EU Vaccine export controls - what actually happened?

Question

I've seen quite a few news reports recently over the EU's introduction of new export rules to control vaccines leaving the bloc. The BBC is a British outlet and perhaps, given Brexit, may put a more negative stance. An extract from the article says:

The European Union is introducing export controls on coronavirus vaccines made in the bloc, amid a row about delivery shortfalls.

The so-called transparency mechanism gives EU countries powers to deny authorisation for vaccine exports if the company making them hasn't honoured existing contracts with the EU.

"The protection and safety of our citizens is a priority and the challenges we now face left us with no choice but to act," the European Commission said.

Is the EU insisting companies provide the EU with vaccines before any other country?(That is not part of the EU). Regardless on when orders were made? That is how it sounds, but I'm aware the news can be rather emotive sometimes.

What exactly are the new controls that the EU put in place?

Answer 1

According to news media:

• The EU subsidized the creation of vaccine factories even before the vaccine was approved for use, in exchange for a promise to start production and stockpile production before approval for delivery after approval.
• Apparently the contracts contain terms like best effort, which is less than a firm promise to deliver. The full details of the contracts are secret.
• Apparently the EU pays less per dose than other customers, who signed earlier and with different liability agreements. The full details of those contracts are also secret.
• Vaccine production seems to fall short of expectations/hopes. Deliveries to the EU appear to be getting reduced while deliveries to other customers appear to be maintained to a higher percentage.
• The EU is considering a requirement for prior notification of vaccine exports from factories in the EU, which would be not a ban of such exports -- but it could be a step towards it.

Various talking heads insist that shortfalls must affect all customers, not just the EU. To me that does not look like an "EU first" demand but it could turn into one.

Answer 2

The main focus of the delays centre around AstraZeneca. Pfizer has also had delays, but they are less relevant.

The claim by the EU is that the contract they have with AstraZeneca is that their manufacturing facilities in the EU and the U.K. should all be used to ensure delivery of the initial doses (300 million + 100 million) that the EU ordered.

The claim by AstraZeneca is that the contract is a best effort, not a guarantee of delivery. They have argued that the reduced yields seen in the EU are because the EU signed the contract 3 months later than the U.K.. Therefore, similar teething problems were ironed out much earlier - before the vaccine was due delivery (even before it has passed the clinical trials).

The full contract is available here, but most reports (1, 2, 3) I’ve seen are that the contract appears to support AstraZeneca‘a stance:

AstraZeneca says that the U.K. has priority on the vaccines manufactured within the U.K., and that the U.K. site is not included in the primary manufacturing centres for the EU - and so cannot be expected to be used to make up the shortfall.

However, the U.K. also relies on the Pfizer vaccine, which is manufactured in Belgium. The EU, by bringing in the export controls, can potentially limit the exports of the Pfizer vaccine, to make up for the shortfall in the AstraZeneca one. Whether they will do this or not, remains to be seen.

The U.K. government has not commented on this specific matter, other than to restate that supplies of vaccines to the U.K. are secure. Again, whether this is the case remains to be seen, but given the AstraZeneca vaccine (and the yet to be approved Novavax vaccine) is manufactured in the U.K., it seems plausible.

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The EU has been reinforcing the fact that it invested billions in vaccine development, and that they now expect the firms to deliver. While I obviously don’t think spending more money should be the only criteria for receiving vaccines, the FT reports that the EU has spent about 1/6th of the amount per capita than the US or the U.K. has - despite ordering slightly more doses per capita. This, combined with the late order date, likely isn’t helping matters.

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In another development, the EU invoked - and then backtracked on invoking - Article 16 of the EU-U.K. “Brexit deal”, which imposed a hard border on the island of Ireland, the land border between the U.K. and the EU. This received widespread condemnation within and outside the EU, in a rare case uniting people who were both for and against Brexit! This was, the EU claimed, to prevent vaccines leaving the EU via the U.K., in avoidance of their (potential) export controls.

Answer 3

Part of the European Commission's allegation is that problems with AstraZeneca's production facilities in the UK may be compensated by the company's factories in the EU. According to reporting by The Guardian:

The development came as Belgian regulators launched an investigation into AstraZeneca’s coronavirus vaccine production site 25 miles (40km) south of Brussels, in Seneffe, at the request of the commission. Officials believe a significant number of vaccine doses made in Belgium have been transported to the UK and that this has contributed to the shortages.

An EU official said: “We discussed this matter with our Belgian colleagues. We want to see whether what we’re being told is correct or not. So I would like to thank the Belgian authorities for undertaking these efforts.”

A spokesperson for the Belgian health ministry said the inspections at the plant were being conducted to “make sure that the delivery delay is indeed due to a production problem on the Belgian site”.

Whether that's actually true, and if it were, whether that would constitute a breach of the contract between AstraZeneca and the EU remains to be seen.

The EU does claim to have evidence of such exports leaving the EU, according to Euractiv:

Asked if the Commission has any figures or evidence that doses produced in the EU were shipped to the UK, the same official said that vaccines produced in Europe were shipped to many countries, as shown by customs data.

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Is the EU insisting companies provide the EU with vaccines before any other country?(That is not part of the EU).

It seems to me that the EU is simply trying to make sure the contract they have entered into and paid for in advance is being honored. As DW explained quoting EC President von der Leyen:

The EU is particularly irritated because it had paid AstraZeneca hundreds of millions of euros in advance in order to expedite production ahead of the vaccine's official approval. European Commission chief Ursula von der Leyen said that "Europe invested billions to help develop the world's first COVID-19 vaccines and create a global demand." The onus, she said, was now on the companies to "deliver and honor their obligations." There is currently no independent information available to explain AstraZeneca's delivery bottlenecks in Europe.

Regardless on when orders were made?

Yes, the order dates don't seem to matter as much from the EU's perspective (the AZ position differs as explained in Tim's answer) because both orders were made very early on (I think Q3 of 2020). Instead, the production locations seem to play a role in the dispute. For example, AstraZeneca claimed the production problems happened at their production plants in the EU. According to that same DW article:

The company's response to a DW request for comment was equally vague. "While there is no planned delay in the start of delivery of our vaccine, initial volumes will be less than originally expected due to reduced yields at a manufacturing site within our European supply chain," the company wrote in an email.