While we wait to see what the BREXIT result will mean for the UK’s data protection regime, it is important to recognize that the result will not change anything immediately. The exact nature of the post-BREXIT UK-EU relationship will influence any UK data protection reform, and it is highly likely that the UK will continue to be heavily influenced by EU laws. Indeed, the UK’s data protection authority (the ICO) has emphasized that “international consistency around data protection laws and rights is crucial both to businesses and organisations and to consumers and citizens.”

So what should you be doing now?

Prepare for the GDPR and changes to UK data protection laws

Data controllers established in the UK processing personal data in the context of that establishment are currently subject to the UK’s Data Protection Act (DPA). Once the EU’s General Data Protection Regulation (GDPR) comes into effect on May 25, 2018, the UK will still be a member of the EU and so the GDPR will automatically replace the DPA. UK companies will then need to comply with the new regime until BREXIT occurs. Following that, the GDPR will fall away but we do not yet know what form any replacement legislation will take.  If the UK wants to continue trading with other EU Member States, it will likely need to adopt legislation similar to the GDPR (see further below). With this in mind, businesses should continue with their GDPR compliance preparations.

In addition, the GDPR will not only apply to businesses established in the EU, but it will also apply to businesses outside the EU that processes personal data of EU citizens, either by offering services or goods or from monitoring behavior. Therefore, following BREXIT, the GDPR will still apply to UK based businesses trading with the EU or targeting EU citizens. Such businesses therefore should continue their GDPR compliance efforts.

Consider where personal data is processed and transferred

EU data protection laws prohibit transfers of personal data to countries outside the European Economic Area (EEA), unless they have been recognized as providing “adequate protection” to personal data. Companies need to consider whether they receive data in the UK from global regions which are currently compliant based on the UK being within the EU or EEA.  If the UK is not classified as “adequate” post BREXIT, UK companies receiving data from the EEA will need to re-think their data protection compliance strategy and put in place adequate safeguards, such as Model Clauses and Binding Corporate Rules.

In addition, the converse (transfers outside the UK) may also be an issue and so companies should consider whether they send personal data from the UK and what compliance measures they may need to put in place. The new EU/U.S. Privacy Shield is due to be adopted early next week. Following BREXIT, the Privacy Shield will not cover transfers from the UK to the U.S. However, the ICO could approve the Privacy Shield as an adequate means of data transfer from the UK to the U.S., or it could establish a similar framework (e.g. like the U.S.-Swiss Safe Harbor framework).

Determine where the organization’s main EU establishment will be

Some GDPR provisions are dependent on the “main establishment” of a business being in the EU. Once the UK leaves the EU, a company with UK based headquarters will no longer count as the main establishment under the GDPR following BREXIT. This will affect a company’s lead data protection supervisory authority under GDPR for the purpose of enforcement and other reasons such as approval of Binding Corporate Rules.

It is hard to predict at the moment precisely the timing and scope of legal changes to the UK’s data protection regime resulting from BREXIT. We will continue to monitor developments closely and keep you fully informed and the post-BREXIT process unfolds.

SAVE THE DATE McGuireWoods Annual European Data Protection and Security Conference September 27, 2016 London

Learn more about data protection laws in light of BREXIT. The conference is designed for in-house counsel, risk managers, security officers, regulatory and compliance officers, directors, financial officers, information officers, human resource officers and managers of corporations with cross-border operations. A full agenda is under development, but topics and speakers from last year’s event can be viewed here.

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