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China May Ban or Restrict Exports of Gene-Editing and Synthetic Biology Technologies
March 7, 2023
It is widely believed within the industry that future cross-border intellectual property (IP) licensing transactions involving gene-editing and synthetic biology technologies could be affected by recently proposed amendments to China’s negative list for technology imports and exports.
Amendments to Export Restrictions and Prohibitions
In 2020, the negative list was amended to restrict exports of technologies related to artificial intelligence. By the end of 2022, the Ministry of Commerce (MOFCOM) and the Ministry of Science and Technology proposed further amendments to the negative list, introducing new export controls as outlined below.
Amendments to Export Restrictions and Prohibitions
In 2020, the negative list was amended to restrict exports of technologies related to artificial intelligence. By the end of 2022, the Ministry of Commerce (MOFCOM) and the Ministry of Science and Technology proposed further amendments to the negative list, introducing new export controls as outlined below.
Technologies Subject to Export Prohibitions
Technologies Subject to Export Restrictions
Human somatic cell cloning technologies, including:
- enucleation technology;
- nuclear transfer technology;
- embryo transfer technology;
- technologies for activating key cellular enzymes.
- zinc-finger nuclease technology;
- transcription activator-like effector nuclease (TALEN) technology and clustered regularly interspaced short palindromic repeats (CRISPR) technology;
- site-specific nuclease technologies;
- homologous recombination technology;
- targeted gene knockout technology;
- gene insertion and fragment deletion technologies;
- multi-site mutation technologies.
CRISPR gene-editing technology used in:
- ethically controversial areas, including gene-edited embryonic cells, oocytes and sperm cells; or
- research that may lead to significant adverse consequences.
- key technologies such as efficient DNA synthesis and assembly, directed evolution and the construction of cell factories;
- technologies for the synthesis of amino acids, proteins, starch and other basic chemicals;
- technologies that may cause significant adverse consequences.
Gene Editing, Synthetic Biology and Technology Exports
Gene editing and synthetic biology are two important areas within the life sciences industry in which China and the United States have long competed.
Following the release of China’s 14th Five-Year Plan for Bioeconomy Development in early 2022, President Biden issued an executive order in September 2022 aimed at advancing biotechnology and biomanufacturing innovation for a sustainable, safe and secure U.S. bioeconomy.
Under Chinese law, “technology export” refers to activities involving the provision or transfer of technologies abroad through trade, investment, technical services or cooperation.
Technologies covered by the restrictions described above are not limited to patented technologies. Non-patented technologies, including trade secrets and know-how, may also be subject to such export controls.
Recommendations for Companies Facing Export Restrictions or Prohibitions
Before negotiating or entering into any agreements involving the export of restricted technologies, companies should apply to MOFCOM or its local authorities for a letter of intent for a technology export license.
Once such agreements have been concluded, companies must obtain a technology export license and subsequently complete customs, foreign-exchange and other applicable formalities. The agreement will take effect after the export license has been issued.
Where technologies are subject to an export prohibition, companies may need to suspend the relevant transactions, assess their available options and, where necessary, identify alternative solutions.
Commentary
If the amendment enters into force in its current form, it could have a significant impact on cross-border transactions involving gene-editing and synthetic biology technologies, including IP licensing, cooperation agreements and technical services.
One positive aspect is that the restriction is primarily focused on research and development and therefore may not have an immediate impact on the commercialization of products developed using technologies covered by the restrictions.
Gene editing and synthetic biology are two important areas within the life sciences industry in which China and the United States have long competed.
Following the release of China’s 14th Five-Year Plan for Bioeconomy Development in early 2022, President Biden issued an executive order in September 2022 aimed at advancing biotechnology and biomanufacturing innovation for a sustainable, safe and secure U.S. bioeconomy.
Under Chinese law, “technology export” refers to activities involving the provision or transfer of technologies abroad through trade, investment, technical services or cooperation.
Technologies covered by the restrictions described above are not limited to patented technologies. Non-patented technologies, including trade secrets and know-how, may also be subject to such export controls.
Recommendations for Companies Facing Export Restrictions or Prohibitions
Before negotiating or entering into any agreements involving the export of restricted technologies, companies should apply to MOFCOM or its local authorities for a letter of intent for a technology export license.
Once such agreements have been concluded, companies must obtain a technology export license and subsequently complete customs, foreign-exchange and other applicable formalities. The agreement will take effect after the export license has been issued.
Where technologies are subject to an export prohibition, companies may need to suspend the relevant transactions, assess their available options and, where necessary, identify alternative solutions.
Commentary
If the amendment enters into force in its current form, it could have a significant impact on cross-border transactions involving gene-editing and synthetic biology technologies, including IP licensing, cooperation agreements and technical services.
One positive aspect is that the restriction is primarily focused on research and development and therefore may not have an immediate impact on the commercialization of products developed using technologies covered by the restrictions.
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