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UK Carbon Border Adjustment Mechanism: how will it work?
In February, we reported on the Department of Energy Security and Net Zero’s confirmation that a UK Carbon Border Adjustment Mechanism (CBAM) would be bought into force by 2027
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Australia | Publication | August 2020
The Federal Government’s proposed reforms to the Franchising Code of Conduct seek to “methodically” deliver reform to the Australian franchise sector, while avoiding unnecessary red tape. The headline reforms mentioned in Minister Cash’ announcement head in that direction, but there is a degree of devil in the detail that has the potential to cause consternation and additional compliance cost for franchise systems. The expressed intention for Government to consult with industry concerning the detail of some of the reforms is therefore important to avoid excessive compliance costs and unintended consequences.
The proposed legislation will double the penalties for breach of the Franchising Code, from $66,600 to $133,200. The Government proposes to consult on other specific reforms, which will include:
There are various other initiatives aimed at improving information and franchise awareness, including a franchising specific website.
The Government noted that it had already introduced a number of initiatives in response to issues raised during the 2018 Franchising Inquiry, notably extra ACCC information gathering and enforcement powers in relation to unfair contract terms and the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019, which came into effect on 1 July 2019 and provides protections for franchisees and employees of franchisors reporting a breach of an industry code by a franchisor, and for employees of franchisees reporting a breach by a franchisee.
The Government also noted it had amended the Franchising Code effective 1 June 2020 specifically for the automotive sector to:
The Government noted it will continue to work with the automotive franchising sector on the development of an industry-led, principles based voluntary guide to improve the transparency and fairness of agreements.
The Government aims to increase the information available to prospective franchisees before they enter the franchise agreement, with consultation with the sector to assist it to develop:
The Government proposes to improve franchisees’ access to non-financial information, supporting their ability to conduct due diligence, by amending the Franchising Code:
The Government will also amend the Information Statement (Annexure 2 to the Franchising Code) to include reference to the ACCC’s franchisee manual and emphasise key rights and information.
The Government will amend the Franchising Code so that any financial information must be part of the disclosure document and require disclosure documents to include a statement on the accuracy and appropriateness of the franchisor’s financial information.
The Government will improve disclosure to franchisees on supply arrangements and rebates received by franchisors. The Government will amend the Franchising Code to require franchisors to disclose information on supplier rebates, commissions and other payments and to disclose any master franchisor controls and/or rebates from suppliers. Disclosure of financial information will be improved through the introduction of a Key Disclosure Information Fact Sheet.
Disclosure and Cooling Off time periods will be clarified, although the proposal for franchisee termination at any time up to 14 days after the last of certain events have occurred, such as, the agreement being signed, payment being made, disclosure documents being received and, if applicable, a copy of the terms of the lease being received, seems problematic and an unnecessary complication. Similarly, the extension of cooling off rights to the transfer of an agreement will create compliance complexities.
The Government will strengthen franchisees’ rights when a demand for significant capital expenditure is made by:
The Government will amend the Franchising Code to clarify requirements relating to the treatment and reporting of cooperative funds, and will:
The Government will strengthen the management of the dispute resolution services and organisations, including expressly allowing multi-party dispute resolution under the Franchising Code, conciliation and voluntary binding arbitration, and will:
The Government will strengthen the ability of franchisees to exit the agreement before the end of the term and increase disclosure of end-of-term arrangements for goodwill:
Some technical changes are proposed to clause 23 of the Code in relation to restraint of trade clauses, as well as initiatives designed to increase awareness.
The Government will enhance enforcement, and will:
The Government declined to single out franchise agreements in the context of the review of legislation to prohibit unfair contract terms in standard form small business contracts. It noted that issues relating to unilateral variations of franchise agreements and subsidiary documents are best dealt with through the Australian Consumer Law and the good faith provisions of the Franchising Code.
The Government will work with stakeholders to develop best practice models in relation to the process by which a franchisor makes unilateral variations to contracts and subsidiary documents, and will:
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In February, we reported on the Department of Energy Security and Net Zero’s confirmation that a UK Carbon Border Adjustment Mechanism (CBAM) would be bought into force by 2027
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