BRUSSELS -- The European Union is taking steps to add Japan to the white list of countries exempt from stricter rules governing personal data transfers, a move that would help Japanese businesses hoping to use such information.
The European Commission, the EU's executive body, has begun the procedures to exempt Japan, with formal approval expected by the end of the year.
"We are creating the world’s largest area of safe data flows," Vera Jourova, the European commissioner for justice, consumers and gender equality, told reporters Wednesday.
The EU's General Data Protection Regulation, enacted in May, prohibits the transfer of personal data out of the European Economic Area, which includes the EU and a few other countries such as Norway. If a company is found to have run afoul of the rule, it could face a fine of up to 20 million euros ($23.2 million) or 4% of its annual sales -- whichever is greater.
The EU has white-listed about 10 countries and territories -- including Switzerland -- making them exempt from the stricter privacy law based on what is known as the "adequacy decision." When a non-EU country's domestic laws or international commitments are deemed sufficient for ensuring an adequate level of personal-data protection, an exemption is granted.
To add Japan to this list, the European Data Protection Board, made up of data protection authorities from member states, must review the proposal. The EU and member state legislatures must deliberate on the matter before formal approval is given.
Japan and the EU had agreed in late May on a framework to allow mutual transfers of personal data. Japan last year instituted a new data protection law, and is putting in place additional guidelines to safeguard European data.
Japan's Personal Information Protection Commission is expected to approve the EU as a destination for mutual data transfers as early as next month.