This country-specific Q&A provides an overview of laws and regulations applicable in Uruguay – Environment.
What is the environmental framework and the key pieces of environmental legislation in your jurisdiction?
Environmental policy in Uruguay is based on Section 47 of the Uruguayan Constitution, Law Number 17,283 (Environmental General Law), Law Number 16,466 and its regulatory Decree Number 349/005.
Such provisions declare the protection of the environment against any kind of depredation, destruction or pollution of national interest, which includes the prevention of any negative environmental impact, and, as the case may be, the restoration of damaged environments.
Who are the primary environmental regulatory authorities in your jurisdiction? To what extent do they enforce environmental requirements?
Law Number 16,112 establishes that the Ministry of Housing, Land Planning and Environment (hereinafter, “MVOTMA”) is the main agency that administers and enforces environmental law. Specifically, the main agency is the National Environmental Agency (“Dirección Nacional de Medio Ambiente”) (hereinafter, “DINAMA”).
Pursuant to Section 8 of Law Number 17,283, municipal authorities are also able to administer and enforce environmental law in certain delegated aspects.
Besides the Ministry of Public Health (hereinafter, “MSP”) (through the “División Salud Ambiental y Ocupacional”) and the National Naval Prefecture (through the “Dirección de Protección de Medio Ambiente”) have sectorial competencies regarding their commitments.
As regards the enforcement process, inspections are usually carried out by the regulatory authorities in order to verify that a company or a person has behaved legally according to a law or other formal requirement related to environmental matters.
What is the framework for the environmental permitting regime in your jurisdiction?
Pursuant to Law Number 16,466 and Decree Number 349/005, several environmental permits are required prior to starting certain activities, constructions and works expressly listed in such regulations.
For instance, those interested in carrying out any of the activities, constructions and works are subject to the request of a Prior Environmental Authorisation (hereinafter, “AAP” – “Autorización Ambiental Previa”) and shall communicate the project to the MVOTMA by submitting certain information depending on the category of the same which is determined according to the impact the projects may have on the environment.
Decree Number 349/005 also establishes that parties interested in performing certain activities, constructions or works included in Section 20 of said Decree shall communicate the location and a description of the area of execution and influence to the DINAMA and, as the case may be, include an assessment of the location or section of the site where the project is to be performed, including an analysis of any alternatives.
Some projects that require an AAP must also obtain an Operating Environmental Authorisation (hereinafter, “AAO”) in order to start operating. The AAO shall be requested by the interested party and, once there has been full verification of the conditions established in the AAP, the project is filed before the MVOTMA and, if the Environmental Impact Assessment criteria are met, the MVOTMA grants the AAO.
Those activities that were built, authorised or put into operation without being required to obtain the AAP (because the activity was prior to the entry into force of the Decree or, when the activity started, it did not meet the requirement established in the Decree for obtaining the AAP), would require a Special Environmental Authorisation (hereinafter, “AAE”), included in Section 25 of Decree Number 349/005, if they expand the facilities or increase the productive capacity.
Besides these general authorisations there are other permits required for specific industries.
Can environmental permits be transferred between entities in your jurisdiction? If so, what is the process for transferring?
Environmental permits can be transferred from one person to another, provided the project or activity in question remains unchanged and the transferee assumes the same obligations that the transferor had assumed before, and as long as this is allowed by the current regulation and the corresponding governing body.
As regards the process for transferring, it usually consist in communicating this change by submitting a written note accompanied by documentation from the new entity to the governing body, which shall then approve such transfer.
What rights of appeal are there against regulators with regards to decisions to grant environmental permits?
In Uruguay, decisions by an environmental regulator rejecting an environmental permit, or in respect to conditions contained in an environmental permit, may be challenged through an administrative recourse before the authority rejecting the permit and then an appeal before the Executive Power.
The term to file said administrative actions is 10 calendar days from the publication of the administrative resolution in the Official Gazette or its notification to the affected person, as the case may be. Only those individuals or legal entities that have a direct, personal and legitimate interest may file said administrative actions and, in addition to proving such interest, they have to express the grounds and arguments for the administrative action. However, such grounds and arguments do not need to be filed together with the administrative action, and may be filed later, before the term for the Administration to resolve expires (in the meantime, the Administration may nevertheless decide the case even without having received such grounds).
Once the administrative action has been filed, the Administration has a term of 200 days as from the filing to issue a resolution to decide upon the challenge. If the term expires without any resolution from the Administration, the action shall be deemed rejected.
In the case that the administrative action is expressly or tacitly rejected, the Company shall have the right to file an annulment action before the jurisdictional court called “Tribunal de lo Contencioso Administrativo” (hereinafter, “TCA”) (it is the rough equivalent to a Supreme Court in administrative cases).
Such action does not suspend the application of the resolution, save for the cases in which the Company requests the immediate suspension of the effects of the resolution and the Administration favourably resolves (highly unlikely).
The term to file an annulment action before the TCA is 60 days from the notification of the rejection of the administrative action, or as from the expiration of the 200-day term for the resolution of the administrative action (that is, after the administrative action has been tacitly rejected).
The TCA may confirm or annul the resolution, as applicable, but it may not modify its content.
Also, in case the environmental regulator rejects the environmental permit, and the Company is not willing to file an annulment action before TCA, it could file a lawsuit before our judicial authorities to claim for the damages that the rejection of the permit causes the Company (the term to file the lawsuit is four years).
Are environmental impact assessments (EIAs) for certain projects required in your jurisdiction? If so, what are the main elements of EIAs and to what extent can EIAs be challenged?
Law Number 16,466 and Decree Number 349/005 establish that it is necessary to perform an Environmental Impact Assessment for certain activities, constructions and works expressly listed in such Law .
Pursuant to Sections 11 and 12 of Decree No. 349/2005, the Environmental Impact Assessment must include the project and its potential area of influence, including a general macro-environmental framework, and must provide an unbiased comparison between the conditions before and after the execution of the project, in its construction, operation and abandonment stages.
The document containing the results of the Environmental Impact Assessment must contain at least the following parts: (a) Part I (Characteristics of the receiving environment): in which the main characteristics of the environment shall be described, existing conditions shall be evaluated and sensitive or risk areas shall be identified; all of which shall be in relation to the physical, biotic and anthropic environment; (b) Part II (Identification and evaluation of impacts): in which both negative and positive environmental impacts shall be identified and evaluated; (c) Part III (Determination of mitigation measures): identifying and developing the mitigation measures to be adopted and presenting the estimate of the residual environmental impact, in case such measures are adopted; (d) Part IV (Monitoring, surveillance and audit plan): in which a monitoring plan on relevant environmental factors within the project’s area of influence is presented; (e) Part V (Information and intervening technicians): in the Environmental Impact Assessment information or basic knowledge,deficiencies should be clearly explained as well as the uncertainties that might have arisen in its preparation.
According to Section 15 of Decree No. 349/2005, the MVOTMA must disclose the Summary of the EIA during a 20-day period, so that any interested party may have access to it and make any written assessment it deems appropriate. Additionally, for Category C projects referred to in Article 5 of the Decree (and which includes those projects for activities, constructions or works, which may have significant negative environmental impacts, whether or not prevention or mitigation measures are foreseen and require a complete environmental impact assessment), a Public Hearing must be scheduled, in compliance with Section 16 of the Decree.
What is the framework for determining and allocating liability for contamination of soil and groundwater in your jurisdiction, and what are the applicable regulatory regimes?
Under Uruguayan law, the regulatory framework is regulated by the Waters Code (“Código de Aguas“), and Law No. 17,283. According to section 4 of the Waters Code, it is possible to ban all or some uses of water in order to prevent environmental pollution. In addition, Decree No. 253/1979 establishes a series of provisions with the aim of preventing water pollution. On the other hand, soil pollution – and the environmental pollution generally – is regulated by Law No. 16.466, which in Section 3 establishes the duty to abstain from causing any kind of damage to the environment. In addition, the same Law establishes, in its Section 4, regardless of the administrative and criminal responsibility, that whoever causes the contamination of the environment will be held responsible for the damages caused, and must, if possible, restore the previously existing status.
Under what circumstances is there a positive obligation to investigate land for potential soil and groundwater contamination? Is there a positive obligation to provide any investigative reports to regulatory authorities?
Under Uruguayan legislation, there is no law that imposes the obligation to investigate land for contamination. However, as all persons are obliged to take care of the environment, it could be construed that such obligation exists.
Although there is no express provision imposing the obligation to provide the regulatory authorities with the reports concerning environmental investigations, such obligation can be argued on the basis of the provisions of Law No. 17,283. Additionally, it should be taken into account that under certain circumstances specific information must be provided, when an EIAs is required.
It is to be taken into consideration that the Uruguayan environmental authority has developed plans to detect contaminated sites and adequately manage them. However, it is still not common practice in real estate transactions to address environmental hazards and the allocation of responsibilities regarding contaminated sites.
Ideally, before purchase a site should be reviewed by technical teams and a base line should be determined between buyer and seller. In particular, because although in our law the principle is that the contaminator pays it is sometimes difficult in practice to determine who indeed contaminated the site. Particularly if the same activities have been carried out by seller and buyer. Unless proven otherwise, the landowner or the exploiter of the site will be held accountable. Therefore, good practices in land transaction is key, in particular since in Uruguay environmental insurance policies are not widely used.
It is also worth mentioning that the Uruguayan environmental authority has implemented actions for the protection of the environmental quality and availability of drinking water sources in the Santa Lucía River from which a large part of the water that the Uruguayans consume is extracted.
If land is found to be contaminated, or pollutants are discovered to be migrating to neighbouring land, is there a duty to report this contamination to relevant authorities?
Under Uruguayan legislation, there is no directive that regulates such situation specifically.
However, following the general rules, such situation must be disclosed to an environmental regulator. Specifically, under Section 34 of Decree Number 152/013, the omission of environmental information or the submission of false or incorrect information to the Administration is considered a serious infraction of environmental regulation.
Furthermore, according to the 2017 Bill, which is referred under question 10, it is a crime to hinder environmental control or to provide false information to the corresponding authorities, which may incur a penalty of prison for up to two years.
Does the owner of land that is affected by historical contamination have a private right of action against a previous owner of the land when that previous owner caused the contamination?
Under Uruguayan legislation, there is no regulation that expressly regulates a private right of action to seek contribution from a previous owner or occupier of contaminated land when that owner caused, in whole or in part, the contamination. However, under Uruguayan tort rules, the polluter is liable for all damages caused without exception. Nonetheless, under the freedom of contract doctrine, it can be agreed between the parties which of them shall bear the environmental liability.
Please note that on certain occasions it may be difficult to determine who caused the contamination in which case, unless proven otherwise, the landowner or the exploiter of the site will be liable.
What are the key laws and controls governing the regulatory regime for waste in your jurisdiction?
The waste policy in Uruguay is based on Law Number 19,829, on Waste Management, as well as Decree Number 182/013, there being jointly a series of Decrees that regulate specific types of waste, imposing additional duties and/or controls (i.e., Decree No. 182/013, on solid industrial wastes; Decree No. 586/009, on hospital wastes; Decree No. 373/003, on batteries; Decree No. 152/013, on wastes from agriculture, horticulture and forestry; Decree No. 15/019, on wastes from lamps and other objects containing mercury; and Decrees No. 358/015 and 260/007, regulating tyres and packages, respectively).
Do producers of waste retain any liabilities in respect of the waste after having transferred it to another person for treatment or disposal off-site (e.g. if the other person goes bankrupt or does not properly handle or dispose of the waste)?
Section 7 of National Waste Management Law establishes that any producer of waste of any type will be responsible for the management of the same at all stages, and shall bear the costs thereof.
To what extent do producers of certain products (e.g. packaging/electronic devices) have obligations regarding the take-back of waste?
Fundamentally, waste producers shall submit a Management Plan that regulates all aspects related to such waste to the MVOTMA.
If it is not possible to reintroduce the waste in the production process, the producer shall take back and/or recover the same under the Management Plan.
What are the duties of owners/occupiers of premises in relation to asbestos, or other deleterious materials, found on their land and in their buildings?
In Uruguay it is prohibited to import and market products containing asbestos and it is required to prevent and control health consequences of workers exposed to asbestos, as prescribed by Law 16.643 and the Ordenanza MSP 145/2009 (which follow the International Labor Organization Accord Number 162).
If any evidence of asbestos is found, the company should confirm whether it is monitoring possible asbestos-related health problems among workers and whether there are plans to remove asbestos from roofs or other places where asbestos were found.
To what extent are product regulations (e.g. REACH, CLP, TSCA and equivalent regimes) applicable in your jurisdiction? Provide a short, high-level summary of the relevant provisions.
In Uruguay there is a profuse regulation of the diverse classes of products (chemical precursors, medicines, medical equipment, fertilizers, food, shoes, cosmetics, textiles, among others), without there being a compilation that brings them together.
As for chemical precursors they are regulated in Decree 391/2002 which among other things establishes that any person or entity that produces, prepares, imports, exports, distributes, uses, deposits, offers for sale or in any other way negotiates with chemical products, must be registered with the Ministry of Industry, Energy and Mining (hereinafter “MIEM”).
Regarding medicines, Laws No. 15,443 and 15,564, which regulate the import, representation, production, manufacture and marketing of medicines and other related products for human use, are among the most relevant regulations to be highlighted. Decree No. 3/2008 establishes the requirements that must be met by diagnostic reagents, therapeutic devices and medical equipment.
In relation to fertilizers, Law No. 13,663 regulates the production, marketing, import and export of fertilizers, including requirements for labeling and product registration.
Concerning food and beverages, most of its regulation is contained in the National Regulation on Bromatology (Reglamento Bromatológico Nacional– Decree 315/994)
In the area of cosmetics, Decree No. 521/984 is the main rule that regulates the area.
The above-mentioned regulations are without prejudice to specific regulations that specifically refer to certain kinds of products.
What provisions are there in your jurisdiction concerning energy efficiency (e.g. energy efficiency auditing requirements) in your jurisdiction?
Law No. 18.597 declares the efficient use of energy to be in the general interest, committing the MIEM to preparing an Energy Efficiency Plan, and without prejudice to certain competencies recognized to the municipal authorities.
According to Section 10 of the Law, public and private energy service providers must promote efficient energy use among their customers, informing them of concepts and good practices in use, and facilitating their understanding of the energy consumption of their equipment.
In addition, Section16 of the Law provides that the MIEM will issue Energy Efficiency Certificates to all energy-efficient projects submitted that meet the requirements to be considered as energy efficiency, as set out in the regulations.
Finally, it is also established that energy users who make inefficient and wasteful use of energy in contexts of energy supply crises may be sanctioned with an Warning or a Fine, which amounts will be set annually by the Executive Branch and will range from 1 UR (about USD 32) to 50 UR (USD 1,600 approximately), being the MIEM responsible for its application.
It has also been implemented the Energy Efficiency Standardization and Labeling Program which consist of generating standards and technical specifications that enable the classification of different energy-consuming products and equipment according to their degree of efficiency.
The equipment is tested and classified according to these criteria, incorporating a label that indicates its level of efficiency. One of the main advantages of these labels is that they allow consumers to make better decisions at the time of purchase, being able to select those equipments that are more convenient for them from the energy point of view.
Finally, an interesting fact to be mentioned is that in Uruguay 97% of electrical energy comes from renewable sources.
What are the key policies, principles, targets, and laws relating to the reduction of greenhouse gas emissions (e.g. emissions trading schemes) and the increase of the use of renewable energy (such as wind power) in your jurisdiction?
The Kyoto Protocol was approved by the Uruguayan Parliament in November 2000, with the same being incorporated into Uruguayan regulations by means of Law Number 17,279. In 2013, Law Number 19,158 founded the Uruguayan Institute of Meteorology and Hydrology which, among other commitments, advises the Executive Branch in terms of climate change.
Further, in 2016, Decree Number 172/016 created the National Environmental System (hereinafter, “NES”) with the purpose of strengthening, articulating and coordinating public policies on the matter, which is composed of various State agencies. Said Decree also creates the National Environmental Cabinet (hereinafter, “NEC”), which will have as a function, among others, to propose to the Executive Power an integrated and equitable environmental policy of the State for sustainable and territorially balanced national development. Also, said Decree regulates the National Secretariat of Environment, Water and Climate Change, whose purpose is to supervise compliance with the agreements of the NEC, as well as to provide it with technical and operational support. One of its main tasks is to coordinate – alongside the institutions and organisations which are members of the NES – the execution of public policies related to environment, water and climate change, agreed in the NEC, nationally and internationally.
In August 2018, Law Number 19,644 approved the Amendment to Montreal Protocol on substances that deplete the ozone layer.
To what extent are environmental, social, and governance (ESG) issues a material consideration in your jurisdiction? Is ESG due diligence for transactions and/or ESG public reporting becoming more common?
Uruguay does not have local indigenous communities, and this is a very particular socio-geographic characteristic within the Americas.
Traditionally, neither citizens nor social organizations have actively participated in an organized and public way challenging projects based on environmental grounds. Further there is no private organization that collectively represents the interests of citizen in environmental matters.
However, during the last couple of years, social aspects have been incorporated in environmental impact assessment processes. The social impact of new projects is now a variable to be considered, mainly in large scale infrastructure projects. Those projects have to undergo a public hearing as part of their environmental authorization request process and in these instances the public has participated.
Further and more relevantly, these large projects are required to present for approval of the environmental authority, a social management plan. They are then required to carry out those plans. In addition, project reviewing commissions are usually set up, composed of different relevant actors, including representatives of the communities where the project will develop, or which will be affected by the project.
To what extent can the following persons be held liable for breaches of environmental law and/or pollution caused by a company: (a) the company itself; (b) the shareholders of the company; (c) the directors of the company; (d) a parent company; (e) entities (e.g. banks) that have lent money to the company; and (f) any other entities?
(a) According to tort law, any natural person or legal entity who causes damage to another can be held liable for it. Therefore, a company could be held responsible for the pollution it produces. As a general rule, section 2 of Law No. 17,283 establishes the duty to abstain from any act that causes serious depredation, destruction or contamination of the environment.
(b) Despite the fact that under Uruguayan Law there is no express provision that holds shareholders liable for non-compliance with environmental regulations, it should be noted that according to Section 372 of Law No. 16,060, in the event that a resolution of the Shareholders’ Meeting is challenged and rendered ineffective by a judge, shareholders who had voted in favor of such resolutions will be liable jointly and severally liable for the consequences thereof, without limiting the responsibility of the administrator, the directors, the trustee or members of the fiscal committee.
(c) Under Uruguayan law, there is not yet any particular regulation that establishes direct liability for directors and officers of corporations for environmental wrongdoing. However, the Uruguayan Corporate Law establishes the liability of directors and administrators before the Company, its shareholders and third parties for all damages (it is not exclusive to environmental damages) they may cause if acting against the law or by-laws.
In that sense, directors and officers of corporations could be liable for environmental wrongdoing. However, there is no express provision which establishes the possibility of getting insurance or relying on other indemnity protection in respect of such liabilities.
Furthermore, on February 1, 2017, a bill was presented before Parliament (hereinafter, the “2017 Bill”) which seeks to incorporate a specific Section in the Uruguayan Penal Code regulating “Crimes Against the Environment”. The crimes which are punishable under this project of law are those regarding pollution, crimes against biodiversity, and crimes against environmental management. Also, the 2017 Bill adds a chapter referring to environmental crime to the Uruguayan Penal Code. The 2017 Bill regulates the liability for corporations that commit environmental crimes, and establishes that, in that case, the liability will lie with the people that have effective control over a corporation, provided they have contributed to and determined the commission of the said environmental crime. Although this has not been approved yet, it gives a hint of the tendencies of Uruguayan regulation.
(d) Under Uruguay’s tort law, parent companies could be held liable if it is proven that they were involved in the breach of environmental regulations or in the production of the pollution.
(e) Under Uruguayan law and jurisprudence, there is no specific provision or precedent that establishes a liability to lenders for environmental wrongdoing and/or remediation costs.
However, as it is understood under Uruguayan law, as a general rule all persons who cause environmental damage are liable for such damage.
(f) As previously explained, all persons who cause environmental damage are liable for such damage as a general rule.
To what extent can: (a) a buyer assume any pre-acquisition environmental liabilities in an asset sale/share sale; and (b) a seller retain any environmental liabilities after an asset sale/share sale in your jurisdiction?
According to Uruguayan law, there is no impediment for a buyer to assume any environmental liability prior to the acquisition of a company, nor is there a regulation prohibiting the seller from continuing to be liable for any environmental liabilities following the sale of the company. These conditions should be negotiated by the parties concerned on a case-by-case basis.
What duties to disclose environmental information does a seller have in a transaction? Is environmental due diligence commonplace in your jurisdiction?
Under Uruguayan legislation, there is no law that regulates such a situation in particular. Nonetheless, general principles of law determine the obligation of the parties in an agreement to act with good faith, avoid fraud and disclose any possible hidden faults of the object of the negotiation. Thus, according to such principles, not disclosing environmental problems may be construed as bad faith and may entail legal consequences regarding liability.
Environmental due diligences have become more and more frequent in Uruguay.
What environmental risks can be covered by insurance in your jurisdiction, and what types of environmental insurance policy are commonly available? Is environmental insurance regularly obtained in practice?
The market for environmental insurance is not quite developed yet, being one of its main difficulties the quotation of the damaged to be caused. There is only one compulsory environmental insurance for the companies that provide port services; namely, Section 9 of Decree Number 413/92 stipulates that companies that provide port services shall have policies to cover civil liability which include protection against environmental liabilities.
Although insurance companies do offer specific environmental policies, they are not yet commonly used, since environmental liability is usually covered within general insurance which covers civil liability in general.
To what extent are there public registers of environmental information kept by public authorities in your jurisdiction? If so, what is the process by which parties can access this information?
The National Environmental Observatory is an environmental information web platform, with free access, which provides inputs for institutional decision-making and at the same time brings that information closer to the people. Law 19,147 establishes its creation as a tool to centralize, organize and disseminate all environmental information generated in the different areas of the State and gives the MVOTMA, through the DINAMA, responsibility for its implementation. The National Environmental Observatory provides: data related to environmental management, interactive maps and analysis tools that allow a better understanding of environmental issues, documents and reports generated or compiled by MVOTMA, environmental indicators that are evaluated and updated every year, and EIA reports.
In addition, according to section 12 of Law No. 17,283, the MVOTMA is required to prepare and submit to certain public bodies every three years, a report on the national environmental situation, which must contain systematized and referenced information, organized by thematic areas and shall be widely diffused.
Furthermore, it is possible to request from state agencies the information considered relevant by any interested party, under the provisions of Law No. 18,381, and it is possible to appeal before a court, in case of refusal (section 22 of Law No. 18,381).
To what extent is there a requirement on public bodies in your jurisdiction to disclose environmental information to parties that request it?
There is no regulation in Uruguay that specifically contemplates access to environmental information. However, as we mentioned in our previous answer, Law 18.381 establishes the right of access of any person to public information, considered as such, that information which emanates or is in possession of any public body as long as it is not confidential, restricted or an exception established by law. An administrative procedure for access to public information is established and in case of refusal it is possible to appeal before a court.
Have there been any significant updates in environmental law in your jurisdiction in the past three years? Are there any material proposals for significant updates or reforms in the near future?
Aside from the 2017 Bill, currently, one of the most important developments regarding the preservation of the environment in Uruguay is the National Waste Management Law, Number 19,829. This law was issued on September 2019.
The purpose of the National Waste Management Law is to protect the environment, promoting a model of sustainable development, through the prevention and reduction of adverse effects of the generation and management of waste and the recognition of waste as a reusable and recyclable resource, capable of generating value and employment. The Law provides for the elaboration of a National Waste Management Plan that will establish the guidelines of waste management that shall apply in all the national territory. Along with this, the provinces shall also draw up their own Waste Management Plans that will apply within their jurisdiction, taking into account the guidelines provided by the National Waste Management Plan.
One of the main features of this Law is the establishment of the extended responsibility of the manufacturer and importer in the management of special waste – except in those cases where the Specific Internal Tax is applicable to the products from which it is generated. In such cases, the Executive Power may impose a tax (IMESI) on the products from which the waste is generated, or increase the current tax rate.
Another significant development in Uruguay is the implementation of Law Number 19,655, which was approved in 2018 and its Decree Number 3/019. The law states that it is of general interest to pursue the prevention and reduction of the environmental impact derived from the use of plastic bags, through actions to discourage their use and promote their reuse, recycling and other forms of valorisation. The law prohibits the manufacture, import, distribution, sale and delivery, in any capacity, of plastic bags that are not compostable or biodegradable. Plastic bags authorised by the present law may only be distributed, sold or delivered for any purpose on the national territory, when the manufacturer or importer has obtained the corresponding compliance certificate established by the regulation. Furthermore, Decree Number 3/019 has set a minimum price and method of billing for authorised plastic bags. According to recent studies, the use of plastic bags in Uruguay in the last months has considerably decreased as a consequence of this regulation.