EXPLANATORY MEMORANDUM

1.PURPOSE

In its Opinion of 26 July 2017 the Court of Justice of the EU stated that the Agreement between Canada and the EU for the transfer and use of Passenger name Record (PNR) data signed on 25 June 2014 may not be concluded in its current form. The EU should therefore open new negotiations with Canada with the aim of concluding a PNR Agreement in line with the requirements laid down in the Court's Opinion.

2.CONTEXT OF THE RECOMMENDATION

Canadian legislation requires air carriers operating passenger flights bound for Canada to provide the Canada Border Services Agency (the CBSA) with electronic access to Passenger Name Record (PNR) data prior to the passenger arrival to Canada.

This legislation aims at obtaining PNR data in advance of a flight's arrival and therefore significantly enhances the CBSA's ability to conduct efficient and effective advance travel risk assessment of passengers and to facilitate bona fide travel, thereby enhancing the security of Canada. The EU cooperates with Canada in the fight against terrorism and other serious transnational crime and views the transfer of PNR data to Canada as a means to foster international law enforcement cooperation which will be achieved through the provision by Canada of analytical information stemming from PNR data to the competent Member States authorities as well as Europol and Eurojust within their respective mandates.

PNR is a record of each passenger's travel requirements which contains all information necessary to enable reservations to be processed by air carriers. As far as the present Recommendation is concerned, PNR data covers data collected from passengers and contained in the air carrier's automated reservation and departure control systems.

Air carriers are under an obligation to provide the CBSA with PNR data to the extent it is collected and contained in the air carriers' automated reservation and departure control systems.

The transfer of personal data from the EU to a third country may take place only if that country ensures a level of protection of fundamental rights and freedoms that is essentially equivalent to that guaranteed within the European Union. A solution is required that will provide a legal basis at EU level for the transfer of PNR data from the EU to Canada as a recognition of the necessity of PNR data in the fight against terrorism and other forms of serious transnational crime.

The European Community signed an Agreement in 2005 with Canada on the transfer and processing of PNR data based on a set of commitments by the CBSA in relation to the application of its PNR programme.

The Agreement entered into force on 22 March 2006 and was based on a series of Commitments that the CBSA gave as to the way it would handle PNR data and an adequacy decision issued by the European Commission that considered the Commitments of the CBSA to provide an adequate protection of personal data.

In November 2008 the Commission carried out a joint review on the implementation of the 2006 Agreement where it found that the CBSA implements its Commitments and the conditions spelt out in there to a very large extent.

The Commitments of the CBSA and the adequacy decision expired on 22 September 2009. The Commitments of the CBSA provided that one year before their expiry, the CBSA will enter into negotiations with the Commission with the goal of extending the Commitments upon mutually acceptable terms.

The government of Canada made a request to the Commission that the two parties enter into negotiations with the aim of either amending the existing framework or concluding a new Agreement.

The CBSA also confirmed to Member States, the presidency and the Commission that it would continue implementing its Commitments for such an interim period as it is necessary to negotiate and conclude a long term Agreement between the EU and Canada. As a consequence, Member States assumed the responsibility for ensuring the continuation of transfers of PNR data by air carriers to Canada during this interim period.

The EU therefore opened negotiations with Canada in 2010 for the purpose of signing a new bilateral Agreement laying down the conditions and the framework under which air carriers will make available to the CBSA the PNR data of passengers flying between the EU and Canada. The new draft Agreement with Canada was signed on 25 June 2014 and submitted by the Council to the European Parliament in July 2014 for consent. On 30 January 2015, the European Parliament requested the Opinion of the Court of Justice as to whether the envisaged PNR Agreement with Canada is compatible with the Treaties and the Charter of Fundamental Rights of the European Union.

Directive (EU) 2016/681 on the use of passenger name record data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime (the EU PNR Directive) was adopted on 27 April 2016, setting a legal basis for the transfer of PNR data by air carriers to Member States and the safeguards that Member States shall apply to the processing of PNR data.

On 26 July 2017, the Court of Justice delivered the above mentioned Opinion and stated that the envisaged PNR Agreement between Canada and the EU cannot be concluded in its current form because several of its provisions are incompatible with the fundamental rights recognised by the EU, in particular the right to data protection and respect for private life. The Court also held that the legal basis of such an Agreement should be the combination of Article 87(2)(a) TFEU and Article 16(2) TFEU.

Following the issuance of this Opinion, the CBSA has expressed its wish to enter again into negotiations to find mutually acceptable terms consistent with these findings of the Court.