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2 December 1998
Source: http://www.usia.gov/current/news/latest/98120105.clt.html?/products/washfile/newsitem.shtml

USIS Washington File
_________________________________

01 December 1998

### U.S. AND EU OFFICIALS PRESS AHEAD WITH TALKS ON DATA PRIVACY

    (U.S. negotiators hope for significant progress in January ) (590)
    By Merle D. Kellerhals, Jr.
    USIA Staff Writer

    Washington -- United States and European Union (EU) officials met
    December 1 to continue discussions on complex data privacy laws with
    the United States pressing for a closer resolution of the issue by
    late January, a senior Commerce Department official says.

    The official, speaking on background, said December 1 that U.S.
    Commerce Under Secretary David Aaron and John Mogg, the European
    Commission's director general for the Single Market, reaffirmed their
    objective of seeking a final agreement on data privacy.

    "We have really made, I think, enormous progress on some of the
    fundamental concepts that are necessary to reconcile the two different
    systems," the official said. But, he added, that the hope is for
    "significant progress by the end of January" when the two officials
    meet again.

    At issue between the United States and European Union is how best to
    manage the transfer of private data on individuals, especially
    electronically. The EU's comprehensive privacy legislation, the
    Directive on Data Protection, which became effective on October 25,
    1998, prohibits the transfer of personally identifiable data to third
    countries that do not provide an "adequate" level of privacy
    protection. The United States relies largely on a sectoral and
    self-regulatory approach, rather than legislative, to assure privacy,
    the Commerce Department said.

    The United States has proposed a system known as "Safe Harbor."
    Essentially, U.S. organizations could come within the safe harbor by
    self certifying that they voluntarily adhere to seven privacy
    principles, the Commerce Department said. These principles were
    released for public comment two weeks ago by the Commerce Department.

    However, European Union countries have not accepted the proposed safe
    harbor plan proposed by the United States. The Commerce official said
    that at present "data will not be interrupted so long as we are
    negotiating seriously about this issue. The decision of the European
    Union was to do what they could to refrain from any data interruption
    so long as we were negotiating in good faith, and we are negotiating
    in good faith. So, there's been no deadline that's been set on that."

    The official said that there are a number of technical questions that
    still need to be addressed in the negotiations.

    "But essentially, they revolve around the question of access -- of a
    person's ability to access information about them that may be held by
    a company. The question of monitoring the adherence to the safe harbor
    principles," he said. And, he said the "question of whether existing
    laws and regulations that some of our industry sectors are subject to
    provide adequate privacy protection."

    Both sides have agreed to, in principle, the setting up of an
    independent body to arbitrate disputes between the two bodies, he
    said.

    "There are two different aspects to that," he said. "One is that we
    have agreed that there should be an independent dispute settlement
    mechanism."

    However, the difference is over whether, in addition to that, U.S.
    companies should have to have an independent auditing or monitoring
    body to assure the Europeans that they are adhering to safe harbor
    principles, the official said. "Our view, frankly, is that the
    Europeans have no such body to assure that European companies are
    adhering to the European data directive, and so our companies should
    not have to carry this additional burden."