# EUR-Lex - 52012PC0576 - EN

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# 52012PC0576

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization in the Union /* COM/2012/0576 final - 2012/0278 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

·
Grounds for and objectives of the proposal

The main objective of the proposal for a
Regulation of the European Parliament and of the Council on Access to Genetic
Resources and the Fair and Equitable Sharing of Benefits Arising from their
Utilization in the Union is to implement the Nagoya Protocol in the Union and
to enable Union ratification of this treaty.

·
General context

Genetic resources - the gene pool in both
natural and cultivated stocks - play a significant and growing role in many
economic sectors: 26% of all new approved drugs over the last 30 years are
either natural products or have been derived from a natural product.[1]

A broad range of players in the Union,
including academic researchers and companies from different sectors of industry
(for example, plant and animal breeding, biocontrol, cosmetics, food and
beverage, horticulture, industrial biotechnology, pharmaceutical) use genetic
resources for research and development purposes, some also use traditional
knowledge associated with genetic resources.

The European Union and all of its 27 Member States are Parties to
the Convention on Biological Diversity[2]
(CBD). The CBD recognizes that states have sovereign rights over genetic
resources found within their jurisdiction and the authority to determine access
to such resources. The Convention obliges all Parties
to facilitate access to genetic resources over which they hold sovereign
rights. It also obliges all Parties to share in a fair and equitable way the
results of research and development and the benefits arising from the
commercial and other utilization of genetic resources with the Party providing
these resources.

The CBD also addresses the rights of
indigenous and local communities that hold traditional knowledge associated
with genetic resources, and which may provide important lead information for
the scientific discovery of interesting genetic or biochemical properties.

However, the CBD currently provides little
detail on how access and benefit-sharing (ABS) for the use of genetic resources
and associated traditional knowledge should be done in practice. Actors at the beginning of the genetic resources value chain in the
Union (mostly collections and academic researchers) are in direct contact with
the laws and authorities of provider countries. These first actors pass on
samples of genetic resources and first research results to other users that
engage in basic or applied research. Actors situated at the end of the genetic
resources engage in often lengthy development activities that require
significant investments with uncertain outcomes. They largely depend on
material and information passed on to them from earlier users in the chain,
including in relation to ABS. In the absence of clear rules or with very
burdensome rules in most provider countries, European
researchers and companies have repeatedly been accused of 'biopiracy' by
countries claiming a violation of their sovereign rights. A clear framework of obligations for all users of genetic resources
throughout the value chain is essential for creating an enabling context for
facilitated access to quality samples of genetic resources with high legal
certainty.

The "Nagoya
Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of
Benefits Arising from Their Utilization to the Convention on Biological
Diversity" (hereinafter: Nagoya Protocol) is a new
international treaty adopted on 29 October 2010 by the consensus of the 193
Parties to the CBD. It is a treaty with legally binding effects that
significantly expands the general ABS framework of the CBD. The Nagoya Protocol
is expected to enter into force in 2014. Once
operational, the Nagoya Protocol will generate significant benefits for
biodiversity conservation in States that make available the genetic resources
over which they hold sovereign rights. It will in particular:

–
Establish more predictable conditions for access
to genetic resources.

–
Ensure benefit-sharing between users and
providers of genetic resources.

–
Ensure that only legally acquired genetic
resources are used.

The Protocol rests on two main pillars:
measures on access, and measures on user-compliance.

The access pillar leaves Parties discretion
whether they wish to regulate access, and require prior informed consent and
benefit-sharing for the use of their genetic resources or not. However, if
a Party decides to do so, then it must implement the fairly detailed
"international access standards" set out in the treaty through
binding legislation. The Protocol also clarifies that
states must engage with their indigenous and local communities in case access
is sought to traditional knowledge or to genetic resources held by these
communities. Main Protocol principles in relation to access include: (i)
government authorities or indigenous representatives must give their prior
informed consent before access can take place, (ii) specific benefit-sharing
obligations must be set out in private law contracts between a provider and a
user, and (iii) access frameworks must be clear and transparent, based on
non-arbitrary rules, and result in reliable and timely decisions, in a
cost-effective manner.

The user-compliance pillar of the Protocol
obliges all Parties to the Protocol to take measures to provide that
only legally acquired genetic resources and associated traditional knowledge
are utilized within their jurisdiction. Parties must monitor the compliance of
users within their jurisdiction and designate one or more checkpoints for this
task. They must also take appropriate, effective and proportionate measures in
cases where users within their jurisdiction do not comply with their
ABS-related obligations. Parties must also ensure that disputes arising from
specific benefit-sharing contracts can be taken to court. However, different
than in the case of access, the user-compliance provisions of the Nagoya
Protocol leave Parties quite some discretion on the type and mix of
implementing measures chosen.

Parties to the Protocol will need to make
further choices on the temporal application of implementing measures, on the
respect for existing specialised ABS instruments[3], and apply special
considerations to non-commercial research, to the exchange of genetic resources
with pathogenic properties, and to genetic resources for food and agriculture.
They will also need to address the relations with non-Parties to the Protocol. All Parties to the Protocol must furthermore establish a National Focal Point on ABS to liaise with the international
Secretariat and to respond to information requests by stakeholders. Parties
must also designate one or more Competent National Authorities responsible for
granting access and advising on applicable procedures for requiring prior
informed consent and entering into mutually agreed terms. Parties may designate
a single entity to fulfill the functions of both focal points and competent
national authority.

The Union and most of its Member States[4] have signed the Nagoya Protocol
and thereby committed themselves to work towards implementation and ratification.
Union implementation and ratification of the Protocol will create new
opportunities for nature-based research, and contribute to the development of a
bio-based economy.[5]

·
Existing provisions in the area of the proposal

Neither the implementation of the access
nor of the user-compliance pillar of the Protocol is currently addressed in
Union-law.

·
Consistency with the other policies and
objectives of the Union

The EU and its Member States are
politically committed to become Parties to the Protocol to secure access of EU
researchers and companies to quality samples of genetic resources, based on
reliable access decisions at low transaction costs.[6]

The proposal is also consistent with the EU's
signature of the Protocol and also with target 16 of the CBD's Strategic Plan
which foresees that by 2015 the Nagoya Protocol is in
force and operational, consistent with national legislation.

2.           RESULTS OF CONSULTATIONS
WITH INTERESTED PARTIES AND IMPACT ASSESSMENT

This initiative is the result of extensive
consultations with the general public and relevant stakeholders. Furthermore,
the Commission carried out an impact assessment of the proposed policy options
which led to the publication of a report.

·
Public consultation

The Commission held a web-based public
consultation from 24 October to 30 December 2011 to seek feedback on a list of
questions that addressed key aspects of Nagoya Protocol implementation.
Forthy-three replies were received that represented a much broader number of
respondents, since the majority of replies came from European or international
associations with hundreds or thousands of members each. The respondents
covered most sectors potentially affected by implementation measures under the
Nagoya Protocol. The list of questions together with the results of the
web-based public consultation have been published in the website of the
European Commission under the following link: http://ec.europa.eu/environment/consultations/abs_en.htm.

·
Ad hoc consultations

DG Environment organised a technical
meeting on 26 January 2012 including all respondents to the public
consultation, Brussels-based representatives of stakeholders, and experts
nominated by Member States. At the meeting, the Commission presented its
summary of the public consultation, whereas members of the consultant team
presented tentative findings of their work. Participants used the opportunity
to challenge the consultant team on some of their findings.

DG Environment officials held many meetings
with representatives of botanical gardens, culture collections, industry
federations or individual companies and participated in various expert
conferences on the Nagoya Protocol. The consultant team conducted
semi-structured interviews with representatives of stakeholders and companies.

·
Consultations with third countries

In 2011, DG Environment asked several EU
delegations in third countries to seek information from major partner countries
on the state of play and their concrete ideas for Nagoya Protocol
implementation. The feedback received was complemented by more detailed
bilateral discussions with Australia, Brazil, India, Japan, Mexico and
Switzerland.

·
Impact Assessment Report

In line with its "Better
Regulation" policy, the Commission has conducted an assessment of the
economic, social and environmental impacts of different policy options for
implementing the Nagoya Protocol. This report is accessible on the web site of
the European Commission (DG Environment). The Commission also contracted a
consultancy firm to carry out a study as an input for its report. This study is
accessible at the same web site.

The Commission's impact assessment
considered a broad range of options for implementing the Nagoya Protocol. Two options for access measures and four options for user-compliance
measures were analyzed in-depth. All options were analyzed against a business as
usual baseline without implementing measures at EU or Member State level. It
also analyzed two options on the temporal application of EU-level measures as
well as a range of complementary measures.

The analysis identified the establishment
of an EU platform for discussing access to genetic resources and sharing best
practices as the preferable option on access, whereas the identified preferable
option on user-compliance is a due diligence obligation on EU users
complemented by a system to identify collections as "trusted sources"
of genetic resources. The due diligence obligation would only apply to genetic
resources and associated traditional knowledge that are acquired after the
entry into force of the Nagoya Protocol for the EU. To lower costs and enhance
effectiveness, these measures should be complemented by awareness and training
activities, work on contractual model clauses, work on technical tools for
monitoring and tracking genetic resources flow, and where appropriate through
bilateral cooperation with other countries or regions.

The due diligence obligation would ensure
that minimum information relevant to ABS is available all throughout the
genetic resources value chain in the Union. This will enable all users to know
of and respect related rights and obligations. At the same time, the due
diligence approach does not prescribe the same type of measures to all users,
but leaves users some flexibility to take measures that work best for their
respective context, and also to develop sectoral best practices. The system of
trusted sources would substantially lower the risk that illegally acquired
genetic resources are used in the Union. Acquiring samples for trusted sources
would seem particularly beneficial for academic researchers as well as small and
medium sized enterprises.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

·
Summary of the proposed action

The proposal sets out obligations for users
of genetic resources and traditional knowledge associated with genetic
resources in the Union. It would oblige all users to exercise
due diligence to ascertain that genetic resources and traditional knowledge
associated with genetic resources used were accessed in accordance with
applicable legal requirements and that, where relevant, benefits are fairly and
equitable shared upon mutually agreed terms. To that end, all users would need
to seek, keep and transfer to subsequent users certain information relevant for
access and benefit-sharing. The proposal sets out minimum
features of due diligence measures.

To comply, users could build on existing
ABS codes of conduct developed for the academic sector and different
industries. Associations of users may request the Commission to recognise a
specific combination of procedures, tools or mechanisms overseen by an
association as best practice. Competent authorities of the Member States would
be obliged to consider that the implementation of a recognised best practice by
a user reduces that user's risk of non-compliance and justifies a reduction in
compliance checks.

This proposal also foresees a system of
Union trusted collections that would substantially lower the risk that
illegally acquired genetic resources are used in the Union. Collections that
wish to be included in the register of Union trusted collection would commit to
supply only fully documented samples of genetic resources to third persons for
their use. The competent authorities of the Member States will have to verify
if a collection meets the requirements for recognition as Union trusted
collection. Users acquiring a genetic resource from a collection included in
the Union register would be considered to have exercised due diligence as
regards the seeking of all necessary information. A system of Union trusted
collections will be particularly beneficial for academic researchers as well as
small and medium sized enterprises.

Users would be obliged to declare at
identified points that they complied with their due diligence obligation.
Competent authorities of Member States should check on a risk-based approach
whether users comply with their obligations under this Regulation. Member
States should also ensure that infringements of this Regulation by users are
sanctioned by effective, proportionate and dissuasive penalties.

Finally, the proposed Regulation also
foresees the creation of a Union platform on access.

·
Legal basis

The proposal is based on the Union's environment
policy competence in Article 192(1) of the Treaty on the Functioning of the
European Union as it aims at implementing the Nagoya Protocol, a global environmental
agreement in favour of the conservation and sustainable use of biological
diversity worldwide.

·
Choice of instrument

The proposed instrument is a regulation
because a regulation is necessary in order to ensure the highest level of
harmonization and avoid the coexistence of different standards between Member
States.

·
The principles of subsidiarity and
proportionality

The proposal would comprehensively
implement the user-compliance pillar of the Nagoya Protocol. Member States
would have discretion whether or not to require prior informed consent and
benefit-sharing for genetic resources that belong to them. Their decisions on
this would not be a precondition for Union ratification of the Nagoya Protocol.

Only two Member States of the Union have so
far developed legislation on access to their genetic resources over which they
hold sovereign rights, whereas other Member States have decided to grant free
access to their genetic resources. Presently EU-harmonised access measures are
not needed. In case a Member State decides to require prior informed consent
and benefit-sharing it would have to implement the access-related provisions of
the Nagoya Protocol. The proposed Union platform on access would be a
non-binding approach for streamlining access conditions in Member States based
on the method of open coordination.

A legally binding EU-level intervention on
user-compliance is justified as it avoids negative effects on the internal
market in nature-based products and services that would result from a fragmentation
of user-compliance systems in the Member States and also has the best
performance as regards the creation of an enabling context for research and
development on genetic resources with benefits for the conservation and
sustainable use of biological diversity worldwide.

The proposed due diligence obligation on
users of genetic resources and traditional knowledge associated with genetic
resources is also proportionate as it would balance the objectives of
minimising the risks of the use of illegally acquired genetic resources in the
Union and of supporting the fair and equitable sharing of benefits resulting
from the use of genetic resources or traditional knowledge associated with
genetic resources upon mutually agreed terms with considerations on legal
certainty, low transaction costs, and the flexibility inherent in the due
diligence concept to take implementing measures that are best suited to
different circumstances.

4.           BUDGETARY IMPLICATION

The present proposal does not entail any significant
financial implications for the Community budget.

5.           EUROPEAN ECONOMIC AREA
(EEA)

The proposal concerns an EEA matter and
should therefore extent to the European Economic Area.

2012/0278 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on Access to Genetic Resources and the
Fair and Equitable Sharing of Benefits Arising from their Utilization in the
Union

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning
of the European Union, and in particular Article 192(1) thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[7],

Having regard to the opinion of the
Committee of the Regions[8],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)       A broad range of players
in the Union, including academic researchers and companies from different
sectors of industry, use genetic resources for research, development and
commercialisation purposes; some also use traditional knowledge associated with
genetic resources.

(2)       Genetic
resources represent the gene pool in both natural and cultivated or
domesticated stocks and play a significant and growing role in many economic
sectors including food production, forestry, development of medicines, or
development of bio-based sources of renewable energy.

(3)       Traditional
knowledge that is held by indigenous and local communities may provide important lead information for the scientific discovery
of interesting genetic or biochemical properties of genetic resources.

(4)       The main international
instrument governing access to and use of genetic resources is the Convention
on Biological Diversity (the Convention). Council Decision 93/626/EEC of 25
October 1993 concerning the Convention on Biological Diversity[9] approved the Convention on
behalf of the Union.

(5)       The Convention recognises
that states have sovereign rights over natural resources found within their
jurisdiction and the authority to determine access to their genetic resources. The Convention imposes an obligation on all
Parties to facilitate access to genetic resources over which they hold sovereign
rights. It also makes it mandatory for all Parties to take measures to share in
a fair and equitable way the results of research and development and the benefits
arising from the commercial and other utilization of genetic resources with the
Party providing these resources. Such sharing shall be upon mutually agreed
terms. The Convention also addresses access and
benefit-sharing in relation to the knowledge, innovations and practices of indigenous
and local communities relevant for the conservation and sustainable use of biological
diversity.

(6)       The Nagoya Protocol on Access to Genetic
Resources and the Fair and Equitable Sharing of Benefits Arising from Their
Utilization to the Convention on Biological Diversity (the Nagoya Protocol) is an international treaty adopted on 29 October 2010 by the Parties
to the Convention[10].
The Nagoya Protocol significantly expands the general rules of the Convention on
access and benefit-sharing for the use of genetic resources and traditional
knowledge associated with genetic resources.

(7)       Council Decision xxxx/xx/EU of [date] on the conclusion
of the Nagoya Protocol on Access to Genetic Resources and the Fair and
Equitable Sharing of Benefits Arising from their Utilization to the Convention
on Biological Diversity[11]
approved the Nagoya Protocol on behalf of the Union.

(8)       It
is important to set out a clear and sound framework for implementing the Nagoya
Protocol that should enhance opportunities available for nature-based research
and development activities in the Union. It is also essential to prevent the
use of illegally acquired genetic resources or traditional knowledge associated
with genetic resources in the Union and to support the effective implementation
of benefit-sharing commitments set out in mutually agreed terms between
providers and users.

(9)       In
order to ensure legal certainty, it is important that the rules implementing
the Nagoya Protocol should only apply to genetic resources and traditional
knowledge associated with genetic resources that are accessed after the entry
into force of the Nagoya Protocol for the Union.

(10)     Council
Decision 2004/869/EC of 24 February 2004 concerning
the conclusion, on behalf of the European Community, of the International
Treaty on Plant Genetic Resources for Food and Agriculture International Treaty on Plant Genetic Resources for Food and
Agriculture[12] approved that Treaty on behalf of the Union. That
Treaty constitutes a specialized international access and benefit-sharing instrument
that should not be affected by the rules implementing the Nagoya Protocol.

(11)     It is important to define,
in accordance with the Nagoya Protocol, that use of genetic resources refers to
research and development on the genetic or biochemical composition of samples
of genetic material, which includes research and development on isolated
compounds extracted from genetic material that was accessed in a Party to the Nagoya
Protocol.

(12)     It seems important to
recall CBD Decision II/11 paragraph.2 – as confirmed by
CBD Decision X/1, paragraph 5 – that reaffirms the exclusion of human genetic
resources from the framework of the Convention.

(13)     There is currently no
internationally agreed definition on "traditional knowledge associated
with genetic resources" or on "holding" such knowledge by an
indigenous and local community. International definitions of those terms and
concepts are being negotiated in the Intergovernmental Committee of the World
Intellectual Property Organization. Therefore, in order to ensure flexibility
and legal certainty for providers and users, this Regulation should make
reference to traditional knowledge associated with genetic resources as
described in benefit-sharing agreements.

(14)     With a view to ensuring an
effective implementation of the Nagoya Protocol, all users of genetic resources
and traditional knowledge associated with such resources should have to
exercise due diligence to ascertain that the genetic resources and associated
traditional knowledge used were accessed in accordance with applicable legal
requirements and to ensure that, where relevant, benefits are shared. However,
given the diversity of users within the Union it is not appropriate to oblige
all users to take the same measures for exercising due diligence. Therefore, only
minimum features of due diligence measures should be set out. The specific
choices taken by users on the tools and measures applied for exercising due
diligence should be supported through the recognition of best practices as well
as complementary measures in support of sectoral codes of conduct, model
contractual clauses, and guidelines with a view to increasing legal certainty
and reducing costs. The obligation on users to keep information relevant for
access and benefit-sharing should be limited in time, consistent with the
time-span for an eventual innovation.

(15)     The due diligence
obligation should apply to all users irrespective of their size, including to
micro-enterprises and small and medium-sized companies. Excluding these actors
from the system would entirely undermine its effectiveness. It would also run
against the international obligations of the Union under the Nagoya Protocol.
However, the Regulation should offer a range of measures and tools to enable
micro-enterprises and small and medium-sized companies to comply with their
obligations at low cost and with high legal certainty.

(16)     Best practices developed by
users should play an important role in identifying due diligence measures that
are particularly suitable for achieving compliance with the system of
implementation of the Nagoya Protocol with high legal certainty and at low
costs. Users should be enabled to build on existing access and benefit-sharing
codes of conduct developed for the academic sector and different industries. Associations
of users should be able to request that the Commission determines whether a
specific combination of procedures, tools or mechanisms overseen by an
association may be recognised as best practice. Competent authorities of the
Member States should consider that the implementation of a recognised best
practice by a user reduces that user's risk of non-compliance and justifies a
reduction in compliance checks. The same should apply to best practices adopted
by the collective of the Parties to the Nagoya Protocol.

(17)     Users should declare at
identified points in the chain of activities that constitute use that they have
exercised due diligence. Suitable points for such declarations are the
receiving of public research funds, when a market approval for a product
developed on the basis of genetic resources is requested or at the time of
commercialisation where a market approval is not required. Notably, the
declaration made upon occasion of requesting market approval would not
constitute part of the approval procedure as such and would be directed to
competent authorities established under this Regulation.

(18)     Collecting
of genetic resources in the wild is mostly undertaken for non-commercial
purposes by university-based researchers or collectors. In the vast majority of
cases and in almost all sectors, access to newly collected genetic resources is
gained through intermediaries, collections, or agents that acquire genetic
resources in third countries.

(19)     Collections are major
suppliers of genetic resources and traditional knowledge associated with
genetic resources used in the Union. A system of Union trusted collections
should be set in place. It would ensure that collections included in the
register of Union trusted collections effectively apply measures to only supply
samples of genetic resources to third persons with documentation providing
evidence of legal acquisition and the establishment of mutually agreed terms,
where required. A system of Union trusted collections should substantially
lower the risk that illegally acquired genetic resources are used in the Union.
Competent authorities of Member States would verify if a collection meets the
requirements for recognition as Union trusted collection. Users that acquire a
genetic resource from a collection listed in the Union register should be
considered to have exercised due diligence as regards the seeking of all
necessary information. This should prove particularly beneficial for academic
researchers as well as small and medium sized enterprises.

(20)     Competent authorities of
Member States should check whether users comply with their obligations. In that
context, competent authorities should accept internationally recognised
certificates of compliance as evidence that the genetic resources covered were
legally acquired and that mutually agreed terms were established. Competent
authorities should also keep records of the checks made and relevant
information should be made available in accordance with Directive 2003/4/EC of
the European Parliament and of the Council of 28 January 2003 on public access
to environmental information.[13]

(21)     Member States should ensure
that infringements of the rules constituting the system of implementation of
the Nagoya Protocol by users are sanctioned by means of effective,
proportionate and dissuasive penalties.

(22)     Taking into account the
international character of access and benefit-sharing transactions, competent
authorities of the Member States should cooperate between themselves, with the
Commission, and with authorities of third countries to comply with their duties
within the system for implementing the Nagoya Protocol.

(23)     A Union platform on access
should enable discussions on and contribute to the streamlining of access
conditions in Member States, the design and performances of access regimes,
simplified access for non-commercial research, access practices of collections in
the Union, access of Union stakeholders in third countries and the sharing of
best practices.

(24)     The Commission and the
Member States should take appropriate complementary measures to enhance the
effectiveness of implementing this Regulation and to lower costs, particularly
where this would benefit academic researchers and small and medium sized
enterprises.

(25)     In order to take into
account the inherently international character of access and benefit-sharing activities,
the Commission should also consider whether cooperation with third countries or
regions could support an effective application of the system created for
implementing the Nagoya Protocol.

(26)     The
date of entry into force of this Regulation should be directly correlated to
the entry into force of the Nagoya Protocol in order to ensure equal conditions
at the Union and global levels in activities related to access and benefit
sharing of genetic resources. The Nagoya Protocol will enter into force on the
ninetieth day after the deposit of the fiftieth instrument of ratification,
acceptance, approval or accession by States or regional economic integration
organisations that are Parties to the Convention.

(27)     In
order to ensure uniform conditions for the implementation of this Regulation, implementing
powers should be conferred on the Commission. Those powers should be exercised
in accordance with Regulation (EU) No 182/2011 of the European Parliament and
of the Council of 16 February 2011 laying down the rules and general principles
concerning mechanisms for control by the Member States of the Commission's
exercise of implementing powers[14].

(28)     The objectives of this
Regulation are to minimise the risk that illegally genetic resources or
traditional knowledge associated with genetic resources are used in the Union,
and to support the fair and equitable sharing of benefits resulting from the
use of genetic resources or traditional knowledge associated with genetic resources
upon mutually agreed terms. These cannot be achieved by the Member States
individually, and can therefore, by reasons of their scale and to ensure
functioning of the internal market, be better achieved at Union level. The
Union may therefore adopt measures in accordance with the principle of
subsidiarity as set out in Article 5 of the Treaty on European Union. In
accordance with the principle of proportionality, as set out in that Article,
this Regulation does not go beyond what is necessary to achieve its objectives.

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter

This Regulation establishes rules governing
access and benefit-sharing for genetic resources and traditional knowledge
associated with genetic resources, in accordance with the provisions of the
Nagoya Protocol on access to genetic resources and the fair and equitable
sharing of benefits arising from their utilisation to the Convention on
Biological Diversity (the Nagoya Protocol).

Article 2

Scope

This Regulation applies to genetic resources
over which states exercise sovereign rights and to traditional knowledge
associated with genetic resources that are accessed after the entry into force
of the Nagoya Protocol for the Union. It also applies to the benefits arising
from the use of such genetic resources and to traditional knowledge associated
with genetic resources.

This Regulation does not apply to genetic
resources for which access and benefit-sharing is governed by a specialised
international instrument to which the Union is a Party.

Article 3

Definitions

For the purposes of this Regulation, the
following definitions apply:

(1)
"Nagoya Protocol" means the Nagoya
Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of
Benefits Arising from their Utilization to the Convention on Biological
Diversity;

(2)
"genetic material" means any material
of plant, animal, microbial or other origin containing functional units of
heredity;

(3)
"genetic resources" means genetic
material of actual or potential value;

(4)
"access" means the acquisition of
genetic resources or of traditional knowledge associated with genetic resources
in a Party to the Nagoya Protocol in accordance with the applicable domestic access
and benefit-sharing legislation or regulatory requirements of that Party.

(5)
"user" means a natural or legal person
using genetic resources or traditional knowledge associated with genetic
resources;

(6)
"use of genetic resources" means to
conduct research and development on the genetic or biochemical composition of
genetic resources;

(7)
"mutually agreed terms" means the
contractual arrangement concluded between a provider of genetic resources or of
traditional knowledge associated with genetic resources and a user of such
resources or knowledge, that sets out specific conditions for the fair and
equitable sharing of benefits arising from such use, and that may also include
further conditions and terms for the use of such resources or knowledge;

(8)
"traditional knowledge associated with
genetic resources" means traditional knowledge held by an indigenous or
local community that is relevant for the use of genetic resources and that is
as such described in the mutually agreed terms applying to the use of genetic
resources;

(9)
"collection" means an ensemble of
collected samples of genetic resources and related information that is
accumulated, stored, and taxonomically identified, whether owned by public or
private entities;

(10)
"association of users" means a legal
person representing the interests of users that is involved in developing and
overseeing best practices under Article 8 of this Regulation.

(11)
"internationally recognised certificate of
compliance" means an access permit or its equivalent issued by a competent
national authority in accordance with Article 6(3)(e) Nagoya Protocol, that is
made available to the Access and Benefit-sharing Clearing-House;

(12)
"Access and Benefit-sharing
Clearing-House" means the global information-sharing portal established
under Article 14(1) Nagoya Protocol.

Article 4

Obligations of users

1.           Users shall exercise due
diligence to ascertain that genetic resources and traditional knowledge
associated with genetic resources used were accessed in accordance with
applicable access and benefit-sharing legislation or regulatory requirements
and that, where relevant, benefits are fairly and equitably shared upon
mutually agreed terms. Users shall seek, keep, and transfer to subsequent users
information relevant for access and benefit-sharing.

2.           Users shall:

(a)
seek, keep and transfer to subsequent users
information on:

(1)
the date and place of access of genetic
resources and traditional knowledge associated with such resources;

(2)
the description of genetic resources or
traditional knowledge associated with such resources used, including available
unique identifiers;

(3)
the source from which the resources or the
knowledge were directly obtained as well as subsequent users of genetic
resources or traditional knowledge associated with such resources;

(4)
the presence or absence of rights and
obligations related to access and benefit-sharing;

(5)
access decisions and mutually agreed terms, where
applicable;

(b)
obtain additional information or evidence where
uncertainties about the legality of access and use persist; and

(c)
obtain a proper access permit, establish
mutually agreed terms, or discontinue the use where it appears that access was
not in accordance with applicable access and benefit-sharing legislation or
regulatory requirements.

3.           Users shall keep the
information relevant for access and benefit-sharing for twenty years after the
end of the period of use.

4.           Users acquiring a genetic
resource from a collection listed in the Union register of trusted collections referred
to in Article 5(1) shall be considered to have exercised due diligence as
regards the seeking of information relevant to access and benefit-sharing for
genetic resources and traditional knowledge associated with genetic resources.

Article 5

Union trusted collections

1.           The Commission shall
establish and maintain a Union register of trusted collections. That register
shall be internet-based, easily accessible to users, and shall include the
collections of genetic resources identified as meeting the criteria of Union
trusted collection.

2.           Each Member State shall, upon
request by a collection under its jurisdiction, consider the inclusion of this
collection in the Union register of trusted collections. After verifying that
the collection meets the criteria set out in paragraph 3, the Member State shall
notify the Commission without delay of that collection's name, contact details,
and type. The Commission shall without delay include the information thus
received into the Union register of trusted collections.

3.           In order for a collection
to be included in the Union register of trusted collections, a collection owner
shall demonstrate its capacity to:

(a)
apply standardised procedures for exchanging
samples of genetic resources and related information with other collections,
and for supplying samples of genetic resources and related information to third
persons for their use;

(b)
have samples of genetic resources and related
information supplied to third persons for their use only with documentation
providing evidence that the resources and the information were accessed in
accordance with applicable legal requirements and, where relevant, mutually
agreed terms for the fair and equitable sharing of benefits;

(c)
keep records of all samples of genetic resources
and related information supplied to third persons for their use;

(d)
establish or use unique identifiers for samples of
genetic resources supplied to third persons;

(e)
use appropriate tracking and monitoring tools
for exchanging samples of genetic resources and related information with other
collections.

4.           Member States shall regularly
verify that each collection under their jurisdiction included in the Union
register of trusted collections effectively applies the measures set out in
paragraph 3.

Member States shall inform the Commission
without delay if a collection under their jurisdiction included in the Union
register no longer complies with paragraph 3.

5.           Where there is evidence that
a collection included in the Union register of trusted collections does not apply
the measures set out in paragraph 3, the Member State concerned shall without
delay identify remedial actions in dialogue with the owner of the collection
concerned.

The Commission shall remove a collection from
the Union register of trusted collections when, in particular on the basis of
information provided pursuant to paragraph 4, it has determined that a
collection included in the Union register of trusted collections faces important
or persistent difficulties to comply with paragraph 3.

6.           The Commission shall be
empowered to adopt implementing acts to establish the procedures for
implementing paragraphs 1 to 5 of this Article. The implementing acts shall be
adopted in accordance with the examination procedure referred to in Article 15(2).

Article 6

Competent authorities and focal point

1.           Each Member State shall
designate one or more competent authorities responsible for the application of
this Regulation. Member States shall notify the Commission of the names and
addresses of their competent authorities as of the entry into force of this
Regulation. Member States shall inform the Commission without delay of any
changes to the names or addresses of the competent authorities.

2.           The Commission shall make
public, including on the internet, a list of the competent authorities. The
Commission shall keep the list up to date.

3.           The Commission shall
designate a focal point on access and benefit-sharing responsible for providing
information to applicants seeking access to genetic resources and traditional
knowledge associated with such resources in the Union and to liaise with the Secretariat
of the Convention on Biological Diversity.

Article 7

Monitoring user compliance

1.           Member States and the
Commission shall request all recipients of public research funding involving
uses of genetic resources and traditional knowledge associated with genetic
resources to declare that they will exercise due diligence in accordance with
Article 4.

2.           Users shall declare to the
competent authorities established under Article 6(1) that they exercised due
diligence in accordance with Article 4 on the occasion of requesting market
approval for a product developed on the basis of genetic resources or
traditional knowledge associated with such resources, or at the time of
commercialisation where a market approval is not required.

3.           Competent authorities
shall transmit to the Commission every two years the information received on
the basis of paragraphs 1 and 2. The Commission shall summarise the information
received and make it available to the Access and Benefit-sharing Clearing
House.

4.           The Commission shall be
empowered to adopt implementing acts to establish the procedures for implementing
paragraphs 1, 2 and 3 of this Article. The implementing acts shall be adopted
in accordance with the examination procedure referred to in Article 15(2).

Article 8

Best practices

1.           Any association of users may
submit an application to the Commission for recognising as best practice a
combination of procedures, tools or mechanisms developed and overseen by it. The
application shall be supported by evidence and information.

2.           Where, on the basis of
information and evidence supplied to it by an association of users , the
Commission determines that the specific combination of procedures, tools or
mechanisms, when effectively implemented by a user, enables the user to comply with
its obligations set out in Articles 4 and 7, it shall grant recognition as best
practice.

3.           An association of users shall
inform the Commission of any changes or updates made to a recognised best
practice for which it was granted recognition in accordance with paragraph 2.

4.           If evidence from competent
authorities of the Member States or other sources indicates repeated cases
where users implementing a best practice fail to comply with their obligations
under this Regulation, the Commission shall examine in dialogue with the relevant
association of users whether the repeated cases of non-compliance indicate
possible deficiencies in the best practice.

5.           The Commission shall
withdraw the recognition of a best practice, when it has determined that
changes to the best practice compromise a user's ability to meet the conditions
set out in Articles 4 and 7, or when repeated cases of non-compliance by users
relate to deficiencies in the practice.

6.           The Commission shall establish
and keep up to date an internet-based register of recognised best practices. That
register shall list in one section best practices recognised by the Commission in
accordance with paragraph 2 of this Article and display in another section best
practices adopted on the basis of Article 20(2) Nagoya Protocol.

7.           The Commission shall be
empowered to adopt implementing acts to establish the procedures for implementing
paragraphs 1 to 5 of this Article. The implementing acts shall be adopted in
accordance with the examination procedure referred to in Article 15(2).

Article 9

Checks on user compliance

1.           The competent authorities shall
carry out checks to verify if users comply with the requirements set out in
Articles 4 and 7.

2.           The checks referred to in
paragraph 1 of this Article shall be conducted in accordance with a
periodically reviewed plan following a risk-based approach. When developing
this risk-based approach, Member States shall consider that the implementation by
a user of a best practice recognised under Article 8(2) of this Regulation or
under Article 20(2) of the Nagoya Protocol reduces that user's risk of
non-compliance.

3.           Checks may be conducted
when a competent authority is in possession of relevant information, including
on the basis of substantiated concerns provided by third parties, concerning non-compliance
of a user with this Regulation.

4.           The checks referred to in
paragraph 1 shall include at least:

(a)
examination of the measures taken by a user to
exercise due diligence in accordance with Article 4;

(b)
examination of documentation and records that
demonstrate the exercise of due diligence in accordance with Article 4 in
relation to specific use activities;

(c)
on the spot checks, including field audits;

(d)
examination of instances where a user was
obliged to make declarations under Article 7.

5.           Competent authorities
shall accept an internationally recognised certificate of compliance as
evidence that the genetic resource it covers has been accessed in accordance
with prior informed consent and that mutually agreed terms have been
established, as required by the domestic access and benefit-sharing legislation
or regulatory requirements of the Party to the Nagoya Protocol providing the
prior informed consent.

6.           Users shall offer all
assistance necessary to facilitate the performance of the checks referred to in
paragraph 1, notably as regards access to premises and the presentation of
documentation or records.

7.           Without prejudice to
Article 11, where, following the checks referred to in paragraph 1 of this
Article, shortcomings have been detected, the competent authority shall issue a
notice of remedial actions to be taken by the user.

Additionally, depending on the nature of the
shortcomings detected, Member States may take immediate interim measures,
including inter alia seizure of illegally acquired genetic resources and suspension
of specific use activities.

8.           The Commission shall be
empowered to adopt implementing acts to establish the procedures for
implementing paragraphs 1 to 7 of this Article. The implementing acts shall be
adopted in accordance with the examination procedure referred to in Article 15(2).

Article 10

Records of checks

1.           The competent authorities
shall keep records of the checks referred to in Article 9(1), indicating in
particular their nature and results, as well as of remedial actions and
measures taken under Article 9(7).

Records of all checks shall be kept for at
least five years.

2.           The information referred
to in paragraph 1 shall be made available in accordance with Directive
2003/4/EC.

Article 11

Penalties

1.           Member States shall lay
down the rules on penalties applicable to infringements of the provisions of Articles
4 and 7 of this Regulation and shall take all measures necessary to ensure that
they are implemented.

2.           The penalties provided for
must be effective, proportionate and dissuasive. Those penalties may include:

(a)
fines;

(b)
immediate suspension of specific use activities;

(c)
confiscation of illegally acquired genetic
resources.

3.           Member States shall notify
the rules referred to in paragraph 1 to the Commission by [date] at the latest and
shall notify it without delay of any subsequent amendments affecting them.

Article 12

Cooperation

1.           The competent authorities shall
cooperate with each other, with the administrative authorities of third
countries and with the Commission in order to ensure compliance of users with
this Regulation.

2.           The competent authorities
shall exchange information on serious shortcomings detected through checks
referred to in Article 9(1) and on the types of penalties imposed in accordance
with Article 11 with the competent authorities of other Member States and with
the Commission.

Article 13

Union platform on access

1.           A Union platform on access
to genetic resources and traditional knowledge associated with genetic
resources is hereby established.

2.           The Union platform shall
contribute to the streamlining of access conditions at Union level by
discussing related issues, including the design and performances of access
regimes established in Member States, simplified access for non-commercial
research, access practices of collections in the Union, access of Union
stakeholders in third countries and the sharing of best practices.

3.           The Union platform may
provide non-binding advice, guidance or opinions on issues under its mandate.

4.           Each Member State and the
Commission may nominate one regular member for the Union platform. Stakeholders
and other experts in matters addressed by this Regulation may be invited as
appropriate.

5.           The Union platform will
take decisions by the consensus of its regular members participating in a
meeting. Decisions on procedure may be taken by a two-thirds majority of the
regular members participating in a meeting. The first meeting of the Union
platform shall adopt by consensus its detailed rules of procedure. The
Commission shall prepare, convene and chair the meetings of the platform.

Article 14

Complementary measures

The Commission and the Member States shall,
as appropriate:

(a)
support information, awareness raising, and
training activities to help stakeholders to understand their obligations under
this Regulation;

(b)
support the development of sectoral codes of
conduct, model contractual clauses, guidelines and best practices, particularly
where they would benefit academic researchers and small and medium-sized
enterprises;

(c)
support the development and use of
cost-effective communication tools and systems in support of monitoring and
tracking the use of genetic resources and traditional knowledge associated with
genetic resources by collections and users;

(d)
provide technical and other guidance to users,
taking into account the situation of academic researchers and small and
medium-sized enterprises, in order to facilitate compliance with the
requirements of this Regulation.

Article 15

Implementing acts

1.           The Commission shall be
assisted by a committee. That committee shall be a committee within the meaning
of Regulation (EU) No 182/2011.

2.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

3.           Where the opinion of the
committee is to be obtained by written procedure, that procedure shall be
terminated without result when, within the time-limit for delivery of the
opinion, the chair of the committee so decides or a two-thirds majority of committee
members so request.

4.           Where the committee
delivers no opinion, the Commission shall not adopt the draft implementing act
and the third subparagraph of Article 5(4) of Regulation (EU) No 182/2011 shall
apply.

Article 16

Reporting and review

1.           Member States shall submit
to the Commission, three years after the date of entry into force of this Regulation
and every five years thereafter, a report on the application of this Regulation.

2.           Not later than one year
after the time-limit for submission of the national reports, the Commission
shall draw up a report to be submitted to the European Parliament and the
Council. The report by the Commission shall include a first assessment of the
effectiveness of this Regulation.

3.           Every ten years after its
first report the Commission shall, on the basis of reporting on and experience
with the application of this Regulation, review the functioning and
effectiveness of this Regulation. In its reporting the Commission shall in
particular consider the administrative consequences for public research
institutions, small or medium-sized enterprises and micro-enterprises. It shall
also consider the need for further Union action on access to genetic resources
and traditional knowledge associated with genetic resources.

4.           The Commission shall
report to the Conference of the Parties serving as the meeting of the Parties
to the Nagoya Protocol on the measures that the Union and its Member States
have taken to implement the Nagoya Protocol.

Article 17

Entry into force and application

1.           The
Commission shall publish a notice in the Official Journal of the European
Union that the Nagoya Protocol
has entered into force. This Regulation shall enter
into force on the twentieth day following the publication of that notice.

2.           Articles 4, 7, and 9 shall
apply one year after the date of entry into force of this Regulation.

3.           This Regulation shall be
binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

[1]               Newman and Cragg (2012), "Natural
Products as Sources of New Drugs over the 30 Years from 1981 to 2010". Journal
of Natural Products, 75(3), pp 311–335.

[2]               Convention on Biological
Diversity (Rio de Janeiro, 5 June 1992, in force 29 December 1993), available
at <http://www.cbd.int/convention/text/>.

[3]               For example, the International Treaty on Plant
Genetic Resources for Food and Agriculture concluded in 2001 in the context of
the UN Food and Agriculture Organization and to which the EU is a Party. For
details see Annex 1.

[4]               Latvia, Malta and Slovakia have not yet signed.

[5]               See Commission Communication on a Bioeconomy for
Europe (COM (2012) 60 final).

[6]               See Council Conclusions of 20 December 2010
(paragraphs 1 and 21), 23 June 2011 (paragraph 14), European Parliament
Resolution of 20 April 2012 (paragraph 101), Commission Communication on an EU
Biodiversity Strategy to 2020 (COM (2011) 244) (Action 20).

[7]               OJ C , , p. .

[8]               OJ C , , p. .

[9]               OJ L 309, 13.12.19993, p. 1.

[10]             Annex I to Document UNEP/CBD/COP/DEC/X/1 of 29 October
2010..

[11]             OJ

[12]             OJ L 378, 23.12.2004, p. 1.

[13]             OJ L 41, 14.2.2003, p. 26.

[14]             OJ L 55, 28.2.2011, p. 13.