The EU ABS Regulation andhow it will work for businesspresentation by Daphne Yong-d’HervéJBA seminar, Tokyo 19 February 2015
Current Status of Implementation of
the Nagoya Protocol in EU

ICC mission

ICC, the world business organization, promotes cross-border
trade and investment and the multilateral trading system.

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ICC members

ICC’s global network comprises over 6 million
companies, chambers of commerceand business associations in 130
countries:– Companies
Of all sizes and from all sectors– Chambers of commerce
Regional, national and local– Business associations
National and sectoral

ICC activities

ICC has three main activities:
Rules-setting

Arbitration

Policy2

ICC involvement in ABS
ICC Task Force on ABS•

Focal point for businesses– Coordination and consensus-building between sectors– Information exchange, networking and awareness-raising– Business contact point for CBD secretariat and governments•

Cross-sectoral and global businesses views to governments•

Represented business during negotiations on Nagoya Protocol•

Coordinating role during implementation phase– Exchange on national implementation– Input on EC Regulation: coordination of different sectors– Awareness raising and dialogue (ICC ABS Conference)

EU ABS Regulation

 Background Structure and contents
 Industry perspective
 Process and timeframe3

BackgroundEU : first Nagoya Protocol party to implement usercompliance measures
Why the rush?
 EU wanted to be part of first Meeting of the Parties toinfluence international discussions
 Needed to have legislation in place to ratify

Birth of EU ABS Regulation

EU ABS Regulation
 adopted 16 April 2014;
 entered into force 12 October 2014

Longstanding dialogue between European Commission (DGEnvironment) and member states with stakeholders


During NP negotiations (ICC coordination)
During elaboration of Regulation
On-going consultation to understand practices of different sectors

Key priority: Regulation that supports innovation andemployment within Nagoya framework

4Nagoya implementation:
Roles and responsibilities in EU
User
compliance

EU-level

Memberstates

Access

ABSRegulation

Nationallegislation

Users andproviders

Benefitsharing

Implementing

Act
Guidance

FranceOther

Individual
agreements

Legislative structure

EU ABS Regulation (not Directive)
direct application in EU member states

Implementing
Act

Guidance

Member statesmeasures• Designate competentauthority• Recognize registeredcollections• Compliance checks• Penalties

5Key provisions

Receivingfundinguser's due
diligenceobligation

GR from aregisteredcollection

applying arecognised
bestpracticemonitoring =checkpoints

compliancechecks

at the final
stage ofdevelopment

penalties

Slide: Alicja Kolowska,
European Commission

Key provisions applied to R&D process
Compliance checks by member state competent authorities
Final
developmentof product Declaration

Research
funding Declaration

AccessResearchDevelop
mentCommercialization

Registeredcollections

Due diligence
Best practices

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Scope – what is covered?
GRs outside national
jurisdictions (e.g. highseas; Antartica)

OUT

GRs : ABS
governed byspecializedinternationalinstruments)(e.g. FAOInternationalTreaty).

IN
Genetic resources +associated traditional knowledge (aTK)- Under sovereign rights of States- Accessed after the entry into force of theNagoya Protocol (NP) for the EU.
- Acquired in Nagoya Protocol party- Utilized for R&D on genetic and/or
biochemical composition of genetic resources,
including through biotechnology

Key provisions applied to R&D process
Compliance checks by member state competent authorities
Finaldevelopmentof product Declaration

Researchfunding Declaration

AccessResearchDevelopment

Commercialization

Registeredcollections

Due diligence
Best practices

7Core concept - Due diligenceCore concept of EU Regulation
Due diligenceStated aims


Focus on processes not individual transactions
Based on existing business practices
Low transaction costs, flexibility, business friendly

Due diligence requirements (1)Users must seek, keep and transfer to subsequent users:
Internationally-recognised certificate of compliance (IRCC)(access permit ABS Clearing House)+Content of the mutually agreed terms relevant for subsequent users

Or, if no IRCC
Information / relevant documents• Date and place of access• Description of GR or aTK utilised;• Source where GR or aTK directly obtained + subsequent users• ABS rights and obligations (e.g. permitted use and commercialisation);• Access permits, where applicable;• Any mutually agreed terms (including benefit-sharing arrangements)

8Due diligence requirements (2)Users must:
Insufficient
information• obtain accesspermit + establish
mutually agreedterms

Uncertainties
about legality ofaccess andutilisationOR• discontinue
utilisation

Key provisions applied to R&D process
Compliance checks by member state competent authorities
Finaldevelopmentof product Declaration

Research
funding Declaration

AccessResearchDevelop
mentCommercialization

Registeredcollections

Due diligence
Best practices

9Tools to faciliate compliance

Registeredcollections

Obtaining GR
from registeredcollection=
Compliancewith duediligence

Recognized
bestpractices

Tools to facilitate
compliance

Modalities for applicationin Implementing Act

User implementationof recognized bestpractice=
Reduced risk of noncompliance
Compliance checks
less likely

Recognized best practices

WhatWho can apply

Combination of procedures,
tools and mechanisms

Association of users
orother interested parties

Enabling user compliance withdue diligence obligations

Who develop and oversee bestpractices

Recognition given by European Commission

10Registered collections (1)Conditions to be in register of collections

Standardised
procedures• GR exchange with other collections,• GR supplied to users for utilisation

Documentation• showing access GR + related information wasin accordance with applicable requirements• mutually agreed terms (where relevant)Records• all GR samples and related information suppliedto users• unique identifiers (where possible) for GRsamples

Tracking/monitoringtools• exchanging GR samples and related information
with other collections

Registered collections (2)Recognition

granted by
Member States

established andmaintained byRegisterEuropean Commission

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Key provisions applied to R&D process
Compliance checks by member state competent authorities
Finaldevelopmentof product Declaration

Research
funding Declaration

AccessResearch

Registeredcollections

Development

Commercialization

Due diligence

Best practices

Check points

Two checkpoints
Research
funding application
Duediligencedeclaration

Final stage ofproductdevelopmentNationalcompetentauthorities

12Key provisions applied to R&D process
Compliance checks by member state competent authorities
Finaldevelopmentof product Declaration

Research
funding Declaration

AccessResearch

Registeredcollections

Development

Commercialization

Due diligence

Best practices

Compliance checks
Compliance checks

 By national competent authoritieso in accordance with periodically reviewed plan (risk-basedapproach)o on the basis of substantiated complaints
 Effective, proportionate, dissuasive
Non-compliance Remedial action or measures
 Penalties- effective, proportionate and dissuasive- defined by member states

13What does business think?

Keybusinessconcern

Specific issues

System not the flexible, low cost, business friendly
solution originally intended
Heavy adminstrative burden and legal uncertainty




Scope
Due diligence
Monitoring of best practices
Declarations

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Scope - temporalTemporal
EU compliance measures should only apply to GRs accessed
after the entry into force of the Nagoya Protocol (NP) for the EU
BUT
How about GRs accessed before NP application in EU but
considered by provider country to be subject to PIC and benefit
sharing (e.g. countries which consider utilization not access as
trigger for PIC and benefit sharing.)?

 Probably not covered

Scope - geographicalGeographical Products manufactured or sold in EU resulting from R&D
activities taking place outside the EU
In Discussion Paper but not in draft Implementing Act.
Probably will not be covered.
 Which laws applicable in complex access chains,
Original provider country, or also intermediary countries?

?

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Scope - material
Material
 Pure information - probably not included
 Research tools - to be addressed in Guidance ; probably notincluded) What is definition of R&D? Manufacturing included?
 Research on GRs sourced as commodities?

Due diligence Very burdensome, requires detailed information
 How to get required information when GRs come throughcomplex cross border supply chains or as commodities?
 Unclear to which activities and GRs due diligencerequired.
 Problems of transferring confidential information
 When does due diligence end?
 Concerns about penalties (including criminal)16

Check point declarations
 Research funding – includes private funding - draft Impl. Act
Definition: grant to carry out research, not internal budgetary resources Which competent authority if utilization in several m-states?
Industry request: centralize declaration in one authority « Placing on market » includes pre-commercial trials? - draft Impl. Act
excludes pre-commercial clinical, field or pest resistance trials
 Application only to GRs within scope of Regulation
Industry request for confirmation – not in draft Implementing Act
 Minimum link between product and GR necessary to require declaration
 Confidentiality of information in declarations?

Best practices
 Degree of oversight necessary by associations of best practices
Still unclear Who can develop recognized best practices
Draft Impl Act: cumulative requirement - legitimate interest + access,collect , transfer or commercialize GRs or aTK
 Factors determing recognition of best practices
Industry requests more guidance Possibility of different best practices in same sector?

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Registered collections
 Not key concern for industry but interest for industry– Sourcing from registered collections = due diligence– Some companies have own collections

 Some collections think current requirements too burdensome
to make registration worthwhile
 For the moment, registered collections outside EU notenvisaged

Specific sector concerns

Pharma• Inclusion of pathogens not covered by otherinternational instruments eg seasonal flu; Ebola• Industry proposal: : pathogens obtained from global
health authorities to be deemed compliant

Plant breeding• Inclusion of commercially available varieties• Industry proposal: exclusion. Court case to annulRegulation• Draft Imp Act : use of sMTAs considered exercise of due
diligence (no further info necessary)• Incompatibility with breeders exemption free exchangesystem• Research funding declaration: Difficult to know which
GRs will be in final product

Biocontrol• Cannot use registered collections so very burdensomeCosmetics• Supply chain confidentiality (identity of suppliers andsources in information transfer)• Differentiation betweeen biotrade and ‘utilization’18Process status
EU level:•Work on implementing act– will define modalities for:

••
•
•
•
•
•

Art. 5 – collections
Art. 8 – best practices
Art. 7 - checkpoints
Discussion paper circulated for comment and stakeholder hearing
Current review by member states
Expected entry into force – 3Q 2015

Preparation of (sectoral) guidance documents• Other points not addressed by Implementing Act e.g. scope

Process status (2)Member State level:– Designation of competent authorities– Lay down rules on penalties– Organize monitoring of compliance checks– Modalities for recognition of registered collections

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Process with stakeholders
EU and member statesConsultation with users (industry, research, collections)
Stakeholder meetings
Participation in conferences (e.g.ICC)
Comments by stakeholders

Business and other stakeholders
 Input to EC and member states on implementing act and guidance Development of best practices
 Awareness raising

Time frame Final draft – June 2015
 Adoption – October 2015_________________________ __________________________
Guidance Mid-2015_________________________ ___________________________
Entry into force of EU 12 October 2015
Regulation articles 4 (duediligence) , 7 (check pointdeclarations) and 9(compliance checks)
Implementing Act20

Arigato
ICC International:- Daphne Yong-d’Hervé , dye@iccwbo.orgICC Japan:- Tsuneyuki Kobayashi, icc.kobayashi@iccjapan.org

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