Article 45 GDPR

← Article 45 - General principle for transfers →
Chapter 1: General provisions Article 1: Subject-matter and objectives Article 2: Material scope Article 3: Territorial scope Article 4: Definitions Chapter 2: Principles Article 5: Principles relating to processing of personal data Article 6: Lawfulness of processing Article 7: Conditions for consent Article 8: Conditions applicable to child’s consent in relation to information society services Article 9: Processing of special categories of personal data Article 10: Processing of personal data relating to criminal convictions and offences Article 11: Processing which does not require identification Chapter 3: Rights of the data subject Article 12: Transparent information, communication and modalities for the exercise of the rights of the data subject Article 13: Information to be provided where personal data are collected from the data subject Article 14: Information to be provided where personal data have not been obtained from the data subject Article 15: Right of access by the data subject Article 16: Right to rectification Article 17: Right to erasure (‘right to be forgotten’) Article 18: Right to restriction of processing Article 19: Notification obligation regarding rectification or erasure of personal data or restriction of processing Article 20: Right to data portability Article 21: Right to object Article 22: Automated individual decision-making, including profiling Article 23: Restrictions Chapter 4: Controller and processor Article 24: Responsibility of the controller Article 25: Data protection by design and by default Article 26: Joint controllers Article 27: Representatives of controllers or processors not established in the Union Article 28: Processor Article 29: Processing under the authority of the controller or processor Article 30: Records of processing activities Article 31: Cooperation with the supervisory authority Article 32: Security of processing Article 33: Notification of a personal data breach to the supervisory authority Article 34: Communication of a personal data breach to the data subject Article 35: Data protection impact assessment Article 36: Prior consultation Article 37: Designation of the data protection officer Article 38: Position of the data protection officer Article 39: Tasks of the data protection officer Article 40: Codes of conduct Article 41: Monitoring of approved codes of conduct Article 42: Certification Article 43: Certification bodies Chapter 5: Transfers of personal data Article 44: General principle for transfers Article 45: Transfers on the basis of an adequacy decision Article 46: Transfers subject to appropriate safeguards Article 47: Binding corporate rules Article 48: Transfers or disclosures not authorised by Union law Article 49: Derogations for specific situations Article 50: International cooperation for the protection of personal data Chapter 6: Supervisory authorities Article 51: Supervisory authority Article 52: Independence Article 53: General conditions for the members of the supervisory authority Article 54: Rules on the establishment of the supervisory authority Article 55: Competence Article 56: Competence of the lead supervisory authority Article 57: Tasks Article 58: Powers Article 59: Activity reports Chapter 7: Cooperation and consistency Article 60: Cooperation between the lead supervisory authority and the other supervisory authorities concerned Article 61: Mutual assistance Article 62: Joint operations of supervisory authorities Article 63: Consistency mechanism Article 64: Opinion of the Board Article 65: Dispute resolution by the Board Article 66: Urgency procedure Article 67: Exchange of information Article 68: European Data Protection Board Article 69: Independence Article 70: Tasks of the Board Article 71: Reports Article 72: Procedure Article 73: Chair Article 74: Tasks of the Chair Article 75: Secretariat Article 76: Confidentiality Chapter 8: Remedies, liability and penalties Article 77: Right to lodge a complaint with a supervisory authority Article 78: Right to an effective judicial remedy against a supervisory authority Article 79: Right to an effective judicial remedy against a controller or processor Article 80: Representation of data subjects Article 81: Suspension of proceedings Article 82: Right to compensation and liability Article 83: General conditions for imposing administrative fines Article 84: Penalties Chapter 9: Specific processing situations Article 85: Processing and freedom of expression and information Article 86: Processing and public access to official documents Article 87: Processing of the national identification number Article 88: Processing in the context of employment Article 89: Safeguards and derogations relating to processing for archiving purposes in the public interest, scientific or historical research purposes or statistical purposes Article 90: Obligations of secrecy Article 91: Existing data protection rules of churches and religious associations Chapter 10: Delegated and implementing acts Article 92: Exercise of the delegation Article 93: Committee procedure Chapter 11: Final provisions Article 94: Repeal of Directive 95: /46: /EC Article 95: Relationship with Directive 20: 02: /58: /EC Article 96: Relationship with previously concluded Agreements Article 97: Commission reports Article 98: Review of other Union legal acts on data protection Article 99: Entry into force and application

Legal Text

Article 45 - Transfers on the basis of an adequacy decision

1. A transfer of personal data to a third country or an international organisation may take place where the Commission has decided that the third country, a territory or one or more specified sectors within that third country, or the international organisation in question ensures an adequate level of protection. Such a transfer shall not require any specific authorisation.

2. When assessing the adequacy of the level of protection, the Commission shall, in particular, take account of the following elements:

(a) the rule of law, respect for human rights and fundamental freedoms, relevant legislation, both general and sectoral, including concerning public security, defence, national security and criminal law and the access of public authorities to personal data, as well as the implementation of such legislation, data protection rules, professional rules and security measures, including rules for the onward transfer of personal data to another third country or international organisation which are complied with in that country or international organisation, case-law, as well as effective and enforceable data subject rights and effective administrative and judicial redress for the data subjects whose personal data are being transferred;

(b) the existence and effective functioning of one or more independent supervisory authorities in the third country or to which an international organisation is subject, with responsibility for ensuring and enforcing compliance with the data protection rules, including adequate enforcement powers, for assisting and advising the data subjects in exercising their rights and for cooperation with the supervisory authorities of the Member States; and

(c) the international commitments the third country or international organisation concerned has entered into, or other obligations arising from legally binding conventions or instruments as well as from its participation in multilateral or regional systems, in particular in relation to the protection of personal data.

3. The Commission, after assessing the adequacy of the level of protection, may decide, by means of implementing act, that a third country, a territory or one or more specified sectors within a third country, or an international organisation ensures an adequate level of protection within the meaning of paragraph 2 of this Article. The implementing act shall provide for a mechanism for a periodic review, at least every four years, which shall take into account all relevant developments in the third country or international organisation. The implementing act shall specify its territorial and sectoral application and, where applicable, identify the supervisory authority or authorities referred to in point (b) of paragraph 2 of this Article. The implementing act shall be adopted in accordance with the examination procedure referred to in Article 93(2).

4. The Commission shall, on an ongoing basis, monitor developments in third countries and international organisations that could affect the functioning of decisions adopted pursuant to paragraph 3 of this Article and decisions adopted on the basis of Article 25(6) of Directive 95/46/EC.

5. The Commission shall, where available information reveals, in particular following the review referred to in paragraph 3 of this Article, that a third country, a territory or one or more specified sectors within a third country, or an international organisation no longer ensures an adequate level of protection within the meaning of paragraph 2 of this Article, to the extent necessary, repeal, amend or suspend the decision referred to in paragraph 3 of this Article by means of implementing acts without retro-active effect. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 93(2).

On duly justified imperative grounds of urgency, the Commission shall adopt immediately applicable implementing acts in accordance with the procedure referred to in Article 93(3).

6. The Commission shall enter into consultations with the third country or international organisation with a view to remedying the situation giving rise to the decision made pursuant to paragraph 5.

7. A decision pursuant to paragraph 5 of this Article is without prejudice to transfers of personal data to the third country, a territory or one or more specified sectors within that third country, or the international organisation in question pursuant to Articles 46 to 49.

8. The Commission shall publish in the Official Journal of the European Union and on its website a list of the third countries, territories and specified sectors within a third country and international organisations for which it has decided that an adequate level of protection is or is no longer ensured.

9. Decisions adopted by the Commission on the basis of Article 25(6) of Directive 95/46/EC shall remain in force until amended, replaced or repealed by a Commission Decision adopted in accordance with paragraph 3 or 5 of this Article.

Relevant Recitals

Recital 103: Adequacy Decisions

The Commission may decide with effect for the entire Union that a third country, a territory or specified sector within a third country, or an international organisation, offers an adequate level of data protection, thus providing legal certainty and uniformity throughout the Union as regards the third country or international organisation which is considered to provide such level of protection. In such cases, transfers of personal data to that third country or international organisation may take place without the need to obtain any further authorisation. The Commission may also decide, having given notice and a full statement setting out the reasons to the third country or international organisation, to revoke such a decision.

Recital 104: Assessment Criteria for Adequacy Decisions

In line with the fundamental values on which the Union is founded, in particular the protection of human rights, the Commission should, in its assessment of the third country, or of a territory or specified sector within a third country, take into account how a particular third country respects the rule of law, access to justice as well as international human rights norms and standards and its general and sectoral law, including legislation concerning public security, defence and national security as well as public order and criminal law. The adoption of an adequacy decision with regard to a territory or a specified sector in a third country should take into account clear and objective criteria, such as specific processing activities and the scope of applicable legal standards and legislation in force in the third country. The third country should offer guarantees ensuring an adequate level of protection essentially equivalent to that ensured within the Union, in particular where personal data are processed in one or several specific sectors. In particular, the third country should ensure effective independent data protection supervision and should provide for cooperation mechanisms with the Member States' data protection authorities, and the data subjects should be provided with effective and enforceable rights and effective administrative and judicial redress.

Recital 105: Considering International Obligations for Adequacy Decision

Apart from the international commitments the third country or international organisation has entered into, the Commission should take account of obligations arising from the third country's or international organisation's participation in multilateral or regional systems in particular in relation to the protection of personal data, as well as the implementation of such obligations. In particular, the third country's accession to the Council of Europe Convention of 28 January 1981 for the Protection of Individuals with regard to the Automatic Processing of Personal Data and its Additional Protocol should be taken into account. The Commission should consult the Board when assessing the level of protection in third countries or international organisations.

Recital 106: Monitoring the Functioning of Adequacy Decisions

The Commission should monitor the functioning of decisions on the level of protection in a third country, a territory or specified sector within a third country, or an international organisation, and monitor the functioning of decisions adopted on the basis of Article 25(6) or Article 26(4) of Directive 95/46/EC. In its adequacy decisions, the Commission should provide for a periodic review mechanism of their functioning. That periodic review should be conducted in consultation with the third country or international organisation in question and take into account all relevant developments in the third country or international organisation. For the purposes of monitoring and of carrying out the periodic reviews, the Commission should take into consideration the views and findings of the European Parliament and of the Council as well as of other relevant bodies and sources. The Commission should evaluate, within a reasonable time, the functioning of the latter decisions and report any relevant findings to the Committee within the meaning of Regulation (EU) No 182/2011 of the European Parliament and of the Council as established under this Regulation, to the European Parliament and to the Council.

Recital 107: Obligations when a Adequate Level of Data Protection is No Longer Ensured

The Commission may recognise that a third country, a territory or a specified sector within a third country, or an international organisation no longer ensures an adequate level of data protection. Consequently the transfer of personal data to that third country or international organisation should be prohibited, unless the requirements in this Regulation relating to transfers subject to appropriate safeguards, including binding corporate rules, and derogations for specific situations are fulfilled. In that case, provision should be made for consultations between the Commission and such third countries or international organisations. The Commission should, in a timely manner, inform the third country or international organisation of the reasons and enter into consultations with it in order to remedy the situation.

Commentary

Overview

Article 45 GDPR refers to the complex issue of international data transfers. The huge amounts of data transferred from the EU to third countries created the necessity to adopt provisions that could ensure the implementation of precautionary measures to protect the transfers. The level of protection that should be achieved is promoted and delimitated in Chapter V of the GDPR. Chapter V of the GDPR creates a three-tiered structure for legal bases for international data transfers, with adequacy decisions being at the top, appropriate safeguards at the middle and negotiations at the bottom. On the basis of Art. 45 GDPR the European Commission has the power to determine, whether a country outside the EU offers an adequate, "essentially equivalent" level of data protection with the EU. Adequacy means that the rules implemented in the third countries or international organisations are effective in practice.

In 2017 the Working Party 29 published a paper in which it states that the rules must comply with a "core" of principles relating both to the content of data protection rules and their enforcement, based on the GDPR, the Charter of Fundamental Rights of the European Union (CFR) and other relevant international instruments, such as Council of Europe Convention 108. The European Commission has so far recognised the following countries as providing adequate protection by means of 'adequacy decisions': Andorra, Argentina, Canada (only commercial organisations), Faroe Islands, Guernsey, Israel, Isle of Man, Japan, Jersey, New Zealand, Switzerland and Uruguay. The current adequacy decisions can be found here.

Adequacy Decision

Under Article 45 GDPR, a transfer of personal data to a third country or an international organisation may take place where the Commission has decided that the third country, a territory or one or more specified sectors within that third country, or the international organisation in question ensures an adequate level of protection.

Criteria

In order to be granted with an adequacy decision, the country (or other geographical area - see above) must be able to ensure an adequate level of data protection. In performing the assessment, the European Commission takes into account different elements. Among these are the national laws and the respect and protection of human rights and freedoms, national security, data protection laws, as well as the existence of a DPA or another kind of data protection body and the binding commitments or agreements that the country has applied nationally.

In the published paper, endorsed by the EDPB, the WP29, detects the principles and mechanisms that should exist in the data protection system of a third country or an international organisation to be considered as adequate. The principles include: (1) Basic data protection principles (2) lawful and fair processing for legitimate purposes, (3) the purpose limitation principle, (4) the data quality and proportionality principle, (5) the data retention principle, (6) the security and confidentiality principle, (7) the transparency principle, (8) the right of access, rectification, erasure and objection, (9) restrictions on onward transfers.

The third countries don’t have to implement the exact, identical or equivalent measures of protection provided by the EU in order for their data protection system to be deemed adequate. The fundamental different ideas on the protection of personal data among the different states, in combination with the economic policy and entrepreneurial freedoms promoted by the EU, leave space for adaptation for the third countries. It must also be noted that, an adequacy decision cannot regulate the exchange of data for the purpose of national security or the common foreign and security policy.

Procedure

The process in order to adopt an adequacy decision requires a submission of a proposal from the European Commission, an opinion from the European Data Protection Board (EDPB), an approval from representatives of EU countries and finally the adoption of the decision by the European Commission. The significance of the decision is easy to be understood due to its effect. After the adoption of a decision personal data can flow from the EEA to a third country without the requirement of further safeguards needed.

The Commission can issue adequacy decisions for any country that is not an EU Member State or party to the EEA, or as the article provides a decision can be issued for an international organisation.  So far, as it was mentioned above, the Commission has issued adequacy decisions for a number of countries such as: Andorra, Argentina, the Faroe Islands, Guernsey, Israel, the Isle of Man, Japan, Jersey, New Zealand, Switzerland and Uruguay, while a partial adequacy decision has been issued for Canada. Adequacy talks were concluded with South Korea on 30 march 2021.  

Time of validity

Adequacy decisions have to be reviewed at least every four years while they can be repealed, amended, or suspended without a retroactive effect, when the third country or the organisation no longer ensures an adequate level of protection. The absence of a retroactive effect departures from EU law and avoids the disappearance of an EU act from the legal order from the date of entering into force (ex tunc). Following the amendment or the repeal, the Commission has to enter into consultations with the third country or the international organisation in order to remedy the situation. All decisions concerning adequacy must be published in the official journal of the EU.

Content

An adequacy decision must contain a number of specific elements. More precisely, it must contains at least:

1. A statement that the third country or the international organisation ensures adequate protection through its domestic law and regulations.

2. The territorial and sectoral application of the decision (Article 45(3) GDPR).

3. A mechanism for periodic review.

4. Identification of the supervisory authority or of authorities holding the responsibility for ensuring and enforcing compliance with the data protection rules (Article 45(2)(b) GDPR and Article 45(2)(3) GDPR).

Additionally, the WP29 has also highlighted the mechanisms that the data protection system, the third country or the international organisation must contain: A supervisory authority, a data protection system that ensures a good level of compliance, providing support and help to data subjects in the exercise of their rights and redress mechanisms, accountability. Also in line with Article 45 (2)(a) GDPR third countries must ensure the minimum of interference with fundamental rights by providing guarantees for law enforcement and national security access: Clear, precise and accessible rules for data processing. necessity and proportionality must be demonstrated with regards to the legitimate objectives pursued, the processing must be subject to independent oversight, effective remedies must be available to individuals.

Schrems II

Regarding transfers to the USA: The European Commission and the US Department of Commerce negotiated special terms for data transfers from the EU to the US in the framework of the 'Privacy Shield'. Transfers to the US are not allowed per se, but to companies in the USA that are participating the Privacy Shield. For this purpose companies have to commit to comply with the Principles of the Privacy Shield and self-certify to the US Department of Commerce. The validity of this framework was broadly discussed at the Court of Justice of the EU in the light of the Data Protection Commissioner v Facebook Ireland Limited, Maximillian Schrems (case C-311/18, Schrems II). In the judgement issued by the court on 16 July 2020 it was decided and highlighted the importance of the maintenance of a high level protection of the data that are transferred from the EU to third countries.

According to the court, the lack of necessary limitations and safeguards on the power of the authorities under US law, the primacy of US law enforcement requirements over those of the Privacy Shield (para. 164), the lack of an effective remedy in the US by EU data subjects (paras. 191-192), particularly in light of proportionality requirements (paras. 168-185) and the deficiencies in the Privacy Shield Ombudsman mechanism (paras. 193-197), should all lead to the invalidation of the Privacy Shield. The Court found that the Privacy Shield Decision was invalid (para. 201) with immediate effect (para. 202).

In another decision by the ECJ and since GDPR does not provide the special conditions that should be met in order for international agreement to provide a legal basis for personal data transfers. The Court found that international agreement can legalise data transfers if the agreements meet the Schrems standard of "essential equivalence" with the EU law and especially the Charter. The opinion refers to the agreement for the processing and transfer of passenger name records (PNR) data between the EU and Canada and examined whether the agreement is compatible with the provision of the Treaties (Article 16 TFEU) and the Charter of Fundamental Rights of the European Union (Articles 7, 8, 52 (1)) as regards the right of individuals to protection of personal data. Additionally, it is questioned whether Articles 82(1)(d), 87(2)(a) TFEU constitute an appropriate legal basis of the act of the Council concluding the envisaged agreement, or whether the act must be based on Article 16 TFEU. The answer was negative to both questions since it was found that the correct legal basis of the Agreement was provided by Articles 16(2), 87(2)(a) TFEU and not by Article 82(1)(d) TFEU.

Enforcement

As regards the enforcement of Article 45 GDPR, it was also stated in Schrems II judgement (para. 63), that an individual must be able to make a claim to a DPA contesting the compatibility of a data transfer based on an adequacy decision with the protection of privacy and fundamental rights, and the DPA must examine the claim with all due diligence.

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Decisions

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