Regulatory Outlook | January 2022
Published on 26th Jan 2022
Welcome to our Regulatory Outlook. This revamped version of the Regulatory Outlook provides you with high-level summaries of important forthcoming regulatory developments to help you navigate the fast-moving business compliance landscape in the UK. Expect to see it in your inbox on a more frequent basis!
Key developments include:
- New climate-related disclosure obligations for large businesses as regulations are due to come into force on 6 April 2022;
- the grace period for CE markings on products placed in the GB market has been extended until 1 January 2023; and
- the deadline for compliance with strong customer authentication for e-commerce transactions is 14 March 2022.
Contents
Bribery, fraud and anti-money laundering
Environmental, social and governance
Advertising and marketing
The Online Safety Bill and DSA
The Joint Committee on the draft Online Safety Bill has published a report recommending major changes. The Bill will apply to "big tech" social media companies and search engines, and is intended to protect users against harmful content online.
The Committee has recommended that paid-for advertising be brought within the scope of the Bill and there is a strong likelihood that they will be adopted in the next draft. The Bill is expected to be presented to Parliament around March 2022. See more in our Insights on the Online Safety Bill.
In the EU, the Digital Services Act (DSA) continues to make its way through the legislative procedure. By way of reminder, the DSA will be a regulation in the EU and includes provisions around transparency of advertising. See Consumer law for more.
Ban on advertising cosmetic interventions to under-18s
due to come into force on 25 May 2022
Following a joint consultation which looked at the impact on body image and mental health, the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) announced a blanket ban on ads promoting cosmetic interventions to under-18s. Under the new rules, ads will not be allowed on TV, radio or non-broadcast programmes directed at under-18s or where under-18s make up at least 25% of the overall audience. The ban is due to come into force on 25 May 2022.
"Cosmetic interventions" are defined as "any intervention, procedure or treatment carried out with the primary objective of changing an aspect of a consumer's physical appearance, including surgical and non-surgical interventions, both invasive and non-invasive." CAP's updated guidance refers to these new rules and usefully includes examples of cosmetic interventions in scope and those out of scope.
Call for evidence into body image concerns
This call for evidence, which closed on 13 January 2022, was seeking to assist CAP and BCAP "in their regulation of advertising which gives rise to potential harms relating to body image concerns."
Evidence is sought on the types of ad content that give rise to body image concerns, the impact of advertising on body image concerns across different demographics, the impact of social media and influencer marketing, and the positive impact of advertising on such concerns.
Following this consultation, CAP and BCAP will outline the proposed next steps later this year.
Government plans to further regulate cryptocurrency advertising
The Treasury announced plans to legislate against misleading cryptoasset promotions on 18 January 2022. The plans aim to bring cryptoasset promotions in line with other rules for financial advertising to increase consumer protection while encouraging innovation.
The Financial Conduct Authority is expected to begin a consultation onto the proposed rules for cryptoassets soon. In the meantime, cryptoasset promotions remain a "red-alert priority" for the Advertising Standards Authority.
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Bribery, fraud and anti-money laundering
Law Commission to publish options paper on corporate criminal liability
Following its investigation into corporate criminal liability last year, which included the publication of a discussion paper and a public consultation, the Law Commission is to publish its options for reform to the government early this year.
Among other possible recommendations is the expansion of the scope of the "failure to prevent" mechanism of offending to include general economic crime. Depending on the content of the options paper, and the government's response to it, the Serious Fraud Office's ability to tackle corporate misconduct could be significantly affected.
EPC payment threats and fraud trends report 2021
Please see Consumer credit and payments.
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Competition
UK Digital Markets Unit
In 2020 the UK government launched its Digital Markets Unit (DMU), the new regulatory body set up to oversee "big tech" by imposing rules on players with "strategic market status". Since our previous Regulatory Outlook, the government has published its consultation: "A new pro-competitive regime for digital markets", in which it sets out its proposals for the DMU's powers.
The consultation has now closed and the responses are being analysed. The Competition and Markets Authority (CMA) published its response to the consultation in September 2021, supporting this new proposal. The government has committed to legislating for the DMU when parliamentary time allows. In the meantime, the CMA has been active in launching a series of investigations into big tech companies.
EU Digital Markets Act
As flagged in our previous Regulatory Outlook, in 2020 the EU published a draft of its Digital Markets Act (DMA), which aims to boost competition in EU digital markets. This introduces new rules aimed at regulating the conduct of online "gatekeepers", that is, players that determine how other companies interact with online users.
The DMA is moving full steam ahead on its path to approval this year. A draft of the legislation was approved for negotiation by the European Parliament on 15 December 2021 and is now set to be negotiated and agreed with EU Member States this year. For more on this, see our Insight.
National Security and Investment Act
The National Security and Investment Act came into effect in the UK on 4 January 2022. The Act creates a new stand-alone regime for the UK government to intervene in a broad range of transactions on national security grounds.
came into effect in the UK on 4 January 2022
Failure to notify a transaction where mandatory notification is required risks significant sanctions, including the transaction being voided, substantial fines and even criminal liability.
Further information on the Act can be found in our Insight and in government guidance. There is also government guidance providing details on how it will interact with other regulators such as the CMA, the Export Control Joint Unit and the Takeover Panel.
Vertical agreements
Manufacturers and brand owners across the UK and EU should be aware that significant changes to the existing regulation of their supply and distribution agreements will kick in as from 31 May 2022, when the EU Vertical Agreements Block Exemption Regulation (VABER) is replaced. More details of these changes can be found in this Insight.
Most recently, in October 2021, the CMA published its recommendation to the Department of Business, Energy and Industrial Strategy on the reforms to VABER. The CMA recommends that the Secretary of State replaces the retained VABER with a UK Vertical Agreements Block Exemption Order that will have a duration of six years.
While it is expected that the UK equivalent of VABER will largely track the changes being made by the EU, there are certain areas where the regimes look set to differ (for example, in relation to the rules around dual distribution). As a result, companies will need to consider both sets of rules if implementing distribution systems that cover both the EU and UK markets.
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Consumer credit and payments
EPC payment threats and fraud trends report 2021
On 6 December 2021, the European Payments Council (EPC) published its 2021 report which looks at the most important current payment threats and fraud trends. The report found that the main attack focus in 2021 has shifted away from malware to social engineering attacks. In particular, company executives, employees, financial institutions and payment infrastructures are increasingly preferred targets, rather than retailers and small and medium enterprises.
The EPC also warns that advanced persistent threats are one of the most lucrative types of payment fraud and must be considered as a potential high risk for payment infrastructures and large customers, including merchants.
HM Treasury consults on regulating BNPL
The HM Treasury launched a consultation setting out the approaches that could be taken towards the future regulation of interest-free buy-now-pay-later (BNPL) credit products.
The proposals in the consultation include: ensuring credit agreements lay out the terms of the deal at the point when people take them out, retailers promoting the services in a way that ensures consumers understand the risks, and the application of section 75 of the Consumer Credit Act – making BNPL providers jointly liable for the contract with the retailer in the same way as credit card providers.
Brokers of BNPL products and other short-term interest-free agreements are not currently "credit-broking" and not within the regulatory perimeter – although this could change once BNPL becomes regulated. Promotions of BNPL agreements will fall within the financial promotions regime. The government is seeking to amend the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 to this effect. Merchants would need approval for BNPL promotions from an authorised person to try to reduce consumer detriment from merchants not themselves being regulated.
Which?, as part of its January 2022 report, has called for stronger safeguards to protect consumers, including: steps at the checkout process to ensure people understand they are borrowing money when using BNPL, and that information about the risks of missed payments and credit checks be communicated to them at the point of transaction.
The consultation closed on 6 January 2022, and the feedback is being analysed. See more on this topic in our previous Regulatory Outlook and this Insight.
E-commerce transactions: deadline approaching
extending the deadline to 14 March 2022
In May 2021, the Financial Conduct Authority (FCA) announced that it was extending the deadline to 14 March 2022 for implementing Strong Customer Authentication for e-commerce transactions (that is, online card payments), taking into account the impact of the Covid-19 pandemic. (See our earlier Regulatory Outlook.)
That deadline is now rapidly approaching. Retailers with an online presence need to make sure they are ready sooner rather than later, and that they are managing their fraud risk appropriately in the meantime. Card issuers will also be starting to decline some non-compliant transactions from 18 January, with a view to avoiding a "cliff edge" scenario in March.
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Consumer law
European Commission publishes new guidance on Consumer Rights Directive, Unfair Commercial Practices Directive and Price Indication Directive
On 29 December 2021, the European Commission published new and updated guidance on three consumer protection directives. The changes reflect the updates introduced as a result of the Omnibus Directive. The Omnibus Directive will come into law in EU Member States from 28 May 2022.
In terms of the Unfair Commercial Practices Directive and the Consumer Rights Directive, the Commission has provided guidance on the new Omnibus-introduced rules and refreshed the guidance generally. The first ever piece of Commission guidance on the Price Indications Directive explains the scope and application of the Omnibus-introduced requirement that any announcement of a price reduction must also indicate the prior price of the goods.
The guidance will be of interest to UK traders selling to EU consumers, who will need to comply with these directives. However, even traders selling within the UK will be interested in the guidance as it summarises pre-Brexit case law which remains binding in the UK until either the relevant UK legislation is amended or the courts decide otherwise.
Digital Services Act
The EU's flagship content moderation legislation, the Digital Services Act, is being hotly debated in the EU Parliament at the moment. The legislation is intended to update the existing law regarding platform liability and impose obligations on platforms to undertake know your customer checks and also take down certain forms of content. Various amendments to the existing proposals are being discussed, including important proposals to regulate online advertising and so-called dark patterns.
The Parliament is due to finalise its draft shortly and it is anticipated that a final version of the legislation will be available in the first half of 2022.
Online harms
Included in the draft Online Safety Bill – which is expected to be introduced to Parliament in March 2022 (see advertising and marketing for more) – are provisions allowing for the criminal sanction of senior managers where information requests by Ofcom, the independent regulator for the UK communications industry, are not adequately dealt with.
Product Security and Telecommunications Infrastructure Bill
Please see Cyber security.
EU Digital Markets Act
Please see Competition.
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Cyber security
National Cyber Strategy 2022
On 15 December 2021, the government published its National Cyber Strategy 2022, which sets out various objectives it intends to reach by 2025 in relation to the cyber capabilities of the UK.
Among other objectives, the government intends to invest in growing a competitive cyber sector and promoting the reduction of cyber risk through improved understanding and management. The strategy will interact with and complement various regulations, such as the National Security and Investment Act 2021, the Network and Information Systems Regulations, and the Product Security and Telecoms Infrastructure Bill.
Product Security and Telecommunications Infrastructure Bill
The government has published part 1 of the Infrastructure Bill which creates a new regulatory scheme to make consumer connectable products more secure against cyber attacks. Specifically, it creates powers for ministers to specify security requirements relating to consumer connectable products.
Businesses involved in making these products available in the UK will need to comply with the specified security requirements, provide statements of compliance, and investigate and take action in relation to compliance failures.
At the moment, the crucial detail of what these relevant security standards will be is missing from the Bill (and will be set out in regulations to be issued by the Secretary of State) and the full impact of the proposed legislation cannot yet be fully evaluated.
The Bill had its first reading in the House of Commons on 24 November 2021 and the second reading is currently under way.
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Data protection
New UK Information Commissioner
On 4 January 2022, John Edwards began his five-year term as the new UK Information Commissioner, succeeding Elizabeth Denham. Mr Edwards has just completed eight years as the New Zealand Privacy Commissioner and previously practised as a barrister.
There are several key challenges for Mr Edwards and the ICO in the coming year as they engage with the government over planned reforms to the UK's data laws post-Brexit and the introduction of the Online Safety Bill. An important continuing focus is expected be the protection of children online, through the Age Appropriate Design Code which took effect on 2 September 2021.
Multi-million Euro fines for cookie compliance breaches
January 2022 has seen two multi-million Euro fines levied by the Commission nationale de l'informatique et des libertés (CNIL), the French data protection authority, in relation to cookie compliance.
Following an investigation, the CNIL concluded that the websites in question did not enable users to refuse cookies as easily as they could accept them, which influences users' choice in favour of consent and affects the freedom of any consent given. This follows 30 compliance orders issued by the CNIL to organisations in December 2021 for similar reasons.
This is part of an increased focus on cookies and similar tracking technologies by several European data protection authorities. Organisations offering online services in the EU should keep their cookie consent mechanisms under review, and ensure that they comply with local regulatory requirements and guidance.
EDPB publishes draft guidance on international data transfers
The European Data Protection Board (EDPB) published its draft Guidelines 05/2021 on the interplay between the application of Article 3 and the provisions on international data transfers (Chapter V) of the General Data Protection Regulations (GDPR), on 18 November 2021.
These provide welcome guidance for organisations on when a transfer of personal data is subject to the international data transfer provisions in Chapter V of the EU GDPR - and when, therefore, a data transfer mechanism is required. However, several aspects relating to international data transfers remain unclear. We discuss the draft guidelines further in our Insight.
EDPB adopts final guidelines on personal data breach notification
The EDPB adopted a final version of its Guidelines 01/2021 on "Examples regarding Personal Data Breach Notification" following a public consultation. The guidelines build on the Article 29 Working Party's guidance on data breach notification by providing more practical, case-based guidance to data controllers on how to handle data breaches and the factors controllers should consider during risk assessments.
The guidelines are set out as fictitious case studies based on typical examples seen by European supervisory authorities, organised by category such as ransomware attacks, human error or deliberate acts of employees, and lost/stolen devices or paper documents, among others. They provide a helpful, practical reference tool for organisations seeking to reduce the risks of, and understand their obligations following, a data breach.
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Employment and immigration
New statutory pay rates from April 2022
New minimum benefit rates applying to statutory leave periods have been proposed and are currently stated to apply from 11 April 2022 as follows:
- The weekly rate of statutory sick pay will be £99.35 (up from £96.35).
- The weekly rate applicable to periods of statutory maternity pay, paternity pay, shared parental pay, adoption pay and bereavement leave will be £156.66 (up from £151.97).
The new wage rates were announced in the autumn Budget 2021, with the government accepting the Low Pay Commission's recommendation to increase the National Living Wage to £9.50 an hour (from £8.91) from April 2022. The national minimum pay rates for younger workers will also increase as follows: from £8.36 an hour to £9.18 an hour for those aged 21 to 22; from £6.56 to £6.83 for those aged 18 to 20; from £4.62 to £4.81 for under 18s; and from £4.30 to £4.81 an hour for apprentices.
The government also announced on 7 September 2021 that a new health and social care levy is to be introduced in the UK, to pay for reforms to the care sector and NHS funding. The new levy will be based on National Insurance Contributions (NICs).
From April 2022, there will be a 1.25% increase in NICs for working age employees, the self-employed and employers. From April 2023, the levy will be formally separated out to become a separate tax on earned income (and NICs rates will return to their current levels).
It is important for businesses to note that the 1.25% rise in NICs for the 2022/23 tax year applies to NICs paid by both employers and employees. Read more in this update from our employee incentives team.
Disability workforce reporting: new consultation
At the end of December 2021, the government published a consultation looking at workforce reporting on disability – both voluntary and mandatory – for large employers (250 employees and above). This follows on from the National Disability Strategy published in July 2021 which set out how the government will work towards creating a society that is fully inclusive for disabled people. There is currently a voluntary reporting framework which provides support to employers to report information on disability, mental health and wellbeing in the workplace.
The consultation seeks to understand what information is currently collected by employers on disability in the workforce, the impact to business and the behaviours it causes, including whether an organisation currently collects information on the proportion of disabled people in their workforce. The consultation will close on 25 March 2022.
We are still awaiting the outcome of earlier consultations on proposals regarding the statutory right to request flexible working and reform of non-competition covenants in employment contracts.
Right to work checks: digital process from 6 April 2022
From 6 April 2022, right to work checks will change. Employers will no longer be able to accept physical documents (save for British nationals) as evidence of right to work and must instead use a new online verification process for anyone with a visa. An overview of the system is here.
From 6 April 2022, to conduct an online check, an individual will need to give you their prospective employer an access code by providing their details online. On receipt of this code, an employer will need to input the code and individual's date of birth. The share code is valid for 30 days and if the check is not completed within this time, a new code will be required.
Employers should take a clear copy of the online profile confirming they have the right to work in the UK and make sure the photograph resembles the individual being hired (at present they can do this via video call if the office is still closed, but this concession is due to end in April 2022 at which point the check will need to be carried out in person).
Businesses will not need to undertake retrospective checks for anyone employed prior to 6 April 2022 using physical documents.
EU proposed legislation on contingent workers' employment status
The EU issued a draft directive, in December 2021, under which organisations that use technology to arrange work for self-employed workers (gig-worker platforms and, probably, most staffing businesses) will be required to prove via a new five-step test that workers are self-employed. If they cannot prove this then the worker will be deemed employed. This will, when it comes into force, affect gig-economy staffing platforms such as driver apps as well as UK and US staffing companies operating in Europe and using independent contractor models.
If there were a change of government in the UK, we would not be surprised to see similar measures being introduced in the UK. There are already similar regimes in other parts of the world, with increasingly tough tests in, for example, the US state of California and Spain. See more Workforce Solutions developments in our recent Insight.
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Environment
The Environment Act 2021
The Environment Act 2021 passed into UK law on 9 November 2021. Among other areas, the Environment Act requires the Secretary of State for Environment, Food and Rural Affairs to set binding targets for environmental priority areas, including air quality, water, biodiversity and resource efficiency.
Various consultations and pieces of secondary legislation are expected to be published by the government during the course of the coming months, establishing in more detail how the various measures introduced by the Environment Act will be implemented.
It also establishes the Office for Environmental Protection: a new independent regulator whose purpose is to regulate the compliance of public authorities with environmental law.
For more information on the Environment Act, see our Insight.
Biodiversity net gain
As reported previously, the Environment Act sets out a new mandatory legal framework which requires the majority of planning permissions granted in England to deliver at least a 10% net gain in biodiversity in connection with their development. There are limited exceptions, including householder applications and permitted development. The biodiversity net gain requirements will also apply to consents for nationally significant infrastructure projects.
As part of the planning process, applicants will need to submit a biodiversity gain plan that outlines the pre-development and post-development biodiversity values of the land benefitting from planning permission, and identifies any mitigation schemes utilised to deliver the biodiversity objective of at least 10%. See our Insight or watch our video series.
Mandatory biodiversity net gain is likely to become law in 2023 when the required secondary legislation is introduced. On 11 January 2022, DEFRA published a consultation to request views on the regulations which will implement the mandatory biodiversity net gain requirement. The consultation will close on 5 April 2022.
Nutrient and water neutrality
In June 2019, Natural England published advice for local planning authorities in the Solent region requiring that all new development in this environmentally-sensitive area achieves nitrate neutrality. Since this initial set of guidance was issued, Natural England has provided similar advice to local planning authorities across England and Wales where those authorities have been situated near to "European Sites". These are sites designated as protected environmental locations under various EU-derived laws.
The guidance issued by Natural England states that the relevant authorities must not grant planning permission for a development if the applicant cannot demonstrate that the development will have a "neutral" impact on nutrient levels (which includes nitrates and phosphates).
Additionally, in September 2021, Natural England issued guidance to authorities within the Sussex North Water Supply Zone stipulating that development is not to be granted for applications unless water neutrality can be demonstrated.
The widespread acceptance of Natural England's guidance by local authorities on neutrality issues represents an effective moratorium on development unless developers are able to offset and/or deliver solutions to Natural England's concerns.
Proposal for a future Climate Change Agreements Scheme
The government is seeking views on a future Climate Change Agreements Scheme (CCA Scheme), publishing a consultation in December.
The existing CCA Scheme allows certain energy-intensive sectors to receive a discount on the Climate Change Levy they pay and incentivises energy and carbon savings.
In the context of the government's commitment to net zero by 2050, the consultation will be seeking to maximise the impact of any future scheme on reducing the UK's carbon emissions.
The consultation ends on 11 March 2022.
Requirement for mandatory transition plans for listed companies
Please see ESG.
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Environmental, social and governance
ESA propose new rules for taxonomy-related product disclosures
On 22 October 2021, the three European Supervisory Authorities (ESA) delivered their final report to the European Commission on Regulatory Technical Standards (RTS) regarding disclosures under the Sustainable Finance Disclosure Regulation (SFDR) on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation). The draft RTS aim to:
- provide disclosures to end investors regarding the investments of financial products in environmentally sustainable economic activities, providing them with comparable information to make informed investment choices; and
- establish a single rulebook for sustainability disclosures under the SFDR and the Taxonomy Regulation.
The European Commission is scrutinising the draft RTS and will decide whether to endorse them within three months of their publication. Disclosure requirements under the Taxonomy Regulation relating to the climate mitigation and adaptation objectives started to apply from 1 January 2022, while the SFDR RTS have an expected application date of 1 July 2022.
Read more about the key changes in our Insight.
Disclosing climate-related financial information
On 29 October 2021 the government confirmed that the UK will become the first G20 country to introduce a mandatory law requiring Britain's largest businesses to disclose their climate-related risks and opportunities, in line with Taskforce on Climate-related Financial Disclosures (TCFD) recommendations.
In its consultation response, the Department for Business, Energy & Industrial Strategy confirmed that a new set of regulations would be introduced for large private companies (that is, those with 500+ employees and £500m in turnover) and certain publicly quoted companies, banking companies, insurance companies and limited liability partnerships, which will require mandatory TCFD-aligned disclosures.
come into force on 6 April 2022
Subject to Parliamentary approval, these new regulations are intended to come into force on 6 April 2022. For more, see our previous Regulatory Outlook.
Requirement for mandatory transition plans for listed companies
On 2 November 2021, the chancellor of the exchequer set out the UK's plans to become the world’s first Net Zero-aligned Financial Centre. Under the proposals, there will be new requirements for UK financial institutions and listed companies to publish net zero transition plans that detail how they will adapt and decarbonise as the UK moves towards a net zero economy by 2050.
The TCFD has issued guidance for organisations that operate in jurisdictions that have made a net zero commitment, like the UK, on how to describe their plans for transitioning to a low carbon economy. In December 2021, the Financial Conduct Authority (FCA) referenced this in its TCFD-aligned disclosure rules for listed companies, asset managers and FCA-regulated asset owners which came into effect on 1 January 2022.
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Food Law
FSA consults on precautionary allergen information and labels
The Food Standards Agency (FSA) launched a consultation on 6 December 2021 to gather views from both businesses and consumers on the use of precautionary allergen information and labels, often written as "may contain" on food packaging. The FSA will then use the responses, in conjunction with a series of workshops they are running, to consider how this information could be presented more clearly. The consultation closes on 14 March 2022.
Nutrition and health claims
On 19 January 2022, the transition period for food products with nutrition or health claims implied by a trademark or brand name which existed before 1 January 2005 came to an end. Government guidance sets out that existing trademarks or brand names suggesting health or nutrition benefits that do not meet the requirement of Regulation (EC) No 1924/2006, must now be removed from the market. Only foods with trademarks or brand names which are fully compliant with Regulation (EC) 1924/2006 may be marketed.
Animal health regulation export health certificates
In order to export or move composite food products from Great Britain to either the EU or Northern Ireland, businesses must ensure they have a composite Export Health Certificate (EHC). The new Animal Health Regulation EHCs, to be used to move certain live animals, germinal products and products of animal origin, were due to be used from 21 August 2021, but the implementation date was delayed by the EU until 15 January 2022. See this government guidance for more details.
Rules of origin
As noted in our previous Regulatory Outlook, under the EU-UK Trade and Cooperation Agreement, UK businesses trading goods from or to the EU at zero tariffs need to have obtained declarations from their suppliers that a product meets the provisions on rules of origin.
As of 1 January 2022, businesses that export goods from the UK to the EU must hold a supplier's declaration at the time of issuing a statement of origin. A supplier uses a supplier's declaration to give information to their customers about the originating status of goods, on the specific preferential rules of origin. The completion of a supplier's declaration declares the originating status of the goods they provide to the customer, who needs this information to make out a statement on origin. The supplier’s declaration must use the wording set out in Annex 6 (supplier’s declaration) of the Trade and Cooperation Agreement. For more information see the government guidance.
The Food (Promotion and Placement) (England) Regulations 2021
On 2 December the Food (Promotion and Placement) (England) Regulations 2021 were made and will come into force on 1 October 2022. These form an important part of the government's childhood obesity strategy.
The purpose of these regulations is to restrict the promotion of high fat, sugar and salt (HFSS) products by location and volume price in medium and large businesses that sell food or drink in England (50 or more employees).
In store location restrictions will apply to store entrances, aisle ends and checkouts and their online equivalents (that is, entry pages, landing pages for other food categories, and checkout pages). Online there will be equivalent restrictions on the display of HFSS products on landing pages and also in ways which would prompt consumers who have not searched for a products to buy them.
Volume price restrictions will prohibit medium and large businesses that sell food or drink in England from offering promotions such as "buy-one-get-one-free" or "3 for 2" offers on HFSS products.
These regulations will have a complex interrelationship with the proposed advertising restrictions for HFSS products which are due to come in to force at a similar time.
EU consultation on alcohol labelling
The European Commission is currently running a consultation on the labelling of alcoholic beverages. The proposal is to revise the rules on information provided to consumers for alcoholic beverages so that they have to provide full information on the so-called "mandatory particulars". This would bring alcoholic beverages in line with the current rules for food as set out in the Regulation No 1169/2011 on the provision of food information to consumers, by introducing mandatory front-of-pack nutrition labelling. The consultation closes on 7 March 2022 and the Commission propose to adopt the initiative of Q4 2022.
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Health and Safety
Health and safety at work: summary statistics for Great Britain 2021
The HSE recently published its annual report on workplace health and safety statistics. The statistics show that rates of work-related ill health increased, with Covid-19 posing a new threat to employers' liability, over the last reporting year. Stress, depression, anxiety and musculoskeletal disorders also increased, with the effects of the pandemic being a major contributory factor (for more, see our Insight).
Businesses should review the themes highlighted in the report and follow guidance and legislation wherever possible to mitigate risks to their employees.
Consideration should be given to both physical and mental health, as well as the emerging liability risks posed by Covid-19.
Building Safety Bill
The Building Safety Bill is making its way through Parliament and began its report stage on 19 January 2022. The Ministry of Housing, Communities and Local Government published a timeline indicating that the Bill is likely to receive Royal Assent between April and July 2022 which suggests that whilst its application is staged, all aspects of the legislation should be in force by the end of 2023.
The Bill introduces a new regulatory regime, with the HSE being appointed as the regulator, to enhance the fire and structural safety of new and existing residential buildings (with an initial focus on high rise). For more on the Bill, see our Insight, or watch our video series.
Scope of PPE regulations expands to gig workers
The Health and Safety Executive (HSE) ran a consultation between 19 July and 17 August 2021 on amending the Personal Protective Equipment at Work Regulations 1992. The changes to the regulations would replace the wording "employee" with "worker" to extend the scope of the employer's duties under these regulations which would mean limb (b) workers (also known as gig economy workers) would fall into this definition.
On 13 December 2021, the HSE published its response outlining its plan to introduce the amending regulations to ensure limb (b) workers are given the same PPE protections as employees.
On 10 January 2022 the amending regulations, The Personal Protective Equipment at Work (Amendment) Regulations 2022, were laid before Parliament. These regulations come into force on 6 April 2022.
regulations come into force on 6 April 2022
Employers need to carefully consider whether the change to UK law applies to them and their workforce and make the necessary preparations to comply. HSE has produced interim guidance to help employers identify whether they and their workforce may be affected by the changes, and explains what employers may need to do.
Spot checks to reduce the spread of Covid-19 continue
The HSE is continuing to carry out spot checks and inspections to ensure businesses are working safely and continuing to reduce the risk posed by Covid-19 transmission in the workplace. Its latest advice on keeping workplaces safe covers the measures that may be required to protect workers, customers and others from the virus. The HSE has also provided guidance on talking to workers about reducing transmission.
As the pandemic continues throughout 2022, businesses must ensure that risk assessments are continually updated and appropriate measures are in place to reduce the risk of transmission.
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Modern slavery
European Commission postpones plans for mandatory human rights due diligence
As flagged in our Insight, in March 2021, the European Parliament adopted a resolution with recommendations to the European Commission and a draft Directive on Corporate Due Diligence and Corporate Accountability calling on the European Union to legally require companies to respect human rights and the environment in their supply chains.
The directive was initially scheduled for May 2021 but got rescheduled several times throughout last year, with the latest date being 8 December 2021. It has now been noted, without any comment from the Commission, that the proposal is no longer on their latest agenda. We await for further developments as to when the Commission may introduce this directive.
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Products
Plastic packaging tax
From 1 April 2022, UK manufacturers and importers of plastic packaging into the UK will be subject to the plastic packaging tax. This new tax applies to manufacturers and importers who produce or import into the UK more than 10 tonnes (over a specific period) of plastic packaging made up of less than 30% recycled plastic. The charge from 1 April 2022 will be £200 per tonne of plastic packaging.
On 30 December 2021, HM Revenue & Customs published guidance on due diligence checks for the plastic packaging tax. The aim of the guidance is to help supply chains establish who is liable for the plastics tax, to avoid it going unpaid.
Scottish Deposit Return Scheme for drinks containers
From August 2023, consumers in Scotland will pay a 20p deposit for each single use drinks containers (sized from 50ml to three litres) to the retailer. These will be made of PET plastic, metal and glass (subject to some exceptions). Consumers will be paid back the 20p deposit when they return the container for recycling. The deposit cost will be circulated in a loop through the supply chain, with producers (or importers), retailers and consumers paying and then receiving reimbursement for the deposit once the container has been retrieved for recycling.
A consultation took place in England last year on whether to introduce a similar system. We await the results of the consultation.
European Parliament publishes response to the proposed General Product Safety Regulation
As detailed in the July Regulatory Outlook, in the summer of 2021, the European Commission proposed reforms to the General Product Safety Directive with the introduction of the General Product Safety Regulation (GPSR).
The GPSR contains significant and far-reaching reforms which increase the compliance obligations on businesses involved in product supply chains. It also addresses new technologies and aims to improve product safety online through additional coverage of online marketplaces.
The European Parliament has now published its intended amendments to the proposal. Significant changes were made including narrowing the scope of the GPSR, additional target obligations on online market places, and the encouragement of a risk-based approach. Further details of these changes can be found in our Insight.
Commission seeks feedback on draft ecodesign regulation
On 7 January 2022, the European Commission opened a consultation to collect views from stakeholders on a draft ecodesign regulation for laying down requirements for off mode, standby mode, and networked standby energy consumption of electrical and electronic household and office equipment, pursuant to Directive 2009/125/EC. Ecodesign and Energy Labelling legislations are recognised as key contributors in product policy supporting the Energy Union objectives and the transition to a circular economy. This specific regulation aims to decrease CO2 emissions and deliver financial savings for European consumers.
The consultation is open until 4 February 2022.
Use of CE markings extended until 2023
The UK government recently laid the Product Safety and Metrology etc. (Amendment) Regulations 2021. These regulations extend the acceptance of certain products using the CE marking requirements when being placed on the market in Great Britain until 1 January 2023. It also allows businesses to attach the United Kingdom Conformity Assessed (UKCA) marking using a label or accompanying document until 1 December 2023.
the grace period has been extended to 1 January 2023
Some goods already require the UKCA mark: those that have been manufactured in Great Britain and conformity assessed by a UK approved body. For all others the grace period has been extended to 1 January 2023.
This extension is to give manufacturers time to adjust to the introduction of the UKCA marking and to allow conformity assessment capacity in the UK to develop, for more on this, see our Insight.
The guidance for using the UKNI marking was updated on 11 January 2022 to also reflect that from 1 January 2023, products will need to have UKCA marking to be placed on the market in GB for the first time.
European Commission launches call for evidence on right to repair initiative
On 11 January 2022, the European Commission published a call for evidence on an initiative to encourage consumers to use goods for a longer time. The initiative aims to encourage consumers to make more sustainable choices by providing incentives and tools to use products for longer, including by repairing defective goods. It also looks at the possibility of establishing a right to repair, which would strengthen consumers' rights to repair products, at fair prices, therefore extending the useful life of the good and also encouraging producers to design goods that last longer and are more easily repairable.
The Commission aims to propose any legislative measures by Q3 2022, as indicated in its 2022 Work Programme, along with other initiatives it plans to propose throughout 2022. This will feed into the EU drive towards a circular economy. See more in our Insight.
European Commission 2022 work programme
In October 2021 the European Commission published its annual Work Programme for 2022, entitled Making Europe stronger together. The programme includes initiatives that will be relevant to those involved in the export of products from the UK to the EU. Annex I sets out 42 new policy and legislative initiatives, including: a zero pollution action plan, a climate measures package, setting a policy framework for plastics and packaging, and restrictions on microplastics and their release into the environment.
These initiatives are set to change the regulatory landscape. We will focus in on each topic as policy measures and legislation develops.
Product Security and Telecommunications Infrastructure Bill
Please see Cyber security.
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Regulated procurement
Green Paper: transforming public procurement
On 6 December 2021, the government published its response to the Green Paper "Transforming Public Procurement". Although the new procurement regime will not be in force until at least 2023, the response indicates the government's direction of travel on reforming public procurement and hints at the significant changes we can expect to see.
Examples of such changes include the government's proposal to consolidate the current public procurement legislation into a single, uniform regulatory framework, and introduce new methods for excluding suppliers from a procurement, including discretionary grounds for exclusion. We provide further details of these changes in our Insight.
Financial thresholds increase
On 1 November 2021, the government laid the Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2021 (SI 2021/1221) before Parliament. The regulations came into force on 1 January 2022. Further guidance on these regulations has been provided by the Procurement Policy Note 10/21 – Thresholds and Inclusion of VAT.
The regulations update certain financial thresholds in the Defence and Security Public Contracts Regulations 2011 (SI 2011/1848), Public Contracts Regulations 2015 (SI 2015/102) (PCR 2015), Concession Contracts Regulations 2016 (SI 2016/273) and the Utilities Contracts Regulations 2016 (SI 2016/274). These amendments do not affect any procurements that commenced before the regulations came into force.
new thresholds now include VAT
As noted in our Insight, one of the key changes is that the new thresholds now include VAT rather than being net of VAT. Therefore, to meet their legal obligations, contracting authorities' procurement teams now need to ensure they take account of VAT when calculating the value of their contracts.
Taking account of a bidder's approach to payment
The Cabinet Office issued Procurement Policy Note 08/21 (PPN 08/21) "Taking account of a bidder's approach to payment in the procurement of major government contracts" on 21 October 2021.
The revised guidance applies to in-scope public procurements with an anticipated contract value above £5 million per annum, advertised on or after 1 April 2022. Until then, PPN 07/20 continues to apply. The new PPN provides contracting authorities with guidance on how to take into account a supplier's payment approach in the procurement of major government contracts. The key update to PPN 07/20 is the increase to the threshold bidders have to meet to demonstrate they have effective payment systems in place to ensure the reliability of their supply chains.
You can also read the PPN 08/21 FAQs which include details on how to report payment data where supply chain finance is used.
Carbon reduction plans in major government contract procurement
Last year the Cabinet Office published Procurement Policy Note 06/21 (PPN 06/21) "Taking Account of Carbon Reduction Plans in the procurement of major government contracts". The PPN requires suppliers bidding for major government contracts (which have an anticipated value of £5 million per annum (excluding VAT)) to commit to achieving Net Zero by 2050 for UK operations and complete a Carbon Reduction Plan (see our Insight here). Failure to do so could result in a supplier's exclusion from a procurement.
The PPN went live on 1 October 2021 and it is essential that suppliers understand the requirements which have been implemented.
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Sanctions and Export Control
There are no upcoming developments to report.
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Telecoms
Ofcom's new General Conditions of Entitlement
On 17 December 2021, the latest amendments to Ofcom's General Conditions of Entitlement (GCs), as part of its implementation of the European Electronic Communications Code, came into force.
The changes that the GCs introduced include: the ban on selling locked devices to residential customers; requirements on accessibility of information; new rules for bundles; and requirements on contract duration and termination.
next changes due to come into force on 17 June 2022
An unofficial consolidated version of the GCs can be found here. These updates to the GCs remain one of the key upcoming changes in telecoms regulation, with the next changes due to come into force on 17 June 2022.
Development and potential change to the Electronic Communications Code
In January 2021 the Department for Digital, Culture, Media and Sport (DCMS) published a consultation on changes to the Electronic Communications Code. On 24 November 2021, following the consultation, the Product Security and Telecommunications Infrastructure (PTSI) Bill was published and is currently on its second reading in the House of Commons.
The aim of the consultation was to see whether changes to the Code can help ensure that the UK has sufficiently robust electronic communications networks to deliver the coverage and connectivity consumers and businesses need.
It identified three main problem areas: issues relating to obtaining and using Code agreements; rights to upgrade and share; and difficulties specifically relating to the renewal of expired Code agreements
The PTSI Bill proposes a number of key changes to the Code and the Landlord and Tenant Act 1954. For more details on these, see our Insight. The government hopes that these changes will resolve some of the difficulties that have been encountered in practice with the Code since its introduction and subsequent decisions by the Tribunal on the interpretation of the Code. Given the changes proposed, landowner and operator communities alike are eagerly awaiting the introduction of the PTSI Bill. We anticipate that it will receive Royal Assent later this year.
Telecommunications Security Bill
As reported in the previous Regulatory Outlook, the DCMS published the Telecommunications (Security) Bill in order to strengthen the legislative framework for telecoms security and resilience.
On 17 November 2021, the Bill received Royal Assent and became the Telecommunications (Security) Act 2021. Specific security requirements will be set out in the draft Electronic Communications (Security Measures) Regulations 2021, and the Secretary of State will also have the ability to produce codes of practice giving guidance on taking security measures.
For additional information you can watch our webinar where we discussed the Bill in further detail.
National Security and Investment Act
Please see Competition.
Delayed reintroduction of roaming charges
In 2017, the EU introduced a Regulation to largely abolish roaming charges across all Member States. Although the UK government had initially suggested that Brexit would not affect this arrangement, the final UK-EU Trade and Co-operation Agreement contained only a commitment for the parties to "endeavour to cooperate" to promote "reasonable" roaming rates.
UK operators committed to retaining free roaming for a period, but roaming charges were due to come back in January this year. Although some operators have delayed the reintroduction of roaming charges and at least one has decided not to pass on the charges to their customers. This is set to become a differentiator between mobile service providers. The question is whether Ofcom will step in to protect consumers if the UK government cannot obtain pan-EU agreement on roaming charges?
consumer organisations and watchdogs will continue to lobby DCMS and Ofcom
Unlike the EU Commission, Ofcom does not have the power to set prices charged to UK operators by EU operators. However, it can step in and put in place caps on the amount that operators can charge their customers. In all likelihood such a step will be more about transparency and allowing consumers to protect themselves against bill shock. It is likely that consumer organisations and watchdogs will continue to lobby DCMS and Ofcom for changes to the roaming regime.
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