Association of Accidental Americans – Court Ruling (France, 2024)

The Association of Accidental Americans (“Association”) sought the annulment of the decision of 23 May 2022 by which the French DPA (“CNIL”) ordered the closure of its complaint seeking the suspension of automatic transfers of tax data operated between France and the United States pursuant to the international agreement concluded on 14 November 2013 (“FATCA Agreement”). The Association appealed the decision in front of the French Supreme Administrative Court (“Conseil d’Etat”). Firstly, Article 5 GDPR states that processing must respect data minimization and storage limitation. The Association had considered that by analyzing the US Treasury and statements by the US tax authority, the transfer of personal data to the US authorities under the FACTA Agreement did not meet the data minimization requirement since (i) little or no use would be made of this data by these authorities due to the lack of resources available and (ii) there would be a lack of reciprocity between the American and European authorities as regards to the transmission of this data. The Conseil d’Etat considered that since it was not disputed that the processing at issue served a legitimate purpose of improving compliance with tax obligations and provides for procedures for selecting, collecting and processing data that was appropriate and proportionate to that purpose, the circumstances alleged could not lead to this processing as being regarded as failing to comply with the data minimization requirement. Furthermore, the Conseil d’Etat noted that the mere fact that the 'FATCA' agreement does not contain any stipulations on the length of time for which transferred data may be retained did not in itself, in view of the safeguards provided by US law, and in particular the Privacy Act of 1974, imply a failure to comply with Article 5(1)(e) GDPR. Secondly, the Association had held that although the Conseil d’Etat had ruled that the FATCA Agreement did not infringe Article 46 GDPR in previous decisi