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__ _ _ . . . . .. _ . __ . ... hlJlI .MU/\. tJft'1',;1 Adclis Ababa, 31st July

4'1 199353-

\?D" UI\. ". '}OD-r """'rc !le 52nd Yar No.

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,;J It flJ E-G A RIT GA ,ZETA

OF THE TRANSITIONAL GOVERNMENT or ETH\Oj:)IA

CONTENTS

I. Rl'l!ulntion No. 121/1993

Tran.fer of Technology Council

of Ministers RegulntiOIlB .... Page 424

CUUNCIL OF lI l\:ISTF.RS REGIJ LATIONS No. 121/1993 ,

COUNCIL 0'" MINISTERS REGlILATIONS TO REGULATE , TilE TRANSFER OF TECHNOLOGY

Th{'se Regula tioD!l' are issued by the Council of M inisters pursuant to Ar ticle 4l2J of the Definition of Powers and Duties of the Prime l'IIinister and Council of Ministcrs Proclamation No. 2/199I and Art ide 23( 4) of the Eneouragcmeut, ExpaD!lion and Coordination of Iuvest l;nt I'rocla,mation No. 15/1992.

PART I GENERAL

1. S"ort Title

These Regulations may he cited ao thc "TraD!lfcr of Te{'hnology Council of Ministers RcgulutioWi No. 121/1993".

2. De/initioru

For the purpose of these Regulations, the following con

cepts and words, shnll have chq meaning provided here

under:

I - "ngn'Nllcnt" menn. technology trnnsfer agrecment;

2. "pally" mCDns a ,;erson participating in a technology transIer agreement either lIS supplying party or as rt'ceh'inl! party;

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Nepri1 Gazeta - No. 53 - 31st July 1993 - Pap 425

J. "I'ct.!on means natural or juridical penon;

1. "recehing party" or " recipient" !DeaDS the party which acqum. technology through \iccnae, purchue or other J.ndul mean.;

5. "supplying party " or ".upplier mM". the party

whieh IlUppliee t,eChnology through aaIe, licencing,

assignment or other lawful _;

6. "transfer "C technology" me:ma tbe transfer of IY.

tematic kllowl ' for the manuCacture of a product,

Cor the appljoatWn or il!lPFOvelMllt of a proc.e or

Cor tbe reuderiDg "C service, includiDf manag!'ment and marketing t nologies, but shall not extend to

trlUlSllCtions invol '

ing t&,: mere salc or lease oC

goods;

7. industrial property" in ans a leplly enforceable right luch 88 patenta, trademarks, indlUtrial designs

Dnd other industrial froperty rigbt. grllDled by yirtue oC Ethiopian law or. treaty 10 which Ethiopia is a

party.

11. "OUice" means II mYl!iltwent OClice oC Ethiopia;

9. "Corcign owned enterprise" means auy COnD of busi

nr" organiution ".:abliBhed existing Ilnder the laws of Ethlopia;the mjority IhUe capit 1 of which

it owaed by' no .,E.thiop.ns.

3. S opc 0/ ApplicatWn I . Theae RqJulatioll8 IbalI apply to lruufer of teciuJo.

1010' agreements botweeDi

a) Dlltun! persona at Iowt 0Qe of which bi I'MlcieDt.

domiciled iD or is lIational of Ethiopia;

,b) a dOllUllltic priva1e c;n- public enterprilll! and a Coreip enterpriae; .

c), a foreign owdd 'ent riae and a domestic private I

or publjc eqtuprUe;

2. The proviti , ons' of these i Regulations shall, wbject to

detailed dbec:tiYelof tM Office, abo he applicahle to I trnn..Cer oC technorogy ugreemenls entered mto bet

ween a paent pant abroad and la. branch or . . ' I subsidiary lD Ethiopia.

". A pplictJble Lav, . Witbout prejlldice to Article 5 of theee Re tions, tbe Y:llidity. perfonnance and interpretation of fer of

, tecbnology agreementa shall he governed in aeco Dce with

the law, oC Ethiopia.

Negarit Gazeta - No. 53 31st July 1993 - Pogo 426

5. m'llUf/' Seftlemflnt

Parlics IIIl1y agree o IIImlc .iisl'u\.el! ,.... ,ng in ">I",.:.;tion wilh lechnology transfe agreement by direct lIt'gol;atiollll or in accordance with rules and procedures of "flllCililltion and arbitration.

6. Form alia lAlnguugll of Agreemenls ], A IPchuolog), Irander ng.reemcut shall IN" J)ll .Jn in

writiJig.

2. The language of the agreement sOOIl he Enj!lir.h.

PART 11 CHOICE OF TECHNOLOGY AND ADVISORY SERV1C.

7, Choice of Technology 1. The choice of l;chn ology or of specific tedllldugical

..,nj"e shall ,, made by the recciV'in,: pnrh, ,

.) !\otwithslanuing the provisiolls of s .arlicle (I) of; Ihis Article. tbe cboice of Lcehnolo,:y shall])I; .unde by giving due nsideration to the need, " .. ;tRhility and non-ob!loleseeDcc of the technulogy. In !.urlif!ular, altention shall be given whether the technology:

n J contrwules to tbe promotion of Ih.. I :.>Hlltry'a economic policy nml Jc\'e!opmcnl "IIUI' :3i.,.,;

b) answers immediale n!'eds. Inking illlo "etuWll the gap belween the' rcquiremelll,; of j"''III"lOnl Blltl n/ltiow.1 technological eOINlIJilily, r

e' NJlllrihuteo to the dc\'eloplIIent u{ .1111;"",,1 ,,.!bnical or tlcicntiic know how .

8 _ ,4dl'isory ServiJ.:e Tbe qffiC'{" dUllI upon ",-quc l, ndvise the wceh,j,ug !""tftJ 0" Ihe choice of technology. a!'o!'ist i.. Ihe nt"L"

industrial p rtY rights tnmsfened, or is otherlrise

Negarit Gazela - NJ. 53 3bt July 1993 Page 427

11 ) (b" technological eonlent Dnd the principal lentun'S of 11le technology being acquired; the anti. cipaled "roduction to be ocquired and tbo quality rand spooi.f tion of products must he dcfincd in detail.

hi "lIr(ie\llllr or Ih., 1 ..,h .. j",,1 OI\.,1..luII"" IllId 11", srrvic(' 1'0 I't'udrred 'by the supplier aud the manner in whieh tbe tecbnology and tbe techui. t:al ser\,jc should he prodded must be clearly identified.

c) tht" relevant teelmiool documents and other

., 11" ... IIgrl"'lIIl'nt

u-"e

I.

in handlin/!. operoting. mastering mId/or Il silllilllling

Nl'gnril Go.clo - No. 53 31s1 July 1993 - Poge 428

11. l"'rlormullcc Guarantee Thc ogreemenl shall provide Ihol the supplier hos UUller lakl'n 10 guorunlee,: thal Ihe technology to he lrans

fcrred "",I Ihe ser"ic!", 10 I ... providcd will he "AJllll'rrl'cn

,i" and .urn.. i .. nl (or ;Otloini'lg Ihe desired result. Tho

n/:rN'ml'nl Rhall where opl'rol'rinlc specify the ,,'dmiUllI

IlIlroDl\,lrrs and includes details of the manner of deter.

miniug whether the pcrforlllance has been met and the

l'oll!ll'quencc of failure 10 meet that performance.

I:;. T .. cl/ll;pal Servicu

Thl' porlie. shall, where uppropriole, provide ill their

U rf'I'III""1 "l'N;irie deluil" ;m lIlt' lechnieul servieeg to be I

I'rO\id,!1 ill conneclioll wilh Ihe ogreement.

Personnel16. Traillillg 01 ,

Ihe ogreement shall pl'Oyide that, upon request of tho

recipienl, Ihe supplier will provide adeqWlIl' training

fhl' It'ehnolof,'J trnnsferred for the recipient's pCl'llOn lIel designoted by him.

2. III such 0 ca-I', the '1uolifit-atiolls of the per"'JJ1Ild to

I ... Imined. Ih .. fields of fl;lilling. 'Ihe m..flwd, dll.ra. lioll alld ploe," of IIl0ining, limeloble for ,'urryilll.l Ollt

Ihe Iroining programme. nlld olher relevulIl dolJlliis .hould he worked oul.

1i. I'ru isioll 01 Accessoriu, Compmumts and Spare Furt.,

I . Where the supplying porly is the mujor or sole sup

plier, he shall furllisb the recipiellt for 11,,, period

pceificd in Ihel agrecDll'nl. with uecessories. spare

parts and "omp,menls thal ore neccssory for using the Icchnolog)' ID be ,transferred.

In sud,' ,'n"", shall provide 111A1 thc

prices of the said articl s should not be higher Ihou

11 ... ellrn'nl inl .. rnnlionnl price lends.

Ill, V"fllil)' SllIIu/ard,

In "i1"",- ,.I "'re Ih.. IIgn 'III "1 ; 11 "'"d,. the ">0

paekage of vorioUB palellts

"I"."rt'

a)

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2. npplicnble. there 'Sholl be a provision on the we of locally avnile:ble UlteriaJB. technology, techni. eal skills. nsultan y a d engineering l!I!rVices and otller resources to be indicuted and tiubscqucntly made available by the recipienl.

20. Payment ObliBfUiOll$

1. tt,ehnoJogy may .he paid on the basis of a lump.sum, myoltit'S, or a eomLiwiuon of these two elemeuts or on the basis of' fees filr technicaJ aervices u the

ca.oe may be.

2. the agreement shall sp. ciIy the form and procedure of payment as \ e1l u'the currency oC pa yments IIInd

IIlriee indexation.

3. th!.'", shall be no f ed inimum royalty payments.

'1. the agreement shall provide tbat payment obLigatwll terminate when inoustrial property rights :have expired or bave bceninvalUlaled, when payment ill bllSCd Ul.l i..U;: c.:m'i."lu:!u exc,h:uec of the;e r;gb! t ' Il!: Ihol

I ..

parties rcn(!gutiule Ihei payment obligotions, wbl'rt,

technology consists of':" and know how

e cept Wh' et! 'u I ... 01."-011.'1.. and/o: )-o"suitllolt. or 1I\'nilllhl, in Ethiopia;

c) "bne the agreell1cl!t inl'ludes c1anse!' I ),nt euuole Ih", lechnology supplier direclly or indir('{tly 10 c'ontml or to ,ulrrvene in 'Ih.. mnllug"ment of lbe recipicllt;

the agreement oontaius ohligal ion I .. IrulIsfcr or

10 use illdWllfial property ight8 or illll'/"O\'(,III,-"II"

ouw;'led by the technology fM.:il'i(,lIt. wilh 'or

without compen. Dlion,

of informalion '.embodics an el"ment oC 1"cil'ro. rity or on 8d anlage 10 the recil,ienl;

, is 0h1-igcd to use staff designated

!2C_ i

.. md

h)

Negarit Gazeta - Nu.. 53 3lat July 1993 - Page 431 " __ _ .

e) the lI i i. [hed [or unduly long duration;

r) the asreement oontains cJalUell prohibiting, or t1III.ri.ctives without valid gtounds, the WIe of oomplemenlllry technology;

g) the recipient is required to obtain equipment, tools, sp or raw mater.ials exclusively from a apecilied sOUl'Ile, when alternative supply lIOur_ or faeilities exist on the national or inter

Djttional market !IT to ccept additional teclmo-" Jogie1l, rr.tu inventions IInd improvements.soods and llervices not wanted by him;

production volumes arc limited or sale or resulc prices an\ imposed on the reoipients national production'" or rts

i) Ihe recipien,t 'by the t loIr supplier. [or a definitc or indefinite periOd Or time. except in tbe absence oC Ethiopia, technical' pet!IOIIlIel t:raiDed in the bo...-;IOOge.and Qpe1'lltion f the technology to be tl:anIIlemed.;

j) the rceipicn( is .fC'luircd to colltiludt, exclusive wet! or rel ,aI:iOlL contracts with the technology supplier. cept' in Ihe cos!' of exporl,

provided 'tMt the renipient acceJlt:!.llU' ",qwrl"menl tlle pl'lier has.,atlequatc machinc.cyat his dispoSal 91' lbat he enjoy!' the' net'esSlll'y oommerejal ffpl(.totion to carry out the market i.ag of the pods under better 1lOJldiDons than the recipient;

1;.) the supplying parly by WCllns uf quality clonlrol or prescription ,uf standards seck.!; 10 impo-:!C un neeesl'4J'y aDd onerous obligation on the recipient;

I) the export of goods ur services produCl'd by the ' M'Cipif'11t is unreasonably prohibited or Te!llrietcd;

m) the agreement ,jl'Olllains the obligation to !lCll the go,ods produeed by tilt> recipient to an exclu Sive client;' , .

I .n) the payment lM; JlO relation to the technology acquired or coll,etitutes an unjustified or e:xees>live encumbral fOf the national economy or [or the v:ing party.

2. Without prej'llwFe 10 the provisions of suh-articlc (I) nf tbis Article, 1 the OClicc cuD9itlcrs that the tcrmsof the agreent t DJ' the technology to be tra.nsferred it co ntrary 10 p(ililic order or the nationol ' interest, it .hall I!'xpl't"S l,. 80 AtIItc. Dnd shall deny approval aDtI rt"giflll'lllion.

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3. Nol ,"ill1Slondill Ih.. nhovt' l'rivi ion or .ul..orl;,l" (I) of lili, Arll"l". In Oil" ""l! if 1111' Uff;"t' j" Rllli.fit'll.

. Ihot il would .be in Ihe nolionol interest sn 10 do. if" lI11lY "I'prove oud re i.lt'r Ih" "grt>ClIlellt.

24. Ef/crl.' ,,/ /(t', ;tlltlliulI A h'ehof)!/\g Imnsh'r Ilgtl't'm('nt which i. 1101 r"gi,[I'rcI' in uC('onlanec wilh Ih're reg llolioll., ho. 110 legul cH..cl.

I 25. CllIIt'P/!"ri'.1I of Hpg;strnt;oll

I . , . here Ih" Offict, is sllli'fi d thnl IIn)' :I rt'''\lI('nl Iws, 5uh,"nI'('rn...1 of ils inten!ioll In clllle..! Ihe regis. tralion. 1I"h nnlil'" shall lw d'-"lIIcd liS noli ... ,,, ,," ':"c! 011 oppli"atil}1l ror rl'gi,, !rlllioll. "ltnl> 11,, 1,,,rli(" lail 10 llIak, 111, ""CI"! liT allll'ml !lI('1I1 1'''T>u"nt 10 Ihe IIlllice. 11 ... Orrice sholl ell "I"-! 11... rerlilk",,' of the pnrli .. enll!,,'rned ..

Il!O,,'/TO/l1M; AM) I El\'EIFAL Of' 1'ECllNOLOGl 7'RANSf'ER AGREElIfENT

26. 'J/olli!orillp 1. ,The Offi,,!' ,Imll. in C(I.opcmlioll wilh "l'l'mpriotP

!'lIthol'ilico. IllOoil",. the implementAtioll" or !lie I('rms :11111 "OIltJi i 'nn, gJlct'ifh'II i l; 0 teehllolog) t rUI"rcr u rpcnl( nt .

I) pI'S oncl 111011..':5 of D1onilorillg.

3. Tit. Offi,'!' ,holl r"'I,iir(' I,rngn-" rl'l,,"I"_ within " )l rio

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27. Rcu",tlu[ 0/ Aw-f.elllent

Th" Uffice JlUly, upon request of the reeipient party and

in consultntion with the nppropriate Iluthority, consider

and deeide DppJicDliop for renewal of technology agree

ments.

28. Ellectite Date Thes... Regulations !!hall come into force on tbe dale of

their PubJieatioD in t Negoril Gazeta.

Done at Addis Abaha.thi.t 31st day of laiy 1993.

TAMUT LAYNIE

.PIlIME AUl'dSTER (IF THE TRANSITIONAL

GO\,ERNMENT OF ETHIOPIA

PART IGENERAL1. Short Title2. Definitions3. Scope of Application4. Applicable Law5. Dispute Settlement6. Forms and Language of Agreements

PART IICHOICE OF TECHNOLOGY AND ADVISORY SERVICE7. Choice of Technology8. Advisory Service

PART IIIEVALUATION, APPROVAL AND REGISTRATION OF TRANSFER OF TECHNOLOGY AGREEMENT9. Grounds for Evaluation10. Description and Itemzation of Technology11. Ownership and validity of Industrial Property Rights and Third Party Claims12. Suitability for Use13. Confidentiality14. Performance Guarantee15. Technical Services16. Training of Personnel17. Provision of Accessories, Components and Spare Parts18. Quality Standards19. Use of Local Resources and Local Personnel20. Payment Obligations21. Evaluation of Payment22. Approval and Registration of Agreements23. Grounds of disapproval and refusal of registration24. Effects of Registration25. Cancellation of Registration

PART IVMONITORING AND RENEWAL OF TECHNOLOGY TRANSFER AGREEMENT26. Monitoring27. Renewal of Agreement28. Effective Date