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The Data Protection Bill, Brexit and Data Transfers

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Matthew Harris (United Kingdom), Partner of EuroCloud CPC Network

The Data Protection Bill (Bill) will replace the Data Protection Act 1998 and will implement the General Data Protection Regulation (GDPR) into the law of England and Wales. The Bill is currently undergoing legislative review in the House of Lords (the upper house of the United Kingdom parliament).

Purposes of the Bill

The Bill performs two core functions.

  1. The Bill will implement the GDPR into the law of England and Wales and sets out the United Kingdom's derogations under the GDPR.
  2. The Bill will ensure that at the point the United Kingdom exits the European Union the United Kingdom will have a data protection regime which is largely aligned with that of the remaining European Union member states. 

Brexit

Following the referendum of 23 June 2016 and the United Kingdom's subsequent notification under Article 50 of the Lisbon Treaty, the United Kingdom's membership of the European Union is due to end on 29 March 2019, subject to any transitional or implementation period that may be agreed with the European Union (and ratified by its continuing member states).

Third country status and international transfers

At the point that the United Kingdom exits the European Union it will for the purposes of the GDPR become a third country. Therefore, transfers of personal data from a European member state to the United Kingdom will engage the provisions of the GDPR relating to the transfer of personal data to third countries (Chapter V). Organisations in European member states will still be able to transfer personal data to the United Kingdom, however, such transfers will need to meet the requirements of the GDPR in relation to transfers of personal data outside of the European Economic Area. 

Transfers on the basis of a decision of adequacy

The optimum position for the United Kingdom post-Brexit would be to obtain and maintain a decision of the European Commission that the laws of the United Kingdom provide an adequate level of protection for the rights of data subjects whose data are transferred to the United Kingdom.

A decision of adequacy would remove the need for an organisation which transfers personal data to the United Kingdom to rely on compliance mechanisms to ensure such transfers meet the requirements of the GDPR (for example, Standard Contractual Clauses and Binding Corporate Rules). Implementing such compliance mechanisms requires organisations to invest additional time and expenditure which will inevitably reduce the ease with which personal data can currently be transferred from mainland Europe to the United Kingdom.

Maintaining a decision of adequacy

The Bill will help to align the data protection regimes of the United Kingdom and the European Union on day one following Brexit, however, it does not guarantee that the European Union will recognise the adequacy of the United Kingdom's data protection regime. Two decisions of the Court of Justice of the European Union <<  Tele2 Sverige AB v Post- och telestyrelsen (C‑203/15) and Secretary of State for the Home Department v Tom Watson and others (C 698/15) >> illustrate Europe's concerns regarding elements of the United Kingdom's privacy regime. The CJEU held that the Investigatory Powers Act did not comply with the requirements of European Union Law.

Furthermore, decisions of the United Kingdom's courts could cause national data protection law to diverge from the GDPR which could prevent a finding of adequacy or call into question a finding of adequacy granted by the European Commission. 

Mind the gap

The United Kingdom's exit from the European Union is unprecedented and shrouded in uncertainty. We cannot be certain as to the length of time it will take for the European Commission to grant the United Kingdom a decision of adequacy, if at all. 

In theory, post-Brexit, it is conceivable that the United Kingdom could be without a decision of adequacy for a significant period of time and that organisations would need to implement appropriate GDPR compliant safeguards to facilitate the cross-channel flow of personal data. 

Challenges to Standard Contractual Clauses

Standard Contractual Clauses would appear to be the natural fall-back position for organisations in the absence of an adequacy decision. However, the future of the Standard Contractual Clauses remains uncertain given that the validity of the Standard Contractual Clauses has been called into question by Data Protection Commission v Facebook & Schrems.

Preparing for uncertain times ahead

It is impossible for organisations to foresee every scenario that may arise in connection with the cross-channel transfer of personal data but it does not mean that organisations cannot take simple practical steps.

  1. Identify existing agreements which will be in force beyond March 2019 and concern the transfer of personal data between the European Union and the United Kingdom. Consider remediating such agreements to includes provisions and mechanisms to facilitate the transfer of personal data in the event that the United Kingdom is not subject to a decision of adequacy.
  2. When entering into agreements which will be in force beyond March 2019 organisations should ensure that such agreements contain provisions which will enable the transfer of personal data in compliance with the requirements of the GDPR irrespective of whether the United Kingdom obtains a decision of adequacy.

 

Article provided by: Matthew Harris (Womble Bond Dickinson)

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