Safe Harbor refers to an agreement struck by the EU and US, that came into effect in 2000. It was designed to provide a "streamlined and cost-effective" way for US firms to get data from Europe without breaking its rules. The EU forbids personal data from being transferred to and processed in parts of the world that do not provide "adequate" privacy protections. So, to make it easier for US firms to function, Safe Harbor was introduced to let them self-certify that they are carrying out the required steps.
Respected Data protection experts like Castlebridge say that Model contract clauses and binding corporate agreements cannot be relied upon and to seek EU alternatives for key services:
This ruling has an impact on EU business doing business online. It always mattered where you store your data but now it's more important than ever. Until now, EU business using an online service from the US relied on the self-certified Safe harbor by the vendor for data protection. Specifically speaking to email marketing or online surveys, if you are an EU Business you must now consider alternatives.
Widely respected Journalist Karlin Lillington wrote in her column that "EU data is, for now, safe if held in data centres run by EU companies..."
What to do next. We all have a responsibility under the Data protection act to safeguard Customer data. Ensuring this data is located in Europe is your best option.
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