ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(75)694
Vol.1975/0255

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COMMISSION OFTHEEUROPEAN COMMUNITIES
5
COM(75)694 final .
Brussels .23December 1975
Report totheCouncil ofMinisters ontheActivities
ontheBusiness Cooperation Centre
COM(75 )694final

Report totheCouncil ofMinisters ontheActivities
ofthaBusiness Cooperation Centre
1. TheCommission decided in1973 tosetupaBusiness Coope­
ration Centre which would have thefollowing tasks :
-tosupply companies with information ontheeconomic ,legal ,fiscal
andadministrative aspects ofcross-frontier cooperations andmergers
-tobring about contacts between firms wishing toenter into coopera­
tion ;
-todraw theattention oftheConmunity Authorities toanyobstacles
intheway ofcross-frontier cooperation within theCommunity .
Itwasunderstood that theCentre 'sactivity was to:
-exclusively serve Community undertakings 5
-bedirected primarily tosnail andmedium-sized firms ;

-beofanintermediary character with thefirms taking theinitiative and
theresponsibility .
Atthetime theCentre was setup,theCommission confirmed tothe
Council that after aninitial period ofthree years itwould report onthe
change ofviews onwhether toconfirm ortomodify theterns ofreference
oftheCentre .
2.TheCentre operates asa:specialized service linked toDirectorate -
General forIndustrial Affairs .Thestaff currently consists ofahead ofde­
partment *three category Aofficials stwocategory 3officials andfour ca­
tegory Cofficials .
TheCentre 'sactivities from May 1973 toOctober 1975 (30months )was
asfollows :
Requests forinformation ;results andexperience acquired ,inorder tchave with theCouncil anex-
Belgium
Germany
Denmark
France89
256
579
207
77488137
United Kingdom
Italy
Ireland
Luxembourg
Netherlands
Non-member countries98
3226
Total 2259

-3-
Therequests forinformation mostly relate tocompany lav;,taxation
systems ,investment andforeign exchange control regulations andtheright
ofestablishment .
Ingeneral ,theCentre confines itself toreferring theinquirer to
therelevant texts orobtaining them forhim ,ortopointing outthevarious
possibilities that exist .Itiscertainly notcalled upon topropose choices
ordraw upsolutions .
Requests tofind partners forcollaboration :
Requests
processed and
circulatedReplies from
interested
firmsRequests resulting
inone ormore
negotiations
Origin
Belgium
Germany
Denmark
France
United Kingdom
Italy
Ireland
Luxembourg
Netherlands28
70
8
45
80
40
17
2
37373
886
67
301
481
126
68
15
17317
47
5
23
44
24
9
2
13
Tots.1 327 2490 189
The twocompanies arebrought into contact atthestage when each
hasseen ananonymous file giving theeconomic ,commercial ,financial and
technical profile oftheother ,andhasconfirmed that itwould beinterested
inentering into talks with aview tocollaboration .

TheBusiness Cooperation Centre isnotaparty tothenegotiations ,
although arepresentative oftheCentre issometimes present atthefirst
meetiag ,andtheCentre remains atthedisposal oftheparties toprovide
anyinformation onquestions arising during thenegotiations .
Following theintroduction ,aconsiderable time elapses -seldom less
than eight months -before thecompanies either reach anagreement orfind
that thetalks aredeadlocked .TheCentre isnotautomatically informed of
theoutcome .Byasystea ofreminders ,itwasnotified between June 1974 andOc­
tober 1975 ofabout 30agreements that hadbeen concluded .Inview ofthe
time lag ,these refer to2/3ofthecontacts established .
Broadly ,then ,itcanb<?said that theCentre manages topropose a
likely partner intwocases outofthree ,andthat thecontacts established
lead toanagreement inonecase outoffive (seeAnnex ).
Although these results arefairly well inline with .theforecasts
that were made atthetime theCentre was setup,they have been adversely
affected both bymethodological problems during therunning-in period and
bytheeconomic situation that hasbeen troubling theCommunity forsome .;
time .'
Thepressure onthecapital markets ,followed byanall-round reces­
sion ,have made companies very cautious andexacting .Often they arein-''
clined toseek newoutlets through cooperation without being able orwilling
tooffer anysatisfactory reciprocation .Theincompatibility ofai;as then ■.
rapidly leads todeadlock inthenegotiations .
3.Ananalysis oftheoverall data ontheinterest shown bybusiness
firms intbeCentre 'sactivity (nuftber ofrequests forinformation ,appli­
cations forpartners ,replies received ,etc.' )brings thefollowing facts
tolight : ^ 1- •>'

-5-
-With regard tothebreakdown bycountries ,thelack ofinterest
shown during thefirst year byFrance andeven more byItaly hasbeen largely
overcome byapublicity drive anddirect contacts with trade associations
andother bodies supplying information toindustry .However ,thenumber of
replies from Italy inanswer torequests forpartners isstill well below
what itmight be,even allowing forthefact that Italy isnotasmuch
sought after asapartner country asGermany ,France orBenelux .Tothat
extent thepublicity drive will have tocontinue .
-Themost active sectors arethose inwhich there 1isavery large
number ofsmall andmedium-sized firms ,andwhere action tointegrate the
marketing andproduction facilities isboth possible andreasonable ,e.g.
thechemical industry ,structural steel products ,mechanical engineering ,
andthefood industry .
Requests for
cooperationReplies from
interested firms
Extractive industries
Chemistry
Structural steel products
Mechanical engineering
Electrical engineering
Food industry
Textiles
Clothing
Timber ,
Paper
Miscellaneous industries
Building andcivil engineering
Commerce .
Transport
Services39
31
14
1753
53
24
9
17
4
15
13
8
273
20518
350
463
410
260
105
98
85
73
28
109
107
:42137
Total 327 2490

-6-
Amore detailed breakdown would reveal theunderstandable absence
notonly oftheextractive industries butalso ofhighly concentrated sub­
sectors such asbasic chemistry ,themotor vehicle industry ,iron andsteel
heavy electrical machinery andlarge-scale electronics .
What onemight have expected ,however ,would have been greater in­
terest from sectors inwhich ameasure ofrestructuring would appear tobe
notjust possible butalso desirable *e.g.wood andtimber ,construction ,
transport .Theservices sector showed aclearly better response tothat
expectation .
-Astosize ,thefirms that apply totheCentre normally employ
between 50and400persons ,theaverage being aroung 250 .
'-Regarding thescope ofcooperation sought ,themajority ofthe
applications aiminthefirst instance atcontractual cooperation inthe
form ofreciprocal marketing ofproducts ;other modes ofcooperation fre-r
quently sought relate totheexchange ofknow-how ,specialization ortrans­
ferofproduction ,orfinancial links intheform ofshareholdings .
4.Thenumber offirms which have applied totheCooperation Centre
shows beyond doubt that itmeets aneed that isfelt bysmall andmedium -!-,-
sized undertakings intheCommunity ,andthat their interest isnotjust
anephemeral one .
* i . »
This interest hasbeen shared bythepress ,radio andtelevision ,
which hasgiven wide coverage totheestablishment oftheCentre andthe
reports onitswork .

-7-
Moreover ,theCentre hasenjoyed thesupport andtheactive colla­
boration -both essential toitseffective operating -oftheorganisa­
tions representing trade andindustry ontheEuropean ,national ,sectoral
andregional level .Besides ,UNICE hasjust come outstrongly infavour of
thecontinuation oftheCentre .
Within theCommunity ,thebusiness world welcomes theCoianunity 's
newinitiative inmaking available toindividual companies aservice which ,
although limited initsscope ,hasadefinite practical value ,and itcan
besaid that theCentre isincourse ofcorrecting theundue expectations
ofthose whohailed itasthereorganizer ofEuropean industry (which is
not itstask ),andthescepticism ofothers whofeared that itwould become
apurely bureaucratic "instrument .
Theactivities oftheBusiness Cooperation Centre have also attracted
attention outside theCommunity ,and IliTAL (Institute fortheIntegration of
Latin America )hasasked permission tomake acloser study ofitsoperation ,
with aview tosetting upa"similar organisation oftheir own .
Whilst being aware that theBusiness Cooperation Centre isaninstru­
ment with limited resources andscope ,theCommission considers that the
experiment hashadpositive results ,andthat theCentre should beconfirmed
intheaims andduties assigned toitin1973 .
5. Theidea ha3been mooted invarious quarters that theCommission or
theBusiness Cooperation Centre should concern itself with subcontracting .
Inthereport bytheEconomic andSocial Committee onthesituation
ofsmall andmedium-sized undertakings ,thewish wasexpressed that the
Business Cooperation Centre should extend itsactivities totake insub-
contacting .

Atthemeeting held inApril 1975 between theCommission and
theorganizations representing small andmedium-sized business inthe
Community ,itwasalso proposed that theCommission ,andinparticular
theBusiness Cooperation Centre ,should actasa"Community relay ,station "
inthesubcontracting sector .
Finally ,thegovernment experts inthefield ofsmall andme-
dium-sized undertakings expressed attheir meeting of15Hay1975
theunanimous wish forthecreation ofarelay station inBrussels for
thesubcontracting markets operating intheCommunity ,andthey thought
that this could infuture beone ofthe functions oftheBusiness Co­
operation Centre .
Itisnotplanned tosubstitute aCommunity subcontracting mar­
ketfortheregional orsectoral subcontracting markets which operate
within theCommunity .Subcontracting generally takes place atregional
level andtoactasintermediary inthis field itwould benecessary
tohave continually updated infdrmation onthetechnical capacities
oftheundertakings ,something which would betooambitious toattempt to
centralize atCommunity level . .
However ,thenational orregional centres engaged insubcon­
tracting expect theCommission ,andinparticular theBusiness Cooperation
Centre ,toundertake coordination intheform oftheexchange ofinforma­
tion onexperience gained ,tobeorganized between thevarious centres .
Acomparision ofmethods andnomenclatures used could lead toincreased
cooperation between theexisting markets ,especially inborder regions .
Assumption ofthis function would bealogical extension ofthe
activities oftheBusiness Cooperation Centre,' andtheCommission isthere~
fore proposing toinstruct theCentre totake onthis task .
Such anextension ofitsactivities would involve only avery
slight increase intheBusiness Cooperation Centre 'soperating expenditure .

6. Anumber ofnon-member countries have manifested their inte­
rest inavailing themselves oftheBusiness Cooperation Centre 'sfaci­
lities andthis possibility hasbeen mentioned explicitly onseveral
occasions when cooperation agreements have bean concluded between the
Community andnon-member countries .Insuch cases ,therefore ,theBusi­
ness Cooperation Centre would also actasanintermediary forcooperation i
joint ventures between theCommunity andundertakings innon-member
countries ,theundertakings involved being primarily medium-sized under­
takings ,ofcourse .
UptonowtheCommission hasnotreacted favourably tosuch steps
asitfears most ofallthat this would result intheCentre having too
wide arange o£tasks tocarry out ,both from thegeographical point of
view andasregards theindustrial activities concerned .
Inaway thesituation hasbeen simplified bytheLome Convention
which provides forthesetting-up ofaspecific procedure forindustrial
cooperation between theCommunity andtheACPcountries ,which would thus
render intervention bytheBusiness Cooperation Centre superfluous .
Nevertheless ,,theCommission hascontractual relations ,either
preferential ornot ,with aconsiderable number ofcountries inandout­
side Europe which arenotACPcountries .Anyextension oftheresponsibi­
lities oftheBusiness Cooperation Centre tonon-member countries would
therefore have considerable repercussions ontheorganization ,onstaff
andonspecific working methods tobedeveloped .
Inanycase ,activities such asthose carried outbytheCentre ,
which aremainly forthebenefit ofmedium-sized undertakings ,presuppose
theexistence ofacertain industrial environment which ,apart from
thecontractual links ,would constitute afactor ofselectivity .Further­
more ,applications would have tobesubmitted explicitly forassistance
from th2Centre and ,what ismors important ,inview oftheneed forsome
degree ofinvestigation ofapplications andthefact that itwould notbe
feasible fortheCommunity Centre tohave thenecessary direct contacts

"10-
xncountries outside theCommunity ,itwould bepossible todeal only
with those countries which satuporappointed anoperational unit to
actastheCentre 'scounterpart andspokesman .
However ,while aware oftheeconomic andpolitical value
ofaninstrument forindustrial cooperation between theCommunity andnon-
member countries atthelevel ofmedium-sized ,oreven small ,untertak -
ings ,theCommission isstill studying thematter andintends toinform
theCouncil ofits conclusions inthis connection atalater date .
7. TheBusiness Cooperation Centre provides itsservices free of
charge .
''When this matter wasdiscussed bytheCouncil andtheCommission ,
thepoint wasraised whether afinancial contribution should bemade by
those undertakings using theCentre 'sservices ,particularly inview of
theexistence ofprivate agencies inthesame line ofactivity .
Onthebasis oftheexperience gained since 1973 ,itmaybesaid
that :
-theBusiness Cooperation Centra iscomplementary totheprivate sector ,
rather than itsrival ;undertakings ofthetype which apply totheCentre
turn only inexceptional cases topaid agencies ,anditmust bepointed
outabove allthat thetype ofcooperation (contractual rather than
financial )established between such undertakings does notfitinwith
thesystem ofremuneration which generally involves apercentage ofthe
assets transferred .

-11-
-Anumber ofprivate organizations (banks ,chartered accountant s
offices )maycarry outactivities ,most often atnational level ,which
arecomparable tothose carried outbytheCentre ,butdosoasafree
service totheir customers .Furthermore ,theBusiness Cooperation
Centre frequently collaborates with those organizations oracts as
arelay between them .
-Afinancial contribution intheform ofaregistration feeora
feeforopening afile ,should ideally beselective without being
prohibitive .However ,theexperience gained bytheprivate organi­
zations mentioned inthepreceding paragraph ,some ofwhich have
been applying afixed charge onatemporary basis ,tends toshow that ,
ifsuch acharge isapplied ,itisnot somuch those undertakings inan
adverse financial position which aredeterred andthat furthermore ,
having paid ,they donotreadily accept failure toproduce successful
results .
TheCommission therefore proposes theretention oftherule
that theservices oftheCentre should beprovided free ofcharge .
8. Inconclusion ,theCommission intends :
a. toconfirm theBusiness Cooperation Centre initsresponsibilities
forproviding information andestablishing contacts between undertakings
within theCommunity ;
b. toinstruct ittocarry outcertain tasks involving coordination
inthefield ofsubcontracting within theCommunity ;
c. tostudy ingreater detail thepossibility ofextending theCentre 's
activities tocertain non-member countries .

ANNEX
Interfirm cooperations concluded through theBusiness Cooperation Centre
Sector Kind ofCooperation Country
May1973 -October 1973
Nil
November U/3-October 1974
Management Consul tancy
Electronic coirponents
Industrial anti-pollution equipment
Graphical industry
Hospital building
Consulting engineers
TransportPartnership
Specialisation andreciprocal
distribution '
Joint marketing ,studies andexecution ,
reciprocal licencing
Pooling ofproduction capacitiss
Joint development ofnon-member
country markets
Joint marketing andproject design
Joint operationD-GB-NL
D-GB
B-D
B-GB
GB-NL
B-GB
GB-NL
November 1974 -October 1S75
Managemint Coisultancy
Forge and Fouidry
PlasticsPartnership
Exchange ofcapacities
Exchange ofknow-how ,reciprocal
marketingGB-F
D-L
D-GB

Sector Kind ofCooperation Com try
Translation Reciprocal ,technical translations GB-GB
Lifting gear Reciprocal marketing D-GB
Consulting etgmeers Joint marketing andproject design GB-NL
Building mat *rials - Joint trading conpany B-GB
Dairy prxlucl s Reciprocal distribution B-F
Builder ?hart ware Reciprocal marketing ,joint research &
development D-GB
Road pissengcr transport Joint operating international coach services GJ-F
Metal components Exchange ofknow-how ,reciprocal marketing 3-GB
Miscellaneous textile industry Joint trading company - 3-F
Recruitment rndtraining ofpersonnel Pooling ofcapacities G3-F
Flavours and essences Joint research andexchange ofknow-how
reciprocal marketing D-GB
Meat processing Reciprocal marketing - DX *■F
éiechanj oalengineering Specialisation G3-
FurnitureSpecialisation -joint development 3-D
PaiiutsReciprocal marketing 1-F
Mechanical engineering Reciprocal marketing 1-F
Industriel constructionsJoint execution ofprojects 3-1
ClothingReciprocal marketing -I
Plumbing materialReciprocal marketing -specialisation -
joint selling under single trade name in
third countriesD-I