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):
- Brexit Update
- Effect of “No Deal Brexit” on data transfers involving UK organisations
- Effect of transitional “withdrawal” agreement on data transfers
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 As such some of the summary set forth below could be quickly outdated and changed as events unfold.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.
