What You Need to Know: Navigating EU Data Protection Changes – EU-US Privacy Shield and EU General Data Protection Regulation
Blog Article Published: 07/12/2016
By Marshall England, Industry Marketing Director, Technology & Cloud, Coalfire If you’re an organization with trans-Atlantic presence that transmits and stores European citizen data (e.g. employee payroll & HR data, client & prospect data) in the U.S. you will want to pay attention. What we will discuss was administered under the European Union’s Data Protection Directive and a previous EU-U.S. agreement called Safe Harbor. We will cover what happened, what’s next, new rules (and penalties) that are set to go into effect and our recommendations. What Happened? Safe Harbor, invalidated by a European Court of Justice (ECJ) ruling (PDF) in October 2015, allowed companies to transmit and store EU citizen data in the US so long as the U.S. companies agreed to meet requirements as described in Decision 2000/520/EC otherwise known as ‘Safe Harbor Privacy Principles’. The European Court of Justice ruled to invalidate the Safe Harbor agreement as it determined that US companies were not able to meet Safe Harbor Privacy Principles as they conflicted with National Security Agency or other government agency subpoenas request for information and other government data collection programs. Data on EU citizens was found as a result of US government surveillance program information being made public. In other words, if U.S. companies were complying with Safe Harbor Privacy Principles, that information would not have been found or made public as a result of those programs. What’s Next… In early February 2016, the US Department of Commerce and the European Commission announced a new framework called the Privacy Shield. Since then, a group known as the Article 29 Working Party, Europe’s data protection body, issued its own statement (PDF) about the Privacy Shield framework and expressed their reservations regarding the adequacy of the “Privacy Shield.” On July 8, 2016 the European Union Member States Representatives approved the final version of the Privacy Shield. The new Privacy Shield framework allows for transatlantic data transmission and outlines obligations on companies handling the data, in addition to written assurances from the U.S. that among other items rules out indiscriminate mass surveillance of European citizens’ data. Additionally, in early 2016 the European Union enacted a new data protection framework that has been in the works since 2012, known as the General Data Protection Regulation. This new Regulation repeals and replaces the pre-existing European Union’s Data Protection Directive. While not much has changed in the new ‘Regulation’ U.S. companies should note that policies and procedures as it relates to employee data transmission from the EU to U.S. be updated as well as be aware of new penalties. The new rules of the Regulation (and penalties) “will become applicable two years thereafter.” So, in 2018, the rules and penalties around the General Data Protection Regulation will go into effect. New Rules that will go into effect (enforceable, starting in January 2018):
- Strong obligations on companies handling Europeans' personal data and robust enforcement: U.S. companies wishing to import personal data from Europe will need to commit to robust obligations on how personal data is processed and individual rights are guaranteed. The Department of Commerce will monitor that companies publish their commitments, which makes them enforceable under U.S. law by the US. Federal Trade Commission. In addition, any company handling human resources data from Europe has to commit to comply with decisions by European DPAs.
- Clear safeguards and transparency obligations on U.S. government access: For the first time, the US has given the EU written assurances that the access of public authorities for law enforcement and national security will be subject to clear limitations, safeguards and oversight mechanisms. These exceptions must be used only to the extent necessary and proportionate. The U.S. has ruled out indiscriminate mass surveillance on the personal data transferred to the US under the new arrangement. To regularly monitor the functioning of the arrangement there will be an annual joint review, which will also include the issue of national security access. The European Commission and the U.S. Department of Commerce will conduct the review and invite national intelligence experts from the U.S. and European Data Protection Authorities to it.
- Effective protection of EU citizens' rights with several redress possibilities: Any citizen who considers that their data has been misused under the new arrangement will have several redress possibilities. Companies have deadlines to reply to complaints. European DPAs can refer complaints to the Department of Commerce and the Federal Trade Commission. In addition, Alternative Dispute resolution will be free of charge. For complaints on possible access by national intelligence authorities, a new Ombudsperson will be created.
- Informing individuals about data processing
- Maintaining Data Integrity and purpose limitation
- Ensuring accountability for data transferred to third parties
- Cooperating with the Department of Commerce
- Transparency related to enforcement actions
- Ensuring commitments are kept as long as data is held