In today’s digital landscape, transferring personal data across borders is a routine part of business operations. However, under the General Data Protection Regulation (GDPR), companies must ensure these transfers meet stringent data protection requirements.
A Transfer Impact Assessment (TIA) is an essential tool for companies. It helps them to assess and reduce risks when transferring personal data across borders.
This article will explore:
- when a Transfer Impact Assessment is required,
- what a Transfer Impact Assessment is,
- its importance under GDPR,
- how you can ensure compliance through careful assessment.
As a bonus, before the conclusion you will find a link to download our Transfer Impact Assessment Checklist. This document will help you conduct TIAs effectively.
What is a Transfer Impact Assessment?
A Transfer Impact Assessment (TIA) clarifies and evaluates your company’s risks involved in the processing activity examined.
Once completed, it ensures that personal data continues to receive adequate protection, even when transferred to countries with different data protection laws. This assessment considers the specific context of the transfer, including the nature of the data, the recipient’s practices, and the legal environment in the third-country.
TIAs are essential for demonstrating accountability under the GDPR. By conducting a TIA, organizations can document the measures they’ve taken to protect personal data and comply with regulatory requirements.
IMPORTANT: Sometimes, the outcome of a TIA may well suggest not to proceed with the processing activity due to risks that cannot be sufficiently mitigated.
When is a Transfer Impact Assessment Required?
A TIA is required whenever personal data flows from the European Economic Area (EEA), which consists of the European Union, Iceland, Norway, and Liechtenstein, to countries outside the EEA (third-countries).
For example, if you are transferring personal data from Germany to the US and Australia, it is important that the same level of protection also applies in these countries.
In practice, a TIA will be necessary whenever personal data is transferred to countries that do not have an Adequacy Decision from the European Commission, which confirms that the country offers a comparable level of data protection.
In this context, the European Commission has not recognized the US as an Adequate Country. On the contrary, US companies registered under the Data Protection Framework (DPF) have been.
IMPORTANT: as a consequence of the June 2021 Standard Contractual Clauses (SCCs), and the Schrems II decision, TIA’s s are now mandatory.
Data Transfer Impact Assessment under the GDPR
In the Shrems II decision, the European Court of Justice indicated that an assessment of the international data transfer has to be conducted, and in certain instances, supplementary measures be implemented. The European Commission has confirmed what the European Court of Justice ruled, namely that conducting TIAs is a legal obligation under the new SCCs.
Therefore, conducting a GDPR Transfer Impact Assessment is a regulatory obligation for companies that handle personal data across borders. This assessment is not only necessary for compliance but also helps to ensure that the rights and freedoms of data subjects are protected. By thoroughly evaluating the risks associated with data transfers, organizations can implement appropriate safeguards and demonstrate their commitment to data privacy.
In a nutshell, conducting a TIA:
- assesses the legal framework and the data privacy laws of the third-country;
- ensures that adequate protections are in place, to protect personal data during cross-border transfers;
- helps to identify potential risks associated with the transfer, such as local laws that may undermine data privacy;
- enables your organization to put in place appropriate safeguards to protect personal data and fulfil GDPR requirements.
Failing to conduct a TIA when required can result in significant fines and damage to a company’s reputation. By being proactive about international data transfers, organizations can avoid risks. This helps them keep the trust of their customers and partners.
How should you conduct a TIA?
To conduct a TIA, you should take the following steps:
- Collect information on the applicable processing activities;
- Verify whether there are any onward data transfers to (sub)-processors;
- Assess a third country’s level of privacy protection.
What challenges can you encounter?
We are aware that not everything goes according to plan and sometimes you must be pragmatic in your approach. There may be challenging hurdles you may encounter, such as not having the right expertise.
This is completely understandable. Most organizations cannot afford to have employees who focus only on data privacy tasks. If you are aware that you need support, it is highly recommended to contact data privacy professionals for assistance in conducting the TIA.
Another hurdle is having no budget and/or time. Please note that you always need a budget to conduct a decent TIA. If your organization chooses not to provide a budget for TIAs, it should understand the financial consequences.
These consequences could impact the organization in various ways. Being aware of the potential effects on finances is important. Think of fines by the supervisory authorities, reputational damage, and possible legal action against the organization.
Furthermore, there can be no response from the other party. Unfortunately, we notice that not all parties respond to our requests to complete the TIAs together. In that case, one or two follow-ups should be sent. But if they still do not respond or send you limited information, you then have two options:
- The lack of information is a clear risk in the TIA. You can therefore complete the TIA as much as possible and let the CEO decide whether the risk is accepted or not; or
- You should consider an alternative vendor to avoid risks.
Lastly, there can also be confusion regarding roles. Organizations often try to provide the new SCCs on their website. However, it is not recommended to just accept the new SCCs because the SCCs that are uploaded may differ from the roles that are actually present in your data transfer.
Download Our Transfer Impact Assessment Checklist
These consequences could impact the organization in various ways. Being aware of the potential effects on finances is important. Think of fines by the supervisory authorities, reputational damage, and possible legal action against the organization.
Furthermore, there can be no response from the other party. Unfortunately, we notice that not all parties respond to our requests to complete the TIAs together. In that case, one or two follow-ups should be sent. But if they still do not respond or send you limited information, you then have two options:
- The lack of information is a clear risk in the TIA. You can therefore complete the TIA as much as possible and let the CEO decide whether the risk is accepted or not; or
- You should consider an alternative vendor to avoid risks.
Lastly, there can also be confusion regarding roles. Organizations often try to provide the new SCCs on their website. However, it is not recommended to just accept the new SCCs because the SCCs that are uploaded may differ from the roles that are actually present in your data transfer.
For a more in-depth exploration of how to conduct a Transfer Impact Assessment and ensure GDPR compliance, download our free tool. This guide provides a step-by-step approach to assessing data transfer risks, implementing safeguards, and documenting your compliance efforts. Click the button below to access the tool and start protecting your data today.
Conclusion
All in all, conducting TIAs does not have to be such a challenging task. If an organization knows how to identify an international data transfer, it can handle the new SCCs. It should also understand what a TIA should include.
Additionally, the organization must know how to manage a TIA project and its challenges. With this knowledge, yourorganization is ready to conduct successful TIA projects.