Privacy Policy and Terms for Processing Customer and Employee Data form the cornerstone of the operational compliance framework for any company operating in Egypt or dealing with the Egyptian market. With the development of the legislative environment and the implementation of executive frameworks for data protection, these policies are no longer merely formal texts published on websites or attached to human resources files; rather, they have become binding legal documents that define the scope of the criminal and civil liability of companies and their executive managers.
This article provides a comprehensive and specialised formulation of the practical applications of data processing, helping local companies and international investors successfully regularise their compliance status.
Legal Framework for Processing Customer and Employee Data in Egypt
The processing of personal data relating to customers and employees in the Arab Republic of Egypt is subject to the protection established under Personal Data Protection Law No. 151 of 2020, in addition to the supplementary provisions of the Egyptian Labour Law in relation to employee data, Telecommunications Regulation Law No. 10 of 2003, and Anti-Cyber and Information Technology Crimes Law No. 175 of 2018.
Legal practice defines processing as any operation performed on personal data, such as collection, recording, storage, modification, retrieval, use, disclosure, or erasure. For processing to be lawful, it must be based on one of the recognised legal grounds:
- Explicit and written consent: Free from defects and easy to withdraw.
- Contractual necessity: Performance of an employment contract or a contract for providing services to the customer.
- Legal obligation: Performance of an obligation imposed by law on the company, such as payroll records, social insurance, and tax declarations.
- Legitimate interest: Provided that it does not infringe upon the fundamental rights and freedoms of the data subject.
Privacy Policy and Terms for Processing Customer Data (B2C & B2B)
The requirements for processing customer data vary depending on the nature of the business activity. Nevertheless, there are fundamental controls that any Privacy Policy and Terms for Processing Customer and Employee Data must include to ensure its lawfulness.
1. Disclosure and Transparency When Collecting Data
The customer must be clearly informed of the data being collected, such as name, contact details, financial data, and geographical location information, together with the specified purpose for its collection. The collection of additional data that is not directly related to providing the service or product is prohibited.
2. Consent Management and Notification (Consent Management)
- In consumer transactions (B2C): Recorded and documented consent must be obtained before sending marketing communications or analysing consumer behaviour.
- In business-to-business transactions (B2B): The focus is on processing the data of company representatives and contact persons within the scope of carrying out commercial transactions.
3. Cross-Border Data Transfer (Cross-Border Data Transfer)
Egyptian rules impose strict requirements on transferring customers’ personal data to servers or processors outside Egypt. This requires obtaining a licence from the Personal Data Protection Center, or ensuring that the receiving country provides an adequate level of protection equivalent to that under Egyptian legislation, together with entering into Standard Contractual Clauses.
Controls Governing the Processing of Employee Data in the Workplace
Employee data is particularly sensitive given the relationship of organisational subordination under the employment contract, which requires the company to comply with the following standards:
1. Scope of Collection and Implied and Explicit Consent
- Employment File Data: This includes the national identification number, educational certificates, criminal record, and family information. This type of data is processed on the basis of legal obligation and contractual necessity.
- Sensitive Data: Such as employees’ medical and health data. Such data requires explicit written consent and enhanced security measures and may only be accessed by the competent person, such as the company doctor or the relevant human resources officer.
2. Electronic Monitoring and Use of Technology
- Cameras and Biometric Attendance Systems: Employees must be notified in advance and in writing of the presence of surveillance cameras in the workplace, while such cameras are completely prohibited in areas of absolute privacy. With respect to biometric fingerprints, alternatives must be provided or freely given consent must be obtained.
- Monitoring Email and Corporate Devices: An Acceptable Use Policy must be drafted, clarifying that the use of company-owned devices is subject to review and inspection for cybersecurity purposes and the protection of business secrets.
Legal Risks and Commercial Consequences of Non-Compliance
Compliance with data processing rules goes beyond merely completing paperwork; it is directly connected to the financial and commercial stability of the organisation.
┌─────────────────────────────────────────┐
│ Risks of Non-Compliance with │
│ Data Protection Laws │
└────────────────────┬────────────────────┘
│
┌────────────────────────────┼─────────────────────────────┐
▼ ▼ ▼
┌──────────────────┐ ┌──────────────────┐ ┌──────────────────┐
│ Criminal │ │ Financial Losses │ │ Operational │
│ Penalties & Fines│ │ & Compensation │ │ & Reputational │
└────────┬─────────┘ └────────┬─────────┘ └────────┬─────────┘
│ │ │
► Fines reaching millions ► Civil compensation ► Licence revocation
► Imprisonment of the ► Cancellation of ► Loss of customer trust
responsible person investment contracts
- Criminal Penalties: Egyptian law provides for severe financial fines that may reach millions of Egyptian pounds, in addition to imprisonment in cases involving the processing of sensitive data without regularisation, intentional data leakage, or transferring data outside the country in violation of the law.
- Executive Manager Liability (Personal Liability): In certain cases, criminal liability extends to the manager responsible for actual management where it is established that he or she was aware of the violation and that a breach of managerial duty contributed to the commission of the offence.
- Commercial Consequences: The company may be exposed to the risk of contract termination by foreign investors or international partners who require compliance with global privacy standards as a fundamental condition for entering into transactions.
Special Considerations for International Companies and Foreign Firms (Local Counsel Aspect)
Multinational companies, shipping, import and export companies, as well as international law firms seeking Local Counsel in Egypt, must take into account the interaction between national and international laws.
- Alignment Between GDPR and Egyptian Law: Although many foreign companies comply with the European General Data Protection Regulation (GDPR), this does not exempt them from compliance with Egyptian local requirements, such as obtaining local licences for data transfers and appointing a Data Protection Officer (DPO).
- Data Processing Agreements for Cross-Service Arrangements (DPA): Where data processing operations, such as payroll or cloud storage services, are outsourced to contractors or subcontractors within Egypt, Data Processing Agreements must be entered into specifying the technical and legal obligations in accordance with Egyptian law.
Common Mistakes in Drafting and Implementing Privacy Policies
In practice, a number of recurring deficiencies arise when preparing data protection policies, most notably:
- Using Generic Online Templates: Relying on translated documents or documents suitable for use in other jurisdictions without adapting them to Egyptian legislative requirements.
- Combining Data Consent with General Terms of Service: Imposing a “mandatory consent” option for marketing data processing as a condition for obtaining the core service, which violates the principle of separate consents.
- Neglecting the Role of the Data Protection Officer (DPO): Failing to appoint a Data Protection Officer or assigning the role to a person facing a conflict of interest, such as the information security manager or marketing manager.
- Failure to Update Policies: Failing to periodically review the Privacy Policy and Terms for Processing Customer and Employee Data to adapt to new regulations and regulatory decisions.
Practical Best Practices for Implementing a Secure Processing System
- Preparing a Comprehensive Processing Record (Data Mapping): Identifying all data collected from customers and employees and determining its flow, storage location, and retention period.
- Privacy by Default Design (Privacy by Design): Incorporating security standards and data minimisation into all products and services before launch.
- Preparing a Breach Response Plan (Breach Notification Protocol): Establishing a mechanism for reporting any security breach involving customer or employee data to the competent authorities and affected individuals within the prescribed legal time limits.
When Is the Intervention of a Specialist Lawyer or Local Counsel in Egypt Required?
Specialised legal intervention becomes necessary at a number of stages, most notably:
- Structuring and developing a data protection framework for technology companies, financial institutions, and logistics companies.
- Preparing and adapting data processing agreements between parent companies and their subsidiaries or independent data processors.
- Corresponding with and representing clients before the Egyptian Personal Data Protection Center and regulatory authorities to regularise compliance status and obtain the necessary licences.
- Conducting a legal due diligence review (Legal Data Protection Audit) to ensure the integrity of operations before investment rounds or acquisitions.
How Can Specialist Legal Support Assist?
El Rouby Law Firm provides an integrated range of legal services for local and international companies to manage data protection and regulatory compliance matters, including:
- Regulatory Compliance and Licensing: We provide proactive legal advice to ensure that corporate activities comply with Personal Data Protection Law No. 151 of 2020 and follow up on procedures for obtaining data transfer permits and processing licences.
- Drafting Contracts and Policies: Preparing specialised legal drafts for the Privacy Policy and Terms for Processing Customer and Employee Data, and drafting Data Processing Agreements (DPA) applicable to workplace environments and commercial systems.
- Risk Management and Dispute Prevention: Developing strategies to limit legal liability and designing internal workplace regulations and data processing records in a manner that prevents criminal or administrative liability.
- Representation Before Egyptian Authorities and Settlement: Providing technical support and legal representation in investigations or disputes relating to data leaks before judicial and official authorities and experts of the Economic Courts.
Conclusion
Building a workplace environment that recognises the importance of privacy, and drafting clear policies for processing customer and employee data, constitutes a key investment in protecting your organisation’s reputation and ensuring the sustainability of its operations. Early legislative compliance also helps avoid severe criminal and financial penalties and enhances the confidence of customers and investors in the organisation’s competence.
We invite you to contact El Rouby Law Firm to discuss your organisation’s requirements and develop tailored privacy policies that align your commercial needs with the latest Egyptian laws and regulations.
Frequently Asked Questions
Q1: Is an Employee’s Written Consent Required to Process Basic Data in the Employment File?
Explicit consent is not required for basic data required by law or the employment contract, such as social insurance and tax information. However, explicit, independent written consent is required for sensitive data such as health status or biometric fingerprint data.
Q2: What Is the Penalty for Failing to Appoint a Data Protection Officer (DPO) in the Company?
The law subjects the company to financial fines that are increased if the violation continues, in addition to the possibility of administrative measures being taken by the Personal Data Protection Center, such as suspending data processing licences.
Q3: Is an English-Language Privacy Policy Sufficient for Companies Operating in Egypt?
Under Egyptian law, an approved Arabic-language version of privacy policies and processing terms directed to employees or customers within Egypt must be provided to ensure their legal enforceability and the validity of consents.
Q4: May a Company Transfer Its Customers’ Data to Cloud Servers Outside Egypt?
Yes, provided that a prior licence or permit is obtained from the Egyptian Personal Data Protection Center, the receiving entity complies with equivalent protection requirements, and the approved standard agreements are signed.
Q5: How Long May a Company Retain Customer Data After the Service Ends?
Data must be securely erased once the purpose for which it was collected has ended, unless another law, such as tax or commercial legislation, requires it to be retained for specified periods.
References
- Egyptian Official Gazette: Personal Data Protection Law No. 151 of 2020.
- Ministry of Communications and Information Technology (MCIT): National Strategy for Artificial Intelligence and Cybersecurity.
- Personal Data Protection Center (PDPC): Regulatory frameworks and decisions issued regarding data processing licences and cross-border transfers.
- Egyptian Labour Law No. 12 of 2003: Provisions concerning employee files and the retention of employment-related data.