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November 04, 1985

Excellency,

1. The Government of the Federal Republic of Germany, in collaboration with the Kassel Chamber of Small and Medium .Scale Industries, and the Government of the Republic of the Philippines shall jointly promote the Chambers of Commerce and Industry in the Regions of Central.Visayas and Northern Mindanao with the aim of Improving Industrial productivity In these regions, particularly in small enterprises.

2. The Government of the Federal Republic of Germany (in collaboration with the Kassel Chamber of Small and Medium Scale Industries) shall make the following contribution to the project:

(1) It shall

(a) second up to two experts for up to 36 months each, and short-term experts in different fields for a total of up to 24 man/months;

(b) supply a limited quantity of equipment to assist the experts in their work;

(c) be prepared to provide further training in various fields for Philippine experts.

(2) It is prepared to meet the cost of

(a) accommodation of the seconded experts and their families, in so far as such costs is not borne by the seconded experts themselves;

(b) official travel by the seconded experts within and outside the Republic of the Philippines;

(c) transport and insurance to the project site of the material referred to in sub-paragraph 1 (b) above excluding the charges and storage fees referred to in paragraph 3 (b) below.

3. The Government of the Republic of the Philippines shall make the following contribution to the project:

It shall

(a) ensure that the governmental institutions afford the Chambers of Commerce and Industry concerned any assistance they may require in carrying out the tasks assumed by them within the scope of this Technical Co-operation project;

(b) exempt the material supplied for the project on behalf of the Government of the Federal Republic of Germany from licences, harbour dues, import and export duties and other public charges, as well as storage fees, and ensure that the material is cleared by customs without delay. The aforementioned exemptions shall, at the request of the implementing agencies, also apply to material procured in the Republic of the Philippines.

(c) afford the experts any assistance they may require in carrying out the tasks assigned to them and ensure that the governmental institutions make available to them all necessary records and documents;

(d) ensure the provision of the contributions required to implement the project, in so far as these are not assumed by the Chambers of Commerce and Industry concerned or, pursuant to the project arrangements, by the Government of the Federal Republic of Germany.

4. (1) The seconded experts shall take all steps necessary to enable the Chambers of Commerce and Industry concerned to offer the regional Industries, on their own or through suitable institutions, a broader range of services in line with demand.

(2) The seconded experts shall, within the scope of the tasks described in sub-paragraph 1 above, be responsible to and subject to the authority of the Chambers of Commerce and Industry concerned, in so far as this does not affect their contractual relations with their German employers.

5. The material supplied for the project on behalf of the Government of the Federal Republic of Germany shall become the property of the Republic of the Philippines upon arrival there. The material shall be at the unrestricted disposal of the sponsored project and the seconded experts for the fulfillment of their tasks.

6. (1) The Government of the Federal Republic of Germany shall charge with the implementation of its contributions the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH, 6236 Eschborn, which shall consult the Kassel Chamber of Small and Medium Scale Industries on all essential matters.

(2) The Government of the Republic of the Philippines agrees to the implementation of the project by the Chambers of Commerce and Industry in the Regions of Central Visayas and Northern Mindanao.

(3) The agencies referred to in sub-paragraphs 1 and 2 above may jointly

(a) lay down details of the implementation of the project in a plan of operation, and

(b) set forth other agreements of relevance to the organization of the project in an implementing contract.

or in some other appropriate form, adapting them as necessary in line with the progress of the project.

7. In all other respects the provisions of the aforementioned Agreement of 7 September 1971, including the Berlin clause (Article 9), shall apply to the present Arrangement.

If the Government of the Republic of the Philippines agrees to the proposals contained in paragraphs 1 to 7 above, this Note and Your Excellency's note in reply thereto expressing your Government's agreement shall constitute an Arrangement between our two Governments, to enter into force on the date of your Note in reply.

Accept, Excellency, the assurance of my highest consideration.

His Excellency
Pacifico A. Castro
Acting Minister for Foreign Affairs
of the Republic of the Philippines
Manila

Embassy
of the
Federal Republic of Germany

Wi 445 PHI 59
N.V. No. 105/86

The Embassy of the Federal Republic of Germany presents its compliments to the Ministry of Foreign Affairs of the Republic of the Philippines and has the honour to refer to the Ministry's Note No. 86-0550 of February 18, 1986 concerning the Arrangement between the two Governments on the project "Twinning of the Cebu City and Cagayan de Oro Chambers of Commerce and Industry with the Kassel Chamber of Small and Medium Scale Industries".

The Government of the Federal Republic of Germany fully agrees with the interpretation the Philippine Government has given to the sections 3 (d) and 6 (3a) of the Arrangement.

The Ministry of Foreign Affairs of the Republic of the Philippines is kindly requested to inform the Ministry of Trade and Industry about the following:

The set-up of a plan of operations is subject to the assignment of a longterm adviser. This adviser will together with a Philippine partner, within an orientation period of at least 6 months, develop the plan of operations and will inform the Ministry of Trade and Industry in due time of its entrance into force.

The Embassy of the Federal Republic of Germany avails itself of this opportunity to renew to the Ministry of Foreign Affairs of the Republic of the Philippines the assurances of its highest consideration

Manila, 10 March 1986

The
Ministry of Foreign Affairs
of the Republic of the Philippines
Manila