Europe
EU
European Commission response to US steel and aluminum tariffs
On March 12, the European Commission announced that it will counter the introduction of US steel and aluminum tariffs in two ways:
- By automatically reimposing suspended 2018 and 2020 rebalancing measures due to expire on 31 March 2025, and
- By introducing a new package of additional measures on certain products originating in the United States
A two week consultation process on the proposed new package of measures began on 12 March. Target products include both agricultural products, such as dairy, poultry, beef, sugar and vegetables and industrial products such as steel and aluminum products, textiles, home appliances and plastics. A full list of targeted products is available on the DG Trade website.
Impact: Stakeholders have until 26 March to respond to the consultation, following this the Commission will finalize the draft legislation, which is expected to enter into force by mid-April. Businesses importing targeted products are likely to face increased costs and disruption to their supply chains.
For more information, please see our briefing.
Battery-related waste codes updated, encouraging sustainability in the automotive sector
On March 5, the EU updated the List of European Waste to include new battery-related waste codes. Shredded battery waste, known as ‘black mass’, is a crucial material used in electric vehicle battery recycling. Black mass will now be categorized as hazardous waste, meaning that it will be subject to greater controls and kept in the European economy, supporting the security of supply goal of the EU Battery Regulation.
Among the updates, specific waste codes now cover lithium-based batteries. Black mass, nickel-based, and zinc-based waste batteries, and sodium sulfur and alkaline waste batteries are also all now classed as hazardous.
Impact: When the new codes are in force waste operators and other stakeholders will need to adapt their management procedures to comply with the more stringent measures. The amendment will now go through a scrutiny period, usually lasting around two months.
Action Plan for the automotive sector published
On March 5, the EU published its Action Plan for the automotive sector, building on the Strategic Dialogue on the Future of the European Automotive Industry, launched in January.
By introducing new measures, the EU aims to boost demand for electric vehicles (EVs), help EU manufacturers to electrify their fleets, and ensure their competitiveness in the EV market.
Impact: The Action Plan proposes new EU requirements and conditions that may affect businesses’ supply chains.
For more information, please see our Flash update.
Clean Industrial Deal published
On February 26, the European Commission published its Clean Industrial Deal, a comprehensive strategy aimed at boosting the competitiveness of European industries through a commitment to decarbonization and reindustrialization.
Impact: This deal will push companies to adopt cleaner technologies and comply with stricter regulations, potentially changing operational strategies.
For more information, please see our Flash update.
InvestAI initiative launched
On February 11, the EU launched the InvestAI initiative to mobilize €200 billion for AI investment, including a €20 billion fund for AI gigafactories. These gigafactories will support the development of complex AI models, enhance Europe’s AI capabilities, and promote open, collaborative innovation. The initiative aims to boost healthcare, research, and competitiveness, with funding from existing EU programs and contributions from Member States.On November 18, the new Product Liability Directive (PLD) was published in the Official Journal. The PLD aims to protect consumers, promote new technologies, and ensure a level playing field for producers. These new rules simplify the process for injured parties to claim damages and provide clear guidelines for manufacturers. Key elements include liability for digital products and online platforms, accountability for modified products, easier access to evidence for claimants, and liability for non-EU manufacturers.
Impact: As AI technology develops, it is expected businesses will benefit from more streamlined production processes and logistics, fostering smarter, more adaptive supply chain systems. Continued AI investment may also lead to establishment of more related businesses in the sector, creating a more competitive, more resilient EU market.
Competitive compass published
On January 29, the European Commission presented the Competitiveness Compass, their strategic agenda for the next policy cycle. The compass identifies three core areas for action, including:
- Innovation: The aim is to close the innovation gap by fostering start-ups, promoting industrial leadership in high-growth sectors, with initiatives include AI Gigafactories, Apply AI, and a Start-up and Scale-up Strategy.
- Decarbonization: A joint roadmap addresses high energy prices and promotes clean, affordable energy. The Clean Industrial Deal and Affordable Energy Action Plan aim to make the EU an attractive manufacturing location and support clean tech.
- Security: Reducing dependencies through effective partnerships and diversifying supply chains. The Compass includes Clean Trade and Investment Partnerships and revised Public Procurement rules to prioritize critical sectors and technologies.
Impact: The Competitiveness Compass will enhance supply chains by promoting innovation, decarbonization, and security. It aims to reduce dependencies, diversify supply chains, and improve market access, fostering a more resilient and efficient supply chain network across Europe.
Proposed tariffs on certain agricultural products and fertilizers from Russia and Belarus
On January 28, the European Commission proposed tariffs on certain agricultural products and nitrogen-based fertilizers from Russia and Belarus. The tariffs will affect 15% of agricultural imports from Russia. Measures are included to protect EU farmers from price increases, while ensuring global food security by allowing transit to third countries. The proposal now awaits consideration by the European Parliament and the Council.
Impact: By reducing dependency on these imports, the EU aims to support domestic production, fostering a more resilient food supply chain. However, this shift might initially disrupt supply chains, potentially leading to higher prices and adjustments in sourcing. The proposal includes measures to mitigate price increases for EU farmers, but some short-term supply chain implications are likely as the market adjusts.
Packaging and Packaging Waste Regulation
On January 22, the Packaging and Packaging Waste Regulation (PPWR) was published. The rules set binding re-use targets, restrict certain single-use packaging, and require economic operators to minimize packaging. Targets include up to 65% recycled content for single-use plastic bottles by 2040. The Regulation also mandates labelling to aid consumer sorting and introduces re-use obligations for businesses.
Impact: The PPWR will drive significant changes in supply chains by requiring businesses to overhaul packaging processes and collaborate closely with suppliers. This Regulation mandates investment in sustainable packaging solutions and adherence to new recycling standards.
For more information, please see our briefing.
New EU Rules for Medical Device Supply Interruptions
On January 10, 2025, Article 10a of the Medical Device Regulation (MDR) and In Vitro Diagnostic Medical Device Regulation (IVDR), introduced under Regulation (EU) 2024/1860 went into effect. Article 10a requires that manufacturers notify relevant parties when an interruption or discontinuation is reasonably foreseeable, and could result in “harm or a risk of serious harm to patients or public health in one or more Member States”. The Commission published guidance on Article 10a in its Q&A on the Obligation to Inform of Device Interruption or Discontinuation. The regulation also facilitates a gradual roll-out of Eudamed, enhancing transparency and monitoring of device availability.
Impact: Manufacturers will need to be prepared to inform relevant authorities and institutions at least six months before anticipated supply interruptions. Additional reporting will require notifications and reasons for supply interruptions or discontinuations to be sent to downstream supply chain entities. Manufacturers should also develop strategies to minimize impact on patient care and public health.
40 hazardous chemicals added to Prior Informed Consent regulation
On January 7, the European Chemicals Agency (ECHA) announced the addition of 40 chemicals to Annex I of the EU’s PIC (Prior Informed Consent) Regulation. This includes five industrial chemicals as well as 35 pesticides.
The PIC Regulation oversees the trade of specific hazardous chemicals that are either banned or heavily restricted within the EU. It imposes requirements on businesses that intend to export these chemicals to non-EU countries or import them into the EU. The new additions include a subgroup of PFAS, used in products such as: protective and stain resistant coatings for electronics, textiles and carpets, packaging; metal plating; fire-fighting foams; cleaning and polishing products.
Impact: Businesses exporting these substances will have to complete an export notification to ECHA, before beginning their export. Explicit consent from importing countries will also be required for 38 of the chemicals on the list.
Revised Construction Products Regulation now in force
On January 1, the Construction Products Regulation (CPR) entered into force. The CPR includes measures to promote the circular economy and green choices, setting new rules for declaring products’ environmental and sustainability performance.
The new regulation updates existing rules, incorporating new technical developments for standardization, and modifying the definition of “construction products” to include both traditional materials and new technologies like 3D printing. It introduces digital product passports, to provide better information to consumers, as well as for declaration of performance and conformity, safety information and instructions for use.
Impact: Businesses must ensure that they follow the new rules including:
- providing digital product passport information
- meeting new environmental sustainability requirements
- compliance with updated product safety requirements
Businesses may also have to meet specific obligations according to their roles as manufacturers, importers or distributors. The new rules will apply from 8 January 2026, with the exception of specific provisions including those relating to development of harmonized standards, assessment and verification systems and market surveillance, which will apply from 7 January 2025.
European Commission bans Bisphenol A in food contact materials
On December 19, the European Commission announced the adoption of a ban on the use of Bisphenol A (BPA) in products that come into contact with food or drink. BPA is a chemical used in the manufacture of certain types of plastics and resins. The new rule means that BPA must no longer be used in products such as coatings on metal cans, reusable plastic drinks bottles, water coolers and other kitchenware. Other bisphenols found to be harmful have also been included in the ban.
Impact: Businesses will have an 18-month transition period during which they must adapt their production to comply with the new rule. There will be limited exceptions to the ban, where no alternative products exist.
Deforestation-free Products Regulation
On December 18, the European Council adopted a one-year postponement of the EU deforestation law’s application. This delay allows stakeholders more time to comply with due diligence obligations, ensuring that commodities like cattle, wood, cocoa, soy, palm oil, coffee, and rubber are deforestation-free. The following application dates will apply:
- December 30, 2025, for large operators and traders
- June 30, 2026, for micro and small enterprises
Impact: The Deforestation-free Products Regulation is crucial for businesses as it mandates compliance with deforestation standards, impacting supply chains by requiring traceability and transparency. Businesses must ensure their products do not contribute to deforestation, which involves rigorous monitoring and reporting. Affected businesses should make use of the extended compliance dates, ensuring that systems for monitoring and reporting are in place.
Forced Labor Regulation
On December 12, the EU's Forced Labor Regulation was published. This Regulation aims to eliminate products made with forced labor from the EU market, requiring businesses to ensure their supply chains are free from such practices. It underscores the EU's commitment to combating forced labor and promoting ethical standards in global trade.
Impact: The Forced Labor Products Regulation will compel businesses to ensure their supply chains are free from forced labor, impacting global operations. Businesses must implement rigorous due diligence, including supplier audits and risk assessments, to comply. Preparing for this regulation involves restructuring supply chains, changing suppliers if necessary, and investing in compliance measures.
16 sanctions package against Russia
On 24 February, the EU adopted its 16th package of sanctions against Russia, introducing several new measures aimed at addressing sanctions circumvention risks. The main elements include:
- targeted export restrictions on 53 new companies supporting Russia’s military-industrial complex or engaged in sanction circumvention, including 34 companies outside Russia
- a prohibition on temporary storage of crude oil/petroleum products in the EU if the goods originate in / are exported from Russia
- an import ban on Russian aluminum, and
- additional export restrictions on products including chemical precursors and software related to CNC machine tools used in weapon manufacturing
Impact: Businesses need to assess if the additional measures impact their global supply operations. More focus on transactional due diligence is expected from competent authorities, and ensuring that prohibited items are not ending up in Russia is of paramount important given the update in enforcement across the EU.
UK
Upcoming updates to the UK strategic export control list
On 11 March 2025, the UK Government announced updates to UK Strategic Export Control List, with the following key changes:
- amendments in line with changes published in the control lists on The Wassenaar Arrangement website, as adopted into UK legislation – these include changes to the following control list entries: ML10, 1C002, 1C005, 3A002, 3C005, 5A001, 5E001, 5A002, 6A005, 8A001, 8A002, 9A004, 9B and 9E003
- editorial amendments to Technical Notes and definitions in certain entries, including an amendment to the definition of ‘spacecraft’ resulting in new definitions for ‘satellite’, ‘space probe’ and ‘space vehicle’
- amendments in line with changes agreed under the guidelines on the Nuclear Suppliers Group (NSG) website, which include changes to following control list entries: 0B004a, 0B004b, 1A202, 1A225, 1B228 and 6A225
- amendments in line with changes agreed under the Australia Group in the control list entry 2B352, and
- amendment to the technical parameters of the existing control under PL9013a4 aimed at high-end digital processing integrated circuits (ICs) most suitable for AI training
Impact: These changes will be implemented in the spring, with amended control lists published in due course. Businesses will need to assess whether the upcoming changes to UK Strategic Export Control List mean that their goods, software and technology are now subject to export licensing requirements.
Procurement Act 2023 comes into force
On 24 February, the postponed Procurement Act 2023 was implemented. The legislation was delayed to allow for the publication of the UK Government’s new National Procurement Policy Statement (NPPS) on 13 February. Contracting authorities are required to “have regard” to the NPPS when undertaking regulated procurement activity, unless procuring under a framework or dynamic market.
The new NPPS sets out ways it encourages contracting authorities to contribute to the government’s aims through public procurement, such as
- driving growth and strengthening supply chains by ensuring that suppliers are treating workers fairly, and ensuring safe working conditions
- ensuring that suppliers are actively working to address bribery, corruption, fraud, modern slavery and human rights violations, and in compliance with tax, employment and other legal obligations
Impact: Businesses will need to ensure that their supply chains align with social value and environmental, social, and governance (ESG) commitments. Suppliers will be expected to demonstrate their commitment to anti-bribery, modern slavery, environmental considerations, and prompt payment.
10 Year Infrastructure Strategy
On January 26, the Government published the 10 Year Infrastructure Strategy. It aims to reduce uncertainty and boost investment in infrastructure, covering growth, housing, clean energy, and public services. It outlines a long-term plan for social, economic, and housing infrastructure, supported by public financing institutions like the National Wealth Fund. The strategy seeks to drive growth and productivity by providing stability and certainty to the market, aligning with the government’s broader growth mission.
Impact: By investing in infrastructure, the strategy aims to improve transportation networks and support the development of clean energy sources, ultimately leading to more reliable and efficient supply chains. Additionally, the focus on housing and public services may create new opportunities and demands within supply chains related to construction and service delivery.
Human Rights Committee Inquires into Forced Labor in Supply Chains
On January 21, the House of Commons Joint Committee on Human Rights launched an inquiry into forced labor in global supply chains. The inquiry will review the adequacy of the Modern Slavery Act 2015 and other legislation. The Committee seeks written submissions by February 13, 2025, focusing on sectors at risk, due diligence, consumer attitudes, and public procurement’s role in forced labor exposure.
Impact: While the Committee has not yet published its findings, businesses should be aware of the potential for new stricter regulations and increased scrutiny of business practices. Businesses may need to enhance their due diligence processes, ensuring their supply chains are free from forced labor. This could involve more rigorous audits and closer monitoring of suppliers.
Inquiry into the reset of UK-EU relations launched
On January 16, the House of Lords European Affairs Committee opened an inquiry and call for evidence on the “UK-EU reset”. This “reset” sets out to ensure closer cooperation with the EU and to put in place new agreements with the EU to cover trade, as well as security and defense. Rejoining the EU Single Market or Customs Union is not on the table. The inquiry will consider the substance of the reset, including what it is and the process for reset. At present the Government has identified the trade priorities as a veterinary/sanitary and phytosanitary agreement, mutual recognition of professional qualifications and easier EU access for UK touring artists.
Impact: For businesses trading with the EU, this is a chance to share insights on how UK businesses and the economy could benefit from changes to trading principles or terms. A successful “reset” in initial areas may reduce trading barriers and lay the groundwork for future trade agreements, enhancing the supply of goods and services between the UK and EU.
Guidance on Countering Russian sanctions evasion
On January 7, the Department for Business and Trade and Office of Trade Sanctions published guidance to help UK businesses combat Russian sanctions evasion in supply chains. This includes a “no re-export to Russia” clause template and advice on identifying red flags for sanctions evasion. The guidance targets those exporting items critical to Russia’s military, emphasizing due diligence to prevent indirect procurement by Russia through third countries.
Impact: As Russian businesses continue to find loopholes in sanctions, this guidance underscores the importance of UK businesses to carry out effective due diligence. This will involve more thorough monitoring of transactions and suppliers, particularly those in third countries that might facilitate indirect procurement by Russia. Adapting to these requirements will help businesses avoid legal and reputational risks.
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