In reality, it's a twig. The EU and U.S. negotiators put off discussion of the safe harbor's application to the U.S. financial services industry, which is regulated by the Federal Reserve and others, after they could not agree on the U.S. demand that such companies be automatically included in the safe harbor. U.S. officials and industry argue that U.S. financial companies' data handling practices are already regulated under U.S. law, which will be further enhanced once a new banking deregulation law passed by Congress goes into full effect. He said the EU is not entirely satisfied that the current laws covering financial services are satisfactory.
Further negotiations are on hold while the safe harbor is being implemented.
After nearly two years of negotiations and continuous consultation between U.S. industry and the Commerce Department, both industry and government officials said it is still difficult to assess whether U.S. companies will embrace the safe harbor. A Commerce Department official said the agency expects about 10 to 15 large Internet service providers and other companies to sign on the first day. We shouldn't expect a gold rush on Nov. 1. Critics, however, predicted a tepid response to the safe harbor from U.S. industry and said this will likely be its undoing. While reluctant to name specific concerns about the safe harbor, Misener said the company is wary about submitting to the EU's jurisdiction.