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Privacy Shield Update: European Commission launches EU-U.S. Privacy Shield

July 14, 2016

EU-US Privacy Shield(Note: This article is an update on our first article about Privacy Shield posted in the February  2016 edition of GZ News.)

~by Paul Harris, Marketing Director

On July, 12th 2016 the European Commission (EC) adopted the new EU-U.S. Privacy Shield. The new Privacy Shield framework protects the fundamental rights of anyone in the EU whose personal data is transferred to the United States, as well as bringing legal clarity for businesses relying on transatlantic data transfers.

Global-Z CEO and Co-Founder Dimitri Garder said: “In the upcoming weeks and months we will update our clients and partners regarding how the new Privacy Shield framework will impact our global data processing solutions.”

According the press release issued by the European Commission, EU-U.S. Privacy Shield is based on the following principles:

  • Strong obligations on companies handling data. The U.S. Department of Commerce will conduct regular updates and reviews of participating companies, to ensure they follow the rules they submitted themselves to. If companies do not comply with them, they face sanctions and removal from the list. The tightening of conditions for the onward transfers of data to third parties will guarantee the same level of protection in case of a transfer from a Privacy Shield company.
  • Clear safeguards and transparency obligations on U.S. government access. The US has given the EU assurance that the access of public authorities for law enforcement and national security is subject to clear limitations, safeguards and oversight mechanisms. Everyone in the EU will, also for the first time, benefit from redress mechanisms in this area. The U.S. has ruled out indiscriminate mass surveillance on personal data transferred to the US under the EU-U.S. Privacy Shield arrangement. The Office of the Director of National Intelligence further clarified that bulk collection of data could only be used under specific preconditions and needs to be as targeted and focused as possible. It details the safeguards in place for the use of data under such exceptional circumstances. The U.S. Secretary of State has established a redress possibility in the area of national intelligence for Europeans through an Ombudsperson mechanism within the Department of State.
  • Effective protection of individual rights: Any EU citizen who considers that their data has been misused under the Privacy Shield scheme will benefit from several accessible and affordable dispute resolution mechanisms. Ideally, the complaint will be resolved by the company itself; or free of charge Alternative Dispute resolution (ADR) solutions will be offered. Individuals can also go to their national Data Protection Authorities, who will work with the Federal Trade Commission to ensure that complaints by EU citizens are investigated and resolved. If a case is not resolved by any of the other means, as a last resort there will be an arbitration mechanism. Redress possibility in the area of national security for EU citizens’ will be handled by an Ombudsperson independent from the US intelligence services.
  • Annual joint review mechanism: the mechanism will monitor the functioning of the Privacy Shield, including the commitments and assurance as regards access to data for law enforcement and national security purposes. The European Commission and the U.S. Department of Commerce will conduct the review and associate national intelligence experts from the U.S. and European Data Protection Authorities. The Commission will draw on all other sources of information available and will issue a public report to the European Parliament and the Council.

Next steps: Privacy Shield framework will be published in the US Federal Register. The U.S. Department of Commerce will start operating the Privacy Shield. Once US companies have had an opportunity to review the framework and update their compliance, companies will be able to certify with the Commerce Department starting August 1st. Companies should assess Privacy Shield’s impact on their EU-U.S. data transfer strategy. In particular, there is a limited “grace period” available in that companies that self-certify within two months of Privacy Shield’s effective date will be given a nine month transitional period to address relationships with third parties.

Please see the US International Trade Administration’s press release for additional information.

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