- Background. Company B-1 and Company B-2 are corporate affiliates who are under common ownership or control but are separate legal entities. Company B-2 is the processor of Company B-1. While data is being directly sent from Company A in Europe to Company B-2, Company B-2 is not acting as the processor of Company A; instead Company B-1 is utilizing Company B-2 as its processor and has directed Company A to directly transmit information to Company B-2. The solid line indicates the data flow; dashed line indicates the contractual relationships.
- No mechanism needed for transfer from Company A to Company B-1. The GDPR does not require a safeguard mechanism for data transferred from a company in the EEA to another company in the EEA. In the visual depiction, while data is not being physically transferred from Company A to Company B-1, Company B-1 might be classified as a “controller” because it determines the purpose and means of processing the data while it is in the possession of Company B-2.
- SCC Module 2. Although Company B-1 and Company B-2 may be under common ownership or control, as separate legal entities they are required to put into place a safeguard when transferring data from the EEA to the United States.1 While data has not physically been sent from Company B-1 to Company B-2, it has been sent at the direction of Company B-1. As a result, the parties might consider putting in place an SCC Module 2.
- A separate SCC is not needed (and may be inappropriate) between Company A and Company B-2. While the GDPR requires that “any transfer of personal data” has an adequate safeguard, in this situation the transfer of data from Company A to Company B-2 is arguably being done at the direction and under the control of Company B-1.2 Furthermore, if Company B-2 is not functioning as the processor of Company A (i.e., it is not taking instructions from Company A) the use of an SCC Module 2 would be inappropriate as it would incorrectly classify Company B-2 as Company A’s processor, and would assign to Company B-2 processor-oriented obligations that Company B-2 cannot fulfill.
- Transfer Impact Assessments. Section 14 of the SCCs requires that Company B-1 and Company B-2 document a transfer impact assessment of United States law to determine whether either party has reason to believe the laws and practices of the United States that apply to the personal data transferred prevent Company B-2 from fulfilling its obligations under the SCCs.
- Law enforcement request policy. Section 15 of the SCCs requires Company B-2 to take specific steps in the event it receives a request from a public authority for access to personal data. As a result, Company B-2 might consider creating a law enforcement request policy for handling requests from public authorities.
1 EDPB, Guidelines 05/2021 on the Interplay between the application of Article 3 and the provisions on international transfers as per Chapter V of the GDPR at para. 16.
2 GDPR, Art. 44.