Lawmakers push for updated Safe Harbor agreement

A group of 56 members of the House and Senate are urging regulators to move quickly to restore smooth data flow between the United States and the European Union.

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The EU high court earlier this month struck down the so-called Safe Harbor agreement that allowed companies to legally funnel personal information across the Atlantic.

Regulators had been in the midst of updating the 15-year-old agreement.

“The [European Court of Justice (ECJ)] decision makes urgent the need to redouble your efforts and conclude a successor to the now-invalidated Safe Harbor Agreement,” the lawmakers wrote in a Wednesday letter to Secretary of Commerce Penny Pritzker and Federal Trade Commission Chairwoman Edith Ramirez.

“The announcement of a revised framework will represent an important step in clarifying misinformation and providing marketplace stability.”

The call for action is spearheaded by Sens. John Thune (R-S.D.) and Bill Nelson (D-Fla.), the chairman and ranking member, respectively, of the Senate Committee on Commerce, Science and Transportation; and Reps. Fred Upton (R-Mich.) and Frank Pallone Jr. (D-N.J.), the chairman and ranking member, respectively, of the House Committee on Energy and Commerce.

Because the ECJ offered no grace period, its decision has left companies on both sides of the Atlantic scrambling for legal alternatives to house and transfer the data of European citizens.

Privacy advocates hail the decision as a step forward in ensuring the U.S. offers EU citizens the fundamental data privacy rights they are entitled under the EU Charter.

Critics say the wholesale invalidation of Safe Harbor has created deep uncertainty for the 4,000 firms that relied on the agreement to handle EU data. Onlookers expect the financial services industry to take the hardest hit in the wake of the decision.

“Trans-Atlantic digital trade is of critical importance to both the U.S. economy and the economy of the EU,” lawmakers wrote. “The recent decision … to invalidate the Safe Harbor Agreement unfortunately creates significant uncertainty for the customers and partners of businesses that send data between Europe and the United States.”

The lawmakers urged Pritzker and Ramirez to push for more guidance from European regulators.

EU commissioners have emphasized that they will work to ensure trans-Atlantic data flow continues under a variety of different mechanisms available under EU law, but critics worry the ruling could result in patchwork enforcement.

“We encourage you to work closely with your European counterparts to issue interim guidance for businesses that have relied upon the Safe Harbor,” the lawmakers wrote Wednesday. “It is imperative these businesses are able to continue operating in the absence of the Safe Harbor.”

Pritzker condemned the ECJ’s decision but has been clear that negotiations over a new Safe Harbor agreement will be ongoing.

“We are prepared to work with the European Commission to address uncertainty created by the court decision so that the thousands of U.S. and EU businesses that have complied in good faith with the Safe Harbor … can continue to grow the world’s digital economy,” she said when the decision was announced.