Following the judgement made today by the European Union Court of Justice ruling the Safe Harbour scheme invalid, the Luxembourg Ministry of Justice has stated that the Presidency is attempting to develop EU data protection reform which strikes a balance between the right to the protection of personal data and the economic importance of transatlantic data flows.
The Safe Harbour agreement, which has allowed the transmission of personal data from the EU to the US, was today ruled invalid by the European Court of Justice, found to not account for the guarantee that US firms were taking adequate data protection measures.
Negotiations on the reform of the EU rules on the protection of this personal data are currently underway, with the judgement of the Court confirming that adequacy decisions by the European Commission can continue to be taken given strong safeguards, in particular with regards to judicial remedies for citizens and a reinforce role for national supervisory authorities. These safeguards have been provided for in the draft regulation currently under negotiation at EU level.
Olivier Reisch, Counsel Litigation/IP TMT at Linklaters LLP Luxembourg, claimed that "This is extremely bad news for EU-US trade. Thousands of businesses rely on the Safe Harbor as a means of moving information to the US from Europe. Without Safe Harbor, they will be scrambling to put replacement measures in place".
However, the Luxembourg Ministry of Justice stated that although this invalidation impacted all stakeholders concerned, it does not preclude transfers to the US taking place on the basis of other mechanisms, such as Binding Corporate Rules, standard contractual clauses, contract and consent. Whilst discussions are currently underway between the Commission and US authorities regarding a safe framework for transatlantic data transfers, the draft EU data regulation foresees other means for transfers outside the EU beyond adequacy decisions.
The Luxembourg Presidency was cited as remaining committed to the objective of finalising the EU data protection reform by the end of the year.
