Additional Protocol To the Agreement establishing an Association between the European Economic Community and the Republic of Cyprus
Date: 1999-05-20
Institutions: Cyprus, European Community
Subjects: Cyprus, EU programme, association agreement (EU), financing of the EU budget, protocol to an agreement, research and development, research policy, research programme, technological change

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To the Agreement establishing an Association between the European Economic Community and
the Republic of Cyprus

ADDITIONAL PROTOCOL

THE EUROPEAN COMMUNITY, hereinafter referred to as ‘the Community',

of the one part, and

THE REPUBLIC OF CYPRUS, hereinafter referred to as ‘Cyprus',

of the other part,

WHEREAS the Agreement establishing an association between the European Economic Community and the Republic of
Cyprus, hereinafter referred to as the ‘Association Agreement', has entered into force on 1 June 1973;

WHEREAS a Protocol on financial and technical co-operation between the Community, of the one part, and Cyprus, of
the other part was signed on 30 October 1995;

WHEREAS the objectives of the Protocol referred to in Article 1 thereof includes the provision that Cyprus is to be
facilitated in its transition efforts with a view to accession to the European Union;

WHEREAS Article 3(2) of the Protocol provides that priority shall be given to projects and operations having inter alia the
aim of promoting participation by Cyprus in Community framework programmes and in the field of science and
technology, the creation or strengthening of links between training and research establishments in Cyprus and the
European Union;

WHEREAS in the Resolution of the Association Council set up by the Association Agreement dated 12th June 1995, it
was reiterated that in the context of the preparation of Cyprus for entry into the European Union a specific strategy will
comprise provisions and arrangements concerning inter alia participation by Cyprus in Community programmes open to
the Member States and/or partner countries which have applied for accession;

WHEREAS the European Council at its meeting in Luxembourg on 12 and 13 December 1997 calls for the opening of
certain Community programmes (such as in the field of research) to the candidate countries, as a way of familiarising
themselves with the policies and working methods of the Union, each candidate country being expected to make a
steadily increasing financial contribution of its own;

WHEREAS the conclusions of the aforementioned Council also call for the participation of the candidate countries, as
observers and for the points which concern them, in the committees assisting the Commission in the implementation of
the programmes to which they contribute financially;

WHEREAS, by Decision No 182/1999/EC, the European Parliament and the Council of the European Union adopted the
fifth framework programme of the European Community for research and technological development and demonstration
activities (1998 to 2002), hereinafter called ‘the fifth framework programme';

WHEREAS; without prejudice to the relevant provisions of the Treaty instituting the European Community, this Protocol
and any activities entered into under it will in no way affect the powers vested in the Member States to undertake bilateral
activities with Cyprus in the field of science, technology, research and development, and to conclude, where appropriate,
agreements to that end,

HAVE AGREED AS FOLLOWS:

Article 1

Article 2

Research entities established in Cyprus,

1.
in accordance
with the laws of Cyprus, may participate in all the specific
programmes of the fifth framework programme. Cypriot scien-
tists or research entities may participate in the activities of the
Joint Research Centre, to the extent that such activities are not
covered by the first sentence.

2.
Research entities established in the Community may
participate in research programmes and projects in Cyprus in
themes equivalent to those of the programmes of the fifth
framework programme.

3.
‘Research entities' as referred to in this Protocol, shall
include inter alia universities, organisations engaged in research
activities, industrial companies, including small and medium-
sized enterprises, or natural persons.

Cooperation may take the following forms:

1. Participation of research entities established in Cyprus in
the implementation of all specific programmes adopted
under the fifth framework programme, in accordance with
the terms and conditions laid down in the ‘rules for the
participation of undertakings, research centres and univer-
sities and for the dissemination of research results for the
implementation of the fifth framework programme of the
European Community (1998-2002)'.

2. Financial contribution by Cyprus to the budgets of the
programmes adopted for the implementation of the fifth
framework programme on the basis of the ratio of the gross
domestic product (GDP) of Cyprus to the sum of the GDPs
of the Member States of the European Union and that of
Cyprus.

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3. Participation of

research entities

established in the
Community in Cypriot research projects and rights to their
results, in accordance with the laws of Cyprus in every case,
and shall require the joint participation of at least one
Cypriot research entity. Research entities established in the
research projects
Community participating in Cypriot
within research and development programmes shall cover
their own costs, including their relative share of the project’s
general management and administrative costs.

4. Timely provision of

information concerning the imple-
mentation of RTD programmes
and the
Community, and concerning the results of work undertaken
within the framework of cooperation.

in Cyprus

5. Cooperation may be adapted and developed at any time by

mutual agreement between the Parties.

Article 3

1.
Research entities established in Cyprus participating in
Community research programmes, shall, as regards ownership,
exploitation and dissemination of information and intellectual
property arising from such participation, have the same rights
and obligations as those of research entities established in the
Community, subject to the provisions of Annex A.

2.
Research entities established in the Community, taking
part in Cypriot research projects within research and develop-
ment programmes, shall, as regards ownership, exploitation
information and intellectual property
and dissemination of
arising from such participation, have the same rights and obli-
gations as those of Cypriot research entities in the project in
question.

amount available each year in the general budget of the Euro-
pean Communities for commitment appropriations to meet the
Commission’s financial obligations stemming from work to be
carried out in the forms necessary for the implementation,
management and operation of these programmes.

2.
The proportionality factor governing the contribution of
Cyprus shall be obtained by establishing the ratio between the
GDP of Cyprus, at market prices, and the sum of the GDPs, at
market prices, of the Member States of the European Union
and Cyprus. This ratio shall be calculated on the basis of the
latest statistical data from the Statistical Office of the European
Communities (Eurostat) pertaining on the same year, available
at the time of publication of the preliminary draft budget of the
European Communities.

3.
In order to facilitate its participation in the specific
programmes, the contribution of Cyprus will be implemented
as follows:

1999: contribution according to the proportionality factor
fixed in accordance with paragraph 2, multiplied by
0,4.

2000: contribution according to the proportionality factor
fixed in accordance with paragraph 2, multiplied by
0,6.

2001: contribution according to the proportionality factor
fixed in accordance with paragraph 2, multiplied by
0,8.

2002: contribution according to the proportionality factor

fixed in accordance with paragraph 2.

Article 4

4.
The rules for financial participation by the Community
are set out in Annex IV of Decision No 182/1999/EC of the
European Parliament and of the Council.

A joint committee shall be established under this Protocol, to
be called ‘EC-Cyprus Research Committee', whose functions
shall

include:

— reviewing, evaluating and discussing measures to ensure the

implementation of this Protocol,

— examining any measure of a nature to improve and develop

cooperation.

The committee, which shall be composed of representatives
of the Commission and of Cyprus, shall adopt its rules of
procedure.

It shall meet at the request of any of the Parties and at least
once a year.

The rules governing the financial contribution of Cyprus

5.
are set out in Annex B.

Article 6

1. Without prejudice to the provisions of Article 3, research
entities established in Cyprus participating in the fifth frame-
work programme shall have the same contractual rights and
obligations as entities established in the Community, taking
the Community and
into account
Cyprus.

interests of

the mutual

Article 5

1.
The financial contribution of Cyprus deriving from
participation in the implementation of the specific programmes
shall be established in proportion to, and in addition to, the

2.
For Cypriot research entities, the terms and conditions
applicable for the submission and evaluation of proposals and
those for the granting and conclusion of contracts under
Community programmes shall be the same as those applicable
for contracts concluded under the same programmes with
research entities in the Community, taking into account the
mutual

interests of the Community and Cyprus.

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Cypriot experts shall be taken into consideration, along-
3.
side Community experts,
in the selection of evaluators or
experts under the Community’s RTD programmes and as
members of the advisory groups and other consultative bodies
which assist the Commission in the implementation of the fifth
framework programme.

4. Without prejudice to the provisions of Article 3, research
entities established in the Community participating in research
projects within research and development programmes shall
have the same contractual rights and obligations as Cypriot
entities,
the
Community and Cyprus.

taking into account

interests of

the mutual

Financial

contractual

Regulations,

5.
A Cypriot research entity may be coordinator of a project
under the same terms and conditions applicable to entities
established in the Community. In conformity with the Commu-
nity’s
arrangements
concluded with, or by, Cypriot research entities shall provide
for controls and audits to be carried out by, or under the
authority of, the Commission and the Court of Auditors. Finan-
cial audits may be carried out with the purpose of controlling
such entities’ income and expenditures, related to the contrac-
tual obligations towards the Community. In a spirit of coopera-
tion and mutual interest, the relevant Cypriot authorities shall
provide any reasonable and feasible assistance as may be neces-
sary or helpful under the circumstances to perform such
controls and audits.

6.
For research entities from the Community, the terms and
conditions applicable for the submission and evaluation of
the granting and conclusion of
proposals and those for
contracts for projects within Cypriot programmes shall be
equivalent to those applicable for contracts concluded under
the same research and development programmes with research
entities in Cyprus, taking into account the mutual interests of
the Community and Cyprus.

Article 8

Cypriot

representatives will,

1.
the points which
concerns them, participate as observers in the programme
committees of the fifth framework programme. These commit-
tees shall moreover meet without
the presence of Cypriot
representatives at the time of voting. Cyprus will be informed.

for

2.
Participation as referred to in paragraph 1 shall take the
same form, including procedures for receipt of information and
documentation, as that applicable to participants from Member
States.

Article 9

This Protocol is hereby concluded for the duration of the

1.
fifth framework programme.

2.
Subject to paragraph 1, either of the Parties may termi-
nate this Protocol at any time upon twelve months’ notice in
writing. Projects and activities in progress at
the time of
termination and/or expiry of this Protocol shall continue until
their completion under the conditions laid down in this
Protocol.

Should the Community decide to revise one or more
3.
Community programmes,
this Protocol may be terminated
under mutually agreed conditions. Cyprus shall be notified of
the exact content of the revised programs within one week of
their adoption by the Community. The Parties shall notify each
other, within one month after the adoption of the Community
decision, of any intention to terminate this Protocol.

4. Where the Community adopts a new multi-annual frame-
work programme for research, technological development and
demonstration activities, this Protocol may be renegotiated or
renewed under mutually agreed conditions.

Article 7

Article 10

1.
Each Party undertakes, in accordance with its own rules
and regulations, to facilitate the movement and residence of
and in the
research workers participating,
Community, in the activities covered by this Protocol and to
facilitate cross border movement of goods intended for use in
such activities.

in Cyprus

This Protocol shall enter into force on the date on which the
Parties have notified each other of
the
procedures necessary for that purpose.

the completion of

Article 11

2.
Cooperation under this Protocol shall be exempt from
Cypriot indirect taxes, customs duties, prohibitions and restric-
tions on imports and exports in respect of goods and services
intended for use under such cooperation.

including Annexes A and B thereto form an
This Protocol
integral part of
the Agreement establishing an Association
between the European Economic Community and the Republic
of Cyprus.

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This Protocol shall be drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Italian,
Portuguese, Spanish, Swedish and Greek languages, each of these texts being equally authentic.

Article 12

Done at Brussels, 20 May 1999.

For the European Community

For the Republic of Cyprus

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ANNEX A

PRINCIPLES ON THE ALLOCATION OF INTELLECTUAL PROPERTY RIGHTS

Rights to intellectual property (IP) created or furnished under the Protocol shall be allocated as provided in this Annex.

I. Application

This Annex is applicable to joint research undertaken pursuant to this Protocol, except as otherwise specifically agreed
by the Parties.

II. Ownership, allocation and exercise of rights

1. For purposes of this Protocol ‘intellectual property' shall have the meaning given in Article 2 of the Convention

establishing the World Intellectual Property Organisation, done at Stockholm on 14 July 1967.

2. This Annex deals with the allocation of rights, interests and royalties of the Parties and their Participants. Each
Party and its participants shall ensure that the other Party and its participants may obtain the rights to IP
allocated to it in accordance with this Annex. This Annex does not otherwise alter or prejudice the allocation of
rights, interests and royalties between a Party and its nationals or participants, which shall be determined by the
laws and practices applicable to each party.

3. The following principles shall apply and be provided for in the contractual arrangements:

(a) Adequate protection of IP. The Parties, their agencies and/or their participants, as appropriate, shall ensure
that they notify one another within a reasonable time of the creation of any IP arising under this Protocol or
implementing arrangements and that they seek protection for such intellectual property in a timely fashion.

(b) Taking account of the contributions of the Parties or their participants in determining the rights and interests

of the Parties and participants.

(c) Effective exploitation of results.

(d) Non-discriminatory treatment of participants from the other party as compared with the treatment given to

its own participants.

(e) Protection of business-confidential

information.

4. The participants shall jointly develop a Technology Management Plan (TMP) in respect of the ownership and use,
including publication, of information and IP to be created in the course of joint research. The indicative features
of a TMP are contained in the Appendix to this Protocol. The TMP shall be approved by the responsible funding
agency or department of the Party involved in financing the research, before the conclusion of the specific
research and development cooperation contract to which it is attached. The TMPs shall be developed taking into
account the aims of the joint research, the relative financial or other contributions of the Parties or participants,
the advantages and disadvantages of licensing by territory or for fields of use, the transfer of export-controlled
data, goods or services, requirements imposed by the applicable laws including those of the Parties concerning IP
rights and other factors deemed appropriate by the participants. The rights and obligations concerning the
research generated by visiting researchers in respect of IP shall also be dealt with in the TMPs.

5. Subject to the specific provisions of the Parties concerning IP rights, information or IP created in the course of
joint research and not addressed in the TMP shall be allocated, with the approval of the Parties, according to the
principles set out in the TMP. In case of disagreement, such information or IP shall be owned jointly by all the
participants involved in the joint research from which the information or IP results. Each participant to whom
this provision applies shall have the right to use such information or IP for his own commercial exploitation with
no geographical

limitation.

6. Each Party shall ensure that the other Party and its participants may have the rights to IP allocated to them in

accordance with these principles.

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7. While maintaining the conditions of competition in areas affected by the Protocol, each Party shall endeavour to
ensure that rights acquired pursuant to this Protocol and arrangements made under it are exercised in such a way
as to encourage, in particular, (i) the dissemination and use of information created, disclosed or otherwise made
available, under the Protocol, and (ii) the adoption and implementation of international standards.

8. Termination or expiry of this Protocol shall not affect rights or obligations under this Annex.

III. International conventions

IP belonging to the Parties or to their participants shall be accorded treatment consistent with the relevant
international Conventions that are applicable to the Parties including the TRIPS Agreement (Agreement on Trade
Related Aspects of Intellectual Property Rights administered by the World Trade Organisation) as well as the Berne
Convention (Paris Act 1971 ) and the Paris Convention (Stockholm Act 1967).

IV. Scientific literary works

Without prejudice to Section V, and unless otherwise agreed in the TMP, publication of results of research shall be
made jointly by the parties or participants to that joint research. Subject to the foregoing general rule, the following
procedures shall apply:

1. In the case of publication by a Party or public bodies of that Party of scientific and technical journals, articles,
reports, books, including video and software arising from joint research pursuant to this Protocol, the other Party
shall be entitled to a world-wide, non-exclusive, irrevocable, royalty-free licence to translate, reproduce, adapt,
transmit and publicly distribute such works.

2. The Parties shall ensure that literary works of a scientific character arising from joint research pursuant to this

Protocol and published by independent publishers are disseminated as widely as possible.

3. All copies of a copyright work to be publicly distributed and prepared under this provision shall indicate the
names of the author(s) of the work unless an author explicitly declines to be named. They shall also bear a clearly
visible acknowledgement of the cooperative support of the Parties.

V. Undisclosed Information

A. Documentary undisclosed information

1. Each Party, its agencies or its participants, as appropriate, shall identify at the earliest possible moment and
preferably in the TMP the information that they wish to remain undisclosed, taking into account, inter alia, the
following criteria:

(a) confidentiality of the information in the sense that it is not, as a body or in the precise configuration or
assembly of its components, generally known among or readily accessible by lawful means to experts in
the field;

(b) the actual or potential commercial value of the information by virtue of its confidentiality;

(c) previous protection of the information in the sense that it has been subject to steps that were reasonable

under the circumstances by the person lawfully in control, to maintain its confidentiality.

The Parties, their agencies and their participants, as appropriate, may in certain cases agree that, unless
otherwise indicated, parts or all of the information provided, exchanged or created in the course of joint
research may not be disclosed.

2. Each Party shall ensure that it and its participants clearly identify undisclosed information, for example by
means of an appropriate marking or restrictive legend. This also applies to any reproduction of the said
information,

in whole or in part.

A Party and a participant receiving undisclosed information shall respect the privileged nature thereof. Such
respect shall automatically terminate when this information is disclosed by the owner and enters the public
domain.

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3. Undisclosed information communicated under this Protocol may be disseminated by the receiving Party or its
organisation to persons within or employed by the receiving Party or organisation authorised for the specific
purposes of the joint research under way, provided that any undisclosed information so disseminated is
pursuant to an agreement of confidentiality and readily recognisable as such, as set out above.

4. With the prior written consent of the Party providing undisclosed information, the receiving Party may
disseminate such undisclosed information more widely than otherwise permitted in paragraph 3 above. The
Parties shall cooperate in developing procedures for requesting and obtaining prior written consent for such
wider dissemination, and each Party will grant such approval to the extent permitted by its domestic policies,
regulations and laws.

B. Non-documentary undisclosed information

Non-documentary undisclosed or other confidential
information provided in seminars and other meetings
arranged under this Protocol, or information arising from the attachment of staff, use of facilities, or joint
projects, shall be treated by the Parties or their participants according to the principles specified for documentary
information in the Protocol; this is on the understanding, however, that the recipient of such undisclosed or other
confidential or privileged information was made aware of the confidential character of the information communi-
cated at the time such communication was made.

C. Control

Each Party shall endeavour to ensure that undisclosed information received by it under this Protocol is controlled
as provided herein. If one of the Parties becomes aware that it will be, or may be reasonably expected to become,
unable to meet the non-dissemination provisions of sections A and B, it shall immediately inform the other Party.
The Parties shall thereafter consult to define an appropriate course of action.

Appendix to ANNEX A

Indicative features of a TMP

The TMP is a specific agreement to be concluded between the participants on the implementation of joint research and
the respective rights and obligations of the participants.

With respect to IP, the TMP will normally deal with, among other things, ownership, protection, user rights for research
and development purposes, exploitation and dissemination, including arrangements for joint publication, the rights and
obligations of visiting researchers and dispute settlement procedures. The TMP may also deal with foreground and
background information,

licensing and deliverables.

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RULES GOVERNING THE FINANCIAL CONTRIBUTION OF CYPRUS REFERRED TO IN ARTICLE 5 OF THIS
PROTOCOL

ANNEX B

1. Determination of the financial participation

1.1. The Commission of the European Communities shall communicate to Cyprus, and shall inform the sub-committee
referred to in Article 4 of this Protocol of such communication, as soon as possible, and at the latest on 1
September, of each financial year the following information, together with relevant background material:

(a) the amounts in commitment appropriations, in the statement of expenditure of the preliminary draft budget of

the European Communities corresponding to the fifth framework programme;

(b) the estimated amount of the contributions derived from the preliminary draft budget, corresponding to the

participation of Cyprus in the fifth framework programme.

Nonetheless,
ponding indicative figures at the latest on 30 May of each year.

in order to facilitate internal budgetary procedures, the Commission services shall provide corres-

1.2. Once the general budget has been finally adopted the Commission shall communicate to Cyprus in the statement of

expenditure corresponding to Cyprus’s participation, the amounts referred to in paragraph 1.1.

2.

Payment procedures

2.1. The Commission shall issue, at the latest on 1 January and 15 June of each financial year, a call for funds to Cyprus
corresponding to its contribution under this Protocol. These calls for funds shall provide, respectively, for the
payment.

— of six-twelfths of the contribution of Cyprus not later than 20 February,

— and six-twelfths of its contribution not later than 15 July.

However, the six-twelfths, to be paid not later than 20 February shall be calculated on the basis of the amount set
out in the statement of revenue of the preliminary draft budget: the regularisation of the amount thus paid shall
occur with the payment of the six-twelfths not later than 15 July.

2.2. For the first year of implementation of this Protocol, the Commission shall issue a first call for funds within 30 days
of its coming into effect. Should this call be issued after 15 June, it shall provide for the payment of twelve/twelfths
of the contribution of Cyprus within 30 days, calculated on the basis of the amount set out in the statement of
revenue of the budget.

2.3. The contribution of Cyprus shall be expressed and paid in euro.

2.4. Cyprus shall pay its contribution under this Protocol according to the schedule in paragraphs 2.1. and 2.2. above.
Any delay in payment shall give rise to the payment of interest at a rate equal to the one-month interbank offered
rate (Euribor) in euro as quoted on Telerate. This rate shall be increased by 1,5 % for each month of delay. The
increased rate shall be applied to the entire period of delay. However, the interest shall be due only if the
contribution is paid more than thirty days after the scheduled payment dates mentioned in paragraphs 2.1 and 2.2
above.

2.5. Travel costs incurred by Cypriot representatives and experts for the purposes of taking part in the work of the
committee referred to in Articles 4, and 8(1) and of the groups and bodies referred to in Article 6(3) of this Protocol
and those involved in the implementation of the fifth framework programe shall be reimbursed by the Commission
on the same basis as and in accordance with the procedures currently in force for the representatives and experts of
the Member States of the European Union.

3. Conditions for the implementation.

3.1. The financial contribution of Cyprus to the fifth framework programme in accordance with Article 5 of the Protocol

shall normally remain unchanged for the financial year in question.

3.2. The Commission, at the time of the closure of the accounts relating to each financial year (n), within the framework
of the establishment of the revenue and expenditure account, shall proceed to the regularisation of the accounts with
respect to the participation of Cyprus, taking into consideration modifications which have taken place, either by
transfer, cancellations, carry-overs, decommitments, or by supplementary and amending budgets during the financial
year. This regularisation shall occur at the time of the second payment for the year n+1. Further regularisations shall
occur every year until July 2006.

Payment by Cyprus shall be credited to the Community programmes as budget receipts allocated to the appropriate
budget heading in the statement of revenue of the general budget of the European Communities.

The financial regulation applicable to the general budget of the European Communities shall apply to the manage-
ment of the appropriations.

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4.

Information

At the latest on 31 May of each financial year (n+1), the statement of appropriations for the fifth framework
programme related to the previous financial year (n), shall be prepared and transmitted to Cyprus for information,
according to the format of the Commission’s revenue and expenditure account.