Libra Association launched

On 15th October 2019, the 21 initial members of the Libra Association formally signed the Libra Association charter in Geneva, Switzerland. In addition, they formalized the Libra Association council, elected the Board of Directors, and appointed members of the Libra Association executive team.

Libra is a planned digital currency, which was proposed by US social media company Facebook on 18 June 2019. The mission of Libra is to provide a simple global currency and financial infrastructure for billions of users, including those without access to the financial system. According to a World Bank report, 1.7 billion people, 31{b28ae05319d94bff0b4d65c5a9f4524dd588360f05c61ef440e1608e0a1c4144} of the global adult population, do not have access to an account at a financial institution or to mobile money. The Libra founders claim to address this problem.

The Libra will be based on blockchain technology, the Libra Blockchain. However, unlike Bitcoin, for example, Libra will not rely on cryptocurrency mining. Only members of the Libra Association will be able to process transactions via the permissioned blockchain. The evolution of the Libra Blockchain will be overseen by the Libra Association, an independent not-for-profit headquartered in Geneva. The association will be responsible for facilitating the operation of the Libra Blockchain and managing the reserve that backs the currency. The Libra Association will consist of geographically distributed and diverse businesses, nonprofit and multilateral organizations, and academic institutions.

Before the first Libra meeting, seven companies which had participated in the Libra discussions had left: Booking Holdings, eBay, Mastercard, Mercado Pago, PayPal, Stripe, and Visa Inc. Since its inception, the project has faced strong criticism. Regulators and politicians criticised that Libra could undermine national sovereignty and the functioning of the global financial system. Privacy advocates have pointed out data protection risks, which could result from Facebook’s involvement via its subsidiary Calibra.

Further information: Libra website – https://libra.org

On 23rd October 2019, the European Commission published its third annual review report on the functioning of the EU-US Privacy Shield framework, which became operational on 1st ­August 2016.

The Privacy Shield aims to protect the fundamental rights of anyone in the EU whose personal data is transferred for commercial pur­poses to certified companies in the United States. Today there are about 5,000 companies participating in this EU-US data protection framework.

Since the second annual review, there have been a number of improvements in the functioning of the framework, as well as appointments to key oversight and redress bodies, such as the Privacy Shield Ombudsperson. Among the improvements, the third review notes that the US Department of Commerce is ensuring the necessary oversight in a more systematic manner by, for example, carrying out monthly checks of a sample of companies to verify compliance with Privacy Shield principles. Enforcement action has improved with the Federal Trade Commission taking enforcement action related to the Privacy Shield in seven cases. An increasing number of EU individuals are making use of their rights under the Privacy Shield, and the relevant redress mechanisms are functioning well, according to the report.

In spite of the improvements, the Commission recommends concrete steps to better ensure the effective functioning of the Privacy Shield in practice. This includes further strengthening the certification process for companies who want to participate by shortening the time of the certification process; expanding compliance checks, including checks concerning false claims of participation in the framework; and developing additional guidance for companies related to human resources data. The Commission also expects the Federal Trade Commission to further step up its investigations into compliance with substantive requirements of the Privacy Shield and provide the Commission and the EU data protection authorities with information on ongoing investigations.

When the report was published, litigation was pending before the European Court of Justice on EU-US data transfers, which may also have an impact on the Privacy Shield.

Further information:
• Press release – https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6134

• Third Privacy Shield review report – https://ec.europa.eu/info/sites/info/files/report_on_the_third_annual_review_of_the_eu_us_privacy_shield_2019.pdf