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Our article “United Kingdom and United States make progress towards data adequacy” explains the previous dialogue between the UK and the US concerning the free flow of personal data, which is currently restricted by complex and potentially costly data transfer mechanisms such as standard contractual clauses.
The ongoing discussions between the UK and the US have materialised into a commitment in principle to create a ‘data bridge’ which would allow UK and certain US companies to transfer personal data freely, facilitating and encouraging globalised trading.
The proposed framework will operate as an opt-in certification scheme for US companies which will be enrolled if they meet the necessary certification requirements.
UK exports are data-dominated and in 2021, 93% of the UK’s services exports were data-enabled, with £79b worth of these services being exported to the US, representing approximately 30% of the UK’s total data-enabled exports.
Whilst data exports to the US clearly make up a significant proportion of the UK economy and trade, these exports are currently mired in compulsory red tape in the form of standard contractual clauses and agreements which slow down the data transfers, leading to increased costs and inefficiencies.
Free data flows will, therefore, result in the relatively unhindered and seamless transfer of personal data between the UK and the US, whilst still serving to protect the rights of individuals, presenting significant advantages for UK businesses. The ‘date bridge’ will unlock new opportunities for collaboration, enhance operational efficiency, and drive economic growth. By enabling UK companies to transfer data to US counterparts with confidence, the ‘data bridge’ will encourage innovation and international trade and support the digital economy.
A formalised framework will also reassure UK businesses that their customers’ data is being transferred and stored safely and securely, promoting trust, and reinforcing their competitive position in the global marketplace. With the potential for reduced costs, increased productivity, and expanded market reach, the free flow of personal data between the UK and the US opens doors to a brighter future of enhanced business partnerships and shared prosperity.
The UK and the US have set a number of objectives to be addressed in 2023 centred around collaboration, promoting secure and reliable communication systems and strengthening relationships across a range of industry sectors and use of technologies.
Representatives from the UK and the US are set to meet again in January 2024 to review the progress made and identify the next steps in achieving free data flows between the two countries.
In the meantime, however, the current transfer mechanisms must still be used for data transfers from the UK to the US and other territories.
If you are wanting to transfer data internationally, we strongly recommend you seek legal advice to ensure the correct instruments are being used to facilitate the transfer.
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