On 29 October 2020, the Government of Gibraltar published the Fair Trading Bill 2020 (‘the Bill’). It is intended that the Bill will introduce a series of important changes, which this article considers in the following paragraphs.  The most significant changes included in the Bill are in the area of enforcement, an area in respect of which the Fair Trading Act 2015 (which the Bill seeks to replace) was largely silent.  The following guidance therefore provides a practical look at some of the changes to the current business licensing system in Gibraltar as contemplated in the Bill and what this means for both existing licensees and those seeking to set up a new business.  Despite many elements of the business licensing regime planned to remain as they are today, it is recommended that businesses should consider the impact the following changes may have, and how businesses will need to respond to the Bill’s eventual implementation.

The Decision Making Committee

One of the most noticeable changes being introduced by the Bill is the establishment of the Decision Making Committee (‘the DMC’), which will be established as a statutory committee of the Office of Fair Trading (‘OFT’) and which will replace the Business Licensing Authority (‘BLA’). Unlike the BLA, the DMC will be made up of a panel of eight people, four of which must be lawyers with at least 10 years of experience. The panel will also have a representative from both the Gibraltar Chamber of Commerce and the Gibraltar Federation of Small Businesses.

One of the roles of the DMC will, in a manner reminiscent of the role of the DMC recently constituted under the provisions of the Financial Services Act 2020, be to hear appeals that may arise from decisions made by the OFT. The DMC will have the power to impose fines in excess of £1,000, revoke or suspend licences, refuse to renew licences and exercise the various sanctioning powers introduced by the Bill (see below).

Sanctioning Powers and Enforcement

The Bill seeks to grant the OFT (and the DMC) the requisite powers to sanction businesses not complying with any conditions which may have been imposed or in the event that a person breaches any provision of the Bill or subsequent regulations. The sanctioning powers include:

• A request for an undertaking – the OFT may request that a person provides them with an undertaking to do or not to do something;
• An administrative penalty – a financial penalty which would be payable within 28 days. There is currently no mention of any limits but, in the event that it should exceed £1,000, it must be imposed by the DMC;
• A cease and desist order – an order requiring the relevant person to desist from a particular activity;
• A directions order – an order obliging a person to do a particular thing which the OFT reasonably believes they ought to do to comply with the Bill;
• A compensation order – an order making a person liable to pay a sum, by way of compensation, to another person;
• A licence intervention order – an order suspending or revoking either part or all of a licence; and
• A prohibition order – an order prohibiting that certain acts of business be conducted.

Save in cases of urgency, a ‘warning notice’ must be given to a licensee prior to any of the above being imposed. Any decision to impose any of the sanctions above must be reasonable, proportionate, effective and dissuasive and must consider all relevant circumstances.

Grounds for Refusal or Revocation of a Licence

Although the general presumption in favour of carrying out business in Gibraltar will continue to apply, the Bill introduces new grounds on which the OFT may revoke an existing licence or refuse to grant a new licence.

In addition to the existing grounds (which will continue to apply), the OFT may refuse to grant a licence on the following basis:

• If the applicant fails to provide to the satisfaction of the OFT any information required by the Bill or any regulations; and/or
• The premises do not accord with the Official Address Register held by Land Property Services.

Crucially, the Bill introduces the concept of a Specified Business. “Specified Business” is defined as a business or activity which, whilst not requiring authorisation, licensing or approval under any other enactment, involves one or more of the following:

• The introduction or insertion by injection or by any other means of any substance into the body of a person;
• The tattooing of any part of a person’s body;
• The application or administration to another person of any prescription only medicine;
• The provision of therapy;
• The infliction or carrying out of any process that involves the breaking of another person’s skin;
• The provision of counselling, analysis or other therapy or services designed or intended to identify and or assist a person to understand, accept, overcome or recover or obtain relief from any form of mental condition, mental state, attitude, behaviour or other situation that derives in the mind of that person or any activity that could cause harm to a person’s mental state; and/or
• Such other business or activity as the Minister may prescribe in regulations.

The OFT may refuse to grant a business licence on the grounds that a business is a Specified Business and the OFT is not satisfied that the person has the necessary skill, competence, qualification or resources to carry on that business safely for consumers.

In the event that the OFT were to refuse an application on this (or any other) ground, the applicant would have to appeal this decision to the Decision Making Committee or the Court which may require a hearing to be set and representations to be made as to why the application should be approved.

Licenses subject to Conditions

Under the Bill, the OFT may at any time impose on an existing license any condition which it considers necessary or desirable. Should the OFT seek to impose a condition on a licence they will have to provide the holder with notice. The imposition of a condition is a further matter which can be appealed to the DMC under the Bill.

The Application Process

The application process is largely the same however the OFT will now be able to request more information from the applicant at their discretion, including for example, who the ultimate beneficial owners of the company are. The prescribed forms may also differ in some respects, for example, additional categories of services are likely to be added to the list.

In addition to the relevant notices being published in the Gibraltar Gazette and a local newspaper, the OFT will publish notice of the application on their website for the relevant objection period to allow for any objections to the application to be made.

Objections

The process regarding objections will also remain largely unchanged save for the grounds on which a person will be able to object. An objection may be made by anyone on the same grounds that the OFT can refuse a business licence application. Any objection will be considered by the OFT only if the relevant notice requirements are met and the relevant fee is paid.

Do I need a Business Licence?

The general position is that everyone conducting business in Gibraltar will need a business licence. However, under the Bill, there are some exemptions.

Amongst other exemptions, persons carrying on business as a “cottage industry”, “artisan” or a service provider earning less than an amount not yet specified, will be deemed to not be carrying on business and would not need to obtain a business licence. However, you will still need to be properly registered with the OFT.

“Cottage industry” is defined as a small-scale manufacturing process or other business that takes place in residential premises.

“Artisan” is defined as a craft worker who makes or creates material objects partly or entirely by hand.

Additional Obligations for Licensees

The Bill introduces the following additional obligations for licensees:

• A licensee must inform the OFT if they are convicted of any offence by any court, either in Gibraltar or elsewhere within 30 days.
• A licensee must include their business licence number on their website.
• A licensee must notify the OFT of any charitable, philanthropical, cultural, educational acts which fall outside of their business licence. No business licence will be needed for these acts but the OFT must be informed.

It is important to bear in mind that the Bill is subject to review and scrutiny as it proceeds in the Gibraltar Parliament.  The Bill, and this analysis therefore, is subject to change and may be amended after the publication of this article.  The information contained in this article is for general guidance only and does not constitute legal advice nor should it be relied upon as such.

If you would like more information on your licensing obligations or legal advice, please contact your Manager or the

On 29 October 2020, the Government of Gibraltar published the Fair Trading Bill 2020 (‘the Bill’). It is intended that the Bill will introduce a series of important changes, which this article considers in the following paragraphs.  The most significant changes included in the Bill are in the area of enforcement, an area in respect of which the Fair Trading Act 2015 (which the Bill seeks to replace) was largely silent.  The following guidance therefore provides a practical look at some of the changes to the current business licensing system in Gibraltar as contemplated in the Bill and what this means for both existing licensees and those seeking to set up a new business.  Despite many elements of the business licensing regime planned to remain as they are today, it is recommended that businesses should consider the impact the following changes may have, and how businesses will need to respond to the Bill’s eventual implementation.

The Decision Making Committee

One of the most noticeable changes being introduced by the Bill is the establishment of the Decision Making Committee (‘the DMC’), which will be established as a statutory committee of the Office of Fair Trading (‘OFT’) and which will replace the Business Licensing Authority (‘BLA’). Unlike the BLA, the DMC will be made up of a panel of eight people, four of which must be lawyers with at least 10 years of experience. The panel will also have a representative from both the Gibraltar Chamber of Commerce and the Gibraltar Federation of Small Businesses.

One of the roles of the DMC will, in a manner reminiscent of the role of the DMC recently constituted under the provisions of the Financial Services Act 2020, be to hear appeals that may arise from decisions made by the OFT. The DMC will have the power to impose fines in excess of £1,000, revoke or suspend licences, refuse to renew licences and exercise the various sanctioning powers introduced by the Bill (see below).

Sanctioning Powers and Enforcement

The Bill seeks to grant the OFT (and the DMC) the requisite powers to sanction businesses not complying with any conditions which may have been imposed or in the event that a person breaches any provision of the Bill or subsequent regulations. The sanctioning powers include:

• A request for an undertaking – the OFT may request that a person provides them with an undertaking to do or not to do something;
• An administratve penalty – a financial penalty which would be payable within 28 days. There is currently no mention of any limits but, in the event that it should exceed £1,000, it must be imposed by the DMC;
• A cease and desist order – an order requiring the relevant person to desist from a particular activity;
• A directions order – an order obliging a person to do a particular thing which the OFT reasonably believes they ought to do to comply with the Bill;
• A compensation order – an order making a person liable to pay a sum, by way of compensation, to another person;
• A licence intervention order – an order suspending or revoking either part or all of a licence; and
• A prohibition order – an order prohibiting that certain acts of business be conducted.

Save in cases of urgency, a ‘warning notice’ must be given to a licensee prior to any of the above being imposed. Any decision to impose any of the sanctions above must be reasonable, proportionate, effective and dissuasive and must consider all relevant circumstances.

Grounds for Refusal or Revocation of a Licence

Although the general presumption in favour of carrying out business in Gibraltar will continue to apply, the Bill introduces new grounds on which the OFT may revoke an existing licence or refuse to grant a new licence.

In addition to the existing grounds (which will continue to apply), the OFT may refuse to grant a licence on the following basis:

• If the applicant fails to provide to the satisfaction of the OFT any information required by the Bill or any regulations; and/or
• The premises do not accord with the Official Address Register held by Land Property Services.

Crucially, the Bill introduces the concept of a Specified Business. “Specified Business” is defined as a business or activity which, whilst not requiring authorisation, licensing or approval under any other enactment, involves one or more of the following:

• The introduction or insertion by injection or by any other means of any substance into the body of a person;
• The tattooing of any part of a person’s body;
• The application or administration to another person of any prescription only medicine;
• The provision of therapy;
• The infliction or carrying out of any process that involves the breaking of another person’s skin;
• The provision of counselling, analysis or other therapy or services designed or intended to identify and or assist a person to understand, accept, overcome or recover or obtain relief from any form of mental condition, mental state, attitude, behaviour or other situation that derives in the mind of that person or any activity that could cause harm to a person’s mental state; and/or
• Such other business or activity as the Minister may prescribe in regulations.

The OFT may refuse to grant a business licence on the grounds that a business is a Specified Business and the OFT is not satisfied that the person has the necessary skill, competence, qualification or resources to carry on that business safely for consumers.

In the event that the OFT were to refuse an application on this (or any other) ground, the applicant would have to appeal this decision to the Decision Making Committee or the Court which may require a hearing to be set and representations to be made as to why the application should be approved.

Licenses subject to Conditions

Under the Bill, the OFT may at any time impose on an existing license any condition which it considers necessary or desirable. Should the OFT seek to impose a condition on a licence they will have to provide the holder with notice. The imposition of a condition is a further matter which can be appealed to the DMC under the Bill.

The Application Process

The application process is largely the same however the OFT will now be able to request more information from the applicant at their discretion, including for example, who the ultimate beneficial owners of the company are. The prescribed forms may also differ in some respects, for example, additional categories of services are likely to be added to the list.

In addition to the relevant notices being published in the Gibraltar Gazette and a local newspaper, the OFT will publish notice of the application on their website for the relevant objection period to allow for any objections to the application to be made.

Objections

The process regarding objections will also remain largely unchanged save for the grounds on which a person will be able to object. An objection may be made by anyone on the same grounds that the OFT can refuse a business licence application. Any objection will be considered by the OFT only if the relevant notice requirements are met and the relevant fee is paid.

Do I need a Business Licence?

The general position is that everyone conducting business in Gibraltar will need a business licence. However, under the Bill, there are some exemptions.

Amongst other exemptions, persons carrying on business as a “cottage industry”, “artisan” or a service provider earning less than an amount not yet specified, will be deemed to not be carrying on business and would not need to obtain a business licence. However, you will still need to be properly registered with the OFT.

“Cottage industry” is defined as a small-scale manufacturing process or other business that takes place in residential premises.

“Artisan” is defined as a craft worker who makes or creates material objects partly or entirely by hand.

Additional Obligations for Licensees

The Bill introduces the following additional obligations for licensees:

• A licensee must inform the OFT if they are convicted of any offence by any court, either in Gibraltar or elsewhere within 30 days.
• A licensee must include their business licence number on their website.
• A licensee must notify the OFT of any charitable, philanthropical, cultural, educational acts which fall outside of their business licence. No business licence will be needed for these acts but the OFT must be informed.

Hassans Business Licensing Team

It is important to bear in mind that the Bill is subject to review and scrutiny as it proceeds in the Gibraltar Parliament.  The Bill, and this analysis therefore, is subject to change and may be amended after the publication of this article.  The information contained in this article is for general guidance only and does not constitute legal advice nor should it be relied upon as such.

If you would like more information on your licensing obligations or legal advice, please contact your Manager or our Business Licensing Team at our associated law firm, Hassans. Hassans are able to assist with all aspects of a business’ interaction with the business licensing process, whether in the context of an initial application and dealing with objections or in the context of appeals to the soon to be established DMC in relevant circumstances.