Data privacy has grown into a fiercely protected right in the EU, especially in the aftermath of Edward Snowden's 2013 revelations of mass surveillance carried out by the U.S. - and often targeted at its European allies.
Once the so-called adequacy decision is approved by the European Commission-a mere rubber-stamping exercise at this point-the deal will be signed with the US. "It imposes clear and strong obligations on companies handling the data and makes sure that these rules are followed and enforced in practice", the statement said. "For the first time, the USA has given the EU written assurance that the access of public authorities for law enforcement and national security will be subject to clear limitations, safeguards and oversight mechanisms and has ruled out indiscriminate mass surveillance of European citizens' data".
In a joint statement Thursday, European Commission Vice President Andrus Ansip and Justice Commissioner Vera Jourova said the new agreement "is fundamentally different from the old Safe Harbor".
Its introduction should end months of legal limbo for companies such as Google, Facebook and MasterCard after the EU's top court struck down the previous data transfer framework, Safe Harbour, on concerns about intrusive USA surveillance.
Lawmakers provisionally agreed to the Privacy Shield in February, after months of negotiating an agreement to replace Safe Harbor, the data sharing agreement declared "invalid" by the European Court of Justice in October.
Revelations about the US National Security Agency's widespread surveillance using data which was supposedly protected by Safe Harbour, led to it being struck down.
"For the first time, the USA has given the EU written assurance that the access of public authorities for law enforcement and national security will be subject to clear limitations, safeguards and oversight mechanisms and has ruled out indiscriminate mass surveillance of European citizens' data".
The EU-US Privacy Shield has taken a step closer to coming into force, with the contents of the data-transfer agreement winning the backing of the European Union (EU).
And this reworked agreement has now been approved by European Union member states.
Digital rights group Privacy International (PI) said the revised pact had been drawn up on a "flawed premise". Europe's data protection authorities have also not excluded the possibility of seeking the CJEU's verdict on Privacy Shield.
Meanwhile, former US Federal Trade Commission chief Julie Brill wrote in an opinion for Euractiv that Privacy Shield is "a solution.at hand that will enhance real, enforceable privacy protections on both sides of the Atlantic".
"Therefore, our companies urgently need a safe legal framework", he said in a statment, adding that the ministry had held intense consultations with businesses and data protection authorities during the process.