In an interconnected global economy, transferring personal data across borders is a business necessity. Cloud computing, remote workforces, international supply chains and global customer bases all require data to flow between jurisdictions. However, these transfers must comply with the privacy laws of the originating country, which increasingly impose strict conditions on international data flows.
Why Cross-Border Transfers Are Regulated
Privacy laws regulate cross-border transfers to prevent organisations from circumventing domestic data protection standards by moving data to jurisdictions with weaker protections. The GDPR, PDPA and other frameworks require that personal data transferred outside their jurisdiction continues to receive an adequate level of protection.
GDPR Transfer Mechanisms
The GDPR provides several mechanisms for lawfully transferring personal data outside the European Economic Area (EEA).
Adequacy Decisions
The European Commission can determine that a third country provides an adequate level of data protection. Transfers to countries with an adequacy decision can proceed without additional safeguards. Countries with full adequacy decisions include Andorra, Argentina, Canada (commercial organisations), Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, Republic of Korea, Switzerland, the United Kingdom and Uruguay. The EU-US Data Privacy Framework provides adequacy for certified US organisations.
Standard Contractual Clauses (SCCs)
SCCs are pre-approved contractual terms issued by the European Commission that bind the data exporter and importer to appropriate safeguards. The 2021 modernised SCCs cover four transfer scenarios: controller-to-controller, controller-to-processor, processor-to-processor and processor-to-controller. SCCs are the most widely used transfer mechanism globally.
Binding Corporate Rules (BCRs)
BCRs are internal codes of conduct adopted by multinational groups to allow intra-group transfers of personal data. They require approval from a lead supervisory authority and provide a comprehensive framework for data protection across the corporate group. While powerful, BCRs are resource-intensive to implement and are primarily used by large organisations.
Derogations
In specific situations, transfers may rely on derogations such as explicit consent, contractual necessity, important reasons of public interest, legal claims, vital interests or transfers from public registers. These are intended for occasional, non-systematic transfers and should not be used as the primary transfer mechanism.
Transfer Impact Assessments
Following the Schrems II judgment, organisations relying on SCCs or BCRs must conduct Transfer Impact Assessments (TIAs) to evaluate whether the legal framework of the destination country provides adequate protection. A TIA should consider the nature and sensitivity of the data, the laws of the importing country (particularly regarding government access), any supplementary measures applied and the practical enforceability of data subject rights.
Our Data Protection Manager provides structured templates for conducting and documenting Transfer Impact Assessments as part of your overall compliance framework.
Supplementary Measures
When a TIA reveals that the destination country's laws do not provide essentially equivalent protection, organisations must implement supplementary measures to bridge the gap. These may include:
- Technical measures: Encryption with keys held exclusively in the EEA, pseudonymisation before transfer, split processing
- Contractual measures: Enhanced transparency obligations, audit rights, commitments to challenge disproportionate government access requests
- Organisational measures: Strict access controls, data minimisation, internal policies limiting the scope of transferred data
Singapore PDPA Transfer Rules
Under the PDPA, organisations must ensure that personal data transferred outside Singapore receives a comparable standard of protection. This can be achieved through contractual arrangements with the overseas recipient, ensuring they are bound by legally enforceable obligations to protect the data to a standard comparable to the PDPA. For organisations navigating PDPA transfer requirements, our Singapore DPO service provides expert guidance.
APEC Cross-Border Privacy Rules
The APEC Cross-Border Privacy Rules (CBPR) system provides a framework for facilitating privacy-respecting data flows among APEC member economies. Participating organisations certify their data privacy practices to an APEC-recognised accountability agent. While CBPR does not replace legal compliance requirements, it demonstrates a commitment to cross-border data protection and can complement other transfer mechanisms.
Practical Steps for Compliant Transfers
- Map your data flows: Identify all cross-border transfers, including those through cloud services, SaaS platforms and third-party processors
- Determine the legal basis: Establish the appropriate transfer mechanism for each data flow
- Conduct TIAs: Assess the legal framework of destination countries, particularly for non-adequate countries
- Implement supplementary measures: Apply additional safeguards where TIAs identify gaps
- Execute SCCs: Put appropriate contractual arrangements in place with all data importers
- Document and review: Maintain records of all transfer mechanisms and review them regularly as legal landscapes evolve
Working with experienced compliance consultants can help navigate the complexities of multi-jurisdictional transfer requirements and ensure your organisation remains compliant as regulations evolve.
Emerging Trends in Data Transfers
The landscape of cross-border data transfers continues to evolve. Data localisation requirements are increasing in some jurisdictions, requiring certain types of data to be stored and processed domestically. Meanwhile, new bilateral and multilateral frameworks are emerging to facilitate trusted data flows between aligned jurisdictions. Organisations should monitor these developments and maintain flexibility in their transfer strategies.
Conclusion
Cross-border data transfers are essential for modern business but require careful navigation of complex regulatory requirements. By understanding the available transfer mechanisms, conducting thorough assessments and implementing appropriate safeguards, organisations can maintain compliant international data flows while protecting individual privacy rights.