USCIB Letter on Argentine Legislation Affecting Transborder Data Flows
October 23, 2000
The Honorable James Walsh
Embassy of the United States of America
Avenida Colombia 4300
1425 Buenos Aires
Dear Ambassador Walsh:
I am writing on behalf of the members of the United States Council for International Business (USCIB) to ask your assistance in urging President de la Rua to veto the Habeas Data Bill recently passed by the Argentine Congress, or at a minimum to veto Article 12 of the Bill concerning transborder data flows.
The USCIB advances the global interests of American business both at home and abroad. The USCIB has a membership of over 300 global corporations, professional firms, and business associations. It is the American affiliate of the International Chamber of Commerce (ICC), the Business and Industry Advisory Committee (BIAC) to the OECD, and the International Organisation of Employers (IOE). As such, it officially represents U.S. business positions in the main intergovernmental bodies, and vis-à-vis foreign business communities and their governments.
The Habeas Data Bill poses a significant threat to U.S. business interests. The bill is modeled on the European Union Data Protection Directive (Directive 95/46/EC), a Directive that U.S. business believes goes beyond fair information practices as set forth by the OECD 1980 Privacy Guidelines, the international consensus on this issue. In fact, the Habeas Data Bill goes beyond the E.U. Directive by imposing a near absolute restriction on the transborder flow of data to countries that do not provide an "adequate" level of protection as defined in the Bill, with some limited exceptions. Both U.S. business and international business as represented by the Alliance for Global Business
in its Global Business Action Plan (a copy of which can be obtained from the USCIB website www.uscib.org) oppose restrictions on tranborder flows of data.
Unlike the Habeas Data Bill, the E.U. Directive in Article 26.2 provides for mechanisms to overcome the potential restriction on transborder data flows to countries that are not deemed to offer an "adequate" level of protection through public law. Such mechanisms include a contractual and a safe harbor solution. A company can ensure transborder data flows outside of the E.U. for a particular transaction if a data exporter and data importer include a set of privacy safeguards that are deemed to provide "adequate" protection by either the European Commission or an individual E.U. member state in their contract. In addition, the U.S. and the E.U. recently agreed upon a safe harbor arrangement, effective November 1, 2000, whereby companies can continue to receive personally identifiable information from Europe if they subscribe to a set of privacy principles that have already been deemed "adequate" by the European Commission through negotiations with the Department of Commerce and with significant input by the private sector.
The exceptions set for in the Habeas Data Bill do not include private contracts that guarantee "adequate" privacy protections. The Bill does, however, include a provision for a bilateral treaty to overcome the potential restriction on transborder data flows. USCIB members believe that the negotiation of such a treaty would be extremely onerous and difficult to conclude. We base this conclusion on our experience in providing advice to the U.S. Government during the two years of discussions with the E.U. over the safe harbor and our participation in ICC negotiations with the European Commission over a model contract for personal data.
Our members are very concerned that if the Bill is signed in its current form, there will be a severe, if not absolute, disruption in data flows between Argentina and the U.S., thereby causing significant harm to the Argentine economy and to U.S. firms.
Given that President de la Rua must act by October 28, 2000, any immediate assistance you could provide would be greatly appreciated. If you or your staff have any questions regarding this issue, please feel free to call me in the US at (212) 354-4480.
Thomas M.T. Niles
cc: Mr. Robert LaRussa, Undersecretary for International Trade, Department of Commerce
Mr. Peter Allgeier, Associate U.S. Trade Representative for Western Hemisphere
Mr. Jeffery Irwin, Country Officer, Department of State