Data Privacy & Transfer in Investigations: Czech Republic

1. What laws and regulations in your jurisdiction regulate the collection and processing of personal data? Are there any aspects of those laws that have specific relevance to cross-border investigations?

Czech Republic

The EU General Data Protection Regulation (2016/679) (the GDPR) is directly applicable in Czech Republic.

Together with the GDPR, the Czech Act No. 110/2019, on Processing of Personal Data (the DPA) forms the data protection regime in the Czech Republic. Among other things, the DPA implements derogations and Czech specific exemptions, as permitted by the GDPR. Throughout this chapter, references to the GDPR shall refer to the GDPR as it applies in the Czech Republic.

A number of provisions have particular relevance in the context of investigations. All processing must have a valid legal basis under GDPR. Establishing a legal basis, in the context of an investigation, is not always straightforward, particularly where investigations involve foreign authorities or courts and particularly where the data involved includes sensitive data. Restrictions on international transfers create additional complexity in the context of cross-border investigations, both in relation to transfers within an organisation (and with its advisers) and in relation to transfers to foreign authorities, courts and counterparties in litigation. All processing must comply with the data protection principles under the GDPR, including the principle that processing must be fair, lawful and transparent and the principle of data minimisation. It can be challenging to ensure compliance with these principles in the context of an investigation. 

2. What other laws and regulations, besides data protection laws, may prevent data sharing in the context of an investigation?

Czech Republic

Bank secrecy

Czech Act No. 21/1992, on Banks, as amended, provides that all banking trades and financial services of banks, including information on bank account balances, are subject to the principles of banking secrecy and cannot be disclosed to a third party without the consent of the client.

A bank that has outsourced some of its activities will be responsible for any breaches in relation to bank secrecy committed by the service provider to which the activity was outsourced. The conditions of the outsourcing must be documented in an agreement, usually in a written form. 

Employment law

In relation to the transfer of employee email correspondence for review, the rules of Czech employment law applicable on monitoring of employees may apply. However, the provisions in employment law tend to apply to continuous monitoring, as opposed to one-off reviews of email correspondence, which means that these employment law restrictions shall not be applicable on transferring of personal data in connection with investigation.

3. What constitutes personal data for the purposes of data protection laws?

Czech Republic

The GDPR defines personal data as any data relating to a living individual who can be identified directly or indirectly from that data, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that living person. Personal data protection therefore relates only to natural persons and not legal persons.

Data that are truly anonymised will not be “personal data” for the purposes of the GDPR, as they do not identify the individual.

Data will not be truly anonymised if the data may re-identify the individuals to which the data relates by reasonably available means. Pseudonymised data – information no longer attributable to a specific data subject without the use of additional information, kept separately and subject to appropriate measures – remains personal data for the purposes of the GDPR.

4. What is the scope of application of data protection laws in your jurisdiction? What activities trigger the application of data protection laws, to whom do they apply and what is their territorial extent?

Czech Republic

The GDPR applies to “processing", which is defined broadly and includes any activity in relation to personal data (whether or not by automated means). A number of examples are provided in the GDPR, including the collection, use, disclosure and destruction or erasure of personal data.

The direct obligations under the GDPR apply primarily to controllers. A controller is defined in the GDPR as a person who (either alone or jointly with others) determines the purposes for which and the manner in which any personal data are processed.

However, the GDPR also imposes certain direct obligations on processors. A processor is defined in the GDPR as a person who processes personal data on behalf of the controller.

The GDPR has extraterritorial scope. It covers:

• the processing of personal data in the context of the activities of an establishment of a controller or a processor in the EU, regardless of where the processing takes place; and
• the processing of personal data of data subjects who are in the EU, where the processing activities relate to the offering of goods and services to them or the monitoring of their behaviour in the EU.

An organisation is “established” for the purposes of the first limb where it exercises “any real and effective activity – even a minimal one” through “stable arrangements” in the EU.

5. What are the principal requirements under data protection laws that are relevant in the context of investigations?

Czech Republic

Czech data laws address the processing of personal data in general, not specifically in the context of investigations. For example, the GDPR sets out a number of core data protection principles, with which controllers must comply, including in relation to an investigation.

In principle, a privacy notice under articles 13 and 14 of the GDPR should include information in relation to potential investigation and identify investigators as a potential category of data recipients.

It may be the case in an investigations context that personal data has not been obtained directly from the data subject. If this is the case, article 14 of the GDPR will apply and the fair processing information given to data subject must also include the categories of personal data processed, the source of personal data and details of any personal data obtained from directly accessible sources.

The GDPR sets out a number of data protection principles that controllers must comply with. The first principle is that personal data must be processed "lawfully, fairly and in a transparent manner". This means that data cannot be processed unless there is a legal basis under article 6 of the GDPR. The following legal bases are available:

• the data subject has given his or her consent to the processing for one or more specific purposes;  
• the processing is necessary for the performance of a contract to which the data subject is a party or for the taking of steps at the request of the data subject with a view to entering into a contract;  
• the processing is necessary for compliance with a legal obligation to which the controller is subject;  
• the processing is necessary to protect the vital interests of the data subject or another natural person;  
• the processing is necessary for performing tasks in the public interest or in the exercise of official functions by the controller; or  
• the processing is necessary for the purposes of legitimate interests pursued by the controller or by a third party, except where the processing is unwarranted by reason of prejudice to the interests and fundamental rights and freedoms of the data subject.

In respect of sensitive data (or “special categories of personal data”), the processing must also comply with one of the stricter legal bases set out in article 9 of the GDPR. Sensitive data is defined as information relating to: racial or ethnic origin; political opinions; religious and philosophical beliefs; trade union membership; genetic data and biometric data for the purpose of uniquely identifying a natural person; data concerning health; and sex life and sexual orientation.

The processing of data about criminal convictions and offences is dealt with separately to sensitive data, under article 10 of the GDPR. This provides that such data can only be processed where authorised under national law.

Controllers must comply with the following data protection principles:

• Principle 1: personal data must be processed lawfully, fairly and in a transparent manner in relation to the data subject (“lawfulness, fairness and transparency”, see above for further details on transparency requirements);
• Principle 2: personal data should be obtained only for specified, explicit and legitimate purposes and should not be further processed in any manner incompatible with those purposes (“purpose limitation”);  
• Principle 3: personal data should be adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed (“data minimisation”);  
• Principle 4: personal data should be accurate and, where necessary, kept up to date (“accuracy”);  
• Principle 5: personal data should be kept in a form that permits identification of data subjects for no longer than is necessary for the purposes for which the personal data are processed (“storage limitation”);  
• Principle 6: personal data should be processed in a manner that ensures appropriate security of that personal data, including protection against unauthorised or unlawful processing and against accidental loss, destruction or damage, using appropriate technical or organisational measures (“integrity and confidentiality”); and
• The controller must also be able to demonstrate compliance with each of these principles (“accountability”). 

In addition, under Chapter V of the GDPR, personal data may not be transferred to a country or territory outside the EEA unless the European Commission has decided that the third country or territory ensures an adequate level of protection or if the controller or processor has provided appropriate safeguards and on condition that enforceable data subject rights and effective legal remedies for data subjects are available.

6. Identify the data protection requirements relevant to a company carrying out an internal investigation and to a party assisting with an investigation.

Czech Republic

In the context of an internal investigation, any data processing and transfers need to be analysed in the same way as any other processing and transfers of personal data, and so must be carried out in compliance with the GDPR.

Additional provisions of the GDPR apply where the data are processed by a processor on behalf of the controller. The primary factor considered is control of the data rather than its possession, so the controller must ensure that the third-party processor is complying with the requirements on the security of data set out in the GDPR. A written contract to this effect must be entered into between the processor and controller (article 28 of the GDPR). This contract must include a description of the data processing activities and require the processor, among other things, to:

• act only on the documented instructions of the controller (including with regard to international transfers of data to a third country);  
• ensure that persons who process the data have committed to confidentiality or are under a statutory duty of confidentiality;  
• implement appropriate security measures in accordance with the GDPR;  
• engage a sub-processor only with the prior authorisation of the controller;  
• assist the controller in carrying out its obligations to respond to requests by data subjects to exercise their rights under the GDPR; and  
• assist the controller in ensuring its compliance with its data security obligations.

Where a processor engages a sub-processor, the contract between them must reflect the same data protection obligations as set out in the contract between the controller and the processor.

These provisions of the GDPR apply to processors within the same corporate group in the same way as to other third-party processors.

The GDPR also imposes certain direct obligations on processors. These include an obligation to: (i) maintain a written record of processing activities carried out on behalf of each controller; (ii) designate a data protection officer where required; (iii) appoint a representative (when not established in the EU) in certain circumstances; and (iv) notify the controller without undue delay on becoming aware of a personal data breach.

7. Is the consent of the data subject mandatory for the processing of personal data as part of an investigation?

Czech Republic

The consent of the data subject is one legal basis for processing of personal data under the GDPR. Data subject consent is therefore not mandatory for the processing of personal data, but consent must be obtained if no other legal basis exists.

8. If not mandatory, should consent still be considered when planning and carrying out an investigation?

Czech Republic

Consent may be considered as an enabling action when planning an investigation. However, obtaining consent to the processing of personal data can be practically challenging, and proceeding with processing of personal data in reliance solely on this ground is rarely appropriate. One reason is that consent must be capable of being withdrawn at any time (a right which it is not possible to contract out of, which would be difficult to manage in the context of the investigation).

9. Is consent given by employees likely to be valid in an investigation carried out by their employer?

Czech Republic

Consent is not freely given (and so is invalid) if a data subject has no genuine or free choice or cannot refuse or withdraw consent without detriment, or there is a clear imbalance between the parties. Consent included within an employment contract, or obtained generally by an employer from an employee, is unlikely to be valid for this reason.

10. How can consent be given by a data subject? Is it possible for data subjects to give their consent to processing in advance?

Czech Republic

Whether consent given in advance, such as through general terms and conditions or account opening information, is sufficient for the purposes of the GDPR depends, among other things, on the balance of power between the controller and data subject. Consent is not freely given (and so is invalid) if a data subject has no genuine or free choice or cannot refuse or withdraw consent without detriment, or there is a clear imbalance between the parties. Consent included within an employment contract, or obtained generally by an employer from an employee, is unlikely to be valid for this reason.

Written requests for consent must be clearly distinguishable from other matters, be intelligible, be easily accessible and use clear and plain language. This means that consent should not be hidden among other terms and conditions. In any event, there is a risk that a generic consent provided through general terms and conditions is not specific and informed, and so not validly given by the data subject.

The controller should also consider the requirement for consent to the processing for sensitive data to be explicit.

11. What rights do data subjects have to access or verify their personal data, or to influence or resist the processing of their personal data, as part of an investigation?

Czech Republic

Right of access

A data subject has a right to request information regarding whether their personal data is being processed, known as a data subject access request. The information that can be requested includes a description of the data, the purpose for which it is being processed and to whom it may be disclosed. The controller must also provide a copy of the personal data to the data subject.

A controller is not required to provide personal data in response to a “manifestly unfounded or excessive” request from a data subject (article 12(5) of the GDPR). If relying on this exemption, a controller should retain evidence to demonstrate why it considers the request to be unfounded or excessive. If a controller refuses to act on a request, they must also inform the data subject of the reason why and tell the data subject that they can complain to their relevant supervisory authority and enforce their right through judicial remedy.

Right of erasure

Data subjects have the right to request rectification of any personal data relating to them that is inaccurate, and completion of any incomplete data, including by way of a supplementary statement. There is an obligation on a controller under the GDPR to ensure the personal data it keeps is accurate.

Data subjects have the right to obtain from the controller the erasure of their personal data without undue delay if one of the specified grounds applies. This includes where the data is no longer necessary in relation to the purposes for which it was collected or otherwise processed, or where the data subject has withdrawn consent (and there is no other legal ground for the processing).

Right to object

In certain circumstances, such as when a controller is relying upon their legitimate interests (or those of a third party) or the processing is necessary for performing tasks in the public interest or in the exercise of official functions, data subjects have a right to object to the processing of personal data concerning them at any time. A controller must adhere to this objection unless it can demonstrate a legitimate basis for the processing that overrides the interests of the data subject, or if the processing is necessary within legal proceedings.

A data subject also has a right to obtain a restriction of processing from the controller where it believes the relevant personal data is inaccurate, the processing is unlawful or the controller no longer needs the data for the purposes of the processing. If the latter is the case, the data subject can require the controller to limit the processing to that required in the context of legal proceedings.

12. Are there specific requirements to consider where third parties are appointed to process personal data in connection with an investigation?

Czech Republic

In principle, a privacy notice under articles 13 and 14 of the GDPR should include information in relation to potential investigation and identify investigators as a potential category of data recipients.

It may be the case in an investigations context that personal data has not been obtained directly from the data subject. If this is the case, article 14 of the GDPR will apply and the fair processing information given to data subject must also include the categories of personal data processed, the source of personal data and details of any personal data obtained from directly accessible sources.

Additional provisions of the GDPR apply where the data are processed by a processor on behalf of the controller. The primary factor considered is control of the data rather than its possession, so the controller must ensure that the third-party processor is complying with the requirements on the security of data set out in the GDPR. A written contract to this effect must be entered into between the processor and controller (article 28 of the GDPR).

13. Is it permitted to share personal data with law firms for the purpose of providing legal advice?

Czech Republic

A transfer of personal data to a third-party law firm for the purposes of providing legal advice needs to be analysed in the same way as any other transfer of personal data, and so must be carried out in compliance with the GDPR and the principles relating to the processing of personal data.

14. What is the position and status of law firms under data protection laws? Are law firms directly accountable for data processing under data protection laws, or is responsibility for processing by law firms shared between the law firm and the client?

Czech Republic

According to the guidance by the Czech Bar Association, law firms are in position of data controllers in relation to data provided by their clients or counterparties. As data controllers, the law firms are directly accountable.

15. What is the position and status of legal process outsourcing firms under data protection laws?

Czech Republic

Such persons would be considered data processors of the law firms who are in a position of data controllers.

16. Are there any additional requirements, beyond those specified above, that regulate the disclosure of data to third parties within your jurisdiction for the purpose of reviewing the content of documents, etc?

Czech Republic

Financial institutions that are subject to Czech Act No. 21/1992, on banks, as amended, have a general obligation to obtain consent from their clients for any disclosure of client data to third parties. Furthermore, a financial institution that has outsourced some of its activities will be responsible for any breaches in relation to bank secrecy committed by the service provider to which the activity was outsourced. In addition, these financial institutions must also comply with applicable obligations stemming from regulation of outsourcing, which involve, in particular, an obligation to enter into a written outsourcing agreement.

17. What rules regulate the transfer of data held in your jurisdiction to a third party in another country for the purpose of reviewing the content of documents, etc?

Czech Republic

The GDPR distinguishes between transfers to other jurisdictions within the EEA and transfers of data to jurisdictions outside the EEA.

Within the EEA

A transfer of personal data from this jurisdiction to a processor or controller in another EEA member state must comply with the same requirements as if the transfer was made within the jurisdiction.

Outside the EEA

Personal data subject to the GDPR cannot be transferred to a country or territory outside the EEA unless that third country or territory provides an adequate level of protection for personal data.

The European Commission has determined that certain non-EEA countries and recipients ensure an adequate level of protection for personal data and so a transfer can be made to such countries in compliance with the rules that provide restrictions on transfers outside the EEA.  

Currently, these countries are Andorra, Argentina, Canada (commercial organisations), Faeroe Islands, Guernsey, Israel, Isle of Man, Japan, Jersey, New Zealand, Republic of Korea, Switzerland, United Kingdom and Uruguay. 

Alternatively, the controller as transferor could ensure an adequate level of protection through:

• entering into standard contractual clauses approved by the European Commission for both controller-to-processor and controller-to-controller transfers; or  
• for transfers within the same group, adoption of binding corporate rules.

In a judgment issued on 16 July 2020, the CJEU in Schrems II held that standard contractual clauses should be viewed as offering only the basic level of protection and they may only be used where the protection provided by the contract is not undermined in the particular circumstances. This means that controllers exporting personal data and looking to rely on standard contractual clauses must conduct a transfer adequacy and risk assessment to assess on a case-by-case basis whether additional safeguards (supplementary measures) are needed to remedy any identified deficiency and ensure adequate data protection.

The European Data Protection Board (EDPB) has published recommendations on measures to supplement transfer tools (including standard contractual clauses) here.

In reaction to the above, the European Commission published a modernised set of standard contractual clauses under the GDPR for data transfers from controllers or processors in the EU/EEA (or otherwise subject to the GDPR) to controllers or processors established outside the EU/EEA (and not subject to the GDPR). The modernised clauses can be found here.

These modernised clauses replaced the previously applicable standard contractual clauses. Controllers and processors can continue to rely on earlier standard contractual clauses that were concluded before 27 September 2021 until 27 December 2022.

The European Commission had issued an adequacy decision for recipients registered under the EU-US Privacy Shield framework in respect of their handling of personal data. However, in the judgment in Schrems II, the CJEU held the European Commission’s adequacy decision to be invalid and so data transfers cannot currently be made to the US on the basis of the EU-US Privacy Shield.

Data can otherwise be transferred if one of the following derogations, among others, applies:

• the data subject has consented to the transfer (as noted above, this consent should be explicit as well as freely given, specific, informed and unambiguous);  
• the transfer is necessary for the performance of a contract between the data subject and controller or the implementation of pre-contractual measures taken at the data subject’s request;  
• the transfer is necessary for the conclusion of a contract between the controller and a person other than the data subject, which is entered into in the data subject’s interests;  
• the transfer is necessary for important reasons of public interest;  
• the transfer is necessary for the establishment, exercise or defence of legal claims; or  
• the transfer is necessary to protect the vital interests of the data subject.

Where none of the above derogations is available, a transfer to a third country may take place if the transfer is not repetitive, concerns only a limited number of data subjects, is necessary for the purposes of compelling legitimate interests of the controller (which are not overridden by the interests or rights and freedoms of the data subject), and the controller has assessed all the circumstances surrounding the transfer and has, on the basis of that assessment, provided suitable safeguards with regard to protection of personal data. This ground for processing may only be relied upon where no other legal basis is available. The controller shall inform the supervisory authority of the transfer and, in addition to providing the information referred to in articles 13 and 14, shall inform the data subject of the transfer and on the compelling legitimate interests pursued.

18. Are there specific exemptions, derogations or mechanisms to enable international transfers of personal data in connection with investigations?

Czech Republic

The derogations most relevant to enable the international transfers of personal data in connection with investigations are that:

• the transfer is necessary for important reasons of public interest; and
• the transfer is necessary for the establishment, exercise or defence of legal claims.

19. Under what circumstances is the transfer of personal data to regulators or enforcement authorities within your jurisdiction permissible?

Czech Republic

The transfer of personal data to regulators and enforcement authorities within the jurisdiction must comply with the GDPR in the same way as any other processing. In particular, a legal basis must be established under article 6 GDPR.

20. Under what circumstances is the transfer of personal data held within your jurisdiction to regulators or enforcement authorities in another country permissible?

Czech Republic

The provisions applying to cross-border data transfer generally also apply to the transfer of data to regulators and law enforcement authorities out of the jurisdiction. Any transfer to an overseas regulator would have to comply with the GDPR in the same way as any other processing. Notification to the data privacy authority is not required.

Any disclosure of personal data to an overseas regulator or law enforcement authority would engage the first data protection principle (including the requirement to establish a legal basis under article 6 GDPR) and prohibitions on cross-border transfers of personal data. In particular, the first principle provides that processing of personal data must be fair, lawful and transparent.

Any transfer of personal data to an overseas regulator or law enforcement authority may breach this principle on the basis that this is not a purpose about which the data subjects will have been sufficiently informed. The GDPR sets out exemptions to providing a privacy notice where this is impossible or would involve disproportionate effort on the part of the controller, but these exemptions are interpreted narrowly.

The cross-border transfer of personal data would additionally require safeguards for the relevant transfer and a legal basis for processing. There is no clear exemption or derogation from either the first principle, the requirement for a legal basis for processing, or the prohibition on cross-border transfers that will routinely cover requests for data by a foreign regulator or law enforcement authority.

The transfer may lack a legal basis, depending on the circumstances of the processing. The possible legal bases that a controller may rely on in this context include:

• the consent of each affected data subject to the disclosure and transfer. However, as noted above, this can be problematic to obtain, can be withdrawn at any time and (in the case of sensitive data) consent must be explicit;
• that the processing is necessary for the establishment, exercise or defence of legal claims, depending on the circumstances;
• that the processing is in the legitimate interests of the controller; or
• that the processing is necessary for the performance of a task carried out in the public interests.

The prohibition on cross-border transfers provides that personal data should not be transferred to a country outside the EEA that does not provide an adequate level of protection, unless an exemption applies or safeguards for the personal data are in place. Article 49 of the GDPR provides for derogations to the requirement for an adequacy decision or implementing safeguards in certain circumstances, including where the transfer is necessary for important reasons of public interest or for the establishment, exercise or defence of legal claims.

This article provides that, without prejudice to other grounds for international transfers, a decision from a third country, authority, court or tribunal does not in itself justify the transfer of personal data to a non-EEA country. This is the case unless the transfer is based on an international agreement, such as a mutual legal assistance treaty. The European Data Protection Board guidelines state, in relation to article 48: “In situations where there is an international agreement, such as a mutual legal assistance treaty (MLAT), EU companies should generally refuse direct requests and refer the requesting third country authority to existing MLAT or agreement.”

21. What are some recommended steps to take on receipt of a request from a regulator for disclosure of personal data?

Czech Republic

The recipient of such a request may consider taking the following steps, among others:

• consider if there is a legal obligation to respond to the request and, if so, to what extent;
• seek further information in writing from the requesting regulator to evaluate the purpose of the request;
• if possible, negotiate the scope of the request: for example, to target the specific information required for the purposes of the regulatory investigation;
• in accordance with principles of data minimisation and anonymisation, limit the scope of any data disclosed and transferred to that necessary for the purpose;
• consider whether it is practicable to obtain data subject consent and/or give a further privacy notice;
• put in place a data processing agreement if data will be transferred to an affiliate or third party (acting as a processor); and
• consider transfer via an MLAT as, in some cases, it may be possible to request that the requesting court or regulator requests data via an MLAT or other international agreement.

22. What are the sanctions and penalties for non-compliance with data protection laws?

Czech Republic

There is a tiered approach to penalties for breaches of the GDPR. This permits data protection authorities to impose fines for some infringements of up to the higher of 4 per cent of annual worldwide turnover and €20 million (eg, for breach of requirements relating to cross-border transfers or the principles for processing, such as conditions for consent). Other specified infringements attract a fine of up to the higher of 2 per cent of annual worldwide turnover and €10 million.

The GDPR contains a list of points to consider when imposing fines, such as the nature, gravity and duration of the infringement.

A data subject who suffers material or non-material damage as a result of a breach of the GDPR by a controller may bring a civil claim for compensation.

23. Provide a list of relevant materials, including any decisions or guidance of the data protection authority in your jurisdiction regarding internal and external investigations, and transfers to regulators or enforcement authorities within and outside your jurisdiction.

Czech Republic

EU General Data Protection Regulation (2016/679):

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016R0679&from=EN

Czech DPA

https://www.uoou.cz/en/assets/File.ashx?id_org=200156&id_dokumenty=1837

Guidance of the Czech Data Protection Office to the GDPR (in Czech only)

https://www.uoou.cz/gdpr-obecne-narizeni/ds-3938/p1=3938

There is no specific guidance by the Czech Data Protection Office regarding internal and external investigations (disregarding domestic police and administrative investigations). We are also not aware of any relevant case law in this respect.