EU-U.S. DPF and UK Extension to the EU-U.S. DPF Annex I Binding Arbitration Mechanism

As described respectively in Annex I of the EU-U.S. DPF Principles, the Letter from the U.S. Department of Commerce’s International Trade Administration (ITA) regarding the UK Extension to the EU-U.S. DPF, and Annex I of the Swiss-U.S. DPF Principles, an EU/EEA, UK (or Gibraltar), or Swiss individual has the option to invoke binding arbitration to determine whether a participating organization has violated its obligations under the DPF Principles as to that individual and whether any such violation remains fully or partially unremedied (“residual claims”). In Annex I of the DPF Principles, the U.S. Department of Commerce committed to the maintenance of a fund to which participating organizations will be required to contribute to cover the arbitral costs, including arbitrator fees, up to maximum amounts.

The International Centre for Dispute Resolution^®-American Arbitration Association^® (ICDR-AAA^®) was selected by the U.S. Department of Commerce to administer arbitrations pursuant to and manage the arbitral fund identified in Annex I of the DPF Principles. Please visit ICDR-AAA’s website at https://go.adr.org/dpf-annexi-fund.html to make the required contribution.

EU/EEA and UK (or Gibraltar) individuals: for more information on how to file a DPF Annex I Binding Arbitration, click HERE.

Organizations: to go directly to the Arbitral Fund contribution/fee page, click HERE. 

Background

The EU-U.S. DPF and the UK Extension to the EU-U.S. DPF were respectively developed by the U.S. Department of Commerce and the European Commission and the UK Government to provide U.S. organizations with reliable mechanisms for personal data transfers to the United States from the European Union / European Economic Area and the United Kingdom (and Gibraltar) while ensuring data protection that is consistent with EU and UK law.

The Data Privacy Framework (DPF) program, which is administered by the International Trade Administration (ITA) within the U.S. Department of Commerce, enables eligible U.S.-based organizations to self-certify their compliance pursuant to the EU-U.S. DPF and, as applicable, the UK Extension to the EU-U.S. DPF, and/or the Swiss-U.S. DPF. To participate in the DPF Program, a U.S.-based organization is required to self-certify to the ITA via the Department’s DPF Program website (i.e., https://www.dataprivacyframework.gov) and publicly commit to comply with the DPF Principles. While the decision by an eligible U.S.-based organization to self-certify its compliance pursuant to and participate in the relevant part(s) of the DPF Program is voluntary, effective compliance upon self-certification is compulsory. Once such an organization self-certifies to the ITA and publicly declares its commitment to adhere to the DPF Principles that commitment is enforceable under U.S. law. Organizations that wish to participate in the UK Extension to the EU-U.S. DPF must also participate in the EU-U.S. DPF. The full details of the DPF Program can be found on the U.S. Department of Commerce’s DPF Program website at https://www.dataprivacyframework.gov.

The EU-U.S. DPF and the UK Extension to the EU-U.S. DPF respectively provide the option for an EU/EEA or UK (or Gibraltar) individual to invoke binding arbitration to determine whether a participating organization has violated its obligations under the EU-U.S. DPF Principles as to that individual and whether any such violation remains fully or partially unremedied ("residual claims"). Organizations voluntarily self-certify to the EU-U.S. DPF Principles and, upon self-certification, the commitments become legally enforceable under U.S. law. Organizations that self-certify their compliance pursuant to the EU-U.S. DPF and, as applicable, the UK Extension to the EU-U.S. DPF are required to arbitrate claims pursuant to the Recourse, Enforcement and Liability Principle.

Under the UK Extension to the EU-U.S. DPF personal data transfers from the United Kingdom and Gibraltar to the United States shall, as appropriate (i.e., where the organization has elected to cover such transfers), be treated in accordance with the EU-U.S. DPF Principles and Annex I of the Principles. It follows that for the purposes of the UK Extension to the EU-U.S. DPF references in the EU-U.S. DPF Principles and Annex I of the Principles to the European Union and/or the European Commission, EU DPAs, and EU individuals should generally be understood as referring respectively to the United Kingdom and/or the UK Government, the UK Information Commissioner’s Office (ICO) and/or, as applicable, the Gibraltar Regulatory Authority (GRA), and UK individuals (i.e., as consistent with relevant differences between the United Kingdom and Gibraltar, and the European Union).

In Annex I of the EU-U.S. DPF Principles, the U.S. Department of Commerce committed to facilitating the establishment of a fund into which participating organizations will be required to pay contributions to cover the arbitral cost, including arbitrator fees, up to maximum amounts, in consultation with the European Commission. The purpose of the fund is solely to provide participating organizations with a consolidated mechanism to fund arbitrations. The fund will be managed by ICDR-AAA.

As the Arbitral Administrator and Fund Manager, ICDR-AAA will facilitate the collection and administration of contributions from participating organizations. The required contributions are based on organizations’ annual revenue, using revenue bands that mirror those used to determine the annual fee organizations must pay to the ITA in order to participate in the DPF Program. The ICDR-AAA will provide the ITA with information on an ongoing basis regarding the status of contributions made by organizations to the arbitral fund.

The fee structure for the arbitral fund is available HERE. ICDR-AAA expects these initial fees to provide sufficient revenue for the fund to operate for several years, based on expected case filings and projected administrative and program management expenses. ICDR-AAA shall work with the U.S. Department of Commerce to periodically review the operation of the fund, including any need to adjust the fee structure, and the Department will notify its EU and UK counterparts of the outcome of such reviews and provide them with timely notice of any adjustments to the fee structure.