^1/ Text transmitted by the President to tho Conference at its 7th meeting. See appendix A below.

^2/ Text transmitted by the i’ resident to tlu- Conference at i t s 12th meeting, as revised in the text submitted by the President to the Conference at i t s 14th meeting by which provision; 1.1. (d) and ( o ^ a s well as footnotes 4 and 5 of TD/CODE TOT/20, were deleted. It is understood that the term “technology acquiring country” should be used instead of “country of the acquiring party” in a l l the chapters of the Code.

^3/ Group B accepts inclusion of this sentence subject to agreement to be reached on qualifications relating to the application of the Code to the relations of these entities in relevant parts of the Code.

^4/ This issue is still outstanding. The text of the draft provision in TD/CODE TOT/14 reads as followst

[The code of conduct shall apply to international transfer of technology transactions which occur when technology is transferred across national boundaries between the supplying party and the acquiring party or when a transfer of telchnology transaction i s enlored into between parties which do not refile or are not established in the same country, as well as between parties which are reside;s of r established in the same country, if at least one party is a branch, ubsidiary or affiliate or i s otherwise directly or indirectly controlled by a foreign entity and the teclinology transferred has not been developed in the technology requiring country by the supplying party, or when i t otherwise acts as an intermediary in the transfer of foreign owned technology. ]-*/***

[The code of conduct applies to international transfer of technology transactions which occur when technology is transferred across national boundaries between the supplyingparty and the acquiring party. States may also apply, by means of national legislation, the principles of the code of conduct to transactions which take place between parties within their national boundaries.]**

The Chairman of Working Group 1 had prepared a compromise text, which was included in afoot-note to the draft provision in TD/C0D13 TOT/14. The Chairman's text states:

“The code of conduct shall apply to international transfer of technology transactions which occur when technology is transferred across national boundaries between the supplying party and the acquiring party or when a transfer of technology transactions ic entered into between parties which do not reside or are not established in the same country. States may also decide to extend the application of the Code of Conduct to transactions which take place between parties which are resident of or established in the same country, if nt least one party i s a branch, subsidiary or affiliate or is otherwise directly or indirectly controlled by a foreign entity and the technology transferred has not been developed in the technology acquiring country by the supplying party, or when i t otherwise acts as an intermediary in the transfer of foreign owned technology.”

^5/ The text in brackets has been proposed by the Group of 77, Groups B and D are in favour of deleting paragraph 1.6.

^6/ Text transmitted by the President to the Conference at i t s 12th meeting, aB revised in the text suomitted by the President to the Conference at its 14th meeting.

^7/ Text awaiting outcome of the negotiations on chapter ‘j.

^8/ Subject to review at the next session of the Conference. The Group of 77 considers the language of this principle superseded by the agreement reached at the second session of the Conference on the chapter on national regulation of transfer of technology transactions (chapter j ) .

^9/ Text transmitted by the President to the Conference at i t s 12th meeting.

^10/ Text submitted by the Chairman of the Second Committee to the Conference at it s 12th meeting.

^11/ In view of continuing negotiations on the chapter, no attempt has been made to number the provisions of this chapter consistently with the other chapters.

^12/ Liee appendix B below.

^13/ Text submitted by the Chairman of the Second Committee to the Conference at its 12th meeting,

^14/ See appendix C below.

^15/ Group B suggests that this paragraph should be added to section 5.1. (Common provision on negotiating as well as contractual phase.)

^16/ Agreed text prepared in the First Committer and transmitted to the Conference at its 7th meeting, as revised in the text submitted by the President to the Conference at its 14th meeting.

^17/ The term ‘private decision1’ in the particular context of this chapter should be officially interpreted, in the light of the legal order of the respective country.

^18/ The Group of 77 reserves its position on this provision (6.2.(vi)) of the chapter until it has had the opportunity to examine the references to the industrial property system in the final draft of all chapters of the Code. For the original prop :sal see TD/C0D2 TOT/1.

^19/ Text prepared by the Intergovernmental Group of Experts, as revised in the text submitted by the President to the Conference at its 14th meeting.

^20/ Text transmitted by the President to the Conference at its 12th meeting, as revised in the text submitted by the President to the Conference at its 14th meeting.

^21/ See appendix D below.

^22/ See TD/CODE T0T/L.5 of 17 October 1979- This text was used by the Conference it its second session as a basis for nccotiation. The relevant parts of the chapters if this text on which substantial negotiations remain to be completed are reproduced in the appendix and appendices B and D’ below. In the preface to that document (TD/CODE TOT/L.5) lo-Chairmen stated: “... The elements added to earlier texts are identified by undcrlinin;he new texts”.

^23/ This text combines paras. 12 and 13 of the draft Preamble.

^*/ Whether in an individual case a practice is acceptable should be evaluated-in terms of its over-all purnoso Tnd effects in an actual situation talcing due account n particular, of the following factors:

a) whether the over-all effect of the transaction is, on balance, in the national interest of the technology acquiring country;

^24/ This text was considered in the Drafting Group of Working Group 3, but no final consensus was reached.

^25/ Sco TD/CODE T0T/L.5 of 17 October 1979, and foot-note 22 above.

^26/ Title as surgested by the Chairman of Working Groin) 3-(Sco TD/CODE Tar/9, appendix C).

^27/ Based 011 agree'l portion of chapeau, ac in TTi/CODJS TOT/14.

^28/ Text proposed by the Chairman of Working- Group 3. (Oco TD/CODii TOT/14, foot-noto 24).

^29/ Idem. (Sec TD/CODE TOT/14-, foot-note 26).

^30/ Ibid., foot-note 27 o

^31/ Ibid.., foot-note 20.

^32/ Based on present consolidated text in TD/CODE TOT/14.

^33/ Text proposed by the Chairman of Workinc Group 3. (Sec TO/CCDE TOT/14, foot-noto 31).

^34/ Based on provision 4.1 above and objectives 2.1 (i) and 2.1 (iii) in chapter 2.

^35/ Text proposal by the Chairman of Working.Group 3 (see TD/CCDS TOT/14, foot-notos 32, 35 and YJ).

^36/ Ba.scd on Chairman's proposal (ibid., foot-note 34).

^37/ lieu text, which taken into account the Group of 77 position regarding “practices having similar effects” and basic principles stated by all croups in the chapeau.

^38/ ilew text widen attempts to deal with “rule of reason” and parent-subsidiary relationships.

^39/ Proposal by the Chairman of Working” Group’ 3 (POO TD/C0D3 TOT/14, foot-note 22).uded from a transfer of technology transactior will be determined by:

A parent-subsidiary relationship exists when one enterprise has control and at least majority ownership of another enterprise, and includes relationships between subsidiaries which are controlled by and are at least majority owned by the same parent enterprise.

^40/ In introducing this text to the Conference the Chairman of the Ad Hoe Group on Chapter 5 stated that it had been worked out after intensive eonsulatioas with the regional eo-ordinators and that, in his view, it represented a possible compromise text for the whole chapter.

^41/ The Group of 77 stated that the examination of texts on conciliation and arbitration was part of the general consideration of the chapter and the fact that arbitration had been considered first should not be taken as giving arbitration priority over the other elements of the chapter.

^42/ If this Code becomes a legally binding instrument.

^43/ Text submitted to the Conference by the Chairman of Uoricing Group. 2 at its 9th meeting.

^44/ The list of arbitrators could be established within the framework of the Code by an orcein specifically designated in'the Code. The organ could be the intergovernmental body designated for carrying out the international implementation of the Code or a registry created under the Code to be within the authority of the Secretary-General of the United Nations who would appoint a Registrar to prepare and maintain lists of arbitrstor. The latter approach is followed in the Code of Conduct for Liner Conferences.

^45/ See TD/CODE TOT/L.5 of 17 October 1979f a*cl footnote 22 above.

This proposal recognises tho “difficulties in achieving agreement at present on standards on applicable law and the settlement of disputes to be applied by States and addresses itself to the contractual arrangements of parties to transfer of technology transactions.