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Economy

Japan, US and EU to establish data transfer rules

Nations seek privacy safeguards and to block personal data flows to China

Japan, the European Union and the U.S. plan to discuss the creation of common rules to foster the free flow of information.   © Kyodo

TOKYO -- Japan will promote the free flow of personal data with the U.S. and the European Union by creating common rules on privacy protection, Nikkei has learned.

The new standards, to be worked out next year, aim to allow personal data to be shared across borders, making it easier for businesses to use such information to develop new products.

To ensure that companies and other organizations protect individual privacy, it will establish stiff penalties for those that fail to adhere to the common rules. The regulations will restrict the transfer of personal data to countries such as China that lack proper privacy protection regimes.

The measures will be discussed on Wednesday at Prime Minister Shinzo Abe's IT strategy headquarters. The Ministry of Economy, Trade and Industry in January will begin discussions with the European Commission, the U.S. Trade Representative and the U.S. Commerce Department.

The rules are expected to build on recent initiatives, such as the Cross Border Privacy Rules, which enables data transfers among members of the Asia-Pacific Economic Cooperation forum.

Legislative safeguards are already in place in Japan, the U.S. and EU to protect the privacy of individuals whose data is being transferred. Legislation also mandates that companies install security systems to prevent data leaks.

Under the new initiative, a data transfer accord can be signed when one government concludes a counterpart has an adequate data protection regime. The emerging common standards will be open to other countries, such as India, that also institute sufficient safeguards. The goal is to scale up data transactions on a global scale to facilitate business.

Members who are not part of the common rules, however, would face restrictions in terms of access to personal data in Japan, the U.S. and the EU.

Under the new arrangement, any transfer of personal data overseas would require prior consent of the data's owner. Japan is weighing a law change that would allow authorities to fine violators.

The new arrangements would cover Chinese companies operating in Japan, such as Alibaba, preventing them from taking personal information out of Japan, lest it be used by the Chinese government.

Businesses already harvest a wide range of individual data, from website browsing histories to personal details kept by social media sites to online shopping histories.

Parties in Japan, the U.S. and EU think this data can be shared on a global scale to enable innovative cross-border solutions, such as Japanese companies offering medical solutions to patients in the U.S. based on the analysis of their personal data.

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