In this article, SaleCycle’s In-House Counsel and Data Protection Officer Andrew Elves looks at some of the potential outcomes to the current Brexit impasse, and how they may impact online businesses.
The UK’s withdrawal from the EU is on everyone’s lips at the moment and it feels like you can’t avoid the topic. Not even the politicians know what the outcome of Brexit will be, but at the time of writing the UK is due to leave the EU on 29th March 2019, with or without a deal.
Below we explain the potential outcomes over the coming months and a few of the things that you may want to be thinking about.
The four potential outcomes of Brexit are:
The UK will leave the EU as of midnight on the 29th March 2019 with no agreement in place between the UK and EU to replace the current relationship. This is described as the cliff edge scenario.
In the event of a no deal, amongst other things the free movement of people, goods and data between the EU and UK will be affected.
The practical implications for supply chains are that this may hinder the movement of goods into and out of the UK, with additional customs checks slowing down the manufacturing of and delivery of goods between the UK and EU.
In addition, the free flow of data that is currently enjoyed between the UK and EU would be affected with the EU requiring Controllers and Processors to implement “adequate safeguards” for personal data transferring from the EU to the UK with the UK effectively becoming a “third country” for the purposes of international data transfers.
In the backdrop of GDPR this could be yet another compliance task that organisations need to contend with. However, the reality is much simpler than GDPR implementation with regulatory authorities recommending the use of EU Commission Standard Contractual Clauses to legitimise personal data transfer with the UK.
It is our view that this is the least likely outcome as there appears to be political will within London and Brussels to avoid a no deal scenario. However, a no deal would also have the biggest disruption on supply chains if it happened.
An Agreed Deal Between the UK Government and EU
This would result in a transition period lasting 21 months from the 29th March 2019* (subject to next section – Delayed Brexit).
In this instance a deal will have been reached between the UK and EU and throughout the transition period the EU and UK shall continue to work out the future relationship and allow further time for an orderly withdrawal from the EU for the UK.
EU law would continue to apply to the UK for the duration of the transition period, including free movement of people, goods and data and there should be no immediate impact on an organisation’s supply chain.
As the eventual outcome will be subject to months of further discussions, it’s impossible to say what the outcome would eventually be at the end of the transition period.
It is possible that the UK Government moves to delay Brexit and move the date from the 29th March 2019.
This will require the UK to pass an amendment in law to change this date and give the UK more time to agree a deal with the EU. Again in the event of a delay in Brexit, supply chains and data transfers will continue to operate as they currently do while the UK and EU agree what the future looks like.
There is the possibility that after all this recent uncertainty that there will be no Brexit at all, possibly after the UK has a further vote to decide whether Brexit is what the UK should do after all.
In this event, the UK would revoke their withdrawal from the EU and stay within the EU Customs Union and Single Market. Things would remain as they are and nothing would change from the current position to supply chains, the movement of workers or transfer of data.
There is still plenty of political wrangling to continue both within UK and between the UK and the EU before any outcome of Brexit is clear.
Brexit provides challenges and opportunities for businesses around the world that should be faced and grasped to provide them with a competitive advantage over the coming months and years.
Here at SaleCycle, we have been thinking about this for some time and we are naturally preparing for each outcome, ready to react to each possibility to ensure the seamless flow of our services.
Our Legal and Compliance teams are monitoring developments both in the UK and the EU and one thing is for sure, this will remain on everyone’s news channel for quite some time to come.
For further reading on this topic see the UK Information Commissioner Office website and their recent blog: https://ico.org.uk/about-the-ico/news-and-events/blog-how-will-personal-data-continue-to-flow-after-brexit/
Views expressed within this blog post is opinion and does not constitute legal advice.