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Export controls: Little known risks for biopharma companies

corresponding

Eric R. Mc Clafferty
Partner and chair of Kelley Drye’s International Trade practice group, 
Kelley Drye & Warren

Laura van der Meer
Managing partner, 
Kelley Drye’s Brussels office

Abstract

This article presents an overview of generally unknown violations when exporting items of a dual-use nature to either the US or the EU in the context of biopharmacological  goods and research.  Such companies often overlook their legal exposure and ought to be aware of the risks in order to prevent financial and reputational damages. The article introduces the fundamental regulations and addresses the main areas of concern, such as ambiguities in the legislation as illustrated by the 2013 Dutch decision in the “H5N1 Case”, and provides sound advice for companies involved in international collaboration.


Recent discussions among pharmaceutical and biotech companies, public sector research scientists and the U.S. Government revealed a significant lack of awareness by for profit and nonprofit organizations about the potential applicability of export controls to their activities; in all likelihood, the same is true in Europe. Even unintentional failure to comply with restrictions imposed on the transnational movement of certain chemicals, pathogens, toxins, genetic material, and associated equipment or technology can result in penalties and reputational damage.  Companies operating in the biopharmaceutical space are well advised to seek expert assistance to navigate the complex regulations and to build export control policies and tools into their compliance programs to reduce risk.


DUAL-USE REGULATIONS EU/US

Aimed to strengthen security and contribute to international peace, “dual-use” regulations control the export, transfer, and transit of items, know how, and related services that can have potential use for both civil and military, terrorist, and weapons proliferation purposes. Export rules in the U.S., EU and variou ...




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