Cross-Border Data Transfer

Cross-border data transfer is a critical compliance concern for any organization operating internationally or using cloud services hosted in different jurisdictions. Under GDPR Chapter V (Articles 44-49), personal data may only be transferred outside the European Economic Area (EEA) if the receiving country provides an adequate level of data protection (as determined by an EU adequacy decision), if appropriate safeguards are in place, or if specific derogations apply. Common transfer mechanisms include Standard Contractual Clauses (SCCs), Binding Corporate Rules (BCRs) for intra-group transfers, and the EU-US Data Privacy Framework for transfers to certified US organizations.

The legal landscape for cross-border data transfers has been particularly dynamic. The Schrems I and Schrems II decisions by the Court of Justice of the European Union invalidated the Safe Harbor and Privacy Shield frameworks respectively, raising the bar for organizations relying on transfers to the United States. The current requirement is that organizations using SCCs must conduct Transfer Impact Assessments (TIAs) to evaluate whether the laws of the recipient country provide an essentially equivalent level of protection and, if not, what supplementary measures are needed. NIS2 also introduces considerations around cross-border data flows for essential and important entities operating across EU member states.

For technology companies, managing cross-border data transfers requires a comprehensive approach. This includes mapping all data flows to identify where personal data is transferred internationally, determining the appropriate legal mechanism for each transfer, conducting and documenting Transfer Impact Assessments, implementing supplementary technical measures such as encryption where needed, and updating data processing agreements with sub-processors. Cloud service providers and SaaS platforms must also consider data residency options — the ability to store and process data within specific geographic regions — as this is increasingly demanded by customers and regulators. Organizations should regularly review their transfer mechanisms as the legal landscape continues to evolve with new adequacy decisions and regulatory guidance.