RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/JPN/20
23 October 1998
(98-4134)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions from the EUROPEAN COMMUNITY1 and the UNITED STATES2
Regarding the New and Full Notification of JAPAN3
The following communication, dated 21 October 1998, has been received from the Permanent
Mission of Japan.
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QUESTIONS FROM THE EUROPEAN COMMUNITY
Q. Prefectural Loans from the Japan Development Bank
The JDB, a public institution, provides l oans at preferential interest rates to new
industries, new technologies and companies diversifying their business.
The Community requests Japan to noti fy this programme under Article 25.
Reply
The objective of the Japan Development Bank is to assist and encourage the loan given by
private financial institutions in order to develop industries and to contribute to the improvement of
economy, as clearly stipulated in the Japan Development Bank Law, Article 1.
In order to achieve the objectives, the Japan Development Bank supplies mainly long-term
loans to the business stipulated in the Japan Development Bank Law, Article 18, as follows:
1. Obtaining and improving the facilities to de velop industries and to contribute to the
improvement of the economy;
2. Researching and making use of  high-level and new technology;
3. Developing the land that contributes to the de velopment of industries and to the improvement of
the economy, etc.
The Japan Development Bank can give loans only when the fulfilment of obligation is expected
to be ensured.
                                                     
1 G/SCM/Q2/JPN/4
2 G/SCM/Q2/JPN/7
3 G/SCM/N/3/JPN/Rev.1G/SCM/Q2/JPN/20
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QUESTIONS FROM THE UNITED STATES
Q. Please provide information concerning the following programmes which did not appear
to be included within Japan’s notification, yet may meet the notification requirements of GATT
1994 and/or the SCM Agreement.  Please include information relevant to the elements
requested in the notification format, or explai n the basis on which Japan determined that each
programme did not meet the notification requirements referenced above:
(1) Export subsidies and domestic subsidies granted or maintained on agricultural
products, e.g. subsidies granted under the “Food Control Law”.
Reply
Japan has notified its domestic subsidies granted or maintained on agricultural products since
1996.  Japan provides no export subsidies on agriculture.
(2) Subsidy of Fishing Industry Mutual Aid Loan Interest Payments
Reply
This subsidy was abolished in fiscal year 1995.  This subsidy covered part of expenses
necessary for activities of fisheries mutual release associations compensating for damage caused by
natural disasters.
(3) Forestry Development Public Corporation Subsidy
Reply
It seems that the "Forestry Development Publ ic Corporation Subsidy" mentioned by the US
refers to the grant to the Forest Development Corporation.  This programme provides part of expensesnecessary for planting water-reservoir forests for the public purpose of fostering water resources
borne by the Forest Development Corporation, which is a special public institution founded under the
Forest Development Corporation Law.  Establishing water reservoir forests is part of programmes for
facilitating general infrastructure.  Japan does not consider that this programme is in the scope of the
SCM Agreement.
(4) Forestry Guidance Subsidy
Reply
It seems that the "Forestry Guidance Subsidy" mentioned by the US refers to the grant to
forestry extension services.  This grant covers part of necessary administrative expenses born byprefectural governments to provide advisory services for the promotion of technologies as well as
knowledge concerning forestry.  The grant is prov ided to prefectural governments to cover personal
costs in prefectural governments and no financial support is provided for any enterprises through the
prefectural governments.  Japan does not necessarily consider that this grant is subject to the
notification requirements under the SCM Agreement.G/SCM/Q2/JPN/20
Page 3
(5) Fishing Industry Regulatory Committee Subsidy
Reply
It seems that the "Fishing Industry Regulatory Committee Subsidy" mentioned by the US
refers to the grant to the Fisheries Coordination Committee.  This grant is provided to prefectural
governments for administrative costs of the Committee, which is established in each prefecture under
the Fisheries Law.  The role of the Committee is to provide recommendations to prefectural
governments on making utilization plan of fisheries ground, fishery rights as well as establishing
prefectural fishery regulations.  The Committee also provides instructions on restriction of fishing and
harvesting to prevent fishery dispute.  No financial support is provided for any enterprises through the
prefectural governments.  Japan does not necessari ly consider that this grant is subject to the
notification requirements under the SCM Agreement.
(6) Marine Industry Improvement Subsidy
Reply
It seems that the "Marine Industry Improvement Subsidy" mentioned by the US refers to the
grant to the fisheries extension services.  This grant covers part of necessary administrative expenses
borne by prefectural governments to provide advisory services for the promotion of technologies as
well as knowledge concerning fishery.  The grant is provided to prefectural governments to coverpersonnel costs in prefectural governments and no financial support is provided for any enterprises
through the prefectural governments.  Japan does not necessarily consider that this grant is subject to
the notification requirements under the SCM Agreement.
(7) Financing for the Promotion of Industry Technology Development Scheme
Reply
The loan programme is for the business which finds difficulty in taking loans from financial
institutions other than the Japan Development Bank .  The objective of the Japan Development Bank is
to assist and encourage the loan given by private financial institutions in order to develop industries
and to contribute to improvement of the economy, as clearly stipulated in the Japan DevelopmentBank Law, Article 1.
The criteria for the eligible businesses are s tipulated in the Japan Development Bank Law,
Article 18, as follows:
1. The business contributing to:
(i) the development and the research of high level and new technology;(ii) the sound formation and the systematic improvement of cities;(iii) the rationalizing of utility of energy.
2. The business contributing to the development of industries and to the improvement of the
economy.G/SCM/Q2/JPN/20
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(8) Financing for New Technology Development
Reply
Japan cannot identify "Financing for new technology development" mentioned by the US.
Detailed explanation from the US on this programme will help Japan provide relevant information.
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