Overview

Brexit refers to the United Kingdom’s (UK) decision to leave the European Union (EU) following a referendum in June 2016.

What has happened since the referendum?

The UK left the EU on 31 January 2020 and entered a transition period under the terms of the EU-UK Withdrawal Agreement (agreed on 17 October 2019) in which EU law continued to apply to the UK. The transition period ended on 31 December 2020 and the UK’s relationship with the EU is now governed by the terms of the Withdrawal Agreement and the EU-UK Trade and Cooperation Agreement (agreed on 24 December 2020).

Brexit has changed the way goods are traded, the transfer of personal data between the EU and the UK, the provision of services, and the movement of people.

The UK Government’s guidance on planning for Brexit and the related technical notices remain relevant to assist businesses in planning for these new arrangements.

More information on IBM’s planning is available below.

IBM’s Brexit Plan

IBM has a long history of innovation in the UK and it remains one of our most important markets. For over 100 years, IBM has developed new advances in technology that continue to positively impact the country’s essential services and the everyday lives of UK citizens. We are proud of our investment in the UK and our people who work tirelessly to break new ground every day.

To support this commitment, we began analysing our business operations and taking proactive measures to prepare for various Brexit scenarios even before the referendum in 2016.

IBM’s approach to Brexit is focused on minimising disruption to the delivery of service to our clients and partners and the overall operation of our business. We have executed our plans to do this and are confident in their efficacy.

Free Movement of Goods

The trading relationship between the UK and the EU is now governed by the EU-UK Trade and Cooperation Agreement. The UK has left the EU Customs Union and new customs and other administrative controls have been introduced.

Possible Impact

IBM imports goods into the UK from the EU and vice versa and, as such, could be impacted by an end to the free movement of Goods. The key impacts expected are in the areas of Customs Clearance and Export Compliance, and we have comprehensive plans in place to deal with these considerations. We do not anticipate any impact from tariffs as the Information Technology Agreement (ITA) rates continue to apply.

Free Movement of Services & Data

The EU-UK Trade and Cooperation Agreement has introduced a ‘Bridging Mechanism’ which permits the continued free transfer of personal data from the EU to the UK for a period of 4 months (extendable to 6 months). This is to allow time for an adequacy determination to be made by the European Commission.

As a sensible precaution the UK Government has recommended that, during this bridging period, companies which transfer EU personal data to the UK put in place alternative transfer mechanisms to safeguard against any interruption to the free flow of personal data.

The UK Government is continuing to permit transfers of personal data from the UK to the EU.

Possible Impact

An ‘adequacy’ finding during the bridging period will mean that transfers of personal data from the EU to the UK can continue uninterrupted. In the absence of an ‘adequacy’ finding personal data would no longer move freely between the EU and the UK. Companies would need to use additional measures, such as Standard Contractual Clauses or Binding Corporate Rules, in order to continue to transfer personal data across borders in a lawful way. Protecting the privacy and security of client data is of utmost importance to IBM and we have already taken steps to address this possible impact by implementing appropriate transfer mechanisms.

Free Movement of Labour

Post Brexit, the automatic right to work across Europe no longer exists for EU citizens in the UK, and for UK citizens in the EU. Independently, the UK government has committed to implementing the EU Settlement Scheme, which will allow all EU citizens who are legally resident in the UK to apply for the Scheme and secure their status in UK law.

Possible Impact

IBM employs EU nationals in the UK and also moves personnel into and out of the UK from the EU on a temporary basis. Similarly, IBM employs UK nationals in the EU and also moves personnel into and out of the EU from the UK on a temporary basis. IBM’s extensive global talent pool and well-established practices for deploying resources from around the globe, combined with the UK’s EU Settlement Scheme, mean that impacts to IBM will be very limited.

Free Movement of Capital

As it currently stands, the EU-UK Trade and Cooperation Agreement makes no provision for access to the EU Single Market by UK financial services firms.

Possible Impact

Restrictions to the free movement of capital could impact IBM through increased regulatory reporting, additional fees for cross border payments, and currency volatility. IBM has monitored these impacts closely and has implemented comprehensive plans to deal with any impacts in a way that minimises any residual impact on our clients. IBM continues to maintain banking relationships across Europe.

Frequently Asked Questions

General

Do you have a working group considering the impacts to your business of Brexit?

Yes. IBM began considering the implications prior to the 2016 referendum and has been following the progress of negotiations while accelerating implementation of contingency plans over the interim period.

Have you considered the disruption to your company's supply chain including any vulnerabilities of your suppliers and sub-contractors following Brexit?

We have assessed the potential impact on our supply chain and have completed a review of our suppliers to ensure that any vulnerabilities are managed.

Can IBM help my organisation with our own planning now that the UK has withdrawn from the EU?

IBM’s consulting organisation has been working with many of our clients to help them prepare for Brexit. For example, we are helping them prepare for changes in the movement of goods by implementing solutions that provide better visibility of their entire supply chain and updating their systems to interface with new import and export systems. We are also helping clients manage the movement of data across borders with solutions that track the lineage and permissions associated with customer data. For further information on how IBM can assist your organisation, please contact Jon O’Donnell at Jon.odonnell@uk.ibm.com.

Movement of Goods

Do you have experience of handling customs declarations for goods imported into the UK and how do you plan to handle post Brexit?

IBM holds Authorised Economic Operator status and has substantial experience importing goods into the UK from our manufacturing facilities around the world. We expect this to continue. We have a plan in place to handle any increase in the number of transactions which require customs declaration.

What is Authorised Economic Operator status?

Authorised Economic Operator status is an internationally recognised quality mark that shows our role in the international supply chain is secure and that our customs controls and procedures are efficient and meet EU standards. It gives quicker access to some simplified customs procedures and, in some cases, the right to ‘fast-track’ shipments through some customs and safety and security procedures.

Will there be an impact to IBM on the provision of goods into the UK?

Our current assessment is that there may be a potential impact to allow for additional import checks or as a result of border delays, but we expect to be able to manage these within our existing supply chain and planning processes.

What actions are you taking to avoid delays in the provision of spare parts?

We have assessed the changes necessary for the delivery of spare parts and have worked with our logistics partners to adjust our processes, including increasing local parts stocks in the UK, to be able to continue to meet service level commitments.

Are the physical goods that you import/export EU to UK / UK to EU exempt from duties due to the Information Technology Agreement, or other preferential agreements?

Yes. We expect the World Trade Organisation’s Information Technology Agreement to apply.

As some of your goods and services are sourced beyond Europe what mitigations are planned, post Brexit, for continued supplies?

IBM does not expect any material issues affecting the supply of goods and services that are sourced beyond Europe.

Movement of Services & Data

How do you believe Brexit will impact the movement of data?

The EU-UK Trade and Cooperation Agreement has introduced a ‘Bridging Mechanism’ which permits the continued free transfer of personal data from the EU to the UK for a period of 4 months (extendable to 6 months). This is to allow time for an adequacy determination to be made by the European Commission.

An ‘adequacy’ finding during the bridging period will mean that transfers of personal data from the EU to the UK can continue uninterrupted. In the absence of such a finding personal data would no longer move freely between the EU and the UK and companies would need to use appropriate transfer mechanisms.

Can companies continue to rely on existing mechanisms for transfers of personal data from the UK to other third countries?

Companies in the UK can continue to use EU Model Clauses (Standard Contractual Clauses) for the transfer of personal data to other third countries. This is set out in the UK Statutory Instrument: “The Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019”.

What about transfers to the United States?

IBM will continue to make use of EU Model Clauses to permit transfers to the United States.

What will happen when an IBM sub-contractor is acting as a sub-processor of personal data?

IBM has standard contractual clauses in place with these sub-contractors and has updated these to reflect the UK’s withdrawal from the EU.

How will IBM transfer data for which it is the data controller?

IBM has binding corporate rules approved which allow multinational companies to transfer personal data internationally within the same corporate group and has also agreed to EU Model Clauses (Standard Contractual Clauses), both within the IBM group of companies and with vendors. IBM will continue to make use of these mechanisms post-Brexit.

Movement of People

For any resources located outside of the UK and within the EU, do you have a plan of action?

IBM has extensive global resources and established practices for deploying resources from around the globe into the UK.

Will there be any impact on your UK employees who are non-UK EU nationals?

Through its EU Settlement Scheme, the UK Government has committed that EU nationals currently living and working in the UK can continue to do so regardless of the outcome of the Brexit negotiations.

What immigration system do you expect the UK to have in place post Brexit?

On 22 October 2020, the UK Government published a new Statement of Changes in Immigration Rules, detailing amendments that will take effect under the UK’s new points-based immigration system.

Disclaimer

The implications and impacts of Brexit remain far from certain. Information regarding IBM's plans and preparedness for Brexit are subject to change or withdrawal without notice. IBM will endeavour at its sole discretion to ensure that information contained on this web page is current, but offers no representation or warranty that this is the case. IBM does not provide legal advice.