and the tools used to safeguard the transfers. Controllers in the EU should be very aware of the subject of data transfers in their companies, and prepare accordingly.

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