The UK's investment banks are to press the European Commission to
simplify regulations which restrict the way multinational companies
exchange information with their overseas offices.
The banks are concerned that the European Data Protection
Directive, which comes fully into force next month, will impose
heavy burdens on companies with offices outside Europe.
One of the directive's aims is to ensure that European citizens
have the same rights of privacy, whether personal data is processed
within the EU or in countries with lower standards.
The commission plans to enforce the directive by asking
organisations to sign contracts guaranteeing they will comply with
minimum data protection standards.
But the banks are concerned that they, and other multinational
companies, may be forced to sign large numbers of contracts.
"We think it would be a major administrative burden for no good
reason, particularly when our members comply with high standards
already," said Peter Beales, director of the London Investment
Banking Association.
The banks are particularly concerned that the directive gives no
mechanism for multinational companies to transfer data between
companies within their own organisation.
"If you are a bank in London, it's not clear how you can transfer
data to your office in Geneva because you can't have a contract
with yourself," said Beales.
The association, together with the CBI, is drafting a model group
policy that could be used as an alternative to signing multiple
contracts.
It lays down standards for how data is kept, and aims to ensure
that it is used for appropriate purposes, and corrected if it
contains inaccuracies.
If the policy is approved by the EC, the banks and other
multinational companies will be able to use it to sanction data
transfers between all the companies in a group, irrespective of
their location.
"As far as we know, this is the first document of its sort," said
Beales.
The London Investment Banking Association is seeking a meeting with
the commission next month in an attempt to win approval for the
draft policy.