As the UK government announces that it has donated over two million medical items to Ukraine, MedTech Europe (the European trade association for the medical technology industry) has issued compliance guidance to its member companies who may be considering providing emergency support related to the humanitarian crisis in Ukraine.
The guidance is intended to support legal and compliance teams tasked with considering emergency processes to fast track requests related to the crisis, while ‘attempting to limit the inherent compliance risks of such processes.’
What is covered?
The guidance applies to any request related to providing support to those affected by the crisis, including within Ukraine itself or within neighbouring countries sheltering displaced people. The types of support foreseen by MedTech Europe include:
- Free of charge temporary loans of medical equipment.
- Free of charge temporary software licenses/cloud service subscriptions.
- Donations of single or multiple use products.
- Financial support (eg payment waivers, donations).
The guidance (and this article) does not address sanctions or export control issues that may arise in the context of emergency support. For further information and advice, please see our dedicated resources on the Ukrainian crisis and related sanctions or export controls and contact our global sanctions and trade team.
Additionally, the guidance note stresses that compliance teams must still assess the risk of support requests according to applicable laws, including local laws. It also acknowledges that the types of support under consideration may raise specific risks notwithstanding any relaxations of MedTech Europe Code of Ethical Business Practice (the Code), including for example, risks related to competition law, anti-corruption laws, labour laws, etc.
Guidance to supersede the Code in relation to the humanitarian crisis
The guidance clarifies that some parts of the guidance may contradict the Code, for example with respect to grants and charitable donations. This guidance is intended to supersede such provisions in relation to requests relating to the humanitarian crisis for the duration of the crisis.
The guidance sets out certain key principles when considering any request for support (notwithstanding any relaxations with respect to the Code). All support must:
- Be free from any intent to improperly induce purchase of products or services.
- Be fully documented to allow for detailed transparency.
- Always consider the perception and the image of the industry.
- When dealing with grants or donations, decisions need to be made independent of sales departments, or be made by leadership committees to ensure unbiased allocations.
Donations and free of charge loans
The usual prohibitions and limitations under the Code with respect to permitting financial support to non-charitable organisations have been relaxed to enable donations and/or free of charge loans to non-charitable organisations including hospitals and healthcare systems subject to certain conditions (eg limited to an identified immediate need; under no circumstances can donations be made to individual HCPs).
The guidance states that when a healthcare organisation can demonstrate a ‘critical financial situation,’ companies may ‘exceptionally’ decide to consider payment waivers, but that these should be considered a ‘last resort,’ and should be carefully documented.
Process and documentation
The guidance recommends clear documentation of support given, even on a reconciliation basis if urgency does not permit this on an ex-ante basis. In particular:
- There should be clear documentation of the link between the support provided and the humanitarian crisis, especially where support given may conflict with the provisions of the Code.
- In respect of payment waivers, relevant contracts should be amended beforehand wherever possible, and each request should be thoroughly documented ‘with special emphasis on the underlying reasons.’
Overall, the takeaway is that the industry can offer support to the humanitarian effort even where measures would usually constitute a breach of the Code. However, any action should be strictly limited to what is necessary to support the crisis, must not contravene certain basic core principles, and should be clearly documented.
[T]he industry can offer support to the humanitarian effort even where measures would usually constitute a breach of the Code. However, any action should be strictly limited to what is necessary to support the crisis, must not contravene certain basic core principles, and should be clearly documented.