Tag Archives: adequacy

Red Alert: Hard Brexit and Data Protection

After the House of Commons rejected the text of the treaty negotiated between the European Commission and the British Government on the withdrawal of Great Britain from the European Union (https://ec.europa.eu/commission/sites/beta-political/files/draft_withdrawal_agreement_0.pdf), a “hard brexit” – the dissolution of the relationship without a divorce contract – has become more likely. This also has serious implications for data protection and the companies subject to it.

In its statement issued more than a year ago (http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=611943), the European Commission had already pointed out the serious consequences for data protection resulting from the departure of Great Britain. The Commission pointed out that after the Brexit, Great Britain would become a “third country” to which the corresponding rules of the European General Data Protection Regulation (GDPR) for data transfer to countries outside the EU would apply (Art. 44 ff GDPR). 

While the cross border transfer of personal data between the member states of the European Union is permissible without restrictions under data protection law, an adequate level of data protection must be demonstrated if the data are to be transferred to third countries. The GDPR provides various instruments for this purpose.

The silver bullet would be a so-called “adequacy decision” of the Commission (Art. 45 GDPR). On the base of such decision a transfer shall not require any specific authorisation. But it would be an unrealistic presumption such a decision can be implemented in the short term, as it is not only a question of assessing the data protection law as amended last year, but also the entire legal system, including the highly controversial Investigations Powers Act (IPA), which grants the British security authorities comprehensive powers over personal data.

Appropriate safeguards to demonstrate the adequacy of data protection at the recipient (Art. 46 GDPR) are “standard data protection clauses”, approved binding corporate rules (BCR), approved codes of conduct (CoC) and certification mechanisms.

However, until recently, it looked as if companies could take their time looking for alternatives. The text of the agreement negotiated between the Commission and the British government provides in Art. 70 ff that the GDPR (with the exception of the provisions of the seventh section governing supervisory cooperation) should continue to apply in Great Britain for the planned transitional period of two years. It was also agreed that an adequacy decision should be prepared within the transitional period.

Now that the text of the agreement is out of date, there is an urgent need for action by companies exchanging personal data between the EU 27 and business partners in the UK. By the end of March 2019, they must fulfill the requirements of the GDPR for third country transfers by means of one of the above-mentioned instruments or by means of individual contractual arrangements and, if necessary, corresponding authorisation from the competent supervisory authorities. Otherwise, the corresponding transfer transactions would be illegal. 

It is to be hoped that the European data protection supervisory authorities will assist the companies in an advisory capacity in this difficult matter.


Peter Schaar

Translated with www.DeepL.com/Translator

Brexit and Data Protection: Out Is Out

By Peter Schaar, Chairman, European Academy for Freedom of Information and Data Protection, Berlin


What the consequences of the the UK Brexit referendum are for data protection currently cannot be said conclusively. Considerable uncertainties remain until the end of the upcoming exit negotiations at least. Unless specific arrangements on data protection are made between the EU and the UK, the United Kingdom will be seen from the EU perspective as a regular third country like any other non-member state, such as Japan or South Africa.


At best, the country gets a status like Norway, which belongs to the European Economic Area and is thus largely obliged to apply EU law, without, however – as the EU member states – to have effective decision power and participation rights, in particular in the European Data Protection Board set up by the EU General Data Protection Regulation (GDPR).


I am sceptical that the UK Parliament will implement the GDPR completely by changing the British law by May 2018 when the GDPR starts to be applicable. This seems to be very unlikely, especially since the United Kingdom has already struggled with the adoption of the new EU privacy rules. For example the British Government “opted out” from Art. 48 of the GDPR, the so-called “NSA clause” that is to protect European citizens against third country government access to personal data. Nevertheless the provisions of Art. 48 would probably apply in future to the United Kingdom after the leave from the EU. The transmission of personal data to government authorities protected by the GDPR based on British court rulings or administrative orders will be legal then only within the framework of mutual legal assistance agreements between the UK and the EU or its member states. This is particularly important because the British Parliament has recently stepped up drastically the already strong surveillance powers of security agencies and its corresponding obligations of companies with the amended “Investigatory Powers Bill”. The “national security exemption” of article 4 TFEU will not longer be applicable for the UK. The practices of GCHQ and other government agencies will have to be taken into account even in the assessment of the EU Commission about a possible adequacy decision for the UK (see below).


It seems likely to me that the very requirements of the GDPR provisions on transfer of personal data to third countries (art. 44 and following) will apply in the future on the UK. Thereafter, any transfer of personal data will be permissible only if the data controller and the data processor comply with the conditions laid down in the GDPR. This also concerns the possible onward transfer of personal data to another third country or to an international organization. The GDPR allows the transmission on the basis of “adequacy decisions” of the European Union or other appropriate safeguards, in particular on the basis of standard contractual clauses or under a system of binding corporate rules(BCR).


The UK Information Commissioner (ICO) already pointed out that the United Kingdom continues to need clear and effective privacy laws, irrespective of the question of EU membership (https://ico.org.uk/about-the-ico/news-and-events/news-and-blogs/2016/04/statement-on-the-implications-of-brexit-for-data-protection/). If the British legislator follows this advice, the European Commission could make a decision under article 45 on the existence of an “adequate level of data protection” in the UK. However, such a finding is not supposed to run by itself and it would require negotioations and a thorough examination and assessment of the British data protection system. This could hardly be managed within the available two-year period for the implementation of the EU exit.


In the light of the above companies running business in the UK as well as public bodies of member states and EU institutions have to prepare for the situation that the transmission of personal data from the EU to the UK (including the hosting of personal data on the British soil) will be much more difficult in the future as it is today. This concerns in particular those companies with business processes which are based on combining personal data of various member states or using servers or switching centers located in the UK.


Peter Schaar


Safe Harbor – No Future?

Keynote on the conference „New Directions in Cyber Security“

Berlin, 1 October 2015

Safe Harbor – No Future? How the General Data Protection Regulation and the rulings of the Court of Justice of the European Union (CJEU) will influence transatlantic data transfers
Ladies and gentlemen,

One week ago, the Advocate General at the Court of Justice of the European Union (CJEU) issued his vote on the Safe Harbor case of Max Schrems vs. the Irish Data Protection Commissioner.

Since 1995 when the General European Directive on Data Protection came into force, data transfers from the European Union and its member states to non-EU countries have been subject to specific privacy and security restrictions. Such restrictions do not exist only in Europe.

For example in the US several legal acts and decisions of regulatory authorities constitute the obligation to store specific data in the own country, in particular data, which have been generated by public bodies and providers of critical infrastructures. The US Federal Trade Commission has stated that a company subject to privacy obligations under US law is not allowed to avoid such obligations by outsourcing their data processing activities to offshore service providers.

The key message of Art. 25 of the 1995 GD is that transfer of personal data to a third country may take place only if the recipient in question ensures an adequate level of data protection. The adequacy shall be assessed in the light of all the circumstances surrounding the data transfer operation.

The main road to adequacy are the so-called adequacy decisions of the European Commission, that the said country ensures an adequate level of data protection. These decisions are binding for the member states. They shall take the measures necessary to comply with the Commission’s decision.

One of the most discussed adequacy decisions concerns the United States – the decision on Safe Harbor, although the Commission was of the opinion, that the US in general failed to provide an adequate level of data protection for the private sector, because of the lack of any comprehensive data protection legislation.

The Safe Harbor principles, negotiated between the Commission and the US government in the late 1990s should bridge this obstacle. The SH arrangement has been aimed at guaranteeing the adequate level of protection required by EU law for those companies, committing themselves to comply with the SH principles.

From the beginning, since the Safe Harbor was agreed in the year 2000 there has been some criticism against it. The main critical argument was that the principles do not meet the high EU data protection standards defined by the General Directive.

A scientific implementation study on SH done 2004 on behalf of the Commission came to the result that „Key concepts such as ‚US organization‘, ’personal data’,’deceptive practices’ lack clarity. Moreover, the jurisdiction of the FTC with regard to certain types of data transfers is dubious.“ (p.18)

It also has been criticized, that companies which declare compliance with the principles at once may profit from the Safe Harbor privileges, even if their privacy practices were not yet subject to an independent audit.

These issues remain important until our days. But after the vote the Advocate General at the CJEU (GA) issued recently, the focus lays on another question: How far practices and powers of US authorities have been ignored in the adequacy assessments.

At the first glance, law enforcement authorities, police and intelligence do not fall within the scope of the Safe Harbor agreement and therefore they do not have to be subject to the assessment. But this first impression is wrong.

As Art. 25 of the GD is pointing out, the assessment is to be done in the light of „all circumstances“ surrounding a data transfer to the third country. Even activities of authorities in the third country have to be examined. It is unclear how far this happened during the Safe Harbor assessment in the late 1990s.

But even if such assessment once took place, the result may be invalid today, because things changed dramatically after 9/11 2001. As we have learnt from Edward Snowden and other whistleblowers, US government has obtained broad access to private companies’ databases, telecommunications and Internet services.

Many companies which have co-operated with the NSA – voluntarily or based on legal obligations – have been safe harborists and there is no doubt that NSA and other services have got access to big amounts of data stemming from Europe or related to EU citizens.

The USA PATRIOT ACT and secret Presidential Orders, issued after 9/11 provided intelligence and law enforcement agencies with a lot of new powers and simultaneously demolished many safeguards which have been introduced in the 1970s to protect civil rights and privacy.

For years it seemed that many of these changes were not on the screen of the European Commission and other European stakeholders. The implementation study on SH of 2004 came to the conclusion: „Since the new US legislation only rarely contradicts the SH principles for data covered by SH, these conflicts do not appear to undermine the level of protection for any significant flows of personal data to the United States. The controversial provisions of the USA PATRIOT ACT are essentially irrelevant for SH data flows.“ (p. 101)

But 2013, after the the beginning of the Snowdon revelations, nobody can ignore any more, that the practices of NSA, CIA and FBI introduced after 9/11 have impact on the level of data protection in the United States: The legal provisions on Government access to personal information, especially the Foreign Intelligence Surveillance Act (FISA), do not meet the basic standards of the rule of law at least so far data of non-US-persons are concerned. The practices disclosed in the last two years and the commitments of US officials on mass surveillance provided the public with loads of evidence that the NSA and others are involved in bulk collection of personal data coming from Europe. Therefore it seems evident, that these practices have to be taken into account by the CJEU.

Another change happened in Europe: The Lisbon Treaty came into force in 2009, and at least since then privacy and data protection, including the independent oversight, have been fundamental rights of the European Union, as parts of the European primary law. European secondary law and European Commission’s decisions have to fulfill these requirements. Even older legislation, agreements with third countries as to PNR or TFTP and Commission’s decisions have to be reviewed in the light of Art. 7 and 8 of the EU Charter of Fundamental Rights.

Acknowledging this, the vote of Advocate General Bot (AG) in the case of Maximilian Schrems versus the Irish Data Protection Commissioner, issued last week, is not really surprising. The vote touches two big points:

Even if the Commission decides that the level of data protection in a country is adequate, this does not prevent national data protection authorities from suspending the transfer of the data, it they are of the opinion, that in the concrete case adequacy criteria are not met by the recipient. As we have learnt from the Snowden revelations, Facebook and other Internet companies cooperated closely with the NSA and provided them with broad access to personal data stored on their servers.
The AG is of the opinion that the Safe Harbor arrangement itself is invalid, because the US, especially the intelligence services, do not provide adequate protection for the personal data coming from Europe. Therefore he proposes to suspend the Safe Harbor.

Nobody knows how the European Court of Justice will decide the case. The ruling is expected on 6 October. Perhaps you know the sentence „How the judge decides depends what he ate for breakfast“. It is correct: The vote of the advocate general is only an opinion and it does not bind anybody.

But for me it seems likely that the judges will acknowledge the vote, at least in the result. In two earlier cases, the court decided last year, on data retention and on the right to be forgotten, the judges underlined the high importance of European fundamental rights on privacy and data protection. In these cases the court went beyond the Advocate general’s vote. In the Schrems’ case the AG adapted this recent orientation of the judges.

If the CJEU will decide as proposed by the AG, this does not mean automatically the end of Safe Harbor. But the Safe Harbor arrangement must be renegotiated and at the end there might be a better safe Harbor System, meeting the principles of fundamental rights and complying with the new EU Data Protection Regulation.

Art. 41 of the Commissions proposal contains criteria, conditions and procedures for adequacy assessments, more specific than the current Art. 25 of the GD from 1995: The criteria which shall be taken into account for the Commission’s assessment of an adequate or not adequate level of protection include expressly the rule of law, judicial redress and independent supervision. The new article confirms explicitly the possibility for the Commission to assess the level of protection afforded by a territory or a processing sector within a third country.

My conclusion for today: Safe Harbor will be possible even in the future. But such a „happy end“ requires changes in the SH arrangement. And it requires effective legal guarantees for EU citizens in the US.

Also necessary is a new thinking in Europe, in particular on the fields of law enforcement and intelligence. If we urge the US to respect our privacy, European secret services have to respect fundamental rights of all EU citizens and citizens of third countries as well.