Because No One is Immune to the Law
July 10, 2020 - Biotech, Pharma, Regulatory, Asia

China’s Biosecurity Law will cover Human Genetic Resources

China Patent Eligibility Update: Human Embryonic Stem Cells

During its April 2020 meetings, the Standing Committee of China’s National People’s Congress reviewed a number of draft legislations, among which was a draft Biosecurity Law. At the conclusion of the meetings, the second draft of the Biosecurity Law (the “Draft”) was published for public comments, which may be submitted by June 13, 2020.

The draft Biosecurity Law was first brought to the Standing Committee’s review in October 2019. As a comprehensive and ambitious set of laws covering multiple areas under the overarching name “biosecurity,” the draft legislation was an attempt to address the absence of legal punishments against biotechnology misuses in China in recent years, an infamous example of which is the gene-edited babies scandal that broke out in late 2018.

The Draft covers the following major areas: the establishment of a biosecurity risk prevention and control system, the prevention and control of major new or sudden infectious diseases or animal or plant epidemics, the security of biotechnology R&D and application, laboratory biosecurity, the security of human genetic resources (HGR) and biological resources, countermeasures against the threat of bioterrorism and biological weapons, the buildup of biosecurity capabilities, and the legal liability in the event of violation of relevant provisions of the Biosecurity Law. This article will summarize and analyze certain provisions in the Draft applicable to, and their potential impact on, foreign entities and individuals.

The broad scope of the Draft can first be seen by the vague definition it has ascribed to “biosecurity,” which includes the following “capabilities” of the State: to effectively respond to threats from animals, plants, microorganisms, biotoxins, and other bioactive substances (collectively, “Biological Factors”) and relevant elements, to maintain stable and sound development of the biological field and a danger-free and threat-free status, and to guarantee sustainable development and security. Because of such vagueness, and because the Draft prohibits any individual and any entity from harming State biosecurity, the potential scope of violation of the Biosecurity Law appears extremely broad.

Biosecurity risk prevention and control system

            According to the Draft, China will implement a unified system to issue biosecurity information. The biosecurity information that is considered to be “necessary to be uniformly released” must be issued at the State level or at the local government level as necessary and authorized by the State. No unauthorized entity or individual may issue such information. This prohibition potentially covers the publication of research articles that includes biosecurity information, e.g., the sequence of a newly discovered virus with the potential to cause an epidemic.

            As part of the biosecurity risk prevention and control system, China will publish and amend from time to time State directories and lists of entry and exit items related to biosecurity, which will be used by China Customs. The Draft gives Customs a wide latitude of authority related to biosecurity, which extends to inbound and outbound persons, transportation tools, containers, goods, articles, packaging materials, and the discharge of ballast water of international navigation ships. As necessary and approved by the State Council, Customs may temporarily close a port or the relevant border.

Prevention and control of major new or sudden infectious diseases or animal or plant epidemics

            According to the Draft, any entity or individual that finds any infectious disease or animal or plant epidemic must report it to a medical institution or a relevant professional institution or department. China will also strengthen the construction of border and port protection and control capabilities for infectious diseases and animal and plant epidemics, support international communication and cooperation, take part in international rescue and assistance as needed, and establish an international cooperation network for the prevention and control of infectious diseases and animal and plant epidemics.

Security of biotechnology R&D and application; laboratory biosecurity

            The Draft includes a number of provisions governing biotechnology R&D and application. For example, the State Council will promulgate a list of important equipment and special Biological Factors involving biosecurity, any purchase or import of items on the list by any entity engaging in biotechnology R&D or application will be subject to registration, and no individual will be allowed to purchase or hold such items. The State Council will also categorize biotechnology R&D activities into high, medium or low risk categories. Foreign entities are prohibited from conducting high or medium risk biotechnology R&D activities in China.

            The Draft includes a whole chapter on laboratory biosecurity, particularly with respect to laboratories of pathogenic microorganisms. The establishment of such labs is subject to approval or registration, depending on the circumstances. The establishment of such labs with foreign investment will be subject to an additional security review. If the security review determines that any pathogenic microorganism laboratory may affect public health, state security or public benefits, it may not be established. In addition, individuals will be prohibited from establishing a biosecurity laboratory.

            China will classify pathogenic microorganism laboratories on four levels, based on the biosecurity protection levels. These are largely consistent with the biological safety levels established by the U.S. Centers for Disease Control and Prevention. The Draft also includes a series of provisions on the management of such laboratories, lab animals, accountability, safety and security, and emergency measures. It is worth noting that these provisions apply not only to pathogenic microorganism labs, but also to manufacturing enterprises involving pathogenic microorganism processing, and to laboratories involving other Biological Factors.

Security of biological resources

            The Draft has put provisions for biological resources in the same chapter as provisions for HGR, but does not provide a definition for “biological resources.” The biological resources provisions are obviously watered down compared to the HGR provisions, presumably because the legislators intend that the collection, preservation, use and outbound transportation of biological resources will be regulated by other laws and regulations. Interestingly, the only substantive provisions on biological resources in the Draft all relate to foreign entities or individuals, or alien species. For example, the acquisition or use of China’s biological resources by any overseas organization or individual or any institution established or actually controlled thereby (collectively, “Foreign Persons”), or any international scientific research collaboration using China’s biological resources, must each be approved by the relevant department according to the law. Such collaboration must ensure that the Chinese entity and its researchers are involved in a substantial part of the whole research process, and the relevant rights and interests are shared according to the law, although the Draft does not specify how exactly they should be allocated. The State Council will promulgate a directory of alien invasive species, and will strengthen the investigation, monitoring, early warning, control, evaluation and elimination of alien invasive species set out in the directory in the name of protection of biodiversity. No entity or individual may import, release or discard alien species.

Security of human genetic resources

The Draft has included a number of provisions of China’s Administrative Regulations on Human Genetic Resources (the “Regulations”), in many instances, almost verbatim, particularly with respect to Foreign Persons. Specifically, the Biosecurity Law, according to the Draft, will prohibit Foreign Persons from collecting or preserving China HGR in China, or providing China HGR abroad. International scientific research collaboration using China HGR is permitted but must be approved by China’s Ministry of Science and Technology (MOST) in advance on a project-by-project basis. The only exception to the approval requirement is “international collaboration in clinical trials” at clinical trial institutions that do not involve the outbound transfer of China HGR materials (which has the same definition in the Draft as in the Regulations). Such clinical trial collaboration, however, must still be pre-registered with MOST and, as part of the pre-registration, the types and numbers of HGR proposed to be used and the actual proposed uses must be disclosed to MOST.

The Biosecurity Law, according to the Draft, will require that the permitted international collaboration must ensure that the relevant Chinese entities and their research personnel “can take part in the research substantially in the whole process of the collaboration,” and that the relevant rights and interests resulting from the collaboration be shared in accordance with relevant laws, most likely the Regulations, which dictate that any patent rights based on scientific research results obtained in the collaboration must be jointly owned by the participating Foreign Person and Chinese entity, among other benefit-sharing provisions.

Penalties for violation of the HGR provisions by Foreign Persons, according to the Draft, include injunction; confiscation of any China HGR illegally collected or preserved and of any relevant illegal income; and a fine of more than RMB 1 million but less than RMB 10 million. If the illegal income is more than RMB 1 million, the fine will be five to ten times that of the illegal income. These penalties are consistent with the ones imposed on Foreign Persons in the Regulations.

The Biosecurity Law, according to the Draft, will permit the provision of, or open access to, China HGR information (which also has the same definition in the Draft as in the Regulations) to Foreign Persons, subject only to registration with MOST; provided, however, that, in the event such provision or access could endanger China’s public health, national security or public interests, MOST’s security examination will be required. This is also consistent with the Regulations.

The Draft will obviously need further revisions before its final promulgation. Given the breadth of the Draft, this article does not attempt to address many other areas covered by it, some of which may seem to have more relevance to the current COVID-19 pandemic. In fact, the Regulations (and the corresponding provisions in the Draft) have already played an important role in the global battle against COVID-19. Because the certification or authorization by foreign regulatory authorities of the testing kits developed in China requires the cross-border transfer of development data, which constitutes China HGR information, the data transfer and the product development itself, which involves the use of China HGR materials, are both subject to the Regulations.

The Draft’s inclusion of some of the key provisions of the Regulations related to Foreign Persons has sent a strong signal that Chinese legislators intend to codify a significant portion of the Regulations into law. The Biosecurity Law’s legislative progress undoubtedly warrants close monitoring and careful analysis.

This article is not a comprehensive review of the Draft, but provides a brief summary and analysis of select provisions in the Draft that may be applicable to foreign entities or individuals. For an in-depth analysis of specific provisions or an English translation of the Draft, please contact the author. The author’s previous article on the Regulations may be accessed here.