Restrictions on onward transfers

The level of protection afforded to personal data transferred from the European Union to business operators in Japan must not be undermined by the further transfer of such data to recipients in a third country outside Japan. Such "onward transfers", which from the perspective of the Japanese business operator constitute international transfers from Japan, should be permitted only where the further recipient outside Japan is itself subject to rules ensuring a similar level of protection as guaranteed within the Japanese legal order.
A first protection is enshrined in Article 24 of the APPI which generally prohibits the transfer of personal data to a third party outside the territory of Japan without the prior consent of the individual concerned. Supplementary Rule (4) ensures that in the case of data transfers from the European Union such consent will be particularly well informed as it requires that the individual concerned shall be "provided information on the circumstances surrounding the transfer necessary for the principal to make a decision on his/her consent". On that basis, the data subject shall be informed of the fact that the data will be transferred abroad (outside the scope of application of the APPI) and of the specific country of destination. This will allow him/her to assess the risk for privacy involved with the transfer. Also, as can be inferred from Article 23 of the APPI (see recital 47), the information provided to the principal should cover the compulsory items under its paragraph 2, namely the categories of personal data provided to a third party and the method of disclosure.
Article 24 of the APPI, applied together with Article 11-2 of the PPC Rules, provides several exceptions to this consent-based rule. Furthermore, pursuant to Article 24, the same derogations as those applicable under Article 23(1) of the APPI apply also to international data transfers (46).
To ensure continuity of protection in case of personal data transferred from the European Union to Japan under this Decision, Supplementary Rule (4) enhances the level of protection for onward transfers of such data by the PIHBO to a third country recipient. It does so by limiting and framing the bases for international transfers that can be used by the PIHBO as an alternative to consent. More specifically, and without prejudice to the derogations set forth in Article 23(1) of the APPI, personal data transferred under this Decision may be subject to (onward) transfers without consent only in two cases: (i) where the data is sent to a third country which has been recognised by the PPC under Article 24 of the APPI as providing an equivalent level of protection to the one guaranteed in Japan (47); or (ii) where the PIHBO and the third party recipient have together implemented measures providing a level of protection equivalent to the APPI, read together with the Supplementary Rules, by means of a contract, other forms of binding agreements or binding arrangements within a corporate group. The second category corresponds to the instruments used under Regulation (EU) 2016/679 to ensure appropriate safeguards (in particular, contractual clauses and binding corporate rules). In addition, as confirmed by the PPC, even in those cases, the transfer remains subject to the general rules applicable to any provision of personal data to a third party under the APPI (i.e. the requirement to obtain consent under Article 23(1) or, alternatively, the information requirement with a possibility to opt out under Article 23(2) of the APPI). In case the data subject cannot be reached with a request for consent or in order to provide the required advance information under Article 23(2) of the APPI, the transfer may not take place.
Therefore, outside the cases where the PPC has found that the third country in question ensures a level of protection equivalent to the one guaranteed by the APPI (48), the requirements set forth in Supplementary Rule (4) exclude the use of transfer instruments that do no create a binding relationship between the Japanese data exporter and the third country's data importer of the data and that do not guarantee the required level of protection. This will be the case, for instance, of the APEC Cross Border Privacy Rules (CBPR) System, of which Japan is a participating economy (49), as in that system the protections do not result from an arrangement binding the exporter and the importer in the context of their bilateral relationship and are clearly of a lower level than the one guaranteed by the combination of the APPI and the Supplementary Rules (50).
Finally, a further safeguard in case of (onward) transfers follows from Articles 20 and 22 of the APPI. According to these provisions, where a third country operator (data importer) acts on behalf of the PIHBO (data exporter), that is as a (sub-) processor, the latter has to ensure supervision over the former as regards security of data processing.