Companies that operate in more than one jurisdiction that are either carrying out an internal investigation or are subject to a criminal or regulatory investigation by U.S. law enforcement agencies will almost certainly need to consider the legality of trans-Atlantic data transfers. Under European law, in particular, companies falling short in compliance with data protection laws could face fines of up to the higher of €20 million or 4% of annual global turnover.
With the introduction, in 2018, of the General Data Protection Regulation (“GDPR”) which generally prohibits (with some exceptions) the transfer of EU-based personal data outside of the European Economic Area (“EEA”) and other legislation, the overhaul of the EU data protection framework often leaves companies under investigation by U.S. law enforcement with tough decisions to make between complying with their obligations – or their wish – to meet U.S. prosecutors’ demands and abiding by relevant data protection laws. In particular, some EU-based companies have found themselves at the receiving end of U.S. prosecutors’ requests or subpoenas for documents, in circumstances where compliance with them could potentially risk hefty domestic fines for breaching data protection laws. There may also be other considerations to be borne in mind, such as relevant bank secrecy laws and common law rights to privacy, where a failure to comply with the relevant law could result in criminal sanctions including imprisonment.
Developments in U.S. and U.K. law, however, have introduced a framework for the legal cross-border transfer of data via cooperation between international authorities. In addition to ensuring compliance with the GDPR and other privacy obligations in conducting data transfers, U.S.- and U.K.-based communication service providers (“CSPs”) should familiarize themselves with the recently signed U.K.-U.S. Bilateral Data Access Agreement (the “Agreement”). The Agreement facilitates the objectives of the U.S. Clarifying Lawful Overseas Use of Data Act (the “CLOUD Act”) and the U.K. Crime (Overseas Production Orders) Act 2019 (the “COPOA”). According to a communication by U.S. Attorney General William Barr to Congress earlier this year, the Agreement was scheduled to become effective on July 8, 2020, but there has been no official announcement from either the U.S. or U.K. governments on the status of the Agreement. Indeed, earlier this month, the U.K. government anticipated that the Agreement would “come into use later this year[.]” We discuss the implications of these developments and considerations for U.S.- and U.K.-based companies needing to transfer personal data across the Atlantic to facilitate investigations.
Continue Reading Data Transfer Considerations in Investigations