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Monday, 30 March 2015

Onward march to Nagoya - UK and EU draft implementing regulations

The Nagoya Protocol entered into effect for the EU on 12 October 2014 (see IPKat post here).  On that day, the "Regulation No 511/2014 on compliance measures for users from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization in the Union" entered into effect, as did the Council Decision adopting the Protocol - 2014/283/EU.

Nagoya has four Cat Cafes ...
A brief background.  The Nagoya Protocol follows from the Convention on Biological Diversity (CBD), signed at the Earth summit in Rio de Janeiro, Brazil in 1992. The CBD enshrined the principle that countries have sovereign rights over their natural resources, and are permitted to control access to their genetic resources, and to share in benefits deriving from their utilisation. ("Genetic resources" refers to anything that contains ‘functional units of heredity’, including cells, seeds and whole organisms.)  But the CBD contained no sanction or enforcement mechanism to give it legal effect. Thus, an international treaty on ‘Access to genetic resources and the fair and equitable sharing of benefits arising from their utilization’ was signed in 2010 – the Nagoya Protocol.  You can read a more detailed overview in a piece that this Kat wrote for Chemistry World.

As the IPKat has reported previously (see post here and links back), the EU Regulation places a significant burden on researchers within the EU who conduct research involving genetic material. The most onerous provisions of the Regulation on due diligence and user compliance - Articles 4 (obligation to exercise due diligence to ascertain that genetic resources and traditional knowledge associated with genetic resources which they utilise have been accessed in accordance with applicable access and benefit-sharing legislation or regulatory requirements), 7 (obligation to declare compliance with due diligence obligation on receipt of funding and provide evidence of compliance at the final stages of development of a product), and 9 (checks on user compliance) - do not come into effect for a further year, that is on 12 October 2015, because both EU and national further implementing regulations are required which clarify exactly what is expected of "users" (defined basically to mean researchers) of genetic resources.

The draft EU implementing Regulation does not seem to be available online, but you can see it here, with its annexes here.  The major part of the Regulation concerns the "Register of Collections" (if material is obtained from such a collection it is deemed to be Nagoya-compliant) and certification of "Best Practice" (if a researcher follows "Best Practice" this may be sufficient to show the "due diligence" required under the Nagoya Protocol and the Regulation that genetic resources have not been accessed in contravention of the Nagoya Access and Benefit Sharing requirements).

What most interests this Kat however is Articles 7 and 8 of the draft Implementing Regulation. These relate to Article 7 of the main Regulation that states:
1.   The Member States and the Commission shall request all recipients of research funding involving the utilisation of genetic resources and traditional knowledge associated with genetic resources to declare that they exercise due diligence in accordance with Article 4.
2.  At the stage of final development of a product developed via the utilisation of genetic resources or traditional knowledge associated with such resources, users shall declare to the competent authorities referred to in Article 6(1) that they have fulfilled the obligations under Article 4 and shall simultaneously submit:
(a) the relevant information from the internationally-recognised certificate of compliance; or
(b) the related information as referred to in Article 4(3)(b)(i)-(v) and Article 4(5), including information that mutually agreed terms were established, where applicable.
Many observers, including this Kat, thought that "research funding" in para 1. above meant on receipt of public funding.  But not so.  What the draft Implementing Regulation says is:
Article 6 Due diligence declaration at the stage of research funding
1. Recipients of research funding involving the utilisation of genetic resources and/or traditional knowledge associated with them shall make the declaration of due diligence requested by Member States and the Commission pursuant to Article 7(1) of Regulation (EU) No 511/2014 upon first receipt of research funding.
2. In case a recipient has not yet obtained the genetic resources and/or traditional knowledge associated with genetic resources involved in their utilisation upon first receipt of research funding, the declaration of due diligence requested by Member States and the Commission pursuant to Article 7(1) of Regulation (EU) No 511/2014 shall be made when the recipient has obtained the genetic resources and/or traditional knowledge associated with those resources.
3. The declaration of due diligence referred to in paragraphs 1 and 2 shall be made by submitting the completed template set out in Annex III to this Regulation.
4. Where research funding is provided from both public and private sources, a separate declaration for the privately funded part shall not be requested.
5. Where a Member State determines that the declaration is not to be made directly to the competent authority responsible for the transmission pursuant to Article 7(3) of Regulation (EU) No 511/2014, the designated addressee of the declaration shall transmit a copy of the declaration to that competent authority without undue delay.
6. Where research funding is provided by both the Union and by one or several Member States, the declaration shall be made to the competent authority of the Member State in whose territory the recipient of research funding is established.
7. Where research funding is provided exclusively by the Union, the declaration shall be made to the funding institution which provided the research funding. That institution shall transmit a copy of the declaration to the competent authority of the Member State in whose territory the recipient of research funding is established.
8. Where research is funded exclusively by private sources, the declaration shall be made to the competent authority of the Member State in whose territory the recipient of research funding is established.
9. For the purposes of paragraphs 1 to 7, where the recipient of research funding provided by the Union and/or by one or several Member States is not established in the Union the declaration shall be made to the funding institution. This funding institution shall transmit a copy of the declaration to the competent authority of the Member State in whose territory the funding institution is established.
10. For the purposes of this Article, 'research funding' means any financial contribution by means of a grant, including non-repayable financial or in-kind contribution, to carry out research, whether from commercial or non-commercial sources. It does not cover internal budgetary resources of private or public entities.
Paragraph 10 clearly shows this is any kind of funding, including private.

The due diligence at the "final stage of development of a product" under Article 7(2) of the main Regulation is more onerous, as it requires evidence, and not simply a declaration.  What is proposed for that is as follows:
Article 7 Due diligence declaration at the stage of final development of a product
1. For utilisation of genetic resources and/or of traditional knowledge associated with genetic resources, users shall make the declaration referred to in Article 7(2) of Regulation (EU) No 511/2014 by submitting to a competent authority the completed template set out in Annex IV to this Regulation.
2. The declaration referred to in paragraph 1 shall be made once when any of the following events occur:
(a) market approval is sought for a product developed via the utilisation of genetic resources and/or traditional knowledge associated with genetic resources;
(b) a notification required prior to placing for the first time on the Union market is made for a product developed via the utilisation of genetic resources and/or traditional knowledge associated with genetic resources;
(c) placing for the first time on the Union market a product developed via the utilisation of genetic resources and/or traditional knowledge associated with genetic resources, for which no market approval or notification is required; subsequent placing on the Union market of identical products does not require the declaration referred to in paragraph 1;
(d) the result of the utilisation is sold or in any other form transferred to a natural or legal person within the Union in order for that person to carry out one of the activities referred to in points (a), (b) and (c);
(e) the result of the utilisation is sold or in any other form transferred to a natural or legal person outside the Union.
3. A voluntary declaration pursuant to paragraph 1 may also be made where the utilisation has permanently ended without finalising the development of a product or where the user considers that the stage of final development of a product has been reached.
4. For the purposes of this Article, 'placing on the Union market' means the supply by any means, irrespective of the technique used, for distribution or use as part of a commercial activity, whether in return for payment or free of charge. It does not cover pre-commercial trials, including clinical, field or pest resistance trials, as well as the making available of unauthorised medicinal products in order to provide treatment options for individual patients. 
Article 11 of the main Regulation requires that "Member States shall lay down the rules on penalties applicable to infringements of Articles 4 and 7 and shall take all the measures necessary to ensure that they are applied."  The UK has now released a Statutory Instrument that was laid before Parliament on 23 March 2015 and whose main  provisions will come into force on 12 October 2015, at the correct time to provide the required penalties.  The associated Explanatory Note reveals:
These Regulations implement, within the United Kingdom, compliance measures for users of genetic resources or traditional knowledge associated with genetic resources resulting from 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 Protocol”). The Protocol aims to promote the conservation and sustainable use of biodiversity by ensuring the benefits from the use of genetic resources and traditional knowledge associated with genetic resources are shared fairly. Regulation (EU) No 511/2014 of the European Parliament and of the Council on compliance measures for users from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilisation in the Union (OJ No L 150, 20.5.2014, p 59) (“the EU Regulation”) requires users to exercise due diligence that they only utilise genetic resources or traditional knowledge associated with genetic resources that have been accessed in accordance with the Protocol. Users are also required to make a declaration confirming due diligence at the final stage of development of a product.  
Part 2 deals with the allocation of functions to the Secretary of State as competent authority for the EU Regulation and as member State under Articles 5, 7(1) and 13 of the EU Regulation. Regulation 6 provides that the Secretary of State must take any other administrative or policy measures that are necessary to provide that genetic resources or traditional knowledge associated with genetic resources are utilised in accordance with the Protocol.  
Part 3 and the Schedule enable the Secretary of State to impose civil sanctions. Compliance with requirements to exercise due diligence under, or to fail to make a declaration of due diligence in accordance with, the EU Regulation is made subject to civil sanctions, but will not directly be made an offence. Variable monetary penalties may be imposed in relation to offences under the Regulations.  
Part 4 deals with enforcement. Regulations 9, 10 and 11 confer entry, inspection and seizure powers on inspectors. Regulation 12 makes provision for documents which are the subject of legal professional privilege or its equivalent in Scotland.  
Part 5 sets out offences and penalties. Regulation 13 provides for offences for failure to comply with compliance or stop notices, as well as requirements to keep information under the EU Regulation. Regulation 14 makes it an offence to obstruct an inspector.  
Part 6 requires the Secretary of State to review the operation and effect of these Regulations and publish a report within five years of the enforcement and penalty provisions coming into force. 
There is also an associated Explanatory Memorandum, which is rather longer.  This explains the legislative and policy background, and the consultation procedure (see IPKat post here) that was conducted. Gratifyingly, it seems that pleas to the effect that criminal sanctions would be draconian have been heeded.  The main sanctions for non-compliance with the due diligence obligations are civil sanctions in Part 3 of the SI.  While criminal sanctions are set out in Part 6, these are only for failure to comply with a compliance notice or a stop notice, or for failure to comply with Article 4(6) of the EU Regulation (obligation to keep information for 20 years after utilisation) - and for this last the maximum penalty is a £5000 fine.  For the more severe criminal sanctions to apply, it would have been necessary to have been found non-compliant and have disregarded the notice.  This seems a reasonable balance (since the existence of sanctions is required by the Regulation and the UK cannot unilaterally disregard this).

While the powers and responsibilities in the SI vest within the Secretary of State, it has been announced that these functions will be carried out by the National Measurement Office (see post here).

This Kat welcomes that the UK SI requires monitoring at least every five years as to whether it is achieving the Nagoya objectives.  He has always rather suspected that the bureaucracy and record-keeping required under Nagoya and the Regulation will serve no useful purpose at all.  He looks forward to finding out whether this is so.

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