Policy paper

Professional Qualifications Bill factsheet: Regulator recognition agreements

Updated 3 November 2021

This was published under the 2019 to 2022 Johnson Conservative government

This policy paper was withdrawn on 21 February 2023

Find out about Professional Qualifications Act 2022.

This is one of a series of factsheets exploring themes in the Professional Qualifications (PQ) Bill.

The PQ Bill was introduced to Parliament in May 2021. It will revoke an interim system for the recognition of professional qualifications from overseas, derived from EU law, which often means preference is given to EEA and Swiss professionals. The PQ Bill enshrines the autonomy of regulators in determining whether individuals are fit to practise. Amongst other matters, it provides the ability to empower regulators to conclude recognition agreements with their overseas counterparts.

Summary

This factsheet provides information on the legal powers the Professional Qualifications Bill (PQ Bill) provides relating to regulator recognition agreements. The factsheet explains what regulator recognition agreements are and how they sometimes interact with government frameworks on the recognition of professional qualifications, or professional regulation. This factsheet does not constitute guidance on how to comply with measures in the PQ Bill once enacted.

What is a regulator recognition agreement?

Regulator recognition agreements (RRAs) are a broad term for any type of agreement between regulators which facilitates the recognition of professional qualifications or experience. As RRAs are usually country- and regulator-specific, their form can vary, but they are typically agreed on a profession-by-profession basis by the relevant regulators or professional bodies across two or more jurisdictions. They enable professionals who qualified in one regulator’s jurisdiction to gain recognition of their professional qualification in another regulator’s jurisdiction. RRAs are designed to ease administrative burdens and streamline processes, and do not reduce or bypass standards for entry.

RRAs can either be agreed directly between regulators, or be supported by provisions in Free Trade Agreements (FTAs). FTAs can contain provisions to encourage collaboration and dialogue between regulators, or facilitate negotiations via processes set out in ‘Mutual Recognition Agreement (MRA) frameworks’. ^{[footnote 1]} Alternatively, governments can establish measures for the recognition of professional qualification in separate freestanding international agreements.

Different types of FTAs may require different levels of implementation in UK law. Some agreements, such as the UK-Canada agreement, introduce a process where RRAs concluded under its terms could be annexed to the agreement. In this case, the UK government may need to introduce legislation to help regulators implement RRAs.

RRAs typically include provisions on application requirements, the basis for recognition, and/or data sharing. The decision to enter into an RRA, and its terms, are for the regulators and professional bodies to decide.

Why is the government introducing powers for recognition agreements?

Where an overseas regulator does not provide a route for the recognition of UK professional qualifications, RRAs can help UK-qualified professionals to practise overseas. The changes in the recognition of professional qualifications between the UK and EU, and new FTAs negotiated by the UK, will mean there are more considerations for regulators in determining countries where RRAs may be beneficial.

For the near term, regulators could consider where the absence of a route to recognition for their profession in the EU could cause disruption to their sector, for example by limiting trade in services or adversely affecting access to skills for business. Additionally, RRAs offer opportunities to increase mutual recognition with and outside the EU.

In 2020, UK exports of services were worth £267.1 billion, representing 46.2% of total UK exports. RRAs should be considered as a key facilitator for the trade in services, helping UK professionals to export services in sectors such as accountancy, architecture, and law. Arrangements which help UK professional qualifications to gain recognition overseas more easily may help to enhance the reputation of UK standards and qualifications. They can help ensure UK qualifications are attractive to international students, by allowing them to practise in a wider range of overseas markets.

The lack of recognition of professional qualifications is a key behind the border barrier to trade in services. Without RRAs, professionals may need to requalify to practise their profession in certain markets, or resort to lengthy administrative processes rather than more streamlined arrangements enabled through recognition agreements. Measures on the recognition of professional qualifications can increase the markets available to UK professionals to practise; open access to talent pools for UK business; and, by improving competition, provide greater choice and benefits for UK consumers.

What does it mean in practice?

The PQ Bill introduces powers to enable regulators to conclude regulator recognition agreements independently and to make use of recognition agreement provisions in FTAs. Where regulators already have legal powers to enter into recognition agreements, nothing changes. The UK government expects demand for this additional ability to be governed by regulators’ needs and therefore this power would be provided following engagement with regulators.

Clause 3 of the PQ Bill can be used to support the implementation of RRAs annexed to international government-to-government agreements. These RRAs would have been concluded by regulators under MRA frameworks that form part of the international agreement.

Clause 4 of the PQ Bill will allow the UK government and the devolved administrations to ensure that regulators can enter into regulator recognition agreements with their counterparts. The UK government only plans to use this power where regulators currently do not have sufficient powers to enter into RRAs. This power would only be used where regulators have expressed an interest or need to have RRAs in place. It allows regulators to pursue agreements which facilitate the recognition of professional qualifications, both using the provisions in international agreements and independent of them. These agreements must be in line with the regulator’s existing powers to recognise overseas qualifications unilaterally and the access that overseas qualified professionals can be granted.

To assist regulators that are considering recognition agreements with their overseas counterparts, BEIS has set up a Recognition Arrangements Team, email recognitionarrangements@beis.gov.uk. This team has published guidance for regulators on RRAs. BEIS also established a pilot Recognition Arrangements Grant scheme for Professional and Business Services regulators and professional bodies pursuing negotiating recognition agreements.

1. Mutual Recognition Agreements are a type of Regulator Recognition Agreements. An MRA framework sets out a way for regulators to agree MRAs or other types of RRAs. Examples of MRA frameworks include those in the UK-EU Trade and Co-operation Agreement (TCA) or CPTPP/the UK-Canada Trade Continuity Agreement. ↩