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Hyatt signs up to EU binding corporate rules for data transfers

Hotel firm can now send personal data worldwide

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Hyatt Hotels has become just the fifth company operating in the UK to use a complex process that allows it to send personal data around the world without breaking EU rules. It has signed up to use Binding Corporate Rules (BCRs).

The European Union's Data Protection Directive prevents companies sending personal data outside of the EU except when the destination country has been pre-approved as having adequate data protection. Only a handful of countries – Argentina, Canada, Switzerland, Guernsey, the Isle of Man and Jersey – have qualified as having adequate protection.

When companies want to send personal data to other non-EU countries, that data transfer must be governed by adequate protection, even when the transfer is from one part of a company to another part of the same firm.

One way in which that is possible is by using BCRs. This involves a company submitting its data protection processes to a data protection watchdog and having them approved for use.

Hyatt has become just the fifth company to make use of BCRs in the UK. Privacy watchdog the Information Commissioner's Office (ICO) lists Accenture, Atmel, Koninklijke Philips Electronics and General Electric as the others.

The BCRs are unpopular because, in effect, they must be approved by a regulator in each member state. "The process was streamlined recently, but not enough," said William Malcolm, a data protection law specialist at Pinsent Masons, the law firm behind OUT-LAW.COM. "It remains a costly process and the challenge for regulators is to further streamline the process in order to ensure take-up."

Malcolm said that the current process will suit some global companies, particularly those with complex group structures. "Once you've been through the process, at least you have enjoy freedom to transfer data within a group," he said.

Most companies prefer to legalise overseas transfers for limited defined transfers by using model contractual clauses. These pre-written clauses are supplied by the European Commission.

"BCRs are definitely the right answer for some, but model clauses offer a lower-cost means of achieving compliance that tend to suit the budgets and requirements of more companies," said Malcolm.

Read the ICO's list of BCR users here (pdf).

Also, read the OUT-LAW guide to 'Overseas Transfers of Personal Data' here.

Copyright © 2009, OUT-LAW.com

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

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