[Public Voices]A New Route for the Korea-EU Data FTA Era

Mutual Recognition of Personal Data Transfers with the EU
An Opportunity to Strengthen Competitiveness for Companies Entering Europe
The Challenge: Establishing Robust Management and Protection Systems

Free and secure trade routes are essential conditions for commerce. When trade flourishes and goods flow smoothly, the economy grows. However, in international trade, high tariff barriers and protectionist measures can act as rough waves blocking this flow. When routes are blocked, markets contract and companies lose opportunities for growth.

A similar situation is unfolding in today’s digital economy. In an era where data itself is an asset, companies are creating value by exchanging data across borders. Yet, differences in personal data protection regulations among countries are hindering the smooth flow of data.

The European Union (EU), under the General Data Protection Regulation (GDPR), generally restricts the transfer of personal data collected within the EU to countries outside the EU. However, such transfers are allowed if certain adequacy requirements are met. The most well-known of these is the adequacy decision, which permits data transfers to countries that ensure a level of protection equivalent to the GDPR.

In 2021, the EU recognized South Korea’s personal data protection standards and allowed the transfer of personal data from the EU to South Korea. At that time, South Korean law did not have a similar legal basis, so only one-way transfers from the EU to South Korea were possible. However, this structure inevitably limited the creation of value through data flows.

On September 16, South Korea confirmed that the EU’s personal data protection system is equivalent to its own Personal Information Protection Act and officially approved the recognition of equivalence for the EU. As a result, two-way data transfers are now possible, opening a new route for the data economy between South Korea and the EU.

Mutual recognition of personal data transfers is a system that guarantees the movement of data based on mutual trust in each country’s protection framework. Through this, both sides can achieve the dual goals of activating the data economy and strengthening personal data protection.

Mutual recognition of personal data transfers with the EU presents a significant opportunity for South Korean companies. South Korean businesses entering the EU market can process data in accordance with GDPR standards without additional certification procedures or extra contracts, reducing costs and enhancing competitiveness.

For example, by utilizing data collected from both sides, bio research institutes can more easily predict diseases and develop new drugs, while AI companies can advance multilingual chatbots and recommendation algorithms. Home appliance manufacturers can offer products and services tailored to consumer preferences, and automobile manufacturers can develop optimized autonomous driving technologies based on data about road conditions and driving habits, thereby enhancing performance. Through these changes, companies are expected to advance their technologies, pioneer new service domains, and expand and strengthen their positions in the global market.

Of course, the guarantee of free data movement does not mean companies can use it without restrictions. Companies must establish systems to safely manage and protect data, fully understand both the EU’s GDPR and South Korea’s Personal Information Protection Act, and implement appropriate protective measures.

To support this, the Korea Internet & Security Agency (KISA) is assisting South Korean companies in adapting to Europe’s personal data processing environment through the ‘EU Personal Data Protection Cooperation Center’ located in Belgium. In October, KISA plans to hold a ‘Seminar on Responding to EU Personal Data Protection Regulations’ to address the latest trends in EU personal data policies, including the recognition of equivalence.

The key now is how to utilize these newly opened data routes. The Silk Road of the digital age is no longer a path for camels carrying goods. We have entered an era of digital networks where data flows freely. Now is the time for South Korea to actively seize these open opportunities and become a central player in the global data economy.

Hwang Boseong, Director of the Personal Information Safety & Utilization Division, Korea Internet & Security Agency (KISA)