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10 min read

Writen by Daniela Atanasovska

Posted on: December 6, 2023

Continuing the Journey: What are the Costs of EU-US Data Privacy Framework Program Certification

In our recent exploration of transatlantic data flow post-EU Adequacy Decision – Don’t Get Caught Out: How US Companies Can Comply with the GDPR after the Adequacy decision from the EU, we delved into the impact on US companies, categorizing them into three groups.
Now, let’s dive into the intricacies of the EU-US Data Privacy Framework (DPF) certification fees and costs that these companies encounter.

As businesses increasingly operate in a global digital landscape, the protection and privacy of personal data have become paramount. The EU-US Data Privacy Framework Program (DPF) is a crucial mechanism to ensure compliance with data protection principles.

However, understanding the associated certification fees and costs is vital for organizations seeking DPF certification.

The DPF certification process involves an annual certification fee payable to the International Trade Administration (ITA).

The fee is not uniform; rather, it depends on both the annual revenue of the certified business and the selected framework(s), whether it is solely the EU-US DPF Framework or a combination of the EU-U.S. DPF Framework and SWISS-U.S. DPF. Businesses certifying to the UK Extension, however, do not face additional fees.

The tiered fee structure is as follows:

For businesses with an annual revenue between $0 to $5 million:
– Certifying to a single framework: $250 annually, $375 for both

The fees increase for businesses with higher annual revenues:

Over $5 million to $25 million:
– $650 to certify to a single framework, $975 for both

Over $25 million to $500 million:
– $1,000 to certify to a single framework, $1,500 for both

Over $500 million to $5 billion:
– $2,500 to certify to a single framework, $3,750 for both

Over $5 billion:
–  $3,250 to certify to a single framework, $4,875 for both

Beyond the certification fees, US companies engaging in transatlantic data transfers also face other annual fees:

Arbitral Fund:

This fund covers the fees associated with the DPF Panel, a vital component for dispute resolution. The amount varies based on the organization’s size and is integral to sustaining the DPF program. See the following picture.

data privacy framework arbitral fund fee schedule
Independent Recourse Mechanism (IRM) Fees:

These fees apply to HR and non-HR Data. The IRM fees for non-HR Data depend on the chosen IRM provider.

For HR Data, businesses must cooperate with the appropriate European data protection authority/ies, and the fee for the DPA Panel is $50 per year.

Typically, charges associated with IDM fall into two main categories:

Professional fees

– Usually, no fees are linked to specifying a particular Alternative Dispute Resolution (ADR) provider in a self-certification submission under the DPF Program.
– Charges are applicable only if a DPF matter is taken to the ADR provider.
– Hourly and daily rates differ based on the selected neutral, who, as independent contractors, establish their own professional fees.
– In accordance with EU, UK, and Swiss data protection initiatives, companies responding to ADR matters initiated by consumers bear 100% of associated fees, absolving consumers of any financial responsibility.
– In cases unrelated to consumers, hearing fees are evenly distributed among all involved parties.
– Professional fees cover time spent on hearings, pre- and post-hearing activities, research, and award preparation.

Mediation fees

– An initial non-refundable fee of $300 per party applies to the first 10 hours of professional time.
– Additional hours beyond the initial 10 are charged at 13% of professional fees.
– The Case Management Fee provides access to an exclusive nationwide panel of experts, along with dedicated services encompassing administration throughout the case, document handling, and utilization of conference facilities. Charges may apply for weekends and holidays.

Businesses that maintain an active certification under the Privacy Shield are automatically part of DPF. However, they need to update their privacy policies and procedures to reflect DPF Principles by specific deadlines. The business is required to re-certify on its annual re-certification date and pay the associated IRM(s) and Arbitral Fund annual fees.

If a business chooses to withdraw from part(s) of the DPF program, it must comply with specific requirements.

This includes the submission of a “Post-Withdrawal, Annual Affirmation Questionnaire” and payment of an annual $200 fee per applicable framework associated with post-withdrawal, annual affirmation.

Participating organizations must not only navigate these certification fees but also address additional direct costs associated with DPF program participation. This includes providing a readily available independent recourse mechanism for individual complaints and cooperating with EU DPAs, incurring additional fees.

While the EU-US Data Privacy Framework Program Certification entails certain fees, it is crucial to view them in the context of the broader benefits they bring to organizations. Simplifying the data flow from the EU, UK, and Switzerland, the certification program ensures compliance with data protection principles.

The tiered fee structure, though varying based on revenue, serves as a manageable investment for enhanced trust and streamlined transatlantic data transfers.

The additional annual fees, such as those for the Arbitral Fund and Independent Recourse Mechanism (IRM), are integral to sustaining the program’s effectiveness.

Considering the program’s role in fortifying data privacy practices and fostering international collaboration, these costs are an essential part of ensuring a secure and compliant digital landscape for businesses operating in a global context. As a simple example, annual costs for participating in the framework for a company with a revenue between $0 – $50 million will be:

OrganisationFor one FrameworkFor both Frameworks
Annual certification fee payable to the International Trade Administration (ITA)
$250

$375
Arbitral Fund$250/
Appropriate European data protection authority/ies for HR data$50/
Independent Recourse Mechanism (IRM) FeesApproximately from $300 and above/

Total
Approximately from $850 and above if some dispute in front of IRM aroseApproximately from $975 and above if some dispute in front of IRM arose

GDPRLocal is your trusted partner for achieving compliance with GDPR and other data protection regulations. Our services can cover:

Certification Guidance: Our team of experts can guide you through every step of the certification process. We can help you understand the specific requirements and assist in preparation of the required documentation to ensure a smooth and successful certification.

GDPR Compliance Support: We go beyond DPF certification and can help strengthen your overall GDPR compliance. Our experts can work closely with you to develop a comprehensive compliance framework that aligns with your organization’s specific needs and the principles of the GDPR.

Do you have specific needs? Let us know, and we’ll tailor our support for you. Contact us today at [email protected].

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