Recital 13

An insufficient protection of trade secrets and the challenges in enforcing it in third countries may cause irreparable harm to European businesses. The objective is therefore to strengthen the safeguards for trade secrets by preventing their leakage to natural or legal persons that are established in or subject to jurisdictions posing such risks. This includes Union-based entities controlled by third country entities, who may be acting in bad faith or as fronts for third country entities. Additionally, the objective is to avert direct exposure to third country entities operating within the Union, that are subject to such jurisdictions. Being subject to a third country jurisdiction means the natural or legal person is legally governed, controlled or otherwise bound by the laws or regulatory authority of a third country. Subsidiaries or affiliates of third country companies may exploit these jurisdictions to evade or circumvent Union laws. Direct or indirect control refers to the ability to exercise decisive or dominant influence over another entity’s management or strategic decisions, whether through ownership of capital or voting rights, financial participation, contractual arrangements, or intermediary entities. Control may be exercised directly or through other means, even without majority ownership. Data holders should use best efforts to obtain the relevant information, which may include searches in public registers or requesting it from the user or third party directly, while ensuring it remains appropriately non-intrusive.