1. High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 www.usibc.com Privacy and Cyber Security: legal and policy issues Joseph Alhadeff Chair, USIBC Information Technology Committee

2. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 The Legal Landscape Governmental Sources EU Guidelines FTC Fair Information Practices Regional Law National Law Local Law Quasi Governmental OECD Guidelines APEC Guidelines APT Guidelines Self Regulatory Bodies Business/Sectoral Associations

3. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 OECD Guideline Principles The collection and use of data should be disclosed and users be given an opportunity to decline collection Data should be collected, stored, processed, and communicated only for legitimate purposes; Data should be current, accurate, and relevant to the intended use; and Data subjects should be entitled to examine, where appropriate, data relating to them, and to obtain correction or deletion of such data, if justified.

4. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 APEC Guidelines Like OECD Guidelines recognize the benefits of the information flows as well as responsibilities Based on OECD, but more flexible and adaptable to Global Information Flows Focus is more on use of personal information and preventing harm through appropriate protection obligations that flow with the information This includes work on using corporate rules with regional recognition Principles should be ratified this year, work on implementation continues.

5. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Common Privacy Elements Disclosure/Notice of what, how, why and with who Choice – opt in / opt-out Access for review correction Security Fair, relevant, timely, for business need Compliance/enforcement (company) Redress/oversight (government/third party)

6. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Setting the Stage: EU/US Basics

7. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 EU/US Privacy Paradigms EU Privacy rights mainly applied to protect individuals from corporate/commercial use of information The role of government in protecting privacy The human right of privacy and moral rights of authors Regulation in advance of issue Wrongful collection of information US The Constitutional right to privacy secures citizens from unreasonable governmental intrusion The role of the government in assuring fairness and preventing deception Free speech, individual choice and the fair use doctrine Legislation in response to issue Harmful use of information

8. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 The Nature of a Directive EU wide application National country implementation May vary in implementation as long as not contrary Any Country / Citizen may bring action to claim that national is not in compliance Heard by EU court

9. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 EU Directive October 24, 1998 implementation EU Personally identifiable information must have adequate protection Intranet/Web collection Extraterritorial effect - adequacy of other laws National implementation spectrum: floor not ceiling Directive review

10. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 EU Directive - Continued Extraterritorial effect – precludes transfer to countries not providing for adequate protection of privacy Adequacy findings for Switzerland, Hungary, Canada, Argentina and the US Safe Harbor companies Derogations Contractual solutions EC Data Controller and Processor Model Contracts ICC Model Contract Binding Corporate Rules – Work in progress

11. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Directive Historical Context Directive was drafted in a time of point-to- point EDI and overnight batch processing. Contractual solutions/adequacy were more appropriate for country-to-country transfers Directive review recognized need for greater harmonization across EU application and need for greater flexibility of application to global information flows.

12. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 US/EU Agree on Safe Harbor Effective date 11/00 - Compliance By 7/01 Self-certification Principles/FAQs Enforcement Mechanisms Third Party backed by FTC/DOT Panel of three registrars Benefit - Finding of adequacy is equivalent to transfer w/in EU for prior consent purposes, BUT still requires notice & rationale

13. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Safe Harbor Principles 1.Notice 2.Choice 3.Onward Transfer 4.Security 5.Access 6. Enforcement Documents may be found at: http://www.export.gov/safeharbor

14. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Safe Harbor Review Report was critical of certain practices but did not undermine the Safe Harbor Focused on need for clarification, education and review of oversight practices Financial Services still NOT covered Treasury negotiations “Fractured” alliance prospects… Safe harbor predicated on Agency backstop – FTC, DOT

15. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Outside EU and US – Some Highlights… All enlargement countries, Switzerland and EFTA Other active countries w/some legislation… Hong Kong; New Zealand; Chile; Argentina; Canada, Australia;Taiwan;Korea;South Africa, Japan… Proposed/Thinking: Thailand; India; Brazil; Mexico; China…

16. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Privacy and India: Focus on rationale and objective Review existing laws and processes (including Contract Law and other related laws and processes) Review current state of the data processing and global sourcing industry re: privacy and security Gap analysis to relevant international instruments and norms Selective amendment or revision of existing laws and processes as needed to achieve objectives The need for more, better and targeted information to address gaps in perception

17. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Innovative Privacy Architecture Elements

18. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Concepts for Privacy Approaches Consistent with need for and benefits of global information flows Protection as appropriate to type and use of information – business directory, for instance Limitation of bureaucratic overhead Innovative policy instruments and mechanisms Recognition of registration/ certification/ accreditation Mediation/dispute resolution Cooperation in cross-border transfer and responsibility

19. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 Concepts cont’d Transparency for Business and Consumer Appropriate relationship to security Relevance to developed and developing countries as well as those with and without existing frameworks Considering appropriate incentives, motivating factors and redress frameworks

20. www.usibc.com High Technology Cooperation Group: Data Privacy The Indo-U.S. High Technology Cooperation Group November 18, 2004 To what end? Exploring the thought-leadership role that India could play as a result of long- established legal frameworks, cutting edge technology players, entrepreneurial expertise and increasingly important role in global data transfers