*EU Member States Approve Safe Harbor Pact With U.S.

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The European Commission yesterday received approval from European Union member states for a safe harbor agreement that will allow a continued flow of data to the United States from the EU.

The announcement came from Lisbon, Portugal, where the U.S.-EU Summit is taking place.

The safe harbor arrangement -- which was agreed upon by U.S. and EU negotiators in March but now approved by EU members -- is the result of more than two years of discussions.

It was developed in response to a European Commission Directive on privacy, a sweeping rule that went into effect in October 1998 prohibiting the transfer of personal data to non-EU countries that do not meet privacy protection standards.

The safe harbor now must be reviewed by the European Parliament before it can be formally adopted and implemented. Subject to this review, the remaining procedural steps are expected to be completed in July.

If implemented, the accord will enable U.S. organizations to continue to receive personal data from Europe by adhering to safe harbor principles and complying with European privacy regulations.

U.S. Secretary of Commerce William M. Daley lauded the EU Member State approval of the safe harbor arrangement.

"This is a landmark accord for e-commerce because it bridges the differences between EU and U.S. approaches to privacy protection," Daley said in a statement. "Once the accord is implemented, it will enhance consumer confidence by protecting European citizens' privacy, reduce business costs and keep data flowing across the Atlantic. These are key to the continued expansion of our information economies and the thousands of jobs they generate. Today's approval by the EU Member States begins the process which guarantees implementation of the accord."

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