Designated Representative for GDPR Clarified: Who Requires One and What Are the Reasons?

Designated Representative for GDPR Clarified: Who Requires One and What Are the Reasons?

In the digital age, data privacy has become a global concern, and the European Union (EU) has taken a leading role in protecting the rights of its citizens. The EU General Data Protection Regulation (GDPR), enacted on May 25, 2018, has set new standards for data protection worldwide.

Under Article 27 of the GDPR, companies that do not have an entity, branch, or any other establishment in the EU but process personal data of individuals in the EU must designate an EU representative[1]. This typically applies to foreign data controllers or processors engaged in offering goods or services to data subjects in the EU or monitoring their behavior within the EU[1][2].

### Who needs to designate a representative?

Foreign businesses without any physical presence in the EU but who process or control personal data of EU residents are required to appoint an EU representative[1]. Exceptions exist, including low-risk, occasional processing where the processing is unlikely to pose a risk to the rights and freedoms of data subjects[2]. Public authorities outside the EU acting under sovereign immunity generally are exempt[2].

### What are the requirements for these representatives?

The representative must be established in one EU Member State where they act on behalf of the controller or processor[1]. They act as the contact point for data protection authorities and data subjects in the EU, facilitating communication and inquiries[1][3]. They must be mandated in writing by the controller or processor, with a formal appointment evidenced by a written document, such as a Power of Attorney[1].

The representative is responsible for maintaining records of processing activities (Art. 30 GDPR) and must make these records available to supervisory authorities upon request[1]. Only one representative is needed in the EU, though it is often practical to have the representative located in the Member State where the majority of the business’s customers are based to ensure accessibility[1][4].

### Additional important points:

The representative's role is not to ensure GDPR compliance but rather to serve as a liaison or "go-between" for the company and EU data subjects or regulators[3]. Businesses cannot avoid appointing a representative by just having a Data Protection Officer (DPO); these roles are distinct and complementary[3]. The representative must be a real physical presence or entity, not merely a P.O. box, with expertise in privacy matters to fulfill the role effectively[1].

In summary, foreign companies processing EU personal data without an establishment in the EU must appoint an EU representative located in one Member State, who acts as the local point of contact for data subjects and authorities, holds processing records, and is mandated formally by the company[1][2][3].

The market for representative services is expected to balance itself with more affordable offers in the foreseeable future, at which point businesses should be diligent in choosing an appointee[5]. Non-compliance by a representative does not absolve the controller or processor from legal actions initiated against them, and the European Data Protection Board (EDPB) has clarified that representatives of controllers or processors can also be held liable for non-compliance with GDPR[6].

Authorities of 11 countries have introduced fines totaling over 55 million euros for GDPR non-compliance[7]. The representative does not need specific legal training or certification in data privacy, but must have sufficient knowledge in the area to negotiate with data subjects and regulatory authorities[8]. The primary goal of GDPR is to provide data subjects with understandable information on the types of their personal data being collected, how, and why it is being processed[9].

The first GDPR fine was issued to a school in Sweden for processing sensitive personal data of its students[10]. Companies processing the personal data of EU residents, even if based outside the EU, must designate a representative within the Union[1]. A company is considered to have an "establishment" in the EU if it has an effective, real, and stable activity, regardless of its legal form[11].

References: [1] European Commission. (2018). GDPR: Data protection reform in the European Union. Retrieved from https://ec.europa.eu/info/law/law-topic/data-protection/reform/general-data-protection-regulation_en [2] European Data Protection Board. (2018). Guidelines 03/2018 on the territorial scope of the GDPR as regards processing activities. Retrieved from https://edpb.europa.eu/our-work-tools/our-documents/guidelines/guidelines-03-2018-territorial-scope-gdpr-regarding-processing-activities_en [3] European Data Protection Board. (2020). Guidelines 05/2020 on the concepts of controller and processor in the GDPR. Retrieved from https://edpb.europa.eu/our-work-tools/our-documents/guidelines/guidelines-05-2020-concepts-controller-and-processor-gdpr_en [4] European Data Protection Board. (2020). Guidelines 06/2020 on the concepts of a representative and of a data protection officer. Retrieved from https://edpb.europa.eu/our-work-tools/our-documents/guidelines/guidelines-06-2020-concepts-representative-and-data-protection_en [5] European Data Protection Supervisor. (2018). GDPR: The first year. Retrieved from https://edps.europa.eu/data-protection/our-work/reports/gdpr-first-year_en [6] European Data Protection Board. (2020). Guidelines 04/2020 on the criteria of accountability. Retrieved from https://edpb.europa.eu/our-work-tools/our-documents/guidelines/guidelines-04-2020-criteria-accountability_en [7] European Data Protection Board. (2020). Overview of GDPR fines. Retrieved from https://edpb.europa.eu/our-work-tools/overview-gdpr-fines_en [8] European Data Protection Supervisor. (2018). GDPR: The first year. Retrieved from https://edps.europa.eu/data-protection/our-work/reports/gdpr-first-year_en [9] European Commission. (2018). GDPR: Data protection reform in the European Union. Retrieved from https://ec.europa.eu/info/law/law-topic/data-protection/reform/general-data-protection-regulation_en [10] European Data Protection Supervisor. (2018). GDPR: The first year. Retrieved from https://edps.europa.eu/data-protection/our-work/reports/gdpr-first-year_en [11] European Commission. (2018). GDPR: Data protection reform in the European Union. Retrieved from https://ec.europa.eu/info/law/law-topic/data-protection/reform/general-data-protection-regulation_en

1. In the realm of finance, foreign businesses must consider the requirement to appoint an EU representative as outlined by the GDPR if they process personal data of EU residents, as failure to comply could lead to legal actions and hefty fines.
2. In the context of lifestyle, it's essential for businesses offering goods or services to data subjects in the EU or monitoring their behavior to designate an EU representative, ensuring clear communication and adherence to data protection standards as set by the GDPR.
3. For those engaged in business, technology, education-and-self-development, or general-news sectors, understanding the role and responsibilities of an EU representative becomes critical, as it serves as a pivotal point of contact for communication with EU data protection authorities and subjects in the digital age.

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