Daley And Others Hail US And EU Privacy Agreement

An historic agreement was reached Tuesday in Brussels on data protection that ensures the continued flow of personal data between the U.S. and Europe without interruption.

There was no immediate comment from the direct marketing industry or privacy advocates who are scrambling to obtain a copy of the agreement to assess its impact on international commerce by American companies.

U.S. Commerce Secretary William E. Daley hailed the pact saying it has “important implications for developing self-regulatory models that could be useful in other areas.” The pact is expected to gain preliminary approval by the European Union’s 15 members on March 31.

Daley, noting that the EU rules run counter to U.S. tradition and policy of industry self-regulation, praised the agreement’s safe harbor provision saying that it “demonstrates that both the EU and the U.S. recognize that a carefully constructed and well-implemented system of self regulation…can protect [the] privacy rights of individuals.”

The agreement, slated to go into effect over the summer, requires American information gathering companies such as direct marketers and list companies to join safe harbor programs and agree not to gather, use or disseminate the personal data of Europeans without permission.

Companies participating in safe harbor programs will be deemed by the EU to be in compliance with its privacy rules.

The agreement also contains a provision permitting EU members to stop the flow of personal information to countries without data protection programs, or programs viewed as inadequate or not in compliance with its data protection rule.

Another published report quoted Frits Bolkstein, the EU’s Commissioner of Internal Markets, as saying that the agreement “will facilitate trans-Atlantic information flows by providing legal certainty for operators and the safeguards [European] consumers demand to protect their privacy.”

David Aaron, U.S. Undersecretary of Commerce for International Trade, said in a statement that discussions on international financial privacy would resume later this year after various U.S. agencies like the Federal Trade Commission and the Federal Reserve Bank, finalize their respective rules to implement the Financial Services Modernization Act.

In addition to overhauling the nation’s financial services industry for the first time in nearly 60 years, the act requires the two agencies and others to develop and implement tighter controls over individual financial records.