Chapter 12: Impact Assessments, DPOs and Codes of Conduct – Unlocking the EU General Data Protection Regulation | White & Case LLP International Law Firm, Global Law Practice
EU General Data Protection Regulation (GDPR): EU's new data protection law

Chapter 12: Impact Assessments, DPOs and Codes of Conduct – Unlocking the EU General Data Protection Regulation

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Overview

Why does this topic matter to organisations?

A significant aspect of complying with EU data protection law is demonstrating compliance—making it evident to DPAs that an organisation is meeting its obligations. Three of the key ways in which organisations can demonstrate that they are complying with EU data protection laws are:

  • Impact Assessments. Data Protection Impact Assessments ("Impact Assessments") are a tool designed to enable organisations to work out the risks that are inherent in proposed data processing activities before those activities commence. This, in turn, enables organisations to address and mitigate those risks before the processing begins.
  • DPOs. A Data Protection Officer ("DPO") is a person who is formally tasked with ensuring that an organisation is aware of, and complies with, its data protection responsibilities.
  • Codes of Conduct. Organisations within the same industry, or engaging in similar types of processing, are likely to encounter similar data protection issues. Codes of Conduct provide such organisations with useful guidance on industry-standard approaches to these issues. Compliance with a Code of Conduct may provide evidence of compliance with the GDPR.

What types of organisations are most affected?

All organisations that have data protection compliance obligations under the GDPR (whether as controllers or processors) are affected by this issue.

What should organisations do to prepare?

Organisations should:

  • Review their existing or planned data processing activities, and consider whether any of them present compliance risks from a data protection perspective. Each current or proposed processing activity that presents such risks should be the subject of an Impact Assessment.
  • Consider whether their core business operations involve: (i) regular and systematic monitoring of data subjects on a large scale; and/or (ii) processing of Sensitive Personal Data on a large scale. Organisations that do either of these things should appoint a DPO.
  • Confer with other organisations that are in the same industry, or are carrying out similar types of processing, to consider whether it might be appropriate to adhere to an existing Code of Conduct, or create a new one.

 

Icons are used below to clarify the impact of each GDPR change. These GDPR impact icons are explained here.

   
   

Detailed analysis

Issue

The Directive

The GDPR

Impact

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Impact Assessments

In order to assess the potential risks arising out of any new processing activity, EU data protection law requires organisations to conduct an Impact Assessment.

The WP29 has issued Guidelines on Impact Assessments (WP 248) (the "Impact Assessments Guidelines") which provide further clarity on the requirements around Impact Assessments.

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Rec. 53

Member States may legislate regarding specific types of processing that are likely to pose high risks. However, the Directive does not expressly require controllers to conduct Impact Assessments.

materially changes

Rec.84, 90-94; Art.35; WP29 Impact Assessment Guidelines

Where a new processing activity is proposed (especially where new technologies will be used) resulting in a high degree of risk for data subjects, the controller must first conduct an Impact Assessment. Factors that elevate the level of risk, according to the WP29, include:

  • evaluation of data subjects (e.g., performance at work, health; behaviour; or location);
  • automated decision making with significant effect on a person (e.g., automated refusal of credit);
  • systematic monitoring (especially covert monitoring);
  • processing Sensitive Personal Data;
  • large-scale processing;
  • combining or matching separate datasets;
  • processing affecting vulnerable individuals;
  • processing using untested technology; and
  • Cross-Border Data Transfers.

A single Impact Assessment can cover multiple processing operations that present similar risks. However, the Impact Assessment may need to be an on-going process, depending on the circumstances of the data processing. Any organisation that conducts a DPIA must seek the advice of its DPO (if any).

neutral

The express obligation to conduct Impact Assessments is, in principle, a new burden on controllers. However, even under the Directive, many DPAs would expect controllers to conduct Impact Assessments in relation to new, high-risk processing activities.

 

positive

By conducting Impact Assessments, controllers may identify and address risks that would otherwise not have been detected. This may help controllers to avoid breaches of the GDPR that might otherwise have occurred.

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Prior Consultation

Whenever an organisation is planning to engage in a form of processing that presents particular risks to the rights and freedoms of data subjects, that organisation should consult the relevant DPA(s).

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Rec.54; Art.20

Member States are responsible for creating a list of processing operations likely to present specific risks to the rights and freedoms of data subjects. Where a controller intends to engage in a processing activity on such a list, it must first consult with the relevant DPA.

materially changes

Rec.94-95; Art.35(4)-(6), 36

DPAs are responsible for creating a list of the types of processing that are subject to Impact Assessments. Those lists must be put through the Consistency Mechanism and then sent to the EDPB (see Chapter 15). Where a controller intends to engage in a processing activity on such a list, it must first consult with the relevant DPA.

negative

The obligation to conduct Impact Assessments imposes a new, and in some cases significant, compliance burden on controllers.

 

positive

The requirement to apply the Consistency Mechanism (see Chapter 15) in respect of high risk processing activities should mean that businesses face more consistent enforcement measures from DPAs.

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Appointment of a DPO

A DPO is a person who provides the primary contact point for data protection issues within an organisation.

The WP29 has issued Guidelines on Data Protection Officers (WP 243) (the "DPO Guidelines") which provide further clarity on the key terms of Art 37, including "core activities", "large scale" and "regular and systematic monitoring".

 

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N/A

The Directive does not explicitly require organisations to appoint a DPO. In some Member States (e.g., Germany, Sweden) the appointment of a DPO offers certain advantages (e.g., by obviating the need to register with the local DPA). Many organisations in other Member States appoint DPOs simply to ensure that responsibility for data protection compliance is allocated to a specific person, and does not slip through the gaps.

materially changes

Rec.97; Art.37; WP29 DPO Guidelines

A controller or processor must appoint a DPO if local laws require it to do so, or if its data processing activities involve:

  • regular and systematic monitoring of data subjects on a large scale; or
  • processing Sensitive Personal Data on a large scale.

A corporate group may collectively appoint a single DPO.

Organisations that are not required to appoint a DPO are free to do so voluntarily (although the DPO Guidelines note that a voluntary DPO is subject to the same requirements as mandatory DPOs). If a DPO is appointed, the organisation must publish the details of the DPO, and communicate those details to the relevant DPA.

negative

The obligation to appoint a DPO may impose a significant burden, especially for smaller organisations.

 

positive

The DPO Guidelines clarify that a single DPO can be appointed for a corporate group (or several entities within a group) provided that he or she is easily accessible from each business location for which he or she is responsible. Explicit permission to appoint a single DPO for a corporate group is a welcome development for organisations, but it will be important to ensure that such a DPO is provided with sufficient resources to perform the role.

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Qualifications of a DPO

A DPO is responsible for data protection compliance. It therefore makes sense for organisations to ensure that their DPOs are suitably qualified for this role.

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N/A

The Directive does not specify any minimum qualifications for DPOs.

materially changes

Rec.97; Art.37(5)-(6)

A DPO should have expert knowledge of data protection law and practice, and should be capable of performing the functions of a DPO (outlined below). A DPO can be an employee or an outside consultant.

negative

The DPO Guidelines state that sensitivity, complexity and amount of data processed within an organisation will impact the expertise required for a DPO and a sufficient understanding of operations, as well as information systems, data security and data protection needs of the controller is recommended. For many organisations, it will be challenging to find an existing employee who satisfies the prerequisite requirements of being a DPO. This may mean that such organisations have to engage outside consultants, at potentially significant expense, to fulfil this role.

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Role of a DPO

The role of the DPO is to ensure that the relevant organisation achieves data protection compliance.

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N/A

The Directive does not set out a specific role for DPOs to fulfil.

materially changes

Art.38(1)-(2), (4)-(5)

The DPO must deal with all data protection matters affecting the controller or processor properly and in a timely manner. The controller or processor must provide the DPO with the necessary resources and support. Data subjects may contact the DPO (e.g., to exercise their rights under the GDPR). The DPO must be bound by a confidentiality obligation in relation to his or her work.

neutral

The GDPR formalises requirements not expressly set out in the Directive. However, in most cases this will make little practical difference.

 

negative

The DPO Guidelines state that the DPO must be included in all aspects of data processing decisions undertaken within the organisation and that the DPO's opinion on such matters are given weight. If the organisation acts contrary to the DPO's opinion, it should record the reasons for that decision.

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Special protection for DPOs

In principle, an organisation should not be able to take disciplinary action against a DPO merely because the DPO makes life harder for the organisation. If an organisation could do so, it would leave the DPO unable to act in a truly independent manner.

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N/A

The Directive does not offer DPOs any special protection. However, the laws of several Member States (e.g., Germany) provide that a DPO who is also an employee is protected from almost all disciplinary actions by the employer, making it very difficult to remove the DPO. Consequently, many organisations in these Member States choose to engage an outside consultant as a DPO.

materially changes

Art.38(3)

The organisation cannot instruct the DPO in the performance of his or her duties, and cannot terminate the DPO's employment (or take any other disciplinary action) as a result of the performance of the DPO's duties.

negative

Organisations should consider this issue very carefully, in conjunction with applicable employment laws in the relevant Member States. In practice, some organisations may conclude that it is better to appoint an outside consultant to the role of DPO, as opposed to an employee who will become very difficult to remove from that position. However, the DPO Guidelines state that even external DPOs cannot be "unfairly" removed.

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Tasks of a DPO

The DPO's role involves the performance of certain tasks, such as advising the relevant organisation of its data protection compliance obligations.

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N/A

The Directive does not specifically oblige DPOs to perform any particular tasks, although the national laws of some Member States allocate particular tasks to DPOs.

materially changes

Art.38(6), 39

A DPO must fulfil at least the following tasks:

  • informing and advising the relevant controller or processor (and any employees who process personal data) about their obligations under the GDPR;
  • monitor compliance with the GDPR by the controller or processor;
  • advise on Impact Assessments and prior consultation with DPAs; and
  • cooperate with DPAs and act as a point

negative

The GDPR obliges organisations to appoint a DPO (where applicable) and requires that DPO to perform certain tasks.

 

positive

The fulfilment of those tasks by the DPO should, in theory, mean that the organisation is better able to achieve compliance with the GDPR.

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Purpose of Codes of Conduct

Codes of Conduct provide a means for certain industry sectors, or groups of organisations, to create context specific rules regarding the processing of personal data, in their respective industries, in compliance with EU data protection law.

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Rec.26; Art.27

Associations and other industry bodies may prepare Codes of Conduct covering compliance with the Directive in general, as implemented in the laws of the relevant Member States, or specific aspects of those laws.

does not materially change

Rec.77, 81, 98-99; Art.40(2)

Associations and other industry bodies may prepare Codes of Conduct covering compliance with the GDPR, in respect of general or specific aspects of the GDPR.

neutral

The essential aim of the provisions relating to Codes of Conduct is the same in the Directive and the GDPR—in both cases, a Code of Conduct exists, and is adhered to by organisations, for the purpose of improving overall compliance with EU data protection law.

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Encouragement of Codes of Conduct

Creating a Code of Conduct is a laborious undertaking, but one that can help improve compliance. EU data protection law therefore obliges authorities to encourage the creation of Codes of Conduct.

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Rec.61; Art.27(1)

The Commission, and Member States, are obliged to encourage the drawing up of Codes of Conduct.

does not materially change

Rec.98; Art.40(1), 57(1)(m), (p), (o)

Member States, DPAs and the EDPB are all obliged to encourage the drawing up of Codes of Conduct.

neutral

The language in the GDPR makes only minor adjustments to the position in the Directive, and these are unlikely to materially affect organisations.

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Adherence to Codes of Conduct by non-EEA controllers and processors

One of the core dangers of transferring data out of the EEA is that those data will be subject to lower standards of protection. By adhering to Codes of Conduct, non-EEA controllers and processors can address this risk, and provide a lawful basis for Cross-Border Data Transfers (see Chapter 13).

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N/A

The Directive does not specifically provide for non‑EEA controllers or processors to sign up to Codes of Conduct.

materially changes

Rec.81; Art.40(1)(j), (3), 46(2)(e)

Controllers and processors that are outside the EEA, and that are not subject to the GDPR, may adhere to Codes of Conduct in order to create a framework for providing adequate protection to personal data in third countries. The GDPR specifically allows adherence of non-EEA controllers and processors to an approved Code of Conduct to provide the basis for Cross-Border Data Transfers (see Chapter 13).

positive

The fact that non-EEA organisations can use adherence to approved Codes of Conduct as a basis for Cross-Border Data Transfers provides a new option for organisations seeking to transfer personal data internationally. It may also make compliance simpler for organisations that frequently exchange data with other organisations in the same industry.

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Enforcement of Codes of Conduct

A Code of Conduct only serves a useful purpose to the extent that it is enforceable against entities that sign up to it. The question of who carries out such enforcement, and what powers they have for doing so, is therefore of critical importance to the operation of any Code of Conduct.

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Art.27(2)-(3)

DPAs are responsible for reviewing and enforcing Codes of Conduct. Where Codes of Conduct apply in multiple Member States, the WP29 may also have responsibility for reviewing those Codes of Conduct, although enforcement would still be carried out by DPAs.

materially changes

Art.40(4), 41

An independent body may be appointed by the relevant DPA to monitor and enforce a Code of Conduct if it is:

  • independent and has demonstrated its expertise;
  • has established procedures for reviewing and assessing compliance with a Code of Conduct;
  • has established procedures for dealing with complaints or infringements of the Code of Conduct; and
  • can demonstrate that it has no conflicts of interest in this role.

Such a body may be appointed to monitor and enforce compliance with a Code of Conduct. DPAs still retain their own separate enforcement powers.

positive

An industry body that is already familiar with the processing taking place within that industry may be better placed than a DPA to enforce a Code of Conduct for that industry. That said, such bodies cannot act to the exclusion of DPAs, and it is always open to a DPA to intervene in any such enforcement proceedings.

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Advantages of adherence to approved Codes of Conduct

Codes of Conduct clearly need to provide practical advantages for organisations, in order for the effort necessary to create such Codes of Conduct to be worthwhile.

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Rec.26, Art.27

Approved Codes of Conduct under the Directive:

  • may provide guidance on specific data protection issues (e.g., anonymisation); and
  • provide evidence of compliance with the requirements of the national laws that implement the Directive.

materially changes

Rec.77; Art.24(3), 28(5), 35(8), 46(2)(e), Art.83(2)(j)

Adherence to an approved Code of Conduct:

  • may provide guidance on specific compliance issues;
  • may provide evidence of compliance with the GDPR;
  • is a positive factor in an Impact Assessment;
  • may provide the basis for Cross-Border Data Transfers (see Chapter 13); and
  • may affect any fines imposed upon the adherent controller or processor.

positive

The increased advantages of adherence to an approved Code of Conduct create significant new reasons for organisations to consider creating and implementing Codes of Conduct.

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Approval of Codes of Conduct by DPAs

In order for a Code of Conduct to provide the advantages identified immediately above, that Code of Conduct must first be formally approved by DPAs.

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Art.27(2)

DPAs must ascertain, among other things, whether a Code of Conduct is in accordance with the relevant national law that implements the Directive. The DPA may seek the views of data subjects on this issue.

materially changes

Art.40(5), 57(1)(p), 58(3)(d)

Draft Codes of Conduct must be submitted to the competent DPA, which must then:

  • approve the Code of Conduct if it provides sufficient protections in accordance with the GDPR, or amend it if it does not;
  • register and publish approved Codes of Conduct; and
  • publish the criteria for gaining such approval.
  • If a Code of Conduct affects processing in several Member States, DPAs must review the Code of Conduct in accordance with the Consistency Mechanism (see Chapter 15) and refer it to the EDPB.

positive

Because the approval criteria must be published, and DPAs must act uniformly under the Consistency Mechanism (see Chapter 15), the approvals process under the GDPR is likely to be more transparent and objective than the process under the Directive.

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Approval of Codes of Conduct by the WP29/EDPB

Where organisations seek to implement a Code of Conduct affecting multiple Member States, approval of the Code of Conduct at an EU-level is generally required.

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Art.27(3), 30(d)

A draft Code of Conduct may be submitted to the WP29, which must then issue an opinion on whether that Code of Conduct complies with the Directive (although, on a literal interpretation of Art.27(3), a Code of Conduct would have to comply with the national laws of all 28 Member States that implement the Directive). The WP29 may seek the views of data subjects. The Commission may also publicise any approved Codes of Conduct.

materially changes

Art.40(8), 64(1)(b)

The EDPB is required to issue an opinion on any draft Code of Conduct before it is approved. The EDPB must also register and publish approved Codes of Conduct.

neutral

Although the GDPR changes the language, the approval format and process, and the body from which approval must be obtained, the overall outcome results in minimal changes for organisations seeking to implement a Code of Conduct affecting multiple Member States.

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Purpose of seals and certifications

The primary purpose of seals and certifications is to provide organisations with a formally recognised confirmation of compliance with EU data protection law, typically with an associated visual symbol (e.g., a badge or emblem that can be displayed on published documents and websites, confirming that the organisation satisfies the requirements of the relevant seal or certification).

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N/A

The Directive does not specifically address certification. A number of national DPAs and industry bodies have created their own certification schemes.

materially changes

Rec.77, 81; Art.42, 43

The GDPR provides for a voluntary system of accreditation, under which controllers or processors may adhere to the requirements of a seal or certification scheme, for the purpose of demonstrating compliance with the GDPR.

neutral

Although seals and certifications gain formal recognition under the GDPR, their essential purpose is unchanged: organisations that want a visual badge or emblem that demonstrates their compliance with all, or any aspect, of EU data protection law can apply to the relevant scheme. If they are successful in their application, they earn the right to display the relevant badge or emblem.

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Encouragement of seals and certification

Implementing a seal or certification scheme is a difficult and time-consuming exercise, but one that can help improve compliance. EU data protection law therefore obliges DPAs to encourage the creation of seal or certification schemes.

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N/A

This issue is not specifically addressed in the Directive.

materially changes

Rec.100; Art.42(1), (8)

Member States, DPAs, the EDPB and the Commission are all obliged to encourage the establishment of certification mechanisms, particularly targeting small and medium enterprises. The EDPB is responsible for maintaining and publishing a register of seal and certification schemes.

positive

By drawing additional attention to the various seal and certification schemes, Member States, DPAs, the EDPB and the Commission may increase the value of such schemes in the eyes of the public, and also in the eyes of organisations.

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Adherence to seal or certification schemes

In order to adhere to a seal or certification scheme, an organisation must provide the DPA or independent body that oversees the relevant scheme with all information and access to its processing activities which are necessary to conduct the seal or certification review procedure.

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N/A

This issue is not specifically addressed in the Directive.

materially changes

Art.42(4), (6)

An organisation may apply for a certification or seal by providing all necessary information and submitting its relevant processing activities to the DPA or independent body that oversees the relevant scheme. Adherence to a certification or seal does not reduce the obligation of a controller or processor to comply with the GDPR

neutral

Organisations that wish to obtain a seal or certification are able to select the type of seal or certification for which they wish to apply, and must then agree to provide the relevant DPA or independent body with the necessary information and access to their processing activities.

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Enforcement of seal or certification schemes

A seal or certification scheme only has value if it demonstrates compliance with EU data protection law. Therefore, it must be overseen and enforced, in order to ensure that it achieves that aim.

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N/A

This issue is not specifically addressed in the Directive.

materially changes

Art.42(5), 43(2)

Seal and certification schemes are overseen and enforced, either by the relevant DPA, or an independent body which has an appropriate level of expertise in relation to data protection and has been accredited by the relevant DPA. An independent body may be appointed to this role for a maximum of five years if it is:

  • independent and has demonstrated its expertise;
  • has established procedures for issuing, reviewing and withdrawing seals or certifications;
  • has established procedures for dealing with complaints or infringements of the seals or certifications; and
  • can demonstrate that it has no conflicts of interest in this role.

Such a body may be appointed to monitor compliance with a seal or certification scheme and withdraw the seal or certification if its requirements are no longer met. DPAs still retain their own separate enforcement powers

neutral

Organisations that wish to obtain a seal or certification are subject to enforcement by the DPA or independent body that oversees the relevant seal or certification scheme.

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Expiry of seals or certifications

Seals or certifications have a maximum shelf life, in order to ensure that organisations keep their compliance responsibilities under review.

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N/A

This issue is not specifically addressed in the Directive.

materially changes

Art.42(7)

Seals and certifications last for a maximum of three years, and may be renewed provided that the relevant conditions are still met. If the conditions are not met, the seal or certification may be withdrawn.

negative

Seals and certifications last for a relatively brief period of three years, after which a renewal is necessary. Consequently, seal and certification schemes result in an ongoing, burdensome and potentially expensive process.

 

Further analysis

Commentary: Conducting an Impact Assessment

Some organisations will be familiar with the concept of an Impact Assessment from their experiences under the Directive, but many will not. In essence, an Impact Assessment is a step-by-step review of the relevant processing activity. It is designed to examine each stage of a processing activity, and help an organisation to ensure that it has identified and addressed all of the risks involved in that activity before it commences.

White & Case has extensive experience with guiding organisations through the process of completing an Impact Assessment. We have developed a clear and thoughtful framework for organisations to follow. In the event that a DPA ever asks any questions about the relevant processing activity, our framework allows organisations to look back at a later date, and use the Impact Assessment to illustrate two important facts to the relevant DPA:

  • All of the material risks were identified. An organisation can only comply with the requirements of data protection law if it has identified the material risks that arise in connection with its processing activities.
  • Appropriate steps were taken to address those risks. In relation to each risk, our framework provides a record of the steps that were taken to resolve or mitigate any danger to the rights and freedoms of data subjects, and provides helpful guidance to organisations on achieving compliance.

Any organisation facing questions from DPAs on these issues can rely on this Impact Assessment framework to provide strong support in addressing those questions.

Example: Appointing a DPO

Q. Under the GDPR, Organisation A will be required to appoint a DPO. What steps should Organisation A take in planning for that appointment?

A. Organisation A should consider taking the following steps:

  • Organisation A should analyse the extent to which data processing forms part of its day‑to-day business operations. The more personal data Organisation A processes, the greater the likelihood that the role of the DPO needs to be a full‑time one, rather than a part‑time one.
  • Organisation A should also consider whether it wishes to appoint an internal or an external DPO, bearing in mind: (i) that the GDPR specifically protects the DPO from disciplinary action for tasks performed in his or her capacity as the DPO; and (ii) under the employment laws of some Member States, employees who act as DPOs are afforded additional special protections.
  • Organisation A should also ensure that it adjusts its corporate structures to the extent necessary to provide the DPO with sufficient powers and independence to achieve the requirements of the DPO role under the GDPR.

Commentary: Codes of Conduct, seals and certifications

The GDPR encourages the drawing up of Codes of Conduct by associations and other bodies representing categories of organisations, which should take into account the specific features of the various data processing sectors. Adherence to such Codes of Conduct may be used by controllers and processors to demonstrate compliance with the GDPR requirements. Furthermore, the GDPR encourages the implementation of seals and certifications. Organisations that adhere to either an approved Code of Conduct, or an approved seal or certification scheme, may be able to use such adherence as a means of differentiating themselves from their competitors. For example, an organisation that has achieved a seal that is specific to data protection in its industry is often permitted to display that seal publicly, as a means of demonstrating to individuals that it takes their data protection rights seriously. This, in turn, may persuade those individuals to do business with that organisation rather than with its competitors.

 

NEXT CHAPTER
Chapter 13: Cross-Border Data Transfers

 

Unlocking the EU General Data Protection Regulation:
A practical handbook on the EU's new data protection law

Foreword

Chapter 1: Introduction

Chapter 2: Preparing for the GDPR

Chapter 3: Subject matter and scope

Chapter 4: Territorial application

Chapter 5: Key definitions

Chapter 6: Data Protection Principles

Chapter 7: Lawful basis for processing

Chapter 8: Consent

Chapter 9: Rights of data subjects

Chapter 10: Obligations of controllers

Chapter 11: Obligations of processors

Chapter 12: Impact Assessments, DPOs and Codes of Conduct

Chapter 13: Cross-Border Data Transfers

Chapter 14: Data Protection Authorities

Chapter 15: Cooperation and consistency

Chapter 16: Remedies and sanctions

Chapter 17: Issues subject to national law

Chapter 18: Relationships with other laws

Chapter 19: Transitional provisions

Chapter 20: Glossary

Our Global Data, Privacy & Cyber Security Practice

 

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