In view of international trade and cooperation, it is essential these days to be able to also transmit data to third countries. Examining the legitimacy of such a transfer is done in two stages.
First, the data transfer itself must be legal. Any processing of personal data is prohibited but subjected to the possibility of authorisation. In addition to consent, Art. 6 of the General Data Protection Regulation (GDPR) sets forth further authorisation reasons, such as fulfilling a contract or protecting vital interests. For special personal data which requires a higher level of protection, the Art. 9 of the GDPR provides separate legal requirements.
If the intended data transfer meets the general requirements, one must check in a second step whether transfer to the third country is permitted. One must differentiate between secure and insecure third countries. Secure third countries are those for which the European Commission has confirmed a suitable level of data protection on the basis of an adequacy decision. In those countries, national laws provide a level of protection for personal data which is comparable to those of EU law. At the time that the General Data Protection Regulation became applicable, the third countries which ensure an adequate level of protection were: Andorra, Argentina, Canada (only commercial organisations), Faroe Islands, Guernsey, Israel, Isle of Man, Jersey, New Zealand, Switzerland, Uruguay, Japan and USA (if the recipient belongs to the Privacy Shield). Data transfer to these countries is expressly permitted.
If there is no adequacy decision for a country, this does not necessarily foreclose any data transfer to this country. Rather, the controller must ensure in another way that the personal data will be sufficiently protected by the recipient. This can be assured using standard contractual clauses, for data transfers within a Group through so-called “binding corporate rules,” through the commitment to comply with codes of conduct which have been declared by the European Commission as being generally applicable, or by certification of the data processing procedure.
Furthermore, there are several exceptions which legitimise data transfer to a third country, even if the protection of personal data cannot be sufficiently assured. Most frequently, the consent of the data subject is relevant here. At the same time, one must particularly note the requirements for such consent to be freely given. Further exceptions, such as transmitting to fulfil contracts, important reasons of public interest and the assertion of legal rights are usually less relevant in practice.
Especially from an economic point of view, data transfers between the United States and the European Union are of utmost importance. The European Commission recognised this at an early stage and was keen on securing the flow of personal data through a unique arrangement. However, from a data protection point of view, the so-called Safe Harbour agreement between the two parties has always been questionable and was declared invalid by the European Court of Justice in the wake of the Snowden revelations (Schrems vs. Data Protection Commissioner). Since then it has been replaced by another unique framework, the Privacy Shield, which should provide a stricter set of ground rules for data transfer from the EU to the US. However, many points criticized by the Court during the Schrems ruling still persist in the new arrangement. Therefore, the Privacy Shield is currently under high scrutiny by the European Data Protection Authorities.