The active ingredient is exempt if the conditions in paragraphs (a) and (b) of this section are met.

(a) The active ingredient is characteristic of the population of plants sexually compatible with the recipient plant and is created through genetic engineering from either an insertion of a native gene into the recipient plant as specified in paragraph (a)(1) of this section or a modification of an existing native gene in the recipient plant as specified in paragraph (a)(2) of this section.

(1) Insertion. A native gene is inserted into the genome of the recipient plant and produces a pesticidal substance identical in sequence to the pesticidal substance identified in the source plant. The regulatory regions inserted as part of the native gene must be identical in nucleic acid sequence to those regulatory regions of the native gene identified in the source plant.

(2) Modification. The existing native gene is modified to match corresponding polymorphic sequence(s) in a native allele of that gene using a single source plant as a template.

(b) This exemption does not apply until the requirements in § 174.21(d) have been met.