Commerce Official: U.S.-EU Safe Harbor Vital Because ‘Huge Economic Interests at Stake’

Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...

By Jabeen Bhatti

May 4 —The massive level of trade between the U.S. and the European Union motivates the U.S. to strive to protect personal data so that the U.S.-EU Safe Harbor Program can continue, Ted Dean, deputy assistant secretary for services at the U.S. Department of Commerce said May 4.

The U.S.-EU Safe Harbor Program—which was approved by the European Commission, the EU's administrative arm, in 2000 after negotiations with Commerce—allows U.S. companies to transfer to the U.S. the personal data of EU citizens, on the basis that the transfers are done in accordance with privacy principles similar to those contained in the EU Data Protection Directive (95/46/EC). Dean said over 4,000 U.S. companies from almost all sectors of the economy participate in the program.

After the revelations by Edward Snowden about U.S. surveillance efforts, the program has been under fire from privacy advocates, particularly in the EU, who said the U.S.-EU Safe Harbor Program would allow personal data from the EU to be more easily available for U.S. government review. Critics also say the U.S. Federal Trade Commission doesn't do enough in its role as the enforcement agency for the program.

High-level negotiations to reform the program to allow it to continue to function have been underway since fall 2013. Dean said at the European Data Protection Days Conference in Berlin that the U.S. government is continuing in “active negotiations” with EU officials over the program. He said he couldn't predict when the negotiations might end but was confident there would be an agreement.

“We're engaged in this work for economic benefit, candidly,” Dean said. “In the EU-U.S. context, one-third of all global trade flows between the two; that's huge economic interests at stake,” he said. “As with any international trade and international investment, data flows as well so allowing that data to continue to flow has economic justifications,” he said.

“It's not a tradeoff with data privacy—it's a huge motivation to get privacy right,” he said. The U.S.-EU Safe Harbor Program is a “bridge” that allows U.S. companies to make investments in global compliance that result in stronger privacy protection than would ticking boxes in a dozen jurisdictions instead, he said.

Need to Restore Confidence 

The U.S. has work to do to reassure Europeans that U.S. handling of their data isn't less stringent than in the EU, Dean said. Commerce also has to reassure the EU that is isn't trying to do the minimum privacy protection necessary to win an agreement.

The EU wants the U.S. to agree to permanent and regular controls of companies certified under the program, liability rules covering data transferred to third parties and curbs on state access to the information, in particular law enforcement and security agencies.

The negotiations have made great progress, but the recommendations on national security and surveillance issues remain sticking points, Dean said. “We have leaned very far forward to address these concerns, and ensure we do reach a positive outcome.”

The European Union is pressing the U.S. for resolution by May 28.

FTC's Brill Lauds Safe Harbor 

Julie Brill, a commissioner with the FTC, told conferees that the U.S.-EU Safe Harbor Program is “the solution, not the problem.”

The program “gives me as a law enforcement person a tool to protect EU citizens,” she said. It allows the FTC to bring enforcement cases to oversee the program and serves as an important consumer protection tool, she said.

EU Data Protection Supervisor Giovanni Buttarelli, speaking at the conference, expressed both doubts and optimism over the U.S.-EU Safe Harbor Program. “Safe harbor is a questionable agreement,” he said.

He said, however, that he admired the U.S. approach on enforcement and the presence of judicial review and class action suits.

“Safe harbor, despite its flaws, is a mutual attempt at bridging the divide,” he said. “We need global bridges in order to protect individuals from borderless technology. And I feel the bridge building process gaining strength—perhaps we would be surprised to find out the differences are not so fundamental.”

To contact the reporter on this story: Jabeen Bhatti in Berlin at

To contact the editor responsible for this story: Donald G. Aplin at