Client Alert

European Parliament Vote on the Safe Harbor Agreement


On July 5th, the European Parliament voted in plenary on the EU-US Data Protection Safe Harbor agreement. With 279 votes against 259, the Parliament adopted the report by Elena Ornella Paciotti, Italian Socialist, and thus, the Safe Harbor agreement was voted down. 

The Parliament's report indicates that the Commission's proposal to approve the Safe Harbor agreement is based only on a draft of the safe harbor principles that will be issued by the US Department of Commerce as guidance to US companies wishing to meet the "adequate protection" requirement of the EU Data Protection Directive. The report goes on to state that the free movement of data from the EU to the US cannot be authorised until all the components of the safe harbor system are operational and the US authorities have informed the Commission that the requisite data protection conditions have been fulfilled.

The Parliament voted that the safe harbor system could be considered as offering an "adequate level of protection" only if the following changes are made to it: 

  • providing for an individual's right of appeal to an independent public body competent to resolve any alleged violation of the principles; 
  • providing an obligation for participating firms to compensate for damages resulting from a violation of the principles and to cease unlawful processing of data; 
  • providing for clear procedures to be taken to ensure that data processing is terminated and for obtaining damages; and 
  • providing for a preliminary check by the Commission of the proper functioning of the system within six months of its entry into force. 

It remains to be seen how the Commission will react to this result. The responsible Commissioner, Frits Bolkestein, has previously stressed that the EU has obtained the maximum possible result in its negotiations with the US, and that there is a risk of sinking the entire "safe harbor" system if Ms. Paciotti's report were to be adopted.




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