UNDERSTANDING HOW GDPR AFFECTS NON-EU COUNTRIES – CHALLENGES AND ENFORCEMENT
How does the General Data Protection Regulation (GDPR) affect countries outside the European Union (EU)? One of the significant changes brought about by the GDPR is that it applies beyond EU borders. That means businesses in non-EU countries that handle the personal data of EU residents must follow GDPR rules. This has broad implications. But the question that frequently comes up with laws like this is: how can one country enforce its laws on another, especially when there is no physical presence involved?
There are several situations where EU personal data is processed outside the EU. Firstly, where the controller or processor is domiciled in the EU but the processing of personal data takes place outside the EU. This happens, for example, when multinational corporations operating in third countries deal with EU personal data, like global banks. It also applies to business process outsourcing or knowledge process outsourcing companies in third countries that handle EU personal data.
Secondly, where the controller or processor is not established in the EU and processes the personal data of EU residents. This covers a couple of situations. One is offering goods or services to people in the EU. Think, for example, of a cloud service provider not located in the EU but offering services to EU customers who make online payments. They must follow GDPR rules. But GDPR does not apply if it is just a one-time event. Regulators will check whether a non-EU company targeted EU countries with ads or listed prices in euros on their website. Basically, if a company outside the EU serves EU customers, it needs to make sure it is GDPR compliant.
Jan-Mar 2025 Issue
SG Business Management Consultancy