| In recent years,with the progress of gene technology and the improvement of national health concept,life and health science and gene biotechnology have become important fields of national development.The report of the 19th National Congress of the Communist Party of China raised the implementation of the "healthy China" strategy to the basic strategy of national development.The 13th Five-year Plan listed precision medicine as a"strategic emerging industry" for key support.The 14th Five-year Plan defined "gene and biotechnology" as one of the seven cutting-edge fields of science and technology in China.As an important foundation of precision medicine,gene testing played an important role in clinical medicine,scientific research activities and health examination.The development of gene testing industry has entered an outbreak period.The huge market development prospect also attracts the attention of capital from all over the world.Genetic testing has become one of the hottest tracks in the field of investment and financing.As a powerful,mature leading participant in the private equity market who has a thorough understanding of the gene testing industry,"USD fund" also pays close attention to China’s gene testing industry.However,gene testing involves the research and application of gene technology and the collection,preservation and utilization of human genetic resources.Considering the core technology,national biosafety and the development of domestic industry,the Chinese government maintains a relatively cautious attitude towards the entry of foreign capital into the gene testing industry.The Chinese government restricts the foreign investment in gene testing industry from the perspectives of foreign investment access and human genetic resources management.However,due to the lack of refinement and clarity in the practical application of the above regulatory provisions,there are still different understandings among market participants on whether their business activities are restricted by supervision,and some business activities related to genetic testing may be in the gray area of supervision,which brings uncertainty to the regulatory caliber of the regulatory authorities and the investment and financing behavior of market participants.In view of this,starting from the relevant concepts of gene testing,this paper first introduces the basic connotation of gene testing,clarifies the relationship between gene testing and easily confused concepts in practice such as gene diagnosis and treatment and gene sequencing,and introduces the current attention of the capital market to the gene testing industry in terms of policy,analyze the reasons why the gene testing industry has great investment attraction.In addition to the related concepts of gene testing,this paper also discusses and analyzes the basic connotation of "USD fund" in the current legal practice of equity investment in China,and its attribute of foreign capital and the attention to China’s gene testing industry.After that,this paper combs and studies the dual regulatory restrictions that the USD fund will face when investing in China’s gene testing industry:the first regulatory restriction is the supervision of foreign investment access,that is,the regulations on foreign investment in China’s gene testing industry in Foreign Investment Law and Special Administrative Measures(Negative List)for Foreign Investment Access(Edition 2021).As the Negative List only stipulates that "development and application of human stem cells and gene diagnosis and treatment technology" is prohibited from foreign investment,there are different understandings on whether various business activities of gene testing fall into the Negative List in practice.This paper puts forward a relatively prudent and compliant understanding method from the aspects of the prescribed meaning,the relationship between related concepts of gene testing and the industry classification of business activities.That is,the manufacturing,import and sales of genetic testing products have high risks falling into the Negative List of prohibited foreign investment areas,and it is uncertain whether the R&D activities of genetic testing products fall into the Negative List of prohibited foreign investment areas,which needs to be judged according to the specific situation of R&D activities and the communication with the competent regulatory authorities,while the clinical and non-clinical applications of genetic testing activities have high risks falling into the Negative List;The second regulatory restriction is the regulation of human genetic resources,that is,the regulation of Biosecurity Law and Administrative Regulations on Human Genetic Resources on the collection,preservation and utilization of human genetic resources in China and the supervision of foreign companies.Because the relevant regulatory provisions are relatively general in the identification of foreign companies,the connotation and scope of foreign companies have different understandings in practice.After referring to the lawyer’s practical experience and the reply of government consultation on the Ministry of Science and Technology,this paper holds that the collection,preservation and utilization of China’s human genetic resources involved in the clinical application of gene testing do not need to be authorized by the Ministry of Science and Technology,and the application of gene testing in the field of scientific research and consumption can only be carried out after obtaining the administrative license of the Ministry of Science and Technology.In addition,as long as there is foreign capital in the ownership structure of relevant entities,they will be recognized as "foreign units",while whether the entities controlled by foreign organizations through contractual arrangements and agreements will be recognized as "foreign units" has great uncertainty,which needs to be fully communicated with the regulatory authorities according to the situation of each case.Finally,this paper uses the case study approach to sort out and study the specific cases of USD fund investment in gene testing industry in the legal practice of capital market,refine and summarize the effective compliance operation experience under the current regulatory provisions for market entities:this paper suggests that the USD funds should accurately identify the specific types of genetic testing business engaged by the company to be invested and maintain continuous communication with the regulatory authorities before investing.If the relevant genetic testing business is likely to fall into the areas of China’s negative list where foreign investment is prohibited,or the business involves the collection,preservation and utilization of human genetic resources in China,VIE mode can be adopted to ensure the compliance of investment behavior under the current regulation system.And this paper try to bring forth proposals to refine and improve the current relevant laws and regulatory provisions from the perspective of legislation and regulatory:In terms of foreign investment access,this paper proposes that the regulatory authorities clarify that the specific business forms of gene testing such as diagnosis and treatment level gene testing,non-diagnosis or treatment level gene testing and the development of gene testing products based on new gene testing technology shall fall within the scope of the areas of China’s negative list where foreign investment is prohibited,and could dynamically adjust the foreign capital investment access restrictions in this industry in accordance with the actual situation of China’s gene testing technology and industry development;In terms of human genetic resources supervision,this paper proposes to review the VIE structure by means of penetration verification,and determine whether the domestic companies in the VIE structure belong to "foreign units" according to the different results of penetration verification so as to achieve a more accurate supervision status of human genetic resources in China.. |
PDF Full Text Request