Today, October 7, 2022, President Joe Biden signed an executive order implementing a new privacy framework for data being shared between Europe and the United States. The new framework is called the “Trans-Atlantic Data Privacy Framework,” and it will (hopefully) serve to replace the prior framework, known as “Privacy Shield”, which was struck down by the European Court of Justice in July 2022 (in a case called Schrems II) on grounds that it did not adequately protect EU citizens from U.S. government surveillance. We wrote about the Schrems II decision here, including how it not only struck down the “Privacy Shield” framework, but also potentially called into question all EU-U.S. data transfers.

The new framework was the result of over a year of detailed negotiations between the U.S. and EU, and it is believed to address the concerns raised by the Court of Justice of the European Union (CJEU) in the Schrems II decision. If the European Commission agrees and issues an adequacy decision, the framework will serve to re-enable the flow of data between the EU and U.S., a $7.1 trillion economic relationship. So, how did the U.S. address the CJEU’s concerns?  The key principles are:

  1.  a new set of rules and binding safeguards to limit access to data by U.S. intelligence authorities to what is necessary and proportionate to protect national security, and U.S. intelligence agencies will adopt procedures to ensure effective oversight of new privacy and civil liberties standards;
  2. a two-tier redress system is created to investigate and resolve complaints filed by EU citizens if they are concerned their personal information has been improperly collected by the U.S. intelligence community, including the establishment of a new data privacy court (a data protection review court) inside the Justice Department to investigate valid complaints; and
  3. the creation of strong obligations for companies processing data transferred from the EU, including a continued requirement to self-certify their adherence to the Principles through the U.S. Department of Commerce.

The next step is for the European Commission to assess the framework and (hopefully) issue an adequacy decision. This process could take many months.  Unless and until an adequacy decision is issued, businesses will have to continue to rely on other means for transferring EU personal data to the U.S., such as binding corporate rules or standard contractual clauses.