UK: Brexit And Its Possible Impact On Data Transfers

Last Updated: 23 January 2019
Article by David Navetta and Leo Spicer-Phelps

In its strictest construction, what 'Brexit' means is clear, what it entails and what comes next is absolutely not. Therefore, this article will not focus on matters relating to any such future relationship, but rather only on the terms on which the UK may leave the EU and how that may impact the transfers of personal data. This post covers the following topics (you can click on each of the links below to jump directly to the topic):

We warn: the Brexit situation is very uncertain and extremely fluid. As such some of the summary set forth below could be quickly outdated and changed as events unfold.

Brexit Update

What is Brexit?

'Brexit' simply means the UK ceasing to be a member state of the EU. Following a 2016 referendum, on 29 March 2017 the UK formally notified the EU of its intention to leave the EU (the "Notification"). This Notification started the two year countdown to Brexit prescribed in the Lisbon Treaty (which is essentially the EU constitution) ending 11pm GMT on 29 March 2019.

What is Brexit and when might it happen?

The baseline. Following the Notification, by operation of law, the UK will leave the EU on 29 March 2019 (the "Default Exit Date") – this is the default position, which will occur in the event that no active steps are taken to prevent it.

The potential for a transition period.   To avoid the UK 'crashing out' on the Default Exit Date without a deal as to the terms of that exit, nor a future relationship (a "No Deal Brexit"), the EU and the UK negotiated a transition deal (the "Withdrawal Agreement"). The Withdrawal Agreement provided for a transition period between 30 March 2019 and 31 December 2020 to hopefully enable the UK to effect an orderly exit from the EU. However, in 2017 the English Supreme Court ruled that any such exit/transition deal required parliamentary approval. The UK's parliament's primary legislative body (the House of Commons) then voted resoundingly against approving the Withdrawal Agreement on 15 January 2019.

Following the unambiguous rejection of the Withdrawal Agreement, and the lack of the required parliamentary approval, current reporting suggests that the Default Exit Date may be delayed. However, any such delay to the Default Exit Date would require the approval of both the UK and all other member states of the EU – whether such an agreement is possible remains to be seen. The alternative – assuming the UK seeks to avoid the potentially catastrophic effects of a No Deal Brexit – would be that the UK and the EU seek to strike an agreement for a new transition agreement to provide for an exit/transition on revised terms. However, there is very little time for such agreement to be negotiated and agreed – indeed, whether there is any possible agreement that is both: (a) acceptable to the EU, and (b) could garner majority support in the UK parliament, appears somewhat unlikely at this stage.

Will Brexit happen at all?

There is a (somewhat remote) possibility that Brexit will not occur in any form. In a December 2018 case before the Court of Justice for the EU (the EU's highest court), it was confirmed that the UK had the power to unilaterally revoke the Notification, should it decide it wished to remain an EU member state. However, this is not the intended approach of the UK government, and does not appear to have majority support amongst the members of parliament of either main party in the UK parliament. Accordingly, it currently appears unlikely that the UK will take the active step of revoking the Notification entirely at this point in time.

Effects of No Deal Brexit on data transfers involving UK organisations

The analysis outlined below is based on the intentions of the UK government, as described in the ICO's "Data protection if there's no Brexit deal" guidance.

However, at the date of publication, it is important to note that: (a) the UK needs to pass into law the draft Data Protection EU Exit Regulations, which would give the government (primarily acting via the ICO) to take the steps noted as intended to be taken below, and (b) the government/ICO actually needs to take those steps.

Finally, the amendments effected by the draft Data Protection EU Exit Regulations would require the UK government/ICO to actively review the suitability of any UK approved transfer mechanisms on an ongoing basis, so the position may change going forward post-Brexit (e.g., the ICO may create new UK-approved standard contractual clauses, or it may vary previous EU adequacy decisions).

Transfers from the UK to the EEA

The UK government has stated that transfers of personal data from the UK to the EEA would be permitted post a No Deal Brexit.

Accordingly, there is LIKELY NO ACTION that would be required in respect of such transfers in the event of No Deal Brexit.

Transfers from the UK to the U.S.-based Privacy Shield-certified organisations

Once the UK leaves the EU, it would no longer be able to receive the benefit of any agreements negotiated by the EU for its member states – this includes the Privacy Shield.

However, in the event of a No Deal Brexit, UK-based data exporters would continue to be able to transfer personal data to Privacy Shield-certified organisations, provided that such U.S. organisations have updated their public commitment to comply with the Privacy Shield to extend it to transfers of personal data from the UK  – this position has been confirmed by both the UK data protection regulator (the "ICO") and the U.S. Department of Commerce.

ACTION ITEM FOR U.S. PRIVACY SHIELD-CERTIFIED ORGANISATIONS TO PREPARE FOR A NO DEAL BREXIT: prepare to update public commitments to comply with the Privacy Shield by 29 March 2019 so that they include the UK (in addition to the EU). These updates should typically take the form of updates to the relevant Privacy Shield-certified organisations' privacy policies.

ACTION ITEM FOR UK DATA EXPORTERS RELYING ON IMPORTERS' PRIVACY SHIELD CERTIFICATIONS IN THE EVENT OF A NO DEAL BREXIT: check all relevant U.S. data importers have made the necessary update by 29 March 2019 to extend their public commitments to include data transfers from the UK (in addition to the EU). The easiest way to do this should be to check the relevant Privacy Shield-certified organisations' privacy policies.

Transfers from the UK to a non-EEA country or territory that is the subject of an "adequacy" decision

The UK government intends to recognise existing EU adequacy decisions post a No Deal Brexit. Accordingly, there is LIKELY NO ACTION that would be required in respect of such transfers in the event of No Deal Brexit.

Transfers from the UK to non-EEA country based on EU Standard Contractual Clauses

The UK government intends to recognise the existing EU approved standard contractual clauses as an approved transfer mechanism for restricted transfers by UK organisations. Indeed, the ICO has published its own versions of such standard clauses: (a) Controller to controller clauses, and (b) Controller to processor clauses, together with drafting notes as to their effect. 

Accordingly, there is LIKELY NO ACTION that would be required in respect of such transfers in the event of No Deal Brexit.

Transfers from the UK to non-EEA country based on EU Standard Contractual Clauses.

The UK government intends to recognise binding corporate rules that have been approved under the existing EU process prior to the date on which the UK leaves the EU.

Accordingly, there is LIKELY NO ACTION that would be required in respect of such transfers in the event of No Deal Brexit.

Transfers from the EEA to the UK.

Upon its exit from the EU, absent any deal to the contrary, the UK would become a 'third country' for the purposes of the GDPR. This means that EEA organisations transferring data to the UK would have to establish an approved transfer mechanism in respect of any such transfers to the UK.
Currently, there is no adequacy decision in respect of the UK, nor any mechanism for such a decision to be made automatically/ instantaneously in the event of a No Deal Brexit. This means EEA organisations transferring data to the UK would need to establish one of the other approved transfer mechanisms (e.g., standard contractual clauses) in respect of such transfers to the UK.

ACTIONS ITEMS FOR EEA-BASED ORGANISATIONS TRANSFERING PERSONAL DATA TO THE UK:   Take steps to ensure that an approved transfer mechanism (e.g., standard contractual clauses with the UK organisation as the 'data importer') are in place by 29 March 2019.

Effect of a transitional 'withdrawal' agreement on data transfers

As noted above, as things stand the current draft Withdrawal Agreement has been rejected. Therefore, for this scenario to be relevant, either a revised transition agreement would have to be agreed upon or the UK parliament would have to approve a re-tabled Withdrawal Agreement.

It is our view that it is likely to be the case that if any transition agreement is reached, for data protection related purposes at least, it is highly likely to cause the UK to be treated as if it remains an EU member state during any transition period (indeed this is/was the case in the rejected Withdrawal Agreement).

If any such transition agreement is reached on such terms as are described above relevant to data protection, NO ACTION would be required upon its commencement by either: (a) UK-based data exporters, nor (b) any recipients of that data based outside the UK.

Any action that would need to be taken at the end of any transition period would necessarily be dependent upon the agreement (if any) reached between the EU and the UK at that time as to a future relationship.  However, one can assume that, in the worst-case scenario that a no deal as to a future EU-UK relationship before the expiry of any transition period, the analysis outlined above regarding a No Deal Brexit would hold true – however, one would have to consider any guidance offered at that time by US and UK regulators.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Herbert Smith Freehills
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Herbert Smith Freehills
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions