10/16/2024 | News release | Distributed by Public on 10/16/2024 13:11
October 12, 2024, marks the 10-year anniversary of entry into force of the Nagoya Protocol on Access to Genetic Resources and Fair Benefit-Sharing from their Utilization ("ABS"). This additional treaty to the Convention on Biological Diversity ("CBD") has now been ratified by 142 countries. Over the past decade, Nagoya Protocol has resulted in the mushrooming of more than one-hundred thirty (130+) national ABS laws around the globe. All this time the Covington life sciences team has stood by its pharmaceutical, food and biotech clients to navigate this ever-more challenging Harlequin's costume that is the global ABS legal regime.
In this Client Alert we share lessons learned from our 10+ years of experience on ABS in the life sciences sector.[1] As an anniversary edition, this document is a long read. For ease of navigation, we have structured it as a Q&A.
We first recall the basics of ABS. Then we cover key questions from clients such as e.g. compliance best practices and enforcement trends. Finally, we look to challenges in the near-future, focusing on emerging ABS regimes such as the global mechanism on benefit-sharing from Digital Sequence Information ("DSI"), the genetic resource disclosure requirement when filing patents under a new World Intellectual Property Organization ("WIPO") treaty, the new "pathogen" ABS provisions of the World Health Organization ("WHO") Pandemic Treaty, the High Seas Treaty on marine genetic resources, and last but not least, the new corporate due diligence obligations under the EU's Corporate Sustainability Due Diligence Directive ("CS3D").
If you have any questions or would like a meeting concerning the material discussed in this Client Alert, please contact our partner Bart Van Vooren at [email protected].
1. What is the purpose of the Nagoya Protocol?
The Convention on Biological Diversity of 1992 recognizes the sovereignty of countries over biological resources within their jurisdiction. The CBD has three main objectives: (1) the conservation of biodiversity, (2) its sustainable use, and (3) "the fair and equitable sharing of benefits from the arising from the utilization of genetic resources." Although there are 196 Parties to the CBD, by 2014 very few countries had implemented rules on ABS. The Nagoya Protocol was therefore negotiated as a supplemental treaty to achieve the third objective of the CBD. It does so by empowering countries to impose prior authorization (Access) and payment requirements (Benefit-Sharing) on companies that commercialize products or processes that utilize biological materials. This supposedly creates a financial resources and incentive for countries to protect biodiversity.
In short, ABS is a global tax on R&D on non-human biological materials, intended to fund biodiversity conservation.
2. What are the Obligations that apply to Companies?
ABS laws under the Nagoya Protocol consist of three elements:
Assessment of ABS obligations imposed on a company therefore requires knowledge of the laws of both the provider country and user countries.
There are countries that only have access requirements but no benefit-sharing, like Switzerland. Some parties to the Nagoya Protocol have chosen not to have ABS at all, like Austria, Germany, the Netherlands, or the Flemish region of Belgium (while, to ensure appropriate complexity, the Walloon region of Belgium does have ABS).
There are also countries that are Party to the CBD, but not the Nagoya Protocol, and still have ABS laws, like Australia.
Finally, the only country that is not Party to the CBD or the Nagoya Protocol, is the United States (and the Holy See). Yet even the U.S. has ABS requirements, on materials obtained from National Parks such as Yellowstone.
3. How many ABS laws are there globally?
As of October 12, 2024, the Nagoya Protocol has been ratified by 142 parties, including the EU. Across these jurisdictions, there is a true spaghetti bowl of ABS legislations:
4. How do I determine whether these ABS laws apply to my company?
The Nagoya Protocol supposedly sets out a simple framework: receive a permit for a genetic resource and agree to benefit-sharing in the provider country; and prove in the user country that you have a permit from the provider country and share benefits with them. In practice, the fragmented global legal environment, diverging legal cultures, difficulties knowing ABS laws, complex administrative procedures, language obstacles, time zones, exorbitant "benefit-sharing" expectations, are but some of the problems that life sciences companies have faced in navigating ABS under the Nagoya Protocol.
In practice, a detailed assessment is required as to whether a company's R&D triggers ABS. Below a few of the typical questions the compliance or legal function of a company will have to consider.
First, is my company's activity considered access or utilization under the relevant ABS law?
ABS obligations under the Nagoya Protocol are triggered by the "utilization of genetic resources", which is defined as research and development on the genetic and/or biochemical composition of genetic resources. However, interpretations of this term in national ABS laws vary across jurisdictions. For example, Switzerland follows the Nagoya definition. If a company utilizes Swiss materials, then "utilization" requires a notification to the Federal Environmental Agency. If the same company utilizes Indian biological resources, then any activity other than simple commodity trade will require a permit from the National Biodiversity Authority. In France, "valorization" and even "supply" may require a commercial permit. The European Union tried to bring some clarity in the definition of "utilization. First in 2016, and again in 2021, the EU published a 30+ page guidance dedicated solely to the interpretation of "utilization." Of course, the EU's guidance only applies to the obligation in the EU, of companies to demonstrate that they have complied with ABS. Those same companies will still need to contend with provider country ABS legislation will often have a different interpretation of the term.
This is but the tip of the iceberg. Companies must also determine whether the utilization of physical biological materials, or information on those materials (i.e. DNA sequence, amino acid sequence… known as "Digital Sequence Information") is covered by ABS?
Second, is that utilization of a genetic resource, or Digital Sequence Information in scope of that ABS law?
ABS legislation typically covers three key categories: (i) physical genetic resources and their derivatives; (ii) DSI derived from physical resource; and (iii) traditional knowledge associated with genetic resources ("ATK").
The Nagoya Protocol applies to "genetic resources," defined as genetic material of actual or potential value, including "any material of plant, animal, microbial or other origin containing functional units of heredity" (excluding human biological materials). This definition also encompasses derivatives of genetic resources, such as naturally occurring biochemical compounds resulting from the genetic expression or metabolism of biological or genetic resources, even if they do not contain functional units of heredity.
However, given the rise of synthetic biology and Artificial Intelligence in biology and organic chemistry, many national ABS laws were extended to apply to "Digital Sequence Information." Hence, even if a company did not acquire any physical materials, but simply downloaded a genetic sequence from a public database, ABS may be triggered. This has become such a major issue, that a "new Nagoya Protocol" is on the horizon just for DSI. More on this in Question 14 below.
Finally, it is often forgotten that the Nagoya Protocol also applies to "traditional knowledge associated with genetic resources." In several countries, this triggers distinct ABS obligations whereby benefit-sharing with the Indigenous People or Local Community ("IPLC") is required. Well-known examples are the Guarani people in several Latin American countries whose traditional knowledge led to the discovery of the sweet properties of the Stevia plant; or the San and Khoi people in South Africa, whose traditional knowledge related to the health benefits of Rooibos.
Having a good understanding of the material that your company uses, and how it is used, is not sufficient. It is also necessary (and often difficult) to determine where the physical biological materials, or the information on those materials, originates from.
Fourth, what is the geographic origin of the genetic resource or DSI, and how does that impact what ABS law applies?
Generally, national ABS laws extend to territories where a country exercises jurisdiction. This traditionally covers national territory, territorial waters, and the Exclusive Economic Zone. Thus, maritime areas which are designated as the High Seas, are outside the scope of national ABS laws but may fall under another ABS instrument (More on this in Question 18 below).
In our ABS practice, complexities mainly arose when two or more jurisdiction exercised competing claims over the same material (e.g. extraterritorial application of national laws). During the COVID-19 pandemic, the issue arose as to whether Brazilian ABS applied to the Gamma variant of SARS-CoV-2. If a sample was acquired from a traveler returning from Brazil, who got ill in a country that did not have ABS laws- does Brazil's ABS law still apply? After all, the Gamma variant had developed its "unique properties" in Brazil and was therefore considered Brazilian "genetic heritage". For the answer to that question, and since you're not even halfway through this Client Alert, please contact your friendly lawyers in the Covington life sciences team to chat further, or for a fun and free workshop on ABS. If not, do read on.
Fifth, is it relevant when that genetic resource or DSI was physically acquired, sequenced, or utilized?
ABS rules generally apply after the dates on which they come into effect. However, in some jurisdictions, ABS requirements apply retroactively. For instance, the Brazilian law of 2015 applies retroactively to 2001, requiring users who conducted activities on Brazilian genetic resources between 2001 and 2015 to "rectify" their non-compliance by aligning with the 2015 ABS legislation. If a user plans to conduct R&D in 2024 on a material affected by past unlawful activities, they may still be required to address and rectify those previous violations.
Sixth, if I am utilizing a pathogenic genetic resourceor DSI are there specific ABS rules?
Over the years, it has become broadly accepted that the Nagoya Protocol applies to pathogenic genetic resources (i.e. viruses or bacteria that can cause human disease). Countries like Japan have fought against this interpretation, but this battle has been lost. That creates significant complexity in an area where this is highly undesirable: global public health. Depending on the type of pathogen, or the presence/absence of a pandemic emergency, different ABS regimes may apply.
For example, if a flu strain is utilized for the manufacturing of a seasonal influenza vaccine, provider country ABS laws under the Nagoya Protocol will apply. If, however, the sample turns out to be influenza "with pandemic potential," the World Health Organization regime of the Pandemic Influenza Preparedness ("PIP") framework will apply. And if the influenza is novel and with pandemic potential, the new benefit-sharing mechanism under the WHO Pandemic treaty may apply (More on this in Question 15 below).
Seventh, if I am using food crops like maize, olives, cocoa or coffee, does it matter whether I use them for an agricultural, food, cosmetic, or health purpose?
Evidently, yes- or we would not include this question. If a food crop is listed on Annex I of the International Treaty on Plant Genetic Resources for Food and Agriculture ("Plant Treaty"), or a country has chosen to voluntarily include the materials, the Plant Treaty may apply. The purpose of a company's utilization further influences the applicable framework: R&D on a cosmetic would not be covered by the Plant Treaty, but R&D for a food purpose would.
5. Is the Nagoya Protocol relevant to a U.S. Company?
The United States is not a Party to the CBD or the Nagoya Protocol and does not enforce compliance with the ABS laws of provider countries. Nevertheless, in our experience U.S. companies are very much affected by the ABS rules:
6. How is ABS enforced?
In our daily practice, we have observed four distinct mechanisms of enforcement in the legal, financial, reputational and commercial spheres, that companies typically encounter:
7. How do Non-Governmental Organizations (NGOs) "enforce" ABS?
During the early years of the Nagoya Protocol, NGOs have been the main driver of putting ABS on companies' agendas. Enforcement of ABS laws on the provider - and user country side was, back in the 2010's, extremely rare (this has changed - see questions 8-9). In fact, it is allegations of bio-piracy in May 2010 that gave major impetus to the countries negotiating the Nagoya Protocol, that eventually led to the adoption of that treaty. Here are some notable examples:
8. How do Provider Countries enforce their national ABS laws?
The entry into force of the Nagoya Protocol prompted countries like Brazil, South Africa and India to strengthen enforcement of their ABS laws, imposing penalties for non-compliance such as (i) fines, (ii) confiscation of samples and products, (iii) seizure of derived products, (iv) suspension of product sales, and (v) suspension of business activities for companies that fail to comply with national regulations.
In our practice with international clients, we have observed ABS enforcement mostly in the IP realm, for instance:
Finally, we are also aware of instances where national authorities in provider countries "warned" authorities in user countries (in the EU) of potential non-compliances, triggering an investigation in that user country (see question 9).
9. How do User Countries enforce compliance with the ABS laws of Provider Countries?
In the European Union, enforcement is governed by Regulation 511/2014, which imposes a due diligence obligation on companies to demonstrate that ABS laws have been complied with, and that benefits have been shared if applicable. If there is any uncertainty about the legality of access, users are required to discontinue utilization, making the legal standard particularly high. This regulation is implemented at the national level, leading to differing sanction regimes across the EU's 27 member states.
Between 2014 and 2018, enforcement by European national authorities was rare. A few authorities like those in the UK, Germany, Denmark and the Netherlands would do awareness-raising with some companies. This would include friendly visits whereby authorities were educating themselves about how companies "utilize" genetic resources, how they typically track and trace materials, and so on.
Around 2018, this started to change, and the number of compliance checks started to increase, and in parallel, the "friendly nature" diminished. Increasingly, more European national authorities started to enforce compliance through (1) written audits; (2) in-person inspections; and sometimes even (3) financial penalties. An extract from our experience:
Typically, after submitting responses to the initial letter, authorities would drill down on a few use cases, or a specific genetic resource; and ask to provide evidence whether ABS applied, and if so- demonstrate if ABS was complied with (e.g. through a supplier certificate). None of the inspections on which we have supported clients have led to sanctions. Nonetheless, we are aware of a few low administrative fines (~5,000 EUR) having been imposed in some instances, e.g. in Germany.
Some EU countries do have significantly higher fines, but no enforcement yet that we are aware of. For instance, in France, failure to comply is subject to one year imprisonment or a criminal fine of up to 150,000 EUR. Conducting "commercial" R&D without the required documentation is subject to a fine of up to 1,000,000 EUR, times five for legal persons.
Finally, some countries are still trying to figure out their enforcement priorities. In May 2024, Belgium published a tender requesting outside consultants to bid on a project (1) to determine the users of genetic resources and digital sequence information in Belgium; (2) to determine the users of federal genetic resources outside of Belgium; (3) what information is further needed to ensure successful inspections and (4) recommendations for an inspection plan.
10. What is the impact of the EU Directive on Corporate Sustainability Due Diligence (CS3D) on compliance with the Nagoya Protocol and CBD?
On July 5, 2024, the EU published the CS3D in its Official Journal. Over the next two years, the CS3D will be implemented in the laws of the 27 EU Member States and apply to large companies with significant turnover in the EU, even if they are established in the United States.[2]
The CS3D contains due diligence obligations for companies to identify, assess, prevent, mitigate, end, and/or remediate "adverse environmental impacts." The CS3D states that this applies to:
"The obligation to avoid or minimize adverse impacts on biological diversity, interpreted in line with Article 10, point (b) of the 1992 Convention on Biological Diversity and applicable law in the relevant jurisdiction, including the obligations of the Cartagena Protocol on the development, handling, transport, use, transfer and release of living modified organisms and of the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity of 12 October 2014."
Therefore, it is beyond doubt that the CS3D due diligence obligation will be stacked on top of those of EU Regulation 511/2014, and that it applies to the Nagoya Protocol including national implementing laws in relevant jurisdictions. It is also likely that it extends to compliance with implementation of the Global Mechanism on Benefit-Sharing from Digital Sequence Information,[3] discussed further in Question 14 of this Alert.
The CS3D will significantly increase the legal risk posed by ABS to companies:
You can read more about the impact of the CS3D in our previous alert. As part of our deep-dive series into CS3D, we are also planning a separate alert on the interlocking ABS due diligence obligations of EU Regulation 511/2014 and CS3D.
11. What measures do companies typically take to ensure ABS compliance?
In the early years of the Nagoya Protocol's implementation, many companies took a cautious approach to ABS compliance, often through pilot programs targeting specific projects. This allowed businesses to test processes for obtaining permits, negotiating benefit-sharing agreements, and managing genetic resources without committing extensive resources upfront. However, as the regulatory landscape has matured and enforcement has become stricter, these initial efforts have evolved. Companies now recognize that ABS compliance requires a comprehensive and integrated approach across all departments involved in product development.
Approaches to compliance differ depending on the industry and the company's reliance on biological materials, but as a rule, enforcement authorities - especially in the EU - expect certain practices:
12. How does ABS affect Business-to-Business relationships?
Business-to-Business relationships is one of the areas where the maturity of ABS compliance systems gets tested. The following anonymous examples are all taken from our practice, and illustrate typical challenges across the cosmetics, food and pharmaceutical sectors that companies need to navigate in their day-to-day interactions with other businesses.
A company intends to apply for an access permit which will also require the negotiation of a benefit-sharing agreement. Careful planning is required from the perspective of anti-bribery legislation.
13. How does ABS impact research and innovation?
The implementation of ABS has presented numerous challenges for companies:
14. What is the new mechanism on benefit-sharing from digital sequence information?
When the Nagoya Protocol was adopted, synthetic biology was nascent at best. Hence, the Protocol was drafted with physical biological materials in mind. The system was based on a transaction whereby a party wished to acquire physical materials, sought a permit, and a benefit-sharing contract was put in place between the provider and user.
As science progressed, the need for access to physical materials decreased, as many researchers started using the digital footprint of genetic resources - i.e. DNA/RNA data, information on amino acid sequences/proteins, and so forth. In line with principles of open science, much of this information was also made available on public databases. Thus, a permit and benefit-sharing agreement appeared to become obsolete. For some CBD parties, this was seen as the next frontier in 'biopiracy.'
On November 1, 2024, the 196 countries that are party to the Convention on Biological Diversity ("CBD") may agree on the terms and conditions of the "multilateral mechanism ("MLM") for benefit-sharing from the use of digital sequence information." The purpose of this mechanism is to exist alongside the Nagoya Protocol, to extract additional funding from the private sector to finance recovery and preservation of Earth's biodiversity.
The 196 countries will convene at a meeting called the Conference of the Parties, taking place late October 2024 for the 16th time since 1992 ("COP-16"). At that meeting, government officials may adopt a Decision of the COP. This Decision has been eight years in the making and is already available in draft form. Countries have put forward four possible models for the new DSI payment mechanism: (1) a product sales tax; (2) a corporate income tax for DSI-intensive certain sectors; (3) a broad VAT-style tax; and (4) a voluntary contribution by DSI users. So far, options one and two have attracted the widest support amongst countries.
The final COP-16 Decision, if adopted, will contain details on which sectors are expected to pay into the global fund (top candidates are pharmaceuticals, devices, agriculture and biotech), what will be the basis for calculating the payment (e.g. annual company turnover or product sales), at what percentage (1% or 0.1%), and who will receive the payments (countries, or a centralized global fund). Given these features, and for ease of reference, we will refer to the benefit-sharing system from digital sequence information as the 'DSI Tax.'
You can learn more about the DSI MLM in our previous alert. Covington has also made a written submission to the CBD negotiators, and presented during the DSI MLM negotiations. Our written submission from August 2024 can be downloaded here: "The Impact of Co-Existing Access and Benefit-Sharing Obligations on Life Sciences Companies: A View from Private Legal Practice."
15. What is the WHO Pathogen Access and Benefit-Sharing ("PABS") System?
The CBD and the Nagoya Protocol are international instruments that legally recognized that countries exercise sovereignty over their genetic resources. This also includes viruses, bacteria, and fungi that can cause disease in animals or humans ("pathogens"). As negotiations on the Nagoya Protocol were ongoing in the 2000s, Indonesia shared H5N1 samples with the World Health Organization ("WHO") Global Influenza Surveillance and Response System ("GISRS"). When that country approached the WHO to receive vaccines and antivirals in 2006, they were unable to obtain them due to e.g. advanced purchase agreements with high-income countries. Thus, Indonesia decided to exercise its "viral sovereignty" and refuse to further share H5N1 samples for product development. As a result, in 2011, the WHO member states agreed on the Pandemic Influenza and Preparedness ("PIP") Framework. The PIP Framework is essentially a Nagoya Protocol-style international instrument, but only for research entities that receive influenza samples from the GISRS ("Access" in Nagoya Protocol terminology) - i.e. mainly seasonal influenza vaccine manufacturers. They are expected to allocate a percentage of their pandemic influenza vaccines ("Benefit-Sharing" in Nagoya Protocol terminology), should there ever be another flu pandemic. Thus, an ABS system for pandemic flu was born.
During the COVID-19 pandemic, history repeated itself. While South Africa was first to share the Omicron-variant of SARS-CoV-2, that country never had access to vaccines that were updated to this new strain. To resolve this inequity in global health, a new ABS instrument for all pathogens with pandemic potential is being negotiated - the WHO Pathogen Access and Benefit-Sharing System ("PABS").
16. What obligations will pharmaceutical companies have under the WHO PABS System?
The PABS System may require pharmaceutical companies accessing pandemic pathogens and associated DSI to make annual monetary payments "to support the functioning of the PABS System." While no specific public figures have been disclosed, the WHO Secretariat has set ambitious goals to raise sufficient funds, aimed e.g. at investing in enhancing laboratory capacities in developing countries. Additionally, companies will likely be mandated to provide a minimum of 5% to 20% of their real-time production of vaccines, therapeutics, and diagnostics either for free or at cost. The PABS System may also require companies to grant royalty-free, non-exclusive manufacturing licenses to the WHO, allowing for sublicensing to manufacturers in developing countries.
17. When will the WHO PABS System come into force?
The Pandemic Agreement is expected to lay down the key principles of the PABS System, while the more detailed implementation and operationalization of the system will be achieved in a separate instrument. It is expected that the WHO Pandemic Agreement negotiations will be finalized by the World Health Assembly of May 2025. An "Intergovernmental Working Group" ("IGWG") may start work soon after. According to WHO officials, the IGWG could conclude negotiations on the detailed PABS Instrument within two years.
For more information on the challenges surrounding the PABS System, see our previous blog. Bart Van Vooren has also been appointed as a "resource person" (i.e. invited expert) to the WHO and has made written submissions to the WHO to avoid the mistakes of the Nagoya Protocol and ensure the proper functioning of the PABS. Please do reach out should you wish to read this submission and discuss PABS further.
The Treaty on the Conservation and Sustainable Use of Marine Biological Diversity of Areas beyond National Jurisdiction
18. Will there be new benefit-sharing requirements for marine genetic resources?
The Nagoya Protocol already applies to marine genetic resources ("MGRs"), but only those under countries' national sovereignty - i.e. MGRs from the territorial waters and Exclusive Economic Zone of coastal countries. This somewhat artificial separation of the sea territories meant that resources beyond national jurisdiction (an area covering 2/3 of the world's oceans and 45% of the planet's surface) were not subject to any ABS rules.
This changed in 2023 when, after almost 20 years of negotiations, the UN Agreement on Biodiversity Beyond National Jurisdiction or "High Seas Treaty" was adopted, creating a new mechanism for the fair and equitable sharing of benefits arising from activities with respect to MGRs collected beyond national jurisdiction. The scope is comparable to the Nagoya Protocol, namely any material from marine organisms containing functional units of heredity, such as marine mammals, fish-derived products, and algae extracts. The treaty also applies to DSI, though the exact definition is still under discussion depending on what decision will be reached by the CBD State Parties at COP-16.
Under the new system, companies using MGRs for research or development must comply with both monetary (milestone payments or revenue-sharing from commercialized products, though exact percentages remain yet to be set) and non-monetary (e.g. providing access to samples, data, and technology) benefit-sharing obligations. Notably, the treaty's benefit-sharing provisions can apply retroactively to MGRs and DSI collected before the Treaty's entry into force, requiring companies to provide contributions based on past collections or share research results.
Find out more about the High Seas Treaty in our previous blog.
19. What are the new patent disclosure requirements on genetic resources?
Finally, in May 2024 more than 190 countries agreed on a new WIPO Treaty aimed at combating "biopiracy" by obliging patent applicants to disclose the origins of biological materials used in a patentable invention. At the time of this Alert, the treaty has already been signed by thirty states (e.g. Brazil, Colombia, South Africa) and is only 15 ratifications away from entering into force.
Under the treaty, patent applicants whose invention is "materially / directly based on" genetic resources ("GRs") or associated traditional knowledge ("ATK") will need to disclose the "country of origin of the GRs" / "the indigenous peoples or local community that provides the Associated TK" used. If the national authority establishes that the access to the GR or ATK was not done in compliance with national ABS rules, the patent application may be denied.
While there is a risk to patents not being granted, we foresee that the real risk is that the disclosed information once the patent is published will be used by national ABS authorities and NGOs to check and enforce ABS compliance. As stated previously in this Alert on user country enforcement, authorities like the German BfN already follow that approach.
You can read more on how the WIPO treaty disclosure regime will impact life sciences companies in our previous blog.
If you have any questions concerning the material discussed in this client alert, please contact the members of our Food, Drugs, and Devices practice.
[1]Within its life sciences industry group, Covington Partner Bart Van Vooren and his team have grown a unique legal practice focusing on Access and Benefit-Sharing ("ABS"). Since 2013, we have advised on a whole range of ABS legal issues including, e.g. ABS permit filings in 'provider' countries; 'user' country compliance checks (e.g. EU, UK, Switzerland); due diligence programs; M&A transactions; supply, licensing and R&D agreements; patent filings and disclosures; public policy; as well as litigation. By our last count there are more than 100+ ABS regulations globally, and we have a working knowledge of ABS across all seven continents.
[2]The CS3D's application to companies will be phased in between 2027 and 2029. It will first apply from 2027 to the largest companies. The thresholds for 2027 are for EU companies: 5,000 employees and 1.5 billion global turnover, and for non-EU companies: 1.5 billion turnover in the EU (no employee threshold). From 2028 the thresholds are lower: for EU companies, 3,000 employees and a net global turnover of EUR 900 million, and for non-EU companies: 900 million net turnover in the EU (no employee threshold). For 2029 the thresholds are further lowered, for EU companies: 1,000 employees and a net global turnover of EUR 450 million, and for non-EU companies: 450 million net turnover in the EU (no employee threshold).
[3] Article 10(b) CBD states "Each contracting party shall, as far as possible and as appropriate: … adopt measures relating to the use of biological resources to avoid or minimize adverse impacts on biological diversity." It could thus be argued that due diligence obligations under CS3D as regards the CBD only extend to the second objective of CBD- the sustainable use of the components of biodiversity. However, since the third CBD on benefit-sharing is meant to provide financial and other means to ensure sustainable use, and since CS3D expressly incorporates the Nagoya Protocol, an additional treaty to CBD, we consider it likely that CS3D would also incorporate compliance with the DSI Multilateral Mechanism that is adopted under CBD but not the Nagoya Protocol.