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Companies are allowed to transfer personal data outside the European Economic Area (EEA) if they are (1) transferring data to an entity within a country recognized by the European Commission as ensuring an adequate level of protection or (2) they have put in place a European Commission-approved mechanism (a “safeguard”) that imposes many of the substantive provisions found within the GDPR.[1]

The United States is not currently recognized as an “adequate” country. As a result, controllers in the EEA are typically required to utilize a safeguard when transferring personal information to the United States. The most common safeguard utilized is referred to as the “Standard Contractual Clauses,” or “SCCs” – a template contract that was approved by the European Commission in June of 2021.[2] The SCCs are actually comprised of four different “modules,” which are intended to be used (separately or in unison) to account for the following different types of transfers:

Module Exporter Importer
Module 1 Controller Controller
Module 2 Controller Processor
Module 3 Processor Processor
Module 4 Processor Controller

Notwithstanding that the SCCs are designed to be used with relatively little customization (i.e., the material terms of the SCCs cannot be modified without jeopardizing their status as an approved safeguard), significant confusion exists as to when certain modules of the SCC should be utilized, and what types of transfers are permitted. The following provides a visual summary of how a controller in the United States that receives personal data from a controller in the EEA can onward transfer the personal data, using the SCCs, to other controllers in the United States.

Onward transfers from controllers in the US to another controller in the US

  • Initial cross-border transfer from the EEA to the US utilizes the SCC Module 1 designed for transfers from a controller to another non-EEA Controller (1st SCC).
  • Pursuant to Section 8.7 of the 1st SCC, all subsequent onward transfers to non-adequate jurisdictions must also utilize the SCCs (whichever module is appropriate for the onward transfer).
  • Section 8.7 specifies that onward transfers can include transfers to entities that are in the same country as the initial data importer (e.g., the US)
  • Note that if Company C makes any additional onward transfers, the appropriate module of the SCCs would also need to be used.
  • Note that Section 14 of the SCCs require all parties (Company A, Company B, and Company C) to document a transfer impact assessment of United States law to determine whether any party has reason to believe that the laws and practices of the United States that apply to the transferred personal data prevent the data importer(s) from fulfilling their obligations under the SCCs.
  • Note that Section 15 of the SCCs require the data importers (Company B and Company C) to take specific steps in the event that they receive a request from a public authority for access to personal data.

[1] Companies are also permitted to transfer personal data outside of the EEA if the transfer is subject to one of the exceptions or “derogations” found within Article 49 of the GDPR.


[2] These are sometimes referred to as the “new SCCs” to distinguish them from the “old SCCs” – previous templates that were approved by the European Commission under the Privacy Directive, and that can no longer be utilized as an approved transfer mechanism in new contracts.