New EU-US data transfers agreement due soon, says US official

Catherine Novelli, US under secretary of state for economic growth, energy and the environment, said the US government is "very optimistic that we are going to be able to come to an agreement soon on safe harbour" and that agreement would not take months to be reached, Reuters reported.

"It's very important that we find ways to preserve data flows," Novelli said, according to the Reuters report. "Because so much of this is business to business and because of the cross-investment, we don't want to be shooting ourselves in the foot by hampering this economic activity."

The new agreement would replace the safe harbour framework which currently exists and facilitates the transfer of personal data from the EU to the US by US businesses.

Under EU data protection laws, the transfer of personal data from the EU to so-called 'third' countries is governed by strict rules designed to ensure the adequate protection of EU citizens' privacy in accordance with EU data protection standards, even when that data is held outside of the trading bloc.

Only a handful of countries, including Argentina, Canada and Switzerland, but not including the US, are deemed by the European Commission to provide adequate protection for personal data.

However, the European Commission and US government previously agreed a special framework which allows US businesses signed up to the scheme to transfer personal data outside of the EU to the US in a way which meets the adequacy requirements. More than 3,000 US businesses are currently signed up to the safe harbour framework.

The safe harbour scheme has come in for criticism, though, following revelations by whistleblower Edward Snowden about the intelligence gathering capabilities of the US' National Security Agency. EU politicians and digital rights campaigners have subsequently questioned whether the safe harbour regime does adequately protect the privacy of EU citizens.

In November 2013, the European Commission published a report that found "deficiencies in transparency and enforcement" in how the safe harbour framework works. It made 13 recommendations that it said would address its concerns and called on the US government to take steps to safeguard the privacy of EU citizens. It has threatened to suspend the safe harbour framework if those measures are not implemented.

MEPs have made similar calls for the safe harbour scheme to be brought to an end. A legal case against safe harbour has also been brought before the EU's highest court. A non-binding opinion in the case before the Court of Justice of the EU is expected to be issued on 24 June.