Arbitral Fund Contribution

Announcement of EU-U.S. Privacy Shield Arbitral Administrator and Fund Manager and Privacy Shield Participants’ Required Contributions to the Arbitral Fund

The Department of Commerce (DoC) is announcing the International Centre for Dispute Resolution-American Arbitration Association (ICDR-AAA) as the third party selected to administer arbitrations pursuant to Annex I to the EU-U.S. Privacy Shield Principles (Annex I); and manage the arbitral fund.

The Privacy Shield Framework provides the option for an EU individual to invoke binding arbitration to determine whether a Privacy Shield organization has violated its obligations under the Privacy Shield Principles as to that individual and whether any such violation remains fully or partially unremedied (“residual claims”). Organizations voluntarily self-certify to the Principles and, upon certification, the commitments become legally enforceable under U.S. law. Organizations that self-certify to the Privacy Shield Framework are required to arbitrate claims pursuant to the Recourse, Enforcement and Liability Principle.

This announcement provides Privacy Shield participants with additional information about the fund, participants’ required contribution, and the steps participants must take to make that contribution.

The Arbitral Fund
In Annex I, DoC committed to facilitating the establishment of a fund into which Privacy Shield organizations will be required to pay contributions to cover the arbitral cost, including arbitrator fees, up to maximum amounts, in consultation with the European Commission. The purpose of the fund is solely to provide Privacy Shield organizations with a consolidated mechanism to fund arbitrations. The fund will be managed by ICDR-AAA.

Required Contributions
As the Arbitral Administrator and Fund Manager, ICDR-AAA will facilitate the collection and administration of contributions from Privacy Shield participants. The required contributions are based on organizations’ annual revenue, using revenue bands that mirror those used to determine Privacy Shield administration fees collected by the International Trade Administration.

The fee structure for the arbitral fund is available at the ICDR-AAA’s website at: ICDR-AAA expects these initial fees to provide sufficient revenue for the fund to operate for several years, based on expected case filings and projected administrative and program management expenses. ICDR-AAA shall periodically review any need to adjust the fee structure, and DoC and the European Commission will review the operation of the fund during the annual review of the Privacy Shield.

Organizations self-certifying to the EU-U.S. Privacy Shield for the first time on or after September 13, 2017 will be required to pay this fee to ICDR-AAA at before ITA will finalize their certification. ICDR-AAA will begin collecting this fee from existing participants in the EU-U.S. Privacy Shield program on October 3, 2017 and existing participants will be required to pay the fee within 30 days. The ICDR-AAA will provide DoC with information on an ongoing basis regarding the status of contributions made by Privacy Shield participants into the arbitral fund.

If you have any questions regarding this matter, please contact: