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Morrie Goodman/Pat Woodward, 202- 482-4883
or Monica Hill, 202-482-3809 

MAY 31, 2000



Lisbon, Portugal -- U.S. Secretary of Commerce William M. Daley today hailed EU Member State approval of the safe harbor arrangement. The accord will enable U.S. organizations to comply with European privacy regulations and continue to receive personal data from Europe.

"This is a landmark accord for e-commerce because it bridges the differences between EU and U.S. approaches to privacy protection," Secretary Daley stated. "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."

The safe harbor is a mechanism which, through an exchange of documents, enables the EU to certify that participating U.S. companies meet the EU requirements for adequate privacy protection. Participation in the safe harbor is voluntarily. Organizations will need to adhere to the privacy requirements laid out in the safe harbor documents for all received from the EU.

Data transfers are the life blood of many organizations and the underpinnings for all of electronic commerce. Without the safe harbor, corporations would find it difficult to run multinational operations. Basic information about their employees would not be transferable to the United States. Accountants would not be able to perform consolidated audits for multinational firms with offices in Europe and the U.S.

The safe harbor must now 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.

The safe harbor arrangement is the result of more than two years of high level discussions between the two sides. It was developed in response to a European Commission Directive on privacy, a sweeping privacy rule that went into effect in October 1998 that prohibits the transfer of personal data to non-EU countries that do not meet their standard for adequate privacy protection. This rule covers all industry sectors and virtually all personal data. The trade implications for countries such as the United States, which receive a significant number of data transfers from European countries, are serious. Without the safe harbor arrangement, this rule has the potential to lead to trade disputes that could severely affect U.S.-EU trade, which in 1999, was approximately $350 billion.




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