Key items on the agenda for in-house lawyers this month include the 2020 Budget, and developments on Brexit (particularly business immigration), climate change and artificial intelligence.
Brexit
Ahead of formal negotiations on the future UK-EU relationship, which are expected to start in early March 2020, the Department for International Trade (DIT) has launched a consultation on the design of the “UK global tariff” (UKGT). It invites views on ideas to create a bespoke UK tariff applying UK-specific rates of duty to imported goods. The UKGT will apply to imported goods unless they are covered by an exception to the most favoured nation principle, such as an applicable free trade agreement. It is intended to apply from 1 January 2021 (the first day after the end of the transition period). The consultation closes on 5 March 2020.
The DIT has also published a consultation on its proposed freeports policy. Freeports are designated zones that the government aims to make into international hubs for manufacturing and innovation. It will incentivise businesses to locate manufacturing and the processing of imported goods there by offering favourable customs and tax rules. The government proposes to create up to ten freeports in the UK and will announce their location by the end of the year. The consultation closes on 20 April 2020.
Practical Law has published:
- A note on UK law during the post-Brexit transition period.
- A blog post on what companies need to know about data protection during the Brexit transition period.
Business immigration
The government has set out its plans for a new UK points-based immigration system from 1 January 2021, once free movement with the EU has come to an end. Under the proposals:
- EU and non-EU citizens will be treated equally.
- The government will not introduce a general low-skilled or temporary work route.
- Migrants to the UK will have to score 70 points under the new system to qualify for a visa.
- The skills threshold for roles that can be filled by migrant workers will be reduced to include “medium skilled occupations”.
- EU citizens will benefit from a more streamlined application process than non-EU citizens.
- The cap on the number of people able to enter the UK under the skilled worker route will be suspended.
Climate change
Various decarbonisation policies and initiatives are expected in the coming months. The government has already announced that:
- It will consult on bringing forward the deadline for removing unabated coal generation from the UK’s energy system.
- The UK will end the sale of new petrol and diesel vehicles by 2035 or earlier if the transition is feasible, subject to consultation.
Climate change litigation is continuing to develop. For example, ClientEarth is bringing a judicial review challenge to the government’s approval of new gas turbines at Drax’s Selby power station.
Practical Law has published:
- A note outlining practical first steps on governance and reporting for companies and boards on climate change and sustainability.
- A checklist highlighting the main mandatory climate-related and environmental disclosures for UK companies in their annual report.
2020 Budget
The government has confirmed that the new Chancellor, Rishi Sunak, will deliver the 2020 Budget on 11 March 2020.
Artificial intelligence
The Information Commissioner’s Office (ICO) has launched a consultation on its draft Guidance on the AI auditing framework. The guidance is aimed at both those developing artificial intelligence (AI) systems and those whose organisations use AI systems. The consultation is open until 1 April 2020.
As part of its vision of shaping Europe’s digital future, the European Commission has published a White Paper on a European approach to AI and a report on safety and liability implications of AI, the Internet of Things and robotics. The White Paper’s proposals are open for consultation until 19 May 2020.
Ethnic diversity of UK boards
The Parker Review Committee has published its first update report on the ethnic diversity of UK boards. The report includes detailed data both on the current profile of FTSE 350 boards and on ethnic diversity. Headline findings are that:
- 52% of FTSE 250 companies fail to mention ethnicity in their board diversity policy.
- Most of the FTSE 350 do not set measurable ethnicity targets.
- Only 14% of FTSE 100 companies set measurable objectives for board ethnic diversity. For FTSE 250 companies the figure is 2%.
Corporate governance
The Investment Association (IA) has published a document setting out shareholder priorities for 2020 at listed companies. The IA highlights four issues of particular importance this year:
- Responding to climate change.
- Audit quality.
- Stakeholder engagement and voice.
- Diversity.
ICSA has published revised guidance on terms of reference for audit, remuneration and nomination committees. The guidance notes have been revised primarily to reflect the 2018 UK Corporate Governance Code and the FRC’s Guidance on Board Effectiveness published in 2018, as well as changes to the law since the last versions were published.
The Pensions and Lifetime Savings Association has also published its Stewardship Guide and Voting Guidelines 2020.
Deferred prosecution agreements
The Serious Fraud Office (SFO) recently entered into a Deferred Prosecution Agreement (DPA) with Airbus. An indictment was laid at the Royal Courts of Justice and suspended at the request of the SFO in light of the DPA. The indictment charges Airbus with five counts of failing to prevent bribery, contrary to section 7 of the Bribery Act 2010. As part of the DPA, Airbus has agreed to pay a total of EUR991 million.
Practical Law has published an article looking at the approval of the SFO’s DPA with Airbus and the implications for corporate criminal liability and future DPAs.
Report on Market Abuse Regulation
ESMA is expected to publish a final report on its review of the Market Abuse Regulation in Spring 2020.
Consumer and competition Command Paper
BEIS will publish a consumer and competition Command Paper in spring 2020 and carry out a five-year review of the Consumer Rights Act 2015 later in the year.
Dates for your diary
4 March 2020
Closing date for consultation on ICO draft direct marketing code of practice.
11 March 2020
Consultation on RPI reform opens.
15 March 2020
Revised Ethical Standard for auditors become effective.
16 March 2020
FRC consultation on changes to FRS 101 closes.
23 March 2020
Government consultation on regulating online advertising closes.
