Frequently Asked Questions on the CJEU judgment “Schrems II” – C-311/18

July 28th, 2020 | Posted by Claude-Etienne Armingaud in Data Transfer | Privacy

This document aims at presenting answers to some frequently asked questions received by supervisory authorities (“SAs”) and will be developed and complemented along with further analysis, as the EDPB continues to examine and assess the judgment of the Court of Justice of the European Union (the “Court”).

The judgment C-311/18 can be found here, and the press release of the Court may be found here.

1. What did the Court rule in its judgment?

In its judgment, the Court examined the validity of the European Commission’s Decision 2010/87/EC on Standard Contractual Clauses (“SCCs”) and considered it is valid. Indeed, the validity of that decision is not called into question by the mere fact that the standard data protection clauses in that decision do not, given that they are contractual in nature, bind the authorities of the third country to which data may be transferred.

However, that validity, the Court added, depends on whether the 2010/87/EC Decision includes effective mechanisms that make it possible, in practice, to ensure compliance with the level of protection essentially equivalent to that guaranteed within the EU by the GDPR and that transfers of personal data pursuant to such clauses are suspended or prohibited in the event of the breach of such clauses or it being impossible to honour them.

In that regard, the Court points out, in particular, that the 2010/87/EC Decision imposes an obligation on a data exporter and the recipient of the data (the “data importer”) to verify, prior to any transfer, and taking into account the circumstances of the transfer, whether that level of protection is respected in the third country concerned, and that the 2010/87/EC Decision requires the data importer to inform the data exporter of any inability to comply with the standard data protection clauses, and where necessary with any supplementary measures to those offered by those clause, the data exporter then being, in turn, obliged to suspend the transfer of data and/or to terminate the contract with the data importer

The Court also examined the validity of the Privacy Shield Decision (Decision 2016/1250 on the adequacy of the protection provided by the EU-U.S. Privacy Shield), as the transfers at stake in the context of the national dispute leading to the request for preliminary ruling took place between the EU and the United States (“U.S.”).

The Court considered that the requirements of U.S. domestic law, and in particular certain programmes enabling access by U.S. public authorities to personal data transferred from the EU to the U.S. for national security purposes, result in limitations on the protection of personal data which are not circumscribed in a way that satisfies requirements that are essentially equivalent to those required under EU law, and that this legislation does not grant data subjects actionable rights before the courts against the U.S. authorities.

The Court underlines that certain surveillance programmes enabling access by U.S. public authorities to personal data transferred from the EU to the U.S. for national security purposes do not provide for any limitations on the power conferred on the U.S. authorities, or the existence of guarantees for potentially targeted non-US persons

As a consequence of such a degree of interference with the fundamental rights of persons whose data are transferred to that third country, the Court declared the Privacy Shield adequacy Decision invalid.

2. Does the Court’s judgment have implications on transfer tools other than the Privacy Shield?

In general, for third countries, the threshold set by the Court also applies to all appropriate safeguards under Article 46 GDPR used to transfer data from the EEA to any third country. U.S. law referred to by the Court (i.e., Section 702 FISA and EO 12333) applies to any transfer to the
U.S. via electronic means that falls under the scope of this legislation, regardless of the transfer tool used for the transfer (Section 702 FISA applies to all “electronic communication service provider” (see the definition under 50 USC § 1881(b)(4)), while EO 12 333 organises electronic surveillance, which is defined as the “acquisition of a non- public communication by electronic means without the consent of a person who is a party to an electronic communication or, in the case of a non electronic communication, without the consent of a person who is visibly present at the place of communication, but not including the use of radio direction-finding equipment solely to determine the location of a transmitter” (3.4; b)).

3. Is there any grace period during which I can keep on transferring data to the U.S. without assessing my legal basis for the transfer?

No, the Court has invalidated the Privacy Shield Decision without maintaining its effects, because the U.S. law assessed by the Court does not provide an essentially equivalent level of protection to the EU. This assessment has to be taken into account for any transfer to the U.S.

4. I was transferring data to a U.S. data importer adherent to the Privacy Shield, what should I do now?

Transfers on the basis of this legal framework are illegal. Should you wish to keep on transferring data to the U.S., you would need to check whether you can do so under the conditions laid down below.

5. I am using SCCs with a data importer in the U.S., what should I do?

The Court found that U.S. law (i.e., Section 702 FISA and EO 12333) does not ensure an essentially equivalent level of protection.

Whether or not you can transfer personal data on the basis of SCCs will depend on the result of your assessment, taking into account the circumstances of the transfers, and supplementary measures you could put in place. The supplementary measures along with SCCs, following a case- by-case analysis of the circumstances surrounding the transfer, would have to ensure that U.S. law does not impinge on the adequate level of protection they guarantee.

If you come to the conclusion that, taking into account the circumstances of the transfer and possible supplementary measures, appropriate safeguards would not be ensured, you are required to suspend or end the transfer of personal data. However, if you are intending to keep transferring data despite this conclusion, you must notify your competent SA (See in particular recital 145 of the Court’s judgment, and Clause 4(g) Commission decision 2010/87/EU, as well as Clause 5(a) Commission Decision 2001/497/EC and Annex Set II (c) of Commission Decision 2004/915/EC.).

6. I am using Binding Corporate Rules (“BCRs”) with an entity in the U.S., what should I do?

Given the judgment of the Court, which invalidated the Privacy Shield because of the degree of interference created by the law of the U.S. with the fundamental rights of persons whose data are transferred to that third country, and the fact that the Privacy Shield was also designed to bring guarantees to data transferred with other tools such as BCRs, the Court’s assessment applies as well in the context of BCRs, since U.S. law will also have primacy over this tool.

Whether or not you can transfer personal data on the basis of BCRs will depend on the result of your assessment, taking into account the circumstances of the transfers, and supplementary measures you could put in place. These supplementary measures along with BCRs, following a case-by-case analysis of the circumstances surrounding the transfer, would have to ensure that

U.S. law does not impinge on the adequate level of protection they guarantee.

If you come to the conclusion that, taking into account the circumstances of the transfer and possible supplementary measures, appropriate safeguards would not be ensured, you are required to suspend or end the transfer of personal data. However if you are intending to keep transferring data despite this conclusion, you must notify your competent SA (See in particular recital 145 of the Court’s judgment and Clause 4(g) of Commission Decision 2010/87/EU. See also Section 6.3 WP256 rev.01 (Article 29 Working Party, Working Document set