Safe Harbor is a framework that allows the transfer of personal data from the EU to the US in compliance with EU data privacy laws. It provides a bridge between differing US and EU privacy approaches through voluntary self-certification to its principles by organizations doing business between the regions. The principles address issues like notice, choice, security and enforcement to protect EU citizens' privacy rights when their data is transferred to the less restrictive US context. While initially controversial, Safe Harbor has helped enable transatlantic data flows for many companies over the past 15 years.

1. Safe Harbor: A framework for
US – EU data privacy
Raymond K. Cunningham, Jr.
CRM, CA, CDIA+, CIPP/IT

2. What is Safe Harbor?
• Safe Harbor is a framework providing a bridge
between the approaches taken by the United
States and the European Union toward the
protection of privacy
• Safe Harbor is for corporations and other
organizations doing business in or with EU
companies and subsidiaries
• Safe Harbor is voluntary
• Organizations self-certify to the principles of Safe
Harbor

3. Safe Harbor
• Because of the implementation of the EU
Directive on Data Protection in 1998 the transfer
of personal data to non-EU states was to be
halted
• In order to bridge the gap the US Department of
Commerce and the EU Commission developed
the Safe Harbor program

4. Why Safe Harbor?
• Privacy in the United States differs
significantly from Privacy in Europe
• European Privacy is a basic human right
Everyone has the right to respect for his
private and family life, his home and his
correspondence.
- European convention for the Protection
of Human Rights and Fundamental freedoms

5. Privacy in Europe
• Privacy is derived from the
European Convention on Human
Rights (1950) Article 8
• Directive on Data Protection
Directive 95/46/EC was the result
of 15 years of work to provide an
EU framework on data protection

6. Data Protection Directive 95/46/EC
• The directive takes a comprehensive approach to
privacy: the objectives are to protect individuals
with respect to processing personal information
and to ensure the free movement of personal
information
• Personal data is defined as relating to an
identifiable person.
• The directive is broad. Storage and retrieval are
covered in the directive but transmission is not.

7. Data Protection Directive 95/46/EC
• Article 25 of the EU Directive prohibits any EU
country from transferring personal data via the
Internet to, or receiving data from, countries
deemed to lack "adequate" Internet privacy
protection.
• The United States is one such country with no
national laws regarding Internet data privacy

8. Privacy in the United States
• Privacy has been defined in court
decisions Roe v. Wade
• Privacy is protected through legislation
in various areas:
–HIPAA, COPPA, GLBA
Privacy and security is also protected
by self-regulatory initiatives - PCI-DSS

9. Benefits to Safe Harbor
• All member EU states are bound by the EU
Commission’s finding of adequacy of SH
• Companies participating will be allowed data
flows
• Prior approval of member states will be waived
or automatically granted
• Claims brought by EU citizens will be heard in the
US (some exceptions may apply)

10. A Word about Switzerland
• In 2008 the Swiss Federal Act on Data
Protection (FADP) was modified and a Safe
Harbor Program instituted
• The Swiss data protection application is
identical to EU Safe harbor form and the
process is also similar but it is separate

11. Safe Harbor Principles
• Notice
• Choice
• Onward Transfer
• Security
• Data Integrity
• Access
• Enforcement

12. Safe Harbor Principles: Notice
• Organizations must provide a clear and
conspicuous notice
• The information’s purpose and how it will
be used must be stated
• A contact for questions or complaints
• Individuals must be told the types of third
parties data is to be disclosed

13. Safe Harbor Principles: Choice
• The organization must give the opportunity for
individuals to opt-out when:
– Their information is transferred to a third party
– Their information is used for a purpose for which it
was not originally collected
• Mechanisms must be in place to exercise choice

14. Safe Harbor Principles: Choice
• People must be given affirmative or explicit
opt-in choice if the following information is
to be divulged to a third party
–PII or PHI
–For racial, ethnic, political opinions,
religious or philosophical beliefs, trade
union membership, sexual orientation

15. Choice – Explicit Opt-in
• Explicit opt-in gives the recipient a clear
understanding of the process of opting-in or
opting-out
• Opt-in – to request a service, single click
• Confirmed Opt-in – Confirmation email sent
allowing them to unsubscribe
• Double Opt-in – Confirmation email sent and
they must reconfirm

16. Safe Harbor Principles:
Onward Transfer
• To disclose to a third party must apply the
Notice and Choice principles.
• The organization MUST ascertain that the
receiving party subscribes to the principles.

17. Safe Harbor Principles: Security
• Organizations must take reasonable
precautions to protect information
from loss, misuse, unauthorized
access, disclosure, alteration and
destruction
• Similar to PCI-DSS and GLBA
• ISO/IEC 27002 is a best practice
formerly 17799

18. Safe Harbor Principles:
Data Integrity
• Personal information must be relevant for the
purposes for which it is used
• An organization must not process information in
a way that is incompatible with the purpose for
which it has been collected or authorized by the
individual
• Organizations should take reasonable steps to
ensure that the data is reliable for its intended
use, accurate, complete, and current

19. Safe Harbor Principles: Access
Individuals must have access to
personal information about them that
an organization holds and be able to
correct, amend, or delete that
information where it is inaccurate

20. Safe Harbor Principles: Access
EXCEPT where the burden or expense of
providing access would be disproportionate to
the risks to the individual’s privacy in the case in
question, or where the rights of persons other
than the individual would be violated.

21. Safe Harbor: Enforcement
• Enforcement mechanisms must include:
– Readily available and affordable independent
recourse mechanisms by which disputes are
investigated and resolved and damages awarded
– Follow up procedures for verifying that the
organization makes about their privacy practices are
true, the policies implemented as presented
– Obligations to remedy problems arising out of failure
to comply with the principles
– Sanctions must be sufficiently rigorous to ensure
compliance

22. Safe Harbor
• Self-assessment (in-house)
– Maintain documentation
– Have documentation available
– Employee training
– Conduct regular audits
• Outsource compliance review
– Random reviews for compliance
– Statements of compliance verification
– All documents should be available upon request

23. Certification of Compliance

24. Safe Harbor: Enforcement
• The FTC is committed to reviewing referrals from
privacy self-regulatory organizations such as
BBBOnline and Truste.
• The FTC maintains a list of Safe Harbor
companies on the web
• Member states alleging non-compliance can use
the FTC’s Section 5 prohibiting unfair or
deceptive acts
• The FTC may obtain civil penalties

25. Enforcement
• Fact: From November 2000 to 2009 NO
actions were taken
• In November 2009 six companies were
sanctioned and an injunction ordered
against another
• Balls of Kryptonite, LLC was misleading
customers stating self-certification

26. Important!
• Whatever you put into a Privacy
Statement you must conform to the
statement.
• Designate a point of contact to handle
questions
• Keep your certification current!

27. Records Managers
• Records Managers are front-line players in
privacy/security
• Records retention is directly tied to privacy
• Records access is directly tied to security
• Records managers in your organization should
have some oversight role
• In 2006 the DPA condemned the retention of
telecomm data on security grounds in response
to the London and Madrid bombings

28. FAQ – Some Questions
• How do organizations provide for verifications
that the attestations and assertions they make
are being followed in accordance with the Safe
Harbor Principles?
• Documenting the Self-assessment or having an
outside firm audit the principles.

29. FAQ – Some Questions
• How does the Access Principle apply to
Human Resources records?
• Safe Harbor requires that an organization
processing such data in the US will
cooperate in providing access either
directly or through the EU employer.

30. FAQ – Some Questions
• What about data transferred to the US for data
processing only?
• Data controllers in the EU are always required to
enter into a contract. Data protection is always a
key element to outsourced data storage or
processing.
• Principles would not necessarily apply depending
on the work to be done.

31. Pharma and Medical Products
• Do member states laws apply to personal
medical data collected in the EU transferred to
the USA?
– Safe harbor principles apply after the transfer to the
US. Anonymize data where appropriate
• What happens to an individual’s data if a
participant decides to withdraw from a clinical
trial?
– Data collected previous to the withdraw; may be
processed if it was made clear to the participant in
the notice.

32. How much will it cost?
• Fees are $200 certifying for the first time
• Recertification is $100
• Payments are made to the Department of
Commerce
• This is exclusive of fees to third parties for
compliance

33. What is the Future?
• The EU Directive is being rewritten (Dec. 2011)
• The right to be forgotten
• Data protection officers
• Certification and seal programs
• Breach Notifications
• Data protection impact statements
• Consent
• New European Data Protection Board

34. What is the Future?
• The Right to be Forgotten
– Adults should not be made to live in perpetuity with
data they posted during a less mature point in their
lives
• Breach Notification
– Data controllers will be required to notify supervisory
authority without undue delay – within 24 hours

35. Resources
• http://safeharbor.export.gov/list.aspx
• International Association of Privacy Professionals
(IAPP) Sign up for free daily newsletter
• Federal Trade Commission (FTC)
• AICPA

36. Contact Ray Cunningham
cunningham@uif.uillinois.edu
217 244-0658