Goods

Part 1: UK Market Access: Goods Introductory

Section 1: Purpose of the Act

• This section sets out the purpose of Part 1 of the Act, which is to promote the continued functioning of the UK internal market for goods in the UK by establishing two new market access principles in UK law.
• These principles are the mutual recognition principle for goods (set out in sections 2 to 4) and the non-discrimination principle for goods (set out in sections 5 to 9).
• Subsection (3) provides that these principles have no direct legal effect except as provided by Part 1 of the Act.

Mutual recognition: goods

Section 2: The mutual recognition principle for goods

• This section sets out the principle of mutual recognition for goods, including the effect of mutual recognition.
• Subsection (1) sets out that a good that can be lawfully sold in the part of the UK in which it has been produced or imported into may be sold in any other part of the UK without needing to comply with any relevant requirements applying to the sale in that other part of the UK.
• In cases where there are no relevant requirements that would apply to the sale of a good in the part of the UK it was produced in or imported into, mutual recognition still permits the good to be sold in other parts of the UK without complying with the relevant requirements that apply in those other parts. The relevant requirements for the purposes of mutual recognition are set out in section 3.
• The definitions of “goods”, “sale”, “production”, “importation” and other key terms are provided in sections 13 and 14.

• Subsection (2) provides that the effect of mutual recognition is limited by reference to the particular types of sale that a good is lawfully permitted to undergo in the part of the UK where it was produced in or imported into.
• Subsection (3) provides that when a good is being sold in a part of the UK and the conditions in subsection (1) are met, the relevant requirements that apply in that part have no application in relation to the This complements subsection (1) which provides that a good can be sold free from relevant requirements in the place it is sold if the relevant conditions are met.

Section 3: Relevant requirement for the purposes of section 2

• This section defines “relevant requirement” for the purposes of the mutual recognition principle for goods as it applies to a particular sale.

• Subsection (2) provides that relevant requirements for the purposes of mutual recognition are statutory requirements that prohibit the sale of the goods or result in their sale being prohibited if not complied with, are within scope of the mutual recognition principle (as set out in subsection (3)) and are not otherwise excluded (see section 4, section 10 and Schedule 1).
• Subsection (3) provides the types of statutory requirements that are in scope of the mutual recognition principle. This includes any statutory requirement which relates to the characteristics, presentation or production of goods; the identification or tracing of an animal; the inspection, assessment, authorisation of goods or any similar dealing with them; and the documentation that must be produced, kept or accompany that goods or be submitted to an authority. Subsection (4)(g) also provides that any requirement not falling within the listed categories that apply to or in relation to the goods before they are allowed to be sold are within scope.
• Subsection (4) clarifies that manner of sale requirements are not in scope of the mutual recognition principle unless subsection (6) applies.
• Subsection (5) clarifies that manner of sale requirements covers any aspect of the circumstances or matter in which goods are Therefore, it includes pricing requirements, for example Minimum Unit Alcohol Pricing or plastic bag charges. The effect of this is that these matter of sale requirements are not in scope of the mutual recognition principle unless subsection (6) applies.
• Subsection (6) clarifies that mutual recognition will only apply to a manner of sale requirement if it appears to have been artificially designed to avoid the operation of the mutual recognition This provision captures artificially restrictive requirements that disguise, in practice, a total ban on a good being sold or a ban on a good being sold unless it complies with the requirement.
• Subsection (7) provides that statutory requirements which require the person selling or acquiring a good to keep or submit, after the sale of the good takes place, any documentation or information that required to be produced or recorded beforehand in order to buy or sell the good, is treated as a “relevant requirement”. This means that the mutual recognition principle will apply to these requirements.
• Subsection (8) sets out that “statutory requirements” are obligations, conditions, or prohibitions imposed by legislation, including legislation imposing mandatory terms into contracts for the sale of goods.

Section 4: Exclusion of certain requirements existing before commencement

• This section excludes certain existing requirements from being relevant requirements for the purposes of the mutual recognition principle where different regulatory requirements existed in different parts of the UK.
• Subsection (1) sets out that a statutory requirement which applies in relation to a particular sale of goods in a part of the UK and would otherwise be classified as a relevant requirement under section 3 should not be so classified in relation to that sale if it meets the conditions set out in subsection (2) below. In effect this means that statutory requirements meeting these conditions will be excluded from the scope of mutual recognition and remain unaffected by
• Subsection (2) sets out the conditions referenced in subsection (1). Subsection (2)(a) sets the condition that the same statutory requirement would have applied to the sale had it taken place on the relevant day (the day before the day on which this section came into force).Subsection 2(b) sets the condition that there was no corresponding requirement in force in each of the other three parts of the UK on that day.

• Subsection (3) provides that “the relevant day” is the day before the day on which this section came into force.

• Subsection (4) provides that the re-enactment of a statutory requirement, without substantive change, does not affect its continuity for the purposes of subsection (2)(a), meaning that these re-enactments will also be excluded from the principle of mutual recognition as existing requirements.

• Subsection (5) defines “corresponding requirement” for the purposes of subsection (2)(b). This is a statutory requirement that would have the same effect in another part of the UK as the statutory requirement that applies in the relevant part of the UK on the day before the day when this section comes into force.
• Subsection (6) provides that, for the purposes of subsections (2) and (5), a statutory requirement is only regarded as the same as (or having the same effect as) another statutory requirement if any differences between them are not substantive.

Non-discrimination: goods

Section 5: The non-discrimination principle for goods

• This section sets out the principle of non-discrimination for goods. This principle states that the sale of goods in one part of the UK should not be affected by directly or indirectly discriminatory relevant requirements towards goods that have a relevant connection with another part of the The non-discrimination principle will cover both direct discrimination (section 7) and indirect discrimination (section 8).
• Subsection (2) provides the meaning of “destination part”, “incoming goods” and “originating part”. These are important concepts in the operation of the principle of non-discrimination.
• Subsection (3) provides that, to the extent it directly or indirectly discriminates against incoming goods, a relevant requirement will have no effect in the ‘destination part of the UK’. The ‘destination part’ is the part of the UK where the goods are sold. In other words, while legislation might have a discriminatory effect, it will not be able to be enforced to the extent that it has such an effect.
• Subsection (4) provides for when a good has a relevant connection with a part of the UK (if it is produced in, produced by a business based in, comes from or passes through that part of the UK before reaching the destination part of the UK). These are the matters on the basis of which discrimination is not permitted.
• Subsection (5) provides the meanings of “components” and a business being “based” in a part of the UK, for the purposes of Part 1 of the Act.

Section 6: Relevant requirements for the purposes of the non-discrimination principle

• This section defines “relevant requirement” for the purposes of the non-discrimination principle for goods.
• Subsection (2) sets the criteria for a statutory provision to be a relevant requirement. A relevant requirement is one which applies to, or relation to, goods sold in that part of the UK and is within scope of the non-discrimination principle.
• Subsection (3) states that statutory provisions in scope of non-discrimination are those relating to: the circumstances or manner in which the goods are sold; transportation, storage, handling, or display of goods; inspection, assessment, registration, certification, approval or authorisation of the goods, or any similar process dealing with them; the conduct or regulation of businesses that engage in the sale of certain goods or certain types of good.
• Subsection (4) sets out which statutory provisions are not relevant requirements and therefore not in scope of non-discrimination. These are requirements defined as “relevant requirements” for the purpose of mutual recognition for goods (as defined in section 3) and certain existing provision covered in section 9.
• Subsection (5) provides that the Secretary of State may, by regulations, amend the list of statutory provisions within scope of the non-discrimination principle in subsection (3). Subsection (6) provides that the power must be exercised by affirmative resolution
• Subsection (7) provides that power may not be exercised before consent has been sought from all devolved If that consent is not given within one month then subsection (8) provides that the Secretary of State may make the regulations without that consent. In the event that the Secretary of State proceeds in the absence of consent under subsection (8), subsection (9) stipulates that the Secretary of State must publish a statement explaining the reasons for proceeding without consent.
• Subsection (10) provides the definition of “statutory provision” for the purpose of this

Section 7: The non-discrimination principle: direct discrimination

• This section explains what direct discrimination is for the purposes of section 5. It explains that direct discrimination is where relevant requirements apply to incoming goods in a way that they do not apply, or would not apply, to local goods and that puts the incoming goods at a disadvantage compared to local goods.
• Subsection (2) provides that an incoming good would be put at a disadvantage if it is more difficult or less attractive to sell the goods or buy the goods or do anything in connection with their sale.
• Subsection (3) defines “local goods” for the purposes of direct It provides that local goods are those that are the materially the same as the incoming good and share the material circumstances of the incoming good but are not produced in, or produced by a business based in, the originating part of the UK and do not come from, or pass through the originating part of the UK before reaching the destination part of the UK. These local comparator goods can be actual or hypothetical.
• Subsection (4) further explains the definition of local goods in subsection (3) by providing the ways in which they are deemed to lack the relevant connection to the originating part of the UK that the incoming goods have. This differs depending on the way in which the incoming goods have a relevant connection to the originating part of the UK.
• Subsection (4)(a) provides that if the incoming good was produced in the originating part, the local good is produced in the destination part. Subsection (4)(b) provides that if the incoming goods are produced by a business based in the originating part, the local goods are produced by a business based in the destination part. Subsection (4)(c) provides that if the incoming goods come from or pass through the originating part before reaching the destination part, the local goods have come from the destination part and did not pass through anywhere outside that part.

Section 8: The non-discrimination principle: indirect discrimination

• This section provides for the principle of indirect
• Subsection (1) provides that a relevant requirement will indirectly discriminate against incoming goods where the requirement does not directly discriminate but applies to, or in relation to the incoming good in a way that puts it at a disadvantage, and has an adverse market effect and cannot be reasonably considered a necessary means of achieving a legitimate aim. Subsection (2) provides the circumstances in which a good will be put at a
• Subsection (3) provides that a requirement has an adverse market effect if it puts incoming goods at a disadvantage but does not put comparable goods with a relevant connection to the destination part (and no other part of the UK) at that disadvantage and as a result, it causes a significant adverse effect on competition of those goods in the UK.

• Subsection (4) provides the meaning of “comparable goods” as “like goods” or “interchangeable goods”. “Like goods”, and “interchangeable goods” are then defined
• Subsection (5) provides that the test for whether a requirement has an adverse market effect in subsection (3) must have regard to the content of a requirement and the way it operates, or is administered, in practice.
• Subsections (6) lists the ‘legitimate aims’ for the purposes of the test for indirect discrimination in subsection (1).

• Subsection (7) provides a power to the Secretary of State to add to, vary or remove an aim from the list of legitimate aims by regulations. Subsection (8) provides that the power in subsection (7) must be exercised by the affirmative resolution procedure.
• Subsection (9) provides that before the power is exercised, consent must be sought from all devolved If that consent is not given within one month then subsection (10) provides that the Secretary of State may make the regulations without that consent. In the event that the Secretary of State proceeds in the absence of consent under subsection (10), subsection (11) stipulates that the Secretary of State must publish a statement explaining the reasons for proceeding without consent.
• Subsection (12) provides that in considering whether a relevant requirement cannot be reasonably considered a necessary means of achieving a legitimate aim for the purposes of subsection (1)(d), regard must be had to the effects of the requirement in all the circumstances and the availability of alternative means to achieving the legitimate aim.

Section 9: Exclusion of certain provision existing before commencement

• This section provides that certain existing provisions will not be relevant requirements for the purpose of the non-discrimination principle for goods.
• Subsection (1) provides that statutory provisions in force in the part of the UK concerned on the day before the day on which this section came into force are not relevant requirements for the purposes of the non-discrimination principle.
• Subsection (2) provides if a statutory provision is re-enacted, without substantive change, it will be treated as an existing requirement within subsection (1).
• Subsection (3) provides that provision that has not been substantively changed will be treated as an existing requirement within subsection (1).
• Subsection (4) provides that “statutory provision” has the same meaning as in section

Exclusions from market access principles

Section 10: Further exclusions from market access principles

• Section 10 provides that exclusions from the application of mutual recognition and non- discrimination for goods are set out in Schedule 1.
• Subsection (2) provides that the Secretary of State may amend Schedule 1 by regulations (which are subject to the affirmative procedure – see subsection (8)).
• Subsection (3) (together with the definition of “common framework agreement” in subsection (4)) makes clear that the power to amend Schedule 1 includes, for example, the power to give effect to a consensus reached between a Minister of the Crown and one or more of the devolved administrations that certain things should be excluded from the application of the market access principles. In relation to such a consensus, the things that may be excluded are cases, matters, requirements or provisions dealing with the regulation of devolved or transferred matters previously governed by EU law.

• Subsections (5) and (6) make provisions relating to the interpretation and determination of devolved or transferred matters for the purposes of this section.
• Subsection 7 requires the Secretary of State, in making (any) regulations under subsection (2), to have regard to the importance of facilitating the access to the market within Great Britain of qualifying Northern Ireland goods.
• Subsection (8) provides that regulations by the Secretary of State under subsection (2) to amend Schedule 1 are subject to the affirmative resolution procedure.
• Subsections (9), (10) and (11) provide that before making any regulations under subsection (2), the Secretary of State must seek the consent of the devolved administrations. If consent is not provided within one month of its being requested, the Secretary of State may proceed to make the regulations without consent. If the Secretary of State does so, the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without that consent.
• Subsection (12) defines certain terms used in this

 

Supplementary

Section 11: Modifications in connection with the Northern Ireland Protocol

• This section sets out modifications to the market access principles for goods in relation to the sale of goods in parts of Great Britain.
• Subsections (2) and (3) state that the mutual recognition principle applies to all qualifying Northern Ireland goods (but not other goods originating in Northern Ireland unless subsection (4) applies).
• Subsection (4) enables goods falling within subsection (3) (to which mutual recognition would not otherwise apply) to benefit from mutual recognition if they move from Northern Ireland into England, Scotland or Wales, in the same way as goods imported into those places from outside the UK.
• Subsection (5) provides that goods that are not qualifying Northern Ireland goods do not have a “relevant connection” with Northern Ireland for the purposes of the non-discrimination principle for goods.
• Subsections (6) and (7) provide that in respect of Northern Ireland, the second condition in paragraph 1 of Schedule 1 (that a pest or disease is present in Northern Ireland) is met even if the pest or disease was merely present in qualifying Northern Ireland goods but not present in Northern Ireland more widely.
• Subsection (8) provides that the “qualifying Northern Ireland goods” in section 11 has the same meaning as in section 47.

Section 12: Guidance to Part 1

• This section provides the Secretary of State with a power to issue statutory guidance about the practical operation and effect of the market access principles of mutual recognition and non- discrimination for goods. This could include guidance on enforcement, for market surveillance authorities and UK traders.
• The UKIM Act will not directly introduce any new enforcement bodies, powers or penalties, relying instead on enforcement provisions in existing goods regulation to ensure compliance with the requirements of the mutual recognition principle.
• Subsection (2) provides for guidance to be addressed to any description of Guidance will be needed to explain how the existing enforcement framework will work to give effect to the new market access principles, including how this affects the roles and responsibilities of regulators and what it means for traders in terms of regulatory compliance.
• Subsection (4) provides for the Secretary of State to revise guidance from time to time, and withdraw it, as appropriate.

Section 13: Duty to review the use of Part 1 amendment powers

• This section places a requirement on the Secretary of State to carry out a review of any use of the powers in Part 1 of the Act. The powers in Part 1 of the Act are the power to amend the relevant requirements for non-discrimination in section 6(5), the power to amend the list of legitimate aims in section 8(7) and the power in section 10(2) to amend Schedule 1.
• Subsection (2) requires that within three to five years of the passing of the Act, the Secretary of State must conduct a review of the use of the powers, and produce a report of that review, a copy of which must be laid before Parliament.
• Subsection (3)(a) requires that the devolved administrations must be consulted as part of the review. Subsection (3)(b) provides that any relevant reports or advice issued by the Competition and Markets Authority must be considered by the Secretary of State in carrying out the review. Subsection (3)(c) requires the Secretary of State, in carrying out the review, to assess the impact and effectiveness of any changes made under the Part 1 amendment
• Subsection (5) sets out that in the event that the powers to amend have not been used by the time of the review, the Secretary of State must prepare a report containing a statement to the effect that the power has not been used since its entry into force and containing such other information relating to that statement that the Secretary of State considers appropriate. In relation to that power that has not been used, subsection 5(b) provides that the requirements in subsection (3), namely, to consult with the devolved administrations, to consider any relevant reports or advice from the CMA and to assess the impact and effectiveness of any changes made under that power, do not apply.

Section 14: Sale of goods complying with local law

• This section sets out that nothing contained in Part 1 of the Act prevents goods produced in or imported into a part of the UK being sold in another part of the UK if the sale complies with any requirements applicable in that part (or if there are no such requirements). So, for example, where goods do not meet the criteria for mutual recognition, or where traders do not wish to make use of the principle for their goods, these goods can continue to be sold in a particular part of the UK by complying with the requirements relating to sale that apply

Section 15: Interpretation of references to “sale” in Part 1

• This section supplies the meaning of “sale of goods” for the purposes of Part 1 of the
• Subsections (2) and (3) provide that “sale” excludes sales which are not made in the course of a business or are made in the course of a business but only for the purpose of performing a public function. Therefore, “sale” will generally exclude sales made by public bodies or authorities, except where these sales are made for commercial purposes and not for the purpose of performing a public function (other than a function related to the carrying on of commercial activities). For example, the supply of medication by the NHS to a patient through a prescription would not be covered as it is a sale made by a public authority fulfilling a public function. Sales by public bodies or authorities which are carried out for purely commercial purposes would be captured. For example, if a public body were to set up a gift shop selling merchandise, this would be captured as ‘sale’ for the purposes of this part as it would be commercial activity not directly related to its public functions.

• Subsection (4) provides that “sale” includes some earlier actions with a view to sale, namely an agreement to sell, offering or exposing for sale or having in possession or holding for
• Subsection (5) provides that other types of supply-related activities should also be treated as “sales” for the purposes of this Part. These other types of supply are listed in subsection (6) and include things like the leasing or hiring out of goods, or the gifting of goods where no consideration is given in Earlier actions with a view to these types of supply would also be covered e.g. an agreement to hire.
• Relevant regulatory requirements for the purposes of mutual recognition and non- discrimination for goods will therefore include any requirements relating to these activities. However as set out in section 2, the effect of mutual recognition will be limited by reference to the particular type of sale that is taking place in the nation where a good is being sold.

Section 16: Interpretation of other expressions used in Part 1

• This section sets out the definition of terms used for the purposes of this
• Subsection (2) defines “goods” for the purposes of this Part. “Goods” means any tangible movable or corporeal moveable thing (including its packaging or label), with the exception of water or gas that is not offered for sale in a limited volume or set quantity. This will therefore not cover water or gas that is piped directly into buildings as a utility but will cover bottled water or canisters of This definition does cover agricultural goods, including live animals, germinal products and animal by-products.
• Subsection (3) defines “produced in” for the purposes of this Part. If the good is not wholly produced or made within one part of the UK, it can still be classed as “produced in” a relevant part of the UK if the most recent significant production has taken place in that part, so long as it is regulation in that part.
• Subsection (4) defines “regulated” as part of the wider definition of “produced in”. A significant step is regulated if it is covered by any statutory requirement in the part where it takes place or could materially affect a person’s ability to lawfully sell the good in that part.
• Subsections (5), (6) and (7) define what is meant by “significant” for the purposes of the wider definition of “produced in”. Subsection (5) sets out that a production step is significant if it is significant in terms of the character and purpose of the goods. Subsection (6) specifies steps that are not to be considered significant, even if they are regulated. Subsection (7) further specifies that packaging, labelling or marking of goods is not significant unless fundamental to the character of the good.
• Subsections (8) and (9) define “imported into” for the purposes of this Goods brought by sea are imported when the ship carrying them enters the limits of the port at which they are discharged. Goods brought by air are imported when they are unloaded. Goods brought by land are imported when they enter the UK. For the purposes of the definition of “imported into”, goods that arrive in the UK from the Isle of Man are to be treated in the same way as any other imported goods.
• Subsection (10) states that where a good is “produced in” or “imported into” in one part of the UK (the original part), and is then exported outside of the UK before being re-imported back into the UK, the good should still be regarded as having been produced in or imported into the original part of the UK.
• If a good was imported into one part of the UK and then underwent a significant regulated production step in a different part, the good would be treated as having been produced in that other part.
• Subsection (11) clarifies that the references to “production” in section 3 subsection (4)(c) should be taken to include specified production processes associated with agricultural products and livestock or other animals. This reflects the fact that the definition of “goods” in section 14 includes agricultural products.