Guidance Paper on the use of Sanctions Clauses 2014

Derivatives Under the EU ABS Regulation: the Continuity Concept

In this paper, ICC puts forward key business issues to be addressed in the development of horizontal guidelines for the implementation of the EU Regulation on access and benefit sharing. These include the definition of utilisation , the need for guidance on the interpretation of what constitutes R&D, confirmation that screening does not constitute utilisation and the necessity of ensuring a consistent definition of utilisation throughout the ABS legal and guidance documents.

Based on the views of most key sectors, ICC has prepared the current paper to help increase the clarity needed on the issue of derivatives by both users and Member States Competent Authorities.

A difficulty faced by users when seeking to understand the nature and scope of their obligations under the EU ABS Regulation relates to so-called derivatives. Whereas no direct reference is made to obligations applying to such materials in the EU ABS Regulation, the Horizontal Guidance of the European Commission provides that access to a derivative is covered when it also includes genetic resources for utilisation. Those limited provisions, while welcomed, do not give the clarity needed by users to ascertain when, and to what extent, activities conducted on derivatives trigger compliance obligations under the EU ABS Regulation.

ICC proposes in the present paper to build upon the Commission’s interpretation of “combined access” developed in its Horizontal Guidance by endorsing the concept of an ascertainable level of continuity between R&D activities conducted on a derivative and the genetic resource from which it was generated.

For example, such continuity1 would be expected to exist, and activities conducted on derivatives would qualify as utilisation for the purpose of the EU ABS Regulation, in the following situations:

  • The R&D activities conducted on a derivative form part of a research project covering the genetic resource and including the generation of the derivative.
  • A user has generated the derivative or commissioned a third party to produce the derivative in a research collaboration or as a  specific service (e.g. under a service agreement).
  • The derivative is acquired from a third party together with PIC and MAT conditions that cover R&D activities on the derivative.

By contrast, such continuity would not be expected to exist in case:

  • The derivative is acquired from a third party as a product available on the market and it is transferred without PIC and MAT conditions that cover R&D activities on the derivative.
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