Making the UN Tax Committee’s Subcommittees More Effective for Developing Countries
By Abdul Muheet Chowdhary, Sebastien Babou Diasso, and Aaditri Solankii
New United Nations (UN) Tax Committee Members have been appointed by the UN Secretary-General and among them 13 out of 25 are from developing countries. The Committee sets international tax standards, vital for financing for development, and works mainly through its Subcommittees. However, an unhealthy trend over time has been the disproportionate involvement of business representatives in the Subcommittees, which can be harmful for promoting the interests of developing countries. This policy brief examines this trend and outlines some of the tools available to developing countries to promote their interests in the Subcommittees.
Some Key Elements for Developing Countries in Climate Change Negotiations of COP 26: Climate Finance, Article 6 Negotiations and Implications
By M. Natalia Pacheco Rodríguez and Luis Fernando Rosales
Human influence is deepening the climate crisis at an unprecedented pace. Developing countries’ economies have been hit hard by the crisis caused by COVID-19. Means of implementation are crucial for them to contribute to the achievement of the Paris Agreement goal. Developed countries must fulfill their commitments to provide US$ 100 billion per year by 2025 to climate finance. The latest years’ negotiations have shown the importance of improving the reporting methodology and the need for an agreed operational climate finance definition. In turn, Article 6 negotiations offer an opportunity to ensure higher ambition of both mitigation and adaptation through cooperative approaches while respecting the agreed balance between market and non-market approaches. What should developing countries expect on these issues at COP 26?
Developing Country Demands for an Equitable Digital Tax Solution
By Abdul Muheet Chowdhary
The taxation of the digitalized economy is the foremost challenge in international taxation today. Countries around the world, especially developing countries, are struggling with taxing the rising profits of major tech giants which operate on entirely new business models that have made traditional international tax rules obsolete. A “Two Pillar solution” is being negotiated in the OECD/G20 Inclusive Framework on BEPS that seeks to update these rules, re-allocate taxing rights and establish a global minimum tax. However, as it stands, the solution has very limited tax revenue benefits for developing countries and is administratively complex. For the solution to be durable, it must be equitable, and accordingly must incorporate the concerns of developing countries going forward.
Strong Intellectual Property Protection, Weak Competition Rules – or the Other Way Around to Accelerate Technology Transfer to the Global South? Ten Considerations for a “Prodevelopment” IP-Related Competition Law
By Klaus D. Beiter
Competition law provisions relating to intellectual property (IP) rights should play an enhanced role in facilitating the domestic and international transfer and dissemination of technology. IP-related competition rules in the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) create an obligation for Member States to apply competition law in the IP context. TRIPS competition rules should be read in a “prodevelopment” fashion – IP rights need to be read reductively, IP-related competition law expansively. Ten considerations for a “prodevelopment” IP-related competition law are formulated.
Accelerating COVID-19 Vaccine Production via Involuntary Technology Transfer
By Dr. Olga Gurgula
This policy brief explains that the currently discussed proposals at the WTO related to increasing the production of COVID-19 vaccines, including the EU proposal to clarify the use of compulsory licensing and the submission by South Africa and India on the intellectual property (IP) waiver, require complementary mechanisms to rapidly improve the production of COVID-19 vaccines that are urgently needed today. The key problem is that to accelerate the manufac- ture of COVID-19 vaccines, access to knowledge and know-how, that are protected by trade secrets owned by several pharmaceutical companies, is required. It is therefore important that governments implement an additional mechanism of compulsory licensing of trade secrets that would allow an involuntary transfer of COVID-19 vaccine technologies. Such a mechanism would be compliant with the TRIPS Agreement and relevant whether the TRIPS waiver is adopted or not agreed upon. While this mechanism must provide full access to the information necessary to manufacture the vaccines in question, it must also ensure the protection of the transferred trade secrets.
O papel dos tribunais na implementação das flexibilidades do TRIPS: Supremo Tribunal Federal (STF) do Brasil declara inconstitucionais as extensões automáticas de prazos de patentes
Por Vitor Henrique Pinto Ido
Este policy brief traz uma contextualização, um resumo e uma análise da decisão do Supremo Tribunal Federal do Brasil, de 6 de maio de 2021, que declarou inconstitucionais as extensões automáticas de prazos de patentes, revogando o Artigo 40, Parágrafo Único, da Lei de Propriedade Industrial do Brasil, de 1996. Conclui-se que esta é uma decisão histórica que contribui para a implementação de um regime de patentes mais equilibrado no Brasil, com impacto positivo no acesso a medicamentos no país. É um precedente importante no que se refere ao papel que os tribunais podem desempenhar na definição dos contornos da proteção à propriedade intelectual e das flexibilidades do Acordo TRIPS.
Combatting Tax Treaty Abuse: Tools available under the BEPS Multilateral Instrument
By Kuldeep Sharma, ADIT (CIOT,UK)
The anxiety of taxpayers, consultants and advisors over the consistent application of Principal Purpose Test (PPT) provisions in tax treaties can now be put to rest as tax authorities are expected to consistently read the PPT provisions in conjunction with the preamble, i.e. the key to application of PPT provisions lies in the preamble of the treaty itself. This follows on taking a leaf out of the Preamble to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion & Profit Shifting (MLI), Vienna Convention, Commentaries on PPT in the respective Organisation for Economic Co-operation and Development (OECD) and United Nations (UN) Model Tax Convention (MTC), 2017 and Australian Taxation Office’s (ATO) instructions on PPT which abundantly highlight on conjoint application of the preamble in the course of invocation of PPT provisions. Now, the entire focus of extending treaty benefits has shifted to undertaking bonafide transactions and preventing double taxation as against a tendency of securing tax savings through tax avoidance. Therefore, PPT as read with the preamble can clearly be invoked to combat treaty-shopping arrangements, abusive tax planning and abusive tax avoidance arrangements or transactions. At the same time, tax authorities in any part of the world may not be inclined to invoke PPT as read with the preamble in respect of any arrangement or transaction when taxpayers are able to discharge their onus establishing that (below mentioned conditions to be satisfied in tandem):
– genuine business and commercial reasons for a transaction exist;
– a purpose for the transaction cannot be ascribed to non-taxation or reduced taxation through tax evasion or tax avoidance;
– despite no tax advantages, the transaction would be carried out exactly in the same way; and
– it cannot reasonably be considered that one of the principal purposes of the arrangement or transaction is to obtain treaty benefits and that the object and purpose of the treaty is getting defeated.
The Investment Facilitation Framework & Most Favoured Nation (MFN) Treatment
By Peter Lunenborg
The issue of Investment Facilitation (IF) is one of the ‘Joint Statement Initiatives’ which has been under negotiation for a number of years between certain World Trade Organization (WTO) Members. It has not been without controversy as there is no multilateral mandate at the WTO for these negotiations. Questions have been raised about how the outcomes of these IF negotiations can be brought into the WTO framework. Despite these uncertainties, there is a draft Investment Facilitation Framework (IFF) text. This Policy Brief discusses the Most Favoured Nation (MFN) treatment as contained in Article 2 of the Investment Facilitation Framework (IFF), also referred to as the Investment Facilitation for Development Agreement (IFDA). This brief highlights the potential implications of the proposed text and proposes some options.
EU Proposals regarding Article 31bis of the TRIPS Agreement in the Context of the COVID-19 Pandemic
By Nirmalya Syam
This Policy Brief presents an analysis of the proposal by the European Union (EU) with regards to Article 31bis of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), as part of a Declaration on the TRIPS Agreement and Public Health in the circumstances of a pandemic. It discusses the EU’s proposed clarifications, why Article31bis does not provide an effective solution to promote access to pharmaceutical products and possible options.
The TRIPS COVID-19 Waiver, Challenges for Africa and Decolonizing Intellectual Property
By Yousuf Vawda
The intellectual property (IP) regimes of African countries are a function of their colonial past, which imposed strong protections, and which have been entrenched through the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement). This has had a devastating effect on their ability to access necessary health products both before and during the current COVID-19 pandemic. It is important to reflect on the challenges that African countries face, before considering the implications of the WTO TRIPS waiver on COVID-19 (henceforth, waiver). In assessing the challenges faced by these countries, as well as the possibilities of improving access, this paper argues that while the waiver offers the best available solution to overcome the current supply shortages of a range of COVID-19 health products, in the longer term a break from this past—the decolonization of IP regimes—is necessary.
The Implementation of the UN Declaration on the Rights of Peasants and Other People Working in Rural Areas: what is next?
By Luis Fernando Rosales Lozada
The UN Declaration on the Rights of Peasants and Other People Working in Rural Areas (UNDROP) was adopted in December 2018. However, its application seems challenging. The South Centre organized a virtual meeting to discuss the implementation of the UNDROP on 4th June 2021, aiming to promote a debate about future actions to move forward the implementation of the UNDROP. The meeting provided an opportunity to listen to the views of government representatives, peasants’ associations, civil society organizations and academia. During the meeting, different questions were discussed such as how the current health and social crisis, caused by the COVID-19 pandemic, has impacted the situation of peasants, the role of the UNDROP in promoting and protecting peasants’ rights, the latest developments in the realization of the rights of peasants under the UNDROP and what steps are needed to promote its implementation.
The WTO TRIPS Waiver Should Help Build Vaccine Manufacturing Capacity in Africa
By Faizel Ismail
The current global health crisis created by the COVID-19 pandemic has re-focused our attention on the inadequacy of the TRIPS agreement and the patent system to address global public health crises. This time, developing countries must ensure that the TRIPS waiver succeeds in creating the impetus for the building of manufacturing capacity in the poorest countries, especially in Africa, for vaccines, pharmaceuticals and other health technologies. This is the only effective way in which African countries can reduce their dependence on imports of essential medicines and build their health security, contributing to the achievement of the sustainable development goals, for the poorest countries.
