The European Commission recently issued an overall positive review in its first annual report on the E.U. – U.S. Privacy Shield (“Privacy Shield”),  after evaluating the Privacy Shield in its joint review with the US last month.

The Privacy Shield took effect in August 2016 replacing the EU – US Safeharbor that was invalidated by the EU High Court of Justice. Over 2,500 companies and tens of thousands of EU companies rely on the Privacy Shield to transfer data between the EU and US.

First Joint Review

In September, the E.U. Justice Commissioner Vĕra Jourová and US Secretary of Commerce Wilbur Ross, launched the first annual joint review of the E.U. – U.S. Privacy Shield (“Privacy Shield”), a built-in requirement of the agreement. E.U. Commissioner Jourová anticipated “some proposals for improvement” but didn’t expect that it “will reopen negotiations again.” On the U.S. end, the White House firmly believed that the review would “demonstrate the strength of the American promise to protect the personal data on citizens of both sides of the Atlantic,” stated White House press secretary Sarah Sanders.

The review examined all aspects of the Privacy Shield administration and enforcement, including commercial and national security related matters, broader US legal developments and communication between E.U. and U.S. authorities.

EU Commission Report

After evaluating the results of the joint-review, the EU Commission published its first annual report on the functioning of the EU-US Privacy Shield (“the Report”) confirming that the Privacy Shield framework provides an adequate level of protection for personal information transferred from the EU to the US. The Report provides a green light for companies that rely on the Privacy Shield for their transatlantic data flow.  Nonetheless, the Report did have concern over US surveillance practices, and Privacy Shield oversight.

The EU Commission provided ten recommendations in the Report to help improve Privacy Shield framework implementation. Key recommendations include:

• Greater cooperation between all enforcement entities – U.S. Department of Commerce, Federal Trade Commission and EU Data Protection Authorities.
• More proactive and regular monitoring of corporate compliance by the US Department of Commerce (“DoC”). This includes that self-certified companies should be required to respond to compliance review questionnaires or file annual compliance reports with the DoC. 
• Reform/Review of US surveillance practices – in particular those associated with the Foreign Intelligence Surveillance Act and privacy protections for non-US citizens.
• Immediate appointment of the Privacy Shield Ombudsperson, and filling key positions in the Privacy and Civil Liberties Oversight Board.

Commenting on the Review, EU Justice Commissioner Jourová stated that, “Transatlantic data transfers are essential for our economy, but the fundamental right to data protection must be ensured also when personal data leaves the EU. Our first review shows that the Privacy Shield works well, but there is some room for improving its implementation. The Privacy Shield is not a document lying in a drawer. It’s a living arrangement that both the EU and U.S. must actively monitor to ensure we keep guard over our high data protection standards.”

For more information on the Privacy Shield compliance requirements and assessing whether the Privacy Shield is the proper mechanism for your company to use when transferring data outside of the EU to the US, we have prepared a Comprehensive EU – US Privacy Shield Q & A.