March 3, 2020
Brexit will change almost every core function for UK companies that do business with the EU: from trade to regulation, hiring and transport, there’s nothing that goes untouched by the withdrawal from the EU and the single market.
Data protection is unlikely to be at the forefront of companies’ minds during this period, but there are real issues facing UK-based data controllers and processors thanks to the GDPR.
Once the transition period ends, the UK could be a third country, which means data transfers will become infinitely more complicated.
Here’s what you need to know about the GDPR and Brexit.
Will the GDPR Apply After Brexit?
Yes, the GDPR will still apply to UK businesses after Brexit because it is a European regulation that protects individuals in Europe. However, there will be two differences for all British people and businesses.
First, people in the UK no longer fall under the protections of the GDPR. As a result, you will not need to uphold the rights of the data subjects among UK residents, even if they are European. The GDPR covers their domicile, not their nationality.
Second, UK organisations will still need to meet the demands of the GDPR if they process data from data subjects who are in the EU. As a result, most UK organisations will still need to be GDPR compliant regardless of any trade or Brexit deals. This is already true for third party countries, of which the UK will soon be one.
The third party country status will be a significant change for UK data controllers and processors because you will need to prove that you handle data in a way that’s conducive to the GDPR.
The UK: A Safe Place for Data Post-Brexit?
The GDPR requires any third country data transfers to be (1) declared and (2) to occur only with countries designated as ‘adequate’ by the European Commission.
Countries with adequacy are those that use an EU-equivalent level of data protection. As a result, they aren’t bound by Article 46 and 47, and data flows between the EU and these countries without limits or checks. At present, countries recognized as being adequate for data transfers include Andorra, Argentina, Faroe Islands, Guernsey, Israel, Isle of Man, Jersey, New Zealand, Switzerland, and Uruguay.
The U.S., Canada and Japan are also included, but there are limitations to data transfers to these three countries. In Canada, only commercial organisations benefit. Additionally, the US-EU Privacy Shield only recognises transfers from U.S. companies who sign up to the framework. In Japan, the adequacy decision only covers private sector organisations.
What comes next for the UK will depend on any data protection agreements worked out in the transition period. The UK already uses the Data Protection Act 2018, which issued requirements similar to the GDPR in terms of privacy and transparency.
However, the most comprehensive understanding of what will be the UK version of the GDPR can currently be found in the Data Protection, Privacy and Electronic Communications (EU Exit) Regulations 2019.
Will Companies Be Able to Send Data Between the UK and the EU?
At present, the UK government does not intend to consider the EU a third party country in terms of UK data processing. As a result, UK companies are able to continue sending data to the EU. However, the EU has not reciprocated this commitment, which means that EU data transfers to the UK will face restrictions.
The results are likely to be messy. UK-based organisations will struggle to serve customers within the EU. It will also present unique challenges on the island of Ireland as well as for Gibraltar/Spain, where ties with the EU are intimate.
Lifting the restrictions will depend on the UK and each relevant company meeting the EU’s safeguards for supporting data transfers. The requirements for third country data transfers are detailed in Chapter V of the GDPR.
When Will the Data Transfer Rules Change?
The Withdrawal Agreement acknowledged by the EU and the UK government stipulated a transition period to last from January 31, 2020 to December 31, 2020. During this period, the UK agrees to continue following EU laws and regulations despite the ‘exit’ taking place in January.
As a result, data transfers (and the provisions or rights) will continue as normal for both EU and UK companies and residents for the duration of 2020.
On January 1, 2021, the UK will no longer fall within the category of a ‘Member State’ and will then become a third country.
However, there will not be a clean break. Any EU-originating data in the UK prior to the end of the transition period still benefits from the GDPR as written and amended by the EU. The product is a backstop that continues to protect the privacy of individuals in the EU regardless of the outcome of negotiations for 2021 and beyond.
Ideally, the GDPR will then be superseded by the UK’s adequacy decision, granted by the EU.
Will UK Companies Need an EU Representative?
If your UK company won’t have an EU office and you intend to accept the data of individuals in the EU (including UK citizens living within the EU), then you will need to appoint an EU representative.
An EU representative is not a Data Protection Officer (DPO). Instead, an EU representative is a natural person or body within the European Union who is able to communicate with individuals in Europe, as well as regulators, and potentially the European Commission, on your behalf. (A DPO works with your company or organisation to facilitate compliance.)
UK companies will not already have an EU representative because there is no need for one. It will be a new position given that the UK is understood to be a ‘Member State’ for regulatory purposes until January 1, 2020.
To be compliant with the GDPR, you will need a representative in place by the end of the transition period.
The Relationship Between the GDPR and Brexit is Not Yet Settled
During the transition period, the GDPR continues to apply to the UK. However, the relationship between the GDPR and Brexit beginning in 2021 is unsettled. Once the UK is no longer a ‘Member State,’ it becomes a third country, and it will need to negotiate adequacy status with the EU. What this entails and how long it will take is largely up in the air, as both parties must agree.
Are you a UK-based data controller or data processor wondering about what comes next on January 1, 2021? EDPO can help you fulfill your need to appoint an EU representative, which will keep you compliant with the GDPR. Take our quick assessment to find out if Article 27 will apply to your data processing activities after Brexit.
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