U.S. Announces Participation in APEC Cross-Border Privacy Rules System

August 10, 2012
Legal Updates

The United States recently took a significant step to enhance electronic commerce and to further open markets and regional trade in the Asia-Pacific region.  On July 26, 2012, Acting Commerce Secretary Rebecca Blank announced that the U.S. would participate in the Asia-Pacific Economic Cooperation's (APEC) Cross-Border Privacy Rules System.  The U.S. was approved as the first formal participant and the Federal Trade Commission was approved as the first privacy enforcement authority.  The APEC Privacy Rules System is a self-regulatory initiative that is intended to enhance the protection of consumer data that is transferred between the U.S. and other members of APEC.  

The APEC Cross-Border Privacy Rules System is based upon a privacy framework first developed by APEC in 2004.  It contemplates a voluntary but enforceable code of conduct to be adopted by participating organizations.  The code of conduct is to be based upon a set of nine privacy principles that are also intended to assist APEC members in developing privacy approaches that maximize privacy protection for personal data that flows across the borders of the APEC member economies.  APEC members' governmental agencies, private corporations and privacy advocates worked together to formulate the Principles and the Rules.   The APEC Privacy Principles are:  (1) preventing harm; (2) notice; (3) use; (4) collection limitation; (5) choice; (6) security safeguards; (7) integrity; (8) access and correction; and (9) accountability.  The System contemplates that international implementation of these principles may optimally be achieved through the use of Cross Border Privacy Rules. 

The CPBR system will facilitate trade between the U.S. and other APEC member economies by removing the uncertainty that may accompany the exchange of data.  Organizations will be able to engage in trade more efficiently by exchanging data in a secure manner and with a consistent level of consumer protection and accountability in the APEC region.

As noted in the DOC's press release, APEC consists of 21 member economies comprising a market of 2.7 billion consumers, and which account for 55% of world real gross domestic product, as well as 44% of world trade.  The U.S. plans to work with APEC to implement the CBPR System within the next six months.