On September 11, 2020, the UK concluded a free trade agreement (FTA) with Japan: the UK-Japan Comprehensive Economic Partnership Agreement. This was the UK’s first major trade deal as an independent trading nation outside of the EU. Key points of interest for digital and Fintech sectors include:
- Cutting-edge digital & data provisions that go far beyond the EU-Japan deal. These will enable free flow of data whilst maintaining high standards of protection for personal data. The government has also committed to uphold the principles of net neutrality, as well as introducing a ban on data localisation, which will prevent UK businesses from having the extra cost of setting up servers in Japan. This is intended to help UK fintech firms operating in Japan to innovate and grow. TechUK welcomed the announcement of the FTA with its “comprehensive digital trade chapter”.
- Improved market access for UK financial services. This includes greater transparency and streamlined application processes for UK firms seeking licences to operate in Japan. The deal creates an annual dialogue between HM Treasury, UK financial regulators, and the Japanese Financial Services Agency that will explore ways to further reduce regulatory friction.
Further details are available here. The UK Parliament and Japanese Diet will now need to ratify the FTA with a view to its entry into force at the end of the transition period for EU withdrawal.