1

Memorandum of Understanding

between

The Government of the Swiss Confederation, represented by

The State Secretariat for Economic Affairs (SECO)

and

The Government of the Republic of Serbia, represented by

The Ministry of Science, and The Ministry of Agriculture, Forestry and Water

Management

regarding

The Implementation of the GLOBALGAP and IPR Projects

2009 – 2012

2

The State Secretariat for Economic Affairs

(hereinafter referred to as "SECO")

and

The Ministry of Agriculture, Forestry and Water Management

(hereinafter referred to as “the MAFWM”)

and

The Ministry of Science

(hereinafter referred to as “the MoS”)

(all together hereinafter referred to as “the Contracting Parties”) Based on the Agreement between the Federal Republic of Yugoslavia and the Swiss

Confederation concerning Technical and Financial Cooperation, signed on 21 February 2003,

This Memorandum of Understanding (hereinafter referred as “this MoU”) shall serve as a

common agreement for all Contracting Parties in their joint efforts to improve the international

economic and trade system in Serbia by carrying out two projects of the Swiss Trade

Cooperation Program Phase III (hereinafter referred to as "the TCP III"):

a) Assistance to the know-how of GLOBALGAP standards (hereinafter referred to as “the

GLOBALGAP Project”), and

b) Assistance in the field of intellectual property rights (geographical indications and

TRIPS compliance) (hereinafter referred to as “the IPR Project”),

according to the project descriptions in Annexes 1 and 2 which form integral parts of this MoU.

The Contracting Parties recognize that the implementation of the TCP III will entail the

collaboration with the MAFWM, the MoS, the Serbian Institute for Intellectual Property and

private enterprises relevant for trade cooperation, as well as other relevant stakeholders.

The following provisions shall reflect the conditions and framework for these mutual activities.

3

Article 1: Obligations of SECO

1.1. SECO shall perform its obligations

for the GLOBALGAP Project through “AGRIDEA”, Jordils 1, 1000 Lausanne

6, Switzerland, hereinafter referred to as "AGRIDEA”, acting as the executing

agency, and

for the IPR Project through the Swiss Federal Institute for Intellectual Property,

Stauffacherstrasse 65/59g, CH-3003 Berne, Switzerland, hereinafter referred to

as "IPI”, acting as the executing agency.

In this framework, AGRIDEA and IPI shall contract the services of SEEDEV D.O.O.,

Knez Danilova 57A, 11000 Belgrade, IBAN RS35 2201 2302 0000 2074 38 within

Procredit Bank A.D., Bulevar Despota Stefana 68c, 11000 Belgrade, Serbia, hereinafter

referred to as “SEEDEV”, to act as their local representative.

1.2. SECO shall cover the costs of the GLOBALGAP Project up to 605’000 CHF and IPR

Project up to 778’300 CHF, as described in Annexes 1 and 2 of this MoU and channel

these funds through AGRIDEA and IPI respectively, for the implementation of the

Projects.

Article 2: Obligations of the Respective Institutions of the Republic of Serbia

2.1. The MAFWM and the MoS shall act as counterparts on behalf of the Republic of Serbia

for the implementation of GLOBALGAP and IPR Projects. The MAFWM and the MoS

will actively participate in the implementation of the Projects and commit resources to

their execution, as detailed in Annexes 1 and 2. All activities of the government's

officials engaged in implementing the Projects are considered as their regular working

activities and shall be covered with their regular income.

2.2. All activities listed in the IPR Project (see Annex 2) do follow a sequencing program

and require the implementation of all activities by the counterparts of the Republic of

Serbia. Some activities mentioned in Annex 2 can only be implemented if certain basic

requirements (as for example the adoption of a new Law on Geographical Indications in

Serbia) are fulfilled.

2.3. The Swiss consultants deployed for the implementation of the Projects shall be

exempted from customs and other compulsory duties as per the Laws of the Republic of

Serbia on Foreign Trade, Customs and VAT.

4

2.4. Activities implemented and equipment, material and services purchased or imported

within the Projects are to be exempted from VAT and import duties as per the clauses of

the Agreement between the Federal Republic of Yugoslavia and the Swiss

Confederation concerning Technical and Financial Cooperation signed on 21 February

2003 (Official gazette of SCG No 6/2003 – International Agreements) and in

accordance with Law on VAT (RS Official Gazette No 84/04; 86/04; 61/05; 58/06 and

61/07) as well as with the Law on Customs of the Republic of Serbia.

Article 3: Steering Committee and Advisory Board

3.1. The Steering Committee shall review the strategic orientation and approve annual plans

of operation and reports of the GLOBALGAP and IPR Projects, in accordance with the

details given in Annexes 1 and 2, in at least one regular session per year. The Steering

Committee shall be chaired by the representatives of the MAFWM and MoS and shall

include:

1. SECO represented by the Swiss Cooperation Office in Belgrade

2. The representative of the MAFWM

3. The representative of the MoS

4. The representative of IPI

5. The representative of AGRIDEA

6. The representative of SEEDEV.

3.2. All other details regarding the Steering Committee shall be laid down in rules and

regulations to be adopted by consensus by the Steering Committee in its first session. In

case of an absence of consensus, SECO represented by the Swiss Cooperation Office in

Belgrade and the representatives of the MAFWM and MoS shall take a final decision.

3.3. An Advisory Board shall ensure the overall coordination of all components of the

TCP III and make a link between the Steering Committees of the WTO, GLOBALGAP

and IPR Projects. The Advisory Board shall be composed by SECO represented by the

Swiss Cooperation Office in Belgrade, the MAFWM, the MoS and the Ministry for

Economy and Regional Development (MoERD), and all implementing agencies of the

TCP III. The Advisory Board shall meet once a year, preferably in the forefront of the

Steering Committee meetings.

5

Article 4: Anti-Corruption Clause

The Contracting Parties share a common concern in the fight against corruption, which

jeopardizes good governance and the proper use of resources needed for development, and, in

addition, endangers fair and open competition based on price and quality. They declare,

therefore, their intention of combining their efforts to fight corruption and, in particular, declare

that any offer, gift, payment, remuneration or benefit of any kind whatsoever, made to

whomsoever, directly or indirectly, with a view to being awarded a mandate or contract within

the framework of this MoU, or during its execution, will be construed as an illegal act or

corrupt practice. Any act of this kind constitutes sufficient grounds to justify annulment of this

MoU, the procurement or resulting award, or for taking any other corrective measures foreseen

by the applicable law.

Article 5: Project Duration and Entry into Force

This MoU shall enter into force upon its signature by all Contracting Parties and extend up to

31 December 2012.

Article 6: Settlement of Disputes

6.1. Disputes as to the interpretation or application of the provisions of this MoU which

have not been settled satisfactorily by means of diplomatic negotiations within three

months of the date on which they were raised by a Contracting Party shall, upon request

of either Contracting Party, be submitted to an arbitral tribunal of three members. Each

Contracting Party shall appoint one arbitrator. The three designated arbitrators shall

appoint a fourth arbitrator as Chairman who shall be a national of a third country.

6.2. If one Contracting Party has not appointed its arbitrator and has not followed the

invitation of the other Contracting Parties to make the appointment within one month,

the arbitrator shall be appointed, upon the request of these other Contracting Parties, by

the President of the International Court of Justice.

6.3. If all three arbitrators cannot come to an agreement about the choice of a fourth

arbitrator (Chairman) within two months of their appointment, the latter shall be

appointed, upon the request of any Contracting Party, by the President of the

International Court of Justice.

6

6.4. If in the cases specified under provisions 6.2 and 6.3, the President of the International

Court of Justice is prevented from carrying out the said function, or if he is a national of

either Contracting Party, the appointment shall be made by the Vice-President, and if

the latter is prevented, or if he is a national of either Contracting Party, the appointment

shall be made by the next senior Judge in Court who is not a national of either

Contracting Party.

6.5. The applicable law is Swiss law. The seat of the arbitral tribunal shall be in the Swiss

Confederation.

6.6. Subject to other provisions made by the Contracting Parties, the tribunal shall determine

its procedure.

6.7. The decisions of the tribunal will be final and binding for each Contracting Party.

Article 7 : Conditionality

Respect for democratic principles and fundamental human rights, as specified in particular in

the Universal Declaration of Human Rights, is the basis of the domestic and international

policies of the Contracting Parties, and represents an essential element, as important as the

objectives of this MoU.

Article 8: Termination and Modification of this MoU

8.1. This MoU shall terminate when all Contracting Parties have fulfilled all their

obligations set out in the MoU.

8.2. This MoU may be terminated at any time by each of the Contracting Parties, subject to

written notice given three months in advance.

8.3. In the event of non-compliance, non-execution or breach by one of the Contracting

Parties of the obligations binding upon it, another Contracting Party may, after written

notice, terminate this MoU with immediate effect.

8.4. Any modification or amendment, including a prolongation, to this MoU shall be made

in writing with the consent of all Contracting Parties.

7

Article 9: Force Majeure

Should this MoU become in-executable for reasons of force majeure, it can be re-scheduled by

the Contracting Parties upon consultations with effect from the moment when it becomes

impossible to carry it out.

Article 10: Responsibility to Inform

The Contracting Parties shall promptly inform each other and, to the extent reasonably

practicable, consult each other regarding any event which interferes, or threatens to interfere,

with the successful implementation of the Projects.

Article 11: Number of Copies and Prevailing Language

This MoU is made in three original copies, both in the English and in the Serbian languages.

In case of any disagreement in the interpretation of this MoU, the English language version

shall prevail.

Signed in Belgrade on 1 October 2009.

On behalf of the Swiss Confederation:

On behalf of the Republic of Serbia:

Jean-Daniel Gerber State Secretary State Secretariat for Economic Affairs

Sasa Dragin Minister Ministry of Agriculture, Forestry and Water Management Bozidar Djelic Minister Ministry of Science

8

Annex 1: “Assistance to the know-how of GLOBALGAP standards”

1. Project objectives The Project will respond to the identified needs by supporting the implementation of the GLOBALGAP standards in Serbia as well as other quality insurance schemes according to identified requirements of foreign buyers and needs of Serbian producer and companies. Moreover, it will increase the efficiency of the implementation by setting up a training and coaching program for producers, companies and trainers (training for trainers). Indeed, a better understanding of the different certification schemes and the possibility to make an informed decision on which scheme to choose according to the benefits should facilitate the implementation. Overall goal: Improve competitiveness and market access of producers by ensuring compliance with quality control schemes adopted by retailers on domestic and export markets. Outcome 1: Enhancement of business environment through capacity building of public and private institutions Objective 1.1: Private and public entities have a good understanding of quality standard scheme and have the required knowledge and the tools to perform their role related to it Objective 1.2: Establishment of local certification bodies (at least one) able to certify standards needed by the Serbian producers Outcome 2: 15 companies enhanced their business and export capacity through certification according to quality standards required by the market Objective 2.1: Strategic decision and implementation of certification scheme by 15 companies. 2. Project activities The following project activities correspond to the project objectives outlined above: Project management Activity cluster 1: Project Set-up - Setting up the project in coordination with other actors that support Serbia in the implementation of GLOBALGAP.

• Activity 1.1: Establish cooperation modalities with USAID and other agencies that support Serbia in the implementation of GLOBALGAP in close cooperation with the Ministry of Agriculture, Forestry and Water Management (MAFWM).

• Activity 1.2: Set up a working group in Serbia.

• Activity 1.3: Set up terms of reference and contracts with external consultants.

• Activity 1.4: Define a detailed plan for the whole project.

Activity cluster 2: Yearly Steering Committee and coordination meetings.

• Activity 2.1: Preparation and attendance to the Steering Committee .

• Activity 2.2: Preparation and attendance to meetings with IPI, COOF coordinate programme components two and three.

9

Activity cluster 3: Reporting – preparation of reports.

• Activity 3.1: Preparation of periodical reports.

• Activity 3.2: Preparation of end of project report.

Analysis and mobilisation Activity cluster 4: Development of a strong rationale - Identify all argument to stimulate the willingness for the enterprises and the farmers to adopt standards based on innovative solutions to overcome identified obstacles and bottlenecks and market requirements.

• Activity 4.1: Sum up the obstacles bottlenecks and innovative solution on the basis of the known facts and interviews and experiences of enterprises already certified for GLOBALGAP or in the process of certification.

• Activity 4.2: Continuous up-date of the rational as new information, knowledge and experience are acquired by the project, in particular with the implementation of value chain analysis and market survey.

• Activity 4.3: Assess the feasibility of combining other supports with the current programme, on the basis of interviews in pilot regions for implementing the IPM at farm level.

Activity cluster 5: Supply and demand analysis - market study identifying the requirements of foreign and national buyers in terms of certification of Serbian goods and a participatory value chains analysis in selected areas.

• Activity 5.1: Establish selection criteria for foreign and national buyers, in order to fit with the target export market of the companies associated in the project.

• Activity 5.2: Identify the countries in which the buyers will be interviewed (the foreseen countries are 1 or 2 EU countries, Russian Federation, Switzerland, and 1 or two CEFTA countries).

• Activity 5.3: Interviews with the foreign and national buyers (external consultants).

• Activity 5.4: Benchmarking of the standards required by buyers.

• Activity 5.5: Establish selection criteria for value chains with the Serbian authorities, companies and the local advisors (target audience for the participatory value chain analysis seminars).

• Activity 5.6: Organize participatory analysis seminars for the selected value chains and regions.

Business environment enhancement Activity cluster 6: Institutional capacity building and definition of a strategy for the adoption of quality standards scheme in Serbia – Enhance the capacity of public institutions (MAFWM, Accreditation Board of Serbia), to support farmers and companies to certify their products, and to retailers to define a strategy conducive for the adoption of the products certification, and support entities (extension services and consultants) to assist producers.

• Activity 6.1: Basic training/informative seminars on qualification schemes (GLOBALGAP, BRC, IFS, ISO, Russian standards GOST …) on conditions, benchmarking and buyers preferences. Target audience: State Institutions, retailers, and state advisors and private consultants.

10

Activity Cluster 7: Support to accreditation and the certification and control system – Support to the accreditation system and to private initiatives aiming at the establishment of local certification body.

• Activity 7.1: Support to the Accreditation Board of Serbia (ATS) in synergy with the component three of the Programme. This may include e.g. simulated peer evaluation, joint accreditation of a certification body by SAS (Swiss Accreditation Service) experts. Training of assessors for a better understanding of GLOBALGAP will be provided in synergy with activity 6.1, 9.2 and 9.3.

• Activity 7.2: Support for the establishment and training to potential local Certification and Control body (-ies) specialised in certification of food products. Certification EN 45011, quality management, traceability, products analysis, business plan and coaching etc.

Capacity building to producers and companies Activity cluster 8: Targeting and mobilisation of entities - Set up a core group of Serbian companies and identify their potential buyers and needs in terms of certification.

• Activity 8.1: Entities pre-identification - Identify the Serbian entities (producers groups and companies) that could have interest in the whole project activities. The project will consider producers groups (cooperatives), large faming operations and companies operating cold storage, packaging and processing facilities.

• Activity 8.2: Definition of entities selection criteria - Establish a set of criteria for the selection of entities. Among others, the criteria should take into consideration the capacity of the entities to implement quality standards schemes, the current business of companies (market linkages, production volumes), the economic impact (number of involved primary producers), the entities motivation and financial capacity. Geographic considerations will also be included for the sake of Project efficiency.

• Activity 8.3: Selection and mobilisation of entities – Selection based on interviews with pre-selected entities in order to assess their real interest to be partner in the project.

• Activity 8.4: Synthesis of the needs of national companies in terms of certification and fine-tuning of the objectives of the next steps of the project.

Activity cluster 9: Support to selected companies with high potential for quality scheme certification - Coaching of companies in their strategic choice and implementation of certification schemes

• Activity 9.1: Collect recommendations of experts in terms of certification schemes to adopt

• Activity 9.2: Preparation of guide to certification, to help producers to select appropriate certification schemes, and a guide to export based on the market survey and existing documentation (SIPPO and other SDC/SECO funded projects) to better know the conditions to fulfil by the producers.

• Activity 9.3: Organize 1-2 seminars on how to make strategic choices of certification schemes for an enterprise. Target audience: producers and companies, State institutions, private consultants and state advisory services.

• Activity 9.4: In-depth coaching of 15 companies on their strategic choice of certification schemes and implementation made by private consultants and maybe state advisory services under the supervision of SEEDEV.

11

• Activity 9.5: Training of the trainers on GLOBALGAP. Target audience: entities associated to the project, retailers, ATS, private consultants and state advisory services.

• Activity 9.6: Training of the trainers on other certification schemes. Target audience: entities associated to the project, retailers, ATS private consultants and state advisory services.

• Activity 9.7: Training on promotion and marketing issues. Target audience: entities associated to the project, private consultants and state advisory services.

Communication and visibility Activity cluster 10: Communication to business community - Communicate on GLOBALGAP and other quality insurance schemes, on the possibilities offered in terms of support, by the programme and by other initiatives (USAID for ex.).

• Activity 10.1: Set up a website with information on the different standards in Serbian language, for the companies, the advisors and all the stakeholders. A part of the website will be devoted to the presentation of the project and the training sessions, as a tool of communication about the project.

• Activity 10.2: Preparation of leaflet(s) and communication material presenting the project, specific issues, etc.

Activity cluster 11: Visibility for media – Communicate to media on Swiss Government efforts to assist business development in Serbia.

• Activity 11.1: PR campaigns to present the project results to wide-audience. Organisation of events associated to agriculture fair of Novi Sad, dissemination of press releases, organisation of field visits for Serbian and Swiss media correspondents.

3. Beneficiaries

a) Producers, farmers, consumers, exporters in Serbia, certification companies;

b) Ministry of Agriculture, Accreditation Board of Serbia

4. Organizational structure The project is organized according to the specific institutional context in both countries and aims at an efficient and transparent collaboration between partners. AGRIDEA will be the executing agency of the program. 5. Responsibilities of parties involved The organizational structure of the project will be adapted to a short-term development project (see Table 1). Thus, no special Project Management Unit will be created. A description of the responsibilities of each partner follows below, while specific responsibilities of other stakeholders and subcontractors will be defined in contracts, terms of reference and/or guidelines.

12

Table 1: Proposed organizational structure

SECO

SECO will be responsible for the overall coordination of the TCP III.

Governmental institutions in Serbia

For the time being, the following governmental institutions have been involved:

• Ministry of Agriculture, Forestry and Water Management (MAFWM);

• Accreditation Board of Serbia (ATS).

These institutions will have the following responsibilities within the project: • Project definition with AGRIDEA and SEEDEV (project content, outputs, activities); • Active support of the implementation of activities (in coordination with AGRIDEA,

SEEDEV and COOF); including provision of facilities for workshops, press conferences, etc. • Evaluation of activities, preparation of reports; • Coordination with other institutions within the Government of Serbia as well with other

donor programs related to certification of GlobalGAP and other quality control schemes, and private stakeholders;

• Regular information and coordination with stakeholders and relevant Serbian agencies.

Establishment of a GLOBALGAP Working Group

The Project intends to promote the establishment of a Working Group (WG) that should facilitate activities coordination and a strategy for the dissemination of GLOBALGAP and other quality standards by farming community. The working group should be composed by the Ministry of Agriculture, Forestry and Water Management (Chair), experts, the ATS and

Swiss State Secretariat of Economic Affairs (SECO) - Overall coordination of TCP

Subcontractors - GEM - International and national

Expert inputs

AGRIDEA Executing Agency

- Coordination project component TWO

- Implementation of activities - Technical input

SEEDEV (Local Implementing Partner)

- Implementation of activities

- Logistical Support - Monitoring

Governmental institutions in Serbia

- Ministry of Agriculture, Forestry and Water Management (MAFWM)

- Accreditation Board of Serbia

Private Project Stakeholders - Producers - Producer’s associations - Export markets - Consumers - Domestic Retail chains - Certification companies

Swiss Cooperation Office in Serbia

(COOF) - Provision of official

contacts in Serbia - Political monitoring - Program coordination

TCP Agreement

Supervision

Coordination

13

assisted by donor projects. Eventually, this working group could be transformed in the National Technical Working Group able to define Serbian interpretation of GLOBALGAP guidelines.

AGRIDEA

AGRIDEA as the executing agency will be responsible for the following tasks: • Project definition with SEEDEV and the respective governmental institutions in Serbia

(project content, feasible tasks, activities, budget items); • Project management in close collaboration with SEEDEV and the respective governmental

institutions in Serbia; • Monitoring of all project activities and the project’s impact; • Provision of contracts to international experts, establishment of contracts for subcontractors; • Regular Update of SECO about the project progress; • Organization of activities to be conducted out of Serbia.

Swiss Cooperation Office in Serbia (COOF)

The Swiss Cooperation Office in Serbia (COOF) will provide support for necessary official contacts, facilitate the policy dialogue, monitor the project in terms of political implications, and help ensure good governance.

SEEDEV (Local Implementing Partner)

SEEDEV, a consultancy company stationed in Belgrade, will be the main responsible agent for the day-to-day project management and the implementation of most activities. SEEDEV should provide country-specific expertise as well as logistical and organizational support and will also act as a facilitator among stakeholders. SEEDEV will be involved in value chain analysis, the targeting and coaching of entities to be associated to the project, the supervision of local consultants.

Subcontractors

For the implementation of specific activities and for particular expertise, AGRIDEA will rely on subcontractors such as international experts from academia or experts in the field of GLOBALGAP and of other certification schemes. The responsibilities of subcontractors shall be outlined in individual contracts and terms of reference (ToR). For the time being, the following potential subcontractors have been identified for further contact during the planning phase of the project: • GEM is a private consulting company with 30 years experience in agro food development

and perform on a regular basis markets studies, supply chain studies, qualitative and quantitative studies. GEM advice agricultural sector and agro food industry in their marketing strategies. GEM will be in charge of the methodology and coordination of market studies activities.

• SAS (Swiss Accreditation Service) as the Swiss organization in charge of examining and accrediting conformity assessment bodies (laboratories, inspection bodies and certification bodies) according to international standards, www.sas.ch.

14

6. Management rules The Project will be organized according to the following management rules: • Goods and services shall be procured according to business management rules and within

principles of free competition. The criteria to be assessed are price, quality, service and supply availability.

• Whenever feasible, AGRIDEA applies model contracts for external experts, where allowances and fees are specified. As adequate preparation is crucial for external experts, their mandate and tasks shall be defined in Terms of Reference (ToR). The ToR should include a brief description of the context of the activity, a detailed description of the expert input that is expected and a provisional program of the activity.

• All partners are obliged to immediately declare any potential conflict of interest. • Financial monitoring shall particularly focus on ensuring good governance. AGRIDEA conducts its cooperation projects in accordance with the following principles of international cooperation: • Integration and participation of all stakeholders in the partner countries, providing them

information about the program and its progress. • Strengthening of ownership in the partner countries . • Sustainability of the benefits of the project after its end. • Coordination with other donor countries in order to use synergies and to avoid duplication of

work, looking for win-win solutions in agreement with the stakeholders. • Alignment with national development strategies of partner countries. • Transparency among all stakeholders. • Accountability and constant monitoring of the implementation process. As a principle, the "train the trainers" approach will be applied in capacity-building activities. (i.e. the participants will be selected according to their capacity and motivation to disseminate the knowledge). An accurate gender balance between participants will be observed.

7. Project monitoring and milestones Details of each individual activity will be outlined in three Annual Work Plans (covering the years 2010, 2011, and 2012). As the Project will start in the fourth quarter of 2009, activities that take place till the end of the year will be outline in an Inception Phase Work Plan. This sequenced planning approach has the following advantages: Firstly, it allows react in a flexible manner to changes. Secondly, readjustments of activities and budget lines in order to include the experience gathered during previous activities into the planning of later implementation phases. The actual drafting of the Annual Work Plans falls into the responsibility of AGRIDEA and SEEDEV, however, the members of the Steering Committee as well as other stakeholders will be closely consulted during this process and should give their final approval. At the time of writing, the preliminary milestones for the Project shall be: Table 2: Milestones of the Swiss-Serbia GLOBALGAP Project 1. Project Approval by SECO Operations Committee 5 May 20092. Planning Mission 26-27 August 20093. Upgrade of the Decision Note to a Project Document 8 September 20094. Signature of the MoU between Switzerland and Serbia September 2009

15

5. Start implementation of activities 1 October 20096. Completion of all activities 31 October 20127. Formal closure of project after audit 31 November 20128. Evaluation of the project by an external expert 31 December 20129. Project end 31 December 2012 8. Budget

Project Phase Planning phase

1st Year

2nd Year 3rd Year Total in CHF

+ Planning 4’350 0 0 0 4’350

+ Management Cost SEEDEV 4’450 8’952 8’952 8’952 31’306

+ Management Cost AGRIDEA

8’400 0 0 0 0

+ Audit of accounts by Swiss Federal Finance Control

0 2‘500 2‘500 2‘500 7’500

+ Evaluation (by an independent IPRTA expert)

0 0 0 8’000 8’000

= Total management costs 17’200 51’156

+ Cost for the implementation of activities in project management

0 76’300

Costs for the implementation of activities in analysis and mobilisation

0 144’450

Costs for the implementation of activities in business environment enhancement

111’835

Costs for the implementation of activities in capacity building to producers and companies

162’356

+ + + +

Costs for the implementation of activities in communication

24’622

16

+

Contingency (7% of activities implementation cost, rounded)1

0 34’281

= Total Project Budget (CHF)

17‘200 605’000

1 The contingency of 7% is due to the risk of exchange rate fluctuations, inflation, uncertainty regarding different

budget items and implementation risks. There is no contingency for management costs.

Annex 2: “Assistance in the field of intellectual property rights (geographical indications and

TRIPS compliance)

1. Project Objectives

1.1. Objectives relating to the protection of GIs

The IPR project contains four main objectives in relating to the improvement of the GI protection system in Serbia:

• Objective 1: An efficient legal and institutional framework for the protection of GIs should be reinforced and adapted which is tailored to the needs of the Serbian socio-economic context, complies with EU regulations and is in conformity with WTO rules.

• Objective 2: Serbian producers should be enabled to prepare the application for the registration of their GIs. By the end of the project, a small number of GIs shall be ready to apply for their registration as a GI in line with the procedure outlined by the Serbian Government.

• Objective 3: Serbian producers of GI protected products should achieve the necessary capacity to organize their marketing accordingly and to effectively enforce their intellectual property rights at the national and international level.

• Objective 4: The administration should be enabled to deliver the services corresponding to an effective GI-protection system (e.g. administration of the register; examination of the applications, support for producers). In this respect, a certification body for GIs certification and control shall be established.

1.2. Objectives in relation to Serbia’s WTO accession and the improvement of TRIPS compliance

The Swiss-Serbian IPR project contains four main objectives in relation to Serbia’s WTO accession and the need for an improvement of its TRIPS compliance:

• Objective 5: Contribute to the development of a consistent IP Policy in Serbia through the provision of legislative and administrative diagnostic analysis.

• Objective 6: Contribute to the legislative and regulatory modernization, provide expert advice on how to comply with the obligations of the TRIPS agreement as well as support the intra-governmental cooperation in the area of IPR in order to prepare Serbia for the accession to and participation in TRIPS and other international IP conventions.

• Objective 7: Support the country’s negotiation capacity in the accession process to TRIPS and other major IP conventions.

• Objective 8: Capacity building & awareness raising on TRIPS and intellectual property protection in general in order to prepare Serbia for the accession to TRIPS and other international IP conventions.

In parallel to the project, a bilateral agreement on the mutual protection of GIs between Switzerland and Serbia will be negotiated by IPI based on the provisions stated in Article 4 in the Annex of the Agreement on Trade and Economic Cooperation between Switzerland and Serbia (in

18

force since 6 May 2003)2. The negotiation of said agreement is however not a part of the technical assistance activities referred to herein.

2. Project Activities

The various project activities are grouped in five GI-Activity Clusters and three TRIPS-Activity Clusters which correspond to a certain extent to the project objectives outlined above.

Details of individual project activities will be outlined in three Annual Work Plans (covering the years 2010, 2011, and 2012). Activities that take place in the year 2009 will be outlined in an Inception Phase Work Plan. This allows for a constant readjustment of upcoming activities according to the experience of previously implemented activities.

2.1. Activities in the field of Geographical indications (GIs) The discussions in the Working Group of GIs and subsequent bilateral meetings with interested Serbian Governmental authorities highlighted the necessity to develop a range of activities in the field of GIs around three main pillars:

1) Legal and institutional framework (see in particular Activity Clusters 1 and 2)

2) Control and certification of GIs (see in particular Activity Cluster 3)

3) Assistance to GI-producers (see in particular Activity Cluster 4)

Activity Cluster 1 (GIs): Capacity building/training for IPO/MAFWM and other relevant governmental authorities’ staff in the area of GIs

This activity cluster should transfer specific knowledge on GI protection to IPO/MAFWM and other relevant governmental authorities’ staff, in order to increase their efficiency and to strengthen the intra-governmental cooperation in this area.

• Activity 1.1: Organisation of a training workshop with national and international experts for participants (MAFWM, IPO and other relevant governmental authorities). The workshops and trainings will address in particular legal aspects in the area of GIs (e.g. presentation of different models adopted in European countries) and analysis of GI application (the work previously done by TAIEX shall first be taken into consideration to avoid any kind of duplication).

• Activity 1.2: Financing/Co-financing of a limited number of study visits, trainings abroad and conference participations by IPO/MAFWM and other relevant governmental authorities’ staff (selection based on the “train-the-trainers” approach). Examples of such events are the annual two-week GI-workshops organized by AGRIDEA or the annual IPR Technical Assistance Forum event.

Activity Cluster 2 (GIs): Support the improvement of the legal and overall institutional framework for GIs

• Activity 2.1: External advices on the current drafting of the GI legislation in order to improve TRIPS and EU compliance and to adapt it to the specific needs of the Serbian socio-economic context.

2 See AS 2003 1007; BBl2002 1474

19

• Activity 2.2: External advices and support for by-laws on GIs, including possible development of guidelines for GI-Registration in Serbia.

• Activity 2.3: External advices for further improvement of the legal and institutional framework, including possible amendments to the law on GIs.

Experts will contribute to the Working Group activities, in particular by attending the Working Group meetings (upon invitation) and by preparing material and presentations on key-issues: such as EU framework, certification and control, economic and rural development stakes of the GIs, products promotion, GI-logo, etc. Experts might come from Switzerland, the EU and Serbia (SEEDEV).

Activity Cluster 3 (GIs): Support in the establishment of an efficient control system This activity cluster shall provide assistance to improve accreditation, certification and control capacities in Serbia.

• Activity 3.1: Support for the development of accreditation scheme with a view to enabling certification of GIs products in Serbia. This may include e.g. simulated peer evaluation, joint accreditation of a certification body by SAS experts. Training of assessors for a better understanding of the GI concept will be provided in synergy with activities under Activity Cluster 1.

• Activity 3.2: Support for the establishment and training to potential Certification and Control organisation(s). EN 45011, traceability, products analysis, business plan, etc.

• Activity 3.3: Training for Serbian authorities in charge of control of GI-products (such as quality control, enforcement of GI-rights).

These activities will be executed in synergy with the GLOBALGAP project concerning capacities in the public authorities, regarding the certification schemes in the agro-food supply chains.

Activity Cluster 4 (GIs): Assist producers in protecting GI and developing marketing strategies for their product This activity cluster shall enable producers to draw clear benefits of GI protection through the better understanding of GI protection benefits, support of marketing strategies and through assistance in the GI registration process. Activities will mainly be conducted on the field in close collaboration with producers and groups of producers and synergy with Activity Cluster 1 based on the “train-the-trainers” approach. This Activity Cluster will support producers of 3 to 4 GIs. This may include products with good potential for registration as GIs and GIs that are currently registered but for which producers are currently not organised (namely for recently registered GIs or for GIs without authorised users registered under the old GI legal framework).

• Activity 4.1: Trainings of 2-3 governmental and/or private support organizations in assisting producer groups to protect GIs in a participatory manner. This training will encompass the basic concepts of GIs as well as mediation techniques to animate groups with common and divergent interest. SEEDEV will lead the training and coordinate inputs of international experts.

• Activity 4.2: Support to global product strategy for a certain number of products. This shall include support on technical aspects (Code of Practice, area of production), economic (Value chain analysis, stakeholders analysis), marketing (position of the products in target markets), control and certification (definition of internal procedures, manuals of control).

20

These tasks would be implemented mainly by the trained support organisations and local animators, with a coaching of SEEDEV. Project matching funds could finance the inputs of support organization and local animators.

• Activity 4.3: Matching Funds to support selected producers in protecting a GI and developing a GI marketing strategy for their product.

Activity Cluster 5 (GIs): Increase general public awareness on GIs (among producers, domestic consumers, and export markets) This Activity Cluster, which was not identified by Serbian stakeholders as a principal pillar of the assistance in the field of GIs, may support the development and implementation of a concept on how to increase public awareness on GIs among domestic consumers and on the main export of Serbian products, as well as targeted activities aimed at increasing general public awareness on GIs. Synergy with Activity Cluster 2 will be favoured.

• Activity 5.1: Support the development of an info brochure on GI protection in Serbia.

• Activity 5.2: Support for the development of a strategy for GI visibility for GIs Communication (such as creation and promotion of a Serbian GI-logo).

2.2. Activities related to the improvement of compliance with the WTO/TRIPS Agreement

Activity Cluster 6 (TRIPS): Stocktaking of the current legal and institutional framework through diagnostic studies and support in the development of a coherent national IP policy that is in compliance with TRIPS and other major IP conventions

• Activity 6.1: Review of all undertaken diagnostics of legal provisions relevant for the protection and enforcement of IPRs in Serbia by an international expert.

• Activity 6.2: Presentation of the diagnostic study’s findings and formulation of recommendations in a workshop with all involved Serbian governmental institutions (see results of the TAIEX workshop in 2008).

• Activity 6.3: Sequence of technical assistance missions by international IPR experts in order to provide further assistance in modernizing the existing legal and institutional framework.

The provision of technical assistance in this area should be organized in close cooperation with or outsourced to organizations experts in the field of IPR technical assistance (e.g. IPRTA Forum, Saana Consulting, World Trade Institute in Berne, WIPO Academy).

Activity Cluster 7 (TRIPS): General trainings for TRIPS legal understanding Activities in this cluster will include on-going review of Serbia’s evolving TRIPS Action Plan, required additional technical assistance and the timetable for implementation of the TRIPS Agreement in Serbia. A precise final stocktaking of the specific needs in this field shall be done before this activity cluster starts. • Activity 7.1: Trainings of IPO. Such training activities should be organized in close

cooperation with or outsourced to organizations experts in the field of IPR technical assistance (e.g. IPRTA Forum, Saana Consulting, World Trade Institute in Berne, WIPO academy). Training costs budgeted are calculated according to experiences drawn from previous projects.

21

Activity Cluster 8 (TRIPS): Training, capacity building & IPR awareness raising In support of activities identified under Activity Clusters 6 and 7 above, activities will be undertaken to raise public awareness and understanding of IP and to provide training and IP skills development for key stakeholders. This includes government officials, private sector creators, innovators and entrepreneurs, the legal practitioner community, the judiciary and the public. Training and awareness raising activities have to be based on the demand in the country and on diagnostics. The Market Inspection Office representatives shall be included also in those activities as the MoERD suggested it. Activities will be based on needs assessments tailored for stakeholders and will include seminars, workshops, foreign study tours and specifically tailored training programs for policy makers, enforcement authorities (e.g. customs and police), the academic community, R&D organizations and entrepreneurs (e.g. exporters).

• Activity 8.1: Information and networking event for representatives of governmental branches and private sectors potentially affected by TRIPS (including press conference).

• Activity 8.2: Funding/Co-funding of a limited number of study visits, trainings abroad and conference participations by IPO staff and WTO Accession Team (selection based on the “train-the-trainers” approach). Examples of such events are weekly courses on TRIPS/WTO at the World Trade Institute in Berne, WTO or WIPO trainings in Geneva, or the annual IPRTA Forum event.

3. Project Beneficiaries

3.1. Direct Beneficiaries The direct beneficiaries of the project will firstly be all Serbian Ministries and governmental offices involved in the implementation of the projects (in particular IPO and MAFWM). Secondly, producers of the targeted GIs and their associations will directly benefit from the support by the project. Thirdly, public and private support organisations (NGOs) that are involved in supporting private sector stakeholders in the field of GIs (this would also include for example the Institute for Food Technology (FINS) or the Ibar Development Agency (IDA)). All the beneficiaries should, as much as possible, be involved in the planning progress of the project in order to ensure that their needs are addressed.

3.2. Indirect Beneficiaries As indirect beneficiaries, the future right holders of GIs in the Serbian private sector are the primary concern of the project. With the prospect of the better positioning of Serbian GI-products on the market, producers (farmers) could increase revenues from higher sales prices. This particularly the case in the export industry. As a consequence, the whole Serbian economy and ultimately the Serbian people should benefit from the project. The registration of GIs should also help to preserve Serbian products from extinction, which of course would need side-measures. Swiss and Serbian consumers are also indirect beneficiaries, as the consumer protection would be enhanced through an effective protection of GI and specifically through a bilateral GI-Agreement between Switzerland and Serbia3.

3 The bilateral GI-Agreement is not part of the cooperation project, but will most likely be negotiated in parallel.

22

4. Organizational Structure of the Project

The project is organized according to the specific institutional context in both countries and aims at an efficient and transparent collaboration between partners. The Swiss Federal Institute of Intellectual Property (IPI) in Berne shall be the executing agency as IPI is the main Swiss centre of competence in the field of intellectual property and has already conducted similar technical assistance projects in the area of GIs and IPR enforcement (e.g. in Vietnam, Kenya, Jamaica, and Azerbaijan)..

Responsibilities of parties involved The organizational structure of the project will be adapted to a short-term development project (see Table 1). Thus, no special Project Management Unit will be created. A description of the responsibilities of each partner follows below, while specific responsibilities of other stakeholders and subcontractors will be defined in contracts, terms of reference and/or guidelines. Table 1:Organizational structure

Coordination Supervision

Members of the Project Steering Committee (only IPO and MAFWM on the Serbian part) SECO SECO will be responsible for the overall coordination of the TCP III. Governmental institutions in Serbia For the time being, the following governmental institutions in Serbia are parties to the MoU and therefore considered the main partners from the Serbian side:

• IPO

• MAFWM

Swiss State Secretariat of Economic Affairs (SECO) - Overall coordination of TCP

Subcontractors - Implementation of certain tasks - Expert input

Swiss Federal Institute of Intellectual Property (IPI)

Executing Agency - Coordination project component

THREE - Technical input

SEEDEV (Local Implementing Partner)

- Implementation of activities

- Logistical Support - Monitoring

Governmental institutions in Serbia

- Intellectual Property Office (IPO) - Ministry of Agriculture, Forestry

and Water Management (MAFWM) - The Ministry of Economic

Development - WTO Delegation/Accession Team - Accreditation Board of Serbia

Private Project Stakeholder - Producers - Producer’s associations - Export markets - Consumers

Swiss Cooperation Office in Serbia

(COOF) - Provision of official

contacts in Serbia - Political monitoring

TCP Agreement, MoU

23

In addition, the following governmental institutions in Serbia are involved as stakeholders in the implementation of the project.

• Ministry of Economy and Regional Development (MoERD)

• WTO Delegation/Accession Team

• Accreditation Board of Serbia (ATS)

The above mentioned Serbian institutions will have the following responsibilities: • Project definition with IPI and the Local Implementing Partner (content, outputs, activities); • Active support of the implementation of activities (in coordination with IPI, the Local

Implementing Partner and the Swiss Cooperation Office); including provision of facilities for workshops, press conferences, etc.;

• Evaluation of activities, preparation of reports; • Coordination with other governmental institutions as well as private stakeholders in order to

support the project implementation; • Serve as a contact point and competence centre within the Serbian Government, for the Serbian

stakeholders and for the public regarding the project; • Regular information and coordination with stakeholders and relevant Serbian agencies; • Invitation of media representatives to relevant events, reporting on the media contributions to

IPI.

Establishment of a GI Working Group In the area of GIs, the establishment of a working group in which all the relevant governmental institutions are represented, is currently underway in Serbia. This Working Group has been proposed by the Serbian partner institutions and its exact mandate and structure is still to be determined. Nevertheless, such a forum and coordinating body should be strongly supported by the project as it facilitates both the planning and the implementation process, reduces information asymmetries and political frictions among stakeholders. During the short IPI preparation mission, all governmental institutions emphasized the importance of such an intra-governmental coordination body and confirmed their support and willingness to participate.

IPI

IPI as the executing agency will be responsible for the following tasks: • Project definition with SEEDEV and the respective governmental institutions in Serbia (project

content, feasible tasks, activities, budget items); • Project management in close collaboration with SEEDEV and the respective governmental

institutions in Serbia; • Monitoring of all project activities and the project’s impact; • Provision of contacts to international experts, establishment of contracts for sub-contractors; • Regular Update of SECO about the project progress; • Organization of activities to be conducted in Switzerland.

Swiss Cooperation Office in Serbia (COOF)

The Swiss Cooperation Office in Serbia (COOF) will provide support for necessary official contacts, facilitate the policy dialogue, monitor the project in terms of political implications, and help ensure good governance.

24

SEEDEV (Local Implementing Partner)

SEEDEV, a consultancy company stationed in Belgrade, will be the main responsible agent for the day-to-day project management and the implementation of most activities. SEEDEV should provide country-specific expertise as well logistical support and will also act as a facilitator within the Working Group on GIs, train state and private (NGO) organisations in servicing producer groups for GI protection, and coach these organisations in their support activities. SEEDEV will also support IPI in the drafting of the Annual Work Plans, the annual reports and the necessary financial statements.

Subcontractors

For the implementation of specific activities and for particular expertise, IPI will rely on subcontractors such as international experts from academia or experts in the field of IPR technical assistance. The responsibilities of subcontractors shall be outlined in individual contracts and terms of reference (ToR). For the time being, the following potential subcontractors have been identified for further contact during the planning phase of the project: • AGRIDEA (Swiss Association for the Development of Agriculture and Rural Areas, is already

very active in the area of GIs in Serbia), www.agridea.ch; • IPRTA Forum & Saana Consulting, www.iprtaforum.org/www.saana.com; • SAS (Swiss Accreditation Service) as the Swiss organization in charge of examining and

accrediting conformity assessment bodies (laboratories, inspection bodies and certification bodies) according to international standards, www.sas.ch;

• World Trade Institute, University of Berne, www.wti.org.

5. Management rules Based on the experience drawn from other IPR technical assistance programmes, the IPR project will be organized according to the following management rules: • Goods and services shall be procured according to business management rules and within

principles of free competition. The criteria to be assessed are price, quality, service and supply availability.

• Whenever feasible, IPI applies model contracts for external experts, where allowances and fees are specified. As adequate preparation is crucial for external experts, their mandate and tasks shall be defined in Terms of Reference (TOR). The TOR should include a brief description of the context of the activity, a detailed description of the expert input that is expected and a provisional programme of the activity.

• All partners are obliged to immediately declare any potential conflict of interest. • Financial monitoring shall particularly focus on ensuring good governance. IPI conducts its cooperation projects in accordance with the following principles of international cooperation: • Integration and participation of all stakeholders. • Strengthening of ownership in the partner countries. • Sustainability of projects.

25

• Coordination with other donor countries in order to use synergies and to avoid duplication of work.

• Alignment with national development strategies of partner countries. • Transparency among all stakeholders. • Accountability and constant monitoring of the implementation process. As a principle, the "train the trainers" approach will be applied in capacity-building activities. (i.e. the participants will be selected according to their capacity and motivation to disseminate the knowledge). An accurate gender balance between participants will be observed. The performance of participants will be monitored and evaluated after each course.

Project Sequencing Details of each individual project activity will be outlined in three Annual Work Plans (covering the years 2010, 2011, and 2012). As the project will start in the fourth quarter of 2009, activities that take place till the end of the year will be outline in a Inception Phase Work Plan. This sequenced planning approach has the following advantages: Firstly, it allows react in a flexible manner to changes (see chapter on risks and opportunities). Secondly, readjustments of activities and budget lines in order to include the experience gathered during previous activities into the planning of later implementation phases. The actual drafting of the Annual Work Plans falls into the responsibility of IPI and SEEDEV, however, the members of the Steering Committee as well as other stakeholders will be closely consulted during this process and should give their final approval.

6. Milestones and next steps

At the time of writing, the preliminary milestones for the Swiss-Serbian IPR Project shall be: Table 2: Milestones of the Swiss-Serbian IPR Project 1. Project Approval by SECO Operations Committee 5 May 20092. Planning Mission 28 June 20093. Upgrade of the Decision Note to a Project Document 25 September 20094. Signature of the MoU between Switzerland and Serbia October 20095. Start implementation of activities 1 November 20097. Completion of all activities 31 October 20129. Formal closure of project after audit 31 November 201210. Evaluation of the project by an external expert 31 December 201211. Project end 31 December 2012

7. Budget

Project Phase Planning phase

1st Year 2nd Year 3rd Year Total in CHF

26

+ Planning 8’000 0 0 0 8’000

+ Management Cost SEEDEV - Activity coordination - Project administration - Logistic support

10‘000200050003000

19‘0005,000

12,0002000

19‘0005,000

12,0002000

12‘000 5,000 6,000 1,000

60’00017,00035,000

8,000

+ Management Cost IPI 5‘000 36‘000 36‘000 36 ‘000 113’000

+ IPI Cost for Participation in Steering Committee & Annual Missions

0 6’000 6’000 5’500 17’500

+ Audit of accounts by Swiss Federal Finance Control

0 2‘500 2‘500 2‘500 7’500

+ Evaluation (by an independent IPRTA expert)

0 0 0 8‘000 8’000

= Total management costs 23‘000 63‘500 63‘500 64’000 214’000

Costs for the implementation of activities in the area of GIs (see activities budget outlined below)

0 130‘000 130‘000 119’800 379’800+ +

Costs for the implementation of activities in the area of TRIPS (roughly estimated)

0 80’000 53’700 0 133’500

+ Contingency (10% of activities implementation cost, rounded)4

0 21’000 18’000 12’000 51’000

= Total Project Budget (CHF) 23‘000 294’500 265’200 195’800 778’300

4 The contingency of 10% is due to the risk of exchange rate fluctuations, inflation, uncertainty regarding different

budget items and implementation risks. There is no contingency for management costs.