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Employee data sans frontières...not in France, Tyco told

US multinational fined for laissez-faire approach

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The French data protection authority has fined a subsidiary of US firm Tyco Healthcare over the transfer of employee information across borders and inadequate data safeguards. Tyco Healthcare France was fined €30,000.

It is believed to be the first time that a US-based multinational has been fined for unauthorised overseas transfers of personal data.

La Commission Nationale de l'Informatique et des Libertes (CNIL) imposed the fine after discovering that Tyco's human resources database was using personally identifiable information more extensively than the company had admitted.

Tyco notified CNIL in 2004 that it was operating a human resources database containing personal information, as required by French law.

When at a later date CNIL requested further information from the company, Tyco said that it had stopped using the database. An inspection in 2006 by CNIL found that not only was the database active, but that it was being used more extensively than the company had indicated.

"The CNIL noted at an on-the-spot check that not only was the use of the system not suspended, but that it was very regularly used and updated, in spite of the many legal uncertainties raised by the CNIL," said the CNIL in an unofficial translation of a statement in French.

The CNIL said it has raised questions with Tyco about the destination of data, the reasons for international transfer and the safety and security of the data on the network.

The fine is evidence of the culture clash between US corporations and European governments on the issue of data protection. A fundamental principle of European data protection is that personal information is only shared with countries with equally stringent protections. The US is not classified as one of those countries.

In recent months Europe and the US have clashed over data transfers in airline systems and a banking system.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has been mired in controversy after it was discovered that it had transferred thousands of financial transaction details to US authorities.

SWIFT is based in Europe and co-ordinates international payments. It has, since 2001, allowed US authorities access to the international financial transactions of Europeans. The body has been condemned by national and EU privacy chiefs, and the European Parliament has now called on it to alter its business.

US authorities have also long had access to 34 pieces of information about European travellers flying into the country under a deal with the European Commission over passenger name records (PNR). A new version of that deal, which is also opposed by the European Parliament, is currently under negotiation ahead of a July deadline.

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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