EU, US Try to Reach Privacy Agreement

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WASHINGTON - The EU and the United States still have "some substantive issues to solve" before they can reach agreement on "safe harbor" provisions that would allow the continued free flow of data from Europe to the US.

At issue is the EU's data protection directive that went into effect last Oct. 24 and theoretically bars data transfer from Europe to outside countries without adequate data protection laws.

Since the United States doesn't have such laws, the two sides have been negotiating about some other modalities, such as the "safe harbor" provisions and model contracts, that would satisfy European demands for privacy protection.

Undersecretary of Commerce David Aaron and his opposite number in Brussels, John Mogg, the head of the EC's directorate general XV, told a news conference last week they were on track to agreement before the EU-US summit in Berlin on June 21.

The summit deadline, Aaron noted, was "self-imposed" by the US. He added that while "we have more work to do, I still think we can make that deadline."

At a Mogg-Aaron meeting in Washington in March, Aaron said agreement would have to come by the end of April to bring it before the summit, but he now believes enough time is left to wrap up a pact.

He said the Commerce Department would extend to May 15 the deadline for public comment on the latest "safe harbor" draft documents, which DOC issued last month.

Industry has expressed concern about provisions governing consumer access to data and to enforcement of safe harbor violations.

Aaron and Mogg stressed that enforcement would follow clearly defined procedures and that the due process would be transparent to allow the US government to present its case if a US firm were charged with safe harbor infringement.

"We are moving forward on the major issue but we need to get further input from our industry as to how they feel about it. We haven't had that feedback and don't know how much progress we've made on that," Aaron said.

Mogg noted that a special EC group charged with resolving the data protection issue, known as the Article 31 Committee, had scheduled three more meetings to deal with the American proposals.

The group will meet May 12, May 21 and again June 14, a week before the summit. In addition, Mogg and Aaron will meet May 28. In the meantime, Aaron said, "we will be in touch electronically."

At the Article 31 Committee meeting in Brussels on April 19, Mogg said there was clear support for reaching agreement. Mogg stressed that scheduling three meetings on the subject within one month demonstrates the EU's determination to come to a resolution.

But he refused to speculate on what the EU would do if the two sides don't reach agreement.

The Europeans have agreed not to ban data transfer so long as meaningful negotiations continue.

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