With the European Commission's endorsement of New Zealand's data protection laws taking effect from 20 March 2013, entities within the European Economic Area (EEA) will be able to transfer data to New Zealand without any need for additional safeguards to be put in place.

A European Commission decision of 19 December 2012 states that data protection standards in New Zealand provide an adequate level of protection for personal data.  The European Commission noted that legal data protection standards in New Zealand reflect the principles of European Union's (EU) data protection Directive 95/46/EC (Data Protection Directive).  This is in large part recognition of the importance New Zealand places on its Privacy Act 1993 and the requirement that it must be taken into account on the enactment of new legislation.

Under the Data Protection Directive, States within the EEA are required to ensure that data transfers outside the EEA are only to countries with adequate data protection laws and additional safeguards (eg data subjects consenting to the data transfer and additional contractual guarantees) have been put in place.

The European Commission's endorsement is significant for New Zealand given its geographical boundaries.  Only four other countries outside of the EU (Argentina, Canada, Israel and Uruguay) have been granted this status.  The endorsement is also likely to be a key factor for other jurisdictions which have data export controls when considering data transfer approvals.  This is because, while such jurisdictions' laws may not accord with EU standards, the European Commission's endorsement should be very persuasive, given that the Data Protection Directive is widely considered to be the "gold standard" in data protection.

The endorsement will be of most relevance to those New Zealand businesses that generally deal with personal data, particularly those involved in data processing, ICT outsourced services or "as a service" IT software or infrastructure (eg HR or CRM solutions).  This decision creates an opportunity for these businesses to further exploit and / or create new European trade ties.