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* EU Commission to propose tighter mechanism on Weds
* Even firms meeting quarterly supply contracts may be hit
* Export block to also hit states with higher shot rates
* J&J has signalled backloaded Q2 deliveries to EU
(Adds details from EU official)
By Francesco Guarascio
BRUSSELS, March 23 (Reuters) - The European Commission on
Wednesday will extend EU powers to potentially block COVID-19
vaccine exports to Britain and other areas with much higher
vaccination rates, and to cover instances of companies
backloading contracted supplies, EU officials said.
The regulation is aimed at making vaccine trade reciprocal
and proportional so that other vaccine-making countries sell to
Europe and the EU does not export much more than it imports, one
EU official said.
With no numerical targets, the change is unlikely to trigger
mass export bans of EU-made vaccines, the official with insight
into the announcement said on Wednesday.
"I just really, really don't see that happening because we
have our international obligations and we want to keep supply
chains going and the global system moving and flowing," the
official said.
The regulation will be the basis for the EU's 27 governments
to decide whether to block vaccine exports or not.
"In practice, all this is, is a piece of paper that says
please take this stuff into consideration when you're looking at
approving export authorisations," the official said.
The move, which EU officials said could hit AstraZeneca
and Johnson & Johnson, are designed to avoid
even limited delivery shortfalls to a region whose inoculation
programme has been beset by delays and supply issues.
Shipments abroad could also be withheld if vaccine-producing
countries, such as Britain and the United States, disallow
exports to the EU, officials said, confirming comments by
commission head Ursula von der Leyen last week.
As London-Brussels tensions rose on Monday over a possible
export ban, Britain demanded that EU authorities allow the
delivery of vaccines it has ordered.
On Tuesday, Prime Minister Boris Johnson said Britain did
not believe in imposing vaccine blockades. "I'm encouraged by
some of the things I've heard from the continent in the same
sense," he told a news briefing.
Johnson & Johnson has announced delays in its second-quarter
supplies to the EU, which a second EU official said could lead
to consequences under the Commission amendment covering
companies backloading contracted quarterly deliveries.
All vaccine makers could be affected, added the second
official, with direct knowledge of the Commission decision. Some
on the EU's list of countries exempt from any vaccine export
monitoring, like Israel, are likely to be removed, because of
their very high inoculation rates, the first official said.
"It doesn't mean they won't get vaccines. It just means
they're not automatically exempted anymore," the first EU
official said.
'WE DON'T WANT THE SAME DELAYS IN Q2'
The EU this month used an export control mechanism, set up
at the end of January, to block an AstraZeneca vaccine shipment
to Australia.
That mechanism can be activated only if companies do not
meet contracted quarterly delivery targets. The block followed
AstraZeneca's announcement of steep cuts in first-quarter
deliveries to the EU.
With the amendments to be adopted on Wednesday, the EU will
be able to block exports to cover companies that respect their
quarterly contracts but backload supplies to the end of the
period, said the official, who asked to remain anonymous.
Johnson & Johnson, which has committed to delivering 55
million doses to the EU between April and June, plans to start
deliveries in the second half of April.
The company told EU officials production issues might make
it difficult to meet its second quarter target, but it was
striving to do so.
Moderna and Pfizer/BioNTech also
had delays in vaccine deliveries to the EU, though they are set
to meet their overall first-quarter targets. "We don't want the
same delays to happen in the second quarter," said the second
official.
(Additional reporting by Jan Strupczewski; Reporting by
Francesco Guarascio @fraguarascio; editing by John Stonestreet
and Richard Chang)
