EU-US Data Privacy Framework: Compliance for US Companies
The EU-US Data Privacy Framework (DPF) is a self-certification mechanism that allows American companies to legally transfer personal data from the European Union without additional protection. Established in July 2023, this framework replaces the invalidated Privacy Shield and provides essential equivalence to EU law for participating US companies.
This guide covers everything you need to know about the Data Privacy Framework: from understanding the adequacy decision to implementing compliance requirements. You’ll learn how to self-certify with the Department of Commerce, maintain your certification, and leverage this framework for seamless EU data transfers.
The framework addresses business needs for US companies operating in European markets, providing legal certainty for billions of dollars in transatlantic commerce while ensuring strong data protection standards.
Key Concepts and Legal Foundation
Core Framework Components
The Data Privacy Framework consists of three aligned mechanisms:
• EU-US Data Privacy Framework: Covers transfers from European Union member states.
• UK Extension: Governs data transfers from the United Kingdom and Gibraltar.
• Swiss-US DPF: Addresses transfers from Switzerland under Swiss FDPA requirements.
The European Commission adopted the adequacy decision on July 17, 2023, after determining that certified US companies provide essential equivalence to EU data protection standards. The Department of Commerce administers the framework through its International Trade Administration, maintaining the public Data Privacy Framework List of participating companies.
Legal Relationships and Adequacy Basis
The framework directly addresses concerns raised in the Schrems II decision that invalidated Privacy Shield. Key legal foundations include:
• Executive Order 14086: Establishes enhanced safeguards for US intelligence activities
• Data Protection Review Court: Provides binding authority for EU individuals to challenge US government data access
• Essential equivalence standard: Ensures DPF Principles align with EU law requirements
This legal architecture convinced the European Commission that certified US companies offer adequate protection, eliminating the need for additional transfer safeguards.
Why the Data Privacy Framework is Critical for American Businesses
The framework provides substantial benefits backed by concrete data:
• Legal certainty: Eliminates transfer assessment requirements that burden Standard Contractual Clauses
• Market access: Enables continued operations in EU markets worth over $7 trillion in GDP
• Competitive advantage: Simplifies vendor selection for EU companies seeking US service providers
• Risk mitigation: Avoids GDPR penalties that can reach 4% of global annual revenue
According to the European Data Protection Board, any type of personal data can be transferred to DPF-certified companies without further authorisation, dramatically reducing compliance overhead compared to alternative mechanisms.
The Federal Trade Commission’s enforcement authority under Section 5 provides additional compliance assurance, with a stated commitment to “vigorous enforcement” of DPF obligations.
Framework Comparison: DPF vs Other Compliance Methods
| Method | Implementation Time | Legal Certainty | Ongoing Requirements | Cost Level |
| Data Privacy Framework | 2-4 weeks | High (adequacy decision) | Annual re-certification | Medium |
| Standard Contractual Clauses | 1-2 weeks | Medium (requires assessments) | Transfer impact assessments | Low |
| Binding Corporate Rules | 12-18 months | High | Periodic audits | High |
| Consent/Derogations | Immediate | Low (limited scope) | Per-transfer basis | Low |
The Data Privacy Framework offers the optimal balance of implementation speed, legal certainty, and compliance sustainability for most US companies handling EU personal data transfers.
Step-by-Step Guide
Step 1: Assess Eligibility and Data Transfer Needs
Before beginning certification, evaluate your organisation’s requirements:
• Data audit: Identify all EU personal data your company receives or processes
• Transfer mapping: Document data flows from EU entities to your US operations
• Category assessment: Determine if you need HR data coverage or other specific categories
• Resource evaluation: Ensure you can commit to annual recertification and ongoing compliance
Preparation checklist:
• Legal review of current data processing activities
• Privacy policy assessment and potential updates
• Independent recourse mechanism selection
• Internal compliance team designation
Step 2: Self-Certify with the Department of Commerce
Complete the certification process through the Department of Commerce:
• Submit self-certification: Commit to DPF Principles through the official portal
• Privacy policy updates: Publish policies reflecting Data Privacy Framework commitments
• Recourse mechanism: Designate independent dispute resolution procedures
• Public listing: Appear on the official Data Privacy Framework List for verification
Required DPF Principles compliance:
• Notice and transparency for data subjects
• Choice mechanisms for data processing
• Accountability for onward transfer to third parties
• Security safeguards and data integrity
• Access rights for EU individuals
• Recourse and enforcement procedures
Step 3: Maintain Compliance and Monitor Updates
Ongoing obligations ensure continued framework benefits:
• Annual re-certification: Submit renewal before expiration to maintain Data Privacy Framework List status
• Policy maintenance: Update privacy practices to reflect any framework modifications
• Vendor management: Ensure onward transfers comply with accountability requirements
• Dispute resolution: Respond to individual complaints through designated recourse mechanisms
Compliance monitoring metrics:
• Data subject request response times
• Security incident documentation
• Vendor contract compliance audits
• Training completion rates for relevant staff
Common Mistakes to Avoid in Data Privacy Framework Implementation
Mistake 1: Assuming framework coverage without proper certification verification. Many companies incorrectly believe they’re covered simply by working with certified vendors. Only companies appearing on the Data Privacy Framework List can receive adequacy benefits.
Mistake 2: Failing to maintain annual recertification requirements. Allowing certification to lapse immediately eliminates adequacy protections. Companies must transition to alternative transfer mechanisms if removed from the framework list.
Mistake 3: Inadequate onward transfer protections. DPF Principles require accountability for third-party transfers. Companies must ensure subprocessors provide equivalent protection through contractual safeguards.
Tip: Establish automated calendar reminders for re-certification deadlines and maintain legal counsel familiar with transatlantic data protection requirements. Regular compliance audits help identify issues before they impact certification status.
Conclusion: Key Takeaways for Data Privacy Framework Success
The EU-US Data Privacy Framework provides the most streamlined path for US companies to achieve GDPR compliance for European data transfers. Key implementation requirements include Department of Commerce self-certification, annual maintenance, and ongoing adherence to DPF Principles.
Essential success factors:
• Complete data transfer audits before certification
• Maintain accurate Data Privacy Framework List status
• Implement strong vendor accountability for onward transfers
• Establish systematic compliance monitoring and renewal processes
• Leverage the European Commission’s adequacy decision for competitive advantage
The framework’s enhanced safeguards and Data Protection Review Court address previous Privacy Shield concerns while providing essential equivalence to EU law standards.
Next action step: Assess your current EU data transfer practices and begin the Department of Commerce self-certification process if your organisation handles European personal data. Contact qualified legal counsel to ensure proper implementation and ongoing compliance with both framework requirements and broader GDPR obligations.
FAQs about the US GDPR Framework
Q1: Can my US company transfer EU personal data without joining the Data Privacy Framework?
A1: Yes, but you must use alternative mechanisms like Standard Contractual Clauses, which require additional transfer impact assessments and potential supplementary measures under current EU law.
Q2: What happens if my company is removed from the Data Privacy Framework List?
A2: You must immediately stop claiming framework participation but continue applying DPF Principles to retained personal data. Implement alternative transfer mechanisms before removal to maintain legal data flows.
Q3: How does the Data Protection Review Court affect my business operations?
A3: The court provides EU individuals with binding redress for intelligence-related data access complaints, strengthening the framework’s legal foundation without directly impacting typical business operations.
Q4: Must I participate in all three frameworks (EU, UK, Swiss) simultaneously?
A4: No, you can self-certify independently for each framework based on your transfer needs. However, the UK Extension requires EU-US DPF participation as a prerequisite.
Q5: What enforcement authority does the Federal Trade Commission have over DPF participants? A5: The FTC can investigate and take action under Section 5 for deceptive or unfair practices, including consent orders and penalties for companies that misrepresent compliance or violate DPF commitments.