Can My Small Business Send Personal Data Outside Of The UK?

Business is becoming increasingly global, which can hugely benefit a small business. For example, you may be able to find savvy suppliers who are overseas and can deliver services at more cost-effective rates. Small companies may need to transfer personal data to partners or service providers outside the UK. A key example would be sending your client’s details (such as their names and email addresses) to an overseas supplier. The UK General Data Protection Regulation (UK GDPR) sets strict rules to ensure that data is protected and secure when sent overseas. 

Understanding the strict rules around international data transfers is essential for protecting your business from risk and avoiding potentially severe penalties. This article explores key issues to consider if your small business wants to send personal data outside the UK. 

What Is the UK GDPR?

The UK GDPR  is a comprehensive legal framework that governs how organisations can use personal data in the UK. 

Under the UK GDPR, personal data refers to any information that can identify an individual, whether directly or indirectly. Personal data includes names, email addresses, phone numbers, IP addresses, and other data. If your business collects, processes, or stores such information, you are legally obliged to protect it and ensure compliance with the UK GDPR rules. 

What Does the UK GDPR Say About Transferring Personal Data Internationally?

The UK GDPR allows businesses to transfer personal data outside the UK, but only if they ensure that the relevant data remains protected to a standard equivalent to that within the UK. 

When transferring data internationally, note that you must consider a range of requirements and rules. This is a very complex area of law that businesses can often struggle with.

Simply put, your business may send personal data to a country with adequate data protection laws or implement specific legal measures, known as appropriate safeguards, to protect the data you are transferring. We explore these issues further below. 

Failing to comply with mandatory UK GDPR rules can result in severe penalties, including substantial fines and reputational damage. Such consequences could devastate small businesses, and ensuring compliance with these rules is vital. 

What are Adequacy Decisions?

The most straightforward way to transfer personal data outside the UK is to send it to a country that the UK government has determined to have an “adequate” level of data protection. The UK government grants an adequacy decision when it assesses that a country’s data protection laws offer protections comparable to those in the UK.

Currently, countries with adequacy decisions include all EU and European Economic Area (EEA) member states and EFTA states, Andorra, Argentina, Canada (for commercial organisations), the Faroe Islands, Guernsey, Israel, Japan (for private-sector organisations), Jersey, New Zealand, Switzerland, and Uruguay. The US also has a partial adequacy decision under the UK-US Data Bridge. 

When you transfer data to any of these countries, you do not need to take any additional steps. However, you should periodically check which countries have an adequacy decision, as this list could change. 

Implementing Appropriate Safeguards for Non-Adequate Countries

Suppose your business needs to transfer personal data to a country that does not benefit from an adequacy decision. In that case, you must implement ‘appropriate safeguards’ to protect the data according to the same UK data protection law standards. There are various safeguards you could implement. There may also be other exceptions you can rely on, though they are rare in practice. 

The International Data Transfer Agreement (IDTA) will likely be the most practical and accessible safeguard for small businesses.

The IDTA is a legal contract drafted for UK businesses that you can use as a safeguard to transfer personal data to countries without an adequacy decision. By entering into an IDTA with the recipient business (e.g. a supplier) in the third country you are sending data to, both parties agree to comply with various data protection standards equivalent to those in the UK. The IDTA offers flexibility, and you may tailor it to suit your business’s needs. 

While the IDTA may be the most accessible tool for small businesses, you should be aware that other safeguards are also available. For instance, there are different methods, such as Binding Corporate Rules. However, they are generally more suited to larger businesses with group companies. If you share personal data with US companies, there is also the possibility of relying on a mechanism known as the UK-US Data Bridge. A data protection lawyer can guide you further on these mechanisms.

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Conducting a Transfer Risk Assessment

Your business must conduct a transfer risk assessment (TRA) before transferring personal data to a country without an adequacy decision. 

TRA is essential when an organisation plans a ‘restricted transfer’ of personal data to a country outside the UK under Article 46 of the UK GDPR. The primary purpose is to assess risks such as unauthorised access when transferring data abroad. 

Organisations must conduct this assessment when using tools such as the IDTA. Since the process can be complex, seeking advice from a data protection lawyer is advisable.

Key Points to Consider for Small Businesses on International Data Transfers

It is essential to realise when making a potential international data transfer. You may not realise you are transferring personal data overseas. However, you should always look into this carefully and seek legal advice if you need clarification. 

When transferring personal data overseas, it is essential to remember that this can be a high-risk activity. For example, if you find a cloud services provider in the United States and plan to share UK customer data with them, you must follow the relevant UK GDPR rules. If you breach these rules, you could face consequences. 

Non-compliance with the UK GDPR can lead to severe penalties, including fines and reputational damage. This can be particularly devastating for a small business. 

The complexities of international data transfers can be challenging to navigate, particularly for small businesses without legal or compliance teams. 

Given the high risks of transferring personal data overseas, obtaining legal advice can be invaluable. A data protection lawyer can guide you through the complexities of international data transfers, helping you ensure that your business remains compliant with UK GDPR. A data protection lawyer can also advise you on whether your company is carrying out international data transfers and the steps it needs to take for UK GDPR compliance. 

Key Takeaways 

Small businesses can legally transfer personal data outside the UK but must strictly comply with the UK GDPR when doing so. If the destination country does not have an adequacy decision, implementing appropriate safeguards like the International Data Transfer Agreement (IDTA) is vital. Conducting a Transfer Risk Assessment (TRA) is also crucial to protect the data. Given the complexities involved and the high stakes of non-compliance, seeking legal advice can help you navigate these requirements and protect your small business from risk.

If you need help understanding the rules on transferring personal data overseas, LegalVision’s experienced data privacy lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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