Your guide to the major EU data transfer deal with Japan

19 Jul 2018

From left: Jean-Claude Juncker, Donald Tusk and Shinzō Abe in Tokyo. Image: Etienne Ansotte/EU

The EU and Japan settled on the data deal as part of the world’s largest free trade agreement.

Earlier this week, the EU and Japan agreed on a massive free trade deal, which covers 600m people and close to a third of the global economy.

In a world where protectionism is a growing trend, the deal could be viewed as an endorsement of a collaborative global trading system. The ambitious pact was signing in Tokyo and Prime Minister of Japan, Shinzō Abe, said: “The EU and Japan showed an undeterred determination to lead the world as flag-bearers for free trade.”

The deal includes removal of tariffs on EU exports such as wine and fewer barriers for Japanese electronics and car-makers doing business in the EU. President of the European Council, Donald Tusk, dubbed the agreement as “the largest bilateral trade deal ever”.

Vital data transfer agreement

As well as the various other elements of the deal, a crucial data transfer agreement was reached. Both regions will allow businesses to freely transfer and share data without extra safeguards or authorisations. The EU bloc has famously strict data protection laws that forbid firms from storing the personal data of EU citizens on international servers unless a high level of privacy can be guaranteed by the foreign company.

Only 12 countries have an adequate level of privacy. These are: Andorra, Argentina, Canada, Faroe Islands, Guernsey, Israel, Isle of Man, Jersey, New Zealand, Switzerland, Uruguay and the US. Firms in other locations need to rely on complicated legal contracts.

Seamless data flows between EU and Japan

The agreement will see Japanese and EU companies take full advantage of seamless cross-border data flows to do business.

The US and EU had a similar data transfer agreement known as ‘Safe Harbour’, but this was struck down in 2015 by the EU’s most powerful court when it found Europeans’ data was not sufficiently protected from potential US spying. A new agreement, Privacy Shield, has been in place since 2016.

Věra Jourová, commissioner for justice, consumers and gender equality, said: “Japan and EU are already strategic partners. Data is the fuel of global economy and this agreement will allow for data to travel safely between us to the benefit of both our citizens and our economies. At the same time, we reaffirm our commitment to shared values concerning the protection of personal data.”

Japan has committed to implementing some additional safeguards to protect the personal information of EU citizens before the data agreement is officially adopted. These include new rules around extra protection for personal data and information around data access rights, as well as a complaints handling system to resolve issues flagged by Europeans involving their data being accessed by Japanese public authorities.

The decision is set to be officially adopted by the European Commission in the autumn of 2018, following finalisation on both sides. Dubbed an “adequacy decision”, this agreement is defined as “a decision taken by the European Commission establishing that a third country provides a comparable level of protection of personal data to that in the European Union, through its domestic law or its international commitments”.

From left: Jean-Claude Juncker,  Shinzō Abe and Donald Tusk in Tokyo. Image: Etienne Ansotte/EU

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects