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Analyzing Assessments and Additional Safeguards for Cross Border Data Transfers post Schrems-II
Published on September 6, 2020 AUTHOR PRIVACY RESEARCH TEAM
The Court of Justice of the European Union (CJEU) released a decision invalidating the US-EU Privacy Shield arrangement for transatlantic data transfers and changing obligations of data controllers when using Standard Contractual Clauses (SCCs) as a mechanism to export data. Among other things, the court held that data controllers may use SCCs to transfer data of EU citizens to a data importer based in a jurisdiction which has been deemed to have inadequate data privacy protections only after:
1. Carrying out a review of the national legislation and regulations relating to data privacy and security of the data importer and verifying whether the existing laws and regulations ensure that the contractual promises within the SCCs can be honored by the importer;
2. If the national legislations and regulations are too weak to allow the SCCs to be enforced, then the controller along with the assistance of the data importer will have to establish supplementary measures to enforce the data importer’s obligation to protect the data under the SCCs;
3. If the data controller, the data importer or the relevant Supervisory Authority believes that the contractual protections on the data as per the SCCs cannot be honored by the data importer then the data transfer between the controller and importer should be cancelled and any data already transferred under the SCCs should be deleted by the data importer.
Risk assessments
Upon a close reading of the CJEU’s judgement, it appears that the data controllers and processors should be focusing on the following factors while conducting the obligatory risk assessments under the SCCs:
1. Identity of the data importer:
- Is the data importer from a regulated industry?
- Who is the data importer and in which industry do they work?
- Does the data importer have the capability to refuse public authorities’ requests to hand over transferred data for surveillance needs?
- Whether the data importer has received surveillance requests in the past and complied with the same for similar sets of data?
The identity of the data importer matters since some data importers might be targeted more by public authorities in comparison to others due to the industry they work in. Moreover, the data importer’s history of compliance with a regulatory regime and it’s capability to challenge requests for surveillance by public authorities can also help assess the risk of exposure to the personal data being transferred.
2. Assessment of the industry-specific regulatory regime of the data importer:
- What are the powers, roles and performance of the relevant local regulators?
- What safeguards and redress are available for data subjects under the relevant legal and regulatory regime?
The type of safeguards and redress available to data subjects under a regulatory regime should be analyzed and evaluated in terms of scope, efficacy and enforceability of protections.
3. The nature of the data and the data transfer:
- What type of data is it?
- Is it sensitive personal data?
- For what purpose is the data being transferred?
- What is the residual risk to the data subject if the transferred data is exposed or surveilled by the public authorities of the importing country?
- Has the data subject provided (enhanced) informed and free consent to have his/her personal information transferred despite the risk of it being exposed or surveilled by the public authorities of the data importer’s country?
Some data and transfers are inherently more at risk than others to be the subject of surveillance by governments due to national security concerns and/or law enforcement interests in the type of data being transferred. Similarly, the type of data being transferred also matters as sensitive personal data being exposed to surveillance is more harmful to the data subject compared to other data types.
4. The categories of data subjects:
- Who are the data subjects whose data is being transferred?
- Do these data subjects have access to judicial/regulatory bodies in the data importer’s country to exercise their rights and challenge the surveillance of their information?
Some data subjects might be at increased risk of surveillance by a country’s public authorities due to their employment or nationality etc. Similarly, some categories of data subjects (i.e EU citizens who have dual nationality as US citizens) will have the enhanced capability to take action to stop or redress any government action which threatens to expose their data while others might not.
5. The nature and scope of surveillance and national security laws of the data importer’s country:
- Are the surveillance laws of the data importer’s country expansive or limited in their scope?
- Are surveillance efforts for national security requirements curtailed by the principles of necessity and proportionality?
- What is the probability that the transferred personal data will be surveilled?
Some jurisdictions have very well structured surveillance laws and the law applies to some specified industries, people, etc. but some jurisdictions have vaguely worded and overbroad surveillance laws. The risk is less if the laws (and their limitations) are well written and understood.
6. Other supplementary measures used by the data importer to protect the data:
- Does the data importer employ any industry-specific protections to the transferred data?
- Does the data importer apply any technical or organizational protections to the transferred data?
- Are there any protections to the transferred data which are in the nature of international commitments by the data importer or the country the data importer is based in?
- What supplementary measures will be used in the SCC and how effective would they be in protecting the data?
Some data importers can be subject to additional and independent supplemental measures for the protection of the transferred data that are industry-specific or international in nature (via international treaties or obligations). These can reduce the risk of the transferred data being exposed.
Additional Safeguards
The data controller after conducting a holistic assessment of the risk can choose to enact additional safeguards within the SCCs to protect the data and mitigate risk to achieve compliance with the CJEU judgment. Such additional measures may include:
- technical and organizational (i.e such as heavy grade encryption of the transferred data with the data importer not having access to encryption key at all times),
- data minimization (i.e reducing data flow to a data importer if they become subject to surveillance requests or the risk of them being issued a surveillance request increases),
- other contractual measures that can offer some form of control over data importers by data controllers (i.e the data controller exercises total control on the data importer in relation to the imported data),
- reporting obligation (the data importer is obligated to inform the data controller of data surveillance requests received on the imported data by public authorities),
- data protection obligation (i.e obligation upon data importer to delete the data or transfer it forward and to challenge data surveillance requests by public authorities before domestic courts).
Conclusion
"Data controllers in the EU should immediately begin to audit their data sharing practices and prepare for the eventual compliance actions by regulators. NOYB - Max Schrems’ data rights organization - has already filed 101 complaints with various Supervisory Authorities against European companies continuing to transfer data to the US after the judgement and the European Data Protection Board has formed a task force for the implementation of the ruling. Since there is no grace period for companies to adapt to the decision, even tomorrow the Supervisory Authorities can knock on EU data exporters’ doors asking for justifications for data transfers being made to US companies."
Thus adoption and enhancement of SCCs with additional measures to mitigate the risks which arise in risk assessments is the only viable step for many companies (at least in the short term) as other solutions such as Binding Corporate Rules (BCRs) are too expensive and solutions such as enhanced consent are not sustainable or viable for systematic transfers. Until further guidance comes from the authorities or the US and EU authorities can clobber together a Privacy Shield 3.0, these steps are required to ensure the billions of dollars worth of transatlantic trade does not come to a grinding halt.
Navigating the Impact of “Schrems II” and Cross-Border Data Transfers
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Michael Morgan
CIPP/US, Partner, Global Privacy & Cybersecurity, McDermott Will & Emery
Srinivas Avasarala
VP Product Management, Securiti
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- Automate erasure requests
- Continuous monitoring and tracking
- Automate People Data Graph
- Meet cookie compliance
- Monitor and track consent
- Assess China’s Draft PIPL readiness
- Map data flows
- Manage vendor risk
- Breach Response Notification
- Customize a data subject rights request portal for seamless customer care
- Automate data subject access request handling
- Secure fulfillment of data access
- Automate the processing of rectification requests
- Automate object and restriction of processing requests
- Automate erasure requests
- Continuous monitoring and tracking
- Automate People Data Graph
- Meet cookie compliance
- Monitor and track consent
- Assess DPA readiness
- Map data flows
- Manage vendor risk
- Automate data subject access request handling
- Secure fulfillment of data access
- Automate the processing of rectification requests
- Automate erasure requests
- Automate object and restriction of processing requests
- Continuous monitoring and tracking
- Automate People Data Graph
- Meet cookie compliance
- Monitor and track consent
- Assess PDPO readiness
- Map data flows
- Manage vendor risk
- Breach Response Notification
- Automate data subject access request handling
- Secure fulfillment of data access
- Automate the processing of rectification requests
- Automate erasure requests
- Automate object and restriction of processing requests
- Continuous monitoring and tracking
- Automate People Data Graph
- Meet cookie compliance
- Monitor and track consent
- Assess DPA readiness
- Map data flows
- Manage vendor risk
- Breach Response Notification
- Continuous monitoring and tracking
- Automate People Data Graph
- Monitor and track consent
- Assess TRA CPR readiness
- Map data flows
- Manage vendor risk
- Customize DSR Request Portal
- Automate Data Subject Access Request Handling
- Secure Fulfillment of Data Access
- Automate Processing of Rectification Requests
- Automate Erasure Requests
- Automate Objection & Restriction of Processing Requests
- Continuous Monitoring & Tracking
- Automate People Data Graph
- Meet Cookie Compliance
- Monitor & Track Consent
- Assess PIPA Readiness
- Map Data Flows
- Manage Vendor Risk
- Breach Response Notification
- Customize DSR Request Portal
- Automate Data Subject Access Request Handling
- Secure Fulfillment of Data Access
- Automate Processing of Rectification Requests
- Automate Erasure Requests
- Automate Objection & Restriction of Processing Requests
- Continuous Monitoring & Tracking
- Automate People Data Graph
- Meet Cookie Compliance
- Monitor & Track Consent
- Assess Japan APPI readiness
- Map Data Flows
- Manage Vendor Risk
- Breach Response Notification
- Customize a data subject rights request portal for seamless customer care
- Automate data subject access request handling
- Secure fulfillment of data access
- Automate processing of rectification requests
- Automate erasure requests
- Automate objection and restriction of processing requests
- Continuous monitoring and tracking
- Automate People Data Graph
- Meet cookie compliance
- Monitor and track consent
- Assess Qatar DPL readiness
- Map data flows
- Manage vendor risk
- Breach Response Notification
BackSnowflake is a cloud based data warehouse that allows organizations to run large scale data analytics projects to uncover business insights, run or train machine learning models, and modernize their data infrastructure.
Key Features
The Amazon S3 (Simple Storage Service) is a web-service which allows for scalable storage solutions for data archival, backup, and recovery purposes.
Key Features
Microsoft O365 is the ubiquitous productivity suite for every business worker. Users rely on Office products such as OneDrive and SharePoint to collaborate with their co-workers.
Key Features
Organizations want to migrate their on-premises data to cloud data stores to take advantage of scale and flexibility while reducing operational cost of managing on-premises infrastructure. However, due to privacy regulations such as GDPR, CCPA administrators have to ensure that data is migrated in compliance with these laws.
Key Features
Protecting sensitive content is a priority for all organizations, however, due to volume of sensitive content and
Key Features
While data aids in business decision making, global privacy regulations such as GDPR, CPRA require organization to identify personal & sensitive data & use only for its intended purpose and implement adequate protection.
Key Features
The California Consumer Privacy Act (CCPA) was signed into law on June 28, 2018 and is scheduled to come into effect on January 01, 2020. Often compared to GDPR, CCPA protects consumers from mismanagement of their personal data and gives the consumer control over what data is collected, processed, shared or sold.
Key Features
The EU General Data Protection Regulation (GDPR) came into effect on May 25, 2018 and changed the global privacy landscape. It has broadened the definition of processing activities and personal data, impacting companies worldwide, and has tightened the rules to obtain consent before processing information.
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The Lei Geral de Proteção de Dados (LGPD) is modeled with similarities to the General European Data Protection Regulation (GDPR) and contains sixty-five articles. It was approved on August 14, 2018 and its validity has undergone several changes, the last relevant fact being MPV 959. LGPD is in effect since September 18, 2020. The sanctions by the ANPD (Brazilian Data Protection Authority) were postponed to August 2021. The LGPD allows people have more rights over their data and expects organizations to comply with their regulations or face heavy penalties or fines.
Key Features
The government of New Zealand has recently replaced its long-existing Privacy Act of 1993 with a modernized version, the Privacy Act 2020. The New Zealand Privacy Act 2020 (NZPA) will take effect from December 1, 2020.
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The Personal Data Protection Act, B.E. 2562 (2019) ('PDPA') is Thailand's first consolidated data protection law, which was published in the Thai Government Gazette on 27 May 2019. This law was said to go into effect on 27 May 2020. However, in May 2020, the Thai Cabinet through a Royal Decree has deferred the enforcement of certain data protection provisions of the PDPA until 31 May 2021.
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In order to protect the data of individuals in South Africa, Parliament assented to the Protection of Personal Information Act (POPIA) on 19th November 2013. The commencement date of section 1, Part A of Chapter 5, section 112 and section 113 was 11 April 2014. The commencement date of the remaining sections (excluding section 110 and 114(4)) was 1st July 2020. As per the Regulator’s Operational Readiness Plan the Regulator will be able to take enforcement actions for the violation of POPIA by July 1st 2021.
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The DIFC Data Protection Law, 2020 lays down regulations regarding the collection, disclosure and processing of personal data in the DIFC, a special economic zone in Dubai. It also gives rights to individuals whom the personal data relates to and provides power to the Commissioner of Data Protection to enforce the law, enact regulations and approve industry-wide Codes of Conduct.
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The Australia Privacy Act 1988 (Privacy Act) was enacted to protect the privacy of data subjects and regulate how Australian agencies and organizations with an annual turnover of more than $3 million handle their customers’ personal information.
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Singapore’s Personal Data Protection Act (PDPA) comprises various provisions governing the collection, disclosure, use, and care of personal data. It recognizes the rights of individuals to have more control over their personal data and the needs of organizations to collect, use, or disclose personal data for legitimate and reasonable purposes.
Key Features
On April 13, 2000, the Personal Information Protection and Electronic Documents Act (PIPEDA) received Royal Assent. It came into force in stages, beginning on January 1, 2001. PIPEDA came fully into effect on January 1, 2004. The legislation applies to organizations that collect, use or disclose personal information in the course of commercial activities.
Key Features
After the invalidation of Privacy Shield, many companies are relying on the SCCs in order to continue transferring data of EU citizens to companies based in countries who are not deemed adequate for data transfer.
After the CJEU judgement, it is clear that these companies have to conduct Risk Assessments with the data recipients in these countries in order to ensure they have enough controls to mitigate any potential data or regulatory risk.
Key Features
On 2nd March, 2019, the Department of Health—Abu Dhabi (DoH), launched the Abu Dhabi Healthcare Information and Cyber Security (ADHICS) Standard. This is the first standard that aims to provide healthcare professionals and entities a comprehensive guide to the regulation of healthcare data in Abu Dhabi. This law ensures the highest levels of privacy and security of patients’ data, in line with international standards, is maintained.
Key Features
On January 31, 2020, the government of Saudi Arabia issued the Executive Regulations to the Saudi E-Commerce Law 2019 (“ECL”) that was in effect since October 2019. The Executive Regulations together with the ECL (“Law”) aim to protect consumers’ personal data by requiring organizations to take appropriate technical and administrative measures.
Key Features
Turkey was one of the first countries to start the trend of legislating data protection. Turkey published “Law on the Protection of Personal Data No. 6698 (LPPD) covering personal data protection on April 07, 2016.” The LPPD is based on the European Union Data Protection Directive 95/46/EC and has several similarities with the GDPR. It aims to give data subjects’ control over their personal data and outlines obligations that organizations and individuals dealing with personal data must comply with. The LPPD has also provided comprehensive guidelines for the transfer of personal data to the third parties.
Key Features
In December 2019, India, following several other countries' footsteps on the privacy laws' developments, introduced the Personal Data Protection Bill (PDPB) to regulate the processing, collection, and storage of personal data.
Key Features
On 13 October 2020, the National People's Congress of the Republic of China submitted the long awaited draft of the Personal Information Protection Law (Draft PIPL) to the Standing Committee meeting for preliminary review. This draft was officially released for the public consultation on 21 October, 2020. The consultation period will last until 19 November 2020.
Key Features
The Irish Data Protection Act, 2018 (Irish DPA) implements the General Data Protection Regulation (GDPR) and transposes the European Union Law Enforcement Directive in Ireland. Since it incorporates most of the provisions from the GDPR and the Law Enforcement Directive with limited additions and deletions as per the national law, it is considered to be the principal data protection legislation in Ireland.
Key Features
The Personal Data (Privacy) Ordinance (Cap. 486) as amended in 2012 (the “PDPO) is the primary legislation in Hong Kong which was enacted to protect the privacy of individuals’ personal data, and regulate the collection, holding, processing, disclosure, or use of personal data by the organizations.. The Data Protection Principles ( the “DPPs or DPP ''), which are contained in Schedule 1 to the PDPO, outline how entities should collect, handle, disclose, and use personal data.
Key Features
In 2012, the Philippines passed the comprehensive privacy law, Data Privacy Act 2012 Republic Act. No, 10173 (the "DPA"). The DPA recognizes the rights of individuals to have more control over their personal data while ensuring a free flow of information to promote innovation and growth.
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The United Arab Emirates (UAE) has a Federal Telecommunication Law ( Federal Law) which requires that a company must hold a license in order to provide public communications services and operate public telecommunication networks. Under this Federal Law, a Telecommunication Regulatory Authority (TRA) was established which regulates the telecommunication sector in the UAE.
Key Features
South Korea has a general law and several special laws that cover data protection and individuals' privacy. South Korea's data protection regime is considered one of the strictest data protection regimes owing to its notification requirements, opt-in consent, extensive data subject rights, mandatory data breach notifications, and heavy sanctions in case of non-compliance.
Key Features
The Act on the Protection of Personal Information (the "APPI'') regulates personal related information and applies to any Personal Information Controller (the “PIC''), that is a person or entity providing personal related information for use in business in Japan. The APPI also applies to the foreign PICs which handle personal information of data subjects (“principals”) in Japan for the purpose of supplying goods or services to those persons.
Key Features
Qatar is the first gulf country that has passed a national data privacy law and has paved the way for all other gulf countries to follow suit. In 2016, Qatar enacted Law no. 13 Concerning Personal Data Protection (the “DPL”). Qatar became the first Gulf Cooperation Council (GCC) member state to issue an “European Style” applicable data protection law. The DPL establishes a certain degree of personal data protection, provides data subject rights, and prescribes the guidelines for organizations for the processing of personal data within Qatar.
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