Model contracts ‘will beat data privacy trap’

Date: 29/03/01

SINGLE market chief Frits Bolkestein is set to unveil model contracts that firms can use to avoid falling foul of the Union's tough data-protection laws - despite EU industry and US fears that the agreement could impose onerous new conditions on companies.

The move is intended to boost compliance with the Union's 1995 directive which allows national regulators to restrict the transfer of data to countries lacking 'adequate protection' measures.

The complex contracts, which will be scrutinised by MEPs later this year, will set out the legal terms governing data privacy between a firm selling information about EU citizens to another company.

They will be available free of charge for any business to use, and would be worded in a way that would ensure the data, such as a mailing list or credit rating, were not misused.

If the contract was broken - for example if the information on a Union resident was sent on to a third party without the person's permission - he or she could seek legal redress.

The scheme was last week criticised by the US Commerce and Treasury departments, which cited concerns of the US financial services sector, adding to fears voiced by EU lobbies, including direct marketing lobby FEDMA who said early drafts could have left firms exporting data open to lawsuits.

But Sue Binns, a senior Bolkestein aide said there is "a lot of misunderstanding", adding that the contracts were voluntary and did not impose new rules on companies.

She said the move could have a "much greater economic impact" than the vaunted 'safe harbour' deal signed between the Union and US last year in a bid to avert a trade row over the 1995 directive. Under the safe harbour accord, US firms promise to not misuse EU citizens' personal data.

Single market chief Frits Bolkestein is set to unveil model contracts that firms can use to avoid falling foul of the Union's tough data-protection laws - despite EU industry and US fears that the agreement could impose onerous new conditions on companies.