A European Programme for business cooperation and partnership with Latin America, 1994-2000

AL-INVEST was set up at the initiative of the European Commission to encourage the development of cooperation and partnerships between enterprises and institutions in the European Union and their counterparts in 18 Latin American countries (Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, El-Salvador, Uruguay and Venezuela). Aimed chiefly at SMEs, the programme is established as part of the on-going dialogue to strengthen economic cooperation between the two regions and to reinforce the new economic and political directions undertaken by the various governments in the region.

The programme offers European businesses the opportunity for exchanging know-how, the chance to achieve an international dimension and, linked to this, the possibility to exploit new markets with promising potential. For Latin American companies, participation in the programme offers considerable advantages, including the consolidation of their current expansion, access to European technological know-how, and access to business partners with direct experience in the field. Moreover, participation in the programme provides Latin American businesses with a means of accessing the European single market.

AL-INVEST is focused on the four following goals:

- Organization and distribution of instruments for industrial cooperation and investment promotion, throughout Latin America, by developing the Eurocentros de Cooperacion Empresarial-ECEs-network (see the "Implementation" section of this record);
- The linking of Latin American and European business networks;
- Improvement, through the ECEs, of the credibility of industrial cooperation or investment promotion projects presented by Latin American companies;
- Personalized support provided for businesses by the ECEs and COOPECO for the duration of these programmes.

It is expected that the various activities sponsored by the programme to implement these goals will act as both a catalyst and a driving force in strengthening economic ties between the European Union and Latin America.
To foster mutually beneficial transfers of technology, know-how and finance and to establish business partnerships between European and Latin American companies.
Four types of initiative:

- Bringing together European and Latin American companies on a one-to-one basis:
Companies from each region are introduced to each other through the BRE and BC-NET business networks. These networks assist European companies, who wish to establish partnership cooperation with Latin American companies (and vice-versa), locate appropriate partners;

- Development of South-South trade:
To bring businesses together in developing countries and to promote inter-company agreements both in terms of trade and cooperation (e.g. in the form of technology transfers). This applies to Latin American firms seeking partners from other Latin American countries or in other developing countries outside the region. This section is executed through TIPS (Technological Information Promotion System) which is a world-wide network of specialist centres with a particularly strong presence in Latin America;

- Encounters between business leaders from the same business sectors:
Based on the experience of the Community's INTERPRISE programme, support is to be given to the organization of direct encounters between business leaders of a particular sector during trade fairs. Such encounters provide a useful forum for the direct exchange of cooperation opportunities within the chosen sector;

- Development of sub-contracting:
Organization of industrial sub-contracting partnerships within the framework of major trade fairs to be organized in both the European Union and Latin America. The initiative is to be carried out through specialized networks: ALABSUB in Latin America which groups subcontracting agencies from 13 different countries; and RIOST in Europe, a network of 34 representative organizations and 300 institutions with subcontracting departments.
The Commission is responsible for the overall implementation of AL-INVEST, assisted by a Secretariat run from outside the Commission and an Advisory Committee composed of Commission departments, the joint Eurochambers/Aico organization, and employers' organizations.

The programme was initially set up for a two-year period (1994-1995) with a financial contribution from the Commission of ECU 20 million. On 21 September 1995, a decision was taken to extend the programme until the year 2000, with an additional budget of ECU 85 million, of which ECU 41 million is contributed by the Commission.

The programme is open to business interests in the European Union and Latin America who gain access to it via institutional operators and networks in their respective regions: in other words, applications for support under the programme come from business initiatives proposed by enterprises or individuals acting through the different institutional operators. The implementation of the programme is highly decentralized, with an emphasis on interaction between the institutional operators and networks on each side.

Within the context of the programme, the role of the European and Latin American institutional operators in their respective regions is to:

- Promote AL-INVEST, by informing businesses and through increasing the awareness of cooperation opportunities offered by the programme;
- Propose initiatives of all types within the programme, by organizing information meetings on regulatory environments, ways and means of investment in each of the regions and the promotion of investment opportunities;
- Encourage companies to play an active part in cooperation and partnership schemes;
- Identify the needs of businesses in their respective regions, providing support for partner searches and putting them in touch with corresponding networks in the other region to facilitate such partner searches. (In Europe, the main networks are the BRE (Bureau de Rapprochement des Entreprises), the BC-NET (Business Cooperation Network) and the RIOST (Reseau International des Organismes de Sous-Traitance - International Network of Sub-contracting Organizations). Under AL-INVEST, the BRE and BC-NET have expanded into Latin America, providing assistance to SMEs located in the region. The other networks operating on the Latin American side are ALABSUB (which brings together subcontracting bureaux from the region and TIPS (Technology Information Promotion System.);
- Furthering partnership opportunities by means of these networks, in accordance with a previously established schedule of events;
- Ensure the personalized follow-up of businesses and initiatives.

European business wishing to benefit from the AL-INVEST programme should first contact an institution within the COOPECO network, the primary focal point for European participation in the programme. COOPECO is an open network linking over 180 European trade institutions (Chambers of Commerce, Employer’s organizations and professional organizations, specialized consultancies, development agencies and other institutions involved in regional development, banking institutions, etc.) which specialize in industrial cooperation and investment promotion between Europe and Latin America. COOPECO members also belong to other European networks such as BRE, BC-NET, SPRINT and the Euro Info Centres.

The main focal point for Latin American participation in the programme are the Eurocentros de Cooperacion Empresarial-ECEs-(Eurocentres for Enterprise Cooperation) which broadly mirror the COOPECO network. Like COPECO, the ECEs are responsible for the promotion and organization of activities taking place within the programme on the Latin American side, in cooperation with the networks operating in the region under the programme (BRE, BC-NET, ALABSUB and TIPS.

The Commission co-finances projects under the programme up to a maximum of 50% for initiatives focusing on a single business sector. Proposed schemes must be submitted to the Commission for evaluation and approval at least eight months in advance of their scheduled start date. Applications for funding under the programme on the European side must involve institutions from at least three Member States of the European Union. To ensure that initiatives supported under the programme are carefully monitored from start to finish, they must be carried out according to the schedules proposed by the sponsoring institutions, which are established in agreement with the Commission.

Given that partnerships developed under AL-INVEST may lead to the setting-up of common/joint venture companies, funding for such operations may be made available under the ECIP initiative (European Community Investment Partners). Established in 1988, the ECIP is a financial instrument set up to promote common/joint ventures in a number of regions. In the context of the AL-INVEST programme, the ECIP can provide support for European companies wishing to form an association with a Latin American business, either through capital investment or through a licensing agreement, for either an existing company or a start-up.