Source: https://www.jdsupra.com/legalnews/unlocking-the-eu-general-data-13044/
Timestamp: 2019-06-24 16:32:21
Document Index: 57395011

Matched Legal Cases: ['Art.35', 'Art.20', 'Art.35', 'Art.37', 'Art.37', 'Art.38', 'Art.38', 'Art.38', 'Art.27', 'Art.40', 'Art.27', 'Art.40', 'Art.40', 'Art.27', 'Art.40', 'Art.27', 'Art.24', 'Art.83', 'Art.27', 'Art.40', 'Art.27', 'Art.27', 'Art.40', 'Art.42', 'Art.42', 'Art.42', 'Art.42', 'Art.42']

Unlocking the EU General Data Protection Regulation: A practical handbook on the EU's new data protection law: Chapter 12: Impact assessments, DPOs and Codes of Conduct | White & Case LLP - JDSupra
A significant aspect of complying with EU data protection law is demonstrating compliance—making it evident to DPAs that an organisation is meeting its obligations. Three of the key ways in which organisations can demonstrate that they are complying with EU data protection laws are:
Impact Assessments. Data Protection Impact Assessments ("Impact Assessments") are a tool designed to enable organisations to work out the risks that are inherent in proposed data processing activities before those activities commence. This, in turn, enables organisations to address and mitigate those risks before the processing begins.
DPOs. A Data Protection Officer ("DPO") is a person who is formally tasked with ensuring that an organisation is aware of, and complies with, its data protection responsibilities.
Codes of Conduct. Organisations within the same industry, or engaging in similar types of processing, are likely to encounter similar data protection issues. Codes of Conduct provide such organisations with useful guidance on industry-standard approaches to these issues. Compliance with a Code of Conduct may provide evidence of compliance with the GDPR.
All organisations that have data protection compliance obligations under the GDPR (whether as controllers or processors) are affected by this issue.
Review their existing or planned data processing activities, and consider whether any of them present compliance risks from a data protection perspective. Each current or proposed processing activity that presents such risks should be the subject of an Impact Assessment.
Consider whether their core business operations involve: (i) regular and systematic monitoring of data subjects on a large scale; and/or (ii) processing of Sensitive Personal Data on a large scale. Organisations that do either of these things should appoint a DPO.
Confer with other organisations that are in the same industry, or are carrying out similar types of processing, to consider whether it might be appropriate to adhere to an existing Code of Conduct, or create a new one.
In order to assess the potential risks arising out of any new processing activity, EU data protection law requires organisations to conduct an Impact Assessment.
Member States may legislate regarding specific types of processing that are likely to pose high risks. However, the Directive does not expressly require controllers to conduct Impact Assessments.
Rec.84, 90-94; Art.35
Where a new processing activity is proposed (especially where new technologies will be used) resulting in a high degree of risk for data subjects, the controller must first conduct an Impact Assessment. A single Impact Assessment can cover multiple processing operations that present similar risks.
The express obligation to conduct Impact Assessments is, in principle, a new burden on controllers. However, even under the Directive, many DPAs would expect controllers to conduct Impact Assessments in relation to new, high-risk processing activities.
By conducting Impact Assessments, controllers may identify and address risks that would otherwise not have been detected. This may help controllers to avoid breaches of the GDPR that might otherwise have occurred.
Whenever an organisation is planning to engage in a form of processing that presents particular risks to the rights and freedoms of data subjects, that organisation should consult the relevant DPA(s).
Rec.54; Art.20
Member States are responsible for creating a list of processing operations likely to present specific risks to the rights and freedoms of data subjects. Where a controller intends to engage in a processing activity on such a list, it must first consult with the relevant DPA.
Rec.94-95; Art.35(4)-(6), 36
DPAs are responsible for creating a list of the types of processing that are subject to Impact Assessments. Those lists must be put through the Consistency Mechanism and then sent to the EDPB (see Chapter 15). Where a controller intends to engage in a processing activity on such a list, it must first consult with the relevant DPA.
The obligation to conduct Impact Assessments imposes a new, and in some cases significant, compliance burden on controllers.
The requirement to apply the Consistency Mechanism (see Chapter 15) in respect of high risk processing activities should mean that businesses face more consistent enforcement measures from DPAs.
A DPO is a person who provides the primary contact point for data protection issues within an organisation.
The Directive does not explicitly require organisations to appoint a DPO. In some Member States (e.g., Germany, Sweden) the appointment of a DPO offers certain advantages (e.g., by obviating the need to register with the local DPA). Many organisations in other Member States appoint DPOs simply to ensure that responsibility for data protection compliance is allocated to a specific person, and does not slip through the gaps.
Rec.97; Art.37
A controller or processor must appoint a DPO if local laws require it to do so, or if its data processing activities involve:
processing Sensitive Personal Data on a large scale.
A corporate group may collectively appoint a single DPO.
Organisations that are not required to appoint a DPO are free to do so voluntarily. If a DPO is appointed, the organisation must publish the details of the DPO, and communicate those details to the relevant DPA.
The obligation to appoint a DPO may impose a significant burden, especially for smaller organisations.
Explicit permission to appoint a single DPO for a corporate group is a welcome development for organisations, but it will be important to ensure that such a DPO is provided with sufficient resources to perform the role.
A DPO is responsible for data protection compliance. It therefore makes sense for organisations to ensure that their DPOs are suitably qualified for this role.
The Directive does not specify any minimum qualifications for DPOs.
Rec.97; Art.37(5)-(6)
A DPO should have expert knowledge of data protection law and practice, and should be capable of performing the functions of a DPO (outlined below). A DPO can be an employee or an outside consultant.
For many organisations, it will be extremely challenging to find an existing employee who satisfies the prerequisite requirements of being a DPO. This may mean that such organisations have to engage outside consultants, at potentially significant expense, to fulfil this role.
The role of the DPO is to ensure that the relevant organisation achieves data protection compliance.
The Directive does not set out a specific role for DPOs to fulfil.
Art.38(1)-(2), (4)-(5)
The DPO must deal with all data protection matters affecting the controller or processor properly and in a timely manner. The controller or processor must provide the DPO with the necessary resources and support. Data subjects may contact the DPO (e.g., to exercise their rights under the GDPR). The DPO must be bound by a confidentiality obligation in relation to his or her work.
The GDPR formalises requirements not expressly set out in the Directive. However, in most cases this will make little practical difference.
Special protection for DPOs
In principle, an organisation should not be able to take disciplinary action against a DPO merely because the DPO makes life harder for the organisation. If an organisation could do so, it would leave the DPO unable to act in a truly independent manner.
The Directive does not offer DPOs any special protection. However, the laws of several Member States (e.g., Germany) provide that a DPO who is also an employee is protected from almost all disciplinary actions by the employer, making it very difficult to remove the DPO. Consequently, many organisations in these Member States choose to engage an outside consultant as a DPO.
Art.38(3)
The organisation cannot instruct the DPO in the performance of his or her duties, and cannot terminate the DPO's employment (or take any other disciplinary action) as a result of the performance of the DPO's duties.
Organisations should consider this issue very carefully, in conjunction with applicable employment laws in the relevant Member States. In practice, some organisations may conclude that it is better to appoint an outside consultant to the role of DPO, as opposed to an employee who will become very difficult to remove from that position.
The DPO's role involves the performance of certain tasks, such as advising the relevant organisation of its data protection compliance obligations.
The Directive does not specifically oblige DPOs to perform any particular tasks, although the national laws of some Member States allocate particular tasks to DPOs.
Art.38(6), 39
A DPO must fulfil at least the following tasks:
informing and advising the relevant controller or processor (and any employees who process personal data) about their obligations under the GDPR;
monitor compliance with the GDPR by the controller or processor;
advise on Impact Assessments and prior consultation with DPAs; and
cooperate with DPAs and act as a point
The GDPR obliges organisations to appoint a DPO (where applicable) and requires that DPO to perform certain tasks.
The fulfilment of those tasks by the DPO should, in theory, mean that the organisation is better able to achieve compliance with the GDPR.
Purpose of Codes of Conduct
Codes of Conduct provide a means for certain industry sectors, or groups of organisations, to create context specific rules regarding the processing of personal data, in their respective industries, in compliance with EU data protection law.
Rec.26; Art.27
Associations and other industry bodies may prepare Codes of Conduct covering compliance with the Directive in general, as implemented in the laws of the relevant Member States, or specific aspects of those laws.
Rec.77, 81, 98-99; Art.40(2)
Associations and other industry bodies may prepare Codes of Conduct covering compliance with the GDPR, in respect of general or specific aspects of the GDPR.
The essential aim of the provisions relating to Codes of Conduct is the same in the Directive and the GDPR—in both cases, a Code of Conduct exists, and is adhered to by organisations, for the purpose of improving overall compliance with EU data protection law.
Encouragement of Codes of Conduct
Creating a Code of Conduct is a laborious undertaking, but one that can help improve compliance. EU data protection law therefore obliges authorities to encourage the creation of Codes of Conduct.
Rec.61; Art.27(1)
The Commission, and Member States, are obliged to encourage the drawing up of Codes of Conduct.
Rec.98; Art.40(1), 57(1)(m), (p), (o)
Member States, DPAs and the EDPB are all obliged to encourage the drawing up of Codes of Conduct.
The language in the GDPR makes only minor adjustments to the position in the Directive, and these are unlikely to materially affect organisations.
Adherence to Codes of Conduct by non-EEA controllers and processors
One of the core dangers of transferring data out of the EEA is that those data will be subject to lower standards of protection. By adhering to Codes of Conduct, non-EEA controllers and processors can address this risk, and provide a lawful basis for Cross-Border Data Transfers (see Chapter 13).
The Directive does not specifically provide for non‑EEA controllers or processors to sign up to Codes of Conduct.
Rec.81; Art.40(1)(j), (3), 46(2)(e)
Controllers and processors that are outside the EEA, and that are not subject to the GDPR, may adhere to Codes of Conduct in order to create a framework for providing adequate protection to personal data in third countries. The GDPR specifically allows adherence of non-EEA controllers and processors to an approved Code of Conduct to provide the basis for Cross-Border Data Transfers (see Chapter 13).
The fact that non-EEA organisations can use adherence to approved Codes of Conduct as a basis for Cross-Border Data Transfers provides a new option for organisations seeking to transfer personal data internationally. It may also make compliance simpler for organisations that frequently exchange data with other organisations in the same industry.
A Code of Conduct only serves a useful purpose to the extent that it is enforceable against entities that sign up to it. The question of who carries out such enforcement, and what powers they have for doing so, is therefore of critical importance to the operation of any Code of Conduct.
Art.27(2)-(3)
DPAs are responsible for reviewing and enforcing Codes of Conduct. Where Codes of Conduct apply in multiple Member States, the WP29 may also have responsibility for reviewing those Codes of Conduct, although enforcement would still be carried out by DPAs.
Art.40(4), 41
An independent body may be appointed by the relevant DPA to monitor and enforce a Code of Conduct if it is:
independent and has demonstrated its expertise;
has established procedures for reviewing and assessing compliance with a Code of Conduct;
has established procedures for dealing with complaints or infringements of the Code of Conduct; and
can demonstrate that it has no conflicts of interest in this role.
Such a body may be appointed to monitor and enforce compliance with a Code of Conduct. DPAs still retain their own separate enforcement powers.
An industry body that is already familiar with the processing taking place within that industry may be better placed than a DPA to enforce a Code of Conduct for that industry. That said, such bodies cannot act to the exclusion of DPAs, and it is always open to a DPA to intervene in any such enforcement proceedings.
Advantages of adherence to approved Codes of Conduct
Codes of Conduct clearly need to provide practical advantages for organisations, in order for the effort necessary to create such Codes of Conduct to be worthwhile.
Rec.26, Art.27
Approved Codes of Conduct under the Directive:
may provide guidance on specific data protection issues (e.g., anonymisation); and
provide evidence of compliance with the requirements of the national laws that implement the Directive.
Rec.77; Art.24(3), 28(5), 35(8), 46(2)(e), Art.83(2)(j)
Adherence to an approved Code of Conduct:
may provide guidance on specific compliance issues;
may provide evidence of compliance with the GDPR;
is a positive factor in an Impact Assessment;
may provide the basis for Cross-Border Data Transfers (see Chapter 13); and
may affect any fines imposed upon the adherent controller or processor.
The increased advantages of adherence to an approved Code of Conduct create significant new reasons for organisations to consider creating and implementing Codes of Conduct.
Approval of Codes of Conduct by DPAs
In order for a Code of Conduct to provide the advantages identified immediately above, that Code of Conduct must first be formally approved by DPAs.
Art.27(2)
DPAs must ascertain, among other things, whether a Code of Conduct is in accordance with the relevant national law that implements the Directive. The DPA may seek the views of data subjects on this issue.
Art.40(5), 57(1)(p), 58(3)(d)
Draft Codes of Conduct must be submitted to the competent DPA, which must then:
approve the Code of Conduct if it provides sufficient protections in accordance with the GDPR, or amend it if it does not;
register and publish approved Codes of Conduct; and
publish the criteria for gaining such approval.
If a Code of Conduct affects processing in several Member States, DPAs must review the Code of Conduct in accordance with the Consistency Mechanism (see Chapter 15) and refer it to the EDPB.
Because the approval criteria must be published, and DPAs must act uniformly under the Consistency Mechanism (see Chapter 15), the approvals process under the GDPR is likely to be more transparent and objective than the process under the Directive.
Approval of Codes of Conduct by the WP29/EDPB
Where organisations seek to implement a Code of Conduct affecting multiple Member States, approval of the Code of Conduct at an EU-level is generally required.
Art.27(3), 30(d)
A draft Code of Conduct may be submitted to the WP29, which must then issue an opinion on whether that Code of Conduct complies with the Directive (although, on a literal interpretation of Art.27(3), a Code of Conduct would have to comply with the national laws of all 28 Member States that implement the Directive). The WP29 may seek the views of data subjects. The Commission may also publicise any approved Codes of Conduct.
Art.40(8), 64(1)(b)
The EDPB is required to issue an opinion on any draft Code of Conduct before it is approved. The EDPB must also register and publish approved Codes of Conduct.
Although the GDPR changes the language, the approval format and process, and the body from which approval must be obtained, the overall outcome results in minimal changes for organisations seeking to implement a Code of Conduct affecting multiple Member States.
Purpose of seals and certifications
The primary purpose of seals and certifications is to provide organisations with a formally recognised confirmation of compliance with EU data protection law, typically with an associated visual symbol (e.g., a badge or emblem that can be displayed on published documents and websites, confirming that the organisation satisfies the requirements of the relevant seal or certification).
The Directive does not specifically address certification. A number of national DPAs and industry bodies have created their own certification schemes.
Rec.77, 81; Art.42, 43
The GDPR provides for a voluntary system of accreditation, under which controllers or processors may adhere to the requirements of a seal or certification scheme, for the purpose of demonstrating compliance with the GDPR.
Although seals and certifications gain formal recognition under the GDPR, their essential purpose is unchanged: organisations that want a visual badge or emblem that demonstrates their compliance with all, or any aspect, of EU data protection law can apply to the relevant scheme. If they are successful in their application, they earn the right to display the relevant badge or emblem.
Encouragement of seals and certification
Implementing a seal or certification scheme is a difficult and time-consuming exercise, but one that can help improve compliance. EU data protection law therefore obliges DPAs to encourage the creation of seal or certification schemes.
This issue is not specifically addressed in the Directive.
Rec.100; Art.42(1), (8)
Member States, DPAs, the EDPB and the Commission are all obliged to encourage the establishment of certification mechanisms, particularly targeting small and medium enterprises. The EDPB is responsible for maintaining and publishing a register of seal and certification schemes.
By drawing additional attention to the various seal and certification schemes, Member States, DPAs, the EDPB and the Commission may increase the value of such schemes in the eyes of the public, and also in the eyes of organisations.
Adherence to seal or certification schemes
In order to adhere to a seal or certification scheme, an organisation must provide the DPA or independent body that oversees the relevant scheme with all information and access to its processing activities which are necessary to conduct the seal or certification review procedure.
Art.42(4), (6)
An organisation may apply for a certification or seal by providing all necessary information and submitting its relevant processing activities to the DPA or independent body that oversees the relevant scheme. Adherence to a certification or seal does not reduce the obligation of a controller or processor to comply with the GDPR
Organisations that wish to obtain a seal or certification are able to select the type of seal or certification for which they wish to apply, and must then agree to provide the relevant DPA or independent body with the necessary information and access to their processing activities.
Enforcement of seal or certification schemes
A seal or certification scheme only has value if it demonstrates compliance with EU data protection law. Therefore, it must be overseen and enforced, in order to ensure that it achieves that aim.
Art.42(5), 43(2)
Seal and certification schemes are overseen and enforced, either by the relevant DPA, or an independent body which has an appropriate level of expertise in relation to data protection and has been accredited by the relevant DPA. An independent body may be appointed to this role for a maximum of five years if it is:
has established procedures for issuing, reviewing and withdrawing seals or certifications;
has established procedures for dealing with complaints or infringements of the seals or certifications; and
Such a body may be appointed to monitor compliance with a seal or certification scheme and withdraw the seal or certification if its requirements are no longer met. DPAs still retain their own separate enforcement powers
Organisations that wish to obtain a seal or certification are subject to enforcement by the DPA or independent body that oversees the relevant seal or certification scheme.
Expiry of seals or certifications
Seals or certifications have a maximum shelf life, in order to ensure that organisations keep their compliance responsibilities under review.
Art.42(7)
Seals and certifications last for a maximum of three years, and may be renewed provided that the relevant conditions are still met. If the conditions are not met, the seal or certification may be withdrawn.
Seals and certifications last for a relatively brief period of three years, after which a renewal is necessary. Consequently, seal and certification schemes result in an ongoing, burdensome and potentially expensive process.
Commentary: Conducting an Impact Assessment
Some organisations will be familiar with the concept of an Impact Assessment from their experiences under the Directive, but many will not. In essence, an Impact Assessment is a step-by-step review of the relevant processing activity. It is designed to examine each stage of a processing activity, and help an organisation to ensure that it has identified and addressed all of the risks involved in that activity before it commences.
White & Case has extensive experience with guiding organisations through the process of completing an Impact Assessment. We have developed a clear and thoughtful framework for organisations to follow. In the event that a DPA ever asks any questions about the relevant processing activity, our framework allows organisations to look back at a later date, and use the Impact Assessment to illustrate two important facts to the relevant DPA:
All of the material risks were identified. An organisation can only comply with the requirements of data protection law if it has identified the material risks that arise in connection with its processing activities.
Appropriate steps were taken to address those risks. In relation to each risk, our framework provides a record of the steps that were taken to resolve or mitigate any danger to the rights and freedoms of data subjects, and provides helpful guidance to organisations on achieving compliance.
Any organisation facing questions from DPAs on these issues can rely on this Impact Assessment framework to provide strong support in addressing those questions.
Example: Appointing a DPO
Q. Under the GDPR, Organisation A will be required to appoint a DPO. What steps should Organisation A take in planning for that appointment?
A. Organisation A should consider taking the following steps:
Organisation A should analyse the extent to which data processing forms part of its day‑to-day business operations. The more personal data Organisation A processes, the greater the likelihood that the role of the DPO needs to be a full‑time one, rather than a part‑time one.
Organisation A should also consider whether it wishes to appoint an internal or an external DPO, bearing in mind: (i) that the GDPR specifically protects the DPO from disciplinary action for tasks performed in his or her capacity as the DPO; and (ii) under the employment laws of some Member States, employees who act as DPOs are afforded additional special protections.
Organisation A should also ensure that it adjusts its corporate structures to the extent necessary to provide the DPO with sufficient powers and independence to achieve the requirements of the DPO role under the GDPR.
Commentary: Codes of Conduct, seals and certifications
The GDPR encourages the drawing up of Codes of Conduct by associations and other bodies representing categories of organisations, which should take into account the specific features of the various data processing sectors. Adherence to such Codes of Conduct may be used by controllers and processors to demonstrate compliance with the GDPR requirements. Furthermore, the GDPR encourages the implementation of seals and certifications. Organisations that adhere to either an approved Code of Conduct, or an approved seal or certification scheme, may be able to use such adherence as a means of differentiating themselves from their competitors. For example, an organisation that has achieved a seal that is specific to data protection in its industry is often permitted to display that seal publicly, as a means of demonstrating to individuals that it takes their data protection rights seriously. This, in turn, may persuade those individuals to do business with that organisation rather than with its competitors.