Chapter 4: Supplementary provision
Section 53: Guidance
- This Section provides the Secretary of State with the power to issue guidance on the effect of any provision made by or under Part 1 of the Act.
- Subsection (2) provides the enforcement authority, as defined in Section 56, with a power to issue guidance on the exercise of any of its enforcement functions.
Example of guidance supporting the enforcement function
The Secretary of State publishes guidance for economic actors on how to engage with the enforcement process and what parties should do upon receipt of a compliance notice. The guidance may include information on how the party should provide evidence of compliance or how the party can request that the notice is varied to allow a longer period of time to comply with the requirements of the notice.
Section 54: Meaning of "UK consumer connectable product"
- This Section defines the meaning of "UK consumer connectable product". It is defined as a relevant connectable product that meets either of the conditions within subsection (2) or subsection (3).
- Subsection (2) sets out the first condition - condition A. Condition A captures relevant connectable products that are or have been made available to UK consumers and that are not "used" at the point at which they are made available to customers.
- Subsection (3) sets out the second condition - condition B. Condition B captures relevant connectable products that are or have been made available to businesses, where the products are not "used" at the point at which they are made available to customers and where products identical to it meet Condition A. Unused products that are made available to any UK customer, where other products in that product line have been, or are being made available to UK customers, will meet Condition B.
- Duties predicated on a relevant person’s intent or knowledge that a relevant connectable product is or will be a "UK consumer connectable product" will cease to apply if a product that has previously been supplied to a customer is made available to UK customers again. This applies principally to products in a "used" condition (i.e. they have been "supplied" before). This Section also provides that duties continue to apply in relation to returned or reconditioned (when reconditioned by or on behalf of the manufacturer as per the provisions in subsections (7) and (8)) products.
- Subsection (10) provides a power for the Secretary of State to make regulations to repeal the conditions in subsections (2)(b) and (3)(b) which prevent duties from applying to used products and to amend any provisions of the product security part of the Act that are necessary or appropriate consequent to the repeal of subsections (2)(b) and (3)(b). Regulations made in the exercise of this power will be subject to the affirmative resolution procedure by virtue of subsection (11).
Example of when a product sold to businesses may also be a "UK consumer connectable product"
A product may meet the definition of "UK consumer connectable product" even if it is solely aimed at business customers. A smart camera is advertised to business users but not to consumers in the UK because the distributor selling the camera only sells to businesses. However, products identical to it (e.g. a smart camera of the same make and model) has been advertised (made available) to consumers in the UK by another distributor. This means the product should also be considered a "UK consumer connectable product" and must meet Part 1 security requirements. The distributor must also meet all relevant duties under Part 1.
As with condition A, if this camera has been supplied to customers (this means end users who can be either consumers or business users) before being advertised (made available to consumers in the UK), the camera will not be a consumer connectable product. The presumption is that products that have been supplied to users would have been used and used products are out of scope.
Intention for Section 54
This ensures that all products that may reasonably be expected to be used by consumers are subject to the same security requirements, even where a particular individual product has not been directly made available to consumers.
Section 55: Meaning of "supply"
- This Section defines the term "supply" for the purposes of Part 1.
- Subsection (2) defines "supply" as supplying a product in the course of business. This includes "supply" of a product by companies, sole traders, not for profit organisations and public bodies, but not supplies made by individuals acting outside the individual’s business.
- Subsection (2) also provides that supply is not limited to instances where a product is sold as part of a financial transaction. Provision of a product in exchange for non-monetary consideration (e.g. in exchange for goods or services, or as a gift accompanying a separate transaction) would also be considered a "supply".
- Subsection (3) provides that supply of a product does not include hiring out or the lending of a product unless the manufacturer is hiring out or lending the product, or unless the product is supplied under a hire-purchase agreement.
- Subsection (4) provides that where a product has been supplied by being hired out or lent to a person, a continuation or renewal of the hire or loan or any transaction for the transfer after that time of any interest in the product to the person is not considered as "supply" of the product. This ensures that administrative duties such as ensuring that there is a statement of compliance do not need to be complied with each time a person renews a rental agreement for a product because compliance at the first instance of "supply" of the product to the same customer is sufficient.
- Subsection (5) provides that performance of a contract for the carrying out of works that consist of or include the installation of a product into a building or structure is treated as "supply" for the purposes of Part 1, only in so far as it involves the provision of a product to a person by means of its installation into a building or a structure. The effect of this provision is that customers receive similar protections when hiring someone to install products in their premises as customers who directly buy in-scope products.
- Subsection (6) provides that the provision of products by means of incorporating them in a building or a structure is considered a supply of those products if they were incorporated in the course of a performance of a contract for the construction of the building or structure.
- Subsection (7) provides that the transfer of in-scope products, either as fixtures or chattels, resulting from an agreement for the creation or a disposal of an interest in land, or resulting from the performance of such an agreement, is not to be treated as a "supply" of the products. However, an exception to this is where the in-scope product is incorporated into or contained in a building, or part of the building, constructed on the land in question, the building or part of building is to be used for a particular purpose, and at the time of the supply the building or part of the building had not previously been used for that purpose.
- The effect of subsection (7) is that a home owner selling their home (be it a flat or a house) or a business selling their premises with new in-scope products are not considered distributors of those products. The distributor is the retailer who sold the products to the property owner in the first instance, which is consistent with regular supply chains of UK consumer connectable products where a retailer is usually the distributor. However, for example, a developer selling, or otherwise disposing of an interest in a previously unoccupied house which includes in-scope products is considered to have supplied them to the new occupier.
- Subsection (8) provides that selling a product for scrap does not constitute "supply". Subsection (9) provides that providing transport services for the purpose of enabling the supply of a product does not constitute "supply".
- Subsection (10) provides that where a person ("P") who is the customer or the customer’s successor in title (e.g. a person who received the product as a gift by the original customer) returns the product temporarily (e.g. to a retailer for repairs under warranty) the subsequent return of the same product to "P" (e.g. after the product has been repaired) is not a supply of that product. This provision ensures that persons merely providing repairs services are not treated as distributors. However, if a product cannot be repaired and another product, even if it is of the same model, is provided to P as a replacement, this is considered a new supply.
- Subsection (11) distinguishes between retailers who supply products to customers (e.g. by selling the products) and companies that finance purchases of products (e.g. a financing company providing the funds to purchase a product). The effect of this provision is that retailers are treated as distributors, but financial companies are not.
Example of when consumer connectable products are "supplied"
A manufacturer rents out a smart camera (subsection (4)): A manufacturer rents out smart cameras to a consumer. The manufacturer will have to comply with the relevant duties when first renting out the product. Any subsequent renewals of the rental agreement with the same consumer will not require the manufacturer to comply with the duties again. Likewise, if the same consumer buys the product from the manufacturer after renting it, the manufacturer will not need to comply with the applicable duties again.
A developer equips a new house with built in smart products (subsection (5)): If a developer is hired to build a house with a built-in smart fridge, the developer will be considered a distributor with respect to that smart fridge, and will have to comply with the duties of distributors in Sections 21 to 25, e.g. not make the product available if there is a compliance failure and ensure that the product is accompanied by a statement of compliance, etc.
This provision will not capture individuals installing commonly available to consumers products.
A builder is hired by a homeowner to build a garage fitted with smart surveillance cameras (subsection (6)): If a construction company is hired to build a garage and it installs a smart camera while building the garage, the company would be considered to have supplied that camera and as distributors, they would need to comply with the relevant duties.
A developer sells to a consumer a new building with smart appliances (subsection (7)): If a developer builds a new house with incorporated and freestanding smart products and appliances such as smart locks and microwaves, the developer will be considered a distributor of the products and appliances and will need to comply with the duties of distributor when selling the house to a consumer.
The developer will not need to comply with the duties of a distributor if the house was previously occupied. Individuals selling a flat or house will not be considered distributors and will not need to comply with any duties arising from the sale.
This provision helps to capture smart home control systems within the scope of the legislation.
Instances where a product is not supplied because it is part of a wider transaction: If an electrician hired to repair a smart oven instals a new smart thermostat, they will not be considered to have supplied the thermostat because the services they provided were not part of a contract for the erection of a building or a structure. The electrician will not need to comply with any duties in relation to the thermostat.
Likewise, a shipping company that delivers relevant connectable products to distributors on behalf of the manufacturer is not considered to have supplied those products and will not need to comply with any duties in relation to them.
Section 56: Meaning of other expressions used in Part 1
- This Section sets out definitions for interpreting this Part of the legislation.
