The United Kingdom’s (UK) exit from the European Union (EU), more popularly known as “Brexit,” will have broad ramifications for IT organizations on either side of the Channel. Among those ramifications are new challenges regarding data sovereignty and data privacy involving the Personally Identifiable Information (PII) of UK and EU citizens.
Brexit and Data Sovereignty
Data sovereignty is the idea that digital data is subject to the laws of the location where it is stored. When data is stored in an EU member nation, it is subject to EU laws—in particular, the General Data Protection Regulation (GDPR). Since the UK is currently a member of the EU, data in the UK is subject to EU laws and regulations.
Once the UK leaves the EU, however, their respective data storage laws may not be compatible with one another. In fact, the Information Commissioner’s Office (ICO), an independent body established by the UK to uphold information rights, has confirmed that the GDPR will have to be adopted into UK law in order for data to be transferred between the UK and the EU.
In order to comply with the GDPR, the UK will have to establish an international agreement with the EU, similar to the US-EU Safe Harbor Agreement in 2000 and the Privacy Shield Agreement in 2016.
Let’s look at three unique implications Brexit will have for IT organizations based upon where an organization conducts business and whose data it is handling:
- For Organizations Operating Solely in the UK
Data privacy and data sovereignty regulations are likely changing. Most likely they will be similar to the EU GDPR, but if the new regulations are stricter or in any way different, businesses in the UK will need to adjust their data policies and practices accordingly.
- For Organizations Operating in the UK and the EU But Not the US
For now, it’s business as usual – comply with the GDPR. Once the UK formally exits the EU and adopts its own regulations, however, companies operating in the UK might need to establish data centers in the UK and the EU in order to accommodate EU data sovereignty requirements. Naturally, these companies will now have to establish, manage and audit different data policies and practices for each location.
- For US-based Organizations Transferring Data between the US and the EU
For now, US-based businesses handling EU data can comply with EU data regulations either through model contracts (assuming these withstand the ongoing scrutiny of regulators) and the new Privacy Shield Agreement, which was recently ratified by the EU. After Brexit, US- and UK-based companies might need to negotiate separate agreements with one another, since any US-UK data transfer will no longer be covered by Privacy Shield.
Common to all these scenarios is the requirement for companies to pay attention to where the PII of residents of specific countries are stored, and to ensure that data is always handled in compliance with the appropriate regulations.
Further Complications and Potential Uncertainty
As complicated as this situation sounds, it may become more complicated yet. Consider the following variables:
- Scotland May Leave the UK and Rejoin the EU
Scotland held a similar referendum to exit the UK last year (citizens ultimately voted to remain) and in the Brexit vote, Scotland voted resoundingly to remain in the EU. Disappointed by the Brexit outcome, the Scottish government is now considering holding a second independence referendum to leave the UK in order to remain in the EU. If Scotland does rejoin the EU, the UK would be required to comply with the GDPR when processing the personal data of Scottish citizens.
- Northern Ireland may also decide to Leave the UK and Rejoin the EU
Weary of political partition and strife, Northern Ireland might want to eliminate the need for a guarded border between a non-EU region and the Republic of Ireland, which remains a member of the EU. (The Good Friday Peace Accords were premised on both countries being members of the EU and the border remaining open.) In addition, Northern Ireland’s economy is strongly linked to the EU – about 55% of its manufacturing goes to the EU, principally the Irish Republic. As with Scotland, if Northern Ireland returns to the EU, then on behalf of any Britain-based organizations storing PII belonging to a Northern Ireland resident, the UK would need to adopt GDPR or some other data protection law that the EU recognizes as giving adequate protection to personal data.
- Companies Will Move Staff and Perhaps Even Headquarters to Remain in the EU
If a UK address no longer provides tariff-free access to the EU market, manufacturers may close or relocate their operations. For example, Toyota, which produced nearly 200,000 cars last year in its Derbyshire plant, expects to pay 10% higher duties on cars as a result of Brexit. Those duties would not apply if Toyota’s factory was in the EU. Banks and financial services firms are also considering leaving London for Dublin, Paris, or Frankfurt. Vodafone, a telecommunications giant and the seventh largest company listed on the FTSE 100, has also announced it might move its headquarters outside the UK. These moves could have drastic ramifications on the UK’s tax revenues and unemployment rate.
Regardless of the scenario, Brexit is going to make the IT function a lot more complicated. UK-based businesses will have to, at bare minimum, adopt GDPR and devise new practices and policies to comply with a different set of data privacy and data sovereignty requirements.
kiteworks and Post-Brexit Data Sovereignty
Despite all of these shifting alliances and trade rules, businesses need to keep operating efficiently and securely. Their mobile workforces still need access to data and that data needs to be secure as it’s transferred from device to device and from region to region. Data security therefore needs to be policy-driven, detail-oriented, and highly configurable.
kiteworks offers enterprise organizations a secure file sharing and collaboration solution that enables secure internal and external sharing of enterprise information, and a development platform for designing and deploying custom enterprise applications to increase productivity, while ensuring data security and compliance.
The Advantages of a Tiered Architecture
The kiteworks platform features a flexible tiered architecture that enables Web, application, and data storage tiers to be deployed and scaled separately as needed. Any or all tiers may be deployed as private cloud services, giving enterprises full control over the security and locality of their data. This is critical for businesses that need to comply with the shifting data privacy regulations prompted by Brexit as well as the ratification of Privacy Shield.
The diagrams below show various deployments of these tiers, which can be configured to not only meet location-specific requirements for data sovereignty compliance but also to optimize performance.
The first diagram shows the kiteworks architecture with its separate tiers for web presentation, application logic, and storage. All three tiers are present whether the kiteworks platform is deployed as a virtual appliance or on physical servers in a data center or a cloud service.
![Brexit Diagram 01]()
In the next diagram, a company based in the post-Brexit UK needs cloud services for the UK and the EU. UK data is stored in the UK, and EU data is stored in the EU. Both locations benefit from a local, highly responsible web tier. But the company benefits from a common application tier, enforcing business policies and operational rules.
![Brexit Diagram 02]()
Any tier can be scaled independently to address demand.
The diagram below shows even more flexibility. Data is stored on-premises in Germany and Italy. As in the first example, a centralized application tier enforces business rules for the entire organization. And all three locations—the UK, Germany, and Italy—benefit from a locally hosted web tier, ensuring that mobile and desktop users in each location benefit from high performance.
![Brexit Diagram 03]()
Conclusion
To adapt to a post-Brexit world, organizations operating in the UK will need to be flexible. The multi-tiered architecture of kiteworks provides the flexibility they need, along with best-in-class content management services for today’s mobile workforce.
To learn more about how the kiteworks platform can benefit your company’s international IT requirements, please contact us.