Commerce Requests Comment on Latest EU Privacy Documents

Washington, DC, March 20, 2000 - Since the fall of 1998, the US Department of Commerce and the European Commission have engaged in negotiations over a safe harbor for US companies from the European Union data protection directive. Among other things, the directive prohibits the flow of personal information from European Union member states to any recipient outside the EU that lacks adequate privacy protections. Companies complying with the terms of the safe harbor would have a presumption of adequacy in this regard, significantly reducing the potential that data flows to those companies would be challenged under the directive. The US financial services industry has asked that the EC find that financial services firms subject to the Gramm-Leach-Bliley Act and/or the Fair Credit Reporting Act have adequate privacy protections based on compliance with those laws.

In preparation for a March 31 meeting with the EC, Commerce has posted most of the revised safe harbor documents on its website, with a request for final comments by March 28, 2000. Ambassador Aaron's cover letter states that "[b]ecause more time is needed to examine recent developments in U.S. laws governing privacy in the financial services sector and the Financial Modernization Act regulations are not yet complete, we will continue working with the European Commission with the goal of bringing the benefits of the safe harbor to the financial services sector. We do not anticipate interruptions in data flows while we continue our good faith efforts to resolve these issues."