UK: Brexit Trade Deal Excludes Financial Services, With Data Sharing and Privacy Rules to Come

The Brexit withdrawal agreement officially transpired on January 31, 2020. But it was not until January 1, 2021, that a new trade deal went into effect with rules around how the UK and EU will work together. That trade deal brings several considerations for UK employers. Notable highlights include industry inclusions and exemptions from the deal, worker mobility rules, and data protection and privacy.

First, there are notable industry implications. Absent from the deal is the financial services industry, without any clear indicators for when a set date or plan may emerge. In the meantime, there will be no tariffs on trade between the UK and EU beginning January 1 of this year. However, the BBC reports, “Businesses offering services, such as banking, architecture and accounting, will lose their automatic right of access to EU markets and will face some restrictions.” Examples include new limitations around customs and immigration.

Another issue is that of worker movement. Many UK workers relocated to Europe last year, looking to obtain resident status before Brexit, although COVID-19 travel restrictions limited some of this activity. As such, cross-border remote workers may require new types of regulatory and immigration permissions. In addition, UK businesses with EU, European Economic Area (EEA) and Swiss citizens working for them need to know those workers need to apply for the EU Settlement Scheme by June 30, 2021, to continue residing in the UK after that date. (See related article on the updated points-based immigration system.)

The topic of security and data continues to develop in the region. Many rules around processing and storing personal data – ranging from a UK businesses’ EU customer’s IP address to corporate payroll details – are yet to be resolved. For the time being, a six-month transition plan allows for the continued free flow of personal data from the EU/European Economic Area to the UK. And, the General Data Protection Regulation, commonly known as GDPR, remains in place, maintaining high standards for data protection.

Takeaway: Regarding industry rules, a wait-and-see approach is needed. As UK Financial Services Leader at EY Omar Ali commented, “The focus for financial services firms now will be on what can be achieved through trade deals and regulatory cooperation with key financial services hubs across the world.” Regarding worker movement, carefully review new regulations around any plans to relocate UK workers to EU offices and shore up related compliance risks. And, consider that there is no automatic, mutual recognition of professional qualifications for now. On the data front, UK businesses will need to remain vigilant as updates are announced. A good resource to bookmark is the Information Commissioner’s Office page on international data transfers.

UK: Brexit Trade Deal Excludes Financial Services, With Data Sharing and Privacy Rules to Come

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