Security Exceptions Nothing in this Agreement shall be construed as:
- a)requiring a Member to furnish any information the disclosure of which it considers contrary to its essential security interests; or b) preventing a Member from taking any action which it considers necessary for the protection of its essential security interests:
- i)relating to fissionable materials or the materials from which they are derived; ii) relating to the traffic in arms, ammunition and implements of war, and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment; iii) taken in time of war or other emergency in international relations; or c) preventing a Member from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
1. For the purposes of Article 31 bis and this Annex:
- a)"pharmaceutical product" means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address the public health problems recognized in paragraph 1 of the Declaration on the TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2). It is understood that active ingredients necessary for its manufacture and diagnostic kits needed for its use would be included[1]; (1) This subparagraph is without prejudice to subparagraph (b) of paragraph 1.
- b)"eligible importing Member" means any least-developed country Member and any other Member that has made a notification[2] to the Council for TRIPS of its intention to use the system set out in Article 31 bis and in this Annex ("the system") as an importer, it being understood that a Member may notify at any time that it will use the system in whole or in a limited way, for example, only in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. It is noted that some Members will not use the system as importing Members[3] and that others have stated that, if they use the system, they will do so only in situations of national emergency or other circumstances of extreme urgency; (2) It is understood that this notification does not need to be approved by a WTO body in order to use the system.
(3) Australia, Canada, the European Communities with, for the purposes of Article 31 bis and this Annex, their member States, the United States, Iceland, Japan, Norway, New Zealand, Switzerland.
- c)"exporting Member" means any Member using the system to produce pharmaceutical products for an eligible importing Member and export them to that Member.
2. The terms referred to in paragraph 1 of Article 31 bis are that:
- a)the eligible importing Member or Members[4] have made a notification(2) to the Council for TRIPS, which:
(4) Regional organizations referred to in paragraph 3 of Article 31 bis may make joint notifications containing the information required under this subparagraph on behalf of eligible importing Members that use the system and are parties to them, with the agreement of those parties.
(2) It is understood that this notification does not need to be approved by a WTO body in order to use the system.
- i)specifies or specify the names and expected quantities of the product or products needed[5]; (5) The WTO Secretariat shall make the notification publicly available through a dedicated page on the system on the WTO website.
- ii)confirms or confirm that the eligible importing Member in question, unless it is a least-developed country Member, has established, in one of the forms set out in the Appendix to this Annex, that its manufacturing capacities in the pharmaceutical sector are insufficient or non-existent for the product or products in question; and iii) confirms or confirm that, where a pharmaceutical product is patented in its territory, it has granted or intends to grant a compulsory licence in accordance with Articles 31 and 31 bis of this Agreement and the provisions of this Annex[6]; (6) This sub-subparagraph is without prejudice to paragraph 1 of Article 66 of this Agreement.
- b)the compulsory licence issued by the exporting Member under the system shall contain the following conditions:
- i)only the amount necessary to meet the needs of the eligible importing Member or Members may be manufactured under the licence, and the entirety of this production shall be exported to the Member or Members that have notified their needs to the Council for TRIPS; ii) products produced under the licence shall be clearly identified, through specific labelling or marking, as being produced under the system. Suppliers shall distinguish such products through special packaging and/or special coloring or shaping of the products themselves, provided that such distinction is feasible and does not have a significant impact on price; and iii) before shipment begins, the licensee shall post on a website[7] the following information:
(7) The licensee may use for this purpose its own website, or with the assistance of the WTO Secretariat, the dedicated page on the system on the WTO website.
- the quantities being supplied to each destination referred to in sub-subparagraph (i) above; and - the distinguishing features of the product or products referred to in sub-subparagraph (ii) above; c) the exporting Member shall notify the Council for TRIPS of the grant of the licence, including the conditions attached to it.[8] The information provided shall include the name and address of the licensee, the product or products for which the licence has been granted, the quantity or quantities for which it has been granted, the country or countries to which the product or products are to be supplied, and the duration of the licence. The notification shall also indicate the address of the website referred to in sub-subparagraph (iii) of subparagraph (b) above.
(8) The WTO Secretariat shall make the notification publicly available through a dedicated page on the system on the WTO website.
3. With a view to ensuring that products imported under the system are used for the public health purposes implicit in their importation, eligible importing Members shall take reasonable measures within their means, proportionate to their administrative capacities and to the risk of trade diversion, to prevent the re-exportation of products that have actually been imported into their territories under the system. In the event that an eligible importing Member that is a developing country Member or a least-developed country Member experiences difficulty in implementing this provision, developed country Members shall provide, upon request and on mutually agreed terms and conditions, technical and financial cooperation in order to facilitate its implementation.
4. Members shall ensure that effective legal means are available to prevent the importation into, and sale in, their territories of products produced under the system and diverted to their markets inconsistently with its provisions, using the means that are already required to be in place under this Agreement. If any Member considers that such measures are insufficient for this purpose, the matter may be reviewed, upon request of that Member, in the Council for TRIPS.
5. With a view to harnessing economies of scale to increase the purchasing power for pharmaceutical products and facilitate their local production, it is recognized that the development of systems providing for the grant of regional patents applicable in the Members referred to in paragraph 3 of Article 31 bis should be promoted. To this end, developed country Members undertake to provide technical cooperation in accordance with Article 67 of this Agreement, including in conjunction with other relevant intergovernmental organizations.
6. Members recognize the desirability of promoting the transfer of technology and capacity building in the pharmaceutical sector in order to overcome the problem faced by Members with insufficient or non-existent manufacturing capacities in the pharmaceutical sector. To this end, eligible importing Members and exporting Members are encouraged to use the system in a manner that furthers this objective. Members undertake to cooperate with a view to paying special attention to the transfer of technology and capacity building in the pharmaceutical sector in the work to be undertaken pursuant to paragraph 2 of Article 66 of this Agreement and paragraph 7 of the Declaration on the TRIPS Agreement and Public Health, as well as in any other relevant work of the Council for TRIPS.
7. The Council for TRIPS shall review annually the functioning of the system with a view to ensuring its effective operation and shall report annually to the General Council on its operation.
APPENDIX TO THE ANNEX TO THE TRIPS AGREEMENT Assessment of Manufacturing Capacities in the Pharmaceutical Sector Least-developed country Members shall be deemed to have insufficient or non-existent manufacturing capacities in the pharmaceutical sector.
In the case of other eligible importing Members, insufficient or non-existent manufacturing capacities for the product or products in question may be established in either of the following ways:
- i)the Member in question has established that it has no manufacturing capacity in the pharmaceutical sector; or ii) where the Member has some manufacturing capacity in this sector, it has examined this capacity and found that, excluding any capacity owned or controlled by the patent owner, it is currently insufficient to meet its needs. When it is established that such capacity has become sufficient to meet the Member's needs, the system shall cease to apply.
(Thus added by the sole article of International Treaty No. 9008 of November 10, 2011)