EBC BOG EOB COMBINED END-OF-YEAR MEETING MINUTES

EBC Board of Governors, EBC Executive Operating Board, EBC Committee Chairmen

Thursday, December 06, 2007; 08:30 a.m. - 10:30 a.m., 6th Floor, Europa House, EC Delegation

1. COMMENTS FROM THE EC DELEGATION:

Mr. Peter van Den Heuval, Head of Trade, Delegation of the EC to Japan reported on upcoming key events. The signing of the Lisbon treaty will take place on December 14, with all member states expected to sign the treaty prior to it being submitted to voters for ratification. This treaty aims to improve internal functions, the decision-making system, and safeguard human rights among a range of other reforms and goals. The annual Regulatory Reform Dialogue with the Government of Japan also takes place this month. Deputy Director Kovanda from DG Relex will meet with Japanese government ministries to submit proposals for regulatory reforms.

2. UPDATE FROM THE EBC CHAIRMAN:

1. In Brussels on October 4, the EBC Chairman met with Carlos Gonzalez and Adrian Van den Hoven of Business Europe to discuss the EU EIA Task Force. The meeting was an opportunity for both the EBC and Business Europe to discuss the EIA Task force process and timeline for preparing the industry recommendations. He further emphasized that collaboration and partnership between Business Europe and the EBC on the EIA Task Force was of critical importance, and that the European business community in Japan could not take on this commitment without their European counterparts.
2. In Brussels on October 4, the EBC Chairman held a meeting with David O'Sullivan, Director-General, DG Trade; Alan Seatter, Director, North America, East Asia, Australia, NZ, EEA, EFTA, San Marino, Andorra and Monaco, External Relations Directorate; and Gerhard Lohan, Head of the Japan Unit, External Relations Directorate. EBC Chairman was warmly welcomed and the subsequent discussion on the EIA was productive.
3. On October 29, the EBC Chairman, Executive Director, Policy Director, and representative committee chairmen met with EU Parliamentarians from the Economy and Monetary Committee. The EU visitors were briefed on key issues in the financial sector as well as developments in business regulations, and EBC activities in promoting an EU-Japan Economic Integration Agreement.
4. On October 30, the EBC Chairman, Executive Director, and Policy Director met with Mr. Alan Seatter, Director, North America, East Asia, Australia, NZ, EEA, EFTA, San Marino, Andorra and Monaco, External Relations Directorate, EU Commission. The meeting was an opportunity to brief Mr. Seatter on current activities regarding the EIA and progress in regulatory reforms impacting EBC member companies.
5. On November 8, the EBC Chairman delivered a 30-minute presentation to EU Member State Ambassadors on the role and function of the EBC and current activities, most notably the production and launch of the 2008 White Paper. Preliminary copies of the White Paper were distributed to each Ambassador for their reference. The speech was then followed by a 30-minute question period.
6. On November 8, the EBC Chairman and EBC Executive Director attended the Investment Group Lunch, a bimonthly meeting with Japanese government officials of various ministries and agencies including MOFA, JDB, JETRO, METI, Keidanren, etc. At the meeting, an informal discussion addressed the potential of the EIA to boost trade and investment flows between Europe and Japan.
7. On November 8, the EBC Chairman, Executive Director and Policy Director held a meeting with Toshiba and JETRO who confirmed the members of the Japanese EIA Task Force and also gave a brief progress report on current activities. The EBC also provided an update on their current activities and discussions regarding EIA recommendations.
8. On November 14, the EBC Chairman gave a presentation to the Foreign Correspondent's Club of Japan (FCCJ). Following an increasing amount of coverage in the media and discussions within policy circles regarding a potential trade agreement between EU and Japan, the FFCJ invited the EBC Chairman to present the position of the European industry on this issue.
9. On November 19, the EBC Chairman and Secretariat met with METI Vice-Minister Shindo. The meeting was an opportunity to discuss this year's regulatory reform recommendations, the EIA, and other key issues for European businesses.
10. The Launch of the EBC White Paper held on November 21 at the Westin Hotel was successful, attended by approximately 260 guests including 23 of the EU Member State Ambassadors and high-ranking members of the Japanese Ministries and Parliament. The Executive Director thanked the Committee Chairmen for their participation and presenting an excellent set of remarks, well received by the audience.
11. On November 22, following an invitation by the Keizai Doyukai to discuss the future of closer trade and economic relations between the EU and Japan, the EBC Chairman gave a speech on the concept for the EIA, followed by a question and answer session.

3. REPORT FROM THE EXECUTIVE DIRECTOR:

1. The Executive Director distributed copies of the 2007 Report from the EBC Secretariat, a detailed synopsis on the activities and functions of the EBC including lobbying issues, stakeholder contributions, and funding sources.
2. The Executive Director provided the final figures on the production of the 2007 White Paper and funds that have been raised via sponsorships. Funding at 5.4 million yen was close to the target figure of 5.5 million yen.
3. The EBC Secretariat is now focused on conducting research and outreach in preparation for the EU EIA Task Force Paper. A draft EBC resource paper will be circulated among internal and external stakeholders for discussion, feedback and consensus in early 2008. Update: Following this BOG meeting, preliminary drafts of the EIA paper along with White Papers and the first EBC position paper on EIA will be distributed at the first Europe-based EU EIA Taskforce meeting to be held in Brussels on December 11 at BusinessEurope.

4. Secretariat activities and meetings:

1. On October 24-25 the EBC secretariat organized Eucomed visits to various government ministries and medical associations.
2. The date for the kick-off of the 2008 ETP recruitment program has been delayed. As part of the EBC's role in ETP recruitment, the EBC Executive Director will attend the kick-off meeting to be held probably in Brussels sometime in the early part of next year, probably late February. Michel Martino, Director of the ETP program recently visited Japan and met with the EBC Executive Director to discuss progress and challenges for ETP program.
3. On November 29, the EBC Executive Director gave a speech on the role of the EBC and business in promoting research and innovation activities for European researchers in Japan at the EU Researchers' Network event organized by the Science and Technology section of the EC Delegation. The responses to the speech and the possibility of forming an EBC Research and Innovation Taskforce was positive, with approximately 30 attendants expressing interest in joining such a Taskforce and requesting copies of the White Paper.
4. On December 11, the Executive Director will attend the first Europe-based EU EIA Taskforce Meeting at BusinessEurope in Brussels.
5. On December 17, the EBC secretariat and a small group of EBC chairmen (to be specified by the Delegation) will meet with the European Commission's Deputy-Director General Kovanda as part of the Regulatory Reform Dialogue.
6. The EBC is also considering the possibility of setting up a Chemicals Committee as a French chemical company recently contacted the EBC about a tariff issue and indicated that they will find some other companies that might be interested in joining.

5. REPORT FROM THE POLICY DIRECTOR:

Banking committee: The committee has witnessed how its long-standing proposal to loosen firewall regulations separating banking and securities was included in the recommendations from the Financial Systems Council released in November. The committee will follow closely its implementation.

Airlines Committee: The Committee submitted Public Comments as an endorsement of a document recently issued by the Japan Fair Trade Commission (JFTC) suggesting that anti trust immunity should not be extended to pricing based on IATA. If implemented, the recommendation would open up for free pricing on International air fares from Japan

Retail Committee: Member companies are lobbying for revision of current labeling requirements for household products

Cosmetics committee: The committee visited MHLW to express their concern with parallel imports that do not follow the law on labeling requirements. EBC member companies have invested significant time and resources to ensure that their products abide by labeling requirements, and believe that allowing mislabeled parallel imports on the market, distorts the principle of equal treatment and fair competition.

Insurance committee: Discussions and dialogues with the authorities on postal privatization are ongoing. The Insurance Committee plans to submit public comments and continue active engagement with the government.

Immigration procedures: There has been substantial media coverage of the new immigration procedures, including numerous articles on the position and recommendations of the EBC on this critical issue. Feedback from foreigners indicates that the new procedures including the data registration process and the lines for entry and departure at the airport customs counters are functioning relatively well. Members of the Board reported on their own experience with the new identity registration procedures and entry and departure procedures.

Japan Fair Trade Commission (JFTC): The JFTC has informed the EBC that they will be distributing surveys to all foreign companies on antimonopoly laws.

6. COMMENTS FROM COMMITTEE CHAIRMEN:

Tax Committee Chairman, Hans-Peter Musahl: The Committee is monitoring progress in discussions on the triangular merger issue. The FSA is also engaged in discussions on permanent reduction in tax breaks. An EIA between the EU and Japan could be instrumental in achieving key reforms: reduction of tax rates, mutual deductions for social security, and new documentation standards.

Airlines Committee Chairman, Otto Benz: The committee is continuing with its efforts to address restrictions on European airlines in terms of pricing and distribution of air travel, and limited slots at airports. The Committee will also meet with IATA Director General Giovanni Bisignani upon his visit to Japan in February.

Banking Committee Chairman, Jean-Francois Minier: The Committee is engaged in discussions on firewall regulations. It is expected that although article 33 will not be abolished, current firewall regulations may be relaxed at the wholesale level and allow for a larger degree of double hatting of management. Chairman Francois Minier will step down at the end of the year and Phillipe Avril of UBS securities will take over the role.

Telecommunications Carriers Committee Chairman, Ian Pulford: European telecommunications companies continue to encounter market access issues, as the Japanese market is largely dominated by NTT. Chairman. Ian Pulford will resign at the end of this year and will be replaced by his replacement at BT Japan Corp. from 2008.

Materials Committee Chairman, Vincent Trelut: The Committee continues to address the issue of tariffs imposed on most industrial material imports.

Medical Equipment Committee Chairman, Seiji Kamijo: The committee continues to work with product regulations and reimbursement reform. Mutual recognition of products is needed and the reimbursement system needs to be revised to create a system that provides incentives for innovation. Certain Progress has been achieved with a new set of regulations shortening the period of registration for products but an average 4% decrease in reimbursement prices is expected next year.

Retail Committee Chairman David Buckley: The retail committee is seeking more clarification and revisions in current labeling regulations. In terms of controlling the price of alcoholic products, the MOF continues to have the mandate to raise revenue, raise taxes, and ask for price increases if prices are not kept at an "appropriate" level.

Food Committee Chairman, Duco Delgorge: The issues identified by the committee are included in this year's regulatory reform proposal to the Japanese government from the European Commission. A positive development is reported a company can now request a second set of tests on imports that tested positive for residue in a first testing. Progress is slow in the approval of food additives, but polysorbate, an additive widely used in Europe, is expected to complete the approval process soon.

Defense Committee Representative, Michel Theoval: Recent scandals have highlighted deficiencies of the procurement system within the defense sector. The procurement system is largely impacted by the dominant role of the trading companies and the fact that these trading companies can finance large deals whilst the Japanese government are severely restricted in maximum allowable amount per year and product.

7. 2007 FUNDING:

1. The Executive Director presented the figures on stakeholder funding and EBC budget.
2. The Executive Director noted that approval for the 2008 budget from each Chamber was received. Potential funding sources for 2008 include:
   • Eurochambres - ETP promotion 2008/9
   • Eucomed- visit program organization/liaison with EBC Medical Equipment Committee (TBC)
   • European Wood - office location
   • British Computer Society (under consideration)

8. ORGANISATIONAL MATTERS:

Interim result of Chamber Vote on Registration: Two Chambers have yet to submit their votes on EBC registration. All votes must be submitted by December 31. All responses so far support the registration proposal.