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1 PREAMB The Bureau of Standards, Metrology and Inspection (BSMI) under the jurisdiction of the Ministry of Economic Affairs, having itsaddress at 4 Chinan Road, Section 1, Taipei, 100, Taiwan, Repub-lic of China, and Swiss Association for Quality and Management Systems (SQS), incorporated under the laws of Switzerland and h-aving its address at Bernstrasse 103, P.O. Box 686, CH-3052 Zol-likofen, Switzerland. The parties both conduct assessments of c-lients' quality management systems and register such systems inaccordance with international standards and requirements. The p-arties recognize the need to effectively respond to requests forregistration of quality management systems and to minimize the costs and burdens on clients requesting such registration. ThisMoU outlines the arrangements between BSMI and SQS to facilitatethe process of assessing and registering quality management sys-tems. 1.0 PURPOSE 1.1 This MoU is to provide a mechanism whereby BSMI and SQS willcooperate to respond efficiently to requests for registrati-on and to minimize costs and burdens on clients in the asse-ssments and registration of quality management systems acco-rding to the International Organization for Standardization's ISO 9001:2000 standard and other comparable standards su-ch as SN EN ISO 9001:2000, CNS 12681, etc. 2.0 SCOPE 2.1 Both BSMI and SQS intend to offer their services to evaluateand register client's quality management systems. 2.2 This MoU applies to the following situations: 1) Clients seeking registration of their quality managementsystems from both parties. 2) Quality management systems first registered by one partyto this MoU may be recognized for joint registration by the other party subject to reasonable verification and i- nvestigation of the particular registration conducted pu- rsuant to this MoU. 2.3 A client should apply for registration to the party locatedin the same country as the client. This party shall be thePrimary Registrar and shall be responsible for the assessme-nt and surveillance. The other party may send its personnelto participate in the assessment and surveillance as observ-er in order to understand the on-site operation. Both parti-es agree that within the respectation of legal requirementsit is finally at the discretion of the client to choose thePrimary Registrar and the respective audit programme. 2.4 If a client with a global certification programme chooses t-he SQS as Primary Registrar and one of its sites is locatedin Taiwan, the BSMI, or an audit team composed of auditorsfrom both the SQS and the BSMI shall be responsible for theassessment and surveillance audit. 2.5 Upon successful completion of an assessment, the party perf-orming the assessment shall share the results of its work w-ith the other party for the purpose of the other party issu-ing its certificate of registration. Each party reserves theright to comment or request additional information before a-ccepting the results of the other's assessment. 3.0 REQUIREMENTS 3.1 TRAINING AND QUALIFICATIONS 3.1.1 Lead Assessors and Assessors must meet the minimum criter-ia in accordance with currently accepted practices and gu-idelines as followed by other qualified Registrars and ot-her international standards and practices. 3.2 JOINT APPLICATION PROCEDURES 3.2.1 Separate applications and initial information data will berequired for the BSMI and SQS registration programs. Eith-er party may accept applications and initial information forms on the other's behalf, provided such information is necessary and in accordance with both parties' registrati-on programs. 3.2.2 A client seeking registration must submit documents descr-ibing its quality to the Primary Registrar. 3.2.3 The Lead Assessor of the assessment team will schedule thevisit with the client seeking registration at a time mutu-ally convenient for the client and the assessment team. T-he Lead Assessor will also be responsible for the coordin-ation of arrangements, paperwork, etc., between the parti-es. All such arrangements must be mutually acceptable to each party. 3.2.4 Each party shall have the right to conduct the necessary verification and investigation for its registration and s-hall have the right to determine the process relating to its registration. 3.3 CERTIFICATES 3.3.1 Each party will be responsible for issuance and control ofits certificate of registration. 3.3.2 In the event that joint registration is in effect, each p-arty agrees to notify the other if the client's use of di-splay of the other's certificate of registration and mark (s) is improper. 3.4 SURVEILLANCE VISITS 3.4.1 Follow-up visits shall be conducted by the Primary Regist-rar, except in cases relating to clause 2.4. 3.4.2 In the event of joint registration, routine follow-up vis-its will be regularly scheduled and conducted annually. 3.5 FINANCIAL CONSIDERATIONS 3.5.1 Each party will independently determine and administer itsprogram of financial charges associated with assessment a-nd registration. Accordingly, each party shall separately invoice the client seeking registration, for its charges for the assessment and registration. Each party shall bearits own costs and expenses incurred in the assessment and registration. 3.6 INDEMNIFICATION 3.6.1 BSMI shall indemnify and hold harmless SQS, its successorsand assignees, directors, officers, agents and employees against in respect of any and all damages, claims, losses,liabilities, expenses, fines, penalties or suits of whate-ver nature, from third parties which may, solely by an actor omission of BSMI's, arise as a causal consequence out of: (i) any breach or violation of this MoU by BSMI; (ii) any negligent, fraudulent, defective or delayed performan-ce of BSMI's obligations under this MoU; and (iii) any ne-gligent or willful misrepresentation in any certificate ofdocument delivered in conjunction with this MoU by BSMI w-hich is not caused by SQS. Said indemnification also shallinclude all legal fees and defense expenses incurred by t-he indemnitee unless otherwise specified herein. 3.6.2 SQS shall indemnify and hold harmless BSMI, its successorsand assignees, officers, agents and employees and ROC gov-ernment and the employees of ROC government, against in r-espect of any and all damages, claims, losses, liabilities, expenses, fines, penalties or suits of whatever nature from third parties which may, solely by an act or omissionof SQS's, arise as a causal consequence out of: (i) any b-reach or violation of this MoU by SQS; (ii) any negligent fraudulent, defective or delayed performance of SQS's obl-igations under this MoU; and (iii) any negligent or wilfulmisrepresentation in any certificate of document deliveredin conjunction with this MoU by SQS which is not caused byBSMI. Said indemnification also shall include all legal f-ees and defense expenses incurred by the indemnitee unlessotherwise specified herein. 3.7 ADVERTISING 3.7.1 It is not intended by this MoU that (a) BSMI be or refer to itself as a SQS "accredited" party or any similar desc-ription or (b) SQS be or refer to itself as a BSMI "accre-dited" party or any other similar description. Neither pa-rty shall refer to or use the other's name or Mark in any advertising orally or in written materials without the ot-her's prior written consent. 3.8 AGENCY NOT CREATED 3.8.1 Neither party is authorized by this MoU to incur obligati-ons on behalf of the other party or to bind the other par-ty in any respect. 3.9 INDEPENDENT ORGANIZATION 3.9.1 BSMI and SQS are independent organizations not affiliatedwith nor influenced or controlled by customers in any man-ner, which might affect their capacity to render assessme-nts and registrations objectively and without bias. Speci-fically, they comply with all of the following: (A) No managerial affiliation with customers. (B) Results of their work accrue no financial benefits to any customers, via stock ownership or the like. (C) Sufficient breadth of interest or activity that the l-oss or award of a specific contract to assess a custo- mer's quality management system with the applicable s- tandard would not be a determinative factor in its fi- nancial well-being. (D) Employment security status of its personnel is free ofinfluence or control of customers. 4.0 GOVERNING LAW AND JURISDICTION 4.0.1 The parties hereto shall strive to settle any disputes am-icably between themselves. Any controversy or claim arisi-ng under, out of, in connection with or relating to this MoU which cannot be settled amicably shall be subject to the jurisdiction of the Taipei District Court, governed a-ccording to the Republic of China's legislation, in case that the suit is instituted by SQS and subject to the jur-isdiction of Swiss District Court governed according to S-wiss legislation, in case that the suit is instituted by BSMI. 5.0 GENERAL 5.0.1 Both parties will provide the public with non-proprietaryinformation about quality management registration programsand answer general questions. 5.0.2 Both parties will furnish the other with all necessary in-formation reasonably required to ensure the effectiveness of this MoU. Each party will refrain, without the client'sprior authorization in writing, from voluntarily disclosi-ng to third parties secret information, which is obtained,by BSMI or SQS in confidence from the client. 5.0.3 In the event where either party does not adhere to any ofthe items stated in this MoU, the other party shall bring it to the attention of the other for corrective action. 5.0.4 This MoU, written in duplicate in the English language, s-hall come into effect upon signing by both parties and sh-all remain effective until a notice of termination is giv-en by either party. Termination of this MoU shall be by w-ritten notice at least 90 days prior to the effective dateof termination. Signed for and on behalf of Signed for and on behalf ofBureau of Standards, MetrologySWISS ASSOCIATION FOR QUALITY and Inspection (BSMI) AND MANAGEMENT SYSTEMS (SQS)_________________________________ ________________________Neng-Jong Lin Prof. Dr. H.D. SeghezziDirector GeneralPRESIDENT ________________________ T. Zahner MANAGING DIRECTOR _________________________________ ________________________DATEDATE