Even though celebrations to welcome in 2021 were rather muted in light of the ongoing pandemic, the New Year did bring some good news to businesses in the United Kingdom and the European Economic Area (EEA) in respect of personal data transfers.
Prior to the end of the Brexit transition period, the issue of how to ensure ongoing personal data transfers from the EEA to the UK in 2021 was causing a headache for many businesses. Although the UK’s position was that transfers of personal data to the EEA could continue as usual without any additional legal hurdles after Brexit, this position was not mirrored by the European Union in respect of flows of personal data from the EEA to the UK.
While the last-minute post-Brexit Trade and Co-operation Agreement between the EU and the UK does not grant an adequacy decision to the UK in respect of transfers of personal data, Article FINPROV.10A does provide for a grace period for transfers of personal data from the EEA to the UK. Initially this grace period will last for four months, unless in that time the UK has obtained an adequacy decision from the EU in respect of data protection. If it hasn’t, then the grace period will be extended by a further two months (provided both the UK and the EU agree) to allow further time to finalise an adequacy agreement.
This is welcome news to businesses, who can now continue to transfer personal data between the UK and the EU for the next four to six months without requiring additional measures as a result of the UK having become a ‘third country’. The fact this has been agreed gives a positive indication that both sides are serious about reaching an adequacy decision as soon as possible. However, there is no guarantee an adequacy decision will be reached, and the grace period will only continue as long as the UK does not amend its own data protection legislation to diverge from rules applicable in the EU. Organisations for whom such data transfers are critical would therefore be well advised to consider alternative arrangements in case no such adequacy decision materialises by the end of the grace period.
For the duration of the specified period, transmission of personal data from the [European] Union to the United Kingdom shall not be considered as transfer to a third country under [European] Union law, provided that the data protection legislation of the United Kingdom on 31 December 2020 [...] applies and provided that the United Kingdom does not exercise the designated powers without the agreement of the [European] Union within the Partnership Council.