Guidance

Access and benefit sharing of genetic resources (Nagoya Protocol)

Updated 22 April 2024

Guidance on enforcement actions and associated rights

Nagoya Protocol (Compliance) Regulations 2015

April 2024

OPSS enforces the above Regulations. This guidance, which sits alongside our Enforcement Policy, explains the enforcement powers that are available to OPSS when addressing non-compliance with the Regulations.

Information and guidance are also available on the requirements of the Regulations and complying with these:

Read about the Regulations.

1) Introduction

1.1 The Office for Product Safety and Standards (OPSS) is part of the Department for Business and Trade and enforces a range of regulations on behalf of the Secretary of State. Our primary purpose is to protect people and places from product-related harm, ensuring consumers and businesses can buy and sell products with confidence.

Read about our approach to delivering regulation.

1.2 The regulations enforced by OPSS include The Nagoya Protocol (Compliance) Regulations 2015, also referred to as the ‘UK Access and Benefit Sharing Regulations’ (referred to in this guidance as ‘the 2015 Regulations’). The 2015 Regulations put in place the measures needed to implement and enforce Regulation (EU) No 511/2014 on compliance measures for users from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (referred to in this guidance as ‘the 2014 Regulation’), and elements of the Nagoya Protocol. ^{[footnote 1]} References in this guidance to ‘OPSS’ refer to OPSS acting as the Secretary of State for the purpose of these regulations.

1.3 This enforcement guidance should be read alongside our Enforcement Policy. Our Enforcement Policy explains our approach to addressing non-compliance, providing a framework for our decision-making, and helping those affected by our enforcement activities to understand how and why decisions are made, while this guidance explains the specific powers that are available to OPSS when addressing non-compliance under the 2015 Regulations.

1.4 The guidance explains the following actions that are available to OPSS under the 2015 Regulations. These actions are set out in the Schedule to the 2015 Regulations:

a) acceptance of an Enforcement Undertaking that is given to OPSS by a user, committing to taking actions in relation to non-compliance (see section 2)

b) service of a Stop Notice on a user by OPSS, prohibiting further non-compliance (see section 3)

c) service of a Compliance Notice on a user by OPSS, requiring action to be taken (see section 4)

d) imposition of a Variable Monetary Penalty (see section 5) or a Non-Compliance Penalty (see section 6) on a user by OPSS, requiring payment of a financial penalty.

Compliance Notices, Stop Notices, Variable Monetary Penalties and Non-Compliance Penalties are referred to in the 2015 Regulations as ‘civil sanctions’.

1.5 This document does not explain our approach to prosecution, which is covered in our Enforcement Policy. OPSS is only able to prosecute where there has been a failure to comply with a Stop Notice or Compliance Notice served by OPSS under the 2015 Regulations; in relation to a failure to keep required information for 20 years after utilisation; or in respect of obstruction. ^{[footnote 2]}

1.6 Use of the various actions that are available to OPSS is determined on the facts of the individual case, in line with our Enforcement Policy. We select proportionate action(s) with the aim of preventing or mitigating the risk of harm and/ or changing user behaviour, including through the use of sanctions.

1.7 This guidance also explains the statutory rights that are set out in the Schedule to the 2015 Regulations to make representations in respect of enforcement action that we are proposing to take, or to appeal enforcement action that we have taken.

1.8 Where you do not have statutory rights to make representations or appeal, you are still entitled to challenge any action that we are taking in relation to you or your organisation. These rights to challenge are explained in our Challenges and Appeals Guidance.

Read our Challenges and Appeals Guidance.

1.9 If you have a concern about our approach, or the behaviour of our staff, please send us your comments or complaint. Our complaints processes are explained in our Complaints Procedure.

Read our Complaints Procedure.

2) Enforcement Undertakings

2.1 An Enforcement Undertaking is a written agreement through which a user that has failed to meet its obligations under the 2015 Regulations commits to undertake specific actions within a specified timeframe and these commitments are accepted by OPSS. An Enforcement Undertaking may be accepted where OPSS has reasonable grounds to suspect that a user has:

• failed to exercise due diligence as required by Article 4(1) of the 2014 Regulation
• failed to seek and keep the required information and documentation and transfer this to subsequent users as required under Article 4(3) of the 2014 Regulation
• failed to make a due diligence declaration as required by Article 7(2) of the 2014 Regulation
• committed an offence under Regulation 13(c) of the 2015 Regulations by failing to keep information for 20 years after utilisation, as required by Article 4(6) of the 2014 Regulation
• committed an offence under Regulation 14 of the 2015 Regulations of obstructing an OPSS inspector

However, OPSS considers it unlikely that a circumstance would arise in which it would be appropriate to accept an Enforcement Undertaking in relation to an offence of obstructing an OPSS inspector.

2.2 The actions that are specified in the Enforcement Undertaking must be:

a) actions to ensure that non-compliance does not continue or recur

b) actions to ensure that the position is, as far as possible, restored to what it would have been if the non-compliance had not taken place, or

c) actions (including the payment of a sum of money) to benefit any person affected by the non-compliance

2.3 Where OPSS accepts an Enforcement Undertaking and all of the actions specified in the Enforcement Undertaking are completed within the specified timeframe(s), no further enforcement action will be taken in respect of the non-compliance to which the Enforcement Undertaking relates.

2.4 OPSS will take any failure to complete the specified actions in an Enforcement Undertaking satisfactorily within the specified timeframe seriously and will consider further enforcement action. The following actions are available to OPSS:

a) a Non-Compliance Penalty (see section 6)

b) a Stop Notice, Compliance Notice or Variable Monetary Penalty, in relation to any failure to comply with Article 4(1), Article 4(3) or Article 7(2) of the 2014 Regulation (see section 2.1)

c) prosecution (in relation to an offence under Regulation 13(c) or 14 of the 2015 Regulations)

2.5 A person who has given inaccurate, misleading, or incomplete information in relation to an Enforcement Undertaking, is considered not to have complied with it.

2.6 OPSS publishes details of any Enforcement Undertaking that we accept, in line with our Enforcement Policy.

View Enforcement Undertakings accepted by OPSS.

The published details are updated to indicate where OPSS has subsequently determined that the requirements of the undertaking have been met and has issued a Completion Certificate (see section 2.16).

Giving an Enforcement Undertaking

2.7 An Enforcement Undertaking may be given to OPSS by a user that brings the relevant non-compliance to our attention, as well as in circumstances where non-compliance has already come to our attention or that of another regulator. In either case, the Enforcement Undertaking will be assessed by OPSS on a case-by-case basis and the decision as to whether to accept the Enforcement Undertaking rests with us.

2.8 We aim to acknowledge receipt of an Enforcement Undertaking within 5 working days. Please note that expert, technical and/or legal consultation may be required to assess the Enforcement Undertaking and provide a substantive response. While there is no prescribed time frame within which we are required to respond to an Enforcement Undertaking, we will aim to do so within 28 days of receiving the Enforcement Undertaking.

2.9 An Enforcement Undertaking should be sent to OPSS using the contact details below. There is no legally prescribed form for an Enforcement Undertaking, however we can provide a template on request. Please email your request to: abs@businessandtrade.gov.uk.

2.10 Where the OPSS template is not used, the Enforcement Undertaking must include:

• a statement to the effect that it is given in accordance with the relevant provisions ^{[footnote 3]} in the 2015 Regulations
• the specific actions that are proposed, which must be actions of the type described in section 2.2
• the timeframe within which each action will be completed
• information as to how and when the person giving the undertaking will be considered to have discharged it

2.11 In order for OPSS to make an informed decision on an Enforcement Undertaking, it is important that we are provided with key information about the non-compliance when the Enforcement Undertaking is given, including:

• full details of the non-compliance, including relevant dates
• an assessment of the impact of the non-compliance
• any identified failures which have contributed to the non-compliance occurring
• any actions already taken to stop the relevant non-compliance from continuing, and prevent it from recurring
• details of any action already taken towards the restoration of the position to what it would have been had the non-compliance not taken place, as well as any actions taken to benefit third parties who may have been affected

2.12 Where an Enforcement Undertaking proposes a donation or the carrying out of works for a third party, it should be communicated to the recipients of the donation or works that the donation or carrying out of works is part of an Enforcement Undertaking which has been given to OPSS in relation to non-compliance with the 2015 Regulations.

a) Enforcement Undertakings must clearly state that the payment is an unrestricted donation from which the donor derives no benefit.

b) Donations cannot be made to an organisation with whom the donor has a personal or family relationship, or with the trustees or management of that organisation.

2.13 OPSS is more likely to consider it appropriate to accept an Enforcement Undertaking where we are satisfied that the acceptance of the Enforcement Undertaking is a proportionate response to the relevant non-compliance, taking account of the nature, seriousness, and circumstances of the non-compliance. In making our decision, we will have regard to the following:

a) whether the Enforcement Undertaking includes sufficient detail – in relation to both the non-compliance and any specified action(s) – to enable us to make an informed decision

b) whether the time period specified in the Enforcement Undertaking is achievable and appropriate, having regard to the nature, seriousness, and circumstances of the relevant non-compliance

c) whether the Enforcement Undertaking has been given as an early and proactive response to non-compliance that has been identified, whether by the person giving the undertaking or by another

d) whether there is evidence of a positive commitment to the actions specified in the Enforcement Undertaking and whether this commitment is evident at an appropriate level of the organisation

e) whether there is evidence of a commitment to transparency to those who may be materially impacted by the non-compliance, where applicable

f) whether we are satisfied, taking account of information provided in the Enforcement Undertaking and from any other source, that the person giving the undertaking is in a position to complete the specified action(s)

g) whether we are satisfied, taking account of information provided in the Enforcement Undertaking and from any other source, that we will be able to ascertain how and when the person giving the undertaking has completed the specified action(s)

h) whether any actions that are specified in the Enforcement Undertaking in order to address continuing non-compliance appear adequate to secure that the non-compliance does not continue

i) whether any actions that are specified in the Enforcement Undertaking in order to prevent future non-compliance appear adequate to secure that the non-compliance does not recur

j) whether any actions that are specified in the Enforcement Undertaking in order to restore the position to what it would have been if the non-compliance had not taken place committed appear adequate to restore the position in so far as it is possible to do so

k) whether any actions that are specified in the Enforcement Undertaking to benefit any person affected by the non-compliance (including the payment of a sum of money) appear proportionate to the impact of the non-compliance

2.14 OPSS is unlikely to consider it appropriate to accept an Enforcement Undertaking:

a) in respect of an obligation which it considers can be quickly and easily met

b) when there is insufficient detail as to how and/ or when non-compliance will be resolved

c) if the level of non-compliance is not fully acknowledged by the user

d) in respect of non-compliance in relation to which we have already given notice of our intention to serve a Compliance Notice (see section 3) or impose a Variable Monetary Penalty (see section 5)

e) in respect of an offence in relation to which we have commenced or recommended legal proceedings or where we have already determined that a prosecution is appropriate in the public interest

f) in respect of conduct in relation to which we are aware that another regulator has relevant concerns

g) in respect of non-compliance that involved intent, obstruction or the falsification of information or documentation

h) that includes a clause denying liability

i) that sets up defences for possible non-compliance with the Enforcement Undertaking

j) that purports to restrict our ability to publish details of the Enforcement Undertaking

Variation of an Enforcement Undertaking

2.15 An Enforcement Undertaking that has been accepted by OPSS may be varied, or the period within which the action must be completed may be extended, if OPSS and the user agree the variation in writing. A user can apply for a variation or extension of its Enforcement Undertaking by contacting OPSS, using the contact details provided when the Enforcement Undertaking was accepted. There is no specific template to use, but the following information should be provided:

• a copy of the Enforcement Undertaking
• details of the progress that has been made in delivering the actions(s) specified in the Enforcement Undertaking
• the reasons for proposing a variation or extension
• details of the variation or extension that is proposed

Completion Certificates

2.16 When OPSS is satisfied that all of the actions specified in the Enforcement Undertaking have been completed (referred to in the 2015 Regulations as ‘discharge’ of the undertaking) we will issue a Completion Certificate.

2.17 A Completion Certificate can be applied for at any time. When making the application, we will expect you to provide sufficient information to enable us to determine that the actions have been completed. We may require you to provide further information where we consider that this is necessary in order for us to determine whether all of the actions in the Enforcement Undertaking have been completed. Where the actions specified in the Enforcement Undertaking include a commitment to offset detriment caused to a third party, we will require evidence that this commitment has been met, usually by confirmation in writing.

2.18 OPSS must then decide whether or not to issue a Completion Certificate and give you written notice of the decision within 14 days of the application.

2.19 Where OPSS decides not to issue a Completion Certificate you are entitled to appeal against our decision to the First-tier Tribunal (see section 7) on the grounds set out in the paragraph 20(5) of the Schedule to the 2015 Regulations. We will set out your rights when we inform you of our decision.

2.20 OPSS may revoke a Completion Certificate if it was issued on the basis of information that is subsequently established to be inaccurate, incomplete, or misleading. OPSS will send you written notice of any decision to revoke a Completion Certificate and will consider whether further enforcement action is appropriate (see section 2.4).

3) Stop Notices

3.1 A Stop Notice is a written notice, served by OPSS on a user, to prohibit non-compliant activities or to restrict products being made available on the market until the user has taken the steps specified in the notice.

3.2 A Stop Notice may be issued only where the user is carrying on an activity and OPSS reasonably believes that:

a) the activity involves or is likely to involve a failure to comply with Article 4(1), Article 4(3) or Article 7(2) of the 2014 Regulation (see section 2.1) or

b) the user is likely to make available on the market a product developed by means of the utilisation of genetic resources or traditional knowledge associated with genetic resources for which the obligations under the 2014 Regulation have not been met

OPSS is not required to give notice of its intent before serving a Stop Notice.

3.3 OPSS is able to use a Stop Notice independently or in combination with other civil sanctions, namely a Compliance Notice and/ or a Variable Monetary Penalty. This allows us to tailor the use of civil sanctions to the circumstances.

3.4 OPSS will take any failure to comply with the requirements of a Stop Notice seriously and will consider further enforcement action. This may involve:

a) a Non-Compliance Penalty (see section 6)

b) prosecution. It is a criminal offence to fail to comply with a Stop Notice within the time limit specified in the notice and a person guilty of an offence is liable, on conviction, to a fine or a term of imprisonment

3.5 OPSS is likely to serve a Stop Notice where we consider that there is a need to prevent an activity that presents a risk to the objective of fair and equitable sharing of benefits arising out of the utilisation of genetic resources, and we are not satisfied that appropriate and timely action is being taken, or will be taken by the user without our intervention. In considering whether to serve a Stop Notice, OPSS would consider whether this might remove the added value of the genetic resource(s) in question and impact negatively on any current or imminent flow of equitable benefit sharing.

3.6 OPSS is less likely to serve a Stop Notice where we are satisfied by assurances given by the user in relation to the action that it is taking or proposes to take.

3.7 Where OPSS decides to issue a Stop Notice you are entitled to appeal against our decision to the First-tier Tribunal (see section 7) on the grounds set out in the paragraph 14(2) of the Schedule to the 2015 Regulations. We will set out your rights when we inform you of our decision.

3.8 A Stop Notice may be withdrawn by OPSS or may be varied in order to reduce the amount of work required of the user. Where OPSS decides to withdraw or vary a Stop Notice, we will inform you in writing.

3.9 OPSS publishes details of any Stop Notice that we serve, in line with our Enforcement Policy. The published details are updated to indicate where OPSS has subsequently determined that the requirements of the notice have been met, and has issued a Completion Certificate.

Completion Certificates

3.10 When OPSS is satisfied that all steps set out in the Stop Notice have been taken, we will issue a Completion Certificate. When a Completion Certificate is issued, the Stop Notice ceases to have effect.

3.11 A Completion Certificate can be applied for at any time. When making the application, we will expect you to provide sufficient information to enable us to determine that the actions have been completed. OPSS must then decide whether or not to issue a Completion Certificate and give you written notice of the decision within 14 days of the application.

3.12 Where OPSS decides not to issue a Completion Certificate, you are entitled to appeal against our decision to the First-tier Tribunal (see section 7) on the grounds set out in the paragraph 15(5) of the Schedule to the 2015 Regulations. We will set out your rights when we inform you of our decision.

Compensation

3.13 Where a Stop Notice has been issued or a Completion Certificate has been refused in relation to a Stop Notice and, as a result, the recipient of the Stop Notice has suffered loss, OPSS may be required to pay compensation. The obligation to compensate the recipient applies only where:

a) OPSS withdraws or amends the Stop Notice because the decision to issue it was unreasonable, or any step specified in the notice was unreasonable

b) the recipient successfully appeals against the Stop Notice (see section 7) and the Tribunal finds that the service of the notice was unreasonable, or

c) the recipient successfully appeals against the refusal of a Completion Certificate and the Tribunal finds that the refusal was unreasonable.

3.14 In these circumstances, a recipient of a Stop Notice who wishes to claim compensation should do so in writing, using the contact details provided on the Stop Notice. In order for OPSS to make an informed decision on a claim for compensation, it is important that we are provided with the following information and that any available evidence to support the claim is provided when the claim is made:

a. Full details of the loss(es) suffered

b. The amount of compensation sought

c. An explanation of how the Stop Notice, or the refusal of a Completion Certificate, caused the loss, and

d. Any steps taken to minimise the loss

3.15 OPSS will not pay compensation where an appeal was successful on a technical or minor matter but the Tribunal upheld the Stop Notice as having been reasonably served, or where it is deemed that we acted reasonably on the basis of the information provided by the recipient of the Stop Notice.

3.16 OPSS will consider all information provided to support a claim for compensation and will give you written notice of its decision. Where OPSS decides to refuse compensation the claimant is entitled to appeal against our decision to the First-tier Tribunal (see section 7). Where OPSS decides to award compensation, the claimant is entitled to appeal the amount of compensation to be awarded (see section 7). The grounds for appeal are set out in the paragraph 16(2) of the Schedule to the 2015 Regulations. We will set out your rights when we inform you of our decision.

4) Compliance Notices

4.1 A Compliance Notice is a written notice, served by OPSS, which requires a user to take action, within a specified period (or periods) to secure that non-compliance does not continue or recur.

4.2 To serve a Compliance Notice OPSS must be satisfied beyond reasonable doubt that the user has:

• failed to exercise due diligence as required by Article 4(1) of the 2014 Regulation
• failed to seek and keep the required information and documentation and transfer this to subsequent users as required under Article 4(3) of the 2014 Regulation
• failed to make a due diligence declaration as required by Article 7(2) of the 2014 Regulation

This is the same standard of proof as is required in criminal prosecution.

4.3 OPSS is not able to serve a Compliance Notice requiring a user to take action to achieve compliance with the requirements of the 2014 Regulation and/ or to prevent future non-compliance where a Compliance Notice has previously been served in relation to the same act or omission.

4.4 OPSS is able to use a Compliance Notice independently or in combination with other civil sanctions, namely a Stop Notice and/ or a Variable Monetary Penalty. This allows us to tailor the use of civil sanctions to the circumstances.

4.5 OPSS will take any failure to complete the actions specified in a Compliance Notice satisfactorily within the specified period seriously and will consider further enforcement action. This may involve:

• a Non-Compliance Penalty (see section 6)
• prosecution. It is a criminal offence to fail to comply with a Compliance Notice and a person guilty of an offence is liable, on conviction, to a fine or a term of imprisonment.

4.6 OPSS is likely to serve a Compliance Notice in response to continuing non-compliance, where we consider that advice or guidance alone is not an appropriate response, or as an escalating response where advice or guidance have not delivered the required improvements. A Compliance Notice may be considered appropriate, for example, to require a user to take steps to:

• retrospectively request appropriate Prior Informed Consent / Mutually Agreed Terms / equivalent documentation
• retrospectively make a declaration of due diligence as required at the stage of final development of a product

4.7 OPSS is less likely to serve a Compliance Notice where we consider that this is unlikely to be an effective response to non-compliance. This may include circumstances where OPSS has already accepted an Enforcement Undertaking in relation to the non-compliance and the specified actions have not been completed satisfactorily within the specified timeframe.

4.8 Before serving a Compliance Notice OPSS will issue you with a notice indicating our intention and setting out the right to offer a Third-Party Undertaking (see sections 4.13 to 4.16). Where we issue a Notice of Intent, you are entitled to make written representations and objections to us in relation to the proposed Compliance Notice. You must do this within 28 days beginning on the day on which you received the notice of our intention. This allows you to raise any concerns in relation to the proposed Compliance Notice.

4.9 Once the period for making representations and objections has expired, OPSS will take account of any written representations or objections and make a decision. Where we decide to proceed with the proposed notice, with or without modifications, we will serve the Compliance Notice (referred to in the 2015 Regulations as a Final Notice). Where a Third-Party Undertaking is offered, and we decide to accept this offer, we will take account of the Third-Party Undertaking in making our decision on serving a Compliance Notice.

4.10 Where OPSS decides to serve a Compliance Notice you are entitled to appeal against our decision to the First-tier Tribunal (see section 7) on the grounds set out in the paragraph 9(2) of the Schedule to the 2015 Regulations. We will set out your rights when we inform you of our decision.

4.11 A Compliance Notice may be withdrawn by OPSS or may be varied in order to reduce the amount of work required of the user. Where OPSS decides to withdraw or vary a Compliance Notice, we will inform you in writing.

4.12 OPSS publishes details of any Compliance Notice that we serve, in line with our Enforcement Policy. The published details may be updated to indicate where OPSS has subsequently determined that the requirements of the notice have been met.

Third party undertakings

4.13 A Third-Party Undertaking is an undertaking offered to OPSS by a user that has received notice of our intention to serve a Compliance Notice. It should not be confused with an Enforcement Undertaking (see section 2).

4.14 A Third-Party Undertaking may set out action(s) that the user proposes to take (including payment of a sum of money) to benefit any third party affected by the offence or non-compliance. Any Third-Party Undertaking offered will be assessed by OPSS on a case-by-case basis and we will notify the user in writing of our decision.

4.15 OPSS will take any failure to complete the actions set out in a Third Party Undertaking satisfactorily within the specified timeframe(s) seriously and further enforcement action will be considered. This may involve:

a) a Compliance Notice (see section 4)

b) a Variable Monetary Penalty (see section 5)

c) a Non-Compliance Penalty (see section 6)

4.16 OPSS publishes details of any Third Party Undertaking that we accept. The published details may be updated to indicate where OPSS has subsequently determined that the actions set out in the undertaking have been completed.

5) Variable Monetary Penalties

5.1 A Variable Monetary Penalty is a financial penalty that may be imposed by OPSS. OPSS can impose Variable Monetary Penalties without recourse to the criminal courts. Penalties are payable to the Consolidated Fund and are not retained by OPSS.

5.2 To impose a Variable Monetary Penalty OPSS must be satisfied beyond reasonable doubt that a user has:

• failed to exercise due diligence as required by Article 4(1) of the 2014 Regulation
• failed to seek and keep the required information and documentation and transfer this to subsequent users as required under Article 4(3) of the 2014 Regulation
• failed to make a due diligence declaration as required by Article 7(2) of the 2014 Regulation
• committed an offence under Regulation 13(c) of the 2015 Regulations by failing to keep information for 20 years after utilisation, as required by Article 4(6) of the 2014 Regulation
• committed an offence under Regulation 14 of the 2015 Regulations of obstructing an OPSS inspector

This is the same standard of proof as is required for Compliance Notices and for criminal prosecution.

5.3 A Variable Monetary Penalty can be imposed independently or in combination with other civil sanctions, namely a Stop Notice and/ or a Compliance Notice. This allows OPSS to tailor the use of civil sanctions to the circumstances.

5.4 A Variable Monetary Penalty cannot be imposed more than once in relation to the same act or omission. Equally, OPSS cannot institute criminal proceedings for an offence under the 2015 Regulations, in relation to which we have previously imposed a Variable Monetary Penalty, other than where there has been a failure to complete the actions specified in a related Third Party Undertaking (see 5.16 to 5.19).

5.5 OPSS is likely to impose a Variable Monetary Penalty where we consider this to be an appropriate response given the nature and seriousness of the non-compliance and the circumstances of the case. In particular, we are more likely to impose a penalty where we consider that this may serve to:

• tackle any financial gain or benefit from non-compliance
• change the behaviour of the user
• deter future non-compliance more widely

5.6 OPSS is less likely to impose a Variable Monetary Penalty in relation to an offence where we consider there is a greater public interest in prosecution.

5.7 OPSS will take any failure to pay a Variable Monetary Penalty seriously and can pursue the unpaid penalty as a debt in the relevant civil court.

5.8 When considering whether it is appropriate to impose a Variable Monetary Penalty, and the level at which any penalty should be set, OPSS may require that information is provided in order to enable it to establish the amount of any financial benefit arising as a result of the non-compliance.

5.9 Before imposing a Variable Monetary Penalty OPSS will issue you with a notice indicating our intention; explaining how the level of the proposed penalty has been determined (see Penalty Amount); and setting out the right to offer a Third Party Undertaking (see sections 5.16 to 5.19). Where we issue a Notice of Intent, you are entitled to make written representations and objections to us in relation to the proposed Variable Monetary Penalty. You must do this within 28 days beginning on the day on which you received the notice of our intention. This allows you to raise any concerns in relation to the proposed penalty.

5.10 Once the period for making representations and objections has expired, OPSS will take account of any written representations or objections and make a decision. Where we decide not to impose the proposed penalty we will notify you of our decision. Where we decide to vary or confirm the proposed penalty we will issue a Variable Monetary Penalty Notice (referred to in the 2015 Regulations as a Final Notice), setting out the amount to be paid; how payment may be made; and the period within which payment must be made, which will usually be 28 days from the date of the notice but may be longer where we consider this appropriate. Where the user offers a Third Party Undertaking, and we decide to accept this offer, we will take account of the terms of the Third Party Undertaking in determining whether to proceed with the proposed penalty and the amount of the penalty.

5.11 Where OPSS decides to serve a Variable Monetary Penalty Notice you are entitled to appeal against our decision to the First-tier Tribunal (see section 7) on the grounds set out in the paragraph 9(2) of the Schedule to the 2015 Regulations. We will set out your rights when we inform you of our decision.

5.12 A Variable Monetary Penalty Notice may be withdrawn by OPSS, or may be varied in order to reduce the amount of the penalty. Where OPSS decides to withdraw or vary a Variable Monetary Penalty, we will inform you in writing.

5.13 OPSS publishes details of any Variable Monetary Penalty that we impose, in line with our Enforcement Policy. The published details may be updated to indicate whether the penalty has been paid.

Penalty amount

5.14 Variable Monetary Penalties have no financial limit. In line with its Enforcement Policy, OPSS will usually set a starting point for its calculation of the penalty that takes account of the potential or actual harm associated with the breach; culpability factors; and, in the case of a business, its position in the market. It will then take account of any relevant mitigating or aggravating factors that it is aware of, or that are brought to its attention, in order to determine the level of the penalty.

5.15 The mitigating and aggravating factors that OPSS may consider include:

a) prompt and full disclosure in relation to the non-compliance

b) any known practical or technical reasons for continuing non-compliance

c) any early action to remedy the non-compliance or its effects

d) any restorative or restitutional action taken

e) the compliance history of the person

f) the period of the non-compliance

g) a co-operative approach in dealing with OPSS

h) any evidence of general commitment to compliance and to acceptance of responsibility for non-compliance and its effects

i) any financial gain attributable to the non-compliance

Third party undertakings

5.16 A Third Party Undertaking is an undertaking offered to OPSS by a user that has received notice of our intention to impose a Variable Monetary Penalty. It should not be confused with an Enforcement Undertaking (see section 2).

5.17 A Third Party Undertaking may set out action(s) that the user proposes to take (including payment of a sum of money) to benefit any third party affected by the offence or non-compliance. Any Third Party Undertaking offered will be assessed by OPSS on a case-by-case basis and we will notify the user in writing of our decision.

5.18 OPSS will take any failure to complete the actions set out in a Third Party Undertaking satisfactorily within the specified timeframe(s) seriously and further enforcement action will be considered. This may involve:

a) a Compliance Notice (see section 4)

b) a Variable Monetary Penalty (see section 5)

c) a Non-Compliance Penalty (see section 6)

d) prosecution (see section 1.6).

5.19 OPSS publishes details of any Third Party Undertaking that we accept. The published details may be updated to indicate where OPSS has subsequently determined that the actions set out in the undertaking have been completed.

6) Non-Compliance Penalties

6.1 Where OPSS has served a Compliance Notice or Stop Notice under the 2015 Regulations or has accepted an Enforcement Undertaking or Third Party Undertaking, and there has been a failure to comply with the requirements of the notice, or to meet the commitments in the undertaking, we may serve a Non-Compliance Penalty Notice, requiring payment of a financial penalty. OPSS can impose Non-Compliance Penalties without recourse to the criminal courts. Penalties are payable to the Consolidated Fund and are not retained by OPSS.

6.2 Where the requirements of the original Compliance Notice, Stop Notice, Enforcement Undertaking or Third Party Undertaking are met within the period specified for payment of the Non-Compliance Penalty, then the penalty does not have to be paid. Where OPSS is satisfied, within the payment period, that all requirements of the notice or undertaking have been met and that the Non-Compliance Penalty does not have to be paid, it will confirm this in writing.

6.3 OPSS will take any failure to pay a Non-Compliance Penalty seriously and can pursue the unpaid penalty as a debt in the relevant civil court. OPSS may also consider whether it is appropriate to initiate criminal proceedings in respect of any offence to which an undertaking related.

6.4 Before imposing a Non-Compliance Penalty OPSS will usually give you notice of our intention, setting out the grounds for the proposed penalty and the amount to be paid. We will offer you the opportunity to make representations in relation to the proposed penalty within 28 days beginning on the day on which you received the notice of our intention.

6.5 Once the period for making representations has expired, OPSS will take account of any written representations and make a decision. Where we decide not to impose the proposed penalty, we will notify you of our decision. Where we decide to vary or confirm the proposed penalty, we will serve a Non-Compliance Penalty Notice, requiring payment of the penalty within a specified period. This will usually be 28 days but may be longer where we consider this appropriate.

6.6 Where OPSS decides to impose a Non-Compliance Penalty you are entitled to appeal against our decision to the First-tier Tribunal (see section 7) on the grounds set out in the paragraph 23(7) of the Schedule to the 2015 Regulations. We will set out your rights when we inform you of our decision.

6.7 A Non-Compliance Penalty may be withdrawn by OPSS or may be varied in order to reduce the amount to be paid. Where OPSS decides to withdraw or vary a Non-Compliance Penalty, we will inform you in writing.

6.8 OPSS publishes details of any Non-Compliance Penalty that we impose, in line with our Enforcement Policy. The published details may be updated to indicate whether the penalty has been paid. In cases of non-payment, OPSS will make clear where the penalty was not payable on the basis that the requirements of the Compliance Notice or Enforcement Undertaking were met within the payment period.

Penalty amount

6.9 A Non-Compliance Penalty may be any amount up to the cost of fulfilling the remaining requirements of the notice or undertaking. In line with its Enforcement Policy, OPSS will usually set a starting point for its calculation of the penalty at the statutory maximum ie. 100% of the cost of fulfilling the remaining requirements of the notice or undertaking. It will then take account of any relevant mitigating or aggravating factors that it is aware of, or that are brought to its attention, in order to determine whether it is appropriate, based on the facts of the individual case, to adjust the level of the penalty downwards from the statutory maximum.

6.10 The mitigating and aggravating factors that OPSS may consider include:

a) prompt and full disclosure in relation to the non-compliance

b) any known practical or technical reasons for continuing non-compliance

c) any early action to remedy the non-compliance or its effects

d) any restorative or restitutional action taken

e) the compliance history of the person

f) the period of the non-compliance

g) a co-operative approach in dealing with OPSS

h) any evidence of general commitment to compliance and to acceptance of responsibility for non-compliance and its effects

i) any financial gain attributable to the non-compliance

7) Statutory rights to appeal to the First Tier Tribunal

7.1 You have a statutory right to appeal to the First-tier Tribunal (General Regulatory Chamber) in relation to the following actions that may be taken by OPSS:

a) a Stop Notice or a decision not to issue a Completion Certificate in relation to a Stop Notice (see section 3.7 and 3.12)

b) a decision not to award compensation in relation to a Stop Notice, or a decision on the amount of compensation (see section 3.16)

c) a Compliance Notice (see section 4.10)

d) a Variable Monetary Penalty (see section 5.11)

e) a Non-Compliance Penalty (see section 6.6)

f) a decision not to issue a Completion Certificate (also referred to as a certificate of discharge) in relation to an Enforcement Undertaking (see section 2.19)

7.2 You must exercise your right to appeal within 28 days of the date of the notice, or of a letter advising you of the decision not to award compensation or not to issue a Completion Certificate.

7.3 The Tribunal may:

• withdraw, confirm, or vary a requirement or notice
• take such steps as OPSS could take in relation to the act or omission giving rise to a requirement or notice
• defer the decision whether to confirm a requirement or notice, or any matter relating to that decision, back to OPSS

7.4 Where you exercise your right to appeal, the notice or penalty is suspended until the outcome of the appeal is reached, other than where your appeal relates to a Stop Notice.

7.5 To exercise your right to appeal, use the Notice of Appeal (General Regulatory Chamber) (Form T98).

Access form T98 and guidance on completing it.

Read further information on the General Regulatory Chamber.

8) Footnotes

1. References in this guidance to legislation should be taken to refer, where applicable, to that legislation as amended. ↩

2. In relation to an offence in Scotland or Northern Ireland, OPSS would refer the case to the Procurator Fiscal or the Public Prosecution Service respectively. ↩

3. The relevant provisions are the Nagoya Protocol (Compliance) Regulations 2015 Schedule, Part 3. ↩