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Deal on new US, EU transatlantic data transfer pact imminent: sources

[BRUSSELS] European and US negotiators are on the brink of clinching a new transatlantic data transfer pact which should stop European regulators restricting data transfers by companies, two people familiar with the talks said on Tuesday.

The European Union and the United States have been racing to replace the previous data transfer framework called Safe Harbour. The European Court of Justice (ECJ) struck it down last year over concerns about US mass surveillance, leaving thousands of companies in legal limbo.

While the new framework being negotiated still needs political approval, the two sides should finalise the framework on Tuesday, the sources said.

European data protection authorities end a two-day meeting in Brussels on Wednesday.

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

For 15 years, Safe Harbour allowed more than 4,000 companies to avoid cumbersome EU data transfer rules by stating that they complied with EU data protection law.

EU law bars companies 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.

A deal would come as a relief for firms on both sides of the Atlantic who face a crackdown from EU privacy regulators on the alternative legal systems used to transfer data, such as binding corporate rules and model clauses.

It would mean companies such as Facebook and Google should no longer face the prospect of having their ability to move user data across the Atlantic curtailed.

The new framework will feature stronger oversight of companies' compliance, as well as explicit guarantees from the United States that access to Europeans' data will be subject to clear safeguards and limitations, the sources said.