REPORT ON THE IMPLEMENTATION OF ARTICLE 66.2 OF THE TRIPS AGREEMENT
The following communication, dated 13 September 2021, from Switzerland, is being circulated pursuant to paragraph 1 of the Decision on Implementation of Article 66.2 of the TRIPS Agreement (IP/C/28).
In paragraph 11.2 of the Decision on Implementation-Related Issues and Concerns (document WT/MIN(01)/17), adopted in Doha on 14 November 2001, developed country Members reaffirmed their commitment to provide enterprises and institutions incentives to promote and encourage technology transfer to least-developed country Members ('LDCs'), pursuant to Article 66.2 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). In its Decision (document IP/C/28) of 19 February 2003, the Council for Trade-Related Aspects of Intellectual Property Rights (Council for TRIPS) agreed that developed country Members shall submit annual reports on actions taken or planned in pursuance of their commitments under Article 66.2 of the TRIPS Agreement. Furthermore, it was agreed that new detailed reports shall be delivered every third year and that updates shall be provided in the intervening years.
According to this obligation, and taking the Decision of the Council for TRIPS into account, Switzerland herewith submits its updated report on actions taken or planned. The report reflects all latest relevant developments in Switzerland.
Switzerland's understanding of 'technology transfer' includes a broad set of processes covering the flows of know-how, experience and equipment amongst different stakeholders such as governments, private sector entities, financial institutions, NGOs and research/education institutions. Incentives and activities reported here belong to any of the following four key modes of technology transfer: (i) physical objects or equipment; (ii) skills and human and organisational aspects of technology management and learning; (iii) designs and blueprints which constitute the document-embodied knowledge on information and technology; and (iv) production arrangement linkages within which technology is operated, including the enabling environment for such transfer. Foreign direct investment, official development assistance (ODA; cf. para. 4.2 below), equity investment, or other instruments such as commercial lending, are all important channels through which technology transfer is financed. The present report is focused on technology transfer under ODA financing. Switzerland provides incentives in numerous sectors contributing to sustainable development in LDCs and believes that this assistance should be comprehensive and not be limited to certain areas.
2 GOVERNMENT AGENCIES INVOLVED IN THE PROVISION OF INCENTIVES FOR TECHNOLOGY TRANSFER
There are primarily two Swiss government agencies involved in providing either direct or indirect incentives for Swiss enterprises and institutions, as well as those in other developed country Members, to engage in activities involving technology transfer to LDCs. These two agencies are the Swiss Agency for Development and Cooperation (SDC) and the State Secretariat for Economic Affairs (SECO). They are jointly responsible for the formulation and implementation of the Swiss international development cooperation policy. While the SDC assumes the overall coordination function in matters pertaining to development cooperation and humanitarian aid, SECO is the centre of competence for economic development and the integration of developing and transition countries into the world economy.
Another agency involved in technology transfer activities in Switzerland is the Swiss National Science Foundation (SNSF). Acting on a mandate issued by the Swiss Federal Government, the SNSF supports research inside and outside universities and fosters young scientific talent. At international level, the Swiss National Science Foundation aims to make a positive contribution through its research programmes to scientific research in relevant areas of the world and to promote research cooperation between these areas and Switzerland. At present, the Swiss National Science Foundation, in collaboration with the SDC, has a large programme focused on research partnerships with developing countries and encompassing several projects in LDCs (see Annex II).
3 DOMAINS OF SWISS TECHNOLOGY TRANSFER ACTIVITIES
Switzerland promotes technology transfer in domains that are of high importance to the LDCs. Specifically, the Swiss Government fosters technology transfer to LDCs in the fields of public health, pharmaceuticals, water supply and sanitation, land governance, agriculture, food industry and security, machine industry, textiles, chemical industry, trade facilitation, clean energy, energy efficiency and eco-technology, climate change adaptation and relevant IP protection. For an overview of ongoing projects, see Annexes I and II.
Switzerland promotes and incentivises technology transfer to LDCs in domains in which it has special expertise. These include the machining industry, as well as the manufacturing of precision instruments and chemical products. Promoting the transfer of environmentally sound technologies to LDCs is another domain in which Switzerland is active. Here, the goal is to transfer both knowledge and methods that help meet environmental standards. These programmes focus particularly on technology transfer in the metal, paper, cement, food and textile industries. Furthermore, Switzerland supports the transfer of technologies in the field of renewable energies, energy efficiency and resource efficiency, for example through its REPIC platform.
The Swiss Government encourages technology transfer between Switzerland and LDCs in various ways including research funding, consulting and other forms of assistance, particularly in the domains of public health, agriculture and sustainable water management. Switzerland's constant engagement in these domains is confirmed by the new projects presented in this year's report.
4 LEVELS OF SWISS ACTIVITES PROMOTING TECHNOLOGY TRANSFER TO LEAST DEVELOPED COUNTRIES
Switzerland's activities and incentives regarding technology transfer aim to increase the flow of technology to LDCs and developing countries and to build up capacities which enable beneficiary countries to assess, adopt, manage and apply technologies. The activities supported by the Swiss Government embrace projects at the bilateral, regional and multilateral levels.
SECO's and the SDC's activities relevant to Article 66.2 of the TRIPS Agreement are carried out under the framework of the Swiss ODA. The projects and programmes under the Swiss ODA include bilateral, multi-bilateral and multilateral initiatives and are primarily aimed at a selected group of priority countries in Latin America and the Caribbean, Africa, Central and South East Asia and south‑eastern Europe. Many of the projects contract Swiss enterprises and institutions as well as those of other Members to provide knowledge and technology that facilitates the development of human capital, infrastructure and private sector enterprises in LDCs.
At the multilateral level, Switzerland contributes to a variety of technical assistance trust funds in conjunction with the World Bank Group, the regional development banks, and the International Monetary Fund. These funds are available either to project managers at these banks or to countries seeking funding for technical assistance and technology transfer. Switzerland recently participated in the negotiations on the 19th replenishment of the International Development Association (IDA‑19), and will contribute CHF 683 million to this replenishment. For the African Development Fund, Switzerland participated in the 15th replenishment in 2019 and will contribute CHF 196 million. For the Asian Development Fund, Switzerland participated in the 12th replenishment in 2020 and will contribute CHF 25 million. Besides cooperation with these financial institutions, Switzerland is also engaged in the development projects of many other international organisations. Examples of organisations which run related projects are the World Health Organization (WHO), the United Nations Industrial Development Organization (UNIDO), the United Nations Conference on Trade and Development (UNCTAD), the World Intellectual Property Organization* (WIPO), the United Nations Development Programme (UNDP), the United Nations Office on Drugs and Crime (UNODC), the Food and Agriculture Organization (FAO), the International Labour Organization (ILO), the International Fund for Agricultural Development (IFAD), the Global Environment Facility (GEF), and the International Organization of Supreme Audit Institutions* (INTOSAI). International research institutions, such as the numerous specialised centres of the Consultative Group on International Agricultural Research (CGIAR), are also supported by Switzerland. Furthermore, Switzerland participated in the first replenishment of the Green Climate Fund, covering the period from 2020‑2023, and will contribute USD 150 million.
Switzerland supports various bilateral and multilateral projects in order to promote investment as well as the efficiency, effectiveness and sustainable impacts of trade. In investment promotion, Switzerland aims at mobilising private capital, know-how and technologies (i.e. mobile money applications) to strengthen access to finance for enterprises and households as well as financial intermediation in LDCs, and facilitate direct investments or joint ventures which transfer know-how and technology. Concerning the improvement of trade-related cooperation, Switzerland cooperates on a bilateral basis and with bilateral or multilateral agencies. Trade-related assistance to LDCs is mainly delivered through multilateral programmes and organisations such as the Enhanced Integrated Framework* (EIF) and the UN Interagency Cluster on Trade and Productive Capacities*. Among these there are special thematic partnerships with ITC, UNCTAD, ILO and UNIDO, as well as with selected NGOs. Switzerland concluded and continues to conclude a high number of bilateral agreements with LDCs that promote and protect investments as well as agreements on double taxation (Link).
5 INSTRUMENTS FOR THE PROMOTION OF TECHNOLOGY TRANSFER
One of the main goals of Switzerland's economic and trade-related cooperation is the transfer of modern technology and know-how to recipient countries in order to better enable them to upgrade their production facilities to meet the requirements of world markets and to become more competitive in the global economy. The promotion of investment and of cooperation agreements between the private sectors in the North, South and East is an important instrument of development policy, which is primarily intended to support sustainable development in these partner countries.
5.1 Support of Private-Sector Investments in Least-Developed Countries
Switzerland promotes technology transfer to LDCs by supporting small and medium-sized enterprises (SMEs) in several ways. For instance, it provides technical advice to SMEs domiciled in LDCs such as Bangladesh.
Switzerland also encourages Swiss SMEs and entrepreneurs to invest in LDCs in order to enhance technology transfer to LDCs. The SECO Start-up Fund (SSF) is a loan instrument established by SECO in 1998. The administration of the fund is delegated to FINANCEcontact. The fund promotes private sector investment projects in countries with economies under development or in transition, including LDCs. The projects must be commercially viable and meet recognised environmental and social standards. Investments in developing and transition economies involve business risks beyond those generally encountered in Western countries. The aim of the SSF is to share financing and risks with the investor. It does so by co-financing the initial investment phase. Financing by the SSF is in the form of a loan that must be repaid within seven years. The SSF aims to enable the transfer of capital, technological know-how and managerial expertise. The SSF has actively supported SME activities in LDCs and countries in transition through more than 120 projects and in creating over 16,000 jobs.
Technology transfer to LDCs is also provided by Swiss charitable institutions, which are incentivised under tax exemption schemes established by the Swiss Government. This practice is in line with the proposed incentive number 7 of the room document RD/IP/24 circulated by the LDC Group in 2018. One example of a Swiss institution to which the tax incentives apply that is engaged in technology transfer to LDCs is the Novartis Foundation for Sustainable Development. The Foundation not only supplies a large amount of cost-free medicines to many LDCs, but it also runs various public health related projects, including local training to promote integrated management of childhood illness, training and supportive supervision of health personnel and the provision of training infrastructure.
Switzerland supports private participation in infrastructure in developing countries through companies of the Private Infrastructure Development Group (PIDG). Those various companies have an infrastructure focus only and are active along the entire infrastructure cycle (concept, early stage development, construction as well as operation). This allows PIDG to be an aware risk taker. The risk can be with regard to the countries PIDG works in (least developed or fragile states), the type of projects (new technology or greenfield) or the type of finance product (such as local currency guarantees). PIDG gets involved in situations where the private sector would not otherwise be willing or able to invest. PIDG-supported infrastructure projects are mostly financed and wholly implemented by the commercial private sector. Since 2002 and thanks to PIDG's involvement, over 170 projects have reached financial close, of which over 110 are now operational. Most PIDG‑supported projects employ local managers and operators who are recruited on the basis of their existing, appropriate qualifications, but they are all also provided with on-the-job training. The percentage of training costs in relation to a project's total investment cost varies widely and depends upon the type of infrastructure being provided, the numbers of staff employed and the type of technology being used. It is unusual for the PIDG companies supporting a project to finance the costs of technology-related training, as these costs are part of the overall investment cost of the project. However, in some exceptional cases, Technical Assistance (TA) grants have been accessed to provide technology-related training to PIDG-supported projects. Such training costs can be as high as 10% of the total investment costs of the project.
Switzerland supports the Climate Investment Fund's Scaling Up Renewable Energy Programme (SREP) for low-income countries, most of them LDCs (17), which finances capacity-building measures and infrastructure projects. The latter also includes technology transfers for renewable energy technologies.
Finally, the Swiss Government, through the Swiss Investment Fund for Emerging Markets (SIFEM AG), also provides long-term financing for small and medium-sized enterprises in LDCs through local or regional risk-capital funds. These funds provide equity, debt or a combination thereof to SMEs in the target countries and combine the investment with a broad range of technical assistance to the beneficiary companies such as skills development, ESG, risk management and capacity building. Examples include the Agricultural Rural Impulse Fund (CHF 5 million), the Business Partners International East Africa Fund (CHF 4 million), the NAVIS VIII CAMBODIA LAOS MYANMAR VIETNAM Fund (CHF 154 million), the METIER SUSTAINABLE CAPITAL INTERNATIONAL FUND (CHF 10 million) or Ethos Mezzanine Partners III (CHF 10 million), in combination with a separate Technical Assistance Facility for the financing of training and capacity-building from the Swiss Government (CHF 4 million).
5.2 Information on Commercial Establishment of LDC Companies in Switzerland and other Developed Countries
Through the Swiss Import Promotion Programme (SIPPO), Switzerland supports Business Support Organisations (BSO) - in selected developing and transition countries, including LDCs, through organisational and capacity development. The programme works with BSOs in the areas of matchmaking, networking, and market intelligence to better serve their members (export-oriented SMEs).
LDCs' access to new markets is facilitated through the Global Trade Helpdesk. This web platform, supported by Switzerland, simplifies market research for companies by integrating trade and business information into one user-friendly, online tool. It provides accessible and comprehensive information, from the trade formalities relevant at the exporter's doorstep to the market access information and business contacts in the destination market.
5.3 Financial Assistance and Export Risk Guarantees
Switzerland also provides non-reimbursable financial assistance (grants) to LDCs for the construction, rehabilitation or extension of infrastructure in LDCs. The Swiss grant contribution to such projects also covers technology transfer, consulting services for project implementation and expertise for institutional (managerial) and sector reforms. A special focus is given to the establishment of public-private partnerships for infrastructure services.
5.4 Trade and Clean Technology Cooperation
Switzerland is focused on promoting the transfer of environmentally sound technologies. A comprehensive programme for the establishment of what are known as 'Cleaner Production Centres' was set up. The aim of the centres is to offer private companies and the public sector in LDCs a wide range of services including general information, in-plant assessments, workshops, demonstration projects, capacity building and support for the preparation of bankable projects. The centres provide these services with the support of technical institutes, universities and industries in Switzerland and other developed country Members. The newly established and initiated Global Eco-Industrial Parks Programme (GEIPP), which aims to demonstrate the viability and benefits of greening existing industrial parks by improving the resource productivity and economic, environmental and social performance of businesses, possesses a global component on knowledge development. Its objective is to generate and disseminate knowledge from present and past endeavours, which can be used to tackle the required preconditions for EIP, including in LDCs.
The Sustainable Trade Initiative IDH provides producers in developing countries, including LDCs, with know-how on environmentally and socially sustainable production methods, thereby assisting these producers to increase their market share for the main target products, including cotton, cocoa and coffee.
Switzerland also supports programmes in the field of energy efficiency which aim at mitigating CO2 emissions globally and controlling air pollution locally. These projects are related to the traffic and transportation sector and to small and medium-sized industries (e.g. foundry, glass, and brick industries). The main objective is to strengthen local partners (capacity building) and to pool international expertise in order to develop locally adequate solutions (technology packages). These pilot programmes are then evaluated, documented and disseminated at the national level. In addition, Switzerland supports transfer of know-how, training and infrastructure in the field of environment monitoring and chemicals management.
With specific trade promotion programmes, Switzerland promotes the integration of LDCs in the global economy. In the context of the Enhanced Integrated Framework (EIF), Switzerland has joined forces with the UN Interagency Cluster on Trade and Productive Capacities to support LDCs' integration into the world trading system. So far, three country programmes were launched, in Lao P.D.R. (2010-2017, completed), in Tanzania (2014-18, completed), and in Myanmar (ongoing since 2018).
The Swiss Tropical Institute, now Swiss Tropical and Public Health Institute, offers a postgraduate diploma course entitled 'Health Care and Management in Tropical Countries'. More than half of the participants in this course usually come from LDCs. Their participation is possible thanks to the scholarships offered by the Swiss Government.
As part of its Global Programme for Intellectual Property Rights (GPIPR), Switzerland offers IP trainings to support developing and least developed countries as well as emerging economies in building up an efficient and effective protection of intellectual property rights, in order to support economic development and facilitate the implementation of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. As part of the GPIPR, a project is currently ongoing in Myanmar.
5.6 Research Activities
Another kind of technology transfer which Switzerland is engaged in is collaborating with international organisations and/or with LDCs directly in research, particularly in public health and cross-cutting issues in the agriculture domain. The SDC promotes research partnerships in a number of LDCs, including support through the Swiss Programme for Research on Global Issues for Development, implemented jointly with the Swiss National Science Foundation (SNSF).
5.7 Support to Global Health Initiatives
Switzerland also engages in various global initiatives to combat diseases that the LDCs are particularly affected by, such as malaria. The SDC supports, for example, the Medicines for Malaria Venture, the Foundation for Innovative New Diagnostics as well as the Drugs for Neglected Diseases Initiative. Through these engagements, Switzerland promotes the development and provision of new treatments and/or diagnosis kits for tropical diseases.
5.8 Other Instruments
In addition to the activities mentioned above, Switzerland has also engaged in capacity building and technology transfer in favour of developing and least developed countries, pursuant to the Convention on Biological Diversity (CBD) and its provisions on access and benefit sharing.
Moreover, Switzerland and like-minded donors supported the UNCTAD Debt Management and Financial Analysis System (DMFAS). The DMFAS initiative aims to support LDCs and LMICs in the sound management of their public debt. At its core, the programme provides governments with a modern and continuously updated IT system that produces complete, up-to-date and reliable debt data and allows comprehensive analysis. Almost 60 countries currently rely on DMFAS to manage their debt portfolio. Switzerland has supported the programme since its establishment in the 1980s, currently with a contribution of CHF 5.26 million for 2017-2022.
6 CONCLUDING REMARKS
Challenges remain for fostering technology transfer to LDCs, and Switzerland remains committed to actively engaging in the discussion to further promote the transfer of technology. Through the various incentives outlined in this report, Switzerland significantly contributes to transferring, in particular, know-how to LDCs via its economic and development cooperation, thereby increasing LDC partner capacities for creating enabling environments that promote investment, render industries more efficient and competitive, and help link producers with the global economy. This in turn provides further opportunities for additional synergies with the private sector. Of particular importance for Switzerland is the promotion of technologies which are based on sustainable production methods.
As stated in earlier reports, government incentives to provide technology transfer to third countries are only one of many factors relevant for the strategic decisions companies make regarding where to direct their foreign investments and transfer their innovative technology. Overall conditions in LDCs are often unfavourable to foreign enterprises which, in principle, would have the capability and the willingness to transfer their technology and know-how. LDCs are thus encouraged to persistently work towards an enabling environment that attracts foreign investment and technology transfer. Some of the decisive factors that contribute to attracting technology are favourable overall macroeconomic and microeconomic conditions, a safe legal and regulatory framework (including an accountable judicial system, adequate protection of intellectual property rights and a well‑functioning government administration) and market potential at national level.
RESEARCH PARTNERSHIPS WITH LDCS
Research partnerships between Switzerland and developing countries, including LDCs, were integrated into the Swiss Programme for Research on Global Issues for Development – r4d programme (http://www.r4d.ch) – a joint funding initiative by the Swiss Agency for Development and Cooperation (SDC) and the Swiss National Science Foundation (SNSF).
The r4d programme supports relevant research for development with the aim of solving global challenges and with a focus on least developed, low and middle income countries. It is likely to involve technology transfer between Swiss researchers and developing countries' researchers, including those from LDCs. It consists of five thematic modules and a research module without pre-defined topics.
The five thematic modules are:
- Causes of and solutions to social conflicts in contexts of weak public institutions or state fragility;
- Employment in the context of sustainable development;
- Innovation in agricultural and food systems for food security;
- Sustainable management of ecosystems for the provision of ecosystem services; and
- Provision systems and financing mechanisms in the public health sector.
Currently, 57 projects are funded by the r4d programme. LDCs touched by the programme include Mozambique, Nepal, Burkina Faso, Lao P.D.R., Bangladesh, Ethiopia, Madagascar, Zambia, Mali, Rwanda, Burundi, Tanzania, Lesotho, Malawi, South Sudan, Cambodia, Benin, Myanmar, Senegal, Uganda and Togo. A total budget of CHF 97.6 million is available for the duration of the entire programme from 2012 to 2022. CHF 72 million is being contributed by the SDC and CHF 25.6 million by the SNSF.
 Together with the Human Security Division (HSD), which is a division separate from the SDC; both within the Federal Department of Foreign Affairs), the SDC and SECO form the three actors responsible for Switzerland’s international cooperation. However, the HSD is not involved in technology transfer since its actions focus on the promotion of peace and human rights as set out in the Federal Council’s foreign policy strategy.
 * These organisations are not included in the ODA framework.
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