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EU Court of Justice Judgment on EU-US Privacy Shield and Standard Contractual Clauses

EU Court of Justice Judgment on EU-US Privacy Shield an

On 16 July 2020 the EU Court of Justice (“the Court”) rendered a Judgment under case C-311/18, which became widely known as the Schrems II case.

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The matters referred to the Court concern the validity and interpretation of European Commission decisions related to Standard Contractual Clauses for transfer of data to third countries and to the adequacy of the protection provided by the EU-US Privacy Shield.

The Court rendered invalid the EU Commission decision on the adequacy of the protection provided by the Privacy Shield mechanism between the EU and USA. As a result, the said mechanism may not hence forth be used to facilitate transfers of personal data between EU and USA.

Additionally, the Court proclaimed that whenever Standard Contractual Clauses are used, an assessment must be made in each particular case on whether these clauses provide a sufficient guarantees for the rights of data subjects and that especially the possibility for state authorities to access the transferred data for national security purposes must be taken into account. The Court further elaborates that competent supervisory authorities must undertake actions to suspend or prohibit the transfer of data, where they reckon that the Standard Contractual Clauses cannot ensure sufficient level of protection to data subjects.

The immediate effect of the Judgment of the Court is that all companies which transfer data to the US or other third countries will have to revise the mechanism they utilize for the purposes of data transfers so as to ensure adequate protection of data subjects is in place.

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KPMG team remains at your disposal should you have any questions or need of assistance concerning the impact of the judgment.

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KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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