What are the best practices for drafting data transfer clauses in contracts with vendors or partners?

Be it GDPR(EU), DPA (UK), DPDPA (India), CCPA (California), LGPD (Brazil) or PDPA (Singapore), legal framework focusses of three key pillars: 1. Education of users on data usage and sharing 2. Giving back control to users to define how, when and who can process their data 3. Careful handling of user data as temporary guardians of a valuable asset These pillars can manifest themself in various form factors specific to local jurisdiction. Studying them in detail helps implement it faster

Understand which regulators have jurisdiction over the data you are handling. Jurisdiction can be based on the residency or citizenship of the impacted individuals not just where your company is based.

All global privacy law aims to achieve the same goal: To allow an individual to regain control over their personal data. A successful privacy program within any business is built on a principled approach to data privacy that meets this goal. Building a business' privacy program around one regulation or the other will result in a conflation of data processing requirements. Legal departments must be very knowledgeable about information technology to be able to apply the various frameworks in a holistic manner to complex IT contracts.

This paragraph is, at the same time, both true and vague. It's almost like it was written by a bot - but that can't be, can it?

Identify and describe the types of data that will be transferred. Clearly state the purpose for which the data is being transferred and ensure it aligns with the data subject’s consent. Specify the security measures the vendor must implement to protect data (e.g., encryption, access controls). Specify data retention periods and requirements for secure data deletion.

To be a successful privacy attorney with robust contracts you must understand information security and data processing at an advanced level. Most professionals trying to negotiate data processing agreements lack an understanding of personal data processing and data processing at the intersection of the security and privacy, which causes conservative contracts that decrease business efficiency because of the fear of the unknown.

1. Data Inventory and Mapping:Conduct a Data Inventory,Data Mapping 2. Purpose Specification:Define Data Purposes,Document Use Cases 3. Legal Basis for Data Transfer:Identify Legal Requirements,Ensure Compliance 4. Data Sensitivity Assessment:Assess Data Sensitivity,Apply Risk Management 5. Stakeholder Engagement:Involve Relevant Stakeholders,Consult with Vendors or Partners 6. Documentation and Transparency:Document Data Transfer Details:Ensure Transparency 7. Data Minimization and Proportionality:Apply Data Minimization,Ensure Proportionality 8. Regular Review and Updates:Review and Update Data Clauses,Adapt to Changes

In my experience, a meticulous identification of data types and purposes is paramount when drafting data transfer clauses. Specify the exact nature of personal data being transferred, for instance, distinguishing between names, email addresses, health records, and financial information. Clearly outline the intended purposes, tying them to legal bases like contract fulfilment, service provision, research, or legal compliance. To illustrate, if transferring health records for research, expressly state the purpose as 'conducting medical research with explicit consent.' Also, ensure a solid legal foundation, such as legitimate interest or obtained consent, aligning with GDPR principles and fostering transparency in contractual relationships.

Before drafting data transfer clauses, identify the personal data types being transferred (e.g., names, email addresses) and define the purposes and legal bases for processing (e.g., fulfilling contracts, providing services, research). Avoid vague terms to prevent ambiguity, ensuring clarity. Confirm a legitimate interest or consent for the specified data transfer and processing purposes.

In my experience as a privacy professional, thorough identification of data types and purposes is fundamental in drafting data transfer clauses. This involves specifying the personal data being transferred and the purposes and legal bases for processing it. Clear delineation of data types, such as names or financial records, and purposes, like fulfilling contracts or conducting research, minimizes ambiguity and ensures alignment with legal requirements. It's crucial to avoid vague terms that may lead to uncertainty. Additionally, confirming legitimate interests or obtaining consent for data transfer and processing enhances transparency and compliance.

Data sharing clauses with vendors/ sub-vendors should be ironclad to manage liabilities in cases of a breach in any of these systems. Assigning roles such as data fiduciary, data processor, data controller clearly maps a vendor with their responsibilities while handling your users' data. Defining exact terms of data exchange transactions between any two entities will help prevent any future conflicts and make enforcement of your data privacy policy easier

Be sure to have a thorough understanding as to what the parties are doing and why, because without understanding the context, you won't be able to properly define the roles and responsibilities of the parties; depending on what the applicable privacy law is, you will need to draft the rights/obligations of the parties differently (e.g. seller vs service provider under CCPA, or controller vs processor under GDPR).

1. Define Scope and Purpose:Specify Data Types,State Purpose 2. Legal Basis for Data Transfer:Identify Legal Requirements,Specify Compliance 3. Data Security Measures:Data Protection Standards,Specify Security Controls 4. Responsibilities of Parties:Data Handling,Compliance Obligations 5. Subprocessing and Third-Party Transfers:Consent for Subprocessing,Data Protection Requirements 6. Data Subject Rights:Support Data Subject Rights,Transparency 7. Data Retention and Deletion:Retention Period,Compliance with Legal Requirements 8. Audits and Compliance Monitoring:Audit Rights,Reporting and Monitoring 9. Dispute Resolution and Termination:Dispute Resolution,Termination Clause 10. Updates and Amendments:Review and Update,Mutual Agreement

In data transfer clauses, clearly outline roles (e.g., controller, processor) and associated responsibilities, such as notice provision, consent acquisition, security assurance, and breach reporting. Define communication and cooperation procedures for addressing issues or incidents related to the data transfer.

??? Data Controllers and Processors: Define the roles of each party in the data processing activities, including any sub-processors, to clarify obligations. ?? Accountability Measures: Outline specific responsibilities for data security, breach notification, and data subject rights fulfillment.

On 10.7.2023, the European Commission announced a so-called adequacy decision ("Adequacy decision for the EU-US Data Privacy Framework") pursuant to Art. 45 (1) GDPR. According to this decision, the U.S. now offers an adequate level of data protection, the transfer of personal data to the U.S. is again possible on this basis and it is not mandatory to conclude SCCs. Since it has already been announced that this adequacy decision will also be challenged in court, however, it should be examined whether SCCs should not be retained contractually as a fallback solution.

Privacy Shield is no longer an adequate mechanism for data transfers, but the EU and the US are currently negotiating a replacement mechanism. When relying on the SCCs, please note that while these clauses are "standard" --- they do have a few provisions that can be negotiated and modified between the parties.

1. Understand Legal Requirements:Identify Applicable Laws,Review Regulatory Guidance 2. Assess Data Transfer Context:Data Sensitivity,Transfer Context 3. Consider Lawful Mechanisms:Standard Contractual Clauses, Use Case, Content,Binding Corporate Rules:Use Case,Content,Adequacy Decisions:Use Case,Content,Derogations (Exceptions):Use Case,Content,4. Include Supplementary Measures:Data Security,Contractual Provisions 5. Consult with Legal Experts:Legal Review,Internal Compliance 6. Regular Monitoring and Review:Monitor Changes,Review Contracts

Select an appropriate mechanism for data transfer based on legal requirements and destination. Options include Standard Contractual Clauses (SCCs), Binding Corporate Rules (BCRs), Privacy Shield for EU-US transfers, and adequacy decisions for recognized data protection standards. Evaluate and choose the most suitable mechanism for your specific needs.

n my experience as a privacy professional, selecting the appropriate mechanism for data transfer is crucial and depends on the legal framework and destination. Options like standard contractual clauses (SCCs), binding corporate rules (BCRs), Privacy Shield, or adequacy decisions offer varying levels of data protection. SCCs are pre-approved templates, while BCRs are internal policies for multinational companies. Privacy Shield facilitates EU-US data transfers, and adequacy decisions recognize countries with data protection equivalent to EU standards. It's essential to evaluate each mechanism based on your specific needs and circumstances to ensure compliance and data protection.

1. Data Types and Scope:Definition of Data,Scope of Data Transfer 2. Legal Basis for Data Transfer:Lawful Basis,Compliance with Regulations 3. Data Security and Confidentiality:Security Measures,Confidentiality Obligations 4. Data Subject Rights:Support for Rights,Handling Data Subject Requests 5. Subprocessing and Third-Party Transfers:Consent for Subprocessing,Data Protection Requirements 6. Data Retention and Deletion:Retention Period,Compliance with Legal Requirements 7. Audits and Compliance Monitoring:Audit Rights,Reporting and Monitoring 8. Dispute Resolution and Termination,Dispute Resolution Mechanisms,Termination Clause 9. Updates and Amendments:Review and Update,Mutual Agreement

One thing I found very helpful is to consider to adapt the contractual obligations to the specific processing scenarios, the data life cycle and the specific risk of processing. Often the standard does not fit when it comes to high risk processing. In addition to pragmatic regulations, a good contract should address the real risks. Sometimes the real truth lies in the Annexes and processes such as regulation on breach management as well as the handling of data subject rights, provisions on the changes in the supplychain.

Think pragmatically. Try to agree on an approved list of sub-processors prior to the start of the contractual relationship, and add it to the contract as an appendix. This will save time for both sides and streamline the efficiency of your common project ??

?? Data Protection Safeguards: Incorporate clauses on encryption, anonymization, and other security measures to protect the data during transit and at rest. ?? Audit and Compliance: Allow for regular audits and insist on compliance certifications from the vendor to ensure adherence to the contract and applicable laws.

?? Dynamic Updates: Acknowledge the dynamic nature of data privacy laws and tech environments by committing to regular reviews and updates of the data transfer clauses. ?? Adaptability Clause: Include provisions for renegotiation or modification of the agreement in response to legal, technical, or business changes.

?? In #DataProtection, stakeholder management is crucial! Engage them as early as possible. Remember: You're responsible for your consumers' data, whether outsourcing or in a joint controllership.? Before contractual engagement, ask: 1?? What security measures does your vendor have? 2?? What's their #DataProtection knowledge level? Check their policy framework and accreditations.?? 3?? Any history of breaches? How were they handled??? Maintain quality control throughout the relationship, set it in a legally binding contract?? documenting your exact instructions for the data processing. Plan ahead for any sub-processors engagement, required notices, consents, and pre-approved parties.??

Provide a clear definition of terms, specifying the purpose and legal basis for data transfer, outlining security measures, emphasising data minimisation, addressing subcontracting, respecting data subject rights, incorporating audit and inspection provisions, establishing data breach notification procedures, defining data return or deletion conditions, addressing international data transfers, ensuring compliance with laws, including indemnification clauses, outlining dispute resolution mechanisms, and accounting for updates to terms based on changes in data protection laws. Crafting comprehensive and transparent clauses helps establish a robust legal framework for data transfers while ensuring compliance with relevant regulations.

It may be worth considering the best way to present and incorporate the data transfer clauses in vendor or customer contracts. Adding to a contract's length, even to its length's perception, can hinder the review process. It may be worth considering what other ways, such as links, exist to incorporate clauses, particularly non-negotiable clauses and modules.