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In brief

On 22 March 2022, the Ministry of Science and Technology of the People’s Republic of China (MOST) issued Draft Implementation Rules of the Administrative Regulations on Human Genetic Resources (“Draft Rules”) for public comments until 21 April 2022. The Draft Rules provide clarifications and operational details on the Administrative Regulations on Human Genetic Resources (“HGR Regulations”) promulgated in 2019.

Highlight of the Draft Rules

  1. Narrowing the Definition of “Human Genetic Resources Information”

Under the HGR Regulations, human general resources (HGR) include materials of human genetic resources (“HGR materials”) and information of human genetic resources (“HGR information”). HGR materials refer to “the genetic materials such as organs, tissues, cells and so on which contain human genome, genes and other genetic substances”; while HGR information refers to “the data and other information generated from the utilization of materials of human genetic resources”. 

The Draft Rules now narrow the scope of HGR information to “human genes or genome information derived from HGR materials”. This means data that are not related to human genes or genome, for example, patients’ physiological data, medical images such as x-ray and ultrasound pictures collected in clinical trials or other researches will not fall within the scope of HGR information.

This amendment would result in substantial relaxation of the control over data sharing with foreign parties in pharmaceutical or other healthcare researches. Under the HGR Regulations, a recordal with the MOST is required before sharing any HGR information to a “foreign party”. The Draft Rules release the sharing of non-genetic data from the recordal requirement.

The transfer of HGR information with foreign parties will require security review if the proposed transfer presents a risk of prejudicing public health, national security or public interests as stipulated under the HGR Regulations. The Draft Rules now specify the provision of exome sequencing and genome sequencing information of more than 500 individuals, and HGR information of important genetic pedigrees or in a specific area is subject to security review.

Specific review criteria will be formulated by MOST later.

The HGR Regulations prohibit “foreign parties”, which are foreign organizations and those institutions established or controlled by foreign organizations and individuals, from collecting, preserving human genetic resources in China or providing the same to other foreign parties. The Draft Rules clarify the meaning of “control”, referring to the following circumstances:

  1. overseas organization or an individual directly holds or indirectly holds more than 50% of the shares, equity, voting rights, property shares or other similar rights and interests of the institution;
  2. overseas organization or an individual directly holds or indirectly holds less than 50% of the shares, equities, voting rights, property shares or other similar rights and interests of the institutions but the voting rights, other rights and interests of the decision-making bodies they owned are sufficient to have a significant impact on the resolution, decision-making and internal management of the institution;
  3. the agreement or other arrangement by the overseas organization(s) or individual(s) is sufficient to have a significant impact on the decision-making, operation and management and other major matters of the institution; and
  4. other status identified by the MOST.

Although it is clear that if an overseas organization or individual holds more than 50% interest in an institution, such institution is considered as foreign party, there is no further clarification on the meaning of “significant impact on the resolution, decision-making and internal management” under the less than 50% interest holding circumstances and it is also unclear whether entities are required to submit any documents to prove there is no significant control. Moreover, the discretion of the MOST under subsection 3.4 leaves significant uncertainty on the definition of foreign parties.

Pursuant to the HGR Regulations, a recordal rather than examination and approval is required for international collaboration in clinical trials without cross-border provision of HGR materials.  The Draft Rules provide more details on the conditions where only recordal is required, namely:

  1. the collection, testing, analysis of human genetic resources and the processing of the remaining samples are carried out in the clinical institution; or
  2. the collection of human genetic resources is conducted in the clinical institution, and the testing, analysis and processing of remaining samples are carried out in a domestic entity designated in the clinical trial protocol.

Notably, the Draft Rules also clarify that if exploratory research is involved in the clinical trial in China, the exploratory research part is still subject to examination and approval by the MOST.

The ownership and interests arrangements of intellectual properties, particularly patents and data, have been a focus of the MOST in reviewing agreements in international collaboration research projects and clinical trial agreements between foreign sponsors and local clinical trial institutions.

The Draft Rules reiterate that patents resulting from the international collaboration using China’s human genetic resources shall be co-owned and jointly filed by the Chinese entity and the foreign party. 

It is worth noting that data, along with other results from the collaboration, can be contractually arranged between the foreign and Chinese parties. 

In relation to law enforcement, the Draft Rules set out more detailed procedures, including administrative supervision and audits, evidence preservation, administrative coercive measures, jurisdictions of authorities, investigations and hearings, and factors to consider in determining penalties. 

In particular, the Draft Rules provide that the value of the human genetic resources collected or the amount of funds invested into the illegal activities shall be taken as the “illegal gain” for penalty.  However, no further details are provided with regard to the specific method of calculation.

In sum

The Draft Rules have provided useful guidance and clarifications to some of the widely contested issues in the regulation of human genetic resources, including the scope of regulated HGR information, security review, and IP arrangement. However, there are still some uncertainties in the provisions of the Draft and industry players are strongly encouraged to provide comments to the MOST to consider and address these issues in the final document.

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Bin Xin Li is a partner with Baker McKenzie FenXun, a joint operation established by Baker McKenzie in China and FenXun Partners, which was approved by the Shanghai Justice Bureau in 2015. Li has contributed to this series.


Elva Yao is an Associate in Baker McKenzie Shanghai office.

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