United Kingdom Internal Market Bill (HL Bill 150)

A

BILL

[AS AMENDED IN COMMITTEE]

TO

Make provision in connection with the internal market for goods and services
in the United Kingdom (including provision about the recognition of
professional and other qualifications); to make provision in connection with
provisions of the Northern Ireland Protocol relating to trade and state aid; to
authorise the provision of financial assistance by Ministers of the Crown in
connection with economic development, infrastructure, culture, sport and
educational or training activities and exchanges; to make regulation of the
provision of distortive or harmful subsidies a reserved or excepted matter;
and for connected purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 UK market access: goods

Introductory

1 Purpose of Part 1

(1)5This Part promotes the continued functioning of the internal market for goods
in the United Kingdom by establishing the United Kingdom market access
principles.

(2)The United Kingdom market access principles are—

(a)the mutual recognition principle for goods (see sections 2 to 4), and

(b)10the non-discrimination principle for goods (see sections 5 to 9).

(3)Those principles have no direct legal effect except as provided by this Part.

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Mutual recognition: goods

2 The mutual recognition principle for goods

(1)The mutual recognition principle for goods is the principle that goods which—

(a)have been produced in, or imported into, one part of the United
5Kingdom (“the originating part”), and

(b)can be sold there without contravening any relevant requirements that
would apply to their sale,

should be able to be sold in any other part of the United Kingdom, free from
any relevant requirements that would otherwise apply to the sale.

(2)10Where goods are to be sold in a particular way in the other part of the United
Kingdom, the condition in subsection (1)(b) has effect as if the reference to
“their sale” were a reference to their sale in that particular way.

So, for example, if goods are to be sold by auction, the condition is met if (and
only if) they can be sold by auction in the originating part without
15contravening any applicable relevant requirements there.

(3)Where the principle applies in relation to a sale of goods in a part of the United
Kingdom because the conditions in subsection (1)(a) and (b) are met, any
relevant requirements there do not apply in relation to the sale.

3 Relevant requirements for the purposes of section 2

(1)20This section defines “relevant requirement” for the purposes of the mutual
recognition principle for goods as it applies in relation to a particular sale of
goods in a part of the United Kingdom.

(2)A statutory requirement in the part of the United Kingdom concerned which—

(a)prohibits the sale of the goods or, in the case of an obligation or
25condition, results in their sale being prohibited if it is not complied
with, and

(b)is within the scope of the mutual recognition principle,

is a relevant requirement in relation to the sale unless excluded from being a
relevant requirement by any provision of this Part.

(3)30A statutory requirement is within the scope of the mutual recognition principle
if it relates to any one or more of the following—

(a)characteristics of the goods themselves (such as their nature,
composition, age, quality or performance);

(b)any matter connected with the presentation of the goods (such as the
35name or description applied to them or their packaging, labelling, lot-
marking or date-stamping);

(c)any matter connected with the production of the goods or anything
from which they are made or is involved in their production, including
the place at which, or the circumstances in which, production or any
40step in production took place;

(d)any matter relating to the identification or tracing of an animal (such as
marking, tagging or micro-chipping or the keeping of particular
records);

(e)the inspection, assessment, registration, certification, approval or,
45authorisation of the goods or any other similar dealing with them;

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(f)documentation or information that must be produced or recorded,
kept, accompany the goods or be submitted to an authority;

(g)anything not falling within paragraphs (a) to (f) which must (or must
not) be done to, or in relation to, the goods before they are allowed to
5be sold.

(4)A manner of sale requirement is not within the scope of the mutual recognition
principle unless subsection (6) applies.

(5)For this purpose a “manner of sale requirement” is a statutory requirement that
governs any aspect of the circumstances or manner in which the goods are sold
10(such as where, when, by whom, to whom, or the price or other terms on which
they may be sold).

(6)A statutory requirement that—

(a)is worded as a manner of sale requirement, but

(b)appears to be designed artificially to avoid the operation of the mutual
15recognition principle in relation to what would otherwise be a
requirement within the scope of that principle,

is to be regarded as a relevant requirement, despite subsection (4).

This subsection would apply, for example, where a manner of sale requirement
involves an unusually restrictive condition such that it would be impossible to
20comply with the condition and have a practical chance of selling the goods.

(7)A statutory requirement which requires the person selling or acquiring the
goods to keep or submit, after the sale takes place, any documentation or
information required to be produced or recorded beforehand is to be treated as
a relevant requirement relating to the sale.

(8)25The Secretary of State may by regulations amend subsection (3) so as to add,
vary or remove a paragraph of that subsection.

(9)Regulations under subsection (8) are subject to affirmative resolution
procedure.

(10)Before making regulations under subsection (8) the Secretary of State must
30consult the Scottish Ministers, the Welsh Ministers, and the Department for the
Economy in Northern Ireland.

(11)In this Part “statutory requirement” means an obligation, a condition or a
prohibition (however described) imposed by legislation (including legislation
imposing mandatory terms into contracts for the sale of goods).

4 35Exclusion of certain requirements existing before commencement

(1)A statutory requirement in a part of the United Kingdom (“the relevant part”)
which—

(a)applies in relation to a particular sale of goods in that part of the United
Kingdom, and

(b)40would otherwise fall within section 3 as a relevant requirement,

is not a relevant requirement (so far as relating to the sale) for the purposes of
the mutual recognition principle where the conditions in subsection (2) are
met.

(2)The conditions are that, on the relevant day —

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(a)the same statutory requirement would have applied in relation to the
sale if it had taken place on that day, and

(b)there was no corresponding requirement in force in each of the other
three parts of the United Kingdom.

(3)5For the purposes of subsection (2) “the relevant day” is the day before the day
on which this section comes into force.

(4)The re-enactment (without substantive change) of a statutory requirement
does not affect its continuity for the purposes of subsection (2)(a).

(5)For the purposes of subsection (2)(b) “corresponding requirement”, in relation
10to the statutory requirement in the relevant part of the United Kingdom, means
a statutory requirement in another part of the United Kingdom that would
have had the same effect in relation to the sale (if it had taken place there on the
relevant day).

(6)For the purposes of subsections (2) and (5) a statutory requirement is to be
15regarded as the same as another statutory requirement, or having the same
effect, if any differences between them are not substantive.

Non-discrimination: goods

5 The non-discrimination principle for goods

(1)The non-discrimination principle for goods is the principle that the sale of
20goods in one part of the United Kingdom should not be affected by relevant
requirements that directly or indirectly discriminate against goods that have a
relevant connection with another part of the United Kingdom.

(2)For the purposes of the application of that principle in any given case—

(a)the part of the United Kingdom where sale should not be affected is
25referred to as the “destination part”;

(b)the goods that have a relevant connection with another part of the
United Kingdom are referred to as the “incoming goods”;

(c)that other part is referred to as the “originating part”.

(3)A relevant requirement (see section 6) is of no effect in the destination part if,
30and to the extent that, it directly or indirectly discriminates against the
incoming goods (see sections 7 and 8).

(4)Goods have a relevant connection with a part of the United Kingdom if they or
any of their components—

(a)are produced in that part,

(b)35are produced by a business based in that part, or

(c)come from, or pass through, that part before reaching the destination
part.

(5)For the purposes of this Part—

(a)“components” includes parts, ingredients and constituent materials;

(b)40a business is “based”—

(i)where its registered office is,

(ii)if it does not have a registered office, where its head office is, or

(iii)if it has neither a registered office nor a head office, where its
principal place of business is.

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

(1)This section defines “relevant requirement” for the purposes of the non-
discrimination principle for goods.

(2)A relevant requirement, for the purposes of the principle as it has effect in
5relation to a part of the United Kingdom, is a statutory provision that—

(a)applies in that part of the United Kingdom to, or in relation to, goods
sold in that part, and

(b)is within the scope of the non-discrimination principle.

(3)A statutory provision is within the scope of the non-discrimination principle if
10it relates to any one or more of the following—

(a)the circumstances or manner in which goods are sold (such as where,
when, by whom, to whom, or the price or other terms on which they
may be sold);

(b)the transportation, storage, handling or display of goods;

(c)15the inspection, assessment, registration, certification, approval or
authorisation of the goods or any similar dealing with them;

(d)the conduct or regulation of businesses that engage in the sale of certain
goods or types of goods.

(4)A statutory provision is not a relevant requirement—

(a)20to the extent that it is a relevant requirement for the purposes of the
mutual recognition principle for goods (see section 3), or

(b)if section 9 (exclusion of certain existing provisions) so provides.

(5)The Secretary of State may by regulations amend subsection (3) so as to add,
vary or remove a paragraph of that subsection.

(6)25Regulations under subsection (5) are subject to affirmative resolution
procedure.

(7)Before making regulations under subsection (5) the Secretary of State must
consult the Scottish Ministers, the Welsh Ministers and the Department for the
Economy in Northern Ireland.

(8)30In this section “statutory provision” means provision contained in legislation.

7 The non-discrimination principle: direct discrimination

(1)A relevant requirement directly discriminates against incoming goods if, for
the reason that the goods have the relevant connection with the originating
part, the requirement applies to, or in relation to, the incoming goods in a
35way—

(a)in which it does not or would not apply to local goods, and

(b)that puts the incoming goods at a disadvantage compared to local
goods.

(2)Goods are put at a disadvantage if it is made in any way more difficult, or less
40attractive, to sell or buy the goods or do anything in connection with their sale.

(3)“Local goods”, for the purposes of this section, are actual or hypothetical goods
that—

(a)lack the relevant connection of the incoming goods with the originating
part, but

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(b)otherwise are materially the same as, and share the material
circumstances of, the incoming goods.

(4)Goods (“the other goods”) lack the relevant connection of the incoming goods
with the originating part—

(a)5where the incoming goods have a relevant connection within section
5(4)(a), if the other goods, or (as the case may be) their components,
were produced in the destination part;

(b)where the incoming goods have a relevant connection within section
5(4)(b), if the other goods, or (as the case may be) their components,
10were produced by a business based in the destination part;

(c)where the incoming goods have a relevant connection within section
5(4)(c), if the other goods, or (as the case may be) their components,
came from the destination part and did not pass through anywhere
outside that part.

8 15The non-discrimination principle: indirect discrimination

(1)A relevant requirement indirectly discriminates against incoming goods if—

(a)it does not directly discriminate against the goods,

(b)it applies to, or in relation to, the incoming goods in a way that puts
them at a disadvantage,

(c)20it has an adverse market effect, and

(d)it cannot reasonably be considered a necessary means of achieving a
legitimate aim.

(2)Goods are put at a disadvantage if it is made in any way more difficult, or less
attractive, to sell or buy the goods or do anything in connection with their sale
25than if the requirement did not apply.

(3)A requirement has an adverse market effect if, because it—

(a)puts at a disadvantage the incoming goods (and any comparable goods
that also have a relevant connection with the originating part and are
also put at that disadvantage), but

(b)30does not put at that disadvantage (at all or to the same extent) some or
all comparable goods that have a relevant connection with the
destination part and no other part of the United Kingdom,

it causes a significant adverse effect on competition in the market for such
goods in the United Kingdom.

(4)35“Comparable goods” means like goods or interchangeable goods; and—

(a)“like goods” are goods that are alike the incoming goods in all respects,
or otherwise have characteristics closely resembling those of the
incoming goods;

(b)“interchangeable goods” are goods that, from the point of view of a
40purchaser of the goods, could reasonably be said to be interchangeable
with the incoming goods.

(5)The application of subsection (3) is to be determined with regard both to the
content of the requirement and to the way in which it operates, or is
administered, in practice (as a whole or in particular classes of case).

(6)45“Legitimate aim” means one, or a combination, of the following aims—

(a)the protection of the life or health of humans, animals or plants;

(b)the protection of public safety or security.

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(7)The Secretary of State may by regulations amend subsection (6) so as to add,
vary or remove an aim.

(8)Regulations under subsection (7) are subject to affirmative resolution
procedure.

(9)5The application of subsection (1)(d) is to be determined with regard, in
particular, to—

(a)the effects of the requirement in all the circumstances, and

(b)the availability of alternative means of achieving the aim in question.

9 Exclusion of certain provision existing before commencement

(1)10Statutory provision is not a relevant requirement for the purposes of the non-
discrimination principle for goods if the same provision was in force in the part
of the United Kingdom concerned on the day before the day on which this
section comes into force.

(2)The re-enactment (without substantive change) of statutory provision does not
15affect its continuity for the purposes of subsection (1).

(3)For the purposes of subsection (1) the same provision is to be regarded as in
force on the day concerned if any differences are not substantive.

(4)In this section “statutory provision” has the same meaning as in section 6.

Exclusions from market access principles

10 20Further exclusions from market access principles

(1)Schedule 1 contains provision excluding the application of the United
Kingdom market access principles in certain cases.

(2)The Secretary of State may by regulations amend that Schedule.

(3)Regulations under subsection (2) are subject to affirmative resolution
25procedure.

Supplementary

11 Modifications in connection with the Northern Ireland Protocol

(1)The United Kingdom market access principles for goods apply, in relation to
the sale of goods in a part of the United Kingdom other than Northern Ireland,
30with the following modifications.

(For provision affecting the application of those principles in relation to the sale
of goods in Northern Ireland, see, in particular, the Northern Ireland Protocol
and sections 7A, 7C and 8C of the European Union (Withdrawal) Act 2018.)

(2)The mutual recognition principle for goods applies in relation to all qualifying
35Northern Ireland goods as if they were produced in, or imported into,
Northern Ireland.

(3)That principle does not apply in relation to goods produced in, or imported
into, Northern Ireland that are not qualifying Northern Ireland goods, unless
subsection (4) applies.

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(4)If goods falling within subsection (3) are moved in a way that would, but for
the fact that Northern Ireland is a part of the United Kingdom, amount for the
purposes of the mutual recognition principle for goods to the importation of
the goods into England, Scotland or Wales, the goods are to be regarded for the
5purposes of that principle as having been so imported.

(5)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 (despite section 5(4)).

(6)Subsection (7) applies for the purposes of paragraph 1 of Schedule 1 in a case
10where Northern Ireland is the “affected part” within the meaning of sub-
paragraph (2) of that paragraph.

(7)In determining whether the condition in sub-paragraph (3) of that paragraph
is met, a pest or disease is to be taken to be present in Northern Ireland if it is,
or may be, present in qualifying Northern Ireland goods (including when the
15goods are in Great Britain).

(8)In this section “qualifying Northern Ireland goods” has the same meaning as in
section [Clause removed].

12 Guidance relating to Part 1

(1)The Secretary of State may issue guidance on any matter relating to—

(a)20the practical operation of the United Kingdom market access
principles, or

(b)the effect of any provision of this Part.

(2)Guidance may be directed towards the public generally or towards any
description of persons (such as traders, persons with enforcement functions or
25a class of such traders or persons).

(3)In subsection (2) “enforcement function” means a function relating to the
enforcement of anything which is (or is capable of being) a relevant
requirement for the purposes of either of the market access principles for
goods.

(4)30The power of the Secretary of State under subsection (1) includes power to
revise or withdraw (in whole or part) any guidance previously issued.

(5)The Secretary of State must arrange for the publication of—

(a)any guidance that has been issued, as revised from time to time;

(b)any revisions made under subsection (4);

(c)35notice of the withdrawal of any guidance under subsection (4).

(6)In this section “guidance” means guidance under subsection (1).

13 Sale of goods complying with local law

Nothing in this Part prevents goods produced in or imported into a part of the
United Kingdom from being sold in another part of the United Kingdom if
40(apart from this Part) the sale complies with any requirements applicable in
that other part of the United Kingdom (or there are no such requirements).

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14 Interpretation of references to “sale” in Part 1

(1)This section explains the meaning in this Part of references to the sale of goods
(however expressed).

(2) “Sale” does not include a sale which—

(a)5is not made in the course of a business, or

(b)is made in the course of a business but only for the purpose of
performing a function of a public nature.

(3)Subsection (2)(b) does not exclude a sale which is—

(a)made by a public body or authority for commercial purposes, and

(b)10not made for the purpose of performing a function of a public nature
(other than a function relating to the carrying on of commercial
activities).

(4) “Sale” includes—

(a)agreement to sell,

(b)15offering or exposing for sale, or

(c)having in possession or holding for sale.

(5)This Part applies in relation to a supply of goods other than a sale as it applies
in relation to a sale (and any reference to “sale”, outside this subsection, is to be
read accordingly).

(6)20For this purpose “supply of goods” means the transfer of possession or
property in goods (whether or not under or by virtue of a contract), and
includes, for example, supply by way of—

(a)barter or exchange,

(b)the leasing or hiring out of goods, hire-purchase, or bailment of goods,

(c)25gift (or anything else done free of charge).

15 Interpretation of other expressions used in Part 1

(1)This section applies for the purposes of this Part.

(2)“Goods” means any tangible movable, or corporeal moveable, thing (including
any packaging or label), but not water or gas that is not offered for sale in a
30limited volume or set quantity.

(3)Goods are to be regarded as “produced in” a part of the United Kingdom (if not
wholly produced there) if the most recent significant production step which is
a regulated step has occurred there.

(4)A production step occurring in a part of the United Kingdom is “regulated” for
35the purposes of subsection (3) if —

(a)it is the subject of any statutory requirement in that part of the United
Kingdom, or

(b)it is a step that could materially affect a person’s ability to sell the goods
without contravening—

(i)40any relevant requirement for the purposes of the mutual
recognition principle for goods, or

(ii)any statutory requirement that is excluded from being a
relevant requirement by section 4(1),