The Article 29 Working Party (WP29) issued on 16 October 2015 what it called a “robust, collective and common position” on the consequences of the recent decision of the European Court of Justice that declared Safe Harbor mechanism for transfers of personal data to the US invalid. The WP29 suggested that the EU and the US reach agreement before the end of January 2016 on an appropriate “political, legal and technical solution” for data transfers to the US.
The WP29’s statement follows in the aftermath of the European Court of Justice’s decision in Maximillian Schrems v Data Protection Commissioner. Our Legal alert of 7 October 2015 discussed the ramifications of this judgment and suggested EU model contracts as a temporary and Binding Corporate Rules (BCR) as a more permanent basis for structural data transfers between the EU, the US and elsewhere. The WP29’s statement confirms that both EU model contracts and Binding Corporate Rules can indeed continue to be used.
The WP29’s statement warns about the potential of coordinated enforcement by data protection authorities (DPAs) after the end of January 2016. This coordinated enforcement would likely initially focus on Safe Harbor based transfers. Because of the differences in individual statements of various national DPAs, the extent of actual enforcement will likely vary from country to country. The WP29’s statement further indicates that also the use of alternatives for Safe Harbor, such as model contracts and BCR discussed above, will become subject to more scrutiny and potential enforcement. When employing these instruments, it is therefore important to ensure that their use results in actual data privacy compliance and not just the signing of documents.
Given the broad scope of the WP29 post-Safe Harbor guidance, we advise corporates to map and assess the compliance of both their internal and external data transfers globally.
See also the full text of the statement by the WP29.
Highlights of the WP29’s conclusions
Will EU DPAs give businesses a grace period to align their processes with the ECJ’s ruling?
The WP29’s statement indicates that until the end of January 2016 national DPAs may investigate and enforce any specific data transfers to the US or elsewhere based on any adequacy mechanisms. At least one European DPA (UK’s Information Commissioner) recognised that companies would need time to align their data transfers with law. On the other hand, the German DPA in Schleswig-Holstein has already suggested that companies which fall under its jurisdiction terminate contracts (also using EU Model Contract Clauses) for data transfers to the US. The Schleswig-Holstein DPA backs this guidance up by referring to potential enforcement actions.
Beyond Safe Harbor: real compliance is the key
Following the ECJ’s decision, we advised companies in our previous Legal Alert to analyse which of their personal data transfers are based on Safe Harbor. In doing so, a distinction can be made between:
The above adds agility if there are changes to the adequacy status of other data transfer mechanisms or adequate countries. And we recommend staying abreast of developments in this area, monitoring national DPAs relevant for your business operations and engaging in conversations with them in case of uncertainty.
Some additional background
The EU is currently working on a general data protection regulation (GDPR) that will harmonise data protection laws throughout the EU, have extra-territorial effect and introduce strong mechanisms for protecting personal data. The final text of the GDPR is expected to be adopted in 2015 and to come into force within 2 years. In anticipation of the GDPR, EU DPAs have been taking an increasingly active role in enforcing data protection law and pursuing violators.
The ECJ has followed this trend by a string of groundbreaking cases. In 2014, the ECJ invalidated the EU Data Retention Directive for massive and unjustified collection and storage of personal telecom data. The same year the ECJ extended European jurisdiction over Google Inc. and gave a new dimension to the right to be forgotten. Less than a month ago, in Weltimmo (C‑230/14), the ECJ recognised a right – and a duty – of national DPAs to investigate claims of individuals regarding violation of their rights under data protection law regardless of the applicability of the national law. In Schrems, the national DPAs were reinstated in their authority to investigate and act on the claims on non-compliant data transfers outside the EU, even if there is an adequacy mechanism established by the European Commission.
For an overview of frequently asked questions about Schrems and its consequences, please see our Legal alert of 7 October 2015.