United States: GDPR Spurring Legal Reforms in South America With New Legislation In Brazil

As organizations continue to grapple with the requirements of the EU General Data Protection Regulation (GDPR) even months after its effective date, one thing is clear: The impact of the regulation extends far beyond an organization's European operations. The global effects of the GDPR are even more apparent when one surveys new and proposed data protection legislation around the world. On Aug. 14, 2018, Brazil signed into law the Lei Geral de Proteção de Dados Pessoais (LGPD), the first omnibus privacy law in the nation's history. The law, which is set to take effect on Feb. 16, 2020, is very similar to the GDPR, including in its expansive definition of personal data and its strong emphasis on both the rights of data subjects and the requirement of lawful bases of processing of personal data.

Personal Data

Under the LGPD, as under the GDPR, personal data means any information related to an identified or identifiable natural person. Also similar to the GDPR, the LGPD sets out heightened protections for certain sensitive categories of personal data, including data concerning an individual's racial or ethnic origin; public opinion; trade union membership; religious belief; membership in any religious, philosophical or political organization; health or sex life; genetic profile; and biometric measurements. Importantly, as under the GDPR, anonymized data, meaning data that has lost the possibility of direct or indirect association to a natural person using reasonable technical means, is not personal data under the LGPD.

Extraterritorial Application

As is the case with the GDPR, an organization need not have operations in Brazil to be subject to the LGPD. In addition to any processing of personal data taking place in the Brazilian territory, the law also applies in situations in which the purpose of processing is to offer goods or services to individuals in the Brazilian territory or when the personal data has been collected in the Brazilian territory.

Lawful Bases of Processing Personal Data

As to lawful bases of processing personal data, the LGPD takes a slightly different tack than does the GDPR, dictating 10 lawful bases for the processing of personal data, including the consent of the data subject or the legitimate interests of the controller or third parties. In addition, personal data may be processed for a controller's compliance with legal or regulatory obligations, certain activities by public agencies, research studies by authorized research bodies, the performance of contracts, the regular exercise of rights in a legal or arbitration proceeding, the protection of life or physical safety, the protection of health, and the protection of credit.

Rights of the Data Subject

The LGPD ensures data subjects' ownership of their personal data and guarantees fundamental rights to freedom, intimacy and privacy. Pursuant to these ends, the LGPD allows all data subjects a broad range of rights to obtain from any controller that processes their personal data: (1) confirmation of the existence of processing; (2) access to the data; (3) correction of incomplete, inaccurate or outdated data; (4) anonymization, blocking or elimination of unnecessary or excessive data; (5) data portability; (6) elimination of personal data processed without the data subject's consent; (7) information regarding any entities with whom the controller shares the data; (8) information on the possibility of denying consent and the consequences of such denial; and (9) revocation of consent. A controller may not charge the data subject for the exercise of any of these rights. In addition, when a decision that is likely to affect the interests of the data subject is made based on automated processing of personal data, the data subject is entitled to request a review of that decision by a natural person.

Data Protection Officer

Under the LGPD, a controller must designate a data protection officer (DPO) and publicly and clearly disclose the name and contact information of the DPO on its website. The DPO is responsible for responding to complaints and other communications from data subjects, responding to instructions and communications from the supervisory authority, instructing employees of the controller on measures to protect personal data, and carrying out other duties and responsibilities that may be established by the supervisory authority. There is no requirement for the DPO to be located in the Brazilian territory.

Data Breach Notification

Unlike under the GDPR, which employs a risk-of-harm analysis, under the LGPD controllers will be required to notify both the data subjects and the supervisory authority following any security incident that may result in risk or damage to the data subject. The notice must include a description of the nature of the personal data affected; the information on the data subject involved; a description of the technical and security measures used to protect the data; the reasons for any delay, when applicable; and any measures undertaken to mitigate any risks to the data subjects. The supervisory authority will define the timing in which the notification is to be provided.

Sanctions and Penalties

Violations of any of the provisions of the LGPD could be met with steep penalties, as the law allows for a total fine of up to 2 percent of an organization's sales revenue within Brazil, limited in the aggregate to 50 million reals (~ $13.5 million as of this writing). Organizations may also be subject to a daily fine, subject to the limitation in the previous sentence. In addition, the supervisory authority may issue a warning, publicly disclose an infraction committed by a processing agent, block access to personal data to which the infraction relates or force the deletion of the personal data.

Other Provisions

In addition to the above, the LGPD also establishes restrictions on the international transfer of personal information; imposes heightened requirements for processing sensitive personal data or personal data concerning children or adolescents; implements record-keeping requirements, including data protection impact assessments; and outlines certain technical and administrative measures for protecting personal data and mitigating risk, including a requirement that processing agents maintain an incident response plan.

The LGPD leaves a number of gaps to be filled by rules and regulations established by a supervisory authority; however, the provision of the LGPD that would have established the independent Data Protection Supervisory Authority was vetoed by the Brazilian president when he signed the bill into law, as he determined that the Brazilian Congress did not have the authority to create such an agency. The executive branch previously announced its intention to submit a new bill to Congress that will create such an agency, under similar terms. However, the results of the recent presidential election could lead to a significant modification of the powers to be exercised by the supervisory authority, which could alter the impact of the LGPD altogether.

Although some portions of the LGPD remain unsettled, it is not too early for organizations to begin planning for the February 2020 effective date. In addition, two of Brazil's southern neighbors, Argentina and Uruguay, have either completed or are in the process of updating their data protection legislation. In August, Uruguay adopted a decree that requires most data controllers to register their databases with the Data Protection and Oversight and Regulatory Authority. Argentina, meanwhile, recently submitted a bill to Congress that would replace Personal Data Protection Law No. 25,326, which has been in effect there since 2000, in an attempt to align the country's data protection standards with the GDPR. The draft bill includes requirements for mandatory breach notification, the appointment of a DPO in certain circumstances, the right to data portability and the right to be forgotten, as well as new accountability standards. This legislative activity in South America follows on the heels of a wave of efforts to modernize data protection laws globally, including those in Israel, Japan and South Africa, all of which have implemented new data protection legislation within the past 18 months, with India eying new legislation of its own.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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