United Kingdom

On 11 July 2023 the National Security Act 2023 (the Act) received royal assent and became law. The Act addresses trade secret misappropriation in the context of industrial espionage by a foreign government, making the unauthorised conduct of obtaining, copying, recording or retaining a trade secret, or disclosing or providing access to a trade secret, under certain circumstances, a criminal offence. The maximum penalty is 14 years imprisonment and/or a fine (section 2 of the Act).

The trade secrets provision is part of a broader regime introduced by the UK government to address national security threats such as espionage, sabotage and foreign interference. 

One of the conditions that has to be met in relation to the person’s conduct is the “foreign power condition”. The foreign power condition is defined in section 31(1) of the Act as:

(a)the conduct in question, or a course of conduct of which it forms part, is carried out for or on behalf of a foreign power, and

(b)the person knows, or having regard to other matters known to them ought reasonably to know, that to be the case.

In order for section 31(1) to be triggered it is for example sufficient if the conduct is under direction or control of the foreign power or even just carried out with the financial or otherwise assistance provided by a foreign power for that purpose.

It will be interesting to see how the foreign power condition will be applied in practice, in particular where governments have extensive control and ownership over corporations.…

Continue Reading Trade secrets misappropriation: a new criminal offence in the UK

On 26 June 2023, the International Sustainability Standards Board (“ISSB”) published its inaugural International Financial Reporting Standards Sustainability Disclosure Standards (the “ISSB Standards”) (read our previous blog post on this here).  In August 2023, the UK Financial Conduct Authority (“FCA”) published Primary Market Bulletin 45, confirming its intentions to update its climate-related disclosures…

This note provides highlights of the UK’s recently released and remarkably sweeping Energy Security Bill.  If enacted, the Bill will have profound impacts on energy investments and the pace and scope of the energy transition in the UK.  Before detailing the Bill, some political context may be useful.

The Uxbridge Surprise

Boris Johnson’s resignation as…

Two speeches by the EU Commission President, Ursula Von de Leyen in March and April 2023, set out the EU’s policy towards China. In late April, the UK Foreign Secretary set out the UK’s emerging strategy and on the same day earlier this month, a UK Government Committee released a report which heavily criticized the UK’s dealings with China and the German Government released its long-awaited (and much-redrafted) China Strategy. 

This blog looks at similarities between the three approaches and what conclusions we might draw about the implications.

EU China Strategy

The EU first labelled China a systemic rival in 2019.  Since then, the European Commission has promoted the idea of “de-risking” the bloc’s most sensitive economic sectors to limit their dependence on China.

In a powerful speech in March 2023 Commission President Ursula Von der Leyen set out the need for the EU to develop its China Strategy.  The new strategy was needed because of what she described as the hardening of China’s overall strategic posture, matched by human rights abuses at home and an increasingly assertive stance in Asia. She was careful to note that the EU’s position on China would depend on how China interacts with ‘Putin’s war’ and how China meets international human rights obligations.  President Von der Leyen labelled as deliberate Chinese policies of disinformation and economic and trade coercion, saying they were used to target ‘countries to ensure they comply and conform’.

The tone of President Von der Leyen’s speech was set against the EU’s assessment that a newly assertive China was moving from an era of ‘reform and opening’ to one of ‘security and control’ whose purpose was ‘a systemic change of the international order [to place] China at its centre’.  In her speech, The Commission President noted that ‘all companies in China…are…obliged … to assist state intelligence-gathering operations and to keep it secret’. President Von der Leyen concluded that Chinese focus on military, tech and economic security would increasingly trump the appeal of free markets and open trade.

However, President Von de Leyen made clear that the EU did not seek to ‘cut economic, societal, political or scientific ties’, but rather to ‘rebalance the relationship on the basis of transparency, predictability and reciprocity.’ Using language reminiscent of President Macron’s call for the EU to seek greater ‘strategic autonomy’, President Von der Leyen argued that the new relationship would require the EU’s economy and industry to be more competitive and resilient in the cyber and maritime, space and digital, defence, innovation, health, digital and clean-tech sectors. President Von der Leyen pointed to the Net-Zero Industry and the Critical Raw Materials Acts as examples of the EU’s determination to respond to Chinese domination of these critical sectors.…

Continue Reading China and Europe: De-Risking the Relationship

On 23 June 2023, the Council of the European Union (the “Council”) adopted a new package of economic sanctions against Russia. In addition to new asset-freezing designations, this eleventh package of sanctions includes new trade, transport and financial restrictive measures.

In recent weeks the UK has implemented various amendments to its existing sanctions regimes targeting Russia and Belarus, including the expansion of the UK’s Belarus-related sanctions regime to include certain restrictions previously introduced with respect to Russia and restrictions on the provision by UK persons of certain legal services.  The UK has also amended a number of General Licenses applicable to these two sanctions regimes and introduced new General Licenses, and updated aspects of its sanctions-related guidance, as detailed below.

Summary of New EU Russia Sanctions

Asset-freezing Designations

Council Implementing Regulation (EU) 2023/1216 designates additional individuals and entities to the EU asset-freezing list. The new designations include Russian government and military officials as well as Russian IT companies and the two Russian banks, MRB Bank and CMR Bank, which operate in the non-government controlled Ukrainian territories of Donetsk, Luhansk, Kherson and Zaporizhzhia.

Council Regulation (EU) 2023/1215 broadens the listing criteria upon which specific designations can be made under EU sanctions against Russia, to include, inter alia, the significant frustration of EU sanctions as a basis for designation. The regulation also introduces new derogations, including a derogation for the winding down of a Russian joint venture co-owned with the designated individual Alexey Alexandrovits Mordashov as well as a derogation allowing the disposal of certain types of securities held with specified listed entities.…

Continue Reading EU and UK Adopt New Sanctions Against Russia

On 29 March 2023, the UK’s Department for Culture, Media and Sport (“DCMS”) published the draft Media Bill (the “Bill”), which will deliver on a number of legislative reforms set out in the Government’s White Paper entitled “Up Next; the Government’s vision for the broadcasting sector”, published in April 2022.

The Bill forms part of…

Those in the business of fast‑moving consumer goods (“FMCGs”) are likely aware of the plethora of environmental and product stewardship regulations applicable to the FMCG sector.  These laws are set to increase and expand in application.  What FMCG companies also need to get to grips with are a range of broader (and also fast‑moving!) environmental, social and governance (“ESG”) developments and consequent risks and opportunities.  Companies need to understand how the new world of ESG impacts their supply chains, key ingredients and components, consumer choice and confidence, competitive advantage, market accessibility, and marketing. 

Designed as a ‘primer’ for FMCG companies, in this piece, we cover a range of key trends in the emerging UK and EU ESG legal landscape as relevant for the FMCG sector, from farmers to Food Business Operators (“FBOs”) and from manufacturers to retailers.  We also discuss some key legal and reputational risks; as well as pointers to help companies decipher and prepare for the ESG storm.

We focus on the UK and the EU (first movers on many ESG issues), but the landscape in other jurisdictions (including, for example, the US) is also evolving and becoming more complex.

Key ESG Issues for FMCGs

We think there are four categories of key ESG developments for FMCGs to watch: (I) corporate reporting and disclosure regimes; (II) green/sustainability claims and labelling; (III) supply chain obligations; and (IV) product packaging and presentation.

Many emerging ESG frameworks cut across sectors.  This may be efficient for regulators, but can make identifying sector-specific risks and opportunities more challenging.  We have sought to do that below.…

Continue Reading Green Groceries: Key ESG Issues for the FMCG Industry (including FBOs)

The relationship between the UK and the Republic of Ireland (ROI) came into sharp focus recently, as US President Joe Biden visited ROI.  Biden’s visit coincided with the 25th anniversary of the Belfast (Good Friday) Agreement 1998 (GFA) which brought an end to 30 years of Troubles in Northern Ireland (NI).  The UK government will have welcomed the fact that President Biden described the Windsor Framework (WF) as one of two pillars (along with the GFA) which are key to future peace and prosperity in NI.  The WF is also fundamental to the recent improvement of the tripartite UK-EU-ROI relationship.

The Northern Ireland Protocol (NIP) was part of the UK’s withdrawal from the EU and sought to square the circle of respecting the GFA, whilst maintaining NI’s place in the UK Single Market. But the Unionist community in NI felt the NIP left NI being treated differently from the rest of the UK – a feeling which led to the 2022 suspension of the Stormont Assembly. The negotiation of the WF demonstrated a new and welcome willingness of the UK and the EU to negotiate mutually acceptable solutions to some of the problems created by Brexit (even if the WF has not (so far) achieved one of its objectives of re‑starting power-sharing at Stormont).

What has Changed under the WF?

The WF addresses a number of the difficulties with the NIP — including arrangements for medicines, cross‑border transport of plants and pets, and the power of the NI Government to raise objections to EU legislation that applies in NI (the “Stormont Brake”).  The WF also creates a “Green Lane” (for agri‑foods being traded only into NI) and a “Red Lane” (for agri‑food products ‘at risk’ of leaving the UK’s Single Market and being traded into the EU’s Single Market).  Green Lane goods will be required to carry  new labelling stating ‘not for sale in the EU’ and, in comparison with the checks on such goods required under the NIP, Green Lane goods will be subject to reduced customs checks and procedures.…

Continue Reading The Implications of the Windsor Framework

FCA Issues Reminder on Board and Executive Management D&I Disclosure Obligations

The UK Financial Conduct Authority (“FCA”) has provided a reminder to primary market participants in its Primary Market Bulletin 44 of the need to make diversity and inclusion-related (“D&I”) disclosures in their annual reports. The obligations were introduced last year through amendments to the Listing Rules  and the Disclosure Guidance and Transparency Rules (“DTRs”), as set out in the FCA’s Policy Statement PS 22/3 (and covered in our previous blog post here).

At a glance, the amendments to the Listing Rules oblige in-scope companies to disclose annually on a “comply or explain” basis whether they meet specific board diversity targets, and to publish standardised data on the composition of their board and senior management, in each case in relation to sex or gender and ethnic background.

Changes to the corporate governance rules were introduced (through the amendments to the DTRs) to encourage a broader consideration of diversity at a board level, including with respect to a wider pool of diversity characteristics, spanning ethnicity, sexual orientation, disability, and socio-economic background

The rules are intended to increase transparency with better, more comparable information on the diversity of companies’ boards and executive management. The FCA believes that greater transparency will provide improved data for companies and investors to assess progress in this area, and inform shareholder engagement and investment decisions, thereby enhancing market integrity and promoting greater D&I.…

Continue Reading FCA Primary Market Bulletin No. 44

At the beginning of a new year, we are looking ahead to five key technology trends in the EMEA region that are likely to impact businesses in 2023.

1. Technology Regulations across EMEA

European Union

If 2022 was the year that the EU reached political agreement on a series of landmark legislation regulating the technology sector, 2023 will be the year that some of this legislation starts to bite:

  • The Digital Services Act (DSA): By 17 February 2023, online platforms and online search engines need to publish the number of monthly average users in the EU. Providers that are designated as “very large online platforms” and “very large search engines” will need to start complying with the DSA in 2023, and we may start to see Commission investigations kicking off later in the year too.
  • The Digital Markets Act (DMA): The DMA starts applying from 2 May 2023. By 3 July 2023, gatekeepers need to notify their “core platform services” to the Commission.
  • The Data Governance Act (DGA): The DGA becomes applicable from 24 September 2023.

Also this year, proposals published under the European Data Strategy—such as the Data Act and European Health Data Space—and EU legislation targeting artificial intelligence (AI) systems—including the AI Act, AI Liability Directive and revised Product Liability Directive—will continue making their way through the EU’s legislative process. These legislative developments will have a significant impact on the way that businesses ingest, use and share data and develop and deploy AI systems. In addition, the new liability rules will create potentially significant new litigation exposure for software and AI innovators.…

Continue Reading Top Five EMEA Technology Trends to Watch in 2023