Out-Law Guide 2 min. read
26 Jun 2007, 3:06 pm
Following the widespread use of the model contractual clauses, Binding Corporate Rules were developed by the EU Article 29 Working Party for use by a multinational organisation or group of companies as a mechanism of transferring personal data throughout the organisation. Such rules are intended as an alternative to model contracts (see our OUT-LAW guide EU model contractual clauses) and Safe Harbor (see our OUT-LAW guide The US Safe Harbor scheme) and are aimed at providing a compliance solution to multinational organisations.
Binding corporate rules need to be approved by every European data protection authority in whose jurisdiction a member of the group will rely on them, but the advantage is that the approval process is simplified as an application is made to one national "lead" data protection supervisory authority in Europe and that authority liaises with all other authorities to seek approval. For example, a group with entities in five European countries could submit its rules to the UK Information Commissioner for approval. The UK Commissioner would then obtain approval, on behalf of the organisation, from the four other countries. However, in practice the requirements of EU privacy authorities vary and so the approval process may be lengthy.
Although referred to as rules, an organisation does not have to have one document or policy to comply; a set of policies and procedures or measures taken together could be sufficient.
The UK Information Commissioner requires for approval:
The ICO then requires a set of questions to be answered including:
Large multinational organisations are starting to look at binding corporate rules as an alternative to Safe Harbor and contracts, primarily because it does offer a global solution. So far only Philip, Daimler Chrysler and GE have submitted binding corporate rules in the UK. However, the concept is at a relatively early stage and organisations may wish to learn from the experience of others before committing to this solution.