Working for free trade
A Foreign & Commonwealth Office case study

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Page 4: Protecting e-commerce

An important technical agreement on ‘safe harbours’ for data protection purposes between the EU and the United States was achieved in July 2000. This will help to boost transatlantic trade. It will ensure that data on individuals which is transferred electronically to the US – for instance by airlines and tour operators – will be better protected. At the same time it will make transfers simpler for businesses on both sides of the Atlantic. British and other EU businesses can therefore continue trading electronically, and take advantage of future opportunities for expanding Internet trading (e-commerce) with the US.

How ‘safe harbours’ evolved

Under the EC Data Protection Directive, personal data flows to other countries can be blocked if they do not provide ‘adequate’ data protection.

The US does not have such comprehensive data protection or privacy laws as Europe. It was feared that these laws might not be considered ‘adequate’ by the EU. As a result data transfers to the US could be barred, unless special arrangements could be made.

A ‘safe harbour’ consists of an agreed set of enforceable data protection rules. US companies wishing to receive personal data from the EU can voluntarily sign up. These companies would then meet the ‘adequacy’ requirement, and personal data could be transferred freely.

Without the ‘safe harbours’ agreement, British companies could have been prevented from trading electronically  with the US. This would have meant losing a huge amount of current and future business.

Foreign & Commonwealth Office | Working for free trade