On January 15, 2021, the European Data Protection Board (“EDPB”) and European Data Protection Supervisor (“EDPS”) adopted joint opinions on the draft Standard Contractual Clauses (“SCCs”) released by the European Commission in November 2020, for both international transfers (“International SCCs”) and controller-processor relationships within the EEA (“EEA Controller-Processor SCCs”).
Once finalized, the International SCCs will replace the existing sets of SCCs, which were drafted under the Data Protection Directive, for transfers of personal data from within the EEA to organizations in non-EEA countries that have not been recognized as providing an adequate level of data protection. In those cases, the EU General Data Protection Regulation (“GDPR”) requires that a transfer mechanism be implemented. In the wake of the invalidation of the EU-U.S. Privacy Shield in the Court of Justice of the European Union’s (the “CJEU’s”) Schrems II judgment, the majority of organizations will need to rely on the International SCCs to legitimize their transfers.
EEA Controller-Processor SCCs
In a press release issued by the EDPB and EDPS, EDPB Chair Andrea Jelinek welcomed the EEA Controller-Processor SCCs as a strong, EU-wide accountability tool to facilitate compliance with the GDPR, providing legal certainty to controllers and processors. In their generally positive opinion, the EDPB and EDPS ask the European Commission to clarify the circumstances in which the SCCs may be used. In particular, the EDPB and EDPS:
- Seek clarity as to whether these SCCs should be relied on only for intra-EU transfers, or whether they might also be used for transfers to entities that are outside the EU but directly subject to the GDPR by virtue of Article 3(2);
- Recommend that the SCCs be deemed appropriate for transfers to processors not subject to the GDPR but located in jurisdictions that have received an adequacy determination from the European Commission; and
- Request that the interplay between these SCCs and the International SCCs is made clearer.
The EDPB and EDPS also suggest a draft of further specific amendments to aid clarity, fully align the SCCs with the GDPR and ensure that they are practical. For example, they:
- Suggest that where multiple entities are parties to the SCCs (including through operation of the “docking clause”), the SCCs should require more detail as to the specific allocation of responsibilities and processing operations between the parties in order to avoid confusion;
- Request further explanation with regard to the “docking clause” as to how existing parties to the SCCs might provide their agreement to accession by a new entity, and clarification as to whether agreement must be given by all parties irrespective of their role in the processing under the SCCs;
- Request that controllers and processors be permitted to agree their own terms with respect to, for example, their audit arrangements and deadlines for notification of a breach, in accordance with the GDPR; and
- Request clarity with respect to the types of clauses that risk contradicting, directly or indirectly, the SCCs.
With regard to the International SCCs, the EDPB and EDPS provide more extensive comments. While they welcome the specific provisions intended to address issues identified in the Schrems II judgment, they also suggest that several provisions could be improved or clarified. For instance, the EDPB and EDPS:
- Request more clarity with regard to data exporter assessments of the level of access to data that public authorities may have in a recipient jurisdiction. The opinion comments that the current draft International SCCs only appear to require an assessment of the jurisdiction’s legal framework, without consideration of how public authorities in the jurisdiction behave in practice, even in the absence of any relevant legislation;
- Suggest that the SCCs make clear that the subjective likelihood of public authority access to personal data (based, for example, on the number of access requests a recipient entity has received in the past) should not be considered as part of the assessment, which should instead be based on objective factors (consistent with the EDPB’s own recommendations);
- Recommend appending the assessment of the importing jurisdiction’s legislation to the SCCs themselves, in order to ensure proper documentation of the assessment; and
- Highlight the need for controllers to consider its recommendations on supplementary measures alongside the SCCs, and invite the European Commission to include an explicit reference to the final version of these recommendations if they are adopted before the European Commission’s SCC decision.
It is clear that the EDPB and EDPS envision data exporters and importers undertaking a detailed analysis of all transfers made by their organizations, with respect to both the legal safeguards they have implemented and the role that each entity plays in the processing of relevant data. The EDPB and EDPS state that it is of the “utmost importance” that the SCCs, with absolute clarity, set out the roles and responsibilities of each party in each relationship with respect to each transfer or set of transfers. Specifically, the opinion states that the annexes should be precise enough “so it is possible at any point in time to determine who takes which role as regards a specific transfer or set of transfers of personal data.” Accordingly, a distinct annex should be required for each transfer or set of transfers, signed only by the exporter and importer involved in that transfer and specifying whether they are a controller or processor with respect to that data.
In relation to onward transfers, the opinion considers that obligations of the data importer included in the module of the SCCs that cover controller-controller transfers also raise several issues. For example, the Commission’s draft does not include an obligation for an importing controller to notify an exporting controller of an onward transfer, unlike the existing SCCs. In addition, it is not clear, in practical terms, how a processor to whom an onward transfer is made might become a signatory to the SCCs, without another module being added to reflect their status. Any such module may also need to include additional safeguards depending on the jurisdiction in which the processor is based. Furthermore, in accordance with the GDPR’s transparency requirements, the EDPB and EDPS suggest that a data importer be required to provide a copy of the safeguards implemented with respect to an onward transfer to data subjects upon request.
The opinions will be considered by the Commission, together with the numerous responses to its consultation on the SCCs. The European Commission will then formally adopt a decision incorporating the finalized SCCs and provide details for their adoption by organizations. The timing of these next steps remains unclear.
The opinion on the EEA Controller-Processor SCCs can be viewed here. The opinion on the International SCCs can be viewed here.