International Data Transfers Guide

There are restrictions under UK and EU data protection law when transferring personal data to organisations in other countries, and between the UK and EU.

The rules regarding restricted transfers can be an enigma to the uninitiated and their complexity has been magnified by Brexit and by an infamous 2020 European Court ruling known as ‘Schrems II’.

This guide aims to give an overview of what international data transfers are and the key data protection considerations. It does not cover all the intricacies, nor data transfers for immigration and law enforcement purposes. Also please be aware there may be specific restrictions in place under laws in other territories around the world.

As a general rule, controllers based in the UK or EU are responsible for making sure suitable measures are in place for restricted transfers to other controllers, or to processors. A processor will be responsible when they initiate the transfer, usually to a sub-processor.

Some might be thinking; what would be the impact if we just put all of this into the ‘too difficult’ tray? It’s certainly an area which many feel has become unduly complicated and an onerous paperwork exercise.

However, getting the detail right will pay off should things go wrong. For example, if a supplier you use based overseas suffers a data breach, the consequences may be more significant if you have not covered off legal requirements surrounding restricted transfers. It’s an area likely to come under regulatory scrutiny, in the event of a breach or should a complaint be raised.

What is an international data transfer?

An international data transfer refers to the act of sending or transmitting personal data from one country to another. It also covers when an organisation makes personal data available to another entity (‘third party’) located in another country; in other words, the personal data can be accessed from overseas.

There are specific rules about the transfer of personal data from a UK sender to a receiver located outside the UK (under UK GDPR) and similar transfers from EEA senders (under EU GDPR); these are known as restricted transfers. A receiver could be separate company, public body, sole trader, partnership or other organisation.

EU GDPR

Personal data can flow freely within the European Economic Area (EEA). A restricted transfer takes place when personal data is sent or accessible outside the EEA. Where such a transfer takes place, specific safeguards should be in place to make the transfer lawful under EU GDPR.

UK GDPR

A restricted transfer takes place when personal data is transmitted, sent or accessed outside the UK, and safeguards should be in place to ensure the transfer is lawful.

The reason for these rules is to protect people’s legal rights, as there’s a risk people could lose control over their personal information when it’s transferred to another country.

Examples of restricted transfers would be:

• Sending paper or electronic documents, or any kind of record containing personal data, by email or post to another country
• Giving a supplier based in another country access to personal data
• Giving access to UK/EU employee data to another entity in the same corporate group, based in another country.

There are some notable exceptions:

• Our own employees: A restricted transfer does not take place when sending personal data to someone employed by your company, or them accessing personal data from overseas. However, it does cover the sending, transmitting or making personal data available to another entity within the same corporate group, where entities operate in different countries.
• Data in transit: Where personal data is simply routed via several other countries, but there is no intention that this data will be accessed or manipulated while it is being routed via other countries, this won’t represent a restricted transfer. ICO guidance says; Transfer does not mean the same as transit. If personal data is just electronically routed through a non-UK country, but the transfer is actually from one UK organisation to another, then it is not a restricted transfer.

What are the safeguards for restricted transfers?

A. Adequacy

Adequacy is when the receiving country has been judged to have a similar level of data protection standards in place to the sender country. An Adequacy Decision allows for the free flow of personal data without any additional safeguards or measures.

Transfers from the EEA
The European Commission has awarded adequacy decisions to a number of countries including the UK, Japan, New Zealand, Uruguay and Switzerland. A full list can be found on the European Commission website – Adequacy Decisions.

Therefore personal data can flow freely between EEA countries and an ‘adequate’ country. These decisions are kept under review. There are some concerns UK Government plans to reform data protection law could potentially jeopardise the UK’s current EC adequacy decision.

EU-US Data Privacy Framework: The EC adopted this framework for transfers from the EU to US in July 2023.  It allows for the free flow of personal data to organisations in the US which have certified and meet the principles of the DPF. A list of self-certified organisations can be found on the U.S Department of Commerce DPF website.

Transfers from the UK
There are provisions which permit the transfer of personal data between the UK and the EEA, and to any countries which are covered by a European Commission ‘adequacy decision’ (as of January 2021). Therefore personal data can flow freely between UK and EEA and any of the countries awarded adequacy by the EC.

The UK Government has the power to make its own ‘adequacy decisions’ on countries it deems suitable for transfers from the UK. More information about UK adequacy decisions can be found here.

UK-US Data Bridge: The UK-US ‘Data Bridge’ was finalised on 21st September 2023 and goes live 12th October 2023. Like the EU-US Data Privacy Framework, organisations based in the US must self-certify to the DPF but they must also sign up to the ‘UK extension’. Read more about the Data Bridge

B. EU Standard Contractual Clauses

In the absence of an EC adequacy decision, Standard Contractual Clauses (SCCs) can be used which the sender and the receiver of the personal data both sign up to. These comprise a number of specific contractual obligations designed to provide legal protection for personal data when transferred to ‘third countries’.

SCCs can be used for restricted transfers from the EEA to other territories (including those not covered by adequacy). The European Commission published new SCCs in 2021 which should be used for new and replacement contracts. The SCCs cover specific clauses which can be used for different types of transfer:

• controller-to-controller
• controller-to-processor
• processor-to-processor
• processor-to-controller

There’s an option for more than two parties to join and use the clauses through a docking clause. More information can be found on the European Commission website – Standard Contractual Clauses

Two points worth noting:

• The deadline to update contracts which use the old SCCs has passed – 27th December 2022.
• Senders in the UK cannot solely rely on EU SCCs, see the point below about the UK Addendum.

C. UK International Data Transfer Agreement (IDTA) or Addendum to EU SCCs

Senders in the UK (post Brexit) have two possible options here as a lawful tool to comply with UK GDPR when making restricted transfers.

• The International Data Transfer Agreement, or
• The Addendum to the new EU SCCs

ICO guidance stresses; the new EU SCCs are not valid for restricted transfers under UK GDPR on their own, but using the Addendum allows you to rely on the new EU SCCs. In other words the UK Addendum works to ensure EU SCCs are fit for purpose in a UK context.

In practise, if the transfer is solely from the UK, the UK ITDA would be appropriate. If the transfer includes both UK and EU personal data the, EU SCCs with the UK Addendum would be appropriate, to cover the protection of the rights of EU as well as UK citizens.

It’s worth noting, contracts signed on or before 21 September 2022 can continue to use the old SCCs until 21 March 2024. Contracts signed after 21 September 2022 must use the IDTA or the Addendum to new EU SCC, in order to be effective. See ICO Guidance

The additional requirement for a risk assessment

The ‘Schrems II’ ruling in 2020, invalidated the EU-US Privacy Shield (predecessor of the Data Privacy Framework) and raised concerns about the use of EU SCCs to protect personal data. Concerns raised included the potential access to personal data by law enforcement or national security agencies in receiver countries.

As a result of this ruling there’s a requirement when using the EU SCCs or the UK IDTA to conduct a written risk assessment to determine whether personal data will be adequately protected. In the EU this is known as a Transfer Impact Assessment, and in the UK, it’s called a Transfer Risk Assessment (TRA).

The ICO has published TRA Guidance, which includes a TRA tool; a template document of questions and guidance to help businesses carry out a TRA.

D. Binding Corporate Rules (BCR)

BCRs can be used as a safeguard for transfers within companies in the same group. While some global organisations have gone down this route, it can be incredibly onerous and takes a considerable amount of time to complete BCRs.

BCRs need to be approved by a Supervisory Authority (for example the ICO in the UK, or the CNIL in France).  This has been known to take years, so many groups have  chosen to use EU SCCs (with UK Addendum if necessary) or the IDTA, in preference to going down the BCR route.

E. Other safeguards

Other safeguards measures include;

• Approved codes of conduct
• Approved certification mechanisms
• Legally binding and enforcement instruments between public authorities or bodies.

What are the exemptions for restricted transfers?

It may be worth considering whether an exemption may apply to your restricted transfer. These can be used in limited circumstances and include:

• Explicit consent – the transfer is done with the explicit consent of the individual whose data is being transferred, and where they are informed of possible risks.
• Contract – where the transfer is necessary for the performance of a contract between the individual and the organisation or for necessary pre-contractual steps.
• Public interests – the transfer is necessary for important reasons of public interest.
• Legal necessity – the transfer is necessary for the establishment exercise or defence of legal claims.
• Vital interests – the transfer is necessary to protect people’s vital interests (i.e. in a critical life or death situation) where the individual cannot legally or physically give their consent.

The ICO makes the point most of the exemptions include the word ‘necessary’. The Regulator says this doesn’t mean the transfer has to be absolutely essential, but that it “must be more than just useful and standard practice”. An assessment needs to be made as to whether the transfer is objectively necessary and proportionate, and can’t be reasonably achieved another way.

The regulatory guidance says exemptions, such as contractual necessity, are more likely to be proportionate for occasional transfers, a low volume of data and where there is a low risk of harm when the data is transfer.

The above is not an exhaustive list of the exemptions, further details can be found here.

There is no getting away it, international data transfers are a particularly complex and onerous area of data protection law! It pays to be familiar with the requirements and understand the potential risks.

Sometimes organisations will have little control over the terms under which they do business with others. For example, large technology providers might be unwilling to negotiate international transfer arrangements and will only proceed if you agree to their existing safeguards. A balance might need to be taken here on the necessity of entering the contract and the potential risks should restricted transfers not be adequately covered.