An upcoming European Union (EU) regulatory deadline for data transfer clauses in contracts provides an excellent example of how technology supports lawyers who need to analyze and amend contracts quickly and accurately in response to significant regulatory changes.
About the SCC change deadline
The Standard Contractual Clauses (SCCs) are model contract clauses approved by the European Commission to ensure adequate data protection safeguards for data transfers from the EU to third countries under the EU’s General Data Protection Regulation (GDPR). The GDPR regulates and protects the processing of personal information pertaining to natural persons in the EU (data subjects). Such protections for personal information extend beyond the borders of the EU and apply to any party, regardless of its location, collecting information about data subjects.
The adequacy of the SCCs as a data transfer mechanism was considered in the Court of Justice of the European Union (CJEU)'s landmark 2020 decision in Data Protection Commissioner v Facebook Ireland Ltd, Maximilian Schrems and intervening parties, Case C-311/18 (Schrems II), one important outcome of which was the immediate invalidation of the EU-US data transfer framework known as the Privacy Shield. In its decision, the CJEU held that the SCCs remained a valid data export mechanism under the GDPR provided organizations adopting them undertake additional assessments and implement, when necessary, additional safeguards, and in so ruling, the Court also recognized the SCCs as a viable alternative to the Privacy Shield.1 In the wake of the Schrems II decision, the European Commission decided to reexamine the then-current SCCs with a view to modernizing them, and in June 2021 it adopted a new, updated set of SCCs.
The release of the new SCCs set an important deadline for organizations engaged in the transfer of data that rely on the old SCCs. Organizations with data transfer agreements that existed before September 27, 2021, and that relied on the old SCCs as a transfer mechanism must transition to the new SCCs by December 27, 2022, to remain compliant with the GDPR.
Planning for the December 2022 deadline: How Kira can help
Given the widespread reliance on the SCCs as a data transfer mechanism, organizations and their professional advisors need to understand which contracts might need to be updated with the new SCCs by the December 27, 2022, deadline.
In May 2022, Kira added a new answer field to its collection of smart fields to help customers with this transition. This Yes/No field (“Does this contract reference the GDPR SCCs?”) is designed to help with the impact analysis stage of the review process. Customers can apply the field to their contracts to determine which ones reference the SCCs and are, therefore, most likely to be impacted by this regulatory change. Users of this smart field don’t need to spend a lot of time looking for the governing data transfer framework and can instead focus their efforts on the more substantive aspects of the analysis.
Beyond the impact analysis, customers may find benefit in using some of the smart fields in our Data Protection field group, such as “Transfer of Data”, which can help with reviewing the relevant terms of impacted contracts in more detail. And our “Amendment” smart field can help locate amendment provisions in affected contracts to help determine what steps must be taken to change their terms to incorporate the new SCCs.
Want to see this workflow in action? Watch this video:
Beyond GDPR: unlimited applications for AI in contract analysis
This use case is just one of the ways legal professionals leverage machine learning-based AI for contract analysis today. Kira is a patented machine learning software that identifies, extracts, and analyzes content in contracts and documents with unparalleled accuracy and efficiency. Using our library of over 1,400 built-in smart fields, Kira users can quickly analyze a body of contracts or documents to uncover provisions that might be affected by regulatory changes or to uncover other risks and insights they might contain.
Kira users can also create their own custom fields using our Quick Study feature to find specific clauses and data points relevant to their organization. Quick Study is a no-code solution, meaning that no machine learning or developer skills are required.
Schedule a demo to learn more about how Kira can help you understand what’s in your contracts.