THE WHITE HOUSE
the Press Secretary
Data Privacy Accord with EU (Safe
The U.S. and the EU have taken steps to conclude to a
"safe harbor" Data Privacy Accord that will protect consumers' privacy,
maintain data flows and create the right environment for e-commerce. The accord
will help U.S. organizations comply with the European privacy law and prevent
the potential disruption of approximately $120 billion in U.S.-EU trade.
In October 1998, the EU enacted a sweeping privacy law that prohibits
the transfer of personal data to the United States and other non-EU countries
that do not meet the EU standard for adequate privacy protection. The Data
Privacy Accord provides businesses predictability and certainty, which are
essential for investment and growth. Without the assurance that companies would
be able to conduct their business free of the threat of data cutoffs, many
businesses would find it difficult, if not prohibitively expensive, to conduct
business in Europe. European companies would be similarly affected. This would
have a devastating effect on our respective economies.
are the lifeblood of many organizations and the underpinnings for all of
electronic commerce. Multinational organizations routinely share among their
different offices a vast array of personal information. This information can be
as simple as personnel telephone directories to more sensitive information such
as personnel records, insurance information needed to process medical claims,
credit card billing information, or patient information essential for
conducting pharmaceutical research on new drugs.
Safe harbor is a
mechanism which, through an exchange of documents, enables the EU to certify
that participating U.S. companies meet the EU requirement for adequate privacy
protection. Participation in the safe harbor is voluntary. Organizations will
need to agree to adhere to the privacy requirements laid out in the safe harbor
documents for all data received from the EU. The safe harbor is, figuratively,
a place where US companies can find shelter from potentially damaging
crosswinds caused by different privacy regimes in the U.S. and EU.
Without the safe harbor, corporations would find it difficult to run
multinational operations. Basic information about their employees would not be
transferable to the U.S. Accountants would not be able to perform consolidated
audits for multinational firms with offices in Europe and the U.S.
Pharmaceutical companies would be unable to collect information they need to
conduct long term research and they would be unable to share such information
with companies located outside the EU.
The data privacy issue is likely
the first of many trade issues involving electronic commerce and the agreement
reached today could provide a model for how the US and the EU can move forward
as they grapple with conflicting national laws and regulations.
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