EU and US reach new data-sharing agreement

"Today's announcement of a new deal for EU-US data transfers is extremely important", he said, adding "The European Commission and US Administration must now show total commitment to implementing this agreement and getting trans-Atlantic data flows back onto a secure and stable legal footing".

The agreement, summarized in a release by the European Commission, says USA companies importing European data will be subject to laws enforceable by the FTC, and that EU citizens will have redress possibilities if they feel their data has been misused.

The EU said the new pact - called the EU-U.S. privacy shield - will provide citizens with robust privacy protection and the right to judicial review.

EU law bars firms from transferring the personal data of EU citizens to countries outside the European bloc deemed to have insufficient privacy safeguards - such as the United States.

In its October decision, the Court declared the Safe Harbor pact was invalid because it did not adequately protect European consumers where their data was stored in the USA, in light of the spying revelations made by Edward Snowden, a former contractor at the U.S.'s National Security Agency.

Brussels and Washington were working toward this new agreement after the repeal of the "Safe Harbor" directive by the EU Court of Justice (COJ) in October 2015, deciding in favor of an Austrian law student, Maximilien Schrems, who had launched a lawsuit against the American giant Facebook. Myron Brilliant, vice president of the U.S. Chamber of Commerce, said the deal would allow companies to move data cross the Atlantic while "providing a high standard of data protection for citizens". The European Commission's Safe Harbor replacement does not technically need to be approved by the group, but "the Commission has said it wants approval from the Art. 29 WP before proceeding", Mintz Levin lawyer Sue Foster tells Business Insider. The ruling was the culmination of a privacy complaint filed by Schrems against Facebook with the data protection authority in Ireland, where the company's European headquarters is located.

The regulators are poised to restrict data transfers because of concerns about USA surveillance practices, but have indicated that if a new deal is in place by then it should avoid new legal proceedings against companies.

Tech groups are today cheering news of the deal, which is being called the EU-U.S. Privacy Shield. "It's likely that the initial targets would by US-headquartered companies, but European companies could be targets too".

The "Privacy Shield" will be reviewed every year to make sure the US keeps its commitment on spying.

European Commissioners said that the new agreement will give "certainty" to businesses here that transatlantic data flows would not fall foul of EU law.

United States officials and American executives have grown increasingly anxious about the consequences of not having a new deal in place despite a flurry of high-level talks in Brussels over the past few weeks.

Companies will face sanctions and exclusion from the new framework if they fail to comply with privacy rules. On Wednesday, European national regulators will determine their own rules on how and when data can be sent outside the EU's borders.

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