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Digital Business Lawyer

Lords Report voices concern over data flows post-Brexit

The EU Home Affairs Sub-Committee of the UK House of Lords published on 18 July 2017 a Report entitled ‘Brexit: the EU data protection package,’ which follows discussions about possible barriers to UK trade and security if UK-EU data transfers are hindered post-Brexit. The Report lauded the UK Government’s objective of maintaining unhindered data flows with the EU, but stated that the Sub-Committee was “struck by the lack of detail on how the Government plans to deliver this outcome,” given that the result of the Brexit negotiations regarding cross border data flows will have major implications for UK-based international businesses.

Lorna Cropper, Senior Associate at Fieldfisher, suggests the Government’s lack of detail may be to preserve its Brexit negotiating position. “Without an appropriate transfer mechanism acting as a non-tariff trade barrier, UK businesses will face further disruption and negative impact,” said Cropper.

The Sub-Committee examined four elements of the EU’s data protection package to assess the options available to the UK Government for securing uninterrupted data flows between the UK and the EU post-Brexit: the GDPR, the Police and Criminal Justice Directive, the EU-US Privacy Shield, and the EU-US Umbrella Agreement. A key finding of the Report was that there was consensus among the Sub-Committee’s witnesses that the most effective way to achieve unhindered flows of data post-Brexit would be to secure adequacy decisions from the EU Commission that the UK’s data protection rules offer an equivalent standard of protection to that available within the EU. Hazel Grant, Partner at Fieldfisher, comments however that much is made in the Report of how a finding of adequacy cannot be made until the UK is already a third country, but perhaps, suggests Grant, “the arrangements could be put in order for an agreement of adequacy in principle, with a given period during which the UK must meet certain criteria to actually achieve adequacy.”

The Report discusses possible alternatives to securing an adequacy decision, which includes individual data controllers and processors implementing their own equal data protection standards and establishing data flows with the EU independently, using Standard Contractual Clauses (‘SCCs’) and Binding Corporate Rules (‘BCRs’). “I think that the Government are well aware that they will not get an adequacy decision immediately on Brexit and so are hedging their bets on solutions like SCCs or BCRs,” thinks Robert Bond, Partner at Bristows. “Having said that, many international businesses already trade data within and outside the EU and so may have suitable contractual clauses in place.”

The Report suggests it is imperative that the UK Government consider how best to replace the structures and platforms that have allowed it to influence EU rules on data protection and retention, which should start with the Government securing a continuing role for the ICO on the European Data Protection Board. “The current Information Commissioner has already publicly taken a stance to toughen enforcement of privacy laws in the UK, issuing fines to a number of businesses and showcasing a genuine direction of travel to the higher standards and requirements of the GDPR,” comments Liz Fitzsimons, Partner at Eversheds Sutherland.

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