What you need to know about the EU vaccine row

BRUSSELS, BELGIUM - JANUARY 20: Prime Minister of Portugal Antonio Costa, European Commission President Ursula Von Der Leyen and European Parliament President David Sassoli hold a joint press conference in Brussels, Belgium on 20 January 2021. (Photo by Dursun Aydemir/Anadolu Agency via Getty Images)
European Commission President Ursula Von Der Leyen. Despite the U-turn, the EU insisted it had “no choice” but to go ahead with introducing export controls on vaccines. Photo: Dursun Aydemir/Anadolu Agency via Getty

The European Union’s row over coronavirus vaccine supplies reached new heights on Friday evening after the bloc’s decision to briefly override parts of the Brexit deal.

It quickly reversed its move to control the export of COVID-19 jabs into Northern Ireland (NI) following widespread condemnation from the UK, NI and Ireland.

Despite the U-turn, the EU insisted it had “no choice” but to go ahead with introducing export controls on vaccines.

UK prime minister Boris Johnson spoke to European Commission (EC) chief Ursula von der Leyen after the clause was triggered, a spokesman said. "He expressed his grave concerns about the potential impact which the steps the EU has taken today on vaccine exports could have."

Following the call with the PM, the EC chief said on Twitter (TWTR) that the pair had "agreed on the principle that there should not be restrictions on the export of vaccines by companies where they are fulfilling contractual responsibilities.”

Meanwhile, former Northern Ireland secretary Julian Smith accused the continent of an "almost Trumpian act" by threatening to override part of NI protocol under its vaccine controls.

What is the issue?

On Friday, before things kicked off, the EU threatened to trigger a clause in the Brexit deal, in an effort to prevent NI becoming a backdoor for vaccines to be sent to the UK.

The Brexit agreement between the bloc and the UK ensures an open border, with no controls on exported products between the EU and Northern Ireland.

But, Article 16 of the Northern Ireland Protocol part of the deal permits the EU and UK to choose to suspend any aspects they consider are causing "economic, societal or environmental difficulties.”

WATCH: EU ends threat to override NI Brexit deal in bid to control vaccine exports

AstraZeneca contract issues

The controversy also came amid a row between the continent and pharmaceutical company AstraZeneca (AZN.L) over delays in deliveries of vaccine doses to the 27 member nations.

AstraZeneca agreed to publish its COVID-19 contract with the EU, following pressure from von der Leyen.

While the EC welcomed the company’s “transparency” key issues remain over the “best reasonable effort” clause in the contract, which was published with large redacted sections.

AstraZeneca says the clause is not binding on the numbers of vaccines, but rather on best efforts. However the EU says it’s binding.

As a result, the bloc has asked the pharmaceutical firm to send some doses manufactured in Britain to the continent to make up the shortfall, but AstraZeneca says this would breach its contract with the UK.

Legal experts say that the pharmaceutical firm has “committed to use” its best efforts clause to supply the bloc with 300 million doses of the vaccine by a “specific date.”

Richard Parkinson, commercial contracts partner at JMW Solicitors, said: "Under the contract, these doses are to be made at sites in the EU and the UK. If it has produced those doses, it would appear that it would have to supply them, as its efforts to date have resulted in the creation of that volume of vaccine.”

But, Parkinson said that "it’s important to note that the EU contract is governed by Belgian law, which may interpret the contract differently.” There “doesn’t appear to be anything in the contract” which states that the “UK’s orders take priority,” and it’s “not covered” by the best efforts endeavour, he said.

As such, he says that AstraZeneca “appears to be in a position” where both the UK and EU “seemingly have a valid claim” on the manufactured vaccine doses.

He added: “Even if the UK contract does say that it should be given priority, this doesn’t affect the EU’s position — though it may give the UK another ground to bring a claim against AstraZeneca if the UK contract were breached by AstraZeneca.”

However, if the company hasn’t made enough doses, “then it appears that AstraZeneca will be in a position of choosing whether to breach — by failing to deliver committed quantities — either the UK contract, which we haven’t yet seen, or the EU contract,” Parkison said.

Parkinson added that due to time constraints he thinks that the relevant parties will use commercial negotiations to reach a resolution, but added that “other factors” such as future contracts between the parties and the “EU’s ability to restrict flow of other vaccines” into Britain also play a role.

READ MORE: AstraZeneca publishes vaccine contract after pressure from EU

Britain, which has been dragged into the tussle between the EU and AstraZeneca has said that it expects to receive its vaccine doses to keep Britain’s inoculation programme on track.

A spokesperson for Johnson said on Friday the government would not discuss contractual matters. But he said the government expected contracts to be “facilitated” and he was confident of its supply.

Von der Leyen’s comments were echoed by the EC’s vice-president Valdis Dombrovskis who said that the EU must “ensure that companies are meeting their full contractual obligations” on Friday.

Speaking during a virtual panel at the World Economic Forum in Davos, Dombrovskis, said that the EU were looking at introducing a new "time limited system to ensure clarity on production and exports in the EU." He said the new rules would only apply to advanced purchase agreements and would not amount to export bans.

READ MORE: EU medicines regulator approves AstraZeneca COVID-19 vaccine

Vaccine delays

On Friday, the EU’s medicines regulator approved the use of the AstraZeneca/Oxford University COVID-19 vaccine for people over the age of 18.

The European Medicines Agency (EMA) declared the vaccine safe for general use across the continent’s 27 member states on Friday, a month after it received approval in Britain.

It is the third coronavirus vaccine that received the green light from the EMA after the Pfizer (PFE) –BioNTech (BTNX) and Moderna (MRNA) jabs, which were authorised safe to use for all adults.

It signed a deal in August for 300 million doses, with an option for 100 million more. But, on Saturday, AstraZeneca said that production issues would slow its supplies to the continent.

The reduction will see deliveries to the EU cut by 60% to 31 million doses in the first quarter of the year.

AstraZeneca was expected to deliver around 80 million doses to the 27 EU nations by the end of March.

But, it is not the only manufacturer that has warned on supply issues. Last week Pfizer and BioNTech slowed shipments and distribution proceeds unevenly among EU states.

This meant that some nations' inoculation programmes were slowed due to the cuts. The drugmakers are retooling a site in Belgium to boost output.

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