EU–Brazil Mutual Adequacy: A Milestone for Global Data Flows and Latin America’s Digital Positioning

On January 27, the EU and Brazil announced their positive determination on the mutual adequacy of Brazil’s and the EU’s data privacy frameworks — confirming the growing importance of transatlantic data transfers and the EU-Mercosur relationship. This adequacy decision, while not formally tied to the EU-Mercosur trade negotiations, is a historic development that can facilitate cross-border data transfers and fuel shared economic growth driven by data-centered service sectors.

While the formal EU adequacy procedure was launched in September 2025, the decision represents the culmination of a much longer process that began with Brazil’s adoption of the Lei Geral de Proteção de Dados (LGPD) and the ongoing institutional strengthening of its data protection authority, the Autoridade Nacional de Proteção de Dados (ANPD).

What Is an Adequacy Decision and Why It Matters

At a conceptual level, an adequacy decision means that the EU and Brazil mutually recognize their respective data protection regimes as offering an essentially equivalent level of protection for personal data. The notion of “adequacy” originates in the EU’s 1995 Data Protection Directive, which prohibited transfers of personal data to countries that did not ensure a comparable level of protection.² That framework, later carried forward under the General Data Protection Regulation (GDPR), led the European Commission to develop a repeatable, multi-step evaluation process through which third countries can be formally recognized as “adequate.”

Latin America’s Growing Weight in the EU Adequacy Framework

While the EU-Brazil adequacy decision is not legally linked to the recent EU-Mercosur trade agreement, the political and strategic connection is difficult to ignore. Both initiatives aim to reduce friction in EU-Latin American relations and foster trust-based economic integration, particularly in data-intensive and services-driven sectors. Notably, the only other Latin American countries that have received EU adequacy decisions are Argentina (2003, reaffirmed following GDPR review in 2024) and Uruguay (2012), both of which are also members of Mercosur.³ With Brazil’s inclusion, Latin America now stands out as the most represented region outside Europe in the EU adequacy framework, ahead of Asia-Pacific and North America.

This regional weight matters. Outside Europe, EU adequacy decisions remain rare and highly selective, currently covering only a limited group of jurisdictions such as Japan, South Korea, Israel, New Zealand, and Canada (on a sector-specific basis). Brazil’s recognition is therefore significant not only because of its size and economic relevance, but also because it reflects a level of regulatory maturity and institutional credibility at a scale that few emerging economies have achieved.

Economic and Trade Implications

Beyond legal symbolism, there is growing evidence that adequacy decisions can deliver measurable economic benefits. Recent empirical research suggests that countries granted EU adequacy experience increases of approximately 6–14 percent in digital trade with the EU, driven by reduced legal uncertainty and lower compliance costs for data-dependent Other analysis points to a “club effect,” whereby adequacy partners deepen digital trade not only with the EU but also among themselves. These findings help explain why adequacy has become a strategic objective for jurisdictions seeking to position themselves within global digital value chains.

What Changes for Companies and What Does Not

The decision has immediate and practical implications for companies operating across the EU and Brazil. Now is the time to reassess affiliate outsourcing, reshoring, data transfer strategies, and internal governance frameworks in light of this data transfer mechanism. From a practical compliance perspective, the near-term impact of the EU-Brazil adequacy decision is clear but nuanced. Transfers of personal data between the EU and Brazil no longer require transfer tools such as Standard Contractual Clauses (SCCs) or other enumerated GDPR transfer mechanisms. That said, organizations should not assume that existing SCCs automatically fall away. Adequacy simplifies the transfer mechanism, but it does not eliminate accountability.

In practice, companies will need to review their current transfer arrangements, determine whether SCCs should be formally terminated or amended, ensure that internal documentation reflects the new legal basis for transfers, and broader GDPR and LGPD obligations continue to be met. Companies should also remain attentive to onward transfers of personal data from Brazil or the EU to third countries that do not benefit from an adequacy decision. In those cases, appropriate transfer mechanisms and safeguards may still be required, and organizations should confirm that their data mapping, vendor management, and contractual controls accurately reflect these downstream flows.

Broader Signals and What Comes Next

The EU-Brazil adequacy decision is more than a technical data transfer development. It reflects years of regulatory alignment, strengthens Latin America’s position in the global data governance landscape, and delivers both legal certainty and economic opportunity.

The decision sends an unmistakable signal to other jurisdictions in the region. Brazil’s adequacy recognition raises the question of whether additional Latin American countries may seek to follow a similar path through regulatory convergence and institutional strengthening. It also invites comparison with alternative frameworks for cross-border data governance, including the APEC Cross-Border Privacy Rules (CBPRs) and Global CBPR. While CBPRs have gained renewed attention, particularly in the United States and parts of the Asia-Pacific region, they have had a limited impact in Latin America. Against this backdrop, the EU adequacy model is still perceived as a leading global benchmark for international data flows, especially for countries seeking deeper economic integration with Europe.

1. 1. Directive 95/46/EC, Article 25.
   2. European Commission adequacy decisions for Argentina (2003) and Uruguay (2012).
   3. Ferracane, Hoekman, van der Marel, Santi, Digital Trade, Data Protection and EU Adequacy Decisions (CEPR / CITP, 2023).

Crowell would like to thank Laura Juanes Micas for her contribution to this alert.