The UK-EU Trade and Cooperation Agreement sets the new terms of trade for business from 1 January 2021.
The new relationship enters into force from 1 January 2021. A limited number of the new rules will be phased in over time, however for the majority of business activities the UK-EU TCA will apply immediately.
While any relationship outside of the EU Single Market and Customs Union cannot be frictionless, the deal contains a number of positive aspects for the tech sector which go above and beyond comparable EU free trade agreements.
Key elements for UK tech companies:
- Tariff and quota free trade and importing and exporting goods
- Data adequacy, the rules for transferring personal data between the UK and EU
- The digital trade chapter, the rules for doing business via digital channels
- Telecoms, mobile roaming and net neutrality
- Cyber security
- Providing services, professional services and the movement of workers to deliver services
- Financial Services
- European programmes
- Moving goods to, from and through Northern Ireland
Two key areas are covered in more detail below.
Data adequacy, the rules for transferring personal data between the UK and EU:
The transfer of personal data between the UK and EU is no longer allowed by default due to the UK’s departure from the EU.
During the transition period the UK was being assessed to determine if UK data protection laws offer an equivalent level of protection to the EU’s own. If deemed adequate, then personal data can continue to be transferred without taking extra steps beyond complying with the data protection laws of the jurisdiction the company is based in (i.e. the UK GDPR or the EU GDPR).
Alongside the UK-EU TCA the UK and EU published a statement allowing a further, up to six-month, bridge period to allow for the completion of a UK adequacy decision. During this period data can flow as it did when the UK was an EU member.
Further details on data, adequacy and the future relationship, as well as information on what to do if adequacy is not granted can be found here.
The digital trade chapter, the rules for doing business via digital channels:
A digital trade chapter agreed between the UK and the EU sets the terms under which businesses can provide products and services to each other via digital channels, such as over the internet. The EU does not normally agree full digital trade chapters and the inclusion of this advanced digital trade chapter is an important step forward and victory for the UK and EU tech sectors who argued that high ambition on digital trade should be included in the agreement.
Data flows; the UK-EU TCA creates a positive obligation in favour cross-border data flows to facilitate trade in the digital economy, a significant evolution in EU trade agreements which tend to be more restrictive on data flows.
This includes a ban on data localisation meaning UK/EU based companies and public bodies cannot, (unless in very specific circumstances) require data used when providing a product or service to be stored in a specific jurisdiction. The UK-EU TCA also prevents one party, as a prerequisite to doing business, requesting to see the source code of applications used to provide a good or service.
Electronic contracts, signatures and providing services digitally; for the vast majority of services the UK-EU TCA gives equal treatment to electronic signatures and electronic documents versus paper-based documents. The UK-EU TCA also contains clauses that mean services can be provided digitally by default without requiring prior authorisation.
Please note there are some specific exceptions, for example certain kinds of legal services, gambling services and broadcasting services. A full list of exemptions can be found in the digital trade chapter.
Consumer protection, data protection and online harms; the digital trade chapter places obligations on companies to ensure the protection of consumers engaging in e-commerce as well as ensuring consumer protection bodies can cooperate and enforce breaches of UK and EU consumer rights. There are also additional clauses to protect individuals against unsolicited direct marketing communications.
The digital trade chapter contains a commitment for both sides to ensure high standards of personal data protection and does not limit the ability of the UK or EU from taking policy action to protection privacy or to regulate online harms.
Emerging technology and cooperation; the digital trade chapter contains a positive obligation for the UK and EU to cooperate on the development of emerging technologies such as (but not limited to) AI and quantum computing. This will support dialogue between regulators and other public and private bodies as new technologies are developed. A common understanding and cooperation in these areas should support research and product development as well as compatible market rules allowing for technologies developed in the UK or EU to more easily be sold in each other’s markets. This is an important addition and one that techUK strongly supported in the negotiations.
The digital trade chapter also contains a number of other obligations for cooperation as well as review clauses so that the chapter as a whole (or parts of it) can be updated in future, for example to adjust to new technological developments or evolutions in the way UK and EU companies engage in digital trade.
Please see here guidance and information on providing digital, technology and computer services between the UK and EU after the transition period.Source: techUK