Data protection for your business after a no-deal Brexit

At the time of writing, it is possible that the UK could exit the EU on 31 October 2019 (“exit date”) without a deal which means immediately leaving EU institutions such as the European Court of Justice without an agreement over what happens next.

Whilst a smooth transition of data privacy laws is essential for minimising disruption to the free movement of personal data which forms the lifeblood of the digital economy, this measure is not in itself conclusive. This blog forms part of our data protection series and summarises the government’s proposed data protection regime in the event of a no-deal Brexit and looks at the preparatory steps you can consider to help avoid interruption to your business. 

The “UK GDPR”

The GDPR is the EU’s data privacy regulation which applies as law in the UK and all EEA countries (i.e. the EU plus Iceland, Norway and Liechtenstein). When the UK leaves the EU, the government intends to create the “UK GDPR” by amending the EU GDPR as illustrated in the ‘Keeling Schedule’ for the GDPR. This means that the fundamental rights of individuals and governing principles (such as fairness, transparency and accountability) will stay the same but the territorial scope will be limited to the UK only.

International data transfers

As discussed in our previous blog (GDPR for the UK: Brexit and international transfers of personal data), in the absence of an adequacy decision in favour of the UK (which, according to the government’s recently published Operation Yellowhammer papers, could take years to achieve), as a UK business you will need an alternative legal basis for processing personal data where you (i) send personal data outside the UK (this will be a “restricted transfer” under the UK GDPR); or (ii) receive personal data from the EEA; or (iii) receive personal data from countries which are covered by an adequacy decision.

The Information Commissioner’s Office (the “ICO”) is the independent public authority that is responsible for monitoring the application of the EU GDPR in the UK. (After Brexit, the ICO will continue to be the UK’s supervisory body in relation to the application of domestic data protection law). According to the ICO, the government intends to recognise the EU adequacy decisions that have already been made which will allow most restricted transfers to organisations in those countries to continue (this includes the recently implemented adequacy decision for Japan). Furthermore, UK businesses will still be able to transfer personal data to US organisations that are certified on the EU-US Privacy Shield as long as those organisations expressly state that their commitment to compliance with the Privacy Shield apples to personal data from the UK.  You will need to check this commitment has been updated in each case.

If no adequacy decision applies to your restricted transfer, you should consider what documentation is needed to keep data flowing (and where the data is going), in many cases this will mean entering into standard contractual clauses which the sender and receiver both sign up to as this is a fairly straightforward means of providing an appropriate safeguard for a restricted transfer. Alternatively binding corporate rules (“BCRs”) can be used for transfers from an entity in the UK to overseas branches within the same corporate group. The ICO has stated that the government will recognise BCRs created pursuant to the EU process before the exit date as ensuring appropriate safeguards for the protection of personal data. On exit date the UK will become a third country so your BCRs should be updated to reflect this change. Local laws will apply in respect of data transfers from countries outside the EEA which do not have an EU adequacy decision for transfers to the UK. In these situations you may wish to seek guidance from lawyers of the relevant jurisdiction as necessary.

EU Representatives

If you target customers in the EEA and your business is based in the UK only without any branches or offices in other EEA countries, then as a non-EEA based controller or processor after exit date, you will need to appoint a representative within an EEA country where the data processing takes place. The representative (which can be an individual or an organisation) must be established in the EEA and must be able to represent your business in respect of all matters of compliance with the EU GDPR including liaising with supervisory authorities and data subjects. The representative must be appointed in writing and this is likely to be most effectively achieved through the use of a services agreement. You should make details of the representative easily accessible to customers and supervisory authorities by including them in your privacy notice and publishing them on your website. A representative does need to be appointed if your processing is only occasional and low risk i.e. it does not involve the collection of sensitive data (such as health information and criminal records) on a large scale.

A “one-stop-shop” for cross-border processing

The ICO is preparing guidance for cross-border processing and lead supervisory authorities. The aim is to create a “one-stop-shop” system whereby controllers and processors which carry out processing that impacts individuals in more than one EEA country only need to liaise with a single lead supervisory authority in the EEA. Such authority will act on behalf of all other interested EEA data protection regulators and will be responsible for investigating breach incidents and taking enforcement action such as by issuing fines. Further comment on the proposed arrangements may be provided once guidance has been issued by the ICO and the European Data Protection Board.

Business as usual after Brexit

Whilst Brexit remains in a state of flux, as a UK business with international operations and overseas customers, it is important to evaluate the potential impacts of legal changes and consider your data flows and the subsequent steps you could take to help maintain business as usual after Brexit.

Should you have any Brexit, GDPR or data protection queries, please contact Kingsley Napley’s Brexit or Data Protection teams.