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EU-U.S. Privacy Shield: Most Frequently Asked Questions

July 27, 2016

EU-US Privacy Shield~by Paul Harris, Global-Z Marketing Manager

Are you ready for the new Privacy Shield regulations? The new EU-US agreement is bringing some major changes for American businesses that process European customer data. While many more questions are yet to be answered about Privacy Shield’s impact, we collected the top most frequently asked questions to help you better understand the regulations.

 

 

  • What is Privacy Shield?
    • On July, 12th 2016 the European Commission (EC) adopted the new EU-U.S. Privacy Shield (formerly known as EU-US Safe Harbor). 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.
    • Privacy Shield is a voluntary self-certification to the US Department of Commerce. Once a company publicly commits to Privacy Shield, it is enforceable under US law. It includes multiple avenues of redress to resolve complaints. The agreement is a ‘living commitment’ with annual reviews. Companies who certify with Privacy Shield must select an independent dispute resolution organization that include the following criteria.
      • Panel created by the EU Data Protection Authorities (DPA’s).
      • Accredited organization in EU.
      • Accredited organization in US.
  • What are the principals Privacy Shield is based on?
  • How does it affect my business?
    • From the perspective of U.S. companies, the framework has tightened restrictions on forwarding Europeans’ personal data to other companies. In the technology sector in particular this is going to require a lot more attentiveness on the part of those directly serving Europeans. The companies serving the customers will remain responsible for their personal data, even if the work is outsourced by subcontractors. Companies on the Privacy Shield register will also have to pledge to not collect more personal information that what they need for the purposes of their service.
  • When can we certify with Privacy Shield?
    • Going forward the Privacy Shield framework will be published in the US Federal Register. Once US companies have had an opportunity to review the framework and update their compliance, they will be able to certify with the US Department of Commerce starting August, 1st 2016. Companies should also 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 who 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.
  • Will it cost me to certify?
    • The total cost estimates are still unknown but costs will depend on your business size and a fee charged by your independent dispute resolution organization.
  • Does the recently announced “Brexit” (British exit from the EU) impact the new framework?
    • No, Brexit will have no immediate impact on Privacy Shield. The exit is expected to take at least two years minimum to fully occur and if changes happen within that timeframe, we will be sure to let you know.
  • Should I seek legal counsel?
    • Privacy Shield will be complex; we strongly recommend consulting legal counsel with international privacy law expertise.  If you would like to discuss Privacy Shield in greater detail and/or the specific impact on your company feel free to contact us any time.

For more information regarding the Privacy Shield framework please see the US International Trade Administration’s press release. Also, the US Department of Commerce has issued a “Fact Sheet” overview of the EU-US Privacy Shield Framework it can be viewed here.

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