WT/TPR/S/351/Rev.1  
20 June 2017  
(17-3253) Page: 1/144 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
JAPAN 
Revision  
This report, prepared for the thirteenth Trade Policy Review of Japan, has been drawn up by the 
WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement 
establ ishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from Japan on its trade policies 
and practices.  
 
Any technical questions arising from this report may be addressed  to Mr. Masahiro Hayafuji  
(tel: 022/739 5873), Mr. Pierre Latrille (tel: 022/739 5266), Mrs. Mena Hassan 
(tel: 022/739  6522), and Mr. Michael Kolie (tel: 022/739 5931).  
 
Document WT/TPR/G/351 contains the policy statement submitted by Japan.  
 
 
Note: This report was drafted in English.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  9 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  13 
1.1   Main Features of the Economy  ................................ ................................ ..................... 13 
1.2   Recent Economic Developments  ................................ ................................ ................... 13 
1.2.1    Monetary policy  ................................ ................................ ................................ .......15 
1.2.2    Fiscal policy  ................................ ................................ ................................ ............ 16 
1.2.3    Structural reforms  ................................ ................................ ................................ ...16 
1.2.4    Balance of payments  ................................ ................................ ................................ 16 
1.3   Trade Performance  ................................ ................................ ................................ .....17 
1.4   Foreign Direct Investment  ................................ ................................ ........................... 20 
2   TRADE AND INVESTMENT  REGIME  ................................ ................................ ............  22 
2.1   General Framework  ................................ ................................ ................................ ....22 
2.2   Trade Policy Objectives  ................................ ................................ ............................... 23 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 24 
2.3.1    WTO ................................ ................................ ................................ ...................... 24 
2.3.2    Regional  and preferential agreements  ................................ ................................ ........ 24 
2.3.3    Other agreements and arrangements  ................................ ................................ ......... 25 
2.4   Investment Regime  ................................ ................................ ................................ ....25 
3   TRADE POLICIES AND P RACTICES BY MEASURE  ................................ ........................  28 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 28 
3.1.1    Customs procedures and requirements  ................................ ................................ .......28 
3.1.1.1    Transparency and legal framework  ................................ ................................ .......... 28 
3.1.1.2    Fees and formalities  ................................ ................................ .............................. 29 
3.1.1.3    Release and clearance of goods  ................................ ................................ .............. 30 
3.1.2    Customs valuation  ................................ ................................ ................................ ...31 
3.1.3    Rules of origin  ................................ ................................ ................................ ......... 32 
3.1.4    Tariffs  ................................ ................................ ................................ .................... 32 
3.1.4.1    MFN applied tariff  ................................ ................................ ................................ ..32 
3.1.4.2    Bound tariff  ................................ ................................ ................................ .......... 35 
3.1.4.3    Preferential tariff  ................................ ................................ ................................ ...36 
3.1.5    Import prohibitions, restrictions, licensing, and quotas  ................................ ................. 37 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 38 
3.1.6.1    Overview  ................................ ................................ ................................ ............. 38 
3.1.6.2    Anti-dumping measures  ................................ ................................ ......................... 39 
3.1.6.3    Countervailing measures  ................................ ................................ ........................ 40 
3.1.6.4    Safeguard measures  ................................ ................................ ............................. 41 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 42 
3.2.1    Export procedures and requirements  ................................ ................................ .......... 42 
3.2.2    Export taxes, charges, and levies  ................................ ................................ ............... 42 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 42 
3.2.4    Export support and promotion  ................................ ................................ ................... 44 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......46 
3.3.1    Taxation and tax incentives  ................................ ................................ ....................... 46 
3.3.1.1    Tax reform  ................................ ................................ ................................ ........... 46 
3.3.1.2    Incentive schemes  ................................ ................................ ................................ 47 
3.3.2    Subsidies and other assistance programmes  ................................ ............................... 49 
3.3.3    Competition policy and price controls  ................................ ................................ ......... 50 
3.3.3.1    Recent development  ................................ ................................ .............................. 50 
3.3.3.2    Mergers and acquisitions, and holding companies  ................................ ..................... 50 
3.3.3.3    Exemptions  ................................ ................................ ................................ .......... 51 
3.3.3.4    International arrangements and agreements  ................................ ............................ 52 
3.3.3.5    Enforcement  ................................ ................................ ................................ ......... 54 
3.3.4   Corporate governance  ................................ ................................ .............................. 56 
3.3.5    State trading, state -owned enterprises, and privatization  ................................ ............. 56 
3.3.6    Standards and other te chnical requirements  ................................ ............................... 58 
3.3.7    Sanitary and phytosanitary measures  ................................ ................................ ......... 63 
3.3.8    Labelling and packaging requirements  ................................ ................................ ........ 65 
3.3.9    Government procurement  ................................ ................................ ......................... 67 
3.3.10    Intellectual property rights  ................................ ................................ ...................... 73 
3.3.10.1    Overview  ................................ ................................ ................................ ........... 73 
3.3.10.2    Patents  ................................ ................................ ................................ .............. 78 
3.3.10.3    Utility models (UMs)  ................................ ................................ ............................ 79 
3.3.10.4    Designs  ................................ ................................ ................................ .............. 80 
3.3.10.5    Trademarks  ................................ ................................ ................................ ........ 80 
3.3.10.6    Geographical indications  ................................ ................................ ...................... 81 
3.3.10.7    Copyright  ................................ ................................ ................................ ........... 83 
3.3.10.8    Enforcement  ................................ ................................ ................................ .......83 
3.3.10.9    International cooperation a nd harmonization  ................................ .......................... 86 
3.3.10.10    The 2015 IP strategic programmes  ................................ ................................ ......86 
4   TRADE POLICIES IN SE LECTED SECTORS  ................................ ................................ .. 88 
4.1   Agriculture  ................................ ................................ ................................ ................. 88 
4.1.1    Trade  ................................ ................................ ................................ ..................... 90 
4.1.2    Agricultural policies  ................................ ................................ ................................ ..92 
4.1.2.1    Legal and institutional framework  ................................ ................................ ........... 92 
4.1.2.2    Trade policies  ................................ ................................ ................................ .......93 
4.1.2.3    Domestic support  ................................ ................................ ................................ ..94 
4.1.2.3.1    General support programmes  ................................ ................................ .............. 94 
4.1.2.3.2    Rice ................................ ................................ ................................ .................. 95 
4.1.2.3.3    Other cereals, sugar beet, starch potatoes, buckwheat, and rapeseed  ...................... 95 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.1.2.3.4    Fruits and vegetables  ................................ ................................ ......................... 96 
4.1.2.3.5    Tobacco  ................................ ................................ ................................ ............ 96 
4.1.2.3.6    Livestock products  ................................ ................................ ............................. 96 
4.1.2.3.7    Dairy  ................................ ................................ ................................ ................ 97 
4.1.2.4    Support levels  ................................ ................................ ................................ ......98 
4.1.2.4.1    WTO notifications  ................................ ................................ ............................... 98 
4.1.2.4.2    OECD indicators  ................................ ................................ ................................ .98 
4.2   Fisheries  ................................ ................................ ................................ ..................  100 
4.2.1    Features  ................................ ................................ ................................ ...............  100 
4.2.2    Policy  ................................ ................................ ................................ ...................  100 
4.2.2.1    Stock management  ................................ ................................ .............................  101 
4.2.2.2    International agreements  ................................ ................................ .....................  101 
4.3   Support for fisheries  ................................ ................................ ................................ . 102 
4.4   Mining and Energy  ................................ ................................ ................................ .... 102 
4.4.1    Mining  ................................ ................................ ................................ ..................  102 
4.4.2    Primary energy  ................................ ................................ ................................ ...... 102 
4.4.3    Electricity  ................................ ................................ ................................ .............  104 
4.5   Manufacturing  ................................ ................................ ................................ ..........  107 
4.6   Services  ................................ ................................ ................................ ..................  107 
4.6.1    Financial services  ................................ ................................ ................................ ... 107 
4.6.2    Telecommunications  ................................ ................................ ...............................  111 
4.6.3    Audiovisual services  ................................ ................................ ...............................  113 
4.6.3.1    Film industry  ................................ ................................ ................................ ...... 113 
4.6.3.1.1    Economic str ucture  ................................ ................................ ...........................  113 
4.6.3.1.2    Regulatory framework  ................................ ................................ ......................  116 
4.6.3.2    Television services  ................................ ................................ ..............................  117 
4.6.3.2.1    Economic structure  ................................ ................................ ...........................  117 
4.6.3.2.2    Regulatory framework  ................................ ................................ ......................  119 
4.6.3.3    Radio services  ................................ ................................ ................................ .... 121 
4.6.3.4    Sound recording services  ................................ ................................ .....................  122 
4.6.4    Health -related services  ................................ ................................ ...........................  122 
4.6.4.1    Medical and dental services  ................................ ................................ ..................  124 
4.6.4.2    Services provided by midwives, nurses, physiotherapists and paramedical 
personnel  ................................ ................................ ................................ ........................  126 
4.6.4.3    Hospital and other human health services  ................................ ..............................  129 
4.6.4.4    Social services  ................................ ................................ ................................ .... 130 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 133  
 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  CHARTS  
 
Chart 1.1 Product composition of merchandise trade, 2013 and 2015  ................................ .......19 
Chart 1.2 Direction of merchand ise trade, 2013 and 2015  ................................ ....................... 20 
Chart 3.1 Tariff distribution by type of duty, FY2016  ................................ .............................. 33 
Chart 3.2 Share of non -ad valorem  duties, b y HS Section, FY2016  ................................ ........... 34 
Chart 3.3 Simple average applied MFN tariff rates, by HS Section, FY2014 and FY2016  .............. 35 
Chart 3.4 Structu re of IPR administration and enforcement  ................................ ..................... 78 
Chart 3.5 IP cases handled by courts, 2006 -15 ................................ ................................ ......84 
Chart 3.6 Amount of damages, 2005 -14 ................................ ................................ ............... 85 
Chart 3.7 Import seizures, 2011 -15 ................................ ................................ ..................... 86 
Chart 3.8 Export seizure, 2011 -15 ................................ ................................ ....................... 86 
Chart 4.1 Trade in agriculture, 2011 -15 ................................ ................................ ................ 90 
Chart 4.2 Value of production and support to agriculture, 2011 -15 ................................ ........... 99 
Chart 4.3 Primary energy supply in Japan  ................................ ................................ ...........  102 
Chart 4.4 Final energy consumption by sector, 2012  ................................ ............................  103 
Chart 4.5 Electricity market  reform roadmap  ................................ ................................ ....... 104 
Chart 4.6 Gradual expansion of electricity retail market liberalization  ................................ ..... 105 
Chart 4.7 New entrants in Japan' s electricity retail market  ................................ ....................  106 
Chart 4.8 Categorization and licensing of electricity producers before and after the 
April 2016 reform  ................................ ................................ ................................ .............  106 
Chart 4.9 Holding and affiliated company formats  ................................ ................................  107 
Chart 4.10 Structure of the film industry in Japan  ................................ ................................  114 
Chart 4.1 1 Market revenue and share attributed to films, 2014 ................................ ..............  115 
Chart 4.12 Market revenue attributed to films, 2000 -2014 ................................ ....................  116 
Chart 4.13  Television transmission industry, 2014  ................................ ...............................  118 
Chart 4.14 Foreign medical personnel in Japan, as of December 2015  ................................ .... 123 
Chart 4.15 Nu mber of registered foreign personnel with medical status, 2004 -June 2014  .........  123 
Chart 4.16 Number and origin of registered foreign personnel with medical status, as of 
June 2014  ................................ ................................ ................................ .......................  124 
Chart 4.17 Origin of foreign nurses and care -workers under EPAs, as at June 2014  ..................  127 
Chart 4.18 Number and origin of foreign patients treated  in Japan (including their 
companions), as at June 2014  ................................ ................................ ...........................  130 
 
TABLES  
 
Table 1.1 Selected macroeconomic indicators, 2011 -15 ................................ .......................... 14 
Table 1.2 Balance of payments 2011 -15 ................................ ................................ ............... 17 
Table 1.3 Foreign direct investment, 2011 -15 ................................ ................................ ........ 21 
Table 2.1 Major t rade-related laws and regulations, June 2016  ................................ ................ 22 
Table 2.2 Investment treaties in force, October 2016  ................................ ............................. 27 
Table 3.1 Structure of M FN tariffs, FY2012, FY2014 and FY2016  ................................ .............. 33 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 3.2 Summary analysis of Japan's preferential tariffs, FY2016  ................................ .......... 36 
Table 3.3 Japan's  anti-dumping measures in force, November 2016  ................................ ......... 39 
Table 3.4 Principal legislation affecting exports  ................................ ................................ ......42 
Table 3.5 NEXI insurance activity, FY2011 -15 ................................ ................................ ........ 44 
Table 3.6 JBIC lending and investments, FY2011 -15 ................................ ............................... 45 
Table 3.7 JBIC funding sources, FY2010/14  ................................ ................................ ........... 45 
Table 3.8 Tax revenue, FY2011/15  ................................ ................................ ....................... 46 
Table 3.9 Tax incentives for strengthening local business facilities ................................ ............ 47 
Table 3.10 Tax incentives based on the Industrial Competitiveness Enhancement Act  ................. 48 
Table 3.11 Tax credit for research and development (R&D) expenses  ................................ .......48 
Table 3.12 Exemptions from the Anti -Monopoly Act, June 2016  ................................ ............... 51 
Table 3.13 Japan's participation in international arrangements and  agreements  ......................... 52 
Table 3.14 List of Japan's RTAs/EPAs which have competition -related provisions  ........................ 54 
Table 3.15 Enforcement of compe tition policy, 2009/15  ................................ .......................... 55 
Table 3.16 State trading enterprises notified to the WTO under Article XVII  .............................. 56 
Table 3.17 Large state enterprises, FY2015  ................................ ................................ ........... 58 
Table 3.18 Main laws on standards and technical regulations  ................................ ................... 59 
Table 3.19 JIS established, revised, and w ithdrawn, April 2015 -March 2016  .............................. 62 
Table 3.20 Principal laws on SPS measures  ................................ ................................ ........... 64 
Table 3.21 Comparison of the three categories of  foods with health claims  ................................ 66 
Table 3.22 Japan's government procurement commitments and obligations under various 
FTAs 67 
Table 3 .23 Entities covered, thresholds and disciplines/procedures applicable under the 
GPA and the general voluntary measures  ................................ ................................ .............. 68 
Table 3.24 Sector -specific voluntary measures  ................................ ................................ ......69 
Table 3.25 Foreign participation in Japan's government procurement  ................................ .......71 
Table 3.26 Awards to foreign suppliers by origin, 2014  ................................ ........................... 71 
Table 3.27 Procurement by product and by origin, 2013 and 2014  ................................ ........... 71 
Table 3.28 Procurement by type of service, 2013 and 2014  ................................ ..................... 72 
Table 3.29 Percentage of Foreign Suppliers' Tenders and Awards, 2014  ................................ ....73 
Table 3.30 Implementation of overall -greatest -value evaluation method, 2012 -14 ..................... 73 
Table 3.31 Summary of the protection of intellectual property rights, 2016  ............................... 74 
Table 3.32 Patent applications and patents gra nted, 2007 -15 ................................ .................. 79 
Table 3.33 Utility model applications and registrations, 2007 -15 ................................ .............. 80 
Table 3.34 Design applications and registra tions, 2007 -15 ................................ ...................... 80 
Table 3.35 Trademark applications and registrations, 2007 -15 ................................ ................ 80 
Table 3.36 Information on registered GIs  ................................ ................................ .............. 81 
Table 3.37 Major distinctions between MAFF's GI system and the JPO's Collective 
Trademark System  ................................ ................................ ................................ ............. 82 
Table 3.38 List of GIs for alc oholic beverages designated by the Commissioner of the 
National Tax Agency  ................................ ................................ ................................ ........... 82 
Table 3.39 Statistics on confiscated goods, 2013 -15 ................................ ............................... 84 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 4.1 GDP and employment figures by economic activity, 2011 -14 ................................ .....88 
Table 4.2 Farm households and average farm size, 2011 -15 ................................ ................... 89 
Table 4.3 Total agricultural production and production of selected products, 2011 -15 ................. 90 
Table 4.4 Imports of agricultural products, 2011 -15 ................................ ............................... 91 
Table 4.5 Exports of agricultural products, 2011 -15 ................................ ............................... 91 
Table 4.6 Imports under the SBS system, FY2011 -2015 ................................ ......................... 93 
Table 4.7 Payment rates for other cereals, sugar beet, starch potatoes, buckwheat and 
rapeseed, 2016 ................................ ................................ ................................ .................. 95 
Table 4.8 Administered prices for calves, beef, and pig meat, FY2016  ................................ ......97 
Table 4.9 Total producer support estimate and single commodity transfer values for 
selected commodities, 2011 -15 ................................ ................................ ........................... 99 
Table 4.10 Government tr ansfers to fishing, 2007 -13 ................................ ...........................  102 
Table 4.11 Japan's fossil fuel production and imports, 2013  ................................ ..................  103 
Table 4.12 Size of the Japanese film market, 2012 -15 ................................ ..........................  114 
Table 4.13 Economic contribution of film production, film distribution and film exhibition to 
the Japanese economy, 2014  ................................ ................................ ............................  115 
Table 4.14 Economic contribution of the television sector to the Japanese economy, 2014  ........  118 
Table 4.15 Restrictions on foreign ownership applying to TV broadcasting compa nies ...............  120 
Table 4.16 Main economic indicators of the health sector in Japan, 2010 -12 ............................  122 
Table 4.17 Main conditions and procedure s under bilateral medical recognition agreements 
signed by Japan, as of 2015  ................................ ................................ ..............................  125 
Table 4.18 Conditions to take the national nurses and caretakers exams  ................................  128 
Table 4.19 Foreign nurse and care -worker candidates, 2008 -14 ................................ .............  129 
Table 4.20 Main types of senior accommodation in Japan, 2013  ................................ .............  131 
 
BOXES  
 
Box 3.1 Japan's Authorized Economic Operator Program  ................................ ......................... 31 
Box 3.2 Agencies in charge of TBT issues  ................................ ................................ .............. 61 
Box 3.3 Key agencies responsible for SPS measures  ................................ ............................... 64 
Box 4.1 Financial services in Japan: statistical overview, 2013 and 2015  ................................  107 
Box 4.2 Main economic indicators and regulatory features of the telecommunications 
sector in Japan  ................................ ................................ ................................ ................  111 
 
APPENDIX TABLES  
 
Table A 1. 1 Merchandise exports by product group, 2011 -15 ................................ .................  133 
Table A1. 2 Merchandise imports by product group, 2011 -15 ................................ .................  135 
Table A1.3 Merchandise exports by destination, 2011 -15 ................................ ......................  136 
Table A1. 4 Merchandise imports by origin, 2011 -15 ................................ ............................  137 
 
Table A2. 1 WTO dispute settlement cases active 1 January 2015 -8 July 2016  .........................  138 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table A2. 2 Selected notifications under WTO Agreements (1  January  2015-
11 October  2016), or last notificati on if applicable  ................................ ................................  139 
 
Table A3. 1 Japan's tariff summary, FY2016  ................................ ................................ ........  141 
 
Table A4. 1 Special safeguard, FY2014/15 ................................ ................................ ...........  143 
 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  SUMMARY  
1. During the review period, Japan's economic performance remained sluggish in light of, 
among others, persistently low inflation and an aging and declining population. The  series of 
natural disasters that hit the country in recent years further hampered the economy and put 
increased pressure on public finances. The authorities have responded with extensive policy 
measures with a view to boosting business and consumer confid ence and consolidating public 
finances. The Government's three -pillar strategy of monetary easing, fiscal stimulus, and structural 
reforms (in areas such as agriculture, energy, and healthcare) continues to be the main strategy 
framework for exiting deflat ion and revitalizing the country's economy.  
2. In 2014, real GDP contracted by 0.03%, reflecting the backlash from the consumption tax 
rise in the same year. Private consumption fell as purchasing power deteriorated, and business 
investment declined. Under t hese circumstances, the authorities decided to abstain from a further 
consumption tax rise until October 2019. Domestic consumption slightly increased in 2015, leading 
to an annual GDP growth of 0.5%. However, several downside risks to the growth prospects  
remain as consumer prices struggle to pick up. Since Japan's previous review, the structure of its 
economy has remained largely unchanged, with services accounting for the largest share of GDP 
(72%).  
3. The Bank of Japan is at the forefront of the country's efforts to boost private consumption, 
through quantitative and qualitative monetary easing with a negative interest rate. On the fiscal 
front, a number of economic plans have been adopted with a view, inter alia , to improving the 
country's public finances including its debt position, and boosting the competitiveness of the 
economy through large -scale investments. Structural reforms including those aimed at 
encouraging labour force participation and improving Japan's corporate governance framework are 
also u nder way.  
4. Japan is the world's fourth -largest exporter and importer of goods and services. Both 
merchandise imports and exports declined between 2014 and 2015, reflecting,  inter alia,  a weak 
global demand and falling commodity prices; as the decline was s ubstantially larger in imports 
than exports, Japan's merchandise trade deficit sharply contracted. Services exports and imports 
also declined during the same period; as in the case of merchandise trade, services trade deficit 
declined. Japan's current acco unt surplus substantially increased in 2015, amounting to 3.3% of 
GDP (up from 0.8% in 2014).   
5. In 2015, the stock of inward foreign direct investment (FDI) remained at around 4% of GDP, 
which continues to be smaller than in other major developed economies . Japan maintains a 
general policy of attracting FDI. In March 2015, five measures to attract foreign businesses, 
including enhancing the educational environment for foreign children, were announced.  
6. Among Japan's 15 regional trade agreements (RTAs) curre ntly in force, two RTAs, with 
Australia and Mongolia, entered into force during the review period, and were notified to the WTO, 
and the Trans -Pacific Partnership was signed. Japan is currently negotiating RTAs with: China and 
the Republic of Korea, Region al Comprehensive Economic Partnership (RCEP) partners, the 
European  Union, Canada, Colombia, and Turkey. Since Japan's last trade policy review, Turkey is 
the only country with which Japan has newly entered into negotiations (in December 2014).  
7. The institu tional framework for general trade policymaking in Japan and its trade policy 
objectives have remained largely unchanged since its previous review in 2015. Japan has 
participated in all work of the WTO, negotiating RTAs, and pursuing domestic reforms to im prove 
its competitiveness. Japan deposited its instrument of acceptance of the Trade Facilitation 
Agreement (TFA) on 1 June 2015. Since 1 January 2015, Japan has not been involved in any 
dispute settlement cases as a respondent; it has been involved in 6 c ases as a complainant.  
8. The overall orientation of Japan's trade policies has remained broadly unchanged since its 
previous review in 2015. Japan has several systems in place to expedite the release and clearance 
of goods, including an Authorized Economic Operator (AEO) programme; it has mutual recognition 
arrangements (MRAs) on AEO programmes with some of its trading partners.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  9. Japan's overall simple average applied MFN tariff rate increased from 5.8% in FY2014 
to 6.1% in FY2016 due to higher average ad va lorem  equivalents of non -ad valorem  duties. Of the 
101 highest tariffs, 95 had non ad valorem  rates. The simple average applied rate is 16.3% (up 
from 14.9% in FY2014) for agriculture (WTO definition), and 3.6% for non -agricultural products 
(down from 3.7%  in FY2014). Japan has bound 98.2% of its tariff (159 lines are unbound). The 
difference between the average bound MFN tariff (6.2%) and the average applied MFN tariff 
(6.1%) continues to be negligible in FY2016; this reflects a high degree of predictabili ty in the 
tariff. However, the average bound rate remains considerably higher for agricultural products 
(16.7%) than for non -agricultural products (3.6%). Japan makes use of tariff quotas; there are 
158 tariff lines (1.7%) subject to MFN out -of-quota tarif fs, of which 11 are under state trading. 
The quota allocation method and process remains somewhat intricate; procedures for the 
allocation of tariff quotas have remained unchanged since 2014.  
10. Japan makes relatively little use of trade contingency measures,  although the number of 
anti-dumping measures implemented by Japan has increased (from 2 in 2014 to 6 in 2016). It 
applied neither countervailing nor safeguard measures during the review period. On 30 September 
2016, Japan initiated an anti -dumping investi gation on highly polymerized polyethylene 
terephthalate from China . 
11. The Japan Bank for International Cooperation (JBIC) and the Nippon Export and Investment 
Insurance (NEXI) remain the official export credit agencies of Japan. Most of JBIC's lending 
activi ties are for overseas investment loans, which represents more than three quarters of the 
total operations in value. NEXI provides trade and investment insurance, including insurance 
products covering different aspects of trade risks as well as investment i nsurance for Japanese 
companies.  
12. In 2015, Japan took steps to grant tax incentives to innovative basic research activities. 
Support measures included an increase in the deduction rate, and the expansion of the scope of 
research and development expenses th at qualify under the incentive framework. Japan continues 
to maintain subsidies and other assistance programmes; a significant share of the programmes is 
dedicated to regional development efforts for areas recovering from the tsunami and nuclear 
disaster.  
13. Japan's competition policy framework has remained broadly unchanged since its previous 
review. The main changes included an amendment of the Anti -Monopoly Act (AMA), which entered 
into force on 1 April 2015; it introduced a new appeal procedure putting a court in charge of 
reviewing administrative orders. Certain industries or business practices remain exempt from the 
scope of the AMA. For many years now, civil administrative processes have largely remained the 
main methods used for enforcement.  
14. During the  review period, Japan notified state trading entities engaging in tobacco, opium, 
rice, wheat and barley, and dairy products. According to the Government, its main reasons and 
purposes for maintaining these entities include sound development concerns, stab le provision of 
staple foods, and medical and scientific concerns. In addition to the notified state trading entities, 
several companies are wholly and partially owned by public entities. M ajor commercial 
state-owned enterprises include those engaging in i nternational airports, telecommunications, 
postal services, banking, tobacco, and railways, largely unchanged since the previous review.  
15. The regulatory regime for SPS and TBT measures has remained largely unchanged during 
the period under review.  As at 31 March 2016, there were 10,542 Japanese Industrial Standards 
(JIS), 5,759 of which correspond to international standards, and 97% of which have been 
harmonized with identical or modified international standards . As regards Japan Agricultural 
Standards (JAS) , as at 31 March 2016, there were 201 JAS, 80 of which correspond to 
international standards and 78% of which have been harmonized with international standards. 
Japan currently imposes import prohibitions on beef and poultry from various countries to preve nt 
the spread of certain animal diseases, including BSE and avian flu.  
16. The main changes in the regulatory framework for Japan's government procurement during 
the review period included an amendment in May 2016 to the "operational procedures for 
government procurement". The amendment introduced a "multiple bidding system", where two or 
more companies can bid on a project if one company cannot supply the full amount of the order WT/TPR/S/ 351/Rev.1  • Japan  
 
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  alone. In March  2014, Japan accepted the revised Agreement on Government Procurem ent (GPA), 
which entered into force in the country  on 6 April 2014 . Since early 1990s, Japan has established 
various "voluntary measures" implying commitments going beyond GPA in terms of thresholds, 
entities and sectors covered and procedural obligations.  The thresholds for voluntary measures are 
lower than the GPA in only two instances, due to the fact that the revised GPA has "caught up" 
with voluntary measures as compared to the GPA 1994. According to data provided by the 
authorities, f oreign participat ion in Japan's government procurement remained around 3% in value 
in 2014 (the latest year for which data were available).  
17. As regards Japan's intellectual property rights framework, the main changes during the 
review period included: the implementation of stand -alone legislation on geographical indications 
for foods, beverages, and agricultural and marine products; the strengthening of the protection of 
trade secrets; and various amendments to the Patent Act, the Trademarks Act, the Design Act, 
and the Act on International Applications under the Patent Cooperation Treaty (PCT).  
18. Agriculture remains an important sector to the domestic economy in some parts of Japan 
despite the fact that its share of GDP remains small. The agriculture sector remains highly 
protected with some of the highest import tariffs in the sector and specific market support. Japan 
has 18 tariff quotas covering 186 tariff lines at the HS  9-digit level; the method of administering 
the quotas has remained unchanged since Japan's previous revi ew. While the level of support and 
protection given to agriculture in Japan declined during the review period, it remains high 
compared to other OECD countries. Market price support is the main component and it, along with 
other transfers based on outputs and inputs, is considered as potentially one of the most 
production - and trade -distorting forms of support. Although the average applied MFN tariff on fish 
and fish products was 6.2% in FY2016 (same as in FY2014), import quotas continue to apply to 
several  fish species.  
19. Japan's total energy consumption declined during the period partly due to an increase in 
energy efficiency and a decline in the overall energy demand. Reform in the electricity sector 
continued; the institutional framework was reinforced and  the producer licensing scheme was 
reformed and de -segmented so as to allow more competition during the period. For example, the 
residential/individual consumer segment was further liberalized for competition in 2016. 
Consumers can retain regulated tariffs  until 2020, and full unbundling is stipulated by law for the 
same year.  
20. The services sector, a key component in Japan's economy, is broadly open to competition, 
except in selected areas such as certain broadcasting and medical services. The main changes 
during the review period in the regulatory framework for financial services included several 
amendments to the Banking Act. These amendments have partially relaxed requirements in 
respect of agency services and intermediary services for foreign banks, and,  on the other hand, 
introduced a series of new and stricter rules regarding licensing standards, information obligations, 
maintenance of assets in Japan, and supervisory powers in case of bankruptcy or reorganization 
proceedings, essentially for prudential  reasons.  
21. The regulatory framework of telecommunication sector in Japan has remained largely 
unchanged since its previous review. The sector has undergone a few changes concerning 
measures aimed at promoting mobile virtual operators (MVNOs), consumer prot ection, and SIM 
card unlocking.   
22. In all segments of Japan's film industry, foreign firms are allowed to operate on a national 
treatment basis. The TV industry remains dominated by one public and five commercial terrestrial 
networks. TV and radio broadcast ing licences are subject to a relatively complex system of foreign 
ownership limitations depending of the type of activity (production or transmission), the type of 
licence (basic or general), and the means of transmission (terrestrial, satellite, or cable ). 
Nonetheless, video -on-demand (VOD)/over -the-top (OTT) TV, a very dynamic segment, is not 
considered as broadcasting and is fully open.  
23. Access to the medical profession in Japan is regulated through qualification and language 
requirements; there are a fe w bilateral agreements allowing easier access conditions. Nurse and 
care-worker examinations are accessible to foreigners; this regime is covered in some RTAs. The 
establishment of foreign -owned clinics is subject to the same requirements as the opening of  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Japanese -owned clinics (i.e. economic needs test and quality requirements). Currently, there is 
only one foreign -owned clinic operating in Japan. The retirement home market is economically 
very significant and dynamic in Japan due to an ageing population.  To cope with demand, the 
sector has recently been opened to the private for -profit sector (including foreign investors) 
notably in the form of real investment trusts combin ed with management contracts.  
 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  Japan's GDP growth remains sluggish, hampered by a series of domestic and external 
constraints. To a large extent, persistent ly low inflation has contributed to Japan's  weak output 
growth. An aging and shrinking population has put pressure on public spendi ng, with increased 
borrowing by the Government. Furthermore, the 2011  earthquake exacerbated public finances. In 
response, the national and local governments adopted supplementary budgets for FY 2011 and an 
initial budget for FY 2012 amounting to approximate ly ¥17 trillion  (about 3.6% of GDP).  
1.2.  In 2013, in the context of depressed economic activities, the Government launched a 
three -pillar ("three -arrow") strategy1 to exit deflation and revitalize the country's economy , 
consist ing of: a bold monetary policy, a  flexible fiscal policy, and structural reforms. The first arrow 
was launched in early 2013 with the introduction of "quantitative and qualitative easing" (QQE). It 
was accompanied by the second arrow, which included fiscal packages. The third arrow – the 
Japan Revitalization Strategy – was announced in June 2013 and revised a year later. The 
combined effects of fiscal and monetary policy expansion and structural reform were intended to 
strengthen business investment and private consumption, with a view to overcoming the 
prolonged deflation and revitalizing the Japanese economy.  
1.3.  Key reforms under the third arrow include: (i) stabilizing the size of the labour force by 
boosting the participation of women and older people; (ii) enhancing Japan's integration in to the 
world economy through trade agreements; and (iii) improving the business climate by upgrading 
corporate governance, enhancing labour flexibility and mobility, promoting venture capital 
investment and improving policies for small and medium -sized ent erprises (SMEs). Several 
structural reforms have recently been undertaken ( Section  3.3). 
1.4.  The initial results of the first two arrows were encouraging , as they boosted business and 
consumer confidence. Nominal GDP increased at a faster pace against the back ground of a pick -up 
in inflation, reflecting a large depreciation of the yen. However, over recent months, low 
confidence in economic growth prospects has depressed private consumption and investment. In 
addition, inflation is slowing down , reflecting  weak wage growth and the sharp fall in oil prices 
despite rising employment and high corporate profits. Headline inflation is also affected by the 
sharp fall in oil prices. The recent slowdown in global trade has also prevented exports from 
growing faster.  
1.2  Recent Economic Developments  
1.5.  Japan's GDP growth performance remains subdued. In 2014, the economy contracted by 
0.03% on an annual basis due to underperforming private consumption, the main component of 
the GDP (Table 1.1). Growth accelerated during the first  quarter of 2014, as business and 
consumer confidence improved.2 However, following the increase in the consumption tax rate 
(from 5% to 8%) , growth  declined in the second and third quarters of 2014, before picking up 
slightly during the fourth quarter. Pr ivate consumption fell due to deteriorating purchasing power, 
and low consumer confidence. Business investments also declined, and the yen depreciated. 
However, the weaker yen helped boost exports in 2014. Given  these circumstances , the 
Government has dela yed the planned second tax hike (from 8% to 10%) until October 2019.  
1.6.  In 2015, annual GDP growth remained weak, albeit positive. Weak private consumption 
continued to be a drag on output growth, as wage growth remained weak despite low 
unemployment rates. The export growth rate slowed from 8.3% in 2014 to 2.8% in 2015, 
reflecting weak global demand, while private investments increased by less than 1%.3 
1.7.  Growth in the first two quarters of 2016 showed a slight rebound (0.5% and 0.2% , 
respectively) from the con traction of 0.4% in the last quarter of 2015. Relatively stronger 
                                                
1 The so -called "Abenomics"  – the economic programm e rolled out by the Abe Cabinet – which 
prioritizes policy coordination to meet the challenges facing the Japanese economy.  
2 OECD online information . Viewed at : http://www.oecd.org/eco/su rveys/Japan -2015-overview.pdf .  
3 Private residential investment declined by 2.5% while private non -residential investment increased by 
1.5%.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  consumer and government consumption were the main drivers of this improvement. However, 
according to the IMF, the yen depreciation started to reverse in the second half of 2015 and it 
apprec iated further in early 2016. Safe -haven effects due to global financial market volatility, a 
narrowing of interest rate differentials with the United States, the markets ' perception of the limits 
to the Bank of Japan's stimulus, and a rising current accoun t surplus are the main driving factors 
of the ongoing appreciation  of the yen.4  
Table 1.1 Selected macroeconomic indicators, 2011 -15 
 2011  2012  2013  2014  2015a 
National accounts – GDP expenditure approach  
GDP real growth rate, %  -0.5 1.7 1.4 -0.03 0.5 
 Private consumption  0.3 2.3 1.7 -0.9 -1.2 
 Government consumption  1.2 1.7 1.9 0.1 1.2 
 Gross fixed capital formation  1.4 3.4 2.5 1.3 0.0 
 Exports of goods and services  -0.4 -0.2 1.2 8.3 2.8 
 Imports of go ods and services  5.9 5.3 3.1 7.2 0.3 
Share of current GDP, %       
 Private consumption  60.3 60.6 61.0 60.7 58.6 
 Government consumption  20.4 20.4 20.6 20.6 20.4 
 Gross fixed capital formation  20.6 21.0 21.6 22.0 21.7 
 Change in private inventories  -0.4 -0.2 -0.4 -0.2 0.3 
 Exports of goods and services  15.2 14.7 16.2 17.7 17.9 
 Imports of goods and services  16.0 16.7 19.0 20.9 18.9 
Prices and interest rates  
Consumer price (CPI) (average, % change)  -0.3 0.0 0.4 2.7 0.8 
GDP deflator (% change)  -1.9 -0.9 -0.6 1.7 2.0 
Discount rate (%)  0.3 0.3 0.3 0.3 0.3 
Fiscal balance (% of current GDP)  
Revenue  30.8 31.1 32.0 33.0 33.8 
Expenditure  40.6 39.8 40.5 40.3 39.7 
Balance  -9.8 -8.8 -8.5 -7.3 -5.9 
Primary balance  -9.0 -7.9 -7.8 -6.7 -5.4 
 Excluding socia l security  -7.6 -6.9 -7.5 -6.2 -5.0 
Government debt, gross  229.7  236.6  242.6  246.2  245.8  
Saving and investment (% of current GDP)  
National savings (gross)  22.4 21.9 22.0 22.4 24.8 
National investment  20.2 20.9 21.1 21.9 21.8 
External data (% of curren t GDP, unless otherwise indicated)  
Current account  2.2 1.0 0.9 0.8 3.3 
 Merchandise trade balance  -0.1 -0.9 -1.8 -2.1 -0.1 
 Merchandise exports  13.4 13.0 14.2 15.2 15.1 
 Merchandise imports  13.4 13.9 16.0 17.4 15.2 
 Services balance  -0.6 -0.8 -0.7 -0.6 -0.3 
 Primary income balance  3.1 2.9 3.7 4.0 4.1 
 Secondary income balance  -0.2 -0.2 -0.2 -0.4 -0.4 
Capital account  0.0 0.0 -0.2 0.0 -0.1 
Financial account  2.7 0.9 -0.1 1.3 4.2 
 Direct investment  2.0 2.0 3.0 2.6 3.2 
Total reserves, excluding gold ( US$ billion)  1,258.2  1,227.1  1,237.2  1,231.0  1,207.0  
Memorandum:       
Current GDP (¥  billion)  471,578.7  475,331.7  479,083.7  486,871.2  499,205.8  
Current GDP (US$ billion)  5,909.0  5,957.3  4,908.9  4,595.5  4,124.2  
                                                
4 IMF online information. Viewed at: https://www.imf.org/external/pubs/ft/scr/2016/cr16267.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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   2011  2012  2013  2014  2015a 
GPD per capita (US$)  46,435.0  46,855. 9 38,657.0  36,243.8  32,583.2  
Exchange rate (average, ¥ per US$)  79.81  79.79  97.60  105.94  121.04  
Unemployment rate  4.6 4.3 4.0 3.6 3.4b 
a Estimates.  
b Actual.  
Note:  Annual percentage changes under the national account are based on chain -linked 2005 real figures.  
Source:  IMF; Cabinet Office online information; Ministry of Finance online information.  
1.8.  Inflation, measured by the consumer price index (CPI), sharply increased from 0.4% in 2013 
to 2.7% in 2014, partly due to the consumption tax hike; it lost mom entum in the following year 
with a 0.8% growth. Headline inflation (excluding the tax hike) declined from 1.2% in 2014 to 
0.3% in 2015, as oil prices fell. The year -on-year rate of change in the CPI (excluding fresh food) 
was slightly negative during the f irst half of 2016. It stood at -0.4% in October 2016.5 
1.9.  Japan continues to face persistent government deficits due to rising public social spending, 
coupled with longstanding weak economic growth that has limited government revenues. Social 
spending has inc reased significantly in  recent years , currently amount ing to  half of general 
government spending. Several years of budget deficits have pushed up Japan's gross government 
debt to over 245% of GDP. However, the interest rate on government debt stands at onl y 0.9%.  
The low interest rate reflects, inter alia , the current accommodative financing conditions, and 
confidence in Japan's ability to meet its debt obligations, as the country holds a significant stock of 
external assets.  
1.2.1   Monetary policy  
1.10.   In January 201 6, the Bank of Japan (BOJ) decided to introduce a framework of quantitative 
and qualitative monetary easing (QQE) with a negative interest rate. This framework extends the 
QQE that was introduced in April 2013, with a view to achieving the price stability target of 2%.  
1.11.   Under the framework, the Bank pursues monetary easing by making full use of possible 
measures on three dimensions:  
• Interest -rate: The Bank has applied an interest rate of -0.1% to a part of the current 
accounts held by  financial institutions  at the Bank.  
• Quantity: The Bank conducts money market operations so that  the monetary base 
increases at an annual pace of about ¥80 trillion.  
• Quality: The Bank purchases Japanese government bonds (JGBs) so that  their 
amount outstanding increases at an an nual pace of about ¥80  trillion. The  Bank also purchases 
exchange -traded funds (ETFs)  and Japan real estate investment  trusts (J -REITs) so that their 
amounts outstanding increase at annual paces of about  ¥6 trillion (since July 2016; ¥3.3 trillion 
from Apr il 201 6 to July 2016 ), and about ¥90 billion, respectively. As for  commercial paper and 
corporate bonds, the Bank will maintain their amounts  outstanding at about ¥2.2  trillion and about 
¥3.2 trillion , respectively.6 
1.12.   At its meeting in September 2016, the B OJ decided to introduce a new policy framework 
consist ing of two major components. F irst, "yield curve control" , under  which the Bank sets 
short-term and long -term interest rates as an operating targ et. S econd is an 
"inflation -overshooting commitment" , under which the Bank commits itself to maintaining an 
increase in the monetary base until the annual rate of increase in the observed CPI exceeds the 
price stability target of 2% and stays above the target in a stable manner.  
                                                
5 Japan Statistics Bureau's online information. Viewed at : 
http://www.stat.go.jp/english/data/cpi/1581.htm . 
6 BOJ online information. V iewed at: 
https://www.boj.or.jp/en/mopo/mpmsche_minu/minu_2016/g160315.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  1.2.2   Fiscal policy  
1.13.   In 2013, the Gover nment adopted a medium -term fiscal plan  which aimed to : (i) halve the 
primary deficit of central and local governments by 2015; (ii) achiev e a primary surplus by 
FY2020; and (iii) put the debt ratio on  a downward trend thereafter. The planned consumption t ax 
hike from 5% to 8% in 2014, and 10% in 2015 , was a central element of the fiscal plan.  
1.14.   A number of measures have been taken to reach a primary surplus by 2020 , including the 
"Plan to Advance Economic and Fiscal Revitalization" . Under this plan, the Gov ernment aims to 
achieve  both economic revitalization and fiscal consolidation in an integrated manner , involving  
measures to overcom e deflation  and revitalize the economy, in addition to expenditure  and 
revenue reforms.7 
1.15.   Additionally , in December 2015, the  Government formulated the "Economic and Fiscal 
Revitalization Action Program" . The programme  identifies a roadmap and the k ey performance 
indicators (KPIs)  and clarifies the  details and timeline of reform implementation , including 80 main 
reform items in each expenditure category.  
1.16.   In August 2016, the Government rolled out a set of economic measures with a total value of 
¥28 trillion. The measures  include ¥7.5 trillion in new spending, as part of the Government's  effort 
to boost the nation's economy. The p rogramme aims to promote cutting -edge investments, such 
as upgrading ports to accommodate foreign cruise ships and building food -processing facilities to 
increase exports of farm products. Funds will also be allocated  to, inter alia , reconstruction from 
the 2016 Kumamoto and 2011 Great East Japan earthquake s, safety and security, disaster 
prevention, childcare facilities for working parents, as well as measures to support small and 
medium -sized businesses, owners of small businesses, and local communities . 
1.2.3   Structural reforms  
1.17.   During the review period, a number of steps were taken to achieve  structural reform. Efforts 
are under way to increase the minimum wage by 3%  annually . A plan to promote the "Dynamic 
Engagement of All Citizens" was rolled out in 201 6. It relies on specific measures, including 
providing support to childcare in order to boost fertility and labour force participation. Significant 
progress has been made in corporate governance reform, as the Corporate Governance Code and 
the amendment of the  Companies Act were implemented during the review period ( Section  3.3). 
Furthermore, the Government cut the statutory income tax rate to below 30% in FY2016.  
1.2.4   Balance of payments  
1.18.   Japan's current account remained  in surplus during the review period. Its sur plus increased 
further in 2015 to reach US$135.6 billion, up from US$36 billion in 2014 , as oil prices declined 
(Table  1.2). 
1.19.   Exports and imports of goods expanded in 2014 compared to  the previous year, but 
declined in 2015. The decline in imports in 2015 r eflects lower prices for oil and other 
commodities, while weak exports reflect an economic slowdown in Japan's main trade partners. 
The depreciation of the Japanese yen also contributed to the country's widening surplus, through 
improved merchandise export  competitiveness.  
1.20.   The primary income balance remained in surplus in 2014 and 2015; the surplus declined 
somewhat in 2015, as income receipts fell and income payments rose slightly. The surplus largely 
reflects higher earnings on Japan's direct investment abroad. The secondary income balance was 
in deficit both in 2014 and 2015.  
                                                
7 Cabinet Office online information. Viewed at: http://www5.cao.go.jp/keizai -
shimon/kaigi/cabinet/2 015/summary_en.pdf .  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 1.2 Balance of payments 2011 -15 
(US$ billion)  
 2011  2012  2013  2014  2015  
Current account  129.6  60.1 46.4 36.0 135.6  
Goods and s ervices balance  -39.5 -101.2  -125.1  -128.6  -19.1 
 Goods balance  -4.5 -53.5 -89.6 -99.8 -5.2 
 Exports  790.0  776.6  694.9  699.2  622.0  
 Imports  794.4  830.1  784.6  799.0  627.2  
 Services balance  -35.1 -47.7 -35.5 -28.8 -13.9 
 Receipts  140.7  137.0  135.4  163.8  162.5  
 Transportation  41.7 42.9 39.6 39.6 35.5 
 Travel  11.0 14.6 15.1 18.8 25.0 
 Payments  175.8  184.7  170.9  192.6  176.4  
 Transportation  49.5 55.4 47.0 45.9 41.0 
 Travel  27.3 27.9 21.9 19.3 16.0 
Primary income  183.0  175.7  181.6  183.6  170.7  
 Credit  233.6 229.9  241.5  255.1  242.0  
 Compensation of employees  0.2 0.2 0.1 0.2 0.2 
 Investment income  233.4  229.6  241.4  254.9  241.8  
 Debit  50.6 54.2 59.9 71.5 71.3 
 Compensation of employees  0.3 0.3 0.2 0.2 0.2 
 Investment income  50.3 53.9 59.7 70.2 70.3 
Secondary income  -13.8 -14.3 -10.1 -19.0 -16.0 
 Credit  13.1 14.9 15.9 16.6 17.2 
 Debit  26.9 29.2 26.0 35.5 33.2 
Capital account  0.5 -1.0 -7.7 -2.0 -2.3 
 Credit  7.6 6.0 1.2 0.5 0.2 
 Debit  7.1 7.0 8.9 2.4 2.5 
Balance on current and capital account  130.1  59.1 38.7 34.0 133.4  
Financial account  157.6  53.1 -4.2 58.4 174.8  
 Direct investment  117.7  117.1  145.0  117.8  130.8  
 Japan's direct investment abroad  116.8  117.6  155.7  136.3  130.7  
 Direct investment in Japan  -0.9 0.5 10.6 18.4 -0.0 
 Portfolio investmen t -168.4  32.2 -274.7  -40.3 132.7  
 Financial derivatives  -17.1 7.1 58.2 34.3 17.9 
 Other investment  48.8 -65.1 28.4 -61.9 -111.7  
 Reserves assets  176.6  -38.3 38.8 8.5 5.1 
Net errors and omissions  27.5 -6.0 -42.9 24.4 41.5 
Source:  IMF e -library data.  
1.3  Trade Performance  
1.21.   During 2013 -15, Japan's ratio of merchandise trade (exports and imports) to GDP averaged 
30%. The share of exports of goods and services in GDP , which has been on  an upward trend since 
2011, stood at 17.9%  in 2015, while the share of import s stood at  18.9%.  
1.22.   Japan is the world's fourth -largest exporter and importer of goods. In services trade, Japan 
also ranked fourth among world exporters and importers.8  
1.23.   In 2015, manufactures continued to dominate Japan's merchandise exports, accounting fo r 
87.2% of the total, down slightly from 87.6% in 2013 (Chart 1.1). Automotive products, 
machinery and transport equipment continue to be the main component, representing 58.7% of 
exports in goods, followed by chemicals (10.1%) and consumer goods (8.9%) (T able A1.1).  
                                                
8 WTO "International Trade Statistics 2015". Viewed at: 
https://www.wto.org/english/res_e/statis_e/its2015_e/its2015_e.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  1.24.   Due to a severe decline in international commodity prices, the share of imports of fuels 
significantly decreased to 20.5% in 2015, a fall from 33.8% in 2013. Consequently, the share of 
primary products in total merchandise imports decreased fro m 50.5% in 2013 to 38.7% in 2015. 
In contrast, the share of manufactures increased by 11.5 percentage points from 48% in 2013, 
this is mostly due to the increase in imports of machinery and transport equipment from 22.7% in 
2013 to 28.2% in 2015, and  the increase in imports of  chemicals from 7.9% in 2013 to 10.2% in 
2015 (Table  A1.2).  
1.25.   In 2015, the United States was the largest export market, with a share of 20.2%; followed 
by China with 17.5% (Chart 1.2). The share of Asia as a whole marginally decreased fr om 57.2% 
in 2013 to 56.1% in 2015. The share of the E uropean Union  increased slightly from 10% in 2013 
to 10.6% in 2015  (Table  A1.3).  
1.26.   China has the largest share in Japan's merchandise imports; in 2015, it s share  stood at 
25.7% , up from 21.7% in 2013. The share of goods imported from Asia significantly increased 
from 50.9% in 2013 to 57.1% in 2015. Imports from the Middle East, mostly  of fossil fuels , 
decreased significantly from 19. 3% in 2013 to 9.1% in 2015, while the share of imports from the 
United Stat es increased from 8.6% in 2013 to 10.9% in 2015 (Table  A1.4). This is mostly due to 
the fall in oil prices in 2014 -2015, and the commencement of shipment of shale oil from the United 
States to Japan.  
1.27.   Japan remains a net importer of services. The deficit i n services trade, on a decreasing 
trend since 2012, narrowed further in 2015. The depreciation of the Japanese yen in 2014 -15 has 
contributed to  higher receipts from travel services.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 1.1 Product composi tion of merchandise trade, 2013 and 2015  
Chart 1.1     Product composition of merchandise trade, 2013 and 2015
2013 2015
Exports (f.o.b.)
Automotive products
21.2%
Mining
5.1%
Total:   US$715.1 billion Total:  US$624.9 billion
Imports (c.i.f.)
Chemicals
7.9%Transport 
equipment
3.9%
Manufactures
48.0%Electrical machines  
14.5%
Non-electrical 
machinery  4.2%Electrical machines
17.5%Other semi -manufactures
4.7%
Other semi -manuf.  
5.5%
Chemicals
10.2%Manufactures
59.5%
Total:   US$833.2 billion Total:  US$625.6 billionManufactures
87.2%Consumer goods
8.9%
Non-electrical machinery
15.3%
Other consumer 
goods  9.8%
Other
1.4%Other semi -manufactures
4.9%Other electrical 
machines
6.3%Other transport equipment
5.1%
Mining
4.3%Other electrical 
machines
6.5%
Office machines & 
telecommunication 
equipment
9.8%
Source:  UNSD, Comtrade database (SITC Rev.3) .Other consumer goods
7.9%Other 
6.8%Automotive products
21.9%
Other semi -manuf.
4.5%Other 
5.8%
Agriculture
11.8%Agriculture
10.3%Transport 
equipment
4.9%Chemicals
10.6%Chemicals
10.1%Agriculture
1.5% Agriculture  
1.7%Other transport equipment
5.3%
Fuels
20.5%Textiles & 
clothing  5.1%
Other 
1.8.%Non-electrical 
machinery  5.8%Iron & steel
5.4%Consumer goods
8.7%
Manufactures
87.6%Iron & steel
4.9%
Non-electrical machinery
15.6%Office machines & 
telecommunication 
equipment
9.6%
Fuels
33.8%Other mining
6.3%Textiles & 
clothing  5.9%
Other mining
6.4%
 
Source:  UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 1.2 Direction of merchandise trade, 2013 and 2015  
Chart 1.2   Direction of merchandise trade, 2013 and 2015
2013 2015
Exports (f.o.b.)
Asia
57.2%
Total:   US$715.1 billion Total:  US$624.9 billion
Imports (c.i.f.)
EU-28
9.4%
Australia 
6.1%United States
8.6%Other
6.5%
EU-28
11.4%Other
6.2%
Other 
Middle East
3.7%United States
10.9%
Total:   US$833.2 billion Total:   US$625.6 billionOther America
6.0%
Qatar  2.6%
Korea, Rep. of
4.3%Korea, Rep. of  
4.3%United States
18.8%United States
20.2%
Hong Kong, 
China  5.6%
Source:  UNSD, Comtrade database.Other 
Middle East
2.7%
China
21.7%Other Asia
15.1%
EU-28
10.6%Hong Kong,
China  5.2%Other
3.3%
Qatar  4.4%Other Asia
14.5%China
17.5%EU-28
10.0%Thailand
5.0%
Chinese Taipei
5.8%Thailand
4.5%
China
18.1%Middle East
4.2%
Chinese Taipei 
3.7%Other Asia
15.6%
Malaysia  3.6%Other Asia   
12.3%Korea, Rep. of
7.9%Other
4.4%
Chinese Taipei
5.9%
Chinese Taipei  
2.8%Asia
57.1%Asia
50.9%Asia
56.1%
Australia
5.6%
Malaysia  3.4%Korea, Rep. of
7.0%
China
25.7%Middle East
3.6%Other America
5.6%
Other America
5.3%Other America
5.3%
United Arab
Emirates  5.1%United Arab 
Emirates  3.8%Saudi Arabia, 
Kingdom of
6.0%
 
Source:  UNSD, Comtrade database.  
1.4  Foreign Direct Investment  
1.28.   FDI inward stock in Japan amounted to 4.1% of the GDP in 2015, a n increase of 
0.4 percentage points in comparison with 2014 (Table  1.3).  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 1.3 Foreign direct investment, 2011 -15 
(US$ million unless otherwi se indicated)  
 2011  2012  2013  2014  2015  
FDI inflows  -1,758  1,732  2,304  2,090  -2,250  
FDI inward stock  225,787  205,752  170,710  170,615  170,698  
FDI inward stock (% of GDP)  3.8 3.5 3.5 3.7 4.1 
FDI outflows  107,599  122,549  135,749  113,629  128,654  
FDI outwa rd stock  962,790  1,037,698  1,118,010  1,193,137  1,226,554  
FDI outward stock (% of GDP)  16.3 17.4 22.8 26.0 29.7 
Source:  UNCTAD, Word Investment Report (various issues); and Cabinet Office of Japan online information.  
1.29.   By origin, European affiliates account ed for a 43.9% share of all foreign affiliates  in 2015  (a 
decrease of 0.5 percentage points in comparison with 2014), U.S. affiliates represented 25.9% (a 
decrease of 0.9 percentage points in comparison with 2014), followed Asian affiliates whose share  
increased by 1.6  percentage points  from 2014  to reach 23.8% in 2015. By individual country, the 
largest investors in Japan are the United States (¥6.7 trillion), followed by the Netherlands 
(¥3.1  trillion), France (¥2.8 trillion), and the United Kingdom (¥1.8  trillion).  FDI from Asia to Japan 
mainly comes from Singapore and Hong Kong, China.9 
1.30.   Due to high -profile deals , such as the acquisition of the electronics group Sharp and a 
concession to operate airports in Kansai , many foreign investors may make substant ial inroads 
into Japan in 2016.10 
1.31.   On the other hand, the saturation of the domestic economy has apparently prompted  many 
Japanese enterprises to seek investment opportunities abroad. Japanese FDI outflows amounted to 
US$114 billion and US$129 billion in 201 4 and 2015 , respectively. Japan was the world's second -
largest investor in 2015, after the United States, and followed by China.  
 
                                                
9 JETRO Invest Japan Report (2015). Viewed at: 
https://www.jetro.go.jp/ext_images/usa/jetro_invest_japan_report_2015.pdf . 
10 World Investment Report 2016 (2016). UNCTAD online information. Viewed at: 
http:// unctad.org/en/PublicationsLibrary/wir2016_en.pdf .  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  2  TRADE AND INVESTMENT  REGIME  
2.1  General Framework  
2.1.  The institutional framework for general trade policymaking in Japan has remaine d largely 
unchanged since Japan's previous review in 2015. Ministries involved in trade policy include the 
Ministry of Foreign Affairs (MOFA), the Ministry of Economy, Trade and Industry (METI), and 
several other ministries responsible for specific issues or sectors such as: the Cabinet Office; the 
Ministry of Finance; the Ministry of Agriculture, Forestry and Fisheries; the Ministry of Education, 
Culture, Sports, Science and Technology; the Ministry of the Environment; the Ministry of Health, 
Labour, and W elfare; and the Ministry of Land, Infrastructure, Transport and Tourism. In addition, 
several government agencies also participate in certain aspects of trade policy.1 
2.2.  As indicated in the previous report,  there are several committees in the Diet responsibl e for 
various aspects of trade including the committees on: economy, trade and industry; financial 
affairs; forestry and fisheries; and fundamental national policies. Overall coordination of trade 
policies rests with the Cabinet , and responsibility for tra de-related legislation with the Cabinet and 
Diet. The main laws and regulations relating to trade are presented in Table 2.1.  
Table 2.1 Major trade -related laws and regulations, June 2016  
Legislation  Most rece nt amendment  
Foreign trade and exchange restrictions   
Foreign Exchange and Foreign Trade Act (1949 Law No. 228)  2014 
Export and Import Transaction Act (1952 Law No. 299)  2014 
Foreign Exchange Order (1980 Order No. 260)  2015 
Export Trade Control Order (1949 Order No. 378)  2016 
Import Trade Control Order (1949 Order No. 414)  2003 
Customs - and tariff -related regulations   
Customs Law (1954 Law No. 61)  2016 
Customs Tariff Law (1910 Law No. 54)  2016 
Temporary Tariff Measures Law (1960 Law No. 36)  2016 
Cabinet Order Relating to Countervailing Duties (1994 Order No. 415)  2016 
Cabinet Order Relating to Anti -Dumping Duties (1994 Order No. 416)  2016 
Cabinet Order Relating to Emergency Duties (1994 Order No. 417)  2009 
Cabinet Order Relating to Retaliatory Duties (1994 Order No. 418)  2000 
Cabinet Order on Tariff Quotas (1961 Order No. 153)  2016 
Act on the provision of information regarding originating goods declared under 
the Japan –Australia Economic Partnership Agreement (2014  Law No.  112) 2014 
Trade pro motion   
Trade and Investment Insurance Act (1950 Law No. 67)  2015 
Services and energy   
Construction Business Act (1949 Law No. 100)  2014 
Banking Law (1981 Law No. 59)  2016 
Insurance Business Law (1995 Law No. 105)  2014 
Financial Instruments and Excha nge Law (1948 Law No. 25)  2015 
Telecommunications Business Act (1984 Law No. 86)  2016 
Law Concerning the Measures by Large -Scale Retail Stores for Preservation of 
the Living Environment (1998  Law No. 91)  2000 
Civil Aeronautics Act (1952 Law No. 231)  2015 
Marine Transportation Act (1949 Law No. 187)  2015 
Act on Special Measures Concerning the Handling of Legal Services by Foreign 
Lawyers (1986 Law  No. 66) 2014 
Certified Public Accountants Act (1948 Law No. 103)  2014 
Certified Tax Accountant Law (1951 Law No. 237)  2016 
Law for Improvement of International Tourist Hotels (1949 Law No. 279)  2011 
Travel Agency Law (1952 Law No. 239)  2011 
Electricity Business Act (1964 Law No. 170)  2015 
Gas Business Act  (1954 Law No. 51)  2015 
Oil Stockpiling Act  (1975 Law No. 96)  2012 
Act on the Quality Control of Gasoline and Other Fuels (1976 Law No. 88)  2008 
                                                
1 WTO document WT/TPR/S/310/Rev.1, 6 May 2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Legislation  Most rece nt amendment  
Standards and technical regulations , SPS   
Industrial Standardization Act (1949 Law No. 185)  2014 
Law Concerning Standardization, etc. of Agricultural and For estry Products 
(JAS Law) (1950 Law No. 175)  2013 
Act on Securing Quality, Efficacy and Safety of Products including 
Pharmaceuticals  and Medical Devices, (1960 Law No. 145)  2015 
Food Sanitation Act (1947 Law No. 233)  2015 
Food Labelling Act (2013 Law No.  70) 2014 
Quarantine Law (1951 Law No.  201) 2014 
Plant Protection Act (1950 Law No. 151)  2012 
Act on Domestic Animal Infectious Diseases Control (1951 Law No. 166)  2013 
Building Standard Law (1950 Law No. 201)  2014 
Electrical Appliance s and Material s Safety Act (1961 Law No. 234)  2011 
Consumer Product Safety Act (1973 Law No. 31)  2014 
High Pressure Gas Safety Act (1951 Law No. 204)  2011 
Road Vehicle Law (1951 Law No. 185)  2016 
Act on the Rational Use of Energy (1979 Law No. 49)  2014 
Fire Service L aw (1948 Law No.  186) 2015 
Food Safety Basic Act (2003 Law No. 48)  2015 
Intellectual property rights   
Patent Act (1959 Law No. 121)  2016 
Customs Law (1954 Law No. 61)  2016 
Unfair Competition Prevention Act (1993 Law No. 47)  2015 
Utility Model Act (1 959 Law No. 123)  2015 
Design Act (1959 Law No. 125)  2016 
Trademark Act (1959 Law No. 127)  2016 
Copyright Law (1970 Law No. 48)  2014 
Civil Code (1896 Law No. 89)  2016 
Agriculture   
Basic Law on Food, Agriculture and Rural Areas (1999 Law No. 106)  2015 
Temporary Law for Compensation Price for Producers of Milk for Manufacturing 
Use (1965 Law No.  112) 2014 
Others   
Administrative Procedure Law (1993 Law No. 88)  2015 
Act on Prohibition of Private Monopolization and Maintenance of Fair Trade 
(Anti-Monopo ly Act) (1947  Law No. 54) 2013 
Act Against Unjustifiable Premiums and Misleading Representations (1962 Law 
No. 134)  2014 
Source:  Information provided by the authorities of Japan.  
2.3.  In addition  to the relevant ministries, several incorporated administrative  agencies (IAA) or 
other types of official agencies are responsible for, or involved in, trade -related activities, including  
Japan External Organization (JETRO), the Japan Bank of International Cooperation (JBIC), the 
Nippon Export and Investment Insurance  (NEXI), as well as Japan National Tourism Organization 
and Japan Oil, Gas and Metals Corporation. A number of agencies, which, alongside government 
ministries, are responsible for the development and implementation of standards, including the 
Japanese Ind ustrial Standards Committee, the Pharmaceuticals and Medical Devices Agency, the 
National Public Safety Commission, and the Consumer Affairs Agency.  
2.2  Trade Policy Objectives  
2.4.  Since its previous review, Japan's trade policy objectives have remained unchanged . It has 
continued to  promot e both the multilateral trading system and bilateral and regional trade 
agreements; Japan considers that those agreements are complementary to, not a substitute for, 
the multilateral trading system. The authorities state that th e WTO should continue to play a 
central role in promoting economic growth and development , whilst bilateral and regional trade 
agreements also play an important role.   
2.5.  The authorities state that, given Japan's interdependence with its economic partners 
worldwide, its bilateral and regional efforts include not only the liberalization of trade in goods or WT/TPR/S/ 351/Rev.1  • Japan  
 
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  services but also cover a wide range of areas, including investment, movement of natural persons, 
intellectual property and competition policy , as well as c ooperation and other "WTO -plus" areas.  
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.6.  Japan actively participates in both the WTO 's regular work and negotiations. According to the 
authorities, maintaining and strengthening the multilateral trading system under the  WTO has 
been one of the  main pillar s of Japan's external economic policy. As one of the major Members of 
the WTO, Japan is committed to supporting the system.  
2.7.  Japan is a party to the Plurilateral  Agreement on Government Procurement; in March 2014 , it 
accepted the Protocol Amending the WTO Agreement on Government Procurement adopted in 
March 2012 ( Section  3.3.9). Japan is also a party to the Information Technology Agreement (ITA) 
and has actively participated in the ITA product expansion negotiations (ITA II). Japan deposited 
an instrument of acceptanc e with the WTO on 1 June 2015.  
2.8.  Japan grants MFN or preferential treatment to a country or territory that meets one or more 
of the following criteria: (1) is a WTO Member; (2) is covered by a provision of the C abinet  Order 
under Article 5 of the Customs Tariff Law2; or (3) is a country or territory with whom Japan has a 
bilateral treaty of commerce and navigation. At present, exceptions to such countr ies or territor ies 
are Andorra, Equatorial Guinea, the State o f Eritrea, Lebanon, the Democratic People's Republic of 
Korea, South  Sudan, and the Democratic Republic of Timor -Leste (unchanged since Japan's 
previous review).  
2.9.  Since 1 January 2015 , Japan has not been involved in any dispute settlement cases as  a 
respon dent; it has been involved in 6  cases as a complainant  (Table A2.1). Japan has submitted 
numerous notifications under the different WTO agreements, although notifications in certain areas 
(e.g. domestic support in agriculture, and volume of food aid) were not submitted during the 
review period (Table A2.2).3 Japan's trade policies have been reviewed by the Trade Policy Review 
Body (TPR B) twelve times; the last trade policy review  of Jap an took place on 9 and 
11 March  2015.  
2.3.2   Regional and preferential agreemen ts 
2.10.   Japan has signed a total of 16 regional and preferential agreements (Economic Partnership 
Agreements – EPAs) with: Australia, Brunei Darussalam, Chile, India, Indonesia, Malaysia, Mexico, 
Mongolia, Peru, the Philippines, Singapore, Switzerland, Thailand , and Viet Nam, the ASEAN 
member countries, and the Trans -Pacific Partnership (TPP) member countries.4 All of these 
agreements (except for the TPP) have entered into force. In January 2017, Japan notified New 
Zealand, which is designated as the Depository of the Agreement, of the completion of Japan's 
domestic procedures for the TPP . 
2.11.   Japan has begun  negotiations to conclude a further eight agreements with: China and the 
Republic of Korea, Regional Comprehensive Economic Partnership (RCEP) partners, the 
European Union, Canada, Colombia, and Turkey. Since Japan's last trade policy review, Turkey is 
the only country with which Japan has newly entered into negotiations (in December 2014).  
2.12.   Japan is an active participant in the APEC and ASEM fora5 which held thei r respective 
summit s (Leaders ' Meeting s) in November 2015 and in July 2016. Japan has pursued its bilateral 
dialogue with the U nited States within the pre -existing institutional framework (the 
                                                
2 Article 5 of the Law stipulates that preferential duties can be accorded if specified under a Cabinet 
Order. For example, such duties are accorded to the I slamic Republic of Iran, the Republic of Iraq, and People's 
Democratic Republic of Algeria (Cabinet Order (Application of Beneficial Duty)).  
3 WTO document G/AG/GEN/86/Rev.25, 2 September 2016.  
4 Of the 16 agreements, two have been signed since the last t rade policy review, namely those with 
Mongolia (signed in February 2015, entered into force in June 2016) and the TPP (signed in February 2016).  
5 MOFA online information.  Viewed at: http://www.mofa. go.jp/files/000114630.pdf  and 
http://www.mofa.go.jp/erp/aec/page3e_000507.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Japan -US Economic Partnership for Growth and the Japan –US Frame work for a New Economic 
Partnership) even after the signature of the TPP although at a slower pace.6 
2.3.3   Other agreements and arrangements  
2.13.   Japan provides preferential access under the Generalized System of Preferences 
to 143 countries or territories , including  47 least developed countries, which also qualify for more 
extensive product coverage under Japan's duty -free and quota -free treatment for LDCs. The most 
recent change took place in 2016, when  Japan graduated  the Cook Islands from its list of 
beneficiaries  under the GSP.  
2.14.   Under the GSP scheme, preferential tariff rates apply to 408 tariff lines at the HS 9 -digit 
level in Chapters 1 to 24 (agriculture and fisheries) and to 3,151 tariff lines in Chapters 25 to 
97 (industrial products). The main exclusions are  rice and rice products, meat and meat products, 
fish, dairy products, pineapples, cereal products, textiles and clothing, leather and leather 
products, and footwear.  The preferential margin varies from one product to another.  
2.15.   The GSP scheme itself is revi sed every ten years. The next revision is due in 2021. Product 
coverage under the duty -free, quota -free scheme for least developed countries and the GSP 
scheme is reviewed each year as part of the annual tariff revision.  
2.16.   Japan has been a member of the Asia-Pacific Economic Cooperation (APEC)  since its 
foundation in 1989 and a member of the Asia -Europe Meeting (ASEM)  since its establishment in 
1996. 
2.4  Investment Regime  
2.17.   Japan maintains a general policy of attracting FDI. In March 2015, the authorities 
announc ed five measures to attract foreign businesses: overcoming language barriers, facilitating 
better Internet connectivity, accommodating business jets at local airports, enhancing the 
educational environment for foreign children, and strengthening services t o support foreign 
enterprises. In addition, the Government declared its intention to make the country a global hub 
for trade and investment by enhancing innovation and alliances between domestic and overseas 
enterprises. It aims to attract more than 470 fo reign firms to Japan by FY2018, with the Japan 
External Trade Organi zation (JETRO) as the central player.7 
2.18.   As noted in Section 1, Japan's inward FDI remains significantly lower than outward FDI and 
low compared with other developed economies ( Section  1.4). Japan is ranked 34th out of 
189 economies in the World Bank's Doing Business report for 2017.8  
2.19.   To improve the business environment for FDI, the Government continues to implement 
policies on the reduction of effective corporate tax rates (from 34.62% to 2 9.74% by 2018); 
strengthen corporate governance; and promote further integration into the world economy.  
2.20.   Various pieces of legislation govern  investment, including the Foreign Exchange and Foreign 
Trade Act (FEFTA), the Order on Inward Foreign Direct Inves tment, the Foreign Exchange Order, 
and the Act for Promotion of Japan as an Asian Business Center of 2012, primarily through tax 
breaks, including corporate and income tax breaks.9 Since 2014 , there have been no major 
modification s to FEFTA and its related  regulations regarding inward FDI.  
2.21.   The Act on National Strategic Special Zones of 2013 provides  for the designation of zones 
based on the expectation that  regulatory reform will lead to increased investment. According to 
                                                
6 MOFA online information. Viewed at: http://www.mofa.go.jp/mofaj/area/usa/keizai/pdfs/p_shipe.pdf  
and http://www.mofa.go.jp/mofaj/area/usa/keizai/framework/pdfs/fw_statement_e.pdf . 
7 Government of Japan online information. Viewed at: 
http://www.japan.go.jp/_userdata/abenomics/pdf/160712_abenomics.pdf . 
8 World Bank Group online information. Viewed at: 
http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Annual -Reports/English/DB17 -
Report.pdf . 
9 WTO document WT/TPR/S/276/Rev.1, 18 June 2 013, Section II(3).  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  the authorities, precise details fo r each zone are to be decided by consensus between the national 
government, local authorities, and the private sector.  
2.22.   There are ten national strategic special zones:  
• the Tokyo Zone as an  international business and innovation hub, and a multicultural 
city, and for the exhibition  of near -future technologies;  
• the Kansai Zone for innovation in medical care, and entrepreneurial support;  
• the Niigata City Zone for agricultural reform in large -scale farming;  
• the Yabu City Zone for agricultural reform in hilly and  mountainous areas;  
• the Fukuoka City and Kitakyushu City Zone for employment system reform to promote  
business creation, and actions to address the  declining and aging population;  
• the Okinawa Prefecture Zone for international tourism;  
• the Senboku City Zone for reform in agriculture and forestry, and for international 
exchange in the medical field;  
• the Sendai City Zone to promote active social participation of women and start -ups; 
• the Aichi Prefecture Zone for general reform of education, employment, and 
agriculture , and for fostering industry leaders; and  
• the Hiroshima Prefecture and Imabari City Zone for international exchange and the 
utilization of big data.  
2.23.   The authorities continue to aim to double investment by foreign companies in Japan (to 
¥35 trillion) by end -FY2020 under the revised Japan Revitalization Strategy of 2014, through 
several initiatives including: regulatory reform to improve the business climate; support measures 
for investment; enhancing National Strategic Special Zones; and improving the system for the 
resolution of labour disputes.  
2.24.   The Council for Promotion of Foreign Direct Investment, established by the Government in 
April 2014 , has noted the low level of FDI in Japan and identified several contributory factors:  
• an inflexible labou r market and low participation by women in the labour force , as well 
as insufficient  language skills;  
• deficient corporate governance, particularly the lack of  focus on improving 
shareholders' returns;  
• relatively high energy and distribution costs, the high  costs of meeting Japan's quality 
and safety standards and, particularly in relation to  agricultural raw materials, the high costs of 
inputs;  and    
• high nominal and effective rates of corporation tax , and the high costs of complying 
with the tax system , in addition to  other administration costs such as those associated with setting 
up a business.  
2.25.   On 17 March 2015, the Council adopted the "Five Promises for Attracting Foreign Businesses 
to Japan" as a guideline for relevant ministries and agencies for the  implement ation of  measures 
aimed at improv ing the investment environment in Japan.10 The authorities state that Japan 
continues to : conduct activities focused on identifying and attracting investment projects ; carry 
out institutional reforms ; and implement additional measures, such as regulatory reforms that 
                                                
10 Invest Japan online information. Viewed at: http://www.invest -
japan.go.jp/promotion/promise_ja.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  contribute to the improvement of the investment environment and support measures aimed to 
expand investment, taking foreign companies' needs into consideration.  
2.26.   The FY2015 Subsidy Program for Global Inn ovation Centers provides subsidies to help cover 
the costs of establishing global innovation centres, experimental studies, and feasibility studies.11 
Between April and September 2016, 17 projects were selected.  
2.27.   Japan has  23 bilateral or trilateral investm ent treaties and 12 bilateral/regional trade 
agreements containing  investment provisions (Table 2.2). Treaties that have been signed but have 
not entered into force include those with: Mongolia (signed in 2013), Uruguay (2015), Oman 
(2015) , Iran (2015) , Kenya (2016) and Israel (2017) . 
Table 2.2 Investment treaties in force, October 2016  
(Country and year they were signed)  
Investment treaties  
Egypt (1977)  
Sri Lanka (1982)  
China (1988)  
Turkey (1992)  
Hong Kong, China (1997)  
Bangladesh (1998)  
Pakistan (1998)  
Russian Federation (1998)  Korea, Republic of (2002)  
Viet Nam (2003)  
Cambodia (2007)  
Lao People's Democratic Republic (2008)   
Peru (2008)   
Uzbekistan (2008)  
 Papua New Guinea (2011)  
Colombia (2011)  
Iraq (2012)  
Kuwait, the State of (2012)  
China; and Korea, Republic of (2012)  
Mozambique (2013)  
Myanmar (2013)  
Kazakhstan (2014)  
Ukraine (2015)  
Regional trade agreements with investment provisions  
Singapore  
Chile 
Brunei  
India 
Mexico  Thailand  
Philippines  
Malaysia  
Indonesia 
Switzerland  Australia  
Mongolia  
 
Source:  Information provided by the authorities of Japan.  
2.28.   In addition, by 1 October 2016, Japan had concluded  66 tax conventions , applicable to 
100 jurisdictions, including signatories to the Convention on Mutual Admi nistrative Assistance in 
Tax Matters.12 Since 2015, Japan has signed seven tax treaties, with Belgium, Chile, Germany, 
India, Panama, Qatar, and Slovenia.13 
 
                                                
11 JETRO online information. Viewed at: 
https://www.jetro .go.jp/en/invest/incentive_programs/info.html . 
12 MOF online information. Viewed at: 
http://www.mof.go.jp/english/tax_policy/tax_conventions/international_182.htm . 
13 Treaties with India and Germany concern amendments to the existing treaties.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures and  requirements  
3.1.1.1   Transparency and legal framework  
3.1.  Japan Customs, under the Ministry of Finance, continues to administer and enforce customs 
legislation. Customs and tariff policies are formulated by the Customs and Tariff Bureau of the 
Ministry. Japan has nin e regional Customs offices.1 The main laws and regulations governing 
customs procedures  for imports and exports are the Customs Law No. 61 of 1954, as last 
amended on 31 March 2016; the Cabinet Order No. 150 of 1954 (Order for Enforcement of the 
Customs La w), as last amended on 31 March 2016; and the Ordinance of the Ministry of Finance 
(Ordinance for Enforcement of the Customs Law) No. 31 of 1966, as last amended on 
31 March  2016.2 Japan's applied rates of duties and taxes imposed on or in connection with 
importation are published in the Government Gazette. In 201 5, customs duties amounted to 
¥1.05 trillion, around 2% of the central government revenue (general account).  
3.2.  Japan Customs issues advance written rulings, at the written request of importers or ot her 
interested parties, on: tariff classification, customs valuation, the origin of goods, and relief or 
exemption from customs duties for goods planned for import. The authorities indicate that an 
advance ruling is issued in principle within 90 days of re quest for customs valuation and within 
30 days for other requests. The advance ruling issued is binding on the part of Japan Customs at 
the time of import declaration of the corresponding goods. These rulings can be published on the 
Customs website with th e applicants' consent.  
3.3.  In case of a breach of the Customs Law, a criminal penalty is imposed, as prescribed in 
Articles  108-4 to Article 118. Penalties can consist of a fine of up to ¥30 million and/or 
imprisonment in the case of unauthorized importation o r exportation of prohibited goods; 
importation or exportation of goods without permission; false declaration; and tariff evasion. If a 
trader violates the provisions of the relevant laws and regulations, the Director -General of 
Customs can suspend or revok e the permission or approval that the trader has been granted; for 
example, in the case of the designation of a bonded warehouse, the status of the authorized 
importer, or the licence of a customs broker.  
3.4.  Complaints against Japan Customs' decisions may be  made to the Director -General of 
Customs within three  months of the decision. Further appeals may be lodged with the Minister of 
Finance within one month of the decision by the Director -General of Customs.3 The number of 
complaints and appeals against Cust oms totalled 54 in 2014 and 36 in 2015. The Administrative 
Appeal Act was revised in 2014 and the appeal process was changed in April 2016.4 The 
Director -General of Customs and the Minister of Finance review administrative appeals against 
customs authoriti es.  
3.5.  Japan has signed agreements and arrangements for the exchange of customs information 
with 31 countries and regions.5 Japan became a signatory of the WCO's Revised Kyoto Convention 
in 2001 and makes use of international standards in the area of customs  and trade facilitation.  
3.6.  Japan deposited its instrument of acceptance of the Trade Facilitation Agreement (TFA) with 
the WTO on 1 June 2015. On 6 April 2015, Japan set up a national committee on trade facilitation, 
                                                
1 Hakodate, Kobe, Moji, Nagasaki, Nagoya, Okinawa, Osaka, Tokyo and Yokohama.  
2 Japan Customs online information. Viewed at: http://www.customs.go.jp/english/c -
answer_e/imtsukan/1801_e.htm . 
3 Articles 89 of the Customs Law.  
4 The Administrative Appeal Act, as a general law, is applied to matters not covered under other laws.  
5 Australia; Brunei Dar ussalam; Canada; Chile; China; the European Union; France; Germany; 
Hong Kong, China; India; Indonesia; Italy; the Republic of Korea; Macao, China; Malaysia; Mexico; Mongolia; 
the Netherlands; New Zealand; Norway; Peru; the Philippines; Russian Federation;  Singapore; South Africa; 
Spain; Switzerland; Thailand; the United Kingdom; t he United States; and Viet Nam.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  known as the Liaison Conference on Trade Facilitation (LCTF), as a forum for information -sharing 
among relevant ministries and agencies, represented at director -general level.6  
3.7.  As stipulated in Article 1.3 of the TFA, Japan maintains the following enquiry points:  
 Customs Counsellors located in each regional Customs headquarter and some branch 
offices for customs procedures;  
 Quarantine Stations in the Ministry of Health, Labour and Welfare, and three Regional 
Bureaus of Health and Welfare for quarantine issues;  
 Animal Quarantine Services and Pl ant Protection Stations in the Ministry of 
Agriculture, Forestry and Fisheries for animal/plant quarantine issues;  
 the Trade and Economic Cooperation Bureau in the Ministry of Economy, Trade and 
Industry (METI), and each Regional Bureau of Economy, Trade and Industry for issues related to 
the Foreign Exchange and Foreign Trade Control Act;  
 the Alcohol Division in METI and each Regional Bureau of Economy, Trade and 
Industry  for issues related to the Alcohol Business Act;  
 the Agency for Natural Resources a nd Energy in METI  for issues related to the Act on 
the Quality Control of Gasoline and Other Fuels,  
 the divisions in charge of explosive control in each prefecture for issues related to the 
Explosives Control Act;  
 the divisions in charge of gas control i n each prefecture for issues related to the High 
Pressure Gas Safety Act;  
 the Chemical Substances Control Division in METI and the National Institute of 
Technology and Evaluation for issues related to the Act on the Evaluation of Chemical Substances 
and R egulation of their Manufacture, etc.;  
 the Environmental Policy Division in METI for issues related to the Basel Convention; 
and 
 the Waste Management and Recycling Department in the Ministry of the Environment 
and Local Environment Offices in each prefectur e for environmental issues.  
3.1.1.2   Fees and formalities  
3.8.  A customs import declaration is needed for importation and must be accompanied by an 
invoice, bill of lading, insurance certificate, freight account and packing list. Additional documents 
may be necessary de pending on the type of goods.7 Imports into Japan are held at customs 
designated bonded areas (known as hozei areas) at the ports of entry. Once the necessary 
inspection takes place and customs duties and taxes are paid, a Notice of Import Permit, an 
electronic document, is issued by Customs.  
3.9.  There are no fees or charges required by Customs for an import declaration. Japan Customs 
charges fees for services rendered such as issuing certificates; granting permits for goods 
examination outside of designated a reas; granting permits for Customs Warehouses or Customs 
Display Areas; and granting permits for Customs Manufacturing Warehouses.8 There are no special 
                                                
6 The relevant ministries include the ministries of: foreign affairs; finance; health, labour and welfare; 
agriculture, forestry and fisheries; and  trade, economy and industry.  
7 Certificates of origin (where a preferential rate is applicable); statement on reduction of or exemption 
from customs duty and excise tax (when such reduction or exemption is applicable to the goods); and 
documents required under Japan's generalized system of preferences (G SP). 
8 Japan Customs online information. Viewed at: http://www.customs.go.jp/english/exp -
imp/customsfee.htm . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  registration requirements for importers and the use of a customs broker is optional. The 
authorities in dicate that, with the exception of some documents, photocopies are accepted.  
3.10.   In the case of exports, an export declaration must be accompanied by supporting 
documents such as invoices, permits, approvals or licences. Upon the arrival of the goods to the 
hozei area, exporters receive an export permit after the necessary physical examination of the 
goods. Exporters are also able to file an export declaration before the goods are brought into the 
hozei area. 
3.11.   Japan's Single Window is managed by an independent a gency under private -public 
partnership (PPP) in accordance with relevant laws and regulations . Nippon Automated Cargo and 
Port Consolidated System (NACCS)9 is a system for online processing of procedures with Customs 
and other relevant administrative autho rities or related private -sector services for 
arriving/departing ships and aircraft or import/export cargo.10 All customs offices are linked to the 
Single Window. Documents for clearance are accepted in electronic form through NACCS, with 
some exceptions.  
3.1.1.3   Release and clearance of goods  
3.12.   Since Japan's last review in 2015, there has been little change to customs clearance 
procedures and requirements. In the World Bank's Trading Across Borders 2017 Index, Japan's 
ranking was 49th (out of 190 economies), compare d with 52nd (out of 189 economies) in 2016.11 
3.13.   Japan has several systems in place to expedite the release and clearance of goods. An 
Authorized Economic Operator (AEO) programme  has been developed in close cooperation with the 
business sector, with the aim o f ensuring security while facilitating legitimate trade (Box 3.1).  
3.14.   Pre-arrival examination allows importers to submit documents to Customs before the 
cargo's arrival in Japan, so that they can be notified in advance as to whether Customs' inspection 
of the cargo will be required. A pre -arrival declaration form must be submitted to the customs 
office that controls the hozei  area where the cargo is expected to be brought in. In addition, cargo 
can be released immediately upon its arrival if the importer uses  NACCS for the declaration and 
Customs finds that no inspection is required. Inspection of a shipment under pre -arrival is 
conducted before the cargo is transferred into a hozei area. 
3.15.   The before permission (BP) release system allows imported goods to be re leased before 
permission for their importation has been obtained, subject to the payment of a guarantee 
equivalent to the expected duties on the goods. Situations in which traders may use this system 
include: where the imported goods need to be released qu ickly because they are valuable or 
perishable; where the goods are intended for an exhibition; and where the submission of the 
certificate of origin is delayed due to the application of the preferential tariff rate. All traders can 
use this system, which i s beneficial especially for the release of perishable goods.  
3.16.   Based on its risk management system, Japan Customs has been using post -clearance audit 
(PCA) for many years. The increased use of PCA has allowed the reduction of control activities at 
the borde r and at the time of arrival of goods to only those necessary to determine the 
admissibility of the goods. Japan Customs conducted PCA for 3,545 importers from July 2014 to 
June 2015 .12  
                                                
9 Nippon Automated Cargo and Port Consolidated System Inc. online information. Viewed at: 
http://www.naccs.jp/e/aboutnaccs/aboutnaccs.html . 
10 Based on the Act for partial Revision of the Act on Special Provisions for  Customs Procedure by Means 
of Electronic Data Processing System (Act No. 46 of 2008).  
11 Time to import includes: documentary compliance (3.4 hours) and border compliance (39.6 hours); 
the cost to import includes: documentary compliance (US$100) and border  compliance (US$299.2). Doing 
Business 2016 online information. Viewed at: 
http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documen ts/Annual -Reports/English/DB17 -
Report.pdf . 
12 UNECE online information. Viewed at: http://tfig.unece.org/contents/post -clearance -audit.htm . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Box 3.1 Japan's Authorize d Economic Operator Program  
 Japan Customs introduced its authorized economic operator  (AEO) programme in March 2006 and 
subsequently developed it to simplify customs procedures and facilitate legitimate trade. Importers, 
exporters, manufacturers, warehouse  operators, customs brokers, and logistics operators are eligible to 
become AEOs in Japan. Importers with cargo security management and a good compliance record may 
submit import and duty/tax payment declarations separately; this allows goods to be release d before 
submitting the duty/tax payment declaration; import declarations may be submitted in advance of cargo 
arrivals.  
 
 The legal framework for Japan's AEO programme includes : the Customs Law, which stipulates the benefits, 
requirements for authorizatio n (reasons for disqualification), and revocation of approvals; the Cabinet 
Order (Order for Enforcement of the Customs Law), which covers the procedures for customs clearance 
and benefits and application procedures for authorization; and the Ordinance of t he Ministry of Finance 
(Ordinance for Enforcement of the Customs Law), which stipulates details for the implementation of the 
specific procedures and the compliance programme. In accordance with the March 2016 amendment to 
the customs -related laws,  AEO importers/exporters and AEO customs brokers are allowed to submit 
import/export declarations to any regional customs office ; customs brokers are allowed to operate 
throughout the nation (i.e. their operation is no longer limited to within the boundary of the regional 
customs office at which they were registered). These changes are to be implemented in 2017.  
 
 The Customs and Tariff Bureau  (CTB),  Ministry of Finance is responsible for the policy and planning 
function of the AEO programme. It also develops intern al guidelines for proper implementation and 
operation at regional customs offices.  Mutual recognition  and international issues relating to  the AEO 
programme  also fall under the CTB's responsibility . All nine regional Customs headquarters nationwide 
have AE O specialists that are responsible for application authorization processes  and post audit and have 
authority to authorize eligible applicants. A national AEO centre has been  established in Tokyo Customs to 
oversee the operations of the other regional custo ms offices  in order to ensure consistency of 
implementation of the AEO programme.  
 
 The eligibility  requirements to become  an AEO reflect the standards included in the "SAFE Framework" 
adopted by the WCO.13 The main eligibility criteria for an AEO are: appro priate compliance records; ability 
to use the e-system (NACCS) for customs procedures; ability to conduct related operations  properly 
(including financial integrity ); and the establishment of a compliance programme  (including security 
standards ). 
 
 As at 30  September 2016, the total number of AEOs was 600 (compared with 523 on 1 April 2014). 
Following progressive improvements in Japan's AEO scheme, the release time for AEO import cargos  has 
been reduced significantly. According to the latest time -release stu dy conducted in June 2015 on maritime 
cargos , the release time was less than one minute for AEO import cargos  as against 2.4 hours 
(144 minutes) for non -AEO import cargos . On air cargos , less than one minute was needed for AEO import 
cargos  compared to 0.3  hours (18 minutes) for non -AEO import cargos .  
 
 Japan has mutual recognition arrangements (MRAs) on AEO programmes  with: Canada; the European 
Union; Hong Kong, China; the Republic of Korea; Malaysia; New Zealand; Singapore; and the United 
States. Under th e MRAs, Japan Customs takes into account the status of the members of the other AEO 
programmes when conducting its own risk assessment. Japan is in consultations with China, the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei ), and Switzerland on the 
possibility of having MRAs on AEOs.  
Source:  Information provided by the authorities, and Japan Customs on line information. Viewed at: 
http://www.customs.go.jp/engl ish/aeo/pamphlet.pdf .  
3.1.2   Customs valuation  
3.17.   Japan's customs valuation regime has not changed during the review period. All importers 
must file a customs declaration once goods have entered into a hozei  area; this may now be done 
without entry of goods into t he bonded area under certain conditions, such as an authorized 
importer presenting an import declaration using the electronic data processing system. The 
customs value of imported goods is determined according to their c.i.f. price (in principle based on 
the transaction value of the imported goods).  
3.18.   Complaints against Customs' decisions may be made to the Director -General of Customs 
within two months of the decision. Further appeals may be lodged with the Minister of Finance 
                                                
13 SAFE Framework of Standards, World Customs  Organization online information. Viewed at: 
http://www.wcoomd.org/en/topics/facilitation/instrument -and-
tools/tools/~/media/2B9F7D493314432BA42BC8498D3B73CB.ashx . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  within one month of the decision  by the Director -General of Customs. A lawsuit may be filed 
against the Minister's decision within six months of such decision. The authorities indicate that 
in 2015 there were seven complaints, one appeal, and one lawsuit was filed.  
3.1.3   Rules of origin  
3.19.   Japan has notified the WTO that it has non -preferential rules of origin.14 Japan's MFN rules 
of origin to determine, inter alia,  whether to apply MFN rates (as opposed to general rates) are 
detailed in Article 4 -2 of the Cabinet Order for Enforcement of the Custo ms Law, and Articles 1 -5 
and 1 -6 of the Ordinance for Enforcement of the Customs Law.15 MFN tariff rates are applicable to 
imports from eligible countries, where the country of origin is defined as the country in which the 
goods concerned have been wholly o btained or have undergone substantial transformation 
(change of tariff classification at the HS  4-digit level).  
3.20.   Japan also applies preferential  rules of origin under the Generalized System of Preferences 
(GSP) and its various RTAs/EPAs (Section 2). To bene fit from preferential duties, certificates of 
origin, issued by authorized institutions in the exporting country16, are required  in order to prove 
that the product being imported is "wholly obtained" or "substantially transformed" (e.g. change of 
tariff cla ssification at the HS 4 -digit level or 40% of value added) in the exporting country. For 
goods "not wholly obtained", specific criteria based on change of tariff classification rules, 
processing rules, and value added rules are applied on a product -by-product basis. Rules of origin 
under EPAs and the GSP apply these specific criteria for various products.  
3.1.4   Tariffs  
3.1.4.1   MFN applied tariff  
3.21.   Goods imported into Japan may be subject to customs tariffs, consumption tax (VAT), and 
excise duties on products such as liquo r, tobacco, gasoline, LPG, and automobiles ( Section  3.3.1).  
3.22.   The structure of Japan's MFN applied tariff has remained largely unchanged over the past 
few years. In FY2016, Japan's tariff schedule comprised 9,071 lines (down from 9,151 in FY2014) 
at the HS 9-digit level (Table 3.1).17 Of all tariff lines, 93.2% involve ad valorem  rates (including 
duty-free lines which represent 40.1% of all lines). The remainin g 6.8% (i.e. 619 lines) are 
non-ad valorem : specific rates are applied to 2.7% of the lines; 3.2% ha ve alternate rates; 0.6% 
have compound rates; and other types of tariff (differential duties and sliding duties) apply to 
0.4% of tariff lines (Chart 3.1).18 
                                                
14 WTO documents G/RO/N/1, 9 May 1995 and G/RO/N/1/Add.1, 22 June 1995.  
15 The MFN rules of or igin are also used to determine the country of origin for some trade remedy 
measures and import trade statistics.  
16 Under the EPAs with Mexico , Peru, and Switzerland certificates may also be issued by approved 
exporters. Under the EPA with Australia, certi ficates may also be issued by importers, exporters, or producers.  
17 Excluding in -quota lines.  The Japanese tariff schedule has three distinct sets of rates: statutory rates 
(including both general and temporary rates); WTO bound rates; and preferential rat es (under the GSP, and 
RTAs/EPAs with Brunei Darussalam, Chile, India, Indonesia, Malaysia, Mexico, Peru, Philippines, Singapore, 
Switzerland, Thailand and Viet Nam). In the case of statutory rates, the "temporary" rate, which is reviewed 
annually, is norm ally used instead of the higher general rate; the lower of the statutory and WTO bound rates 
is applied to WTO Members on an MFN basis, except when preferential rates are applied. Where the temporary, 
general, or preferential rate is above the WTO bound ra te, the latter rate applies to WTO Members.  
18 An alternate duty involves either an ad valorem  or specific rate; usually  the higher of the two is 
applied (except in the case of HS2204.21 -2 and HS2204.29 -1). A compound duty involves a combination of 
ad valorem and specific rates. A differential duty involves a specific rate charged per kg of imports with the 
rate varying directly in relation to the difference between the standard import price, set by the authorities, and 
the actual import price. A sliding dut y involves a specific tariff rate for imports valued up to a certain threshold; 
the rate declines as the value exceeds the threshold and becomes zero at a certain point.  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 33 - 
 
  Table 3.1 Structure of MFN tariffs, FY2012, FY2014 a nd FY2016  
(%, unless otherwise indicated)  
 MFN applied  Final bounda 
 FY2012  FY2014  FY2016   
Bound tariff lines (% of all tariff lines)  98.3 98.3 98.2 98.2 
Simple average rate  6.3 5.8 6.1 6.2 
 WTO agricultural products  17.5 14.9 16.3 16.7 
 WTO non -agricultural products  3.7 3.7 3.6 3.6 
Duty-free tariff lines (% of all tariff lines)  40.5 40.4 40.1 38.4 
Simple average rate of dutiable lines only  10.7 9.9 10.2 10.2 
Domestic tariff "peaks" (% of all tariff lines)b 6.6 6.6 6.7 6.7 
International tariff "pea ks" (% of all tariff lines)c 7.6 7.4 7.6 7.6 
Overall standard deviation of tariff rates  20.5 14.3 16.7 16.9 
Coefficient of variation of tariff rates  3.2 2.4 2.8 2.7 
Tariff quotas (% of all tariff lines)  1.8 1.8 1.7 1.7 
Non-ad valorem  tariffs (% of all tariff lines)  6.7 6.7 6.8 6.3 
Non-ad valorem tariffs with no AVEs (% of all tariff lines)  1.5 1.8 1.6 1.5 
Nuisance applied rates (% of all tariff lines)d 1.5 1.5 1.5 1.3 
Number of lines  9,168  9,151  9,071  8,912  
 Ad valorem  rates 8,553  8,538  8,452  8,338  
 Duty-free lines  3,714  3,698  3,641  3,482  
 Non-ad valorem  rates 615 613 619 574 
 Specific  236 236 242 224 
 Compound  57 57 57 58 
 Alternate  290 288 288 289 
 Other  32 32 32 3 
a Final bound rates are based on the FY2016 tariff schedule. Calculations are  based on bound rates 
only. 
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
c International tariff peaks are defined as those exceeding 15%.  
d Nuisance rates are those greater than zero, but less than or equal to 2%.  
Note:  All tariff calculations exclude in -quota lines. Including AVEs, as available, provided by the authorities 
of Japan. In case of unavailability, the ad valorem  part is used for compound and alternate rates. All 
three years are base d on HS12 nomenclature.  
Source:  WTO calculations, based on data provided by the authorities of Japan.  
Chart 3.1 Tariff distribution by type of duty, FY2016  
Chart 3.[1]   Tariff distribution by type of duty, FY2016
Source:  WTO Secretariat calculations, based on data provided by the authorities.Ad valorem duty
53.0%
Duty free
40.1%Non-ad valorem duty
6.8%
Alternate duty  3.2%Specific duty  2.7%
Other  0.4%Compound duty  0.6%
 
Source:  WTO Secretariat calculations, based on data  provided by the authorities.  
3.23.   The non -ad valorem  rates apply mainly to fats and oils, followed by footwear, prepared 
foods, mineral products, vegetables, live animals and animal products, and textiles and clothing 
(Chart  3.2).  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 34 - 
 
  Chart 3.2 Share of non -ad valorem  duties, by HS Section, FY2016  
(77)(66)(37)
(126)
(35)
(5)(6)
(0)(0)(0)(212)(25)
(0)(0)(28)
(0)(0)(0)(0)(2)(0)(619)
0%5%10%15%20%25%30%35%40%45%
Live animals & prod.
Vegetable products
Fats and oils
Prepared food, etc.
Mineral prod.
Chemicals & prod.
Plastic & rubber
Hides & skins
Wood & articles
Pulp, paper, etc.
Textiles & articles
Footwear
Articles of stone
Precious stones, etc.
Base metals & prod.
Machinery
Transport equipment
Precision instruments
Arms & ammunition
Misc. manufactures
Works of art, etc.
TotalChart 3.2    Share of non -ad valorem duties, by HS section, FY2016
Note:
Source:Each bar depicts the percentage of tariff lines within each HS section that carry non -ad valorem duties;  
the figures in parentheses show the corresponding number of lines.  In -quota rates are not included.
WTO Secretariat estimates, based on data provided by the Japanese authorities.
 
Note:  Each bar depicts the percentage of tariff lines within each HS Section that carry non -ad valorem  
duties; the figures in parentheses show the corresponding number of lines. In -quota rates are not 
included.  
Source:  WTO Secretariat estimates, based on data provided by the Japanese authorities.  
3.24.   In FY2016, Japan's overall simple average applied MFN tariff rate was 6.1% (up from 5.8% 
in FY2014) (Table A3.1). This increase i s due to higher average ad valorem  equivalents (AVEs) of 
non-ad valorem  duties. The authorities provided data for  476 out of 619 AVEs based on import 
data for 2014.19 Consequently, the tariff analysis is based on 99.1% of the 9,071 tariff lines. The 
simple average rate for all the AVEs supplied is 32.7%20; however, the highest rate is 389% for 
certain cow peas. Of the 101  highest tariffs, 95  had non -ad valorem  rates.  
3.25.   Import duties on agricultural products are higher than duties on non -agricultural products: 
the simple average for agriculture (WTO definition) is 16.3% (14.9% in FY2014), compared with 
3.6% for non -agricultural products (3.7% in FY2014). Simple average applied MFN tariffs are also 
relatively high for footwear and headgear, prepared foods, vegetab les, live animals, hides and 
skins, arms and ammunition, and textiles and clothing (Chart 3.3).  
                                                
19 For 35 out of 288 alternate rates no AVE was provided (the ad valorem  part was used in the tariff 
analysis). For 23 out of 57 compound rates no AVE was provided (the ad valorem  part was used). For 69 out 
of 242 specific rates and 16 out of 32 "other duties" rates no AVE was provided.  
20 In comparison, the simple average of the AVEs at the time of Japan's last review was 29.7%, which 
was based on 2012 imports.  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 35 - 
 
  Chart 3.3 Simple average applied MFN tariff rates, by HS Section, FY2014 and FY2016  
0%5%10%15%20%25%30%35%
Live animals & prod.
Vegetable products
Fats and oils
Prepared food, etc.
Mineral prod.
Chemicals & prod.
Plastic & rubber
Hides & skins
Wood & articles
Pulp, paper, etc.
Textiles & articles
Footwear, headgear
Articles of stone
Precious stones, etc.
Base metals & prod.
Machinery
Transport equipment
Precision instruments
Arms & ammunition
Misc. manufactures
Works of art, etc.
TotalChart 3.3   Simple average applied MFN tariff rates, by HS section, FY2014 and FY2016
Excluding in -quota rates .  Including ad valorem equivalents (AVEs) provided by the Japanese authorities, 
as available.   The ad valorem part of compound and alternate rates are used where AVEs are not available.  
WTO Secretariat calculations, based on data provided by the Japanese authorities.Note:
Source:FY2014 FY2016
 
Note:  Excluding in -quota ra tes. Including ad valorem  equivalents (AVEs) provided by the Japanese 
authorities, as available. The ad valorem  part of compound and alternate rates are used where AVEs 
are not available.  
Source:  WTO Secretariat calculations, based on data provided by the  Japanese authorities.  
3.26.   There are 158  tariff lines (1.7%) subject to MFN out-of-quota tariffs, of which 11 are under 
state trading . The out -of-quota rates for 38  tariff lines are ad valorem . The average rates differ 
considerably: in -quota rates average 18.4 %, while out -of-quota rates average 76.3%.  The quota 
allocation method and process remains somewhat intricate ( Section  4.1).21 Since 2014, procedures 
for the allocation of tariff quotas have remained unchanged.  
3.1.4.2   Bound tariff  
3.27.   Japan has bound 98.2% of lines ( 159 lines are unbound); unbound lines relate mainly to 
fisheries (fish, crustaceans, and seaweed), petroleum oils, and wood and articles thereof. 
Ad valorem rates account for 8,338 bound lines (93.6%), of which 3,482 lines are duty free. The 
difference bet ween the average bound MFN tariff (6.2%) and the average applied MFN tariff 
(6.1%)  in FY2016 was negligible, which reflects a high degree of predictability in the tariff .22 The 
average bound rate (WTO  definition) is considerably higher for agricultural prod ucts (16.7%) than 
for non -agricultural products (3.6%).  
                                                
21 For details of the quota allocation method, see WTO (2001).  
22 Whereas bound and applied MFN rates coincide for most lines, b ound rates exceed applied MFN rates 
for, inter alia, live animals and animal products (HS Section  1); vegetables (Section 2); prepared foods, 
beverages, and tobacco (Section 4); chemicals and products (Section  6); plastics and rubber (Section 7); 
textiles and clothing (Section 11); and base metals (Section 15).  The gap between bound and applied rates 
ranges from 0.3  percentage points to 40  percentage points in FY2016.  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 36 - 
 
  3.1.4.3   Preferential tariff  
3.28.   Japan offers preferential tariff rates to 138 developing countries and 5  territories under the 
GSP; least developed countries (47 in 2016) receive additional preferences.23 China r emains the 
largest beneficiary of preferential access to the Japanese market; it accounts for over two thirds of 
all preferential imports under the GSP scheme.24 Japan also grants preferential access under its 
RTAs/EPAs for imports from ASEAN, Australia, Br unei Darussalam, Chile, India, Indonesia, 
Malaysia, Mexico, Mongolia, Peru, Philippines, Singapore, Switzerland, Thailand, and Viet Nam as 
at 1 December 2016 (Section  2.3.2) . 
3.29.   Simple average tariff rates under all preferential arrangements (GSP, LDC, and EP As) are 
lower than the simple average applied MFN rates . However, the rates vary widely from one 
product group to another . The overall simple average preferential rates range from 0.5% to 5.0% , 
while agriculture is subject to rates from 1.7% to 15.3% (Tabl e 3.2). Tariffs under these 
arrangements are also high for certain processed and industrial goods, such as leather, rubber, 
footwear and travel goods, and textiles and clothing imports (under GSP); items such as dairy 
products, some footwear, and textiles and clothing are not included in the GSP scheme for 
developing countries and are therefore subject to applied MFN rates of duty.  
Table 3.2 Summary analysis of Japan's preferential tariffs, FY2016  
 Total  WTO ag riculture  WTO non -agriculture  
Average  
(%) Duty -free 
rates (%)  Average 
(%) Duty -free rates 
(%) Average 
(%) Duty -free 
rates  
(%) 
MFN 6.1 40.1 16.3 25.5 3.6 43.7 
GSP 5.0 58.0 15.3 34.2 2.6 63.8 
LDC 0.5 97.9 1.7 96.6 0.2 98.2 
Economic Partnership Agreem ents 
Singapore  3.3 83.3 12.9 48.8 1.0 91.8 
Mexico  3.0 85.8 14.4 42.1 0.3 96.6 
Malaysia  2.8 87.1 12.6 56.0 0.5 94.8 
Chile 3.0 83.0 13.2 48.8 0.5 91.4 
Thailand  2.8 85.1 12.6 49.6 0.5 93.8 
Indonesia  3.0 84.5 13.4 48.8 0.5 93.2 
Brunei  3.4 83.1 13.5 48.1 1.0 91.7 
ASEAN  3.0 81.9 13.1 43.5 0.5 91.4 
Philippines  2.7 85.1 12.4 51.5 0.4 93.4 
Switzerland  3.1 81.1 13.3 43.7 0.6 90.3 
Viet Nam  3.0 83.0 13.3 44.9 0.5 92.3 
India 3.3 78.1 14.0 40.4 0.8 87.4 
Peru 3.1 82.4 13.7 42.9 0.5 89.7 
Australia  3.4 77.1 14.0 43.1 0.9 85.5 
Mongoliaa 3.8 79.2 15.2 40.9 1.2 88.6 
Memorandumb 
Singapore  2.9 84.0 12.7 49.2 0.5 92.6 
Malaysia  2.8 87.2 12.5 56.1 0.5 94.8 
Thailand  2.8 85.1 12.5 49.7 0.5 93.8 
                                                
23 Japan Customs online information (in Japanese). Viewed at http://w ww.customs.go.jp/tetsuzuki/c -
answer/imtsukan/1504_jr.htm . 
24 Other major beneficiaries of Japan's GSP scheme in FY 2014 include: Bangladesh (7.0% of total 
imports under preferential treatment), Myanmar (6.0%), and Cambodia (4.7%).  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 37 - 
 
   Total  WTO ag riculture  WTO non -agriculture  
Average  
(%) Duty -free 
rates (%)  Average 
(%) Duty -free rates 
(%) Average 
(%) Duty -free 
rates  
(%) 
Indonesia  2.9 85.0 13.0 48.9 0.5 93.9 
Brunei  2.9 83.9 13.0 48.3 0.5 92.7 
Philippines  2.7 85.7 12.4 51.5 0.4 94.2 
Viet Nam  2.9 83.3 12.9 45.4 0.5 92.6 
a Entry into force 7 June 2016.  
b Based on lowest rate applied from country's EPA and the ASEAN EPA.  
Note:  Calculations exclude in -quota lines. Including AVEs, as available,  provided by the authorities of 
Japan. In case of unavailability, the ad valorem  part is used for compound and alternate rates.  
Source:  WTO Secretariat calculations, based on information provided by the authorities; and Japan Customs 
online information. Vi ewed at: http://www.customs.go.jp/kyotsu/kokusai/gaiyou.htm . 
3.1.5   Import prohibitions, restrictions, licensing, and quotas  
3.30.   Imports of certain goods are prohibited under Article 69 -11 of Japan's Customs Law. 
Imports of narcotics, certain weapons, and animals or plants listed in the appendices of the 
Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) may be 
prohibited or subject to import licensing requirements for reasons of national security, 
safeguarding consumer health and well -being, and preserving domestic plant and animal life and 
the environment. Japan's Foreign Exchange and Foreign Trade Act governs import licensing 
procedures.25 In addition, some commodi ties, including certain fish, are subject to import quotas, 
unchanged since Japan's previous review.  
3.31.   At present, products that require import approval or are prohibited include: certain marine 
products, certain medicines and chemical products, propellant p owders, nuclear goods, weapons, 
wild animals and plants, substances that deplete the ozone layer, specified hazardous wastes, 
certain chemical weapons production materials , alcohol , rough diamonds, cultural property illegally 
removed from Iraq, all goods f rom the Democratic People's Republic of Korea, and weapons and 
other items from the Libyan Arab Jamahiriya and Eritrea, and Charcoal from Somalia, and chemical 
weapons and other items related to chemical weapons programme and cultural property illegally 
moved from Syrian Arab Republic, as per United Nations Security Council Resolution.26 Licences to 
import are issued free of cost. Japan amended the Customs Law in March 2015; the amendment 
added the products designated under Article 2, paragraph 15 of the Law  on Securing Quality, 
Efficacy and Safety of Products including Pharmaceuticals and Medical Devices to the list of items 
subject to import prohibition. In a 2016 amendment of the Customs Law, Japan added goods 
produced through the use of unlawfully obtaine d trade secrets (as stipulated by the Unfair 
Competition Prevention Act) to the list of items subject to import prohibition.  
3.32.   In 2014, Japan added to the list of items subject to import prohibition some substances as 
"narcotics" (defined under the Narcotics  and Psychotropic Control Law); as a result, the import of 
these substances without a licence is prohibited. In the same year, Japan also added some 
psychoactive substances to the list of items subject to import prohibition as "designated 
substances" (defi ned under the Law on Securing Quality, Efficacy and Safety of Products including 
Pharmaceuticals and Medical Devices); the import of these substances without a specific reason is 
prohibited by law.  
3.33.   In 2014, Japan amended the Foreign Exchange and Foreign T rade Act. The amendment 
added "chemical weapons and other items from Syria" (on 24 January 2014) and "cultural 
property illegally removed from Syria" (on 18 September 2015) to the list of products subject to 
import licensing requirements and removed "weapo ns and other items related to nuclear 
programmes or ballistic missile programmes from Iran" (on 22 January 2016) from the list, in 
response to the UN Security Council Resolution. It also added "specified mercury" and "specified 
mercury -added products" to t he list of products subject to import licensing requirements (not yet 
in force) to ensure the implementation of the Minamata Convention on Mercury. In addition, in 
                                                
25 This is described in Ch art III.3 in WTO (2013).  
26 WTO document G/LIC/ N/3/JPN/1 5, 5 October 201 6. WT/TPR/S/ 351/Rev.1  • Japan  
 
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  2015, Japan: modified technological specifications for certain ceramics subject to import li censing 
requirements, and for aromatic polyamide fibres; added certain gas turbines to the list of products 
subject to import licensing requirements; modified technical specifications of titanium boride and 
semi-finished ceramic products, signal generators  and vessels such as surface -effect vehicles; and 
added devices that are necessary for the control of spacecraft and are installed on the ground to 
the list of products subject to import licensing requirements.  
3.34.   Japan uses quantitative restrictions on impo rts (import quotas); according to the 
authorities, the quotas adhere to the WTO Agreements. Products subject to import quotas 
(unchanged since 2007) include: certain fish products and controlled substances listed in the 
Montreal Protocol on Substances that  Deplete the Ozone Layer.  
3.35.   The Ministry of Economy, Trade and Industry (METI) is responsible for administering the 
import quota system. Eligible importers are issued with an import quota allocation certificate . The 
method for allocating quotas, specified in  METI notices, has not changed since 2007 and remains 
somewhat complex. Quota allocations are decided on an annual basis. Fish -related quotas are 
allocated based on domestic supply and demand, e.g. the amount of imports, domestic production, 
consumption, a nd prices in the previous year, as well as projections for the coming year. These 
quotas are issued by the METI with the consent of the Ministry of Agriculture, Forestry and 
Fisheries (MAFF). Applicants for quota allocations must meet various criteria. Som e quotas are 
allocated on a first -come first -served basis. When the amount applied for exceeds the remaining 
unallocated quota, quotas are allocated by lottery.  
3.36.   Unused import quota allocation entitlements are non -transferable and cannot be carried 
over to the next period. Additionally, the Government does not reissue certificates for unused 
quotas.  
3.37.   Japan has in place a system of prior confirmation to collect data on certain imports. The 
system is intended to ensure that these imports are for specific uses, and to verify documentation 
and origin requirements. Prior confirmation is required from the Minister of Economy, Trade and 
Industry, or the relevant minister. The system is used, inter alia , for goods where fraudulent 
declarations have been found in the p ast or for goods deemed to be at high risk for fraud. These 
include: vaccines of microbial origin for experimental use; specified foreign cultural property; tuna; 
swordfish; whales; poppy and hemp seeds; certain substances listed in the Montreal Protocol; 
radioisotopes; diamonds; and various other chemicals.  
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.1.6.1   Overview  
3.38.   During the period under review, Japan i mposed three anti -dumping measures (i.e. those 
concerning toluenediisocyanate originating in China27 and potassium hydroxide originating in China 
and the Republic of Korea)28 (Table 3.3). Currently, there are six anti-dumping measures in force  
in Japan . Japan initiated an investigation on highly polymerized  polyethylene terephthalate from 
China on 30  Septem ber 2016.29 Japan did not apply any countervailing or safeguard measures 
during the review period, nor did it initiate any countervailing or safeguard investigations.  
                                                
27 Japanese Government online information (in Japanese). Viewed at: http://law.e -
gov.go.jp/htmldata/H26/H26SE415.html . 
28 Japanese Government online information (in Japanese). Viewed at: http://law.e -
gov.go.jp/htmldata/H28/H28SE196.html , and Japan Customs online information (in Japanese). Viewed at: 
http://www.customs.go.jp/tokusyu/kazeikamotsu_hutou.htm . 
29 METI online information (in Japanese). Viewed at: 
http://www.meti.go.jp/policy/external_economy/trade_control/boekikanri/trade -remedy/pet.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 3.3 Japan's anti -dumping measures in force, November 2016  
Country/Customs 
territory  Product, investigation 
ID number  Date of original 
imposition; publication 
reference  Date(s) of extension; 
publication 
reference(s)  
China  Electrolytic manganese 
dioxide  
27042007 -2 01.09.2008; Gazette, 
29.08.20 08 06.03.2014; Gazette, 
05.03.2014  
Toluenediisocyanate  
14022014 -1 25.04.2015; Gazette, 
17.04.2015   
Potassium hydroxide  
26052015 -1 09.08.2016; Gazette, 
03.08.2016   
Republic of Korea  Potassium hydroxide  
26052015 -2 09.08.2016; Gazette, 
03.08.2016   
South  Africa  Electrolytic manganese 
dioxide  
27042007 -3 01.09.2008; Gazette, 
29.08.2008  06.03.2014; Gazette, 
05.03.2014  
Spain  Electrolytic manganese 
dioxide  
27042007 -4 01.09.2008; Gazette, 
29.08.2008  06.03.2014; Gazette, 
05.03.2014  
Source:  Information provided  by the authorities of Japan.  
3.39.   Japan's legislative and institutional framework regarding anti -dumping, countervailing, and 
safeguard measures has remained largely unchanged since its previous review. The Customs Tariff 
Law and the relevant Cabinet Orders an d Guidelines define Japan's legal framework regarding the 
use of anti -dumping, countervailing, and safeguard measures.30 
3.40.   Trade remedies investigations are carried out by the Ministry of Finance (MOF) through its 
Office of Trade Remedy Affairs, the Ministry of Economy, Trade and Industry (METI) through its 
Office for Trade Remedy Investigations, and the Ministry in charge of the relevant industry.31 
According to the authorities, the Minist er of Finance establishes an investigating team composed of 
officials fr om the offices of MOF and METI and from the Ministry in charge of the relevant industry. 
The Japanese Investigation Authority (JIA) consists of the MOF's Office of Trade Remedy Affairs 
and the METI's Office for Trade Remedy Investigations. According to the  authorities, the 
independence of investigations is assured as access to the confidential information is limited.  
3.41.   Revisions of the Cabinet Order Relating to Anti -Dumping Duties and the Cabinet Order 
Relating to Countervailing Duties were promulgated on 8 A pril 2 016 and entered into force on 
1 May 2016. Requirements for associations wishing to file an application on behalf of a domestic 
industry seeking the imposition of an anti -dumping duty or countervailing duty were relaxed. 
Previously, associations were only eligible to file an application if the majority of their members 
were domestic producers of the like products. After the revisions, associations that have at least 
two domestic producers of the like products as members are eligible to file an applicat ion.32 
3.1.6.2   Anti-dumping measures  
3.42.   An anti -dumping investigation is initiated in accordance with the Customs Tariff Law33 and 
the Cabinet Order Relating to Anti -Dumping Duties.34 A Japanese industry may submit an 
application for investigation to the Minister of Fin ance.35 Article 8(5) of the Law stipulates that an 
investigation may be initiated when the Government considers it necessary, when an application 
                                                
30 WTO documents G/ADP/N/1/JPN/2/Suppl.6 ; G/SCM/N/1/JPN/2/Suppl.6; G/SG/N/1/JPN/2/Suppl.2, 
17 August 2009 (separately defined as AD Guid eline, CVD Guideline and SG Guideline).  
31 Articles 8(5) of the Customs Tariff Law and 6(4) of the AD Guideline; Articles 7(6) of the Customs 
Tariff Law and 5(4) of the CVD Guideline; and Articles 9(6) of the Customs Tariff Law, and 6(2) of the 
SG Guideline . 
32 METI online information. Viewed at: http://www.meti.go.jp/english/press/2016/0405_06.html . 
33 WTO document G/ADP/N/1/JPN/2, 30 June 1995 . 
34 Ministry of Justice online information (in Japanese). Viewed at: http://law.e -
gov.go.jp/htmldata/H06/H06SE416.html  (in Japanese).  
35 Article 8(4) of the Customs Tariff Law stipulates that "a person who has an interest in the domestic 
industry under the provisions of paragraph one of this Article as prescribed in the relevant Cabinet Order" may 
submit a request to initiate an AD investigation to the Minister of Finance.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  for investigation has been submitted or when there is sufficient evidence.36 According to the 
authorities, the M inister of Finance, the Minister in charge of the relevant industry and the Minister 
of Economy, Trade and Industry must jointly make a decision to initiate an investigation. The 
decision is made public as a public notice in the Official Gazette by the Min ister of Finance. 
According to the authorities, an investigation is conducted based on the Anti -Dumping Agreement 
and related laws and regulations. The final decision to impose an anti -dumping duty is issued as a 
Cabinet Order.  
3.43.   If a preliminary determinat ion is made, it must be notified to the interested parties and a 
public notice must be made.37 According to the authorities, preliminary determinations are not 
mandatory.  
3.44.   According to the authorities, provisional measures may be applied if the affirmative 
preliminary determinations are made.38 Such measures may be imposed no earlier than 60 days 
from the initiation of the investigation. The authorities indicate that provisional measures may be 
applied, in principle, for up to four months; upon requests of exp orters representing a significant 
percentage of the trade involved, such measures may be imposed for more than four months.39 
3.45.   Exporters may offer an undertaking to revise prices or to cease exports so that the injurious 
effect of the dumping on the domestic  industry is eliminated.40 
3.46.   Anti-dumping duties can be imposed for a period not exceeding five years.41 The measure 
may be extended thereafter following a review. A domestic industry may file an application for a 
review no later than one year prior to the exp iry date. The Government initiates an investigation 
upon the filing of an application or with sufficient evidence of continuation or recurrence of 
dumping and injury after the expiry of the measure. If it is found that the expiry of the duty would 
be likel y to lead to continuation or recurrence of dumping and injury, the Government may extend 
the measure. Each extension of the measure may not be longer than five years.42  
3.1.6.3   Countervailing measures  
3.47.   The Customs Tariff Law43 and the Cabinet Order Relating to Count ervailing Duties44 
comprise the legal framework for the application of countervailing measures in Japan.  
3.48.   As in the case of anti -dumping measures, a Japanese industry may submit an application to 
the Minister of Finance.45 Article 7(6) of the Law stipulates that an investigation may be initiated 
when the Government considers it necessary, when an application has been submitted or when 
there is sufficient evidence with regard, inter alia , to the importation of the subsidized product and 
the material injury to the domestic industry caused by such importation. According to the 
authorities, the Minister of Finance, the Minister in charge of the relevant industry and the Minister 
of Economy, Trade and Industry must jointly make a decision to initiate an investigati on. The 
                                                
36 Article 8(5) of the Customs Tariff Law. The scope of domestic ind ustry is defined in Article 4(1) of the  
Cabinet Order Relating to Anti -Dumping Duties.  
37 Article 13 -2 of the Cabinet Order Relating to Anti -Dumping Duties.  
38 Article 8(9) of the Customs Tariff Law  stipulates that such measures may be applied if the importa tion 
of the products concerned has resulted in material injury to the domestic industry, and it is found necessary to 
protect the industry from such injury.  
39 Article 17 of the Cabinet Order Re lating to Anti -Dumping Duties. While the Order stipulates that 
provisional measures can be applied for up to nine months if the rate of final anti -dumping duty in 
consideration is less than the dumping margin and exporters that export around 50% or more of the like 
product demand that provisional measures are imposed for more than four months, the authorities state that 
such circumstances have never happened.  
40 Article 8(7) of the Customs Tariff Law.  
41 Article 8(1) of the Customs Tariff Law.  
42 Article 8(30) of the Customs Tariff Law.  
43 WTO document G/ADP/N/1/JPN/2, 30 June 1995 . 
44 Ministry of Justice online information (in Japanese). Viewed at:  http://law.e -
gov.go.jp/htmldata/H06/H06SE415.html . 
45 Article 7(5) of the Customs Tariff Law stipulates that "a p erson who has an interest in the domestic 
industry under the provisions of paragraph one of this Article as prescribed in the relevant Cabinet Order" may 
submit a request to initiate a countervailing investigation to the Minister of Finance . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  decision is made public as a public notice in the Official Gazette by the Ministry of Finance. The 
final decision to impose a countervailing duty must be made within approximately one year.46  
3.49.   As in the case of anti -dumping duties, countervailing du ties can be imposed for a period not 
exceeding five years, and each extension may not exceed five years.  
3.1.6.4   Safeguard measures  
3.50.   The Customs Tariff Law47, the Cabinet Order Relating to Emergency Duties48, the Import 
Trade Control Order49 and the Regulations to Go vern Emergency Measures comprise the legal 
framework for the application of the safeguard measures in Japan.50 
3.51.   Unlike in the case of anti -dumping or countervailing measures, for safeguard measures, the 
Customs Tariff Law has no provisions on the private sec tor's submission of a request as one of the 
prerequisites to initiate a safeguard investigation; the Government may initiate an investigation 
when there is sufficient evidence of an increase of particular imports and of serious injury caused 
by such import s to a domestic industry that produces the like (or directly competing) products.51 
According to the authorities, the final decision to impose an emergency duty is issued as a Cabinet 
Order.  
3.52.   If imports of a particular product increase and cause (or threate n to cause) serious injury on 
the domestic industry that produces the like (or directly competing) products as a result of a 
decline in the price in a foreign country (or of unforeseen developments of circumstances), the 
Government may impose an emergency duty upon all specified products to be imported during the 
specified period, or upon such a product to be imported exceeding a certain level of quantity or 
value in addition to ordinary customs duty.52  
3.53.   The period of application of an emergency duty must no t exceed four years. If the period of 
application exceeds one year, the measure must be progressively liberalized at regular intervals.53 
If it is deemed that the serious  injury to a domestic industry caused by increased imports of the 
specified product con tinues to exist after the expiration of the application period of the measure, 
and the domestic industry is adjusting, the period may be extended. The total period must not 
exceed eight years. The measure applied during the extended period must not be more  restrictive 
against import than the measure applied during the period prior to the extension.54 
3.54.   Even prior to completion of the investigation, the Government may decide to apply an 
emergency duty, specifying a product and period of time that must not excee d 200 days, if it is 
deemed urgently necessary in the interest of the national economy.55  
3.55.   The emergency duty must be equivalent to or less than the amount corresponding to the 
difference between the customs value of the product concerned and the wholesale price in Japan 
of a like or similar product minus the amount of customs duty chargeable at an applicable rate 
prescribed in the Customs Tariff Law. The Government may also withdraw or modify tariff 
concessions on the specified product that Japan has grante d under the Marrakesh Protocol to the 
GATT 1994 (or any other treaties concluded under the framework of the 1994 GATT), within the 
limit of the rate of duty prescribed in the Law, and may impose upon such imported product 
customs duty chargeable at the app licable rate prescribed in the Law, or customs duty chargeable 
at the modified rate.  
                                                
46 Article 7(31 ) of the Customs Tariff Law and 5(5) of CVD Guideline.  
47 WTO document G/ADP/N/1/JPN/2, 30 June 1995.  
48 Ministry of Justice online information (in Japanese). Viewed at : http://law.e -
gov.go.jp/ htmldata/H06/H06SE417.html . 
49 Ministry of Justice online information (in Japanese). Viewed at:  http://law.e -
gov.go.jp/htmldata/S24/S24SE414.html . 
50 METI online information (in Japanese). Vi ewed at: 
http://www.meti.go.jp/policy/external_economy/trade_control/boekikanri/download/trade -
remedy/sg_kokuji02.03.29.pdf . 
51 Article 9(6) of the Customs Tariff Law.  
52 Article 9(1) of the Customs Tariff Law.  
53 Article 9(2) of the Customs Tariff Law.  
54 Article 9(10) of the Customs Tariff Law.  
55 Article 9 (8) of the Customs Tariff Law.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.56.   When safeguard measures are applied, tariff concessions may be modified on other 
products in accordance with Article 9(3) of the Customs Tariff Law.  
3.2  Measures Directly Aff ecting Exports  
3.2.1   Export procedures and requirements  
3.57.   There have been no major changes to the procedures and requirements for exports since 
the last review of Japan and most requirements are based on international agreements and/or 
security considerations  as well as for the purposes of gathering statistics. The documents required 
include the export declaration form (Customs form C -5010), invoices, and other documents as 
required by specific laws and regulations.56  
3.58.   The principal legislation affecting exports is set out in Table 3.4. In addition, there are 
several laws applicable to specific groups of products such as the Narcotics and Psychotropics 
Control Act, the Cannabis Control Act, and the Stimulant Drug Control Act.  
Table 3.4 Principal legislation affecting exports  
Legislation  First 
passed  Last 
amended  Purpose  
Customs Law  1954 2016 Is the principal piece of legislation covering customs 
procedures and documentation  
Foreign Exchange and 
Foreign Trade Act  1949 2014 Sets out the legal basis for registration of exporters and 
the application of export controls in specified 
circumstances  
Act on Conservation of 
Endangered Species of Wild 
Fauna and Flora  1992 2014 Provides the legal basis for the Minister of the 
Environment to draft guidelines on conservation of 
endangered species, the requirement to have approval 
for international trade, and other measures for their 
protection  
Act on Controls on the Illicit 
Export and Import and 
Other Matters of Cultural 
Property  2002 2004 Legal basis for measures in connection with the import, 
export, and recovery of stolen cultural property in order 
to ensure proper implementation of the Convention on 
the Means of Prohibiting and Preventing the Illicit 
Import, Export and Transfer of  Ownership of Cultural 
Property  
Export Trade Control Order  1949 2016 Sets out the products to which export controls apply  
Foreign Exchange Order  1980 2015 Sets out the technologies (including software) to which 
export controls apply  
Source:  Information  provided by the authorities of Japan.  
3.2.2   Export taxes, charges, and levies  
3.59.   There are no export taxes, charges, or levies applied by the Government or other public 
authorities in Japan.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.60.   Under the Customs Law, e xport prohibitions apply to a limited range of products including: 
narcotics and certain other drugs; child pornography; articles which infringe intellectual property 
rights; and certain articles that constitute unfair competition under the Unfair Competit ion 
Prevention Act (essentially related to intellectual property rights as well).  
3.61.   Since its previous review, the list of products subject to export licence in Japan has been 
modified mainly to reflect agreements by international export control groups. Sinc e 15 September 
2014, the following products have been added to the list: components designed for detonators, 
neutron generator systems utilizing electrostatic acceleration to induce a deuterium -deuterium 
nuclear reaction, rhenium, alloys of rhenium and all oys of rhenium and tungsten, high explosive 
containment vessels, components designed for fermenters, sampling oscilloscopes, IP  network 
communications surveillance systems or equipment, and specially designed components therefor; 
                                                
56 Japan Customs online information. Viewed a t: 
http://www.customs.go.jp/english/summary/export.htm . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  and the following products  have been deleted: digital video magnetic tape recorders, digital 
instrumentation magnetic tape data recorders and equipment designed to convert digital video 
magnetic tape recorders for use as digital instrumentation data recorders; components designed 
for inertial measurement equipment or systems. Since 1 October 2015, the following products 
have been added to the list: gas turbines designed for propellant control systems, and certain 
terrestrial equipment designed to control or monitor spacecraft (inclu ding sensing and actuation to 
determine and control the position and orientation of a  spacecraft). Since 31 July 2015, Japan has 
added the items regulated under the Minamata Convention on Mercury to the list of products 
regulated under the Export Control O rder with a view to ensuring the implementation of the 
regulation on the date on which the Convention enters into force; at the time of writing this report, 
the convention was not in force in Japan.57  
3.62.   In addition, the Foreign Exchange and Foreign Trade Act  provides the legal basis for 
applying export controls, while product lists and detailed operational guidelines are found in 
secondary legislation, including Cabinet Orders and Ministerial Orders. The main Orders under the 
Act are the Export Trade Control Order of 1949 (last amended in 2016) which sets out the goods 
and their destinations for which the permission or approval of METI is required for export, and the 
Foreign Exchange Order of 1980 (last amended in 2015) which sets out the technologies and 
destinations for which permission from METI is required for transfer outside Japan. These lists of 
goods and technologies are updated regularly, as are destinations and end -user lists.58  
3.63.   Japan maintains export controls for security, conservation, and humanitar ian reasons . Most 
of the products in the lists of goods appended to the Export Trade Control Order and the lists of 
technologies appended to the Foreign Exchange Order are related to Japan's international 
commitments (such as CITES and the Chemical Weapons  Convention) or its participation in 
non-binding arrangements (such as the Wassenaar Arrangement on transfers of conventional arms 
and dual -use goods and technologies, the Missile Technology Control Regime, the Treaty on the 
Non-Proliferation of Nuclear We apons, the Nuclear Suppliers Group, and the Australia Group) and 
include a "catch -all" category for products or technologies that could be used in weapons of mass 
destruction.59 For example, METI permission is required for the export of goods and technologi es 
regulated under the International Export Control Conference with the objective of preventing the 
proliferation of weapons of mass destruction. Japan has no  export quotas.  
3.64.   The Export Trade Control Order also includes exports of several agricultural, fis hing, and 
forestry -related products to all regions where METI approval is required.60 In these cases, METI is 
obliged to obtain the consent of the MAFF before granting a licence.61 
3.65.   The Trade and Economic Cooperation Bureau in METI is responsible for export c ontrol policy 
and legislation and participation in international export control discussions and negotiations. It is 
also responsible for issuing export licences and enforcement.  
3.66.   To obtain an export licence, the exporter must apply to METI using the relevan t application 
form and supporting documents, including an end -use certificate from the end -user. In practice, 
licences are refused for military weapons and certain materials which can be used in developing 
weapons of mass destruction. Japan permits arms ex ports to partner countries for joint 
development provided the government of the country -of-destination obtained consent from Japan 
before any item exported from Japan was transferred to a third country. For dual -use items, 
licence approval depends on METI' s assessment of the risk which is based on the destination and 
                                                
57 As at 3 October 2016, 32 countries have ratified the Convention. UNEP online information. Viewed at : 
http://www.mercuryconvention.org/Convention/tabid/3426/Default.aspx . 
58 METI online information. Viewed at: 
http://www.meti.go.jp/english/policy/external_economy/trade_control/index.html . 
59 CISTEC (2015), Overview of Japan's Export Controls (Fourth Edition), p. 14.  
60 Articles 2, 4, and 11 of the Export Trade Control Order and Appended Table 2; rows 28 (wheat  bran, 
rice bran, barley bran); 29 (feed mixtures for cattle, pigs, sheep, goats, deer, chickens, and quail); 30  (mycelia 
of lentinus edodes ); 32 (logs of kalopanax pictus , and quercus ); and 33 (eels fry) to all regions; and row 
34 (frozen baby clams, hard  clams and sea mussels) to the United States (under the Shellfish Sanitation 
Agreement between Japan and the United States).  
61 Article 2 item 2 of the Export Trade Control Order.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  the end -user, although, for the "catch -all" category of products, a licence is not required for 
exports to 27  countries.62  
3.67.   For technologies, including software, a licence is required for the tr ansfer of a listed 
technology from Japan to another country, or for transfer within Japan to a non -resident.  
3.68.   Normally, each consignment of goods for export under the Export Trade Control Order or 
technology for transfer abroad under the Foreign Exchange Or der requires an individual export 
licence, but there are five different kinds of bulk export licences: for regular exports of 
less-sensitive goods to some locations; for established trading relationships; for re -exports of 
certain goods for repair or repla cement to some locations; and for repeated exports to an overseas 
subsidiary.63 
3.2.4   Export support and promotion  
3.69.   Japan notified the Committee on Agriculture that it had not provided any export subsidies 
for FY1995 -FY2015.64  
3.70.   The Japan Bank for International Coop eration (JBIC) and the Nippon Export and Investment 
Insurance (NEXI) are the official export credit agencies of Japan.65 According to the authorities, 
provision of these credits is based on the terms and conditions of the OECD Arrangement on 
Officially Supp orted Export Credits.66 In order to promote exports of agricultural, forestry, and 
fishery products, the Ministry of Agriculture, Forestry and Fisheries has taken the following 
measures mainly for small and medium -sized enterprises: overseas promotion of Ja panese foods 
and agricultural products; overseas market research; support for presentations given at 
exhibitions overseas; provision of business meeting opportunities in Japan and overseas; and 
offering training seminars in Japan and overseas.67 
3.71.   NEXI is est ablished as an incorporated administrative agency under the Act on General 
Rules for Incorporated Administrative Agencies, and the Trade and Investment Insurance Act. In 
conducting its business, NEXI provides trade and investment insurance with the objecti ve of 
breaking -even financially. It offers several insurance products covering different aspects of trade 
risks as well as investment insurance for Japanese companies ; export credit insurance represents 
around  79% of the total underwritten amount in 2015 (Table 3.5). In July 2015, the Act of 
Amendments of the Trade Investment Insurance Act was adopted by the Diet to transform NEXI 
from an independent administrative institution into a special stock corporation; the Act is to enter 
into force in April 2017.  
Table 3.5 NEXI insurance activity, FY2011 -15 
(¥ million)  
 2011  2012  2013  2014  2015  
Premium income  33,378  38,797  31,994  73,679  51,469  
of which       
 Export credit insurance  14,073  11,943  13,315  15,188  13,858  
 One year or less  5,462  5,025  5,612  6,247  5,081  
 More than one year  8,611  6,918  7,703  8,941  8,777  
 Overseas investment insurance  3,177  3,718  4,471  5,035  5,802  
 Overseas untied loan insurance  10,065  17,924  6,078  38,514  15,231  
 Reinsurance  1,528  3,207  3,771  7,840  3,038  
Claims paid  8,359  4,416  12,234  3,102  22,395  
of which       
 Export credit insurance  7,157  3,079  9,675  2,709  21,926  
                                                
62 Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Czech Republic, D enmark, Finland, France, 
Germany, Greece, Hungary, Ireland, Italy, Republic of Korea, Luxemburg, Netherlands, New Zealand, Norway, 
Poland, Portugal, Spain, Sweden, Switzerland, United Kingdom, and the United States.  
63 CISTEC (2012), pp. 25 -26. 
64 WTO docume nts G/AG/N/JPN/ 212, 23 May 2016;  G/AG/N/JPN/201, 29 April 2015; G/AG/N/JPN/194, 
25 April 2014; G/AG/N/JPN/185, 25  April 2013; G/AG/N/JPN/176, 5 January 2012; etc.  
65 OECD online information. Viewed at: http://www.oecd.org/tad/xcred/eca.htm . 
66 WTO document WT/TPR/S/276/Rev.1, Chapter 3, para. 86, 6 May 2015.  
67 Prime Minister of Japan and His Cabinet online information (in Japanese). Viewed at : 
http://www.kantei.go.jp/jp/singi/nousui/pdf/nousui1.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
- 45 - 
 
   2011  2012  2013  2014  2015  
 Overseas investment insurance  0 0 0 0 0 
 Overseas untied loan insurance  0 0 0 0 0 
 Reinsurance  0 0 436 285 245 
      
Underwritten amount  8,537,772  8,300,064  8,517,171  10,164,974  7,832,488  
of which       
 Export credit insurance  7,110,487  6,151,894  6,849,345  6,965,265  6,169,724  
 One year or less  3,321,146  3,451,195  3,855,361  3,855,510  3,217,940  
 More than one year  3,789,341  2,700,699  2,993,984  3,109,755  2,951,783  
 Overseas investment insurance  440,367  530,106  611,679  471,487  571,993  
 Overseas untied loan insurance  549,068  1,369,370  706,030  2,173,094  437,326  
 Reinsurance  51,834  83,311  108,365  207,007  94,008  
Sourc e: NEXI Annual Report 2015.  
3.72.   JBIC is established under the Japan Bank for International Cooperation Act of 2011. Most of 
JBIC's lending activities are for overseas investment loans – which represented more than three 
quarters of the total operations of ¥2,3 97.4 billion in FY201 5 (Table 3.6) . Standard forms of export 
credit extended by JBIC include buyer's credits and bank -to-bank loans.68 In FY201 4, the total 
commitments for export loans stood at about ¥406.4 billion and, in FY201 5, at about 
¥141.0  billion .69 JBIC's lending activities concern, inter alia , projects that will deliver raw materials 
to Japan, projects involving Japanese companies, as well as projects abroad using exports from 
Japan.  
Table 3.6 JBIC len ding and investments, FY2011 -15 
(¥ billion)  
 2011  2012  2013  2014  2015  
Export loans  207.9  126.6  126.2  406.4 141.0 
Import loans  172.6  304.3  56.2 0 252.3  
Investments  962.0  3,138.5  1,671.0  2,451 .0 1,858.2  
Untied loans  23.2 293.7  46.0 46.7 24.8 
Equity part icipation  1.5 74.3 97.4 32.9 14.4 
Guarantees  228.5  303.2  209.1  312.3  106.7  
Total  1,595.9  4,240.9  2,206.1  3,249.4  2,397.4  
Source:  JBIC Report on FY201 5 JBIC Operations. Viewed at: http://www.jbic.go.jp/wp -
content/uploads/press_en/2016/06/48845/2016betten3.pdf . 
3.73.   JBIC's funding comes from different sources, but is mostly from government accounts or 
with government guarantees including government -guaranteed foreign  bonds, borrowing from the 
Fiscal Investment and Loan Program (FILP) and the Foreign Exchange Fund Special Account 
(FEFSA) (Table  3.7).70 
Table 3.7 JBIC funding sources, FY2010 /14 
(¥ billion)  
 2010  2011  2012  2013 2014  
Capital contribution from FILP industrial investment  35.5 200.0  69.0 0.0 31.0 
Borrowing from FILP fiscal loan  690.9  201.0  400.0  555.1  239.7  
Borrowing from FEFSA  323.5  230.4  1,744.9  1,581.3  1,273.2  
Government -guaranteed foreign bonds  463.3  423.2  205.3  658.6  374.8  
FILP agency bonds  50.0 50.0 0.0 0.0 10.0 
Other (including repayments)  -244.4  -6.9 180.6  -345.9  349.8  
Source:  JBIC Report on FY2015 JBIC Operations. Viewed at: http://www.jbic.go.jp/wp -
content/uploads/page/2015/12/45003/2015E_00_full.pdf . 
3.74.   JETRO is the official agency responsible for promoting exports through information, 
research, support for and participation in international trade fairs, and other activities to promote 
exports from, and investment in, Japan. JETRO is an incorporated administrative agency under the 
                                                
68 JBIC Annual Report 2015, p.  60. 
69 JBIC online information. Viewed at: http://www.jbic.go.j p/wp-
content/uploads/press_en/2016/06/48845/2016betten2.pdf . 
70 MOF FLIP Report 2015. Viewed at: 
http://www.mof.go.jp/english/filp/filp_report/zaito2013/index.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Japan External Trade Organization Incorporated Administrative Agency Act of 2002. JETRO 
currently has 74 offices around the world.  
3.3  Measures Affecting Production and Trade  
3.3.1   Taxation and tax incentives  
3.75.   Total tax revenue in Japan in FY2015 was ¥56,285 billion, with the biggest contributions 
from income tax, consumption tax, and corporation tax (Table 3.8).  Revenue from customs duty 
accoun ted for less than 2% of the total in FY2015.  
Table 3.8 Tax revenue, FY2011 /15 
(¥ million)  
 2011  2012  2013  2014  2015  
Income tax  13,476,192  13,992,487  15,530,813  16,790,227  17,807,137  
Corporation tax  9,351,426  9,758,311  10,493,718  11,031,608  10,827,403  
Inheritance tax  1,474,381  1,503,946  1,574,336  1,882,858  1,968,440  
Consumption tax  10,194,597  10,350,429  10,829,301  16,028,958  17,426,292  
Liquor tax  1,369,318  1,349,638  1,370,852  1,327,564  1,338,006  
Tobacco tax 1,031,547  1,017,942  1,037,548  918,706  953,553  
Gasoline tax  2,648,399  2,621,915  2,574,263  2,486,350  2,464,555  
Liquefied petroleum gas tax  11,301  10,713  10,265  9,677  9,201  
Aviation fuel tax  46,247  49,360  52,188  52,090  51,312  
Petroleum and coal ta x 519,103  566,946  599,473  630,715  630,446  
Promotion of power resources 
development tax  331,379  328,049  328,292  321,069  315,908  
Motor vehicle tonnage tax  447,754  396,894  381,356  372,773  384,930  
Customs duty  874,227  897,230  1,034,379  1,073,104  1,048,74 2 
Tonnage tax  9,681  9,829  9,972  9,989  9,914  
Other  177 42 122 20 16 
Stamp revenue  1,046,873  1,077,676  1,126,069  1,034,992  1,049,547  
Total for general account  42,832,602  43,931,407  46,952,947  53,970,700  56,285,403  
Source:  Ministry of Finance online info rmation. Viewed at: 
https://www.mof.go.jp/english/tax_policy/account/h2015e.pdf  (paths /h2011e.pdf to /h2015e.pdf).  
3.76.   Direct taxes include individual income tax and corporation tax. Indirect taxes, including 
consumption tax (VAT) and excise taxes (applied, inter alia, to liquor, tobacco, gasoline, and 
automobiles), account for the remainder of total tax revenue. The highest individual income tax 
rate (including local taxes) is 50%, an d the highest corporation tax rate (including local taxes) is 
32.11% (FY2015). All income earned in Japan is taxable, for both residents and non -residents, and 
the corporation tax rate is the same for foreign and domestic corporations. Consumption tax is 
levied at a rate of 8% on goods and services transactions.  
3.3.1.1   Tax reform  
3.77.   During the review period, the Ministry of Finance pursued its tax reform agenda with a view 
to, inter alia , ensuring economic revitalization, fiscal consolidation, and reconstruction from  the 
Great East Japan Earthquake. Several measures were taken on direct and indirect taxation .71  
3.78.   The effective corporation tax rate was reduced from 32.11% in FY2015 to 29.97% in 
FY2016, and it is set to further decrease to 29.74% in FY2018.72 Specific meas ures were also 
taken to broaden the tax base in order to compensate for the ensuing loss. These included the 
revision of several deduction and depreciation schemes.  
                                                
71 Ministry of Finance online information. Viewed at: 
http://www.mof.go.jp/english/tax_policy/tax_reform/fy2016/tax2016a.pdf . 
72 Japan External Trade Organization (JETRO) onlin e information. Viewed at: 
https://www.jetro.go.jp/en/invest/setting_up/laws/section3/page3.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.79.   In April 2014, the Government raised the consumption tax rate to 8%. A second tax hike 
(from 8% to 10%) was planned for 2015, before being postponed to 2017. In September 2016, a 
revised Bill was submitted to the Diet to further postpone the consumption tax hike until 
1 October  2019. In line with the consumption tax increase, a reduced tax rate  of 8% is to be 
introduced for: drinks and foods excluding alcohol and those served at restaurants; and 
newspapers subscription fees. In addition, as for the refund of consumption tax to foreign 
travellers, the lower purchase amount limit for tax exemption  for general commodities has been 
reduced since 1 May 2016 from ¥10,000 to ¥5,000 per store per day.  
3.80.   As regards individual income taxation, a d eduction system was introduced for private 
donations made to the student support programmes of national universi ty corporations, in the 
context of the educational reform . Furthermore,  a deduction system was introduced for expenses 
associated with the renovation of houses to accommodate three generations, with a view to 
supporting child rearing through cooperation be tween generations.73  
3.3.1.2   Incentive schemes  
3.81.   During the review period, the Government continued to grant tax -based incentives to 
encourage investment in specific geographical areas, and to promote the competitiveness of 
enterprises, and research and development . Local governments also provide an extensive list of 
incentives to foreign -affiliated companies.74 
3.82.   Tax incentives are in place for companies that relocate their headquarters from Tokyo's  
23 wards to other regions, or that enhance and expand the operations  of their headquarters in 
those regions (Table 3.9).  
Table 3.9 Tax incentives for strengthening local business facilities  
 Incentives for enhancing/expanding 
headquarters of companies in local 
regions  Incentiv es for relocation from 
Tokyo's 23 wards to other regions  
Employment 
promotion taxation  1. Tax credit of ¥500,000 per new employee 
if the requirement is met.  
In addition to the tax credit of ¥400,000 
from the existing tax system, ¥100,000 is 
added to the  amount under the special 
provision.  
 
 
2. Tax credit of ¥200,000 per new employee 
is applicable even if the increase in the 
number of employees of a corporation as a 
whole is less than 10% from the previous 
term  1. Tax credit of up to ¥800,000 per new 
employee. In addition to the tax credit of 
¥500,000 for expansion, ¥300,000 is 
added to the amount.  
 
2. In the above case, tax credit of 
¥300,000 continues for up to three years 
if the employment is maintained.  
 
3. The above provision 2 is applicable to 
employees relocated from Tokyo to local 
regions, even if there is no increase in 
the overall employment of the company.  
Tax credit for 
office acquisition  15% for special depreciation or 4% for tax 
credit (for two years)  25% for special depreciation or 7% f or 
tax credit (for two years)  
Compensation for 
decreased local tax 
revenue  Partial compensation for decreased tax 
revenue of local governments through local 
tax grants when these governments take tax 
reduction measures related to property tax 
and real e state acquisition tax  Partial compensation for decreased tax 
revenue of local governments through 
local tax grants when these governments 
take tax reduction measures related to 
property tax, real estate acquisition tax 
and business tax  
Source:  JETRO onl ine information. Viewed at: https://www.jetro.go.jp/en/invest/incentive_programs . 
3.83.   Under the Industrial Competitiveness Enhancement Act, enacted on 4 December 2013, 
incentives are provided to boost investments in highly productive equipment; these incentives are 
to be abolished at the end of March 2017 (Table 3.10). The Act aim s to implement the measures 
included in the Japan Revitalization Strategy, which was approved by the Cabinet on 14  June 2013 
for the purpose of revitalizing the Japanese economy and enhancing the industrial competitiveness 
of enterprises doing business in Japan (Section 1).  
                                                
73 MOF online information. Viewed at: 
http://www.mof.go.jp/english/tax_policy/tax_reform/fy2016/tax2016a.pdf . 
74 JETRO Online information. Viewed at: 
https://www.jetro.go.jp/ext_images/_Invest/pdf/support/1608_en_local_gov.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 3.10 Tax incentives based on the Industrial Competitiveness Enhancement Act  
Title Overview  Applicable 
facilities  Tax incentives  Applicable p eriod  Competent 
authorities  
Tax 
incentives  
to promote 
capital 
investment 
to improve 
production 
efficiency  Tax 
incentives 
for 
corporations 
to promote 
capital 
investment 
in cutting -
edge 
facilities to 
improve 
production 
efficiency  "Cutting -
edge 
facilities" 
and 
"facilities 
contributing 
to 
improving 
production 
lines and 
operations"  1. Immediate depreciation 
of assets or tax credit of 
up to 5%  
 
2. Special depreciation of 
50% of assets or tax credit 
of 4%  1. From 
20 January  2014 
until the end of 
March 2016  
 
2. From 1  April 2016 
until the end of 
March 2017  Hotline for 
consultation 
regarding 
productivity 
improvement 
tax (METI)  
Source:  Japan External Trade Organization (JETRO). Viewed at: 
https://www.jetro.go.jp/en/invest/incentive_ programs/ . 
3.84.   In 2015, the tax credit system for R& D was revised to encourage certain types of expenses 
("special R&D") on innovative  basic research. This involved an increase in the deduction rate, and 
further expansion of the scope of such expenses. For ex ample, from April 2015, a 30% credit 
(previously 12%) is provided for joint R&D with a university or public research institution, or where 
the R&D is contracted to such entities. Royalty payments made to SMEs also qualify for this special 
tax credit (Table  3.11).  
Table 3.11 Tax credit for research and development (R&D) expenses  
Category  Before amendments  After amendments  
Permanent 
incentive (gross 
R&D cost base)  A credit against national corporate tax is 
allowed. 
 
Credit amount: 8% to 10% of the gross 
R&D cost (rate depends upon the R&D 
costs, including special R&D costs).  
 
Limitation of credit: 30% of corporate tax 
before credit.  
 
Carry over: Excess R&D cost may be 
carried over for one year.  Limitation of cred it: Reduced to 25% of 
corporate tax before credit.  
 
Carry over: Carry over is no longer 
applicable.  
Special R&D cost 
based credit  Joint R&D with or contracted R&D by 
university or public research institution.  
 
Credit amount: 12% of the gross special 
R&D c ost. Scope of special R&D cost: Royalty 
payments to SMEs shall be included in 
special R&D cost.  
 
Credit amount: Increased to 30% of the 
gross special R&D cost for the joint R&D 
with university or public research 
institution (20% for the joint R&D with 
other non -public corporations).  
 
A credit against local inhabitant's tax is 
also allowed for SMEs.  
 
Limitation of credit: 5% of corporate tax 
before credit (separately from other gross 
R&D cost credit).  
Gross R&D cost 
based credit for an 
SME A credit against national corporate tax and 
local inhabitant's tax is allowed.  
 
Credit amount: 12% of the gross R&D cost.  
 
Limitation of credit: 30% of corporate tax 
before credit.  
 
Carry over: Excess R&D cost may be 
carried over for one year.  Limitation of credit: Reduce d to 25% of 
corporate tax before credit.  
 
Carry over: Carry over is no longer 
applicable.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Category  Before amendments  After amendments  
Temporary 
incentive 
(incremental R&D 
cost base)  A credit against national corporate tax is 
allowed for a tax year commencing from 
1 April 2013 to 31 March 2017.  
 
Credit amount: A credit against national 
corporate tax is allowed for the higher of 
(i) and (ii) but subject to the limitation of 
10% of tax liability before the credit.  
 
i. 5% to 30% of incremental R&D costs or  
ii. R&D costs in excess of 10% of the 
average sales, times the "tax credit ratio" 
(ratio is a mechanical calculation that 
increases the credit depending upon the 
relationship between the amount of R&D 
costs and average annual sales).  
Limitation of credit: 10% of corporate tax 
before credit.  Same as be fore amendments  
Source:  Information provided by the authorities of Japan.  
3.3.2   Subsidies and other assistance programmes  
3.85.   In its latest notification to the Committee on Subsidies and Countervailing Measures under 
Article XVI:1 of GATT 1994 and Article 25 of th e Agreement on Subsidies and Countervailing 
Measures, Japan indicated 66 subsidy schemes provided by central and local governments to 
industry, agriculture and fisheries, and finance for the period 2011 -13.75 In most cases, subsidies 
take the form of grants . Interest subsidies and loans are also used to subsidize some economic 
activities.  
3.86.   Since 2011, the Government Subsidy Programme for New Business Establishment in the 
Areas Recovering from Tsunami and Nuclear Disaster towards Employment Creation has been 
aiming to establish new factories (manufacturing), distribution facilities, research laboratories, call 
centres, data centres and facilities, so as to reinvigorate the regional economy and create jobs in 
the areas affected by the tsunami and Tohoku Earthqu ake. The sixth round of the programme was 
initiated in May 2016, with the publication of relevant guidelines setting the eligibility criteria and 
the extent of subsidized costs.76 Rates of subsidy depend on the size of the investing company. A 
subsidy of up  to 1/3 of the investment is offered for big businesses and of up to 1/2 for SMEs. The 
maximum amount of subsidy stands at ¥3 billion; or ¥5 billion for projects which are highly valued 
on the basis of the assessment by the third party committee set up for  this incentive.77  
3.87.   The Subsidy Programme for Global Innovation Centers, formerly known as the Subsidy 
Programme for Projects Promoting Foreign Direct Investment, Site Location and Regional 
Development in Japan (Project of site location for global companies ), is intended to support the 
establishment of high -value -added business sites, such as R&D sites , and experimental studies 
and feasibility studies in Japan . Expenditures under the programme amounted to ¥1 billion in 
FY2016 (provisional basis).  
3.88.   For the pu rpose of regional development, the Government maintains other specific 
programmes under the supervision of the Japan External Trade Organization (JETRO) at the 
METI.78  
                                                
75 WTO document G/SCM/N/284/JPN, 30 June 2015.  
76 JETRO online information. Viewed at: 
https://www.jetro.go.jp/ext_images/_Invest/pdf/meti/Guidelines_for_Subsidy_Application_0601Final.pdf . 
77 Funding under this programme amounted to ¥318 million in FY2013, ¥10,262 million in FY2014, and 
¥2,747  million in FY2015.  
78 JETRO  is a government -related organization that works to promote mutual trade and investment 
between Japan and the rest of the world.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.3.3   Competition policy and price controls  
3.3.3.1   Recent development  
3.89.   The Anti -Monopoly Act (AMA) con tinues to govern Japan's competition policy framework. Its 
overarching objective is to promote, inter alia , fair and free competition, stimulate the creative 
initiative of entrepreneurs, and encourage business activities for enhanced economic development 
and consumer welfare.79 The Japan F air Trade Commission (JFTC) remains its implementing 
agency.  
3.90.   The main regulatory change during the review period was the entry into force of the AMA's 
2013 Amendment on 1 April 2015. It introduced a new appeal procedure, un der which the Tokyo 
District Court is in charge of reviewing administrative orders issued by the JFTC. Under the former 
system, the JFTC had the power to carry out the review of its own administrative orders.  
3.91.   In addition, the amendment has introduced an i mproved hearing procedure. Before issuing 
an administrative order, the JFTC will now be required to hold a hearing presided by the staff 
member designated by the Commission for each case , whose role is to ensure that the proposed 
administrative order is du ly explained to the concerned parties  to secure the opportunity for 
opinions to be stated.  
3.92.   According to the authorities, a bill was submitted to the Diet on 8 March 2016 to amend the 
AMA in order to align its enforcement procedures with common rules under the Trans -Pacific 
Partnership (TPP) competition chapter. The TPP, which has not yet entered into force , calls on 
members to allow competition authorities to resolve alleged violations by mutual agreement with 
the companies concerned. This rule is expected to reduce the risk of enforcement -related business 
delays for companies operating within the TPP countries.  
3.93.   The main prohibitions under the AMA have remained unchanged during the review period; 
they concern unreasonable restraint of trade, private monopoli zation, unfair trade practices, and 
business combination.  
3.3.3.2   Mergers and acquisitions, and holding companies  
3.94.   The AMA prohibits mergers and acquisitions under certain conditions.  
3.95.   No corporation is allowed to enter a merger if: the effect of the merger is deem ed to 
substantially restrain competition in a particular field of trade; or if unfair trade practices (such as 
dealing on exclusive or restrictive terms, abuse of dominant position, or deceptive customer 
inducement) have been employed in the course of the merger. The same applies to other business 
combination acts such as the acquisition of businesses, acquisition of shares, integration by means 
of a holding company, and cross directorship.  
3.96.   The principles underlying the determination of whether the effect of a business combination 
may substantially restrain competition in any particular field of trade have been clarified by the 
JFTC in the Guidelines to Application of the Anti -Monopoly Act Concerning Review of Business 
Combination, taking into account its e xperience in reviews to date. The most recent version of this 
manual was published in 2011.80 The JFTC has also released summaries of the reviews of certain 
cases in which notifications or other submissions were accepted or where prior consultation was 
held, as a reference for business operators with a business combination plan.  
3.97.   Restrictions are in place regarding companies that cause an "excessive" concentration of 
economic power in Japan. A company must submit a business report to the JFTC within three 
months of the end of each business year if the total assets of the company and its subsidiaries 
exceed specified thresholds: ¥600  billion for a holding company, ¥8  trillion for a financial company 
and ¥2 trillion for other companies.  
                                                
79 Japan Fair Trade Commission (JFTC) online information. Viewed at: 
http://www.jftc.go.jp/en/cprc/discussionpapers/53_e_abstract.files/CPDP -53-E.pdf. 
80 Japan Fair Trade Commission (JFTC) online information. Viewed at: 
http://www.jftc.go.jp/en/legislation_gls/imonopoly_guidelines.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.98.   In FY2014, 289 notificat ions and 103 business reports were submitted to the JFTC. In 
FY2015, 295 notifications and 104 business reports were submitted. The JFTC has never issued a 
cease and desist order in business combination cases.  
3.3.3.3   Exemptions  
3.99.   Certain industries or business prac tices are exempt from the scope of the AMA. Competition 
in these industries may be covered by other pieces of legislation and governed by different 
institutions (Table  3.12). According to the authorities, some business acts prescribe exemption 
clauses from  the AMA in terms of certain cartels. Such business acts require that the minister in 
charge obtains consent from or holds a consultation with the JFTC before granting exemption or 
notifies the JFTC of exemption after granting it.  
Table 3.12 Exemptions from the Anti -Monopoly Act, June 2016  
Relevant ministries and 
agencies  Legislation  System  
1. Exemptions under the AMA (1 law, 3 systems)   
Japan Fair Trade Commission  Section 21  Acts under intellectual property 
rights  
 Section 22  Acts of cooperatives  
 Section 23  Resale price maintenance 
contracts concerning published 
works  
2. Exemptions under various individual laws (15 laws, 19 systems)  
Financial Services Agency  Insurance Business Act Insurance cartels  
 Act on Non -Life Insurance Rating 
Organization of Japan  Certain conduct by non -life 
insurance rating bodies  
Ministry of Justice  Corporate  Reorganization Act Reorganization company's 
acquisition of its shares  
Ministry of Finance  Act Concerning Liquor Business  
Associations and Measures for Securing 
Revenue from Liquor Tax  Rationalization cartels  
Ministry of Education, Culture, 
Sports, Science and 
Technology  Copyright Law Cartels on fees for secondary use 
of commercial phonograms  
Ministry of Health, Labour, 
and Welfare  Act on Coordination and Improvement 
of Environmental Health Industry  Cartels to prevent excessive 
competition  
Ministry of Agriculture, 
Forestry and Fisheries of 
Japan  Agricultural Cooperative Act Certain conduct by agricultural 
cooperatives , federations of 
agricultural cooperatives ,central 
unions of agricultural  
cooperatives and agricultural 
producers' cooperative 
corporations   
Ministry of Economy, Trade 
and Industry  Export  and import  Transaction Act Cartels on export  
 Act on the Organizatio n of Small and 
Medium -Sized Enterprise Association  Joint business activities  
 Small and Medium -Sized Enterprise 
Cooperatives Act  Certain conduct by federations of 
small business associations  
Ministry of Land, 
Infrastructure, Transport and 
Tourism  Marine  Transportation Act  Maritime transportation cartels 
(international); Maritime 
transportation cartels (coastal 
service)  
 Road Transportation Act  Transportation cartels  
 Civil Aeronautics Act  Aviation cartels (international); 
Aviation cartels (domestic)  
 Coastal Shipping Association Act  Maritime transportation cartels 
(coastal service); Joint shipping 
businesses  
Source:  Information provided by the authorities of Japan.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.3.3.4   International arrangements and agreements  
3.100.   The JFTC is actively involved in multilatera l frameworks such as the International 
Competition Network (ICN), and those under  the Organization for Economic Co -operation and 
Development (OECD), Asia -Pacific Economic Cooperation (APEC), and the United Nations 
Conference on Trade and Development (UNCTA D). 
3.101.   In addition, the JFTC cooperates closely with foreign competition authorities through 
different types of agreements, including interagency memoranda of understanding (MoU) and 
administrative agreements to conduct joint enforcement activities (Tables 3. 13)  
Table 3.13 Japan's participation in international arrangements and agreements  
A. Administrative agreements  
Title Partner  Date of entry into 
force  Main Contents  
Agreement between the 
Government of Japan a nd 
the Government of Canada 
concerning Cooperation on 
Anticompetitive Activities  The Government of Canada  6 October 2005  - Notification  
- Cooperation  
- Coordination  
- Request for 
enforcement 
activities  
- Consideration 
of important 
interests of the 
other pa rty 
 
Agreement between the 
Government of Japan and 
the European Community 
concerning Cooperation on 
Anticompetitive Activities  The European Communities  9 August 2003  - Notification  
- Cooperation  
- Coordination  
- Request for 
enforcement 
activities  
- Consid eration 
of important 
interests of the 
other party  
 
Agreement between the 
Government of Japan and 
the Government of the 
United States of America 
concerning Cooperation on 
Anticompetitive Activities  The Government of The United 
States of America  8 October 1 999 - Notification  
- Cooperation  
- Coordination  
- Request for 
enforcement 
activities  
- Consideration 
of important 
interests of the 
other party  
 
B. Inter -agency cooperation memoranda  
Title Partner  Date of entry 
into force  Main Contents  
Memorandum on Coope ration 
between the Fair Trade 
Commission of Japan and the 
Competition Authority of Kenya  The Competition 
Authority of Kenya   9 June 2016  - Exchange of information  
- Exchange of experiences 
on the enforcement of their 
competition laws, if 
appropriate  
 
 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Title Partner  Date of entry 
into force  Main Contents  
Memorandum on Anti -
Monopoly Cooperation between 
the Fair Trade Commission of 
Japan and the Ministry of 
Commerce of the People's 
Republic of China  The Ministry of 
Commerce of the 
People's Republic of 
China  11 April 2016  - Exchange of information  
- Technical c ooperation  
- Sharing competition law 
enforcement experience, if 
appropriate  
- Exchanging views on 
international cooperation 
over multilateral competition 
law and policy issues  
Memorandum on Anti -
Monopoly Cooperation between 
the Fair Trade Commission of 
Japan and the National 
Development and Reform 
Commission of the People's 
Republic of China  The National 
Development and 
Reform Commission of 
the People's Republic 
of China  13 October 2015  - Annual consultation  
- Communication  
- Technical cooperation  
- Notification  
Cooperation Arrangement 
between the Fair Trade 
Commission of Japan and the 
Australian Competition and 
Consumer Commission  The Australian 
Competition and 
Consumer Commission  29 April 2015  - Notification  
- Cooperation and 
information exchange in 
enforcement activities  
- Coordination of 
enforcement activities  
- Request of consultation  
- Avoidance of conflicts over 
enforcement activities  
- Consultations  
Memorandum on Cooperation 
between the Fair Trade 
Commission of Japan and the 
Fair Trade Commission of the 
Republic of Korea  The Fair Trade 
Commission of the 
Republic of Korea  25 July 2014  - Notification  
- Cooperation in 
enforcement activities  
- Coordination of 
enforcement activities  
- Request for enforcement 
activities  
- Avoidance of conflicts over 
enforcement activities  
- Annual consultation  
Memorandum on Cooperation 
between the Fair Trade 
Commission of Japan and the 
Administrative Council for 
Economic Defence of the 
Federative Republic of Brazil  The Administrative 
Council for Economic 
Defence of the 
Federative Republic of 
Brazil  24 April 2014  - Notification  
- Cooperation in 
enforcement activities  
- Coordination of 
enforcement activities  
- Request for enforcement 
activities  
- Avoidance of conflicts over 
enforcement activities  
Memorandum on Cooperation 
between the Fair Trade 
Commission of Japan and the 
Department of Justice of the 
Republic of the Philippines  The Department of 
Justice of the Republic 
of the Philippines  28 August 2013  - Notification  
- Exchange of information  
- Technical cooperation  
Cooper ation Arrangement 
between the Fair Trade 
Commission of Japan and the 
Competition Authority of the 
Socialist Republic of Vietnam  The Competition 
Authority of the 
Socialist Republic of 
Vietnam  28 August 2013  - Notification  
- Exchange of information  
- Coordin ation of 
enforcement activities  
- Technical cooperation  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  C. Other type of memoranda  
Title Partner  Date of entry 
into force  Main Contents  
Memorandum of Understanding 
between the Interchange 
Association and the Association 
of East Asian Relations 
Regarding the Application of 
Competition Laws  The Association of East 
Asian Relations  
 26 Nov ember 20 15 - Notification  
- Cooperation in 
enforcement activities  
- Coordination of 
enforcement activities  
- Call for appropriate 
enforcement activities  
- Avoidance of confl icts 
- Annual consultations  
Source:  Information provided by the authorities of Japan . 
3.102.   Most of Japan's trade agreements have a competition -related  chapter (Table 3.14). In 
general, it enables each party to take appropriate measures against anticompetitive activities in 
accordance with its laws and regulations, and to cooperate in controlling anticompetitive activities, 
e.g. by notifying the other party of enforcement activities, cooperation, coordination, requests for 
enforcement activities, and considerati on of the other party's interests.  
Table 3.14 List of Japan's  RTAs/EPAs which have competition -related provisions  
Partner  Signature  Entry into force  
Singapore  January 2002  November 2002  
Mexico  September 2004  April 2005  
Malaysia  December 2005  July 2006  
The Philippines  September 2006  December 2008  
Chile March 2007  September 2007  
Thailand  April 2007  November 2007  
Indonesia  August 2007  July 2008  
ASEAN  April 2008a Partial effectuationb 
Viet Nam  December 200 8 October 2009  
Switzerland  February 2009  September 2009  
India February 2011  August 2011  
Peru May 2011  March 2012  
Australia  July 2014  January 2015  
Mongolia  February 2015  June 2016  
Trans -Pacific Partnership  February 2016  Has not entered into force yet  
a Completion of the signing. Japan signed in March 2008.  
b Entered into force in December 2008 with Singapore, Laos, Viet Nam and Myanmar, in January 2009 
with Brunei Darussalam, in February 2009 with Malaysia, in June 2009 with Thailand, in 
December  2009 with Cambodia and in July 2010 with the Philippines. Not yet in force with 
Indonesia.  
Source:  Information provided by the authorities of Japan.  
3.3.3.5   Enforcement  
3.103.   Japan maintains both a criminal enforcement system (criminal fines and imprisonment), 
and an enfor cement route by way of a civil administrative process (cease and desist orders and 
surcharge payment orders). In addition, private damage actions may be brought by those affected 
by specific violations.  
3.104.   The JFTC has the exclusive authority to impose admini strative orders. With respect to 
criminal sanctions, the JFTC only has the authority to file criminal accusations with the Public 
Prosecutor 's Office . An investigation on possible violations of the AMA may be initiated as a result 
of: a report from the gen eral public, detection by the JFTC itself, notification by the Small and 
Medium Enterprise Agency, or a report by leniency applicants.  
3.105.   The surcharge imposed by the JFTC is calculated by applying certain rates to the sales of 
the relevant product over the period of the violation, up to a maximum of three years. They vary 
depending on the type and size of the firm. Criminal accusations may result in a fine of up to 
¥500 million for firms, or imprisonment of up to five years and a fine of up to ¥5 million for  
individuals. For many years now, civil administrative processes have largely remained the main WT/TPR/S/ 351/Rev.1  • Japan  
 
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  methods used for enforcement. In 201 5, cease and desist orders were issued in 9 cases, down 
from 1 0 in 201 4, following the downward trend since 2011. Cartel cas es continue to account for 
the majori ty of litigations (Table  3.15).  
Table 3.15 Enforcement of competition policy, 2009 /15 
Details  Fiscal year  
2009  2010  2011  2012  2013  2014  2015  
(A) Cease and desist orders    
Number of cases  26 12 22 20 18 10 9 
Private monopolization  0 0 0 0 0 1 0 
Cartels  22 10 17 20 17 7 7 
Price-fixing  cartels  5 6 5 1 8 5 2 
Bid-rigging  17 4 12 19 9 2 5 
Unfair trade practices  4 2 5 0 1 2 0 
Commenced hearings  12 8 40 22 12 72 1 
(B) Sur charge payment orders  
Number of addressees  85 152 280 108 176 128 31 
Surcharge amount (in ¥  billion)  36.1 72.1 44.3 25.1 30.2 17.1 8.5 
Commenced hearings  13 22 45 25 13 70 0 
(C) Recently processed investigation cases  
Cases investigated         
Carry -overs from the previous 
fiscal year  19 22 23 9 13 10 11 
New cases begun during the 
current fiscal year  133 143 157 266 137 118 127 
Total  152 165 180 275 150 128 138 
Cases processed         
Legal measures         
Cease and desist orders  26 12 22 20 18 10 9 
Surcharge payment ordersa 0 0 0 0 0 0 0 
Sub-total 26 12 22 20 18 10 9 
Others         
Warnings  9 3 2 6 1 1 6 
Cautions  69 95 138 208 114 102 106 
Discontinued casesb 26 32 9 28 7 4 2 
Subtotal  104 130 149 242 122 107 114 
Total  130 142 171 262 140 117 123 
Carry -overs to the next fiscal 
year 22 23 9 13 10 11 15 
Criminal accusations  0 0 0 1 1 0 1 
a Surcharge payment orders were made without a cease and desist order.  
b Discontinued due to lack of evidence of wrong -doing.  
Source:  Information provided by the authorities of Japan.  
3.106.   Since 2015, appeals against the JFTC's decisions have been considered by the Tokyo 
District Court in the first instance, rather than the JFTC. The court will no longer be bound by the 
JFTC's factual findings, and parties will be p ermitted to submit new evidence.  
3.107.   The JFTC also maintains a leniency system. Since its inception in 2006, over 800 leniency 
applications have been filed. Under the system, a total of five firms may obtain leniency from 
administrative fines on a given produc t. The first firm to apply for leniency before the JFTC 
investigation begins is entitled to receive full immunity, and the second applicant receives a 50% 
reduction to the surcharge. The following three remaining applicants will receive a 30% reduction. 
Leniency only applies to administrative sanctions, not to criminal or civil claims.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.3.4   Corporate governance  
3.108.   Excessive cash holding by Japanese companies has been depicted as one of the credible 
reasons behind the country's low GDP growth, as it prevents them f rom increasing wages and 
investment, thus holding back both aggregate demand and potential growth. According to the IMF, 
comprehensive corporate governance would encourage higher investment and nominal wages, and 
help Japan exit from deflation and eventual ly revive GDP growth.81 
3.109.   Echoing this consideration, corporate governance has become a core element of Japan's 
structural reform programme under the nation's long -term growth strategy. It aims to encourage 
companies to allocate capital in a more efficient ma nner, through enhanced board transparency, 
director accountability, and greater voice to shareholders over critical board decisions. The 
stewardship code was published in 2014; while the corporate governance code was published in 
March 2015 before entering  into force in June 2015, for companies listed on the Tokyo Stock 
Exchange.  As of September 2016, the code was adopted by 213 companies consisting of 7 trust 
banks 151 investment managers, 26 pension funds, 22 insurance companies, and 7 others 
including ce rtain service providers.  
3.110.   The aim of the stewardship code is to improve dialogue between institutional investors and 
companies. It urges them to review their activities against a number of standards. Investors are 
required to clarify and disclose, inter ali a, their strategy to fulfil stewardship responsibilities, and 
manage conflicts of interests arising from stewardship responsibilities.  
3.111.   The corporate governance code aims at creating increased transparency and fairness in 
decision making by companies, by f urther involving shareholders in critical board decisions. Its 
basic principles include: securing rights and equal treatment of shareholders; promoting 
cooperation between corporates and their employees, customers, business partners and local 
communities; as well as ensuring appropriate information disclosure and transparency. A 2016 
piece of research by the Cabinet Office indicates that companies making efforts to strengthen 
corporate governance in Japan tend to have higher return on equity.82 
3.3.5   State trading , state -owned enterprises, and privatization  
3.112.   In 2016, Japan notified the Agriculture and Livestock Industries Corporation (ALIC), the 
Ministry of Agriculture, Forestry and Fisheries (MAFF), the Ministry of Health, Labour and Welfare, 
and Japan Tobacco Inc.  as state trading enterprises (STEs), pursuant to the provisions of 
Article  XVII: 4(a) of the GATT 1994 and paragraph 1 of the understanding on the interpretation of 
Article  XVII (Table3.16).83 
Table 3.16 State  trading enterprises notified to the WTO under Article XVII  
Agency  Nature of exclusive rights  Trade -related activities  
Japan Tobacco Inc.  JT has a monopoly on manufacturing 
tobacco. Therefore, the importation of leaf 
tobacco for the manufacture of tobacc o in 
Japan is dependent on purchase by JT.  JT purchases all the leaf tobacco 
produced by domestic tobacco cultivators 
who enter into a contracted purchase 
agreement with JT. JT exports tobacco 
products and tobacco  refuse on the basis 
of commercial consider ation.  
Ministry of Health, 
Labour and Welfare 
(MHLW)  MHLW has an exclusive right to import 
and export opium. It determines the price 
for purchase of the opium from opium 
poppy cultivators, after consulting with the 
Ministry of Finance, on the basis of fac tors 
such as the condition of production by 
opium poppy cultivators, import price of 
opium and other economic conditions. 
MHLW also purchases all the opium 
gathered by opium poppy cultivators or 
research cultivators.  MHLW imports opium from India. It 
suppl ies opium for medical and scientific 
purposes, as well as to conduct necessary 
control over the cultivation of opium 
poppy, and the transfer, receipt and 
possession and other relevant activities 
concerning opium and poppy straw. 
There are no exports.  
                                                
81 IMF online information. Viewed at: https://www.imf.org/external/pubs/ft/wp/2014/wp14140.pdf . 
82 Online information. Viewed at : http://www5.cao.go.jp/keizai3/2016/0802wp -keizai/3syo2016.pdf . 
83 WTO document G/STR/N/16/JPN, 5 July 2016.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Agency  Nature of exclusive rights  Trade -related activities  
Ministry of 
Agriculture, Forestry 
and Fisheries (MAFF)  MAFF can import rice, wheat and barley, 
and can export rice when particular 
necessity exists, based on the Law for 
Stabilization of Supply -Demand and Price 
of Staple Food. This law does not restrict 
the importation or exportation of rice, 
wheat and barley by the private sector.  Almost all imports of rice, wheat, and 
barley are carried out by MAFF. MAFF 
does not conduct any commercial export 
of rice, wheat, and barley. Most of the 
wheat and barley consumed i n Japan is 
imported.  
Agriculture and 
Livestock Industries 
Corporation (ALIC)  ALIC, as a state -trading enterprise, is 
authorized to take measures to stabilize 
supply/demand situations and prices for 
milk products. It imports designated dairy 
products under state trading to prevent 
market disruptions, and collects mark -ups 
of such import. ALIC also collects part of 
out-of-quota tariffs of designated dairy 
products; private traders can freely import 
outside state trading by paying out -of-
quota tariffs.   ALIC's role as an importer of dairy 
products continued to decline in the 
period 2013 -15, however, it still imported 
around 10% of whey per year, and 
around 33% of SMP per year during this 
period. It also imports butter 
(Section  4.1.2.3.7). ALIC did not export 
or buy any domestic production.  
Source:  WTO document G/STR/N/16/JPN, 5 July 2016, and information provided by the authorities of Japan.  
3.113.   According to the authorities, t he purposes of operating STEs include sound development 
concerns for some industries, st able provision of staple foods, and medical and scientific 
concerns.84  
3.114.   The proportion of products affected by STEs' activities in Japan's international trade is 
significant. Over the last three years, the MAFF accounted for some 99% of imports of rice, whe at, 
and barley.  
3.115.   Public entities continue to wholly or partially own several companies in Japan. Many of 
them are engaged in the delivery of goods and services that the authorities believe would not be 
adequately provided by the private sector alone. The St ate maintains ownership on a significant 
number of Japan's major large companies in financial services, telecommunications, some 
international airports, petroleum, tobacco, and railways.  
3.116.   The authorities state that there are a total of 234 entities with go vernment capitalization. 
The total amount of capitalization stood at ¥80.1 trillion as of 31 March 2015.  
3.117.   In 2014, based on the OECD definition of state owned enterprises (SOEs), Japan identified 
26 SOEs: 2 minority -owned listed enterprises, 8 majority -owne d non -listed enterprises, and 
16 statutory corporations or quasi -corporations.85  
3.118.   Incorporated administrative agencies (IAAs) are public -sector corporations with a separate 
legal personality, established by the Act on General Rules for Incorporated Administ rative Agencies 
(1999) to perform services of general public interest. There are currently 88 IAAs in operation in 
Japan.86 
3.119.   Japan also maintained "large" commercial entities (i.e. with an operating revenue greater 
than ¥100  billion) wholly or partially -owne d, or controlled by the State or other public authorities 
(Table  3.17). Although they are not listed as "large" commercial entities, companies such as Tokyo 
Metro Co. Ltd, Japan Petroleum Exploration Co. Ltd (JAPEX), INPEX, and Japan Railway 
Construction, Transport and Technology Agency (JRTT) have operating revenues exceeding  
¥100 billion.  
                                                
84 WTO document G/STR/N/16/JPN, 5 July 2016.  
85 WTO document WT/TPR/S/310 /Rev.1 , 6 May 2015.  
86 Cabinet Secretariat online i nformation. Viewed at: 
http://www.cas.go.jp/jp/gaiyou/jimu/jinjikyoku/files/17_2015iaa.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 3.17 Large state enterprises, FY2015  
(¥ billion)  
Name/operation  
Total asset value  
Total operating revenue  
Total oper ating profit 
before/after tax  
State/public authority 
holding  
New Kansai International Airport Company 
Ltd     
Established in 2012 for the operation of Kansai 
International Airport and Itami Airport  2,166  3,185 45/35  100% shares  
Narita International Airp ort Corporation Ltd      
Established in 2004 for the operation of Narita 
International Airport  854 218 37/24  100% shares  
Nippon Telegraph and Telephone Corporation      
Owns all the shares issued by NTT East, NTT West. 
Required to  ensure proper and stable  provision of 
telecommunications services by these companies 
throughout Japan, including remote rural areas, as 
well as to conduct research relating to 
telecommunications technologies.  7,052  521 670/666  35.2% shares 
(36.2% voting 
shares)  
Japan Post Holdin gs Co. Ltd      
Owns all the shares issued by Japan Post Co. Ltd  291,947  － 671/434  80.5% shares  
Japan Finance Corporation      
 
22,324  613 51 
(excluded 
from tax)  100% shares  
Japan Tobacco Inc.      
JT is mainly engaged in the manufacture and sale 
of tobacco products, prescription drugs and 
processed foods  4,558  2,253  565 33.4% shares  
Tokyo Metro Co . Ltd.     
Established in 2004 for operating and managing 
railway business in Tokyo area  
 
1,371  408 90/58  Government of 
Japan 
(53.4%), 
Tokyo 
Metropolitan 
Government 
(46.6%)  
Source:  Information provided by the authorities of Japan.   
3.120.   In December 2014, Japan Environmental Safety Corporation was reorganized into Japan 
Environmental Storage & Safety Corporation. The authorities state that Kyushu Japan Railway 
Company achieve d complete privatization, i.e. selling all stocks held by the JRTT, in October  2016 
through an initial public offering (IPO) . 
3.121.   Japan maintains efforts for further privatization and rationalization of government -run 
businesses. Under the Privatization Programme, in November 2015, the Government conducted an 
IPO for Japa n Post Holdings Co. and its financial subsidiaries. The IPO marks the final stage of the 
privatization of Japan Post.  
3.3.6   Standards and other technical requirements  
3.122.   The main laws on standards and technical regulations in  Japan, together with the agency 
respons ible, are described in Table 3.18. The main changes in these basic laws since the last 
review include the entry into force of the Food Labelling Act, which merged  some food labelling 
provisions  that had previously been scattered across three separate laws (the Food Sanitation Act, 
the Law Concerning  Standardization and Proper Labeling of Agricult ural and Forestry Products WT/TPR/S/ 351/Rev.1  • Japan  
 
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  (JAS Act), and the Health Promotion Act ) into one single act .87 The Act entered into force on 
1 April 2015. As a consequence, the JAS law,  deprived of its food labelling provisions, has been 
renamed the Law concerning Standardization of Agricultural and Forestry Products by an 
amendment. The main changes also include the amendment in 2015 of the 1960 Law on Securing 
Quality, Efficacy and Saf ety of Products including Pharmaceuticals and Medical Devices, which 
transferred the authority to issue licences to specially controlled medical device sellers from 
prefectures to designated cities and specified districts. The Building Standard Law was ame nded in 
2014, including the revision of standards concerning wooden buildings, and a review of the 
conformity assessment system for structural calculation and the system for smooth introduction of 
new technologies.  
Table 3.18 Main laws on standards and technical regulations  
Legislation/Agency  First 
passed  Last 
amended  Purpose  
Industrial Standardization 
Act 
 
METI 1949 2014 Applies to all products except medicines, agriculture 
and fertilizer chemicals, silk yarn , foodstuffs, 
agricultural and forestry products.  
The Law establishes the Japanese Industrial Standards 
(JIS) Committee and the JIS Mark Scheme and 
provides the legal basis for standards, certification, 
accreditation of certification bodies and laboratorie s. 
Consumer Product Safety 
Act 
 
METI 1973 2014 Sets out requirements for: (1) a narrow range of 
specified products which must comply with technical 
requirements; and (2) specified maintenance products 
(some types of domestic water heaters and electric 
appliances) which must be provided with information 
on maintenance. It also provides the legal basis for 
reporting product accident information for consumer 
products.  
Act on Securing Quality, 
Efficacy and Safety of 
Products including 
Pharmaceuticals and 
Medical Devices  
 
Ministry of Health, Labour 
and Welfare (MHLW)  1960 2015 Regulating the manufacture, import and sale of 
pharmaceuticals, and medical devices, regenerative 
and cellular therapy products, gene therapy products 
and cosmetics.  
Law C oncerning 
Stand ardization, etc. of 
Agricultural and Forestry 
Products  
 
MAFF  1950 2013 Applies to foods, drinks, oils, and fats as well as other 
agricultural, forestry, livestock and fishery products and 
products made from them except liquors, drugs and 
cosmetics.  
The Law  provides the legal basis for the Japanese 
Agricultural Standards (JAS) and criteria for adopting 
standards, quality grading, registration of certifying 
bodies, etc.  
Building Standard Law  
 
Ministry of Land, 
Infrastructure, Transport 
and Tourism (MLIT)  1950 2014 Applies to construction of buildings and buildings.  
The Law provides for the establishment of standards for 
construction of buildings, including fireproofing and 
procedures for inspection and certification of buildings, 
and type approval.  
Electrica l Appliance s and 
Materials Safety Act 
 
METI 1961 2011 Applies to electrical appliances and materials.  
The Act regulates the manufacture and sale of electrical 
appliances and requires manufacturers and importers 
of these appliances to register with METI and  ensure 
conformity with technical requirements.  
Measurement Act  
 
METI 1992 2011 Establishes the units of the SI as the measurement 
units in Japan and provides the legal basis to apply and 
verify them and certify devices for their measurement.  
Food Labell ing Act  
 
Consumer Affairs Agency  2013 2014 The purpose of this Act is to ensure a unified food 
labelling system by establishing standards and 
specifying other necessary information regarding 
labelling of food that is intended for sale.  
Source:  Information  provided by the authorities of Japan.  
                                                
87 The Act was promulgated on 28 June 2013.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.123.   Other recent changes to technical regulations include:  
 The establishment of technical regulations under the Act on the Rational Use of Energy 
for (i)  sash, frames and glazing on 30 November 2014, (ii)  commercial vehi cles on 10  July 2015, 
and (iii) electric refrigerators and electric freezers on 1  March 2016. New energy efficiency 
standards were established for freezing/refrigerating showcases, and a new fuel efficiency test was 
added for passenger commercial vehicles in FY2016; these standards will include the energy 
consumption efficiency measurement method, standard method and labelling requirement88; 
 
 The amendment on 31 March 2015 of the Textile Goods Quality Labeling Regulations 
based on the Household Goods Quality  Labeling Act to adopt a new technical regulation on textile 
labelling regarding care instructions for home washing, etc.89 in line with the relevant ISO 
standard. These Regulations are to enter into force on 1 December 201690; 
 
 The revision on 30 October 20 15 of the Indicating  Standards Concerning Geographical 
Indications for Liquor, which includes clarification of the requirements for designation and the 
establishment of a collective labelling method91;  
 
 The establishment on 30 October 2015 of new Labeling Standards for Manufacturing 
Process and Quality of Wine, including rules with respect to information about wine such as 
ingredients, harvesting area of grapes, and name of the type of grapes and space for collective 
labelling and for indication of the coun try of origin92; 
 
 The prohibition of importation of narcotic substances without a licence and the 
prohibition of importation of several new psychoactive substances without specific reasons93; 
 
 The newly established requirement of a label on a container or pa ckage when the 
substances are transferred or provided for designated chemical substances94; 
 
 Several revisions of the JAS for Organic Plants (December 2015 and February 2016) 
and of the JAS for Organic Processed Foods of Organic Plants (March 2015 and Febru ary 2016)95; 
and 
 
 The revision of regulations concerning fuel systems of motor vehicles with highly 
compressed gas fuel  to avoid explosion of hydrogen receptacle; these amendments entered into 
force on 23 February 2016.96 
 
3.124.   By 1 July 2016, Japan had made a to tal of 804 notifications of new technical regulations 
and conformity assessment procedures (including addenda, corrigenda and revisions), 64 of which 
were made after 1 October 2014.  
3.125.   In March 2015, the Russian Federation raised concerns regarding Japan's W ood Use Points 
Programme ( which ended in 2014); the issue was not raised further in subsequent meetings. 
Between 1995 and 1 June 2016, a total of 12 specific trade concerns were raised against measures 
maintained by Japan. At the same time, Japan has used the TBT Committee to raise 72  specific 
trade concerns in areas such as food labelling, electronic appliances, cosmetics, motor vehicles and 
steel products.  
                                                
88 WTO documents G/TBT/N/JPN/466, 16 S eptember 2014; G/TBT/N/JPN/475, 19 December 2012; 
G/TBT/N/JPN/509, 3  December  2015; G/TBT/N/JPN/512, 4 January2016; and G/TBT/N/JPN/514, 
22 January  2016.  
89 Online information. Viewed at: 
http://www.japaneselawtranslation.go.jp/common/data/notice/062503_checked_2015 -09-08-14-28-07.htm . 
90 WTO document G/TBT/N/JPN/476, 6 January 2015.  
91 WTO document G/TBT/N/JPN/495, 15 July 2015.  
92 WTO document G/T BT/N/JPN/496, 29 July 2015.  
93 WTO documents G/TBT/N/JPN/456, 5 May 2014; and G/TBT/N/JPN/524, 19 April 2016.  
94 WTO document G/TBT/N/JPN/510, 15 December 2015.  
95 WTO document G/TBT/N/JPN/489, 2 June 2015.  
96 WTO document G/TBT/N/JPN/505, 25 November 2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.126.   Japan's main agencies responsible for standards, technical requirements, and conformity 
assessment a re listed in Box 3.2. For WTO matters, the TBT enquiry point is the International 
Trade Division of the MOFA.  
Box 3.2 Agencies in charge of TBT issues  
Ministry of Economy, Trade and Industry (METI)  
Japanese In dustrial Standards Committee (JISC)  
Its functions include deliberations on the development/revision of JIS and making recommendations and 
reports on consultation responses to the relevant ministers with respect to the promotion of industrial 
standardizatio n, such as JIS, JIS Mark Certification Scheme, and Laboratory Accreditation System  
Japan Accreditation System for Product Certification Bodies of JIS Mark (JASC)  
National Institute of Advanced Industrial Science and Technology (AIST)  
National Metrology Institute of Japan (NMIJ)  
National Institute of Technology and Evaluation (NITE)  
International Accreditation Japan (IA Japan)  
Specified Measurement Laboratory Accreditation Program (MLAP)  
Accreditation of laboratories for micro -existent substances (e.g.  dioxins)  
Japan Calibration Service System (JCSS)  
Japan National Laboratory Accreditation System (JNLA)  
Ministry of Internal Affairs and Communication (MIC)  
Telecommunication Technology Committee (TTC)  
Japan Cable Television Engineering Association (J CTEA)  
Ministry of Agriculture, Forestry and Fisheries (MAFF)  
Responsible for adopting standards for foodstuffs, and agricultural and forestry products under the 
accompanying JAS system  
Ministry of Foreign Affairs (MOFA)  
Notification authority for the TBT  Agreement  
Ministry of Health, Labour and Welfare (MHLW)  
Pharmaceuticals and Medical Devices Agency (PMDA)  
Reviews and related services, e.g. scientific review of applications for market authorization  
Post-marketing safety measures, e.g. on the quality, efficacy and safety of drugs and medical devices  
Promotion of regulatory science  
Relief services for adverse health effects  
Consumer Affairs Agency (CAA)  
Ministry of Environment (MOE)  
Source:  Information provided by the authorities of Japan.  
3.127.   As at 31 Ma rch 2016, there were 10,542 Japanese Industrial Standards (JIS), and the 
number of JIS with corresponding international standards was 5,7 59. To ensure compliance with 
the TBT Agreement, Japan has been aligning JIS to international standards if correspondin g 
international standards exist. As at 31 March 2016, the proportion of those JIS which are 
harmonized with (identical (IDT) or modified (MOD) according to the definition of ISO/IEC 
Guide  21-1) international standards (ISO and IEC standards) was 97%.  
3.128.   In ad dition, the Pharmaceutical Affairs Law was revised to create a Quality Management 
System (QMS) audit; the revision entered into force on 25 November 2014. Under this new 
regulatory framework, the QMS standard for medical devices has been harmonized with th e 
international standard ISO13485.  
3.129.   Between April 2015 and March 2016, 357 Japan Industrial Standards (JIS) items were 
revised, 234 were withdrawn, and 177 were newly established (Table 3.19).  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.130.   Regarding Japan Agricultural Standards (JAS), two JAS (the JAS f or Organic Plants and the 
JAS for Organic Processed Foods of Organic Plants) are technical regulations, whereas all other JAS 
are standards but not technical regulations. The JAS for Organic  Plants was revised in 
December  2015 and in February 2016, while t he JAS  for Organic Processed Foods of Organic 
Plants was revised in March 2015 and in February 2016. 58 other JAS have been revised since 
2014 and three JAS have been withdrawn.  At the end of March 2016, the total number of JAS in 
force was 201 and the num ber of JAS corresponding with international standards was 80; the 
proportion of JAS harmonized with international standards was 78%.  
3.131.   The authorities indicate that when corresponding international standards do not exist, 
domestic standards or technical regu lations are needed.97  
Table 3.19 JIS established, revised, and withdrawn, April 2015 -March 2016  
JIS 
Divisions   Number of 
JIS newly 
established  Number 
of JIS 
revised  Number of 
JIS 
withdrawn  JIS in force 
at the end 
of March 
2016 
A Civil engineering and architecture  5 22 3 583 
B Mechanical engineering  19 50 7 1,697  
C Electronic and electrical 
engineering  45 62 15 1,707  
D Automotive engineering  2 8 3 371 
E Railway engineering  1 2 0 153 
F Shipbuilding  3 2 0 393 
G Ferrous materials and metallurgy  5 33 1 452 
H Nonferrous materials and 
metallurgy  3 12 0 414 
K Chemical engineering  39 55 15 1,761  
L Textile engineering  2 2 0 228 
M Mining  2 5 0 169 
P Pulp and paper  0 2 0 77 
Q Management system  4 5 0 91 
R Ceram ics 3 5 0 378 
S Domestic wares  3 7 2 192 
T Medical equipment and safety 
appliances  20 46 13 548 
W Aircraft and aviation  0 0 89 8 
X Information processing  2 11 78 456 
Z Miscellaneous  19 28 8 864 
Total  177 357 234 10,542  
Source:  Information provided by the authorities of Japan.  
3.132.   Approximately 7,8 14 domestic and 90 5 foreign factories in 21 countries and economies are 
certified to affix JIS marks (JIS Mark Scheme). The JIS Mark scheme is voluntary, while some 
regulations refer to JIS as an option to fulf il relevant technical requirements. The authorities state 
that domestic and foreign factories are treated in the same manner with regard to certification of 
the JIS marks, and the JIS Mark scheme is internationally harmonized, based on ISO/IEC 17065. 
As at October 2015, 24 organizations were accredited as JIS mark certification bodies.  
3.133.   Compliance with the JAS is not necessary for imports into Japan except for organic plants 
and organic processed foods of plant origin. T he JAS Law allows third -party organiz ations  to certify 
operators (e.g. manufacturers ) to affix JAS marks. T he Minister of Agriculture, Forestry and 
Fisheries  as well as registered certifying bodies (RCBs) and registered overseas certifying bodies 
(ROCBs) are responsible for monitoring and man aging JAS marks.98 Foreign producers or 
manufacturers that are certified by RCBs and ROCBs may conduct their own grading and affix the 
JAS marks to their products. As  at March 2016, there were 23 ROCBs and 92 domestic RCBs; 
furthermore, there were around 3, 000 foreign certified operators and around 7,000 domestic 
certified operators.  
                                                
97 For example, tatami  (traditional floor coverings), futon (Japanese mattresses), shoe dryers, kairo 
(pocket warmers), and kotatsu  (Japanese low tables with heat source) require domestic standards.  
98 For further details see WTO document WT/TPR/S/243/Rev.1, 2  May 2011.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.134.   Since the last review there have been no regulatory reforms concerning conformity 
assessment, acceptance of foreign test results and foreign certification, or the number of 
designated inspection bodies in the Consumer Product Safety Act and Electrical Appliance s and 
Material s Safety Act.  
3.135.   Overseas manufacturers of electrical and consumer products may undergo conformity 
assessment and certification conducted in foreign countries b y foreign registered conformity 
assessment bodies, in accordance with relevant laws (e.g. the Electrical Appliance s and Material s 
Safety Act and the Consumer Product Safety Act). Regarding the  Consumer Product Safety Act,  
there is only one foreign register ed conformity assessment body and seven domestic registered 
conformity assessment bodies as of March 2016. Regarding  the Electrical Appliance s and Material s 
Safety Act, the number of foreign registered conformity assessment bodies as of March 2016 is six 
and the number of domestic registered conformity assessment bodies is five.  
3.136.   Japan accepts test data on chemical products developed in other countries based on OECD 
Test Guidelines and OECD GLP principles and the Decision of the OECD Council concerning the 
Mutual Acceptance of Data in the Assessment of Chemicals.99 
3.137.   The METI has designated 24 inspection bodies (as in 201 6), of which 7 are foreign. The 
designated inspection bodies include: 8 bodies under the Consumer Product Safety Act, 12 under 
the Electrical A ppliance s and Material s Safety Act, 2 under the Act on  the Securing of Safety and  
the Optimization of Transaction of Liquefied Petroleum Gas,  and 2 under the Gas Business Act .  
3.138.   Japan is a member of ISO, the ITU, the International Electrotechnical Commissio n, the 
International Accreditation Forum, the Bureau international des poids et mesures , the Organisation 
internationale de métrologie légale , and the International Laboratory Accreditation Cooperation as 
well as several regional standards and accreditatio n bodies.  
3.3.7   Sanitary and phytosanitary measures  
3.139.   The main laws to implement the SPS Agreement in  Japan, together with the agencies 
responsible, are listed in Table 3.20. Box 3.3 details the key agencies responsible for SPS matters.  
3.140.   The MAFF, the MHLW, and th e Food Safety Commission continue to be responsible for 
Japan's SPS measures. Japan's enquiry point and national notification authority under the SPS 
Agreement remains the Standards Information Service within the International Trade Division of 
the MOFA's Economic Affairs Bureau. The procedure for establishing SPS measures also remained 
unchanged during the review period.  
3.141.   Japan had made 508 notifications SPS Committee by August 2 016, 97 since 
1 January  2015 (including addenda, corrigenda, and revisions). Si nce its last review, no Members 
have raised concerns about measures maintained by Japan in the SPS Committee. Japan has 
raised its concerns about one measure maintained by Chinese Taipei related to its import 
restrictions in response to the nuclear power p lant accident in Japan in 2011 .100 
3.142.   According to the authorities, SPS measures applied by Japan are based on the relevant 
international standards.101 
3.143.   Since the previous review, the most notable changes to SPS laws are the following: (1)  in 
April 2015, some labe lling provisions previously stipulated in the Food Sanitation Act were brought 
into a new Food Labeling Act, which provides that food producers must provide  detailed 
information regarding product ingredients , and also revised relevant labelling standards; (2) in 
2013, the Law on Domestic Animal Infectious Diseases Control was amended with a view to 
strengthening border controls (e.g. requesting travellers entering Japan to disinfect shoes) in order 
to prevent the outbreak and spread of infectious diseases s uch as avian flu.  
                                                
99 Based on the Chemical Substances Control Law.  
100 WTO SPS Information Management System. Viewed at: http://spsims.wto.org . 
101 Where such relevant international standards do not exist, SPS measures are based o n scientific risk 
assessment, in accordance with the WTO SPS Agreement. Additionally, the authorities state that, regarding 
food safety issues, the Japanese Food Safety Commission publishes the result of the risk assessments.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 3.20 Principal laws on SPS measures  
Legislation/Agency  First 
passed  Last 
amended  Purpose  
Food Sanitation Act  
 
MHLW  1947 2015 Applies to food and additives, and containers and packaging . 
 
The Act provides for the setting and application of standards 
on food and food additives as well as inspections of foods  by 
the Ministry of Health, Labour and Welfare.  
Food Safety Basic Act 
 
Consumer Affairs 
Agency, Food Safety 
Commission  2003 2015 Aims to promote policies to ensure food safety by: 
establishing basic policy principles; clarifying responsibilities 
of national and local governments and food -related business 
operators, and the roles of consumers; and establishing 
basic direction for policy  formulation.  
Act Concerning Safety 
Assurance and Quality 
Improvement of Feed  
 
MAFF  1953 2014 Aims to contribute to public safety and stable production of 
livestock products by regulating the production of feeds and 
feed additives, setting official specif ications for feeds, and 
conducting tests of feeds in conformity with official 
specifications.  
Plant Protection Act  
 
MAFF  1950 2012 Provides the legal basis for regulations on plant protection 
including quarantine for local, import and export plants.  
Act on Domestic 
Animal Infectious 
Diseases Control  
 
MAFF  1951 2013 Aims to protect and promote the livestock industry by 
preventing the outbreak and spread of infectious diseases in 
domestic animals.  
Source:  Information provided by the authorities of Japan . 
Box 3.3 Key agencies responsible for SPS measures  
Ministry of Agriculture, Forestry and Fisheries  
Food Safety and Consumer Affairs Bureau  
 Responsible for SPS measures relating to animal feed, animals, plants, ve terinary drugs, etc.  
Ministry of Health, Labour and Welfare  
Department of Environmental Health and Food Safety, Pharmaceutical Safety and Environmental 
Health Bureau  
 Responsible for administration of food safety including specifications and standards for  food, food additives, 
pesticide residues, animal drug residues, genetically modified foods and food containers, inspection and 
safety measures for food.  
Cabinet Office – Food Safety Commission  
 Conducting risk assessment on food and making recommendation s to relevant ministries  
 Implementing risk communication among stakeholders, e.g. consumers and business operators  
 Responding to food -borne accidents and emergencies.  
Ministry of the Environment  
Responsible for managing risks to the environment from imp orts, including from invasive alien species.  
Ministry of Foreign Affairs  
Enquiry point and notification authority.  
Source:  Information provided by the authorities of Japan.  
3.144.   New or revised SPS measures adopted or proposed since Japan's last review include  the 
proposed revision of the regulations under the Plant Protection  Act containing amendments to: the 
quarantine  and non -quarantine pest lists; the list of plants subject to field inspection in exporting 
countries; the list of import prohibited plants; an d to the list of plants subject to specific 
phytosanitary measures to be carried out in exporting countries.102 On 1 July 2014, Japan brought 
into force additional requirements on Porcine Endemic Diarrhoea (PED) for imported live swine 
animals, and on 11 Jul y 2014, additional requirements for swine blood meal from countries where 
PED was endemic.103  
                                                
102 WTO documents G/SPS/N/JPN/43 8, 16 December 2015; and G/S PS/N/JPN/438/Corr.1, 
5 February  2016.  
103 WTO documents G/SPS/N/JPN/352, 25 June 2014; G/SPS/N/JPN/358, 28 July 2014; and 
G/SPS/N/JPN/358/Add.1, 18  September  2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.145.   Standards on the following agricultural chemical residue s and feed additives have been 
established or revised: glufosinate (established on 8 January 201 4)104, pendim ethalin 
(11 June 2014)105, sodium nitrite, melamine (20 August 2014)106, dicamba (27 July 2015)107, 
monensin sodium, avilamycin (7 December 2015), alachlor (18 December 2015)108, fenthion 
(18 December 2015)109, aldicarb (18 December 2015)110, imazapic (18 December 201 5)111, 
imazapyr (18 December 2015)112, and 25 -hydroxycholecalciferol (23 March 2016)113.  
3.146.   The Ministerial Ordinance of the Act on the Protection of Fishery Resources was revised on 
27 January 2016,  as were the Aquatic Quarantine Measures notably regarding the di seases and 
aquatic animal species subject to import quarantine and a detention period.114 
3.147.   Regarding food safety measures, in Japan more than 800 pesticides have residue 
standards and at least 800 food additives are approved for use. According to the authorit ies, it is 
very difficult to confirm whether all of these substances comply with international standards. While 
Codex standards are considered in MHLW's risk management , only additives that have been 
reviewed by the Food Safety Commission and approved by M HLW may be used in food and 
beverages sold in Japan.  This approach is commonly applied not only for food additives but in the 
setting of all types of food standards.  
3.148.   Since its last review, there has been no change to Japan's food import bans. It currently 
imposes import prohibitions on beef and poultry to prevent the spread of BSE and avian flu. Japan 
has allowed beef imports from Brazil, Canada, Denmark, France, Ireland, Italy, Lichtenstein, the 
Netherlands, Norway, Poland, Sweden, Switzerland, and the Uni ted States under certain condition s 
based on scientific review by the Food Safety Commission.  
3.149.   Under the provisions of the Food Sanitation Act, imported food may be exempted from 
inspection upon importation into Japan if a cargo is inspected by an official inspection organization 
in the exporting country and bears the result of the inspection. However, items such as bacteria 
and mycotoxins, whose characteristics may change during transportation, are not exempted. The 
inspection bodies must be registered with  the Government of Japan, through the government of 
the exporting country. As at March 2016, 4,021 foreign testing laboratories were registered in 
Japan under the Food Sanitation Act.  
3.150.   The following EPAs signed by Japan contain chapters or provisions regard ing standards and 
technical regulations, conformity assessment, and SPS: Japan –Australia, Japan –Chile, Japan -India, 
Japan –Malaysia, Japan –Mexico (provisions), Japan –Mongolia Japan –Peru, Japan –Switzerland, 
Japan –Viet Nam, as well as Japan –ASEAN and TPP.  
3.151.   Japan is a member of the Codex Alimentarius Commission and the OIE, and a contracting 
party to the International Plant Protection Convention (IPPC). Its contact points are: the Director 
of the Plant Quarantine Office, Plant Protection Division, Food Safety an d Consumer Affairs Bureau, 
the MAFF (in relation to IPPC); the Director of the Animal Health Division, Food Safety and 
Consumer Affairs Bureau, the MAFF (in relation to OIE); and the Director of the Office for 
Resources, Policy Division, Science and Techno logy Policy Bureau, the Ministry of Education, 
Culture, Sports, Science and Technology (in relation to Codex).  
3.3.8   Labelling and packaging requirements  
3.152.   During the period under review, there were no changes concerning non -food labelling 
requirements under the Consumer Product Safety Act and Electrical Appliance s and Material s 
Safety Act. With regard to the Industrial Safety and Health Measures, some chemical substances 
                                                
104 WTO document G/SPS/N/JPN/321, 16 July 2013.  
105 WTO document G/SPS /N/JPN/330, 20 November 2014.  
106 WTO document G/SPS/N/JPN/337, 2 April 2014.  
107 WTO document G/SPS/N/JPN/345, 5 May 2014.  
108 WTO document G/SPS/N/JPN/366, 21 October 2014.  
109 WTO document G/SPS/N/JPN/367, 20 October 2014.  
110 WTO document G/SPS/N/JPN/368, 20 Oct ober 2014.  
111 WTO document G/SPS/N/JPN/425, 13 July 2015.  
112 WTO document G/SPS/N/JPN/426, 13 July 2015.  
113 WTO document G/SPS/N/JPN/427, 29 July 2015.  
114 WTO document G/SPS/N/JPN/429, 9 October 2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  have been newly designated as substances that are required to have a label on the container o r 
package when the substances are transferred or provided.115 The Textile Goods Quality Labeling 
Regulations  were amended to adopt a new standard on textile care instructions for home washing, 
etc. in line with the relevant ISO standard. These Regulations ar e to enter into force on 
1 December 2016.  
3.153.   With regard to food labelling, as mentioned above, some food labelling provisions which 
had previously been scattered across three separate laws have been gathered into a single new 
Food Labeling Act, promulgated o n 28 June 2013. To implement the Act, a Food Labeling Standard 
establishing specific labelling requirements was defined. The Act and Standard entered into force 
on 1 April 2015.  
3.154.   The main changes to food labelling requirements during the period under review  concern 
food allergen labelling, mandatory nutrient declaration, and the Food with Function Claims (FFC) 
labelling system. Under the new food allergen labelling requirement, which entered into force on 
1 April 2015, the name of the food allerge n must be i ndicated in parentheses immediately after 
the name of the food ingredient containing it, except w hen all names of allergens appear in 
parentheses collectively at the end of the ingredient list. As regards mandatory nutrient 
declaration, under the previous standard (the Nutrition Labeling Standard), nutrition declaration 
was voluntary for pre -packaged processed foods. The new Food Labeling Standard requires 
mandatory declaration of energy value, the amounts of protein, fat, carbohydrates and sodium 
(expresse d in salt equivalent) for pre -packaged processed foods and food additives to be offered 
as such to the consumer. Certain foods may be exempted, for example, on the basis of nutritional 
or dietary insignificance or small packaging or others. The declaration  of saturated fatty acids, 
cholesterol, available carbohydrates (i.e. dietary carbohydrates excluding dietary fibre), sugars, 
dietary fibre, vitamins and minerals is voluntary.  
3.155.   Genetically modified (GM) foods must be labelled as such. Presently, the list o f GM 
products that need to be labelled comprises eight crops (soybeans, corn, rapeseed, potatoes, 
cottonseed, alfalfa, papaya, and sugar beet) and 33 kinds of designated processed food, mainly 
made of soybeans or corn; papaya and processed foods containing  papaya as a main ingredient 
are recent additions. The MHLW does not permit imports of GM foods that do not meet its safety 
requirements.  
3.156.   As regards food with health claims, a new standard, which entered into force on 
1 April 2015, has established a third  category, that of "Foods with Functional Claims" (FFC) 
alongside the two pre -existing categories ("Foods with Nutrient Functions Claims" (FNFC) and 
"Food for Specified Health Uses"(FOSHU)). Table 3.21 describes the main differences between 
these three cat egories.  
Table 3.21 Comparison of the three categories of foods with health claims  
 Object  Proof of 
effectiveness  Notification  Approval  
FNFC Nutritional 
supplement  None No No 
FOSHU  Enhance health  To be 
demonstrated  by 
the Government  Yes Yes 
FFC Enhance health  To be 
demonstrated by 
the producers 
themselves  Yes No 
Source:  Information provided by the authorities of Japan.  
3.157.   Two new labelling standards regarding liquors were established by the Ministry of Fin ance 
in order to protect the consumer's interest : the Indication Standards Concerning Geographical 
Indications for Liquor (fully revised on 30 October 2015), and the Labeling Standards for 
Manufacturing Process and Quality of Wine, etc. ( entered into force  on 30 October 2015).  
                                                
115 WTO document G/TBT/N/JPN/487, 18 May 2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.3.9   Government procurement  
3.158.   According to the OECD, government procurement represents 38.3% of government 
expenditures and 16.2% of the GDP of Japan.116 
3.159.   The basic rules on government procurement in Japan are contained in: the Accounts Law 
of 1947, the Local Autonomy Law of 1947, the Cabinet Order Concerning the Budget, Auditing and 
Accounting of 1947, the Special Provisions for the Cabinet Order concerning the Budget, Auditing 
and Accounting of 1946, and the Regulations on the Management of Co ntract Administration 
(Ministry of Finance Ordinance No. 52 of 1962).  
3.160.   Japan is a party to the WTO Agreement on Government Procurement (GPA). In 
March  2014, i t accepted the revised GPA, which entered into force in Japan on 6 April 2014 . Japan 
implemented th e protocol domestically through the amended Cabinet Order Stipulating Procedures 
for Government Procurement of Products or Specified Services, the Cabinet Order Stipulating 
Procedures for Government Procurement of Products or Specified Services in Local Go vernments 
Entities and the Ministerial Ordinance Stipulating Special Procedures for Government Procurement 
of Products or Specified Services.  
3.161.   The main changes during the review  period include the amendment in May 2016 of the 
"operational procedures for gov ernment procurement" (Order No. 372 of 2006) which introduces 
the "multiple bidding system", where two or more companies can bid in a project if one company 
cannot supply the full amount of the order alone.  
3.162.   Japan has made four notifications to the Governm ent Procurement Committee since 2014, 
namely a notification on the partial revision of the Basic Policy concerning the Promotion of 
Contracts Considering Reduction of Emissions of Greenhouse Gases and Others by the State and 
Other Entities117, and three noti fications on successive revisions to the Basic Policy for the 
Promotion of the Procurement of Eco -Friendly Goods and Services under the Law concerning the 
Promotion of the Procurement of Eco -Friendly Goods and Services by the State and Other 
Entities.118 
3.163.   All Economic Partnership Agreements signed by Japan, except those with ASEAN and with 
Malaysia, have government procurement provisions (Table 3.22).119 The TPP also contains a 
government procurement chapter. Japan's GP commitments under the TPP  are roughly the same 
as its WTO GPA commitments.  
Table 3.22 Japan's government procurement commitments and obligations under 
various FTAs  
Agreements concerned  Japan's commitments and obligations  
Japan –Singapore  
Japan –Switz erland  Both parties refer to or incorporate their GPA 
commitments (1994 version)  
Japan –Brunei Darussalam  
Japan –India 
Japan –Indonesia  
Japan –Philippines  
Japan –Thailand  
Japan –Viet Nam  
Japan –Mongolia  The agreements set out liberalization as the general 
objective and do not contain any procedural rules or 
commitments  
 
Japan –Chile Japan refers to its GPA commitments  
Japan –Mexico  The scope of Japan's commitments in the FTA is 
inferior to that of Japan in the GPA  
Japan –Peru 
Japan –Australia  Japan's commitme nts are roughly the same as in GPA  
Source:  "The Relationship between Services Trade and Government Procurement Commitments: Insights 
from Relevant WTO Agreements and Recent RTAs" by Robert D. An derson, Claudia Locatelli, 
                                                
116 OECD, Govern ment at a Glance 2015 – Country Fact Sheet: Japan.  Viewed  at: 
https://www.oecd.org/gov/Japan.pdf . 
117 WTO document GPA/99/ add.4 , 15 April 2014.  
118 WTO documents GPA/37/add.11, 15 April 2014; GPA/37/add.12, 9 April 2015; and GPA/37/add.13, 
13 July 2016.  
119 Singapore and Switzerland are the only partners that are parties to the GPA.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Anna Caroline Müller and Philippe Pelletier, WTO working paper120, October 2013, p. 41, and 
information provided by the authorities of Japan.  
3.164.   In addition, following a series of bilateral negotiations with the United States in the eighties 
and in the nineties, Japan has established various ( general and sector –specific) so -called 
"voluntary measures" implying commitments going beyond the WTO Government Procurement 
Agreement in terms of thresholds, entities and sectors covered and procedural obligations. The 
procedures applicable to the general  voluntary measures, which were initially contained in a 
November 1991 Understanding on Government Procurement, now appear in the 31  March  2014 
Operational Procedures for Government Procurement.   
3.165.   Table 3.23 compares the entities covered, the thresholds an d the disciplines/procedures 
applicable under the GPA and the general voluntary measures, while Table 3.24 describes the 
specific, sectoral voluntary measures in terms of thresholds, entities and disciplines.  
Table 3.23 Entities covered, thresholds and disciplines/procedures applicable under the 
GPA and the general voluntary measures  
(SDR 10,000 /¥10,000 ) 
 
Number of 
entities  GPA General voluntary 
measure (GVM)  Procedures 
introduced by 
GVM SDR Yen SDR Yen 
Central 
government 
entities  25     (1) Disclosure of 
procurement 
schedules of 
large-scale 
(over 100 SDR) 
goods and 
services in 
official gazettes 
early in a fiscal 
year;  
 
(2) Bidding 
period extended 
to 50 days;  
(3) Suppliers 
are invited 
(a) to submit 
materi als (b) to 
comment on 
proposed 
specifications in 
a bidding;  
(4) Disclosure of 
designated 
suppliers  1. Goods   10 1,600  10 1,600  
2. Construction 
services   450 74,000  * * 
3. Architectural, 
engineering and 
other technical 
services   45 7,400  * * 
4. Other 
services   10 1,600  10 1,600  
Sub-central 
government 
entities  66     
1. Goods   20 3,300  * * 
2. Construction 
Services   1,500  247,000  * * 
3. Architectural, 
engineering and 
other technical 
services   150 24,000  * * 
4. Other 
services   20 3,300 * * 
All other 
entities  125     
                                                
120 Online information. Viewed at: https://www.wto.org/english/res_e/reser_e/ersd201421_e.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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Number of 
entities  GPA General voluntary 
measure (GVM)  Procedures 
introduced by 
GVM SDR Yen SDR Yen 
1. Goods   13 2,100  10 1,600  
2. Construction 
services for 
Japan Post in 
Group A   1,500  247,000  * * 
3. Construction 
services for 
Japan Post and 
entities in 
Group B   450 74,000  * * 
4. Architectural, 
engineering and  
other technical 
services   45 7,400  * * 
5. Other 
services   13 2,100  10 1,600  
* Indicates the goods or services to which the Japanese voluntary measures are not applied (the 
Agreement on Government Procurement applies).  
Source:  MOFA online information. Viewed at: http://www.mofa.go.jp/files/000037391.pdf ; and 2014 
Operational Guideline on Procedures for Government Procurement  Attachment 1.  
3.166.   As shown in Table 3.23, the thresholds for voluntary measu res are lower than the GPA in 
only two instances, due to the fact that the 2014 revised GPA has "caught up" with voluntary 
measures as compared to the GPA 1994, which was signed on 15 April 1994 and entered into force 
on 1 January 1996. The remaining value  added of voluntary measures is essentially of a 
procedural nature: the period for receiving  tenders is extended to no less than 50 days from the 
date of issuance of the Notice of Procurement, unless special circumstances exist, while in the 
revised GPA, t his period is 40 days.121 
Table 3.24 Sector -specific voluntary measures  
Specific voluntary measures  Entities 
covered  Thresholds  GPA+ Procedures  
Supercomputers over 50 tflops  
(2014 Operational Guideline Attachm ent 2; 
procedures to Introduce Supercomputers)  151 (The 
entities 
covered by 
GPA Annexes 1 
and 3)  0 (Any lease or sales 
of supercomputers is 
subject to voluntary 
measures)  n.a. 
Non-R&D satellites  
(2014 Operational Guideline Attachment 3; 
Procedures for the  Procurement of Non -R&D 
Satellites)  25 (The 
central 
government 
entities) + the 
entities that 
purchase or 
lease non - 
R&D satellites 
on behalf of 
the central 
government, 
and entities 
under 
direct/indirect 
supervision of 
the central 
government  0 (Any lease or  sales 
of non -R&D satellites 
is subject to 
voluntary measures)  Potential suppliers of 
non-R&D satellites and 
the U .S. government 
can object to the 
classification of 
R&D/non -R&D 
satellites, established 
by the Japanese 
Government.  
                                                
121 Prime Minister's Office online inform ation. Viewed at: 
http://japan.kantei.go.jp/procurement/2014/ch/4 -1FY2014attach1 -1.pdf. WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Specific voluntary measures  Entities 
covered  Thresholds  GPA+ Procedures  
Computer products and serv ices 
(2014 Operational Guideline Attachment 4; 
Measures on Japanese Public Sector 
Procurements of Computer Products and 
Services)  157 entities 
(i.e. the 
151 entities 
covered by 
GPA Annexes 1 
and 3 + Japan 
Aerospace 
Exploration 
Agency, Shoko 
Chukin bank, 
Kansai airport, 
Nippon 
Foundation, 
NHK, and 
Japan's 
workers 
housing 
association)  100,000 SDR  n.a. 
Telecommunications sector  
(2014 Operational Guideline Attachment 5; 
Measures on Japanese Public Sector 
Procurement of Telecommunications 
Products and Services ) 148 entities 
(i.e. the 151 
entities 
covered by the 
GPA Annexes 1 
and 3 minus 
NTT, NTT east, 
and NTT west)  
 100,000 SDR  n.a. 
Medical technology sector  
(2014 Operational Guideline Attachment 6; 
Measures on Japanese procedures to 
Introduce Supercomputers)  105 (selected 
from the 151 
entities 
covered by the 
GPA Annexes 1 
and 3 )  100,000 SDR  n.a. 
Construction services sector  
(1987 Measures to Ensure Entry 
Opportunity for Foreign Enterprises to 
Large -Scale Public Construction Projects, 
1991 Additional Measur es to 1987 
Measures, 1994 Action Plan on 
Improvement of Bidding and Contracting 
Procedures in Public Construction Projects, 
1996 Guideline of the Action Plan, 2000 Act 
on Promotion of Proper Bidding and 
Contracting in Public Construction Projects, 
and 2005  Act on Ensuring Quality of Public 
Construction Projects)  151 entities 
(The entities 
covered by the 
GPA Annexes 1 
and 3 )  Central government 
entities (Annex 1)  
(1) Construction  
4,500,000 SDR  
(2) design and 
consulting services  
450,000 SDR  
 
Other entities 
(Annex 3)  
(1) Construction  
15,000,000 SDR  
(2) design and 
consulting services  
450,000 SDR  n.a. 
n.a. Not applicable.  
Source:  information provided by the authorities of Japan.  
3.167.   There have been no modifications to the open tendering rules or their exceptions sin ce 
2014. With regard to the procedures of central government entities, a specific contractor may be 
selected under the single tendering contract method if, inter alia , the nature or objectives of the 
procurement do not allow competition, or competition is not possible or is disadvantageous to the 
Government because of the urgent nature of the contract, or the contract value is small, in 
accordance with clause 4 or 5 of Article 29.3 of the Accounts Law. The authorities state that single 
tendering corresponds  to "limited tendering" in the GPA.  
3.168.   Foreign participation in Japan's government procurement is described in Tables 3.25 and 
3.26.  
 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 3.25 Foreign participation in Japan's government procurement  
(%) 
Year Relative foreign share of procurement 
value  Relative foreign share of number of 
contracts awarded   
2013 3.0 2.9 
2014 3.1 5.1 
Source:  Prime Minister's Office online information (in Japanese). Viewed at: 
http://www.kantei.go.jp/jp/kanbou/27tyoutatu/dai2/dai2honbun.pdf . 
Table 3.26 Awards to foreign suppliers by origin, 2014  
 Number  Value（¥ billion ） 
United States  219 30.8 
European  Union  228 23.6 
Others  342 9.4 
Total  789 63.8 
Source:  Prime Minister's Office online information (in Japanese). Viewed at: 
http://www.kantei.go.jp/jp/kanbou/27tyoutatu/dai 2/dai2honbun.pdf . 
3.169.   Tables 3.27 and 3.28 detail foreign participation in Japan's government procurement in 
value terms by type of product and service  in 2013 and 2014 (the latest year for which data were 
available) .  
Table 3.27 Procurement by product and by origin, 2013 and 2014  
No. Products  2013  2014  
Total value  
(¥100 
million)  Foreign 
share  
(%) Total 
value  
(¥100 
million)  Foreign 
share  
(%) 
1 Products from agriculture, and from agricultural 
and food processin g 21.7 46.6 17.6 49.1 
2 Mineral products  382.0  21.3 673.5  11.5 
3 Products of the chemical and allied industries  30.3 10.3 40.8 2.0 
4 Medicinal and pharmaceutical products  249.5  31.3 482.0  21.2 
5 Artificial resins; rubber, raw hides and skins; 
leather; and articles thereof  13.2 0.2 45.4 0.0 
6 Wood and articles of wood; paper making 
material; paper and paperboard and articles 
thereof  190.2  0.1 182.9  0.1 
7 Textiles and textile articles; thread for spinning 
and weaving; and articles thereof  78.3 3.1 84.9 2.5 
8 Articles of stone, of cement and similar 
materials; ceramic products; glass and 
glassware; and articles thereof  6.1 0.0 1.9 0.0 
9 Iron and steel and articles thereof  207.8  0.1 128.8  1.2 
10 Non-ferrous metals and articles thereof  56.4 8.2 48.7 4.6 
11 Power generating machinery and equipment  157.9  1.2 83.3 0.0 
12 Machinery specialized for particular industries  169.6  2.1 23.9 7.0 
13 General industrial machinery and equipment  163.0  4.1 191.5  0.8 
14 Office machines and automatic data processing 
equipment  2,257.9  4.2 2,292.1  2.0 
15 Telecommunications and sound recording and 
reproducing apparatus and  equipment  854.0  4.5 458.7  2.8 
16 Electrical machinery, apparatus and appliances, 
and electrical parts thereof  291.5  4.2 214.1  4.4 
17 Road vehicles  410.1 1.9 464.6  1.0 
18 Railway vehicles and associated equipment  37.3 31.6 136.4  45.9 
19 Aircraft and associated equipment  142.5  53.9 48.5 90.6 
20 Ships, boats and floating structures  76.2 3.1 118.6  14.4 
21 Sanitary, plumbing, and heating equipment  7.9 0.0 1.9 0.0 
22 Medical, dental, surgical and veterinary 
equipment  943.1  42.9 655.7  43.1 
23 Furniture and parts thereof  72.1 0.9 104.4  0.0 
24 Scientific and controlling instruments and 
apparatus  2,839.6  20.8 2,190.9  39.4 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  No. Products  2013  2014  
Total value  
(¥100 
million)  Foreign 
share  
(%) Total 
value  
(¥100 
million)  Foreign 
share  
(%) 
25 Photographic apparatus and equip ment, optical 
goods, and clocks  39.3 1.3 28.7 18.2 
26 Miscellaneous articles  1,247.6  6.8 2,066.1  3.8 
  Total  10,944.8  13.9 10,786.0  15.1 
Source:  Prime Minister's Office online information (in Japanese). Viewed at: 
http://www.kantei.go.jp/jp/kanbou/26tyoutatu/dai2/dai2honbun.pdf  and 
http://www.kantei.go.jp/jp/kanbou/27tyoutatu/dai2/dai2honbun.pdf . 
Table 3.28 Procurement by type of service, 2013 and 2014  
Type of service  2013  2014  
Total value  
(¥100 million)  Foreign 
share 
(%) Total value 
(¥100 million)  Foreign 
share 
(%) 
Total 9,625.3  1.4 9,540.2  1.4 
Maintenance and repair of motor vehicles  4.2 12.9 19.9 0.0 
Maintenance and repair of motorcycles 
and snowmobiles  0.0 0.0 0.0 n.a. 
Other land transport services (except mail 
transportation)  94.8 0.0 111.6  0.0 
Rental services of sea -going vessels with 
operator 6.0 0.0 1.1 33.0 
Rental services of non -sea-going vessels 
with operator  0.7 0.0 0.0 n.a. 
Air transport (except mail transportation)  18.6 14.3 36.8 7.6 
Freight transport agencies  14.5 0.0 20.2 0.0 
Courier services  3.3 11.4 1.7 11.4 
Telecommunicat ion services  173.3  13.5 60.3 0.0 
Computer and related services  7,276.4  1.3 7,107.7  4.4 
Market research and public opinion polling  156.9  0.1 43.2 1.7 
Advertising services  367.1  0.0 482.5  0.0 
Armoured car services  3.8 0.0 194.6  0.0 
Building cleaning ser vices 428.9  0.0 671.7  0.0 
Publishing and printing services  166.9  0.1 166.0  0.1 
Repair services incidental to metal 
products, machinery and equipment  146.7  8.2 167.7  2.5 
Sewage and refuse disposal, sanitation 
and other environmental protection  92.2 0.0 289.6 0.0 
Other  671.0  0.2 165.6  0.0 
n.a. Not applicable.  
Source:  Prime Minister's Office online information (in Japanese). Viewed at: 
http://www.kantei.go.jp/jp/kanbou/26tyout atu/dai2/dai2honbun.pdf  and 
http://www.kantei.go.jp/jp/kanbou/27tyoutatu/dai2/dai2honbun.pdf . 
3.170.   The ratio of open tendering contracts to single tendering contracts varies signi ficantly 
according to whether the items procured were goods or services. In 2014, about 90% of the 
number and 89% of the total value of goods procurement were contracted through open tendering 
procedures. Meanwhile, in terms of service, about 63% of the nu mber and 54% of the total value 
of procurement were contracted through open tendering procedures. For procurement awarded to 
foreign suppliers, the picture is notably different. In 2014, the percentage of foreign suppliers' 
tenders and awards were still lo w in open tendering procedures (Table 3.29). Meanwhile, the 
percentage of foreign suppliers' awards was higher than that of tenders.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 3.29 Percentage of Foreign Suppliers' Tenders and Awards, 2014  
(%) 
 Percentage of tenders 
(previous year)  Percentage of awards or 
percentage of contracts (previous 
year)  
Open tendering procedures  0.7 (1.0)  1.1 (1.8)  
Single tendering procedures  .. 6.5 (5.3)  
.. Not available.  
Source:  Prime Minister's Office online informat ion (in Japanese). Viewed at: 
http://www.kantei.go.jp/jp/kanbou/27tyoutatu/dai2/dai2honbun.pdf . 
3.171.   The voluntary measures (Procedures for Government Procurement of Products) enco urage 
the adoption of the overall -greatest -value evaluation method (OGV) where the lowest -price-award 
method is deemed inadequate. In addition, in the areas of computer products and services, 
telecommunication products and services, and medical technology products and services, when 
large procurement is conducted, it is obligatory under the voluntary measures to apply the OGV. 
In 2014, the OGV was adopted in 992 procurements (compared with 1,068 in 2013), representing 
about 6.4% of the total number of procu rements (6.0% in 2013) (Table 3.30). Of these contracts, 
92 were awarded to foreign products and services (160 in 2013).  
Table 3.30 Implementation of overall -greatest -value evaluation method, 2012 -14 
  Number  of contracts  
2012  2013  2014  
Contracts on a 
domestic/foreign basis  Domestic products and 
services  769 908  900  
Foreign products and 
services  114 160  92  
Total  883 1,068  992  
Source:  Prime Minister's Office online information (in Japanese). View ed at: 
http://www.kantei.go.jp/jp/kanbou/27tyoutatu/dai2/dai2honbun.pdf . 
3.172.   Most cases of proven infringement of Japan's Anti -Monopoly Act (AMA) continue to involve 
bid-rigging r elated to public works ( Section  3.3.3). The Act for Promoting Proper Tendering and 
Contracting for Public Works defines major policy instruments for preventing bid -rigging and other 
improper actions.  
3.173.   Two complaints were filed regarding the functioning of the bid challenge mechanism during 
the period under review. The first was a case concerning procurement of a mobile payment 
terminal filed in July 2014. The second was a case concerning procurement of demolition work for 
a national stadium filed in August 2014. The Government Procurement Review Board found that 
both of these procurements had violated the Revised Agreement on Government Procurement 
(WTO), and proposed for both cases "the cancellation of the contract and the implementation of 
the procurement process again from the start".  
3.3.10   Intellectual property rights  
3.3.10.1   Overview  
3.174.   The legal framework for the protection of intellectual property rights in Japan has 
undergone various changes during the review period. With regard to geographical indications 
(GIs), the  Act on Protection of the Names of Specific Agricultural, Forestry, and Fishery Products 
and Foodstuffs entered into force in 2015. The Act on the Partial Revision of the Patent Act and 
Other Acts, which entered into force on 1 April 2016, introduced amend ments to the Patent Act, 
the Trademark Act, the Design Act, and the Act on International Applications under the Patent 
Cooperation Treaty (PCT). The Act, inter alia : (i) reviews the employee invention system by 
clarifying the elements to be considered for the "appropriate remuneration" of employee s; 
(ii) revises the fee schedule for patents, trademarks and international searches concerning WT/TPR/S/ 351/Rev.1  • Japan  
 
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  international applications; and (iii) establishes provisions regarding the Patent Law Treaty and the 
Singapore Treaty o n the Law of Trademarks to allow Japan's accession to these treaties.122 
3.175.   The Unfair Competition Prevention Act was amended to provide further protection to trade 
secrets. Under the amended act, the scope of acts subject to criminal penalties,  as well as civi l 
remedies,  has been expanded to include the sale, import and export of products manufactured 
with the wrongful use of a trade secret. Furthermore, any party which , for the purposes  of 
acquiring a wrongful gain or causing damage to a trade secret owner, su bsequently acquires  a 
trade secret  knowing that it has been disclosed unlawfully could be penalized for trade secret 
misappropriation.123 
3.176.   The substantive IP laws continue to provide protection to the main types of IPRs 
(Table  3.31).  
Table 3.31 Summary of the protection of intellectual property rights, 2016  
Main 
legislation  Coverage  Duration  Selected exclusions and 
limitations  
Patents  
Patent Act (Last 
amended in 
2016) Any invention of a 
product/method that is 
industrially applicable, 
novel compared with 
the prior art base and 
characterized by the 
highly advanced 
creation of technical 
ideas utilizing the laws 
of nature  20 years from the filing 
date of the patent 
application (Duration of a 
patent for agricultural 
chemicals and medicine 
can be extended to a 
maximum of 25  years 
upon request)  Non-patentable inventions:  
(1) An invention that was publicly 
known in Japan or a foreign 
country, prior to the filing of the 
patent application  
(2) An invention that was publicly  
worked in Japan or a foreign 
country, prior to the filing of the 
patent application  
(3) An invention that was described 
in a distributed publication or made 
publicly available through an 
electric telecommunication line in 
Japan or a foreign country, prior  to 
the filing of the patent application  
(4) An invention that a person 
ordinarily skilled in the art would 
have been able to easily make, 
based on an invention mentioned in 
(1) to (3), prior to the filing of the 
patent application  
(5) An invention that is  claimed in a 
patent application that is identical 
to the one claimed in a patent 
application filed earlier by another 
person  
(6) An invention that is liable to 
injure public order, morality or 
public health  
 
Utility Models  
Utility Model Act 
(Last amend ed 
in 2015)  Any creation of a 
device that is related 
to the shape or 
structure of an article 
or combination of 
articles and is 
industrially applicable  10 years from the filing 
date of the application  Non-registrable devices:  
(1) A device that was publicly 
known in Japan or a foreign 
country, prior to the filing of the 
application  
(2) A device that was publicly 
worked in Japan or a foreign 
country, prior to the filing of the 
application  
(3) A device that was described in a 
distributed publication or made 
publicly available through an 
electric telecommunication line in 
Japan or a foreign country, prior to 
                                                
122 WIPO online information. Viewed at: http://www.wipo.int/wipolex/en/details.jsp?id=16075 . 
123 Further explanation available at WIPO online information. Viewed at: 
http://www.wipo.int/wipolex/en/text.jsp ?file_id=401411 . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Main 
legislation  Coverage  Duration  Selected exclusions and 
limitations  
the filing of the application  
(4) A device that a person 
ordinarily skilled in the art would 
have been able to easily make, 
based on a device mentioned in (1 ) 
to (3), prior to the filing of the 
application  
(5) A device that is identical to a 
device or invention disclosed in a 
utility model/patent application filed 
by another person, prior to the date 
of filing of the application  
(6) Methods of production  
(7) M aterials  
(8) A device that is liable to injure 
public order or morality  
Trademarks  
Trademark Act 
(Last amended 
in 201 6) Any character, figure, 
sign, three -dimensional 
shape, sound, colour or 
any combination of 
them used by a 
business entity in 
connection  with its 
goods or services  10 years from the date of 
registration  Non-registrable trademarks:  
(1) A trademark that is identical, or 
similar, to another person's 
trademark  
(2) A trademark by which 
consumers cannot distinguish goods 
or services pertaining to a business 
of a particular person from another  
(3) A trademark that is likely to 
cause damage to the public (e.g. a 
trademark that resembles flags of 
nations)  
(4) A trademark that contains the 
portrait or name of another person 
without permission  
The ac quisition or holding of a right 
to use a domain name on the 
Internet that is identical or similar 
to another person's specific 
indication of goods or services 
pertaining to a person's business 
(e.g. a name, trade name, 
trademark, mark) is prohibited 
under the Unfair Competition 
Prevention Act  
Industrial design  
Design Act (Last 
amended in 
2016) Any design that is 
industrially applicable; 
shapes, patterns, 
colours, or any 
combination of an 
article (including a part 
of an article), which 
creates an aesthetic  
impression through the 
eye. 
A design in a graphic 
image on a screen that 
is provided for use in 
the operation of the 
article and is displayed 
on the article itself or 
another article that is 
used with the article in 
an integrated manner 
is covered.  20 yea rs from the date of 
registration  Non-registrable designs:  
(1) A design that was publicly 
known in Japan or a foreign 
country, prior to the filing of the 
application for a design registration  
(2) A design that was described in a 
distributed publication or m ade 
publicly available through an 
electric telecommunication line in 
Japan or a foreign country, prior to 
the filing of the application  
(3) A design similar to those 
mentioned in (1) and (2)  
(4) A design that a person 
ordinarily skilled in the art would 
have been able to easily create 
based on shapes, patterns or 
colours, or any combination publicly 
known in Japan or a foreign 
country, prior to the filing of the 
application  
(5) A design that is liable to injure 
public order or morality  
(6) A design that is  liable to create 
confusion with an article pertaining WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Main 
legislation  Coverage  Duration  Selected exclusions and 
limitations  
to another person's business  
(7) A design solely consisting of a 
shape that is indispensable for 
securing functions of the article  
(8) A design that is identical, or 
similar, to another person's design  
whose application has already been 
filed 
An applicant for a design 
registration may request that the 
design be kept in secret for a 
certain period (not exceeding three 
years from the date of the 
registration)  
Copyrights and related rights  
Copyright Law 
(Last amended 
in 201 4) Any work: a production 
in the literary, 
academic, artistic or 
musical domain, in 
which thoughts or 
sentiments are 
creatively expressed 
and which falls within 
the scope of one of the 
followings:  
(1) a work by a 
Japanese national,  
(2) a work that is first 
published in Japan, or  
(3) a work that Japan 
has the obligation to 
protect pursuant to an 
international treaty  
Any performance: 
acting dramatically, 
dancing, giving a 
musical performance, 
singing, giving a 
speech, giving a 
recitation, or by any 
other means for acting 
of a work  
Any phonogram: the 
fixation of sounds on a 
material object such as 
a phonograph disc or 
recording tape  
Any broadcasting/ 
cablecasting: the 
transmission to the 
public of wireless/wired 
communications with 
the objec tive of 
allowing the public to 
simultaneously receive 
transmissions of the 
same contents  A work: author's life and 
50 years from the 
beginning of the calendar 
year after the year in 
which the author dies  
A performance: 50 years 
from the beginning of the 
calendar year after the 
year in which the 
performance takes place  
A phonogram: 50 years 
from the beginning of the 
calendar year after the 
year in which the 
phonogram is published  
A broadcasting/ 
cablecasting: 50 years 
from the beginning of the 
calendar year after the 
year in which the 
broadcasting/cablecasting 
takes place  
An anonymous or 
pseudonymous work: 
50 years after the work is 
made public  
A work whose authorship 
is attributed to a 
corporation or other 
organization: 50 years 
after the work is made 
public  
A cinematographic work: 
70 years after the work is 
made public  A copyright in a work is not 
infringed by, inter alia : copying a 
work(except a cinematograph) for 
personal or family use; incidental 
copying of a work while taking 
pictures, videos or recordin g 
sounds;  exceptions and limitations 
on a work in experiments for the 
development and practical 
implications of technologies; 
copying for educational purposes; 
copying of a work by librarians; 
reproducing a work in Braille 
indicating the sources; reproduci ng 
a visual work by changing it into 
writing for the welfare of persons 
with hearing impairments; fair 
dealing with a work for the 
purposes of news reporting; 
reproducing a work for judicial 
proceedings indicating the sources; 
reproducing a work by a legis lative 
or administrative organ indicating 
the sources;  exceptions and 
limitations on a work for non -
commercial purposes without 
charging fees; quoting from a work 
indicating the sources;  exceptions 
and limitations on a work in the 
delivery of a political s peech 
indicating the sources; conducting 
necessary modification of a work of 
computer programming by an 
owner of a copy of the work  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Main 
legislation  Coverage  Duration  Selected exclusions and 
limitations  
Geographical indications  
Act on 
Protection of the 
Names of 
Specific  
Agricultural, 
Forestry and 
Fishery Products 
and Foods tuffs 
(Entered into 
force in 2015)  Geographical indication 
(GI): Any name of an 
agricultural, forestry or 
fishery product that is 
the combination of a 
name of the place of 
production and a 
common name of a 
product (e.g. Kobe 
Beef), whose 
reputation for the  good 
quality is attributed to 
the name of the place 
of production  Registrations of GIs are 
effective as long as GIs 
meet the prescribed 
requirements  Registrations of GIs become invalid 
when associations of farmers and 
processors that registered GIs 
dissol ve, or they abolish production 
control systems registered 
accompanied with GIs, by which 
they maintain the quality of their 
products  
New Plant Varieties  
Plant Variety 
Protection and 
Seed Act (Last 
amended in 
2015)  Any agricultural, 
forestry or aquatic 
plants meeting the 
following 
requirements:  
(1) the variety is  
clearly distinguishable 
from any other variety ;  
(2) all of the plants of 
the variety at the same 
propagation stage are 
sufficiently similar ; and 
(3) all of the 
expressions of the 
characteristics of the 
variety remain 
unchanged after 
repeated propagation  Duration of breeder's 
rights of plants (except 
perennial plants) is 
25 years, while that of 
perennial plants is 
30 years from the date of 
variety registrations  A variety may not be registered 
when the propagating material or 
harvested material of the variety 
has been transferred in Japan 
earlier than one year before the 
date of application for variety 
registration in the course of 
business  
A variety may not be registered if 
its name is identical or similar to a 
registered trademark of it or similar 
varieties  
A variety may not be registered if 
its name is identical or similar to a 
registered trademark of services 
relating to it or similar varieties.  
Trade Secrets  
Unfair 
Competition 
Prevention Act 
(Last amended 
in 2015)  A trade secret: a 
production method, 
sales method, or any 
other technical or 
operational information 
useful for business 
activities that is 
controlled as a secret 
and is not publicly 
known    
Act on the 
Circuit Layout of 
Semiconductor 
Integrated 
Circuits (Last 
amended in 
2014)  Any layout -design of 
circuitry elements and 
the lead wires 
connecting such 
elements in 
semiconductor 
integrated circuits  10 years from the date of 
registration  A layout -design that was exploited 
by a creator or an other person with 
authorization in the course of trade 
more than two years prior to the 
application for registration cannot 
be registered  
Any act of transferring, leasing or 
displaying semiconductor integrated 
circuits in the course of trade by a 
person wh o was unaware, without 
any fault, that it was manufactured 
imitating a registered layout -design 
is not deemed to be a conduct of 
infringement of the creator's right  
Source:  WTO document WT/TPR/S/211, 20  February  2009, and information provided by the autho rities of 
Japan.  
3.177.   The institutional framework remained broadly unchanged. The 2002 Basic Law on 
Intellectual Property (the Basic Law) sets the roles of the institutions involved in Japan's IP 
regime. The Intellectual Property Strategy Headquarters (the Hea dquarters) which was established WT/TPR/S/ 351/Rev.1  • Japan  
 
- 78 - 
 
  in the Cabinet Secretariat in March 2003 is in charge of, inter alia , coordinating the work of various 
governmental authorities responsible for the administration and enforcement of IPRs (Chart 3.4).  
Chart 3.4 Structure of IPR administration and enforcement  
Source:  Information provided by the authorities. Chart 3.4  Structure of IPR administration and enforcement
Cabinet Office 
Intellectual Property Strategy Headquarters
Ministry of Economy, 
Trade and Industry 
(METI) 
Agency for Cultural 
Affairs Food Industry Affairs 
BureauMinistry of Education, 
Culture, Sports, 
Science and 
Technology (MEXT) Ministry of Agriculture, 
Forestry and Fisheries
(MAFF)Ministry of 
Finance (MOF) 
Intellectual Property
Division •Policy Planning and 
Coordination Department
•Trademark, and 
Administrative Affairs 
Department
•Patent and Design 
Examination Department 
(Physics, Optics, Social
Infrastructure and Design)
•Patent Examination
Department (Mechanical  
Technology)
•Patent Examination
Department (Chemistry,  
Life Science and Material 
Science)
•Patent Examination 
Department (Electronic
Technology)
•Trial and Appeal DepartmentCustoms and 
Tariff  Bureau
Plant Variety Protection 
Office (PVP Office )Japan Patent Office (JPO)
Japan Copyright 
Office Customs Clearance 
Division
Office of IPRAll other 
Ministries
 
Source:  Information provided by the authorities of Japan.  
3.178.   The Basic Law also serves as the legal basis for Japan's strategic IP policy. It provides a 
mandate to the State to take measures to: promote R&D activities in the high value -added areas; 
promote the transfer of technology from universities to business sectors; improve IP acquisition 
procedures and legal proceedings to support business activities; strengthen IP enfor cement; 
establish harmonized international IP systems; provide effective and appropriate protection for 
innovation in new technological areas; research and analyse domestic and international trends of 
IP protection; and promote IP education and develop IP human resources.  
3.3.10.2   Patents  
3.179.   During the review period, Japan's patent regime was revised through different provisions 
of the Act on the Partial Revision of the Patent Act and Other Acts. Under the Act, if any provisions 
in an agreement, employment rule or any other contract that a right to obtain patent for any 
invention made by employee shall be vested in the employer, the right belongs to his/her 
employer at the time of invention . The employee has the right to receive "reasonable 
remuneration  or other economi c profits ", and the METI has defined guidelines for procedures to 
establish the rules  of "reasonable remuneration  or other economic profits ". WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.180.   According to the authorities, Japan has been considering measures necessary to 
implement  the TPP Agreement. Specif ically, it has been considering the possibility  of i) extending 
the 6 -month period of exception to lack of novelty of inventions  to 1 year, for inventions  that lost 
novelty by publication at an applicant's  will prior to filing an application; ii)  introduci ng a system 
allowing the extension of the term of a patent right in cases where the establishment of the patent 
right is registered after 5 years from the filing date of an application, or 3 years from the filing 
date of a request for examination, whicheve r is later.  
3.181.   The process to follow for patent application and registration, under the Patent Act, has not 
changed since the previous review. The Japan Patent Office (JPO) receives applications from 
domestic and international applicants on the basis of the Paris Convention or the Patent 
Cooperation Treaty (PCT). It has issued guidelines on the practices and procedures to be followed 
in examining and processing patent applications and registrations.124  
3.182.   In 2013, the JPO achieved its goal of shortening the perio d from filing a request for 
examination to issuing a first action (FA pendency) to 11 months or less. According to the 
authorities, the JPO is in the process of moving toward its next decade goal, which is further 
shortening "total pendency" and "FA penden cy" to 14 months or less on average and 10 months or 
less on average, respectively.  
3.183.   Although the numbers of patent applications by filing year have been gradually decreasing 
over recent years, the number of patent registrations and requests for examination  by filing year 
has remained almost unchanged over the past several years, and therefore, the patent registration 
rate (the ratio of the number of patent registrations to the number of patent applications) tends to 
be increasing. According to the authoriti es, this shows that applicants have become more strictly 
selective in filing applications, further indicating that companies' IP strategies have been shifting 
from quantity to quality. In addition,  the number of patent applications filed with the JPO by 
foreign applicants slightly decreased  to 59,882  in 201 5, compared with 60,030  in 201 4 
(Table  3.32) . In 201 5, applications by foreigners were dominated by the United States, the 
European Union, the Republic of Korea , and China.125  
Table 3.32 Patent applications and patents granted, 2007 -15 
 2007  2008  2009  2010  2011  2012  2013  2014  2015  
Patent applications to JPO by origin  
Japan  333,498  330,110  295,315  290,081  287,580  287,013  271,731  265,959  258,839  
Other  62,793  60,892  53,281  54,517  55,030  55,783  56,705  60,030  59,882  
          
Patent applications originating from Japan to all patent offices  
Total applications of 
Japanese origin  507,508  509,093  462,666  467,249   473,751  487,360  470,615  464,274  .. 
Patents granted by JPO by origin  
Japan  145,040  151,765   164,459  187,237  197,594   224,917  225,571  177,750  146,749  
Other  19,914   25,185  28,890   35,456   40,729   49,874  51,508  49,392  42,609  
.. Not available.  
Source:  Information provided by the authorities o f Japan.  
3.184.   Parallel imports are allowed in Japan in accordance with the principle of "international 
exhaustion". Compulsory licences may be granted under any of the following circumstances: 
(1) when a patent has not been worked for three consecutive years or  more; (2) when the patent 
is needed to be worked for another patent and its owner is unwilling to allow its use ; or (3) when it 
is thought to be necessary for the public welfare . However, as of August  2016, Japan has never 
granted any compulsory licences.126 
3.3.10.3   Utility models (UMs)  
3.185.   Under the responsibility of the JPO, the registration system for UMs is nearly the same as 
for patents, with the exception of examination of novelty and inventive step. The number of UM 
                                                
124 JPO online information. Viewed at: http://www.jpo.go.jp/tetuzuki_e/t_tokkyo_e/1312 -002_e.htm . 
125 Online information. Viewed at: http://www.jpo.go.jp/shiryou/toushin/nenji/nenpou2016_index.htm . 
126 Online information. Viewed at: http://www.wipo.int/scp/en/exceptions/rep lies/japan.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  applications continued to decrease until 2013, following a long -term trend which began in 2005, 
when a new system was adopted to make the regime more attractive (Table 3.33).  
Table 3.33 Utility model applications and registrations, 2007 -15 
 2007  2008  2009  2010  2011  2012  2013  2014  2015  
UM applications to JPO by origin  
Japan  8,399  7,717  7,799  6,889  6,305  6,292  5,965  5,429  5,213  
Other  1,916  1,735  1,708  1,790  1,679  1,820  1,657  1,666  1,647  
UM registrations granted by JPO by origin  
Japan  8,160  7,187  7,361  6,756  5,998  6,221  5,738  5,322  5,098  
Other  1,920  1,730  1,658  1,816  1,597  1,833  1,625  1,695  1,597  
Source:  Information provided by the authorities of Japan.  
3.3.10.4   Designs  
3.186.   In May 2015, Japan acceded to the Geneva Act of the Hague Agreement Concerning the 
International Registration of Industrial Designs. Under the Act, by filing a single international 
application directly or via the JPO to the International Bureau of the WIPO, an applicant can in 
effect simultaneously file in multiple contrac ting parties. The new system will result in cost saving 
for applicants, compared to filing multiple separate applications in different jurisdictions.  
3.187.   The number of design  applications has fluctuated in recent years, with a downward trend 
since 2005 (Table 3.34). Although the lacklustre  economic context may have played a role, the 
JPO has also pointed out the fact that more applications are being filed with foreign offices in line 
with Japanese companies expanding their business operations overseas.  
Table 3.34 Design applications and registrations, 2007 -15 
 2007  2008  2009  2010  2011  2012  2013  2014  2015  
Design applications to JPO by origin  
Japan  32,202  29,621  27,674  28,083  26,658  27,934  26,407  24,868  24,80 4 
Other  4,342  3,948  3,201  3,673  4,147  4,457  4,718  4,870  5,099  
Design registrations granted by JPO by origin  
Japan  25,228  25,986  25,819  24,458  23,042  24,610  24,272  23,092  21,950  
Other  3,061  3,396  2,993  2,980  3,232  3,739  4,016  4,214  4,347 
Source:  Information provided by the authorities of Japan.  
3.3.10.5   Trademarks  
3.188.   The procedure for registration of trademarks did not change during the review period. 
Applications are filed with the JPO for registration. Protection under the Trademark Act is only 
available for registered trademarks. A decision resulting from an examination is recorded in the 
trademark register if annual registration fees are paid six months before the expiration of the 
term.  
3.189.   In Japan, trademarks  may include characters, figures, sym bols, three -dimensional shapes 
and a combination thereof. Since April 2015, motion marks , hologram marks, colour  per se  marks , 
sound marks , and position marks  can be registered as trademarks.127 
3.190.   The number of trademark  applications increased from 124,442 in 2014 to 147,283 in 2015 
(Table 3.35).  
Table 3.35 Trademark applications and registrations, 2007 -15 
 2007  2008  2009  2010  2011  2012  2013  2014  2015  
Trademark applications by origin  
Japan  118,1 55  95,674  90,474  92,163  84,67 3  95,548  92,495  100,053  117,960  
Other  25,066  23,511  20,367  21,356  23,387  23,462   25,179  24,389  29,323  
Trademark registrations by origin  
                                                
127 In 2014, Japan's Trademark Act was revised to expand the scope of protection by adding 
non-traditional trademarks such as "colour" and "sound". The Amendment came into force in 2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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   2007  2008  2009  2010  2011  2012  2013  2014  2015  
Japan  79,836  82,469  88,449  79,338  70,800  77,129  82,736  79,562  75,965  
Other  16,695   17,774  20,268   18,442   18,479   19,231   20,663  20,334  22,120  
Source:  Information provided by the authorities of Japan.  
3.3.10.6   Geographical indications  
3.191.   The new law for protecting geographical indications (Act on Protection of the Names of 
Specific Agricultural, For estry and Fishery Products and Foodstuffs) was prepared by the Ministry 
of Agriculture, Forestry and Fisheries, and came into force in June 2015. It applies only to 
geographical indications of foods, beverages,  and agricultural and marine products.  
3.192.   Under the new system, in order to protect a geographical indication, a producers group 
may file an application, which includes product specification of the geographical indication and 
quality control plan, to the Ministry of Agriculture, Forestry and Fisheries.  The Minister of 
Agriculture, Forestry and Fisheries must make a public notice of the application for three months 
for possible opposition.  
3.193.   The GI name must be linked with  the location where the product is produced and a given 
quality, reputation or other c haracteristic of the product must be essentially attributable to its 
geographical origin . It also requires that a product be continuously produced throughout a certain 
period of time  in a particular region.  
3.194.   As of October  2016, 21 products were registered u nder the new law (Table 3.36).  
Table 3.36 Information on registered GIs  
Registration  No. Name  Category of products  Date  
1 Aomori Cassis  Class 3: Fruit (Blackcurrant)  22/12/2015  
2 Tajima Gyu/Tajima Beef  Class 6: Fresh meat (Beef)  22/12/2015  
3 Kobe Beef  Class 6: Fresh meat (Beef)  22/12/ 2015 
4 Yubari Melon  Class 2: Vegetables (Melon)  22/12/2015  
5 Traditional Authentic YAME 
GYOKURO Yame Dentou 
Hongyokuro  Class 32: Drinks and other 
products except for alcoholic 
beverages (Tea Leaves)  22/12/2015  
6 Edosaki Kabocha  Class 2: Vegetables (Squa sh) 22/12/2015  
7 Kagoshima no Tsubozukuri Kurozu  Class 27: Seasonings and soups 
(Black Vinegar)  22/12/2015  
8 Kumamoto Rush  Kumamoto 
kensan Igusa  Class 4: Other agriculture 
products (include industrial 
crops) (Rush)  2/2/2016  
9 Kumamoto Rush Mats Kumamoto  
kensan Igusa Tatami omote  Class 41: Tatami facings (Rush 
Tatami Facing)  2/2/2016  
10 Iyo Raw Silk  
Iyo Kiito  Class 42: Raw silk (Raw Silk of 
Domesticated Silkworms)  2/2/2016  
11 Tottori Sakyu Rakkyou/Fukube 
Sakyu Rakkyou  Class 2: Vegetables (Raw 
Shallots)  10/3/2016  
12 Miwa Somen  Class 15: Cereal preparations 
(Uncooked Somen Noodles)  29/3/2016  
13 ICHIDA GAKI  
Ichida Gaki  Class 18: Processed fruits (Dried 
Japanese Persimmon)  12/7/2016  
14 Yoshikawa Nasu  Class 2: Vegetables (Eggplant)  12/7/2016  
15 Yatabe Neg i Class 2: Vegetables (Welsh 
Onion)  7/9/2016  
16 Yamauchi Kabura  Class 2: Vegetables (Turnip)  7/9/2016  
17 Kaga Maruimo  Class 2: Vegetables (Japanese 
yam) 7/9/2016  
18 Mishima Bareisho  Class 2: Vegetables (Potato)  12/10/2016  
19 Shimonoseki Fuku  Class 10: Fishes (Puffer fishes 
and filefishes)  12/10/2016  
20 Noto-Shika Korogaki  Class 18: Processed fruits (Dried 12/10/2016  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 82 - 
 
  Registration  No. Name  Category of products  Date  
Japanese Persimmon)  
21 Tokachi Kawanishi Nagaimo  Class 2: Vegetables (Japanese 
yam) 12/10/2016  
Note:  Names in italics are provided for r eference.  
Source:  Information provided by the authorities of Japan.  
3.195.   Prior to the enactment of this law, Japan had no system to directly protect geographical 
indications  of foodstuffs and agricultural, forestry and fishery products . Although, since 2006, th e 
"Regional Collective Trademark System" has granted protection to a combined trademark 
composed of a place name  and a product or service name, as long as it meets several 
requirements under the current trademark law. There are several differences between the new 
system of GI protection and the Collective Trademark System (Table 3.37).  
Table 3.37 Major distinctions between MAFF's GI system and the JPO's Collective 
Trademark System  
 MAFF's GI system  JPO's Collec tive Trademark System  
Applicant  Producer groups, processor groups or 
local branding associations  
Formal legal status is not required  Cooperative associations, NPOs or 
commerce and industry associations  
Name  A product name with a place name, 
or without a place name if consumers 
generally understand the product to 
be tied to a particular region  Pairing a place name and product name 
is required  
Familiarity  n.a. A name must be well -known as a 
trademark among consumers  
Quality standard  A quality standard mus t be 
established and announced officially  n.a. 
Quality control  A registered producer group must 
practice quality control based on 
quality control plan  n.a. 
Enforcing entity (against 
unauthorized use, etc.)  MAFF  Proprietor of the trademark  
Production his tory Must be "traditional" (approximately 
25 years)  n.a. 
Length of protection  Indefinite  10 years (renewable)  
n.a. Not applicable.  
Source:  USDA Foreign Agricultural Service, Japan to implement GI system on 1  June 2015; and information 
provided by the aut horities of Japan.  
3.196.   Registration of GIs for alcoholic beverages is under the responsibility of the Commissioner 
of the National Tax Agency. The Agency designates GIs in accordance with the Indicating  
Standards Concerning Geographical Indications for Liquor under the Act Concerning  Liquor  
Business Associations and Measures for Securing Revenue from Liquor Tax. Table 3.38 provides 
the list of current GIs for alcoholic beverages in Japan.  
Table 3.38 List of GIs fo r alcoholic beverages designated by the Commissioner of the 
National Tax Agency  
Name  Geographical scope of origin of the product  Wine/Spirits/Sake  
Yamanashi  Yamanashi Prefecture  Wine 
Iki Iki-city, Nagasaki Prefecture  Spirits  
Kuma  Kuma -gun, Hitoyoshi -city 
Kumamoto Prefecture,  Spirits  
Ryukyu  Okinawa Prefecture  Spirits  
Satsuma  Kagoshima Prefecture  
(except Amami -city and Ooshima -gun) Spirits  
Hakusan  Hakusan -city, Ishikawa Prefecture  Sake 
Nihonshu /Japanese sake  Japan  Sake 
Source:  Information provided by the authorities of Japan.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  3.3.10.7   Copyright  
3.197.   The 2012 amendment of the Copyright Law, which imposes criminal penalties for illegally 
downloading copyrighted materials, entered into force in 2013.  
3.198.   Various amendments were made to the Copyright Law in 201 4. These inc lude the 
amendment to implement the Beijing Treaty on Audiovisual Performances. In addition, revisions 
were made to the Act to clarify that not only books published on paper but also electronic books 
are covered by the right of publication. These amendment s entered into force in 2015. 
Registrations are not required to obtain copyright in Japan. Therefore, no accurate data is available 
on the number of copyrights created in Japan.  
3.199.   The Agency for Cultural Affairs, a government office, is responsible for copyr ight 
registration, except for computer programs, whose registration is conducted by the Software 
Information Center.  
3.3.10.8   Enforcement  
3.200.   Japan has notified its checklist of issues on enforcement of intellectual property rights 
since 1997.128 
3.201.   District courts have jur isdiction over IPR infringements at first instance. Regarding 
patent -related cases, Osaka District Court and Tokyo District Court have exclusive power at first 
instance. As the court of second instance, the Intellectual Property High Court reviews decision s 
made by district courts; and the Supreme Court is the jurisdiction of final instance.  
3.202.   Under the METI, the Office for Intellectual Property Right Protection is in charge of 
providing consultation services to industries that face IP infringement abroad. A ccording to its 
2016 annual report, the office has received 10,544 consultations and requests for information from 
various industries since its establishment in 2004. The requests concerned mainly trademark 
infringement in China.  
3.203.   The number of IPR infring ement cases handled by domestic courts has remained on an 
upward trend since 2009. Over 600 cases were dealt with by enforcement institutions in 2015, in 
which over 800 individuals were arrested (Chart 3.5). Efforts to combat counterfeiting and piracy 
also included confiscation of IPR -infringing goods. However, according to the National Police 
Agency online information the number of confiscated goods decreased dramatically from 429,934 
in 2014 to 175,488 in 2015 (Table 3.39).  
                                                
128 WTO document IP/N/6/JPN/1, 18 February 1997.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 3.5 IP cases handled by courts, 2006 -15 
01002003004005006007008009001,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Number of IP infringement cases Number of persons arrested for IP infringementChart 3 .[IP]   IP cases handled by courts, 2006 -15
Source:  The National Police Agency online information.   Viewed at: http://www.npa.go.jp/safetylife/seikeikan/niseburando.pdf
 
Source:  The National Police Agency online information (in Japanese). Viewed at: 
http://www.npa.go.jp/safetylife/seikeik an/niseburando.pdf . 
Table 3.39 Statistics on confiscated goods, 2013 -15 
Type  2013  2014  2015  
Fake brand -name products  104,776  118,464  84,411  
 Videos/DVDs  576,075  290,659  82,770  
 Computer software  3,278  1,592 448 
 Music CDs/Music tapes  5,837  16,127  181 
 Products featuring characters  13,482  3,092  7,678  
Total 703,448  429,934  175,488  
Source:  The National Police Agency online information (in Japanese). Viewed at: 
http://www.npa.go.jp/safetylife/seikeikan/niseburando.pdf . 
3.204.   Counterfeiting and piracy continue to cause noticeable economic losses to Japanese 
companies. Although the amount of damages has been on a declining trend since 2006, it  remains 
high, as it stood at above ¥100 billion in 2014 (Chart 3.6).  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 3.6 Amount of damages, 2005 -14 
(¥ billion)  
020406080100120140160180
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Chart 3 .[IP]   IP -amount of damages, 2005 -14
Source:  JPO's survey report.¥billion
Source:  JPO's survey report.  
3.205.   Every fiscal year since 1996, the JPO conducts a survey on t he conditions of Japanese 
enterprises that suffer actual losses caused by counterfeiting. The exercise supplies data to guide 
anti-counterfeit and anti -piracy measures by policymakers and companies, as well as to raise 
consumer awareness regarding IPRs inf ringements.  
3.206.   In its 2015 Survey Report on Losses Caused by Counterfeiting, the JPO indicated that of 
the 896 companies that were surveyed, 21.9% suffered losses due to counterfeiting.  
3.207.   Japan Customs is responsible for border enforcement on importation, expo rtation and 
transit of infringing goods. Right holders may lodge an application with customs to suspend the 
release of goods suspected of infringing IPRs. Both right holders and importers are provided with 
opportunities to submit their opinions and evidenc e to customs within 10 working days (3 working 
days for perishable items) of the day following the date of the letter of notification.  
3.208.   The scope of enforcement by customs covers: trademarks, copyright and related rights, 
patents, industrial designs, utilit y models and plant breeders' rights, as well as on the grounds of 
violation of the Unfair Competition Prevention Act . Although the majority of suspension cases are 
brought by right holders, Japan Customs is empowered to act ex officio  when there is prima f acie 
evidence of infringement. In such cases, the customs official is responsible for determining 
whether there is such an infringement.  
3.209.   In general, customs authorities confiscate goods identified as infringing IPRs. The number 
of enforcement cases in rel ation to imports remained on an upward trend from 2011 to 2014, 
when the number of cases hit a record of 32,060, before dropping to 29,274 in 2015 (Chart 3.7). 
Seizures of exports remain marginal, due to strict domestic enforcement; there were no cases 
handled in relation to exports in 2013 (Chart 3.8).  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 3.7 Import seizures, 2011 -15 
0200,000400,000600,000800,0001,000,0001,200,000
05,00010,00015,00020,00025,00030,00035,000
2011 2012 2013 2014 2015
Source:  Japan Customs, 2015 Seizure Statistics of IPR Border Enforcement.Number of casesChart 3.[m seizures] Import seizures, 2011 -15
Number of articles
Number of articlesNumber of cases
 
Source:  Japan Customs, 2015 Seizure  Statistics of IPR Border Enforcement . 
Chart 3.8 Export seizure, 2011 -15 
02505007501,0001,2501,500
012345
2011 2012 2013 2014 2015
Source:  Japan Customs, 2015 Seizure Statistics of IPR Border Enforcement.Number of casesChart 3.[x seizures] Export seizures, 2011 -15
Number of articles
Number of articlesNumber of cases
 
Source:  Japan Customs, 2015 Seizure  Statistics of IPR Border Enforcement . 
3.3.10.9   International cooperation and harmonization  
3.210.   Japan is a signatory to several bilateral and multilateral frameworks on IP issues. It has 
signed the m ain international treaties and agreements, including some of those administered by 
the World Intellectual Property Organization (WIPO) .129 Most of Japan's RTAs /EPAs  have an IP 
section, the main purpose of which is to secure adequate, effective, non -discrimin atory, and 
transparent IP  protection and enforcement in trade.  
3.211.   During the review period, Japan continued to expand its pa rticipation in international 
IP frameworks. In September 2014, the Locarno Agreement Establishing an International 
Classification for I ndustrial Designs came into force in Japan, and in May 2015, the Geneva Act of 
the Hague Agreement Concerning the International Registration of Industrial Designs came into 
force. The Patent Law Treaty (PLT) and the Singapore Treaty on the Law of Trademark s (STLT) 
came into force on 11 June 2016 in Japan.  
3.3.10.10   The 2015 IP strategic programmes  
3.212.   Pursuant to the objectives and mandates set out in the Basic Law, the Headquarters issues 
IP strategic programmes on an annual basis. Since its inception in 2003, the prog rammes have led 
to a number of achievements, including new legislation, and revisions of existing legislation 
(patent law, copyright law, etc.), IP infrastructure, and institutions. The main improvements 
include the establishment of the Intellectual Proper ty High Court in April 2005, the establishment 
                                                
129 Since it joined WIPO in 1975, Japan has acceded to 15 international intellectual property treaties 
administered by WIPO; it is currently a member of seven committees.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  of technology licence offices at universities, the restructur ing of education systems for 
IP professional training, and an increase in the number of patent examiners and patent attorneys, 
the review of employe e invention provisions, and the strengthening of trade secret protection.  
3.213.   The 2015 Strategic Programme identifies, inter alia , three pillars to develop high 
technology in Japan and enrich the IP culture among businesses: (i) promotion of local utilization  
of intellectual property; (ii) activation of the intellectual property dispute resolution system; and 
(iii) overseas expansion of content (such as manga, animation, and dramas) and their peripheral 
industries.130 
3.214.   Despite the vital importance of SMEs in Japa n's economy, in 2014, they made up only 13% 
of patent applications. As a consequence, the authorities have put various mechanisms in place to 
promote SMEs' use of intellectual property, and enhance their collaboration with large 
enterprises/universities. S pecific counters have also been established throughout the country to 
respond to SMEs' various management issues.  
3.215.   The IP dispute resolution system is set to undergo some significant changes under the 
2015 strategic plan. These will include: enhancing the validity of rights from the time they are 
granted through dispute settlement; improving evidence collection procedures to reduce the 
burden of proof on right holders; reforming the compensation for damages to reflect the actual 
status of business. Specific  measures are also being taken to improve SMEs full access to a fairer 
dispute settlement system.  
3.216.   Japan has a vast content industry. It includes mainly anime/manga, movies, music, 
games, and broadcast programmes. However its related exports remained limite d.131 The strategic 
programme seeks to tap the potential of the industry, through various export promotion measures.  
 
                                                
130 For more details regarding the 2015 IP strategic programme, see at the Cabinet's online inf ormation. 
Viewed at: http://www.kantei.go.jp/jp/singi/titeki2/kettei/chizaikeikaku_2015gaiyou_e.pdf . 
131 Japan's domestic content industry generated some ¥12,000 b illion in 2013; while the value of its 
related exports stood at only ¥1,441.6 billion.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4  TRADE POLICIES IN SE LECTED SECTORS  
4.1  Agriculture  
4.1.  In 2014 (the most recent year for which data are available), agriculture (including forestr y 
and fishing) contributed around 1.2% of GDP, and 4.6% of total employment (Table 4.1). Although 
agriculture is a relatively small part of the economy and employment , it is important for historical 
and cultural reasons and, according to the authorities, f or food security.  
Table 4.1 GDP and employment figures by economic activit y, 2011 -14 
 2011  2012  2013  2014  
Share of economic activit y in current GDP, at factor cost (%)  
Agriculture, forestry, and fishing  1.2 1.2 1.2 1.2 
Mining  0.1 0.1 0.1 0.1 
Manufacturing  18.6 18.6 18.6 18.7 
 Food products and beverages  2.7 2.7 2.7 2.7 
 Electrical machinery ,equipment and supplies  2.7 2.3 2.4 2.6 
 Transport equipment  2.2 2.5 2.4 2.5 
Construction  5.6 5.7 6.0 6.1 
Electri city, gas and water supply  1.8 1.7 1.7 2.0 
 Electricity supply  0.8 0.7 0.8 1.0 
 Gas and water supply  1.0 1.0 1.0 1.0 
Services  72.7 72.8 72.4 72.0 
 Wholesale and retail trade  14.3 14.4 14.4 14.2 
 Wholesale trade  8.4 8.4 8.3 8.1 
 Retail trade  5.9 6.0 6.1 6.1 
 Finance and insurance  4.8 4.6 4.5 4.4 
 Real estate  12.1 12.0 11.8 11.7 
 Renting of dwellings  10.6 10.5 10.4 10.2 
 Other real estate  1.5 1.5 1.5 1.5 
 Transport  4.9 5.0 4.9 5.1 
 Information and communications  5.5 5.5 5.5 5.5 
 Business activit ies 7.0 6.9 7.1 7.1 
 Community and social services  6.2 6.5 6.5 6.4 
 Personal services  6.3 6.4 6.3 6.3 
 Government services  9.4 9.2 9.1 9.1 
 Producers of private non -profit services to households  2.3 2.4 2.3 2.3 
Share of employment by economic activit y (%) 
Agriculture, forestry, and fishing  4.9 4.8 4.7 4.6 
Mining  0.1 0.1 0.0 0.0 
Manufacturing  15.7 15.5 15.1 15.0 
 Food products and beverages  2.2 2.2 2.2 2.1 
 Electrical machinery, equipment and supplies  2.3 2.2 2.1 2.0 
 Machinery  2.0 2.0 2.0 1.9 
 Transport equipment  2.0 2.0 1.9 1.9 
Construction  8.0 8.1 8.0 8.0 
Electricity, gas and water supply  0.8 0.8 0.8 0.8 
Services  70.6 70.8 71.5 71.6 
 Wholesale and retail trade  18.1 17.9 18.0 17.9 
 Finance and insurance  2.8 2.9 2.8 2.6 
 Real estate  1.7 1.7 1.6 1.6 
 Transport  5.5 5.4 5.4 5.3 
 Information and communications  2.9 2.9 2.8 3.0 WT/TPR/S/ 351/Rev.1  • Japan  
 
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   2011  2012  2013  2014  
 Government services  6.1 6.1 6.0 6.0 
 Producers of private non -profit services to households  2.6 2.7 2.8 2.8 
 Other services  30.8 31.2 32.1 32.4 
Source:  Cabinet Offi ce online information. Viewed at: http://www.cao.go.jp/index -e.html .  
4.2.  Farms remain small , and holdings are often fragmented (Table 4.2). In 2015 , there were 
about 2.2 million farm households, of which 1.3 m illion were classified as commercial farm 
households (defined as farms of at least 0.3 ha or with annual sales of at least ¥500,000). 
Commercial farm  households  may be classified as: either part-time or full-time; or as a business, 
semi-business, or side -business (Table 4.2). Even commercial farm households  are usually small in 
size; in 2015 the average size was 2.2 ha.  
Table 4.2 Farm households and average farm size, 2011 -15  
 Unit 2011  2012  2013  2014  2015  
Farm households  '000 .. .. .. .. 2,155  
Of which        
Commercial farm households  '000 1,561  1,504  1,455  1,412  1,330  
Of which        
Full-time '000 439 423 415 406 443 
Part-time '000 1,122  1,081  1,040  1,006  887 
Commercial farm households  '000 1,561  1,504 1,455  1,412  1,330  
Of which        
Business farms  '000 356 344 325 304 294 
Semi-business  '000 363 344 333 310 257 
Side-business  '000 843 817 798 798 779 
Ha cultivated land/household        
Commercial farm households  Ha 2.02 2.07 2.12 2.17 2.20 
Busine ss farm household s Ha 5.05 5.18 5.38 5.63 5.57 
.. Not available.  
Note:  Definitions:  
 Farm household: operates a farm of at least 10 ares of cultivated land or  with sales of agricultural 
products of  at least  ¥150,000 in the previous year.  
 Commercial farm household: cultivated land under management of  at least  30 ares or with sales of 
agricultural products of at least  ¥500,000 in the previous year.  
 Full-time farm household: no household member s engaged in jobs other than farming.  
 Part-time farm household:  at least one  household membe r engaged in jobs other than farming.   
 Business farm household: commercial farm household where agricultural income exceeds  50% of 
the household income, and with at least one family member (under 65 years old ) engaged in own 
farming for  at least  60 days  per year . 
 Semi-business farm household: commercial farm household for which non-agricultural income forms  
the majority of the household income, and with at least one  family member (under 65 years old ) 
engaged in own farming for  at least  60 days  per year . 
 Side-business farm household: farm household with no member s (under 65 years old ) engaged in 
own farming for more than 60  days per year . 
Source:  The Census of Agriculture and Forestry and Report of Survey on Movement Entities o f Agricultural 
Structure.  
4.3.  Total agricultural output (the sum of the value of crops, livestock and processed agricultural 
products) has been quite stable over the past ten years as, in general, domestic prices and 
national production have changed very littl e. Rice remains the most important single product but 
its total output is less than that of vegetables or livestock (Table  4.3). Rice accounts for about a 
quarter of total agricultural output, with nearly half of commercial farm households specialized in 
rice production and well over half of cultivated land under rice production.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 4.3 Total agricultural production and production of selected products, 2011 -15  
 Total 
agricultural 
output  Crops  Rice Vegetabl es Wheat  Soya beans  
(¥ bn)  (¥ bn)  ('000 
tonnes)  (¥ bn)  ('000 
tonnes)  (¥ bn)  ('000 
tonnes)  (¥ bn)  ('000 
tonnes)  
2011 8,246  5,639  1,850  8,402  2,134  13,513  .. 746 .. 219 
2012 8,525  5,879  2,029  8,523  2,190  13,799  .. 858 .. 236 
2013 8,467  5,703  1,781  8,607 2,253  13,551  .. 812 .. 200 
2014 8,364  5,363  1,434  8,439  2,242  13,764  .. 852 .. 232 
2015 .. .. .. 7,989  .. .. .. 1,004  .. 242 
 Livestock and its 
product  Beef 
cattle  Beef Raw milk  Pigs Pig meat  Hen eggs  
(¥ bn)  (¥ bn)  ('000 
tonnes)  (¥ bn)  ('000 
tonnes)  (¥ bn)  ('000  
tonnes)  (¥ bn)  ('000  
tonnes)  
2011 2,551  463 500 658  7,474  536 1,267  451 2,483  
2012 2,588  503 519 687  7,630  537 1,297  420 2,507  
2013 2,709  519 508 682 7,508  575 1,309  464 2,522  
2014 2,945  594 502 697 7,334  633 1,264  511 2,502  
2015 .. .. 481 .. 7,379  .. 1,254  .. 2,521  
.. Not available.  
Source:  Statistical Year Books and data provided by the authorities of Japan . 
4.1.1   Trade  
4.4.  Japan has a deficit in trade in agricultural goods with imports of over US$53.7 billion and 
exports of US$3.6 billion in 2015.1 In current U .S. dollar value terms, imports have decreased over  
the past five years, while exports have been stable (Chart 4.1).  
Chart 4.1 Trade in agriculture, 2011 -15 
0%1%2%3%4%5%6%7%8%9%10%
01020304050607080
2011 2012 2013 2014 2015Exports of agricultural products (US$ billion)
Imports of agricultural products (US$ billion)
Exports of agricultural products as a % of total
exports
Imports of agricultural products as a % of total
importsChart 4.1 Trade in agriculture, 2011 -15
US$billion
Source: WTO calculations, based on UNSD Comtrade database.Note: Data is based on WTO agriculture definition.
 
Note:  Data based on WTO agricu lture definition.  
Source:  WTO calculations, based on UNSD Comtrade database.  
4.5.  Imports of agricultural products are widely spread across many different tariff lines with the 
top ten products representing around 40%  of total agricultural imports. Several of t he main 
imported tariff lines are cereals and oilseeds, a significant proportion of which is for processing into 
food and animal feedstuffs (Table 4.4).  
4.6.  Exports of agricultural products from Japan tend to be of processed products. Although the 
overall val ue of exports has grown over the past ten years, performance has been mixed among 
different tariff lines; for example , exports of bakers' wares have increased in both volume and 
value, while exports of cigars and cigarettes have decreased (Table 4.5).  
                                                
1 For the purposes of this Section of the Trade Policy Re view report , the definition of agricultural product 
used is that set out in Annex 1 of the Agreement on Agricult ure where fish and fish products are taken to 
include HS2002 Headings 020840, 03, 051191, 1504, 1603, 1604, 1605, and 230120.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 4.4 Imports of agricultural products, 2011 -15 
HS2002 - Products   2011  2012  2013  2014  2015  
Total  US$ million  66,818  66,174  61,380  58,960  53,666  
0203 - Meat of swine, fresh,  chilled or 
 frozen  '000 tonnes  793 779 738 829 791 
US$ million  5,225  5,122  3,996  4,315  3,513  
1005 - Maize  '000 tonnes  15,285  14,895  14,401  15,035  14,707  
US$ million  5,355  5,127  4,750  3,862  3,236  
2402 - Cigars, … and cigarettes  '000 tonnes  90 83 80 74 75 
US$ million  5,777  5,367  4,103 3,364  3,078  
1602 - Other prepared or preserved 
 meat, meat offal or blood  '000 tonnes  612 656 654 620 605 
US$ million  2,855  3,126  2,960  2,824  2,629  
1201 - Soya beans  '000 tonnes  2,831  2,727  2,762  2,828  3,243  
US$ million  1,812  1,811  1,883  1,833  1,703 
1001 - Wheat and meslin  '000 tonnes  6,214  5,970  6,200  5,759  5,531  
US$ million  2,710  2,156  2,278  1,971  1,652  
0901 – Coffee  '000 tonnes  423 387 464 417 442 
US$ million  2,059  1,700  1,586  1,442  1,581  
0201 - Meat of bovine animals, fresh 
 or chille d '000 tonnes  213 212 212 219 205 
US$ million  1,454  1,515  1,455  1,597  1,507  
2204 - Wine of fresh grapes  '000 tonnes  215 .. 463 279 289 
US$ million  1,331  1,575  1,582  1,642  1,490  
0202 - Meat of bovine animals, frozen  '000 tonnes  304 302 322 299 289 
US$ million  1,190  1,245  1,275  1,296  1,277  
.. Not available.  
Source:  UNSD Comtrade.  
Table 4.5 Exports of agricultural products, 2011 -15 
HS2002 - Products  2011  2012  2013  2014  2015  
Total  US$ million  3,343  3,341 3,196  3,356  3,641  
2106 - Food preparations n.e.s.  '000 tonnes  22 22 22 26 29 
US$ million  376 363 336 346 419 
2103 - Sauces and preparations  '000 tonnes  70 69 74 82 92 
US$ million  326 317 289 290 293 
1905 - Bread, pastry, … other bakers' wares  '000 tonnes  16 18 22 26 30 
US$ million  180 208 218 252 281 
2402 - Cigars, … and cigarettes  '000 tonnes  16 14 13 10 11 
US$ million  323 300 228 182 194 
2202 - Waters with added sugar  '000 tonnes  43 .. 132 72 81 
US$ million  128 151 127 150 163 
2208 - Alcohol of strength less than 80% vol.  '000 tonnes  8 .. .. 13 15 
US$ million  72 84 88 101 130 
1209 - Seeds, fruit, spores, for sowing  '000 tonnes  1 1 1 1 1 
US$ million  137 117 119 121 125 
2206 - Other fermented beverages  '000 tonnes  16 .. 77 18 20 
US$ million  116 117 112 113 120 WT/TPR/S/ 351/Rev.1  • Japan  
 
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  HS2002 - Products  2011  2012  2013  2014  2015  
4103 - Other raw hides and skins  '000 tonnes  69 70 71 68 66 
US$ million  113 122 125 110 74 
602 - Other live plants, cuttings, and slips  '000 tonnes  .. .. .. 24 .. 
US$ million  87 105 100 79 65 
.. Not availabl e. 
Source:  UNSD Comtrade.  
4.1.2   Agricultural policies  
4.1.2.1   Legal and institutional framework  
4.7.  The Ministry of Agriculture, Forestry and Fisheries (MAFF) is responsible for agricultural 
policy. The Ministry includes several divisions which deal with all aspects of agri culture (as well as 
forestry and fishing), including trade policy and trade negotiations relating to agricultural products, 
administering tariff quotas, statistics, domestic market supervision, agricultural insurance, and 
SPS and TBT measures relating to a griculture, and overseeing and promoting research and 
development undertaken under the Agriculture, Forestry and Fisheries Research Council.2  
4.8.  The Headquarters on Creating Dynamism through Agriculture, Forestry and Fishery Industries 
and Local Communities,  established in 2013, is chaired by the Prime Minister and includes 
government Ministers. In May 2016, the Headquarters approved a strategy to increase exports of 
agricultural, forestry and fisheries products and food .3 
4.9.  Japan's agricultural policy is set o ut in the Food, Agriculture and Rural Areas Basic Plan which 
is reviewed roughly every five years. The current Plan, adopted in March 2015, sets out the 
objectives of doubling incomes in agriculture and rural areas over the next ten years by increasing 
domestic and export demand, improving value chains, reducing costs, promoting structural reform, 
and improving productivity.4 Agricultural policy continues to emphasi ze self -sufficiency, and the 
new Basic Plan sets self -sufficiency targets for FY2025 of 45% o n a calorie basis and 73% on a 
production value basis, as well as a self -sufficiency target for feeds of 40% for FY2025.  
4.10.   There are many laws affecting farming generally and specific types of farming. Some of the 
principal laws include: (1) the Basic Law o n Food, Agriculture and Rural Areas (last amended in 
2015), which obliges the Government to establish a basic plan for food, agriculture, and rural 
areas setting out national policies and objectives; (2) the Agricultural Co -operatives Act (last 
amended in 2016), which provides exemptions from competition laws for agricultural co -operatives 
and sets out services they may provide to their members, such as supplying farm inputs, 
purchasing outputs, insurance, welfare, and lending and savings; (3) the Agricultu ral Land Act 
(last amended in 2015), which states that farm land cannot be sold or leased unless the local 
agricultural committee approves, nor can it be diverted to other uses without the approval of the 
governor of the prefecture5; and the Act on Dairy a nd Beef Cattle Production Promotion (last 
amended in 2011 ). 
4.11.   Agricultural policy in Japan uses a comprehensive set of policy measures which result in a 
relatively high level of protection and support to producers for most products, with the exception 
of exp ort subsidies, which Japan does not have the right to use under its WTO commitments.  
4.12.   Programmes to encourage production limitation appl y to rice . These programmes  provide 
support through direct payments based on the amount produced within quotas and inclu de a 
diversion programme for rice which is intended to encourage farmers to switch land from rice 
                                                
2 MAFF online information. Viewed at: http://www.maff.go.jp/j/policy/inde x.html  (in Japanese).  
3 MAFF online information. Viewed at: http://www.kantei.go.jp/jp/singi/nousui/pdf/nousui1.pdf  (in 
Japanese).  
4 Statement by the Minister of Agriculture, Forestr y and Food of 10 December 2013, MAFF online 
information. Viewed at: http://www.maff.go.jp/j/keikaku/k_aratana/pdf/daijindanwa.pdf  (in Japanese).  
5 The 2015 amendment relaxed cond itions for a company to possess agr icultural lands as follows: (1)  at 
least one officer or important employee engages in farming, and (2) the number of voting rights possessed by 
non-agricultural sectors is less than half.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  production to other crops. The Japan Dairy Council also administers voluntary production 
restriction programmes for milk. Farmers are not obliged to participa te in these programmes, but 
most do so. Producer  price stabilization policies apply to beef calves, fruits, vegetables and some 
other products which partially or fully compensate for differences between sales and target prices 
or historical average prices.  According to the authorities, the price stabilization policy on pork is 
not implemented at present. In addition, the Government subsidizes the Agricultural Insurance 
Scheme and provides reinsurance to local insurance funds.  
4.1.2.2   Trade policies  
4.13.   Since Japan's pr evious review, there has been little change to market access measures 
(tariffs, the special safeguard, and tariff quotas). The relatively high tariffs have helped to 
maintain higher domestic than world prices.  
4.14.   In general, tariffs on agricultural products (WTO definition), with an average of 16.3%, are 
higher than tariffs on non -agricultural products, with an average of 3.6%. Furthermore, the 
standard deviation of 33.4 for tariffs on agricultural products indicates that tariffs vary 
considerably among agric ultural products with over one  quarter duty free and a maximum tariff 
(ad valorem  equivalent) of about 390%. In addition, 17.5% of agricultural tariff lines are 
non-ad valorem (Section  3.1.4).  
4.15.   Japan reserved the right to use the special agricultural safegu ard (SSG) on 121 tariff lines. 
During the t wo years FY 2014 and FY 2015, Japan applied either the volume or price -based SSG a 
number of times to out -of-quota imports of a variety of products (Table A4.1).  
4.16.   According to  its most recent notification on imports  under tariff quotas (for FY2014) to the 
WTO Committee on Agriculture, Japan has 18 tariff quotas covering 186 tariff lines at the 
HS 9-digit level.6 Fill rates for each quota have been fairly consistent over the past few years but 
vary considerably from o ne quota to another. For example, the fill rates for " other dairy products 
for general use", "barley and its processed products", "wheat […] and its processed products", 
"evaporated milk" and some others were over 90% for each year from FY2007 to FY2014 , but fill 
rates for other quotas, such as "skimmed milk", "prepared whey (for infant formula)", "butter and 
butter oil", and some others were consistently below 40%.  
4.17.   The method of administering the quotas has remained unchanged since Japan's previous 
review . It varies from one quota to another, although the competent authority for all but one 
quota is MAFF (the exception being "designated dairy products for general use" where the 
competent authority is the Agriculture Livestock Industries Corporation, a state  trading 
enterprise). One quota ("prepared edible fat") is partially allocated to a supplying country. Under 
all methods, the applicant for an allocation must meet criteria such as end -use requirements, a 
record as an importer, planned usage, etc.7  
4.18.   Under the simultaneous buy and sell (SBS) systems for rice and wheat, an importer and a 
domestic user make a joint bid to MAFF specifying the government purchase price from the 
importer and government sale price on the domestic Japanese market. MAFF collects the  
difference in the prices (Table 4.6).  
Table 4.6 Imports under the SBS system, FY2011 -2015  
('000 tonnes)  
 2011  2012  2013  2014  2015  
Rice 100 100 61 12 29 
Wheat  830 1,183  1,087 684 .. 
.. Not available.  
Source: Data provided by the authorities of Japan.  
                                                
6 WTO document G/AG/N/JPN/ 210, 7 March 2016 . 
7 WTO (2015) , Trade Policy Review – Japan .  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.19.   Japan did not reserve the right to use export subsidies and has notified the WTO Committee 
on Agriculture that it has not used any.8 Export insurances from NEXI are available for agricultural 
products in the s ame way as exports of other goods.  
4.20.   According to the authorities, Japan makes an annual commitment of food assistance and 
provides funds for purchasing products. Recipient countries purchased 162,546 tonnes of rice and 
99,612 tonnes of other products using these funds in FY2013.  
4.21.   In May 2016 , MAFF developed the Strategy to Promote Agriculture, Forestry, Fisheries 
Products and Foods. In June 2016, the Cabinet adopted the Japan Revitalization Strategy 2016,  
which sets the export target for major agriculture, fo restry, and fisheries products and foods at 
more than ¥1 trillion by 2020 .9 
4.1.2.3   Domestic support  
4.22.   Since its previous review, there have not been major changes to Japan's domestic support 
measures. Administered prices apply to a limited number of products (pig m eat, beef, and calves). 
Participation in other programmes intended to contain production of rice and milk is not obligatory; 
according to the authorities, production in excess of limits sometimes takes place 
(Sections  4.1.2.3.2 and 4.1.2.3.7).  
4.1.2.3.1   General sup port programmes  
4.23.   Domestic support programmes within Japan apply at both the general and product levels. At 
the general level , support is provided for infrastructure, through extension services, and for 
insurance/disaster relief programmes , as well as paymen ts for conversion from rice production.  
4.24.   Legislation to establish a regional government -supported institution in each prefecture to 
promote farmland consolidation  was promulgated in December 2013 and entered into force in 
March 2014 . Under the legislation , the prefectural institutions rent farmland, improve 
infrastructure (if necessary ), and lease the land to core farmers . They had a total budget of 
¥15.4  billion in 2016. Farmers that increase farm size continue to be eligible to receive payments 
of up to ¥1 0,000 for each additional 0.1 ha, and payments of up to ¥700,000 per household are 
available for the purpose of leasing land to farmers.10 
4.25.   The Agricultural Disaster Compensation Act continues to serve as the legal basis for the 
Agricultural Disaster Compens ation Programme that provides compensation from losses caused by 
disasters, diseases, and other events. The current Agricultural Insurance Scheme is supported by 
the Government and usually operated by the Agricultural Mutual Relief Associations run by 
farmers. As a general rule, the Government contributes about 50% of the premiums. Insurance is 
mandatory for rice, wheat, and barley, and optional for livestock, fruit production, field crops, silk 
worms, and greenhouses.11 
4.26.   With a view to maintaining and demons trating the multi-functional roles of agriculture and 
rural areas, the Act on Multi -Functionality of Agriculture was promulgated in June 2014 and 
entered into force in April 2015. The law aims to reform direct payments and establishes three 
programmes that  aim to : (1) promote environmentally  friendly farming practices and activities; 
(2) provide assistance to farmers in hilly and mountainous areas; and (3) maintain and enhance 
multi-functionality.  
                                                
8 For examples see WTO documents G/AG/N/JPN/212, 23 May 2016;  G/AG/N/JPN/201, 29 April 2015; 
G/AG/N/JPN/194, 25 April 2014; G/AG/N/JPN/185, 25 April 2013; G/AG/N/JPN/176, 1 May 2012; and 
G/AG/N/JPN/16 4, 3 May 2011.  
9 The Cabinet online information. Viewed at: 
http://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/2016saikou_torikumi.pdf . 
10 WTO (2015).  
11 MAFF online inf ormation  (in Japanese) . Viewed at: 
http://www.maff.go.jp/j/keiei/hoken/saigai_hosyo/ . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.27.   Under the direct payment programme for environmentally frien dly farming, a total area of 
74,180 ha was estimated to receive an average payment of ¥56,792 per ha in FY2015.12  
4.28.   Under the direct payment programme for farmers in hilly and mountainous areas, payment 
rates depend on the slope of the land and the type of p roduction , ranging  from ¥21,000 per 0.1 ha 
for paddy fields in high inclination areas to ¥ 300 per 0.1 ha for pasture. In FY 2015, the scheme 
covered 653,815  ha and 586,656 participants , amounting to a total of ¥51,405 million.13  
4.1.2.3.2   Rice 
4.29.   The Government's curren t policy on rice is based on the 2003 Basic Reform Policy on Rice, 
as amended in 2006. Under the production adjustment programme, production quotas are 
assigned to each prefecture and each individual farmer based on MAFF estimates of supply and 
demand. The  production quotas can be met with less land than had been used for rice cultivation 
in the past, since some land may be diverted to other uses or taken out of production entirely. 
A direct payment scheme has been available under the direct payments for ri ce programme since 
2011 for farmers that participated in the production adjustment programme.14  
4.30.   The Government adopted a plan set out in December 2013 to phase out production quotas 
for rice by 2018 by way of providing detailed information , inter alia , on rice supply and demand so 
that farmers can adjust rice production without relying on government quota allocation, with the 
objective of giving farmers greater production flexibility. As part of reform, the direct payments for 
rice programme was halved (from JPY  15,000 per 0.1 ha to JPY 7,500 per 0.1 ha) on 1 April 2014 
and is to be abolished in the 2018 crop year. In FY2014, s upport for the introduction of high 
yielding feed rice and flour rice varieties was introduced to  the direct payment programme. In the 
2015 crop year, the Government began providing farmers with rice production targets with in a 
certain range to encourage independent decision -making on production.  
4.1.2.3.3   Other cereals, sugar beet, starch potatoes, buckwheat, and rapeseed  
4.31.   Under the Act on Farmin g Income Stabilization, core farmers producing wheat, barley, soya 
beans, sugar beet, and starch potatoes as well as buckwheat and rapeseed (since the 2015 crop 
year) are eligible for payments based on area planted in the current year and payments based on  
the quantity and quality of annual output (Table  4.7).15  
Table 4.7 Payment rates for other cereals, sugar beet, starch potatoes, buckwheat and 
rapeseed, 2016  
(¥ per unit ) 
Product  Payment rate  Per unit  
Quantity-based payment    
Wheat  6,320  60 kg  
Two-row barley  5,130  50 kg  
Six-row barley  5,490  50 kg  
Naked barley  7,380  60 kg  
Soy beans  11,660  60 kg  
Sugar beet  7,260  tonne  
Starch potatoes  12,840  tonne  
Buckwheat  13,030  45 kg 
                                                
12 MAFF online information. Viewed at: 
http://www.maff.go.jp/j/seisan/kankyo/kakyou_chokubarai/pdf/28_choku.pdf , and 
http://www.maff.go.jp/j/seisan/kankyo/kakyou_chokubarai/pdf/h27 _torikumi.pdf . 
13 MAFF online information. Viewed at : 
http://www.maff.go.jp/j/seisan/kankyo/kakyou_chokubarai/pdf/28_nihon.pdf . 
14 WTO (2015).  
15 They are also eligible for payments which compensate for up to 90% of any loss of income compared 
with the average annual income for the preceding five years, excluding the highest and lowest years. The 
income -related payments are provided from a fund to which the Government con tributes 75% and 
participating producers 25%.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Product  Payment rate  Per unit  
Rapeseed  9,640  60 kg  
Area -based payment  20,000  10 are  
Note:  The a rea-based payment rate for buckwheat is ¥13,000 per 10  are. 
Source:  Data provided by the authorities of Japan.  
4.1.2.3.4   Fruits and vegetables  
4.32.   The Basic Policy for Fruit Industry Promotion of 2010 was revised in 2015. The objectives  of 
the Basic Policy include an emphasis on increasing domestic production, consumption, and 
processing of domestically produced fruits.16 Under the revised Policy, financial a ssistance is to be 
increased for convert ing production to more valuable fruits  (defined as profitable fruits or highly 
valued varieties)  and for on-farm improvements. The budget allocated to this assistance was 
¥5.6 billion in FY2016.  Assistance to farmers that convert their production to more valuable fruits 
(e.g. from less valuable o ranges to more valuable peaches/oranges/mangoes) is to be raised by 
¥10,000 to ¥230,000 per 10  are, while assistance to farmers that convert  their production  to more 
valuable deciduous fruit tree (e.g. apples) is to be increased to ¥170,000 per 10  are.17 Under the 
Policy, payments are made to support the planned fruits production programme, and processing of 
fresh fruits when the market price has declined or is foreseen to decline. For vegetables, farmer 
price support payments are made based on the quantity of production of specific vegetables under 
contract, calculated as the difference between 90% of the average of the past six years and the 
average of annual market prices.  
4.33.   Targeted farmers are listed in a Fruits Production Restructuring Plan for each prod uction 
area, based on the Plan of Fruit Industry Promotion of each prefecture. These farmers are also 
eligible for assistance for a four -year period after replanting when incomes decline while the new 
fruit plants mature. Between 2009 and 2014, 5,530 ha un der fruit production were converted to 
more valuable varieties, which is equivalent to 2.2% of the total area of fruit farms.18 
4.1.2.3.5   Tobacco  
4.34.   The state trading enterprise, Japan Tobacco, which is part -owned by the Government 
(Section  3.3.3) continues to be requir ed to enter into purchase contracts with tobacco growers  
under the Tobacco Business Act.  Since Japan's previous review, there have been no change s to the 
Tobacco Business Act. These contracts specify the area to be planted, the specific varieties of leaf 
tobacco and the prices by variety and grade. For 2017, the total area is set at 7,901 ha (down 
3.6% on 2016) and grower prices are set at ¥1877.6  per kg (unchanged since 2016).19  
4.35.   Importers, wholesalers, and retailers of cigarettes are required to register w ith the Minister 
of Finance who must approve final retail prices.  Although tobacco products are subject to excise 
duties, some brands, all owned by Japan Tobacco, are subject to lower rates.20  
4.1.2.3.6   Livestock products  
4.36.   Grains imported as raw material for feedstuf fs qualify for a reduced tariff subject to 
measures to ensure they are not diverted for human consumption. These measures include 
approval by the Government for import by the processing plants, penalties for misuse of feed 
grains, and specified processing methods.  
4.37.   Administered prices apply to pig meat, beef, and calves (Table 4.8). For calves, the 
Agriculture and Livestock Industries Corporation (ALIC) implements a deficiency payment system 
                                                
16 MAFF online information (in Japanese). Viewed at: 
http://www.maff.go.jp/j/seisan/ryutu/fruits/pdf/point.pdf . 
17 MAFF online information  (in Japanese). Viewed at: 
http://www.maff.go.jp/j/seisan/ryutu/fruits/attach/pdf/index -1.pdf. 
18 MAFF online information. Viewed at: http://www.maff.go.jp/j/seisan/ryutu/fruits/pdf/20160706.pdf . 
19 Japan  Tobacco Inc. online information. Viewed at : 
https://www.jti.c o.jp/investors/library/press_releases/2016/1109_01.html . 
20 The reduced rate of tobacco tax applies to a limited number of brands of 3rd grade cigarettes, all 
owned by Japan Tobaco . MOF online information. Viewed at: 
http://www.mof.go.jp/tax_policy/summary/consumption/127.htm . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  which pays calf producers the difference between the guaranteed pri ce and the actual average 
price. Should prices fall below the target rationalization price , the difference between the local 
price and the target rationalization price is paid by a combination of ALIC, prefectural 
governments, and contributions from produc ers. For beef producers, when prices fall below the 
standard stabilization price , ALIC or other beef -related organizations may purchase and store beef 
which may be released whenever prices rise above the upper stabilization price. A similar scheme 
is used for pig meat.  
Table 4.8 Administered prices for calves, beef, and pig meat, FY2016  
(¥) 
Product  Guaranteed price  Target rationalization price  
Japanese black calves  337,000 per calf  280,000  
Japanese brown calv es 307,000 per calf  257,000  
Dairy breeds  133,000 per calf  90,000  
Cross breeds  205,000 per calf  147,000  
 Upper stabilization price  Standard stabilization price  
Beef 1,155,000 per tonne  890,000  
Pig meat  600,000 per tonne  445,000  
Source:  Data provided b y the authorities of Japan.  
4.38.   Under the Price Stabilization Fund for Eggs , payments are made to egg producers under 
contract, calculated as 90% of the difference between the baseline price (¥189/kg in FY2016) and 
the average trading price, multiplied by the quantity of eggs sold.21 
4.39.   The Feed Price Stabilization Programme operates to help to ease the influence of sudden 
surges in compound feed prices upon farmers. Farmers pay ¥600 per tonne of compound feed into 
the fund operated by the compound feed industry. T he fund is supplemented with the other fund 
founded by the Government and the compound feed industry.22  
4.1.2.3.7   Dairy  
4.40.   Dairy producers benefit from a number of support programmes i n addition to the 
administered prices for dairy calves destined  for beef production ( Table  4.8).  
4.41.   The Japan Dairy Council (JDC)23 continues to operate a voluntary supply control system for 
liquid milk and a separate quota system for milk for processing. Compliance with the planned 
production system is voluntary ; only 5% of dairy producers o perate outside the system. The 
annual production allowances determined by the JDC are based on its estimates of demand and 
are allocated to nine regional blocs , each of which then sets production allowances for the 
cooperatives and dairy farmers within that bloc. To cushion producers against sudden price 
fluctuations, producers and the Government contribute to the farm business stabilization fund (at 
rates which vary from one bloc to another but at a ratio of 1:3 respectively). The fund 
compensates producer s of milk for processing whenever prices fall below the average for the 
previous three years.24 For milk destined  for cheese production producers are eligible for a subsidy 
of ¥15.5 per kg of milk (FY2015). Under this scheme, ¥6.67 billion was paid to dairy farmers 
produc ing liquid milk for cheese production in FY2015.25  
4.42.   In 2014, t here was a shortage of butter supply in the Japanese market; the Government 
decided to import 10,000 tonnes of butter in addition to 3,000 tonnes of butter under  Japan's 
                                                
21 Japan Poultry Association online information. Viewed at : http://www.jpa.or.jp/stability/monthly.h tml. 
22 MAFF online information. Viewed at: 
http://www.maff.go.jp/j/chikusan/sinko/lin/l_siryo/haigou/pdf/131224_1 -minaoshi.pdf . 
23 The JDC was established i n August 1962 at the behest of the Ministry of Agriculture, Forestry and 
Fisheries. In 1966, with the enactment of the Deficiency Payment Law, the Japan Dairy Council became a 
public service corporation. It is composed of prefectural -level associations, an d overseen by national advisory 
organizations such as the Central Union of Agricultural Cooperatives and five other national federation s of 
agricultural associations. JDC online information. Viewed at: http://www.dairy.co.jp/eng/eng15.html . 
24 JDC online information. Viewed at: http://www.dairy.co.jp/eng/eng08.html . 
25 ALIC online information. Viewed at: http://www.alic.go.jp/r -keiei/raku03_000020.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Current Ac cess commitment, under which ALIC was to import 137,000 tonnes (milk equivalent 
basis) of dairy products including butter.26  
4.1.2.4   Support levels  
4.1.2.4.1   WTO notifications  
4.43.   As at the time of the  previous review , the most recent not ification from Japan to the 
WTO Committe e on Agriculture concerning domestic support covers FY2010 to FY2012. The 
authorities indicate that Japan is preparing for the submission of a DS1  notification for FY2013 , 
which will  probably  take place  in the first half of 2017.  
4.1.2.4.2   OECD indicators  
4.44.   According to the OECD revie w of agricultural policies, the value of transfers to agricultural 
producers is measured using the producer support estimate (PSE) and associated indicators. The 
total PSE is the "annual monetary value of gross transfers from consumers and  taxpayers to 
agricultural producers, measured at the farm gate level, arising from policy measures that support 
agriculture, regardless of their nature, objectives or impacts o n farm production or income. 
It includes market price support, budgetary paymen ts and budget revenue foregone, i.e. gross 
transfers from consumers and taxpayers to agricultural producers arising from policy measures 
based on: current output, input use, area planted/animal numbers/receipts/incomes (current, 
non-current), and non -commo dity criteria."27 Thus, the PSE includes estimates for the value of 
transfers provided by market access measures, such as tariffs and tariff quotas, as well as input 
subsidies, direct payments to producers that are coupled to prices or production, and direc t 
payme nts decoupled from prices and production.28 
4.45.   Both the PSE and the total support estimate (TSE) decreased in 2 015 (Chart 4.2) . PSE 
accounts for 48% of gross farm receipts in 2013 -15, which is almost three times the OECD 
average (Table 4.9).29 Furthermor e, measures such as high tariffs on some products have resulted 
in substantially higher farm prices in 2013 -15, as measured by the producer nominal protection 
coefficient (producer NPC). The high tariffs are also the main component of market price support 
which is, in turn, the main component of the PSE.  
4.46.   Single commodity transfers (SCTs) make up most of the support provided to agriculture and 
the rates of support vary considerably from one product to another , but overall they represent 
around 40% of gross f arm receipts (which includes the value of farm production plus non -market -
price support payments)  in 2013 -15. 
4.47.   Despite changes in agricultural programmes over the past few years, support and protection 
given to agriculture in Japan remains high compared to other countries and it is provided by a 
comprehensive set of policies ranging from tariffs and other forms of market price support, to 
deficiency payments, payments related to production, and payments not linked to prices or 
production as well as general s upport such as research, and extension services.30 Market price 
support is the main component and it, along with other transfers based on output and inputs, is 
                                                
26 MAFF online information (in Japanese). Viewed at: 
http://www.maff.go.jp/j/chikusan/gyunyu/pdf/0304.pdf . In Japan, butte r is imported by the Agriculture and 
Livestock Industries Corporation (ALIC), a state trading company  engaging in trade of agricultural and livestock 
products established by a law in 2003, as well as  by private businesses. Private businesses can import but ter 
subject to in -quota tariff rates (where tariff quota are available) and out -of-quota rates. Imports by the ALIC 
accounted for 95% of the total amount of imports of butter in 2015. Tariff  quotas equivalent to about 
580 tonnes per year were allocated for  several years to a limited number of private businesses such as 
processed milk producers in a prefecture and a few international airline companies. MAFF online information. 
Viewed at: http://www.maff.go.jp/j/chikusan/gyunyu/butter.html .  
27 The methodology for calculating these indicators is different from that used to calculate the aggregate 
measure of support (AMS), and the two sets of data are neither compatible nor comparable.  
28 OECD , Agricultural Policy Monitoring and Evaluation 2016 , p. 11. 
29 OECD , Agricultural Policy Monitoring and Evaluation 2016 , p. 96. 
30 OECD , Agricultural Policy Monitoring and Evaluation 2016 , p. 98. WT/TPR/S/ 351/Rev.1  • Japan  
 
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  categorized by the OECD  as one of the potentially most production - and trade -distorting forms of 
support.31  
Chart 4.2 Value of production and support to agriculture, 2011 -15 
(¥ billion)  
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
2011 2012 2013 2014 2015TSE total
PSE total
MPS total
Value of productionChart 4.2 Value of production and support to agriculture, 2011 -15
¥billion
Source: OECD Producer and Consumer Support Estimates database.
 
Source:  OECD Producer and Consumer Support Estimates database.  
Table 4.9 Total producer support estimate and single commodity transfer values for 
selected commodities, 2011 -15 
 2011  2012  2013  2014  2015  
Producer support estimate       
¥ billion  4,811  5,224  4,902  4,603  4,055  
% gross farm receipts  51 55 52 50 43 
Single commod ity transfers       
Total 4,238  4,647  4,320  3,982  3,403  
Rice      
SCT (¥ billion)  1,439  1,595  1,553  1,254  853 
% of gross receipts  75 78 74 70 56 
Wheat       
SCT (¥ billion)  37 37 37 38 39 
% of gross receipts  52 44 49 49 46 
Soya beans       
SCT (¥ bil lion) 25 24 23 24 24 
% of gross receipts  47 50 52 38 42 
Milk      
SCT (¥ billion)  367 447 303 358 390 
% of gross receipts  54 65 44 51 54 
Beef      
SCT (¥ billion)  179 175 153 170 151 
% of gross receipts  36 34 30 30 30 
Pork       
SCT (¥ billion)  342 361 330 334 331 
% of gross receipts  66 68 60 55 61 
Poultry meat       
SCT (¥ billion)  27 28 29 32 29 
% of gross receipts  10 10 10 10 10 
Eggs       
SCT (¥ billion)  68 64 72 73 65 
% of gross receipts  15 15 15 14 14 
Selected fruits and vegetablesa      
SCT (¥ billion)  431 423 395 345 387 
% of gross receipts  40 39 35 31 35 
a Selected fruits and vegetables are apples, Chinese cabbage, cucumber, grapes, mandarins, pears, 
spinach, strawberries, and Welsh onions.  
Source:  OECD Producer and Consumer Support  Estimates database. Viewed at: 
http://www.oecd.org/tad/agricultural -policies/producerandconsumersupportestimatesdatabase.htm ; 
and WTO Secretariat  estimates based on OECD data for selected fruits and vegetables.  
                                                
31 OECD (2014),  Agricultural Policy Monitoring and Evaluation 201 4, p.13. WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.2  Fisheries  
4.2.1   Features  
4.48.   In 2014 , the contribution of fisheries to GDP was less than 0.2% and its contribution to 
employment was less than 0.3%. However, it remains economically important for many  coastal 
communities and socially and culturally for the whole country. Japan is one of the biggest 
importers of fisheries products in the world, with imports of over US$15  billion, compared to 
exports of just under US$2  billion in 2013.32 Since 2005, impor ts have fluctuated from a low of 
US$13.2  billion in 2007 to a high of US$18.1 billion in 2012 , while following a downward trend for 
quantities imported.  
4.2.2   Policy  
4.49.   Overall responsibility for national fisheries policies lies with the Fisheries Agency in MAFF, 
while prefectural governments are responsible for local issues, such as management of local 
fisheries resources. Regarding important policy decision -making, the Fisheries Policy Council ( at 
national level), the Regional Fisheries Coordination Committees (at  regional level), and the Sea 
Area Coordination Committees (at prefectural level) are consulted for opinions depending on the 
nature of the issue.33  
4.50.   The main laws concerning the fisheries sector include: the Fisheries Law (last amended in 
2016), the Basic Law on the Fisheries Policy of 2001 (last amended in 2014), the Fisheries 
Cooperative Association Law (last amended in 2016) , the Law to Ensure Sustainable Aquaculture 
Production of 1999 (last amended in 2014), the Act on the Exercise of the Sovereign Righ t for 
Fishery, etc. in the Exclusive Economic Zone of 1996 (last amended in 2014), the Act on 
Preservation and Control of Living Marine Resources of 1996 (last amended in 2007), and the Act 
on the Protection of Fishery Resources of 1951 (last amended in 20 15).34 The authorities state that 
amendments of these laws during the review period did not involve any changes in their 
substance. In June 2014, the Inland Water Fishery Promotion Act entered into force . The Act aims 
to restore inland water fishery resourc es (e.g. the Japanese eel). Under the Act, enterprises 
engaging in eel aquaculture must obtain a permit from  the Ministry of Agriculture, Forestry and 
Fisheries  as of June 2015.  
4.51.   Policy for the fisheries sector is set out in the 2012 Basic Plan for Fisheri es, unchanged since 
Japan's previous review. It sets out several objectives for the sector and fishing communities, 
based on four axes: reconstruction of damage caused by the Great East Japan Earthquake; 
sustainable use of resources through resource manage ment and sustainable aquaculture; 
promotion of consumption based on food safety, quality, and promotion; and the improved safety 
and livelihood of fishing communities.  
4.52.   The average applied MFN tariff on imports of fish and fish products is 6.2% with a maxim um 
rate of 15% and a standard deviation of 3.7, which indicates that there is not much variation 
among tariffs, unchanged since Japan's previous review. In addition, other market access 
measures apply to several species :  
• For some tuna and tuna -like specie s, such as bluefin tuna, southern bluefin tuna and 
bigeye tuna, Japan has import control systems, including import approval and acknowledgements 
for imports which, according to the authorities, are in accordance with the conservation and 
management measure s of some tuna regional fisheries management organizations (RFMOs) such 
as the International Commission for the Conservation of Atlantic Tunas (ICCAT) and the 
Commission for the Conservation of Southern Bluefin Tuna (CCSBT) . 
• Import quotas apply to several other species, including herring, cod, mackerel, 
sardines, and saury. According to the authorities, these measures complement its management of 
                                                
32 For the purposes of this Section of the Trade Policy Re view report , fish and fisheries products are 
taken to include HS2002 Headings 020840, 03, 051191, 1504, 1603, 1604, 1605, and 230120.  
33 Other relevant organizations include the Fisheries Coo perative Associations and the Fisheries 
Research Agency (WTO , 2015).  
34 See WTO (2015) for the details of these laws.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  coastal fisheries resources, including total allowable catches (TACs) which apply to some of these 
species.35  
4.2.2.1   Stock management  
4.53.   Management of resources is based on several measures, including fishing rights and 
permits, as well as voluntary resource management supported by the Government.  
4.54.   Prefectural governors may grant fishery rights for coastal fishing as well as p ermits for 
small - to medium -scale fishing based on prefectural regulations; MAFF may grant permits for 
large-scale off -shore and distant -water fishing as well as specified fishing methods for certain 
species.36 In accordance with the Act on Promotion of Inl and Water Fisheries enacted in 
June 2014, inland water aquaculture enterprises may, where necessary, become subject to permit 
systems to ensure sustainable use of fisheries resources. Pursuant to the Act, eel aquaculture 
enterprises have been subject to a permit system since June 2015 in order to manage eel 
resources, and an upper limit on the number of juvenile eels (glass eels) per pond was established 
to limit production.  
4.55.   TACs are set for seven species by the Fisheries Agency based on estimates of allowa ble 
biological catch and other factors and in consultation with different stakeholders.37 The authorities 
state that, based on a report issued in July 2014 by an ad  hoc Task Force on Fisheries Resource 
Management, an expert meeting established by the Fisher ies Agency, the TACs have been set as 
equivalent to the allowable biological catches as a general rule since the fishing season of 2015. 
According to the authorities, efforts have been made to ensure that the TAC conforms to the 
allowable biological catch and individual quota systems have been introduced  for three species, 
including Atlantic bluefin tuna and southern bluefin tuna.  
4.56.   Fishery organizations must prepare and implement resource -management plans in line with 
the guidelines developed by the central government or prefectural authorities. As at 
end-March  2016, 1,868 resource -management plans had been prepared.  
4.57.   Several measures have been taken to prevent and deter illegal, unreported, and 
unregulated (IUU) fishing, through bilateral cooperation and info rmation -sharing efforts, and 
through regional fisheries management organizations, for example vessel -monitoring systems and 
trade -related measures such as statistical document programmes and catch documentation 
systems.  
4.2.2.2   International agreements  
4.58.   Japan is a  member of a number of international and regional fishery organizations38 and has 
intergovernmental agreements with Australia, Canada, China, France, Kiribati, the Republic of 
Korea, Marshall Islands, Morocco, the Russian Federation, Solomon Islands, Senega l, and Tuvalu. 
The agreements with Australia, Canada, and France do not provide for access by Japanese fishing 
vessels and the agreements with China, the Republic of Korea, and the Russian Federation are 
mutual  access agreements allowing reciprocal access to each country's EEZ. In addition , there are 
numerous private -sector -based agreements which provide for access to the waters of other 
countries and territories (Cabo Verde, Côte d'Ivoire, Equatorial Guinea, Fiji, Gabon, Gambia, 
Guinea, Guinea -Bissau, Mada gascar, Mauritania, Mauritius, Micronesia, Mozambique, Nauru, Palau, 
Papua New Guinea, Sao Tome and Principe, Seychelles, Sierra Leone, St. Helena, and Tanzania).  
                                                
35 Information provided by the authorities of Japan; and JETRO (2011) , pp. 1-2. 
36 WTO (2015).  
37 TACs are set for saury, Alaska pollack, hors e mackerel, sardine, mackerel, Japanese common squid, 
and snow crab.  
38 Indian Ocean Tuna Commission (IOTC), Western and Central Pacific Fisheries Commission (WCPFC), 
Inter-American Tropical Tuna Commission (IATTC), International Commission for the Conserva tion of Atlantic 
Tuna (ICCAT), Commission for the Conservation of Southern Bluefin Tuna (CCSBT), General Fisheries 
Commission for the Mediterranean (GFCM), South East Atlantic Fishery Organization (SEAFO), Convention on 
the Conservation and Management of P ollock Resources in the Central Bering Sea (CCBSP), North Pacific 
Anadromous Fish Commission (NPAFC), Commission for the Conservation of Antarctic Marine Living Resources, 
and Northwest Atlantic Fisheries Organization (NAFO). Japan joined the South Indian Ocean Fisheries 
Agreement (SIOFA) in June 2014. The Convention of the North Pacific Fisheries Commission (NPFC), which 
Japan joined in July 2013, became effective in July 2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.3  Support for fisheries  
4.59.   Data issued by the OECD indicate that general services account for the  most significant 
portion of government financial transfers (Table 4.10). The framework of Japan's support 
measures for fisheries has remained largely unchanged since its previous review.  
Table 4.10 Government  transfers to fishing, 2007 -13 
(¥ billion)  
  2007  2008  2009  2010  2011  2012  2013  
Marine capture fisheries  214.4  207.7  201.4  149.0  153.0  143.7  141.7  
Decommissioning of vessels and 
licences  1.5 1.4 1.6 1.2 0.5 0.4 0.1 
Disaster relief payments  .. .. .. .. .. .. .. 
Cost-reducing transfers  0.4 0.3 0.3 2.4 1.1 2.1 3.7 
General services  212.6  206.0  199.5  145.3  151.4  141.1  138.0  
Aquaculture  1.4 1.3 1.1 0.9 0.9 0.7 0.7 
Cost-reducing transfers  .. .. .. 0.2 0.1 0.1 0.1 
General services  1.4 1.3 1.1 0.8 0.9 0.6 0.6 
Marketing and processing  2.0  2.2  3.0  1.6  0.6  0.5  1.1  
General services  2.0  2.2  3.0  1.6  0.6  0.5  1.1  
Total  217.9  211.3  205.5  151.5  154.6  144.8  143.5  
.. Not available.  
Source:  OECD (2015), OECD Review of Fisheries: Country Statistics  2015, OECD Publishing. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/oecd -review -of-fisheries -country -
statistics_rev_ fish_stat . 
4.4  Mining and Energy  
4.4.1   Mining  
4.60.   Mining accounts for a very small share of Japan's economy: 0.1% of GDP and 0.0% of 
employment in 2014.  
4.4.2   Primary energy  
4.61.   Chart 4.3 describes the composition of primary energy supply in Japan for 2008 and 2013 
as well as t he targets set by the new (2015) Japan energy policy for 2030 (see below for a more 
detailed description of this policy). The share of nuclear energy in Japan's primary energy supply 
has crumbled from 14% to 1% from 2008 to 2013 following the closure of nu clear power plants 
after the Fukushima accident in 2011. This has been compensated by an increase of the share of 
oil, coal and gas. The total energy consumption declined during the same period partly due to the 
increase in energy efficiency and partly bec ause of the post financial crisis recession.  
Chart 4.3 Primary energy supply in Japan  
23% 27%25%17%23%
21%43%45%
30%14%1%
10%3%
4%
14%
0100200300400500
2008 2013 2030Chart 4.[primary energy supply]
Source:    International Energy Agency online information.Mtoe
Renewable energy
Oil
Gas
CoalNuclear495 Mtoe
428 Mtoe453 Mtoe
 
Source:  International Energy Agency online information  accessed at 14 July 2016 . Viewed at: 
https://www.iea.org/countrie s/membercountries/japan/energyoverview . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.62.   As illustrated by Table 4.11 and Chart 4.4, Japan is highly dependent on import s for all its 
fossil fuels; this has a bearing on its long -term strategy on energy mix. This strategy is detailed in 
the 4th Strategic Energy Plan of Japan39, published in April 2014 under the framework of the Basic 
Law on Energy Policy of 2002 (Act No. 71), the first such plan after the Fukushima accident and 
the Great East Japan Earthquake in 2011. It establishes four basic principles, kno wn as the 3E+S, 
namely stable supply ( energy security), cost reduction ( economic efficiency), environment , and 
safety. Its aim is to build a multi -layered and diversified flexible energy demand /supply structure. 
It was complemented in July 2015 by another document  issued by the Government,  the Long -term 
Energy Supply and Demand Outlook.40 The total primary energy supply targets/forecasts for 2030 
were established by this document: a primary energy supply share of 10-11% for nuclear energy, 
slightly inferior to that prior to the nuclear accident ; a slight decline of coal and gas ; a 
considerable decrease of oil (from 45% to 30%) ; and a considerable increase of renewable 
energies (from 2% to 13 to 14%). In absolute terms and based on a hypothesis of yearly growt h 
of 1.7%, the total primary energy supply is expected to decrease slightly. On the demand side the 
relative share of electricity versus primary energies is expected to increase slightly from 25% to 
28.5% , while the total demand for energy is projected to decrease by about 10%.  
Table 4.11 Japan's f ossil fuel production and imports, 2013  
Fossil fuel production and import dependency  Main imports  
Crude oil production  0.2 Mt   
Crude oil net imports  170.2 Mt  Saudi Arabia (33%), Emirates (24%), Qatar (8%)  
Oil products  production  171.4 Mt   
Oil products net imports  180.1 Mt  Korea (16%), U nited States  (13%), Qatar (11%)  
Gas production  3.3 bcm   
Gas net imports  119.9 bcm  Australia (21%), Qatar (18%), Malaysia (17%)  
Coal production  0.0 Mt   
Coal net imports  195.6 Mt  Australia (67%), Indonesia (17%), Russian Federation 
(7%) 
Energy self sufficiency  6%  
Source:  International Energy Agency online information  accessed on 14 July 2016 . Viewed at: 
https://www.iea.org/countr ies/membercountries/japan/energyoverview .  
Chart 4.4 Final energy consumption by sector, 2012  
Commercial
22% Industry
39%
309
MtoeChart 4. [final consumption]    Final consumption by sector, 2012
Source:  Transport
24%Residential
15%
 
Source:  International Energy Agency online information. Viewed at: 
https://www.iea.org/countries/membercountries/ japan/energyoverview . 
4.63.   Importation, refining and distribution of oil products are activities fully privatized and 
opened to foreign capital. The number of filling station and refineries is declining over  time. There 
is no maritime pipeline linking Japan to its neighbours; all oil (and gas) is entirely imported by sea.  
4.64.   The use of natural gas has significantly increased since 2011 (post –Fukushima) as its share 
in power generation increased from 27% in 2008 to 41% in 2012. Most of this gas is imported as 
LNG. The majority of natural gas is imported by seven electricity companies for power generation 
(65% of the total imports in 2011) while city gas companies import the remainder with one third  
                                                
39 METI online information. Viewed at: 
http://www.enecho.meti.go.jp/en/category/others/basic_plan/pdf/4th_strategic_energy_plan.pdf . 
40 METI online information. Viewed at: http://www.meti.go.jp/english/press/2015/pdf/0716_01a.pd f. WT/TPR/S/ 351/Rev.1  • Japan  
 
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  of their sales to individual consumers and more than half to the ind ustry. The city gas industry is 
fragmented into many vertically integrated regional companies, the four largest having 
nevertheless a combined market share of 71%. The pipeline network for gas is domestic and 
essentially composed of low pressure grids for local distribution. There is no single operator of the 
national transmission system since most pipelines are not interconnected. Each industry (mainly 
electric utilities and city gas companies) owns and operates its gas pipeline. Third party access to 
trunk pipelines and distribution networks was introduced in 2004 and is to be negotiated 
individually by the parties concerned.  
4.65.   Japan has 31 LNG terminals and plans to build more of them. Those terminals are owned 
and operated by electricity utilities and city  gas companies as well as other entities such as steel 
companies and local governments.  
4.66.   Under the provisions of the Foreign Exchange and Foreign Trade Act, foreign entities 
wishing to invest in electric and gas utilities must notify their intention to the competent 
authorities, including the METI. The authorities state that permission may be denied on grounds 
of, inter alia, public order.41  
4.4.3   Electricity  
4.67.   Since its previous review, Japan has continued the liberalization process of the electricity 
market undert aken since the nineties in accord ance with the schedule  (Chart 4.5).  
Chart 4.5 Electricity market reform roadmap  
Source:  METI online information. Chart 4.5    Electricity market reform roadmap
First  
reform *Organization for Cross -regional Coordination of Transmission Operators
**Electricity and Gas Market Surveillance CommissionEstablishment 
of EGC**Establishment 
of OCCTO*
Second 
reformFull liberalization
ofretail marketTransitional period of
regulated retail tariffs
Third  
reformLegal 
unbundlingThird step:
April 2020 Sept.
Abolishment
ofregulated
retail tariffsFirst step:
April 2015 Second step:
April 2016 
 
Source:  METI online information.  
4.68.   On the institutional side , two new bodies were established d uring the review period. The 
Organization for Cross -regional Coordination of Transmission Operators (OCCTO) was established 
in April 2015 , under the 2013 amendment to the Electricity Business Act . OCCTO replaces a 
previous body , the Electric Power System C ouncil of Japan (ESCJ), which was dissolved in March 
2015. Its main function is to facilitate power interchanges between regions so as to balance 
regional surpluses and deficits in electric supplies. OCCTO's has the power to prescribe to utilities 
to incre ase power generation and interchanges when needed, to review utilities' power supply and 
demand plans and to construct transmission lines between regions in response to an increase in 
demand, construction that will be paid for by the power generation compa nies. OOCTO is 
supervised by the Agency for Natural Resources and Energy of the METI.  
                                                
41 The Minister of Finance and the minister in charge of the industry involved may order the suspension 
of a proposed investment if they consider it may "endanger national security, disturb the maintenance of public 
order, or hamper the protection of pub lic safety", or "adversely and seriously affect the smooth management of 
the Japanese economy". They may also recommend that the parties concerned alter their investment plans.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.69.   The volume traded on the Japan Electric Power Exchange (JEPX) is approximately 
80,000  GWh monthly i.e. about 2% of total electricity sales. This volume has gradually incr eased 
(from less than 1%) since the major electric power companies started so -called "voluntary actions" 
in 2013.  These actions include selling surplus electricity to the day-ahead and intraday market s in 
JEPX.  
4.70.   An Electricity Market Surveillance Commission  was established in September 2015  under 
the 2013 amendment to the Electricity Business Act , and in April 2016, the name was changed to 
the Electricity and Gas Market Surveillance Commission (EGC) since its authority was expanded to 
the gas and heat market . It is composed of five experts designated by the METI and has the 
authority to monitor the market and, in particular, the fairness of electricity trading and the 
neutrality of the network, and to make recommendations to the ministry in charge , i.e. the M ETI. 
It also monitors the transactions in JEPX, including whether the incumbents are implementing 
what they pledged in the "voluntary actions ". For the fi scal year 2106 , the Commission has a 
budget of some US$5 million and a secretariat of more than 100 st aff members.  
4.71.   Following a so -called "phase 2" amendment to the Electricity Business Act that entered into 
force in June  2014, the residential/individual consumer sector was opened to competition on 
1 April 2016. However, consumer s can retain regulated tari ffs at least until 2020, if they so wish 
(Chart 4.6).  
Chart 4.6 Gradual expansion of electricity retail market liberalization  
60%Chart 4.[] Gradual expansion of electricity retail market liberalization
User types
Large
factories2000~
74%Small factories
and buildings
Source:  METI online informationRegulated tariffs 
will remain at 
least until 2020Mid-sized 
factories
Small shops 
Household2016~ 2005~ 2004~
26%
40%
62%
38%Fullmarket 
liberalization
 
Source:  Information provided by the authorities of Japan.  
4.72.   While the market share  of new entrants stagnated at around 2% beginning i n the nineties 
(after the beginning of the market reform), it recently surged , reaching around 9% (Chart 4.7).42 
                                                
42 This share is highly variable depending of the region concerned and its growt h comes mainly from the 
area of Tokyo and from the Kansai.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 4.7 New entrants in Japan's electricity retail market  
0%1%2%3%4%5%6%7%8%9%10%
020406080100120140
Number of new entrants
Share of new entrantsChart 4.[New entrants]
 
Source:  Information provided by the authorities of Japan.  
4.73.   The second phase of the reform also introduces a new licensing scheme for electricity 
producers. Pre -existing categories of producers have been reshuffled. There are now three types of 
business categories : generation only  (which requires notification) , transmission and distribution 
(which requires licensing ), and retail  (which requires registration) . This will allow the producers 
belonging , for example,  to the former category of power producers and suppliers (PPS) to extend 
their activities to retail , which is geared at increasing competition.  
Chart 4.8 Categorization and licensing of electricity producers before and after the 
April  2016 reform  
Chart 4.[PPT] 
Source:  Before April 2016
General Electric Utilities 
Power Producer and Supplier(PPS)
Wholesale Electric Utilities, Independent 
Power Producer(IPP)After April 2016
Power 
GenerationPower 
GenerationTransmission/
Distribution
Notification
SystemPermission
SystemPower 
GenerationRetail
Registration
System
and
orand
Retailandand
Retail
 
Source:  Information provided by the authorities.  
4.74.   A third amendment (phase 3) of the Electricity Business Act enacted in June 2015 
establishes  the principles of the next step of the reform which is the legal unbundling of 
transmission and distribut ion activities from generation activities upstream , on the one hand , and 
from retail activities downstream , on the other hand, by 2020. Electricity producers will have the 
choice between two possible legal forms, the holding company o r the affiliated compa ny 
(Chart  4.9). In all instances the transmission/distribution segment will remain regulated so as to 
ensure neutrality and transparency. By 2020,  the regulation of tariff s is to be removed, pending 
the review of the competition situation.  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 107 - 
 
  Chart 4.9 Holding and affiliated company format s 
Source:  Chart 4.[] Holding and affiliated company format
Holding company format
Holding company
Generation
companyGeneration companyAffiliated company format
Retail company
Retail
companyTransmission/
distribution
companyTransmission/
distribution
companyCompetitive Competitive
Competitive Competitive
Regulated Regulated
 
Source:  Information provided by the authorities of Japan.  
4.75.   This liberalization has not yet been translated into lower prices, due to the constraints 
created by the closing dow n of all nuclear plants in the aftermath of the Fukushima accident. Three 
nuclear power plants have so far resumed activity  after their safety had been declared by the 
Nuclear Regulation Authority . This loss has been partly compensated by expensive imports  of oil, 
gas and coal and the reactivation of thermal power plants. On average, tariffs for individual 
consumers have been raised by approximately 25% since the accident and there is no 
compensation scheme financed by the State for individual consumers. Fo r energy intensive 
consuming industries , an exemption of 80% of the so called "feed -in tariff" has been put into 
place, for an effective cost for the Government of ¥45 billion annually.  
4.76.   These new circumstances have added new objectives to the electricity reform, notably to 
secure stable supply of electricity by facilitating even more power interchanged between regions, 
to hold down tariffs as much as possible and to give due regard to the energy mix especially 
regarding nuclear and renewables. The targets for 2030 for the respective shares of nuclear and 
renewables in the electricity mix have already been established  in the Long-Term Energy Supply 
and Demand Outlook, mentioned above. These targets are the following: for nuclear from 1% 
presently to 20 -22% a nd for renewables from 13% of the total presently to 22 -24% (of which 
solar 7%, biomass 3.7 -4.6%, geothermal 0.8. -1.1% and hydro 8.8 -9.2%). In the meantime power 
demand is expected to increase slightly (from 966.6 billion k Wh to 980.8 billion k Wh).  
4.77.   In add ition, this electricity policy will be affected by the results of COP21 and the Paris 
treaty. In 2016, Japan formulated the "Plan for Global Warming Countermeasures", which contains 
new reduction targets.  
4.5  Manufacturing  
4.78.   In 2014, manufacturing accounted for 18.7% of GDP and 15.0% of employment in Japan.  
4.6  Services  
4.6.1   Financial services  
4.79.   Box 4.1 describes the main economic indicators of the financial services sector in Japan.  
Box 4.1 Financial services in Japan: statist ical overview, 2013 and 2015  
General  
Size of financial services compared with GDP : 
2011: 4.8%  
2014: 4.4%  
Share of financial services in total employment :  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 108 - 
 
  2011: 2.8%  
2014: 2.6%  
Net financial services exports : 
2015: ¥7,258 million  (of which insurance  and pension service s: ¥5,734 million)  
Net financial services imports :  
2015: ¥12,457 million  (of which insurance  and pension service s: ¥1,910 million)  
Capital stock of financial services providers abroad : 
2013: ¥11,137.3 billion (1.4% of capital stock abro ad for banks, 11.8% of capital stock abroad for insurance)  
2015: ¥10,433.0 billion (1.4% of capital stock abroad for banks, 8.8% of capital stock abroad for insurance)  
Significance of the financial services arm of the Japan Post :  
JP Bank and JP Insurance  in the Japan Post Group  are deemed to be significant players in the financial services 
sector. The Financial Services Agency supervises them in exactly the same way it supervises other financial 
institutions.  
Banking services:  
Number of banks and recent  consolidation : There has been no consolidation since 2013.  
2013: 196 banks (of which, foreign controlled banks : 5, branches of foreign banks : 59) 
2015: 195 banks (of which, foreign controlled banks : 4, branches of foreign banks : 54) 
Concentration/share o f the various types of banks in the total balance sheet for banks : 
(¥100 million ) 
2013: Total balance sheet 9,123,472 (foreign controlled banks 51,000, branches of foreign banks 325,048)  
2015: Total balance sheet 10,165,870 (foreign controlled banks 56,04 1, branches of foreign banks 471,876)  
Lending activities  (credit volumes, 2015 ) 
2015: ¥523,001.6 billion  
Securities activities : (securities holding in bank accounts, 2015)  
2015: ¥26,863.1 billion  
Insurance:  
Number of insurance companies  
2013: 97  
2015:  94 (life: 42 (of which branches of foreign insurance companies 3) , non-life: 52 (of which branches of 
foreign insurance companies 22) ) 
 
Recent consolidation  
・September 2014 : Sompo Japan Nipponkoa (merger of Sompo Japan and Nipponkoa)  
・October 2014 : Tokio Marine & Nichido Life Insurance Co., Ltd. (merger of Tokio Marine & Nichido Life 
Insurance Co. Ltd. and Tokio Marine & Nichido Financial Life Insurance Co.)  
・October 2014 : Axa Life (merger of Axa Japan Holdings and Axa Life)  
・July 2015 : Orix Life (merger of Orix Life and Hartford Life)  
Total balance sheet of the insurance sector  
2015: ¥ bn 398,834 ( of which life insurance: 92.1%, non -life 7.9%)  
Concentration : (cumulative market share of the top 5 companies, 2015)  
 
Life insurance (%)  
JP Insurance: 23.1  
Nippon Life Insurance Company: 17.0  
Dai-ichi Life Insurance Company :10.0  
Meiji Yasuda Insurance Company: 9.9  
Sumitomo Life Insurance Company: 7.5  
 
Non-life ins urance (%)  
Tokio Marine & Nichido Fire Insurance Co. Ltd: 28.7  
Sompo Japan Nipponkoa Insurance Inc.: 23.2  
Mitsui Sumitomo Insurance Company Ltd: 21.5  
Aioi Nissay Dowa Insurance Co. Ltd: 11.0  
Fuji Kasai Insurance Co., Ltd: 2.7  
Pensions funds:  
Number of pe nsion funds : Total of corporate pension funds  
2013: 19,176   
2015:18,953  
Total assets :  
2013: ¥96.7 trillion  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  2015: ¥96.6  trillion   
Stock exchange and securities:  
Capitalization of the companies listed   
2013: ¥4,584,843 hundred million (87.1% of GDP)  
2015: ¥5,718,329 hundred million (119.3% of GDP)  
 
Gross value of publicly issued bonds  
2013: 1,079  (domestic borrowers 1,070 , foreign borrowers 9),  
2015: 1,129  (domestic borrowers 1,118 , foreign borrowers  11).  
 
Securities turnover on the Stock Exchange (se condary market, 2015 ): 
(¥ hundred million).  
2013: 7,517,141 (of which , domestic shares 6,401,938; foreign shares 347; domestic bonds 0; foreign bonds 
0; structured products and options 102,288; investment funds 1,012,568)  
2015: 8,222,728 (domestic shares 6 ,965,095; foreign shares 29,518; domestic bonds 0; foreign bonds 0; 
structured products and options 6,796,204; investment funds 118,937,598)  
Source:  Information provided by the authorities of Japan.  
4.80.   The regulatory framework of financial services in Japan has been described in detail in 
previous TPR reports43 and has undergone a few changes since the last review.  
4.81.   Regarding banking, the 1947 Banking Act and its subordinated legislation were amended in 
June 2013 , with entry into force of the amendments in Apri l 2014. Some of the amendments deal 
with the regime applicable to domestic  banks or to all banks , while others are specific to foreign 
banks.  
4.82.   Regarding the regime generally applicable, the first such amendment was the creation of an 
exception to the so -called "5% rule" on voting rights. Previously, banks were forbidden to have 
more than 5% of the voting rights of a company in total. The amendment allows some exceptions 
for business reconstruction and revitalization of the regional economy (Banking Act, Arti cle 16.3).  
4.83.   The second amendment relates to the tightening of large exposure limits. Pursuant to the 
Basel core principles and following the Financial Sector Assessment Plan (FSAP) of the IMF, the 
granting of credit in large amounts has been limited in thre e ways. First ly, the scope of assets 
subject to the exposure rules has been extended, in addition to loans and guarantees to undrawn 
amounts in commitment line transactions, interbank transaction amounts (including call loans 
amounts) and deposit, amounts  due to other financial institutions, publicly offered bonds, trading 
accounts balances in banks and amounts equivalent to credit risks in derivative transactions . 
Secondly, the scope of aggregation, i.e the perimeter of controlled and affiliated companies to 
calculate the overall exposure of a consolidated company has been enlarged . Thirdly, the 
calculation method for exposure has been modified so as to include balance items such as undrawn 
amounts in commitment line transactions and amounts equivalent to c redit risk in derivative 
transactions (Banking Act, Article 13).  
4.84.   The amendment to the Banking Act also permits domestic banks to indirectly hold 
companies that were previously not eligible for acquisition, for a period of five years in cases 
where such ind irect holding occurs as a result of the acquisition by the domestic banks of foreign 
financial institutions such as foreign banks, foreign insurance companies and foreign securities 
companies  (Banking Act, Article 16 -2 (4) to (6)).  
4.85.   The amendment to the Ban king Act concerning the regime of foreign banks includes partial 
relaxation of requirements in respect of agency services and intermediary services in that when a 
Japanese bank conducts business as an agent or intermediary of a foreign bank only outside of  
Japan, capital ties are no longer required between the agent or intermediary bank in Japan and the 
foreign bank.  
4.86.   The amendment also involves a series of new and stricter rules regarding licen sing 
standards, information obligations, maintenance of assets in Japan and supervisory powers in case 
of bankruptcy or reorganization proceedings.  
                                                
43 WTO document s WT/TPR/S/276, 15 January 2013; and WT/TPR/S/310/Rev.1, 6 May 2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.87.   The licensing standards have been clarified and complemented by the amendment so as to 
require that: (1) the amount of assets be at least the equivalent to the stated cap ital of the foreign 
bank branch ( ¥2 billion) and sufficient for the sound and efficient performance of the business 
proposed in the licen ce application; (2) the foreign bank record s a profit in at least one of the 
three years following the commencement of its business; (3) its officers and employees have 
sufficient knowledge and experience; and (4) the methods of business of the foreign bank branch 
are appropriate for the protection of depositors and the maintenance of the stability of the financial 
system.  Furthermore, the supervisory guidelines of the FSA have been complemented with new 
rules regarding fund transfers within the foreign bank group, including transfers to and from its 
head offices and branch accounts, the foreign branches' assets in Japan, t he deposit types 
provided by foreign bank branches and the way for the foreign bank branches to treat deposits in 
Japan. These elements will apply not only to the licensing criteria but also to the daily monitoring 
of foreign bank branches.  
4.88.   Existing foreig n bank branches that were active in Japan before the en try into force of the 
amended law were not evaluated by the new licensing standards, and no re -licensing scheme 
exist. However, the new licensing standards have been incorporated into supervision crite ria; thus , 
"existing" foreign bank branches are evaluated and supervised by the new licensing standards.  
4.89.   The amendments have also imposed new information obligations on foreign banks towards 
their Japanese clients. Foreign bank branches must indicate to de positors that the deposit 
insurance system in Japan does not cover their deposits. In addition, they must explain to their 
customers that a foreign bank branch 's solvency means the solvency of the entire foreign bank 
entity, that the relevant supervisory a uthorities of the foreign bank branch shall bear primary 
responsibility for supervision of the solvency and that , even if a refund may be paid through the 
insolvency procedure in the home country in case of failure of the foreign bank, the possibility 
exists that the deposits may not be refunded quickly. Finally the foreign bank branch must indicate 
the details of the coverage by the deposit insurance system of the home country if deposits in 
Japan are covered by this system.  
4.90.   The third main change in the re gime of foreign banks concerns the maintenance of assets in 
Japan. Foreign bank branches are now required to maintain assets equivalent to the amount of 
minimum capital of domestic banks ( ¥2 billion) at all time s in Japan in certain forms , such as loans 
to the bank of Japan, cash, Japanese government bonds and Japanese local government bonds, 
with a phasing -in period that lapsed on 31 March 2016. The penalty for the violation of th ese 
rules, or of FSA orders requiring foreign banks to maintain a certain pro portion of their assets in 
Japan,  has been raised from ¥1 million to ¥3 million plus one year of imprisonment for individual 
persons and ¥200 million for the relevant foreign bank branch.  
4.91.   In addition, the Act on Special Measures for Reorganization was ext ended in 2013 to foreign 
bank branches, and grants the supervisory authority the right to file a petition for commencement 
of bankruptcy or reorganization proceedings or the right to file a petition for a temporary 
restraining order.  
4.92.   Regarding insurance se rvices,  the Insurance Business Act was amended in May 2014 so as 
to ensure that insurance intermediaries provide information to customers and understand their 
intentions during insurance solicitation, including health insurance solicitation (Articles  295.2  and 
29444). In addition , a Cabinet Office Ordinance was amended to ease the requirements to provide 
insurance services for infertility treatment (Cabinet Office Ordinance, Amended March 201645). 
4.93.   Regarding securities and stock exchanges, the Financial Instru ments and Exchange Act was 
amended in June 2013 – with entry into force of the amendment in December 2014 – to 
strengthen penalties regarding insider trading. Under the amended act, criminal penalties are to be 
imposed for leaking inside information or for  inducing someone to trade on such nondisclosed 
information. Fines to be paid for violations committed by asset managers on their client accounts 
were also raised to "the overall management fees for three months" although fines were previously 
calculated b y multiplying "management fees for one month" by "the ratio of the value of the 
relevant stocks to the total assets under management". The Act was also amended in May 2014 – 
with entry into force of the amendment in May 2015 – to promote the use of "invest ment-type" 
                                                
44 It has not yet entered into force.  
45 It has not yet entered into force.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  crowdfunding by easing the requirements for operator s of "investment -type" crowdfunding 
service s to register as a "financial instruments business operator". Registration as a "financial 
instruments business operator" is required for operator s of investment -type crowdfunding service s 
to provide services that include solicitation of stock on behalf of a fund collector. The Act was 
further amended in May 2015  – with entry  into force of the amendment in March 2016 – to require 
additional attachments to the notification forms for "s pecially permitted investment management 
business operators". Conditions for disqualification were also introduced. For example, an operator 
is disqualified from registering as a specially permitted investment management business operator 
if five years have not yet passed since the operator was ordered to dissolve the business.  
4.6.2   Telecommunications  
4.94.   Box 4.2 describes the main economic indicators as well as the main regulatory features of 
the telecommunication s sector in Japan.  
Box 4.2 Main economic indicators and regulatory features of the telecommunications 
sector in Japan  
Economic data  
Penetration rates (2016 ):  
Total telephone subscribers : 
177.1 % (including fixed and mobile phon e subscribers ) 
 
Mobile phone subscribers  (% total telecom subscribers):  
74.3%  
Internet users (per 100 inhab.) : (i.e. the percentage of households in which one or more person uses the 
internet)  
84.6%  
 
Broadband internet subscribers  (per 100 households whic h use the internet from computers at h ome, tablets, 
and other devices ): 
97.6 %  
 
Fixed Internet subscribers : 38,494,563 (September 2016)  
Main actors:  
Number of companies providing telecom services : 
307 carriers (owning networks and circuits) are registered  with the Minister; and 17,168 carriers (without 
networks) have submitted notifications (up to 1 March 2016).  
 
Names and market shares of the leading companies for fixed telecom services : 
NTT East and NTT West (combined market share for fixed telecom servi ce 53.8%), KDDI (10%), K -Opticom 
(10%) (December 2015).  
 
Name and market shares of the leading companies for mobile telephones services : 
NTT DoCoMo (43.3%), KDDI group (including Okinawa Cellular, 28.9%), SoftBank group (27.8%) 
(December  2015).  
 
Name and m arket share of the broadband internet services : 
NTT group (27.1%), pure ISP providers (e.g. Asahi Net, Yahoo BB, OCN, So -net, @nifty, Biglobe)  (24.6%), 
KDDI group (19.0%) (March 2015).  
 
Foreign ownership participation in telecom companies : Except for the N ippon Telegraph and Telephone 
Corporation (NTT), there are no restrictions for Japan's telecommunications carriers. Foreign ownership shares 
of listed telecom companies are not available, except for NTT , where it stood at 30. 5% as at December 2015 . 
State o wnership : NTT 33.3%.  
Establishment of new companies, mergers or closures since the last review: none.  
Registered telecommunications carriers increased in number by 5, notified telecommunications carriers 
increased in number by 620 (4 newly registered, 1,0 24 newly notified) (1 February 2017) . 
Regulatory framework  
Interconnection and competition issues:  
Fixed interconnection regime : 
A telecommunication carrier that installs Category I designated telecommunications facilities (i.e. a carrier 
having more tha n a 50% share of subscriber lines  in the prefecture) has the obligation to define and publish 
the Interconnection Agreement, and the Interconnection Accounting Rules based on the Interconnection WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Accounting Regime . Designated facilities are defined as facilities for subscriber lines and any associated facility 
necessary to connect to the other operator with the aim of improving customer  convenience and contributing 
to the general and adequate progress of telecommunication s. 
 
Mobile interconnection regime : see details of the recent reform below  
 
Number of complaints filed or resolutions effected of interconnection disputes among operators : 
One request in December 2016 for the Minister of Internal Affairs and Communications to start negotiations.  
Other regulat ory aspects:  
Facility sharing : No change since 2015.  
Local loop unbundling : No change since 2015.  
Number portability : System is already introduced (Article 4, Rules for Interconnection Charges, Regulations for 
Article 20, Telecommunications Numbers). No change since 2015.  
Spectrum management : There has been no change in the framework of regulation since 2015.  
Transparency : No change since 2015.  
Accounting rates : No change since 2015.  
Licensing : No change since 2015.  
 
Universal service (beneficiaries, contri butors, services covered, level, expenditures, method of calculation and 
management)  
 
 
Beneficiaries:  
Telecommunications carriers that provide basic telecommunications services , including universal services , are 
designated by the Ministry of Internal Affai rs and Communications (MIC) as carriers meeting the requirements 
(eligible telecommunications carriers: NTT East and NTT West).  
 
Contributors:  
Telecommunications carriers that have connections to universal service facilities of NTT East and NTT West 
(limited to carriers with sales of ¥1 billion or more) . 
 
Services covered:  
(1) analogue fixed telephones (access lines for analogue fixed telephones) or optical IP telephone equivalent 
with analogue fixed telephones (included in universal services from April 201 1); 
(2) Category I public telephone service;  
(3) Emergency calls ( to the numbers 110, 118,  119).  
Expenditure (approved in 2015):  
total compensation for NTT East and NTT West – ¥6.8 billion  
 
Method of calculation:  
- for access lines for analogue fixed telep hones: benchmark method for the top 4.9% of the high -cost regions; 
 when the cost per line exceeds the national average cost + double standard deviations, part of the cost will 
 be covered by the universal service fund.  
- category I public telephone servic e: cancel -out cost -revenue calculation method  
- emergency calls: costs of emergency lines are compensated  
- optical -IP telephones equivalent to analogue fixed telephones: excluded from compensation.  
 
Management:  
The Telecommunications Carriers Association  (universal telecommunications service support institution) is 
responsible for collecting contributions from carriers and providing the subsidies. The institution must obtain 
permission from the MIC regarding the annual subsidies and contributions.  
Source : Information provided by the authorities of Japan.  
4.95.   The regulatory framework of telecommunication services in Japan has been described in 
detail in previous TPR reports 46; since Japan's previous review, it has undergone a few changes 
concerning: the mobile  interconnection regime, consumer information and protection, SIM card 
unlocking and the duration of mobile contracts.  
4.96.   Regarding the mobile interconnection regime, based on the Japan Revitalization Strategy 
(Cabinet decision in June 2013) and the report by  the Information and Communications Council 
(December 2014),  the Telecom Business Act was amended in May 2015 (with entry into force of 
the amendments in May 2016) so as to promote fair competition and encourage the entry of new 
mobile virtual network oper ators (MVNO). The amendments impose an unbundling obligation on 
mobile network operators, which under the previous MIC guidelines could decide to what extent 
                                                
46 WTO documents WT/TPR/S/276, 15 January  2013 and WT/TPR/S310/Rev.1, 6  May 2015.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  they would interconnect and which expenses would be charged at production costs. Under the new 
regime, MIC Ordinance  No. 31 of 29 March 2016  precisely defines the interconnection obligations 
as well as the calculation method and procedures for interconnection fees to be paid by MVNOs, 
which are based on reasonable costs under efficient management  plus reasonable profit.  
4.97.   Regarding the protection of consumers and the provision of information, the 
Telecommunication Business Act was amended in May 2015 so as to empower consumers in 
conclusion of  their telecommunication services  contracts , in particular by o bliging the operators to 
deliver a document (in paper or electronic format depending upon user's choice) on the contract 
regarding designated telecom services, by prohibiting operators and sales agencies from providing 
untrue information and intentionally failing to disclose facts with regard to matters that would 
affect the decision of the user, and by prohibiting operators and sales agencies from continu ing to 
solicit a customer to conclude a contract after the customer has manifested his unwillingness to  do 
so or has refused further solici tation.  
4.98.   Regarding SIM locking, so as to remedy the negative impact of telecom operators' measures 
on users, the MIC issued a "guideline for SIM unlock" in December 2014 . Based on the guideline, 
all major operators (NTT -DoCoMo, KDDI and Softbank) agreed to respond to free SIM unlock ing 
request once six months have elapsed since purchase for all mobile handsets released on and after 
1 May 2015.  
4.99.   Regarding the duration of mobile phone contracts, the MIC established an expert  group and 
requested it to review telecommunications service contracts characterized by binding period and 
automatic renewal, and on 16 July 2015, the group recommended the MIC that new tariff plans 
without a long -term binding condition would be needed . According to the authorities, based on the 
recommendations, published by the MIC, mobile operators voluntarily introduced tariff plans that 
did not involve a long -term binding condition.  
4.6.3   Audiovisual services  
4.6.3.1   Film industry  
4.6.3.1.1   Economic structure  
4.100.   Foreign operators  can legally operate in all segments of Japan's film industry47 sector and 
are effectively present in all of its segments (Chart 4.10). Foreign affiliates have ventured into the 
production of Japanese domestic films.  
                                                
47 Under this heading one can group film production, film distribution (which are both grouped in one 
single CPC provision al item) and film exploitation/ projection in movies theatres.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 4.10 Structure of the film industry in Japan  
Source:  JETRO, Japan Economic Monthly, May 2005; and data provided by the WTO.Chart 4.10  Film Industry 
Production
Other film-production 
companies including 
foreign film 
production companiesDistribution
Distribution divisions 
of majorsThree majors
(Shochiku, Toei & Toho)Planning & financing
Single -company
production but 
joint financing
OthersFilms by major studios
Independent distributors
& distribution divisions
of three majorsExhibition
Foreign -affiliated and
other theatresIndependent theatresDirectly operated and
affiliated theatres
of majors
Independent distributorsJapanese films
Imported films
Exhibition
Foreign -affiliated and
other theatresIndependent theatresDirectly operated and
affiliated theatres
of majorsDistribution
Major affiliates
(Buena Vista, Fox, 
Sony, UIP and Warner)
Rights
acquisition
 
Source:  JETRO, Japan Economic Monthly, May 2005 , and data provided by the WTO . 
4.101.   Table 4.12 describes the size of the market for both domestic and imported films over the 
last three years that are statistically available. In terms of box office , Japan is the third -largest 
single market in the world after the United States and China.48 It is a mature market that has to a 
large extent exhausted its potential of growth and is subject to fluctuations , despite its historical 
peak in 2010 . Independent films and independent theatres are losing ground to commercial films 
produced by the local majors with the financial support of TV broadcasters , and to multiplexes 
chains. Attempts are being made to diversify  the content shown in cinemas beyond films e.g. live 
sport events or concerts based on point -to-point digital transmission (so -called ODS, other digital 
stuff/online digital source).  
Table 4.12 Size of the Japa nese film market, 2012 -15 
 2012  2013  2014  2015  
Total number of movie screens ( number 
of cinema complex es) 3,290  
(2,765)  3,318  
(2,831)  3,364  
(2,911)  3,437  
(2,996)  
Number of films released  
 Japanese films 554 591 615 581 
 Imported films 429 526 569 555 
 Total 983 1,117  1,184  1,136  
Number of admissions (thousand)  155,159  155,888  161,116  166,630  
Average a dmission fee ( ¥) 1,258  1,246  1,285  1,303  
Box office gross receipts  
 Japanese films ( ¥ million)  128,181  117,685  120,715  120,367  
 Imported films ( ¥ million) 67,009  76,552  86,319  96,752  
 Total ( ¥ million)  195,190  194,237  207,034  217,119  
Share (%)  
 Japanese films  65.7 60.6 58.3 55.4 
 Imported films  34.3 39.4 41.7 44.6 
Source:  Motion Picture Producers Association of Japan online information (in Japanes e). Viewed at: 
http://eiren.org/toukei/data.html . 
                                                
48 Motion Picture Association of America online information. Viewed at: http://www.mpaa.org/wp -
content/uploads/2016/04/MPAA -Theatrical -Market -Statistics -2015_Final.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.102.   Table 4.13 describes the economic contribution of film production, film distribution and film 
exhibition to the Japanese economy in 2014 in terms of gross o utput, value added, labour income, 
tax revenue and employment. As the revenue streams of films producers show (Charts 4.11 and 
4.12), the first such stream is still film exhibition , but it accounts only for about 30% of the 
revenues. Physical rental and sa les of DVD are a close second, although they are bound to 
diminish in the near future in favour of dematerialized channels of secondary distribution. The 
relative importance of video distribution through mobile handsets is a specificity of the Japanese 
market. 
Table 4.13 Economic contribution of film production, film distribution and film exhibition 
to the Japanese economy, 2014  
(¥ billion, unless otherwise specified)  
Sector  Gross output  Value added  Labour inco me Tax revenue  Employment  
Direct  Total  Direct  Total  Direct  Total  Direct  Total  Direct  Total  
Film 
production  113.5  229.8  51.4 115.8  25.4 56.6 7.5 18.4 8,852 persons  21,661 
persons  
Film 
distribution  115.0  232.7  52.1 117.3  25.8 57.3 7.6 18.7 1,360 persons  3,326 
persons  
Film 
exhibition  207.0  441.7  77.0 205.9  41.2 102.7  13.0 34.2 12,904 
persons  25,686 
persons  
Total  435.5  904.2  180.5  439.0  92.4 216.6  28.1 71.3 23,116 
persons  50,673 
persons  
Source:  Mitsubishi Research Institute, Inc. (2015), Economic Contrib ution of the Japanese Film and 
Television Industry  p. 18. Viewed at: http://www.jimca.co.jp/research_statistics/index.html . 
Chart 4.11 Mark et revenue and share attributed to films, 2014  
Chart 4.[Market revenue and share attributed to films, 2014]
Source:  Mitsubishi Research Institute, Inc., Economic contribution of the Japanese Film and Television Industry, 
October 2015Film exhibition 
30.4%Internet (mobile)
6.6%
Internet (PC)
10.4%
Terrestrial
broadcasting
6.4%
CATV
5.7%
Satellite 
broadcasting
6.2%
Home video (rental)
27.2%Home video (sale)
7.2%Primary distribution market
Secondary distribution market¥682
billion
 
Source:  Mitsubishi Research Institute, Inc.  (2015) Economic contribution of the Japanese Film and Television 
Industry , P.18. Viewed at: http://www.jimca.co.jp/research_statistics/index.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 4.12 Market revenue attributed to films, 2000 -2014  
(¥100 million)  
0%10%20%30%40%50%60%70%80%90%100%
01,0002,0003,0004,0005,0006,0007,0008,0009,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Film exhibition Home video (sale) Home video (rental)
Satellite broadcasting CATV Terrestrial broadcasting
Internet (PC) Internet (mobile) % of secondary distributionChart 4.[Market revenue attributed to films(2), 2014
¥100 million
Source:  Mitsubishi Research Institute, Inc., Economic contribution of the Japanese Film and Television Industry, October 201 5
 
Source:  Mitsubishi Research I nstitute, Inc.  (2015) Economic contribution of the Japanese Film and Television 
Industry , P.18. Viewed at: http://www.jimca.co.jp/research_statistics/index.html . 
4.6.3.1.2   Regulatory framework  
4.103.   Regarding motion picture and video tape production and distribution49, Japan has 
undertaken full GATS commitments for modes 1, 2 and 3 under market access, full commitments 
for mode 1 and 2 under national treatment , and "none except as indicated in the horizont al 
commitments " for mode 3 under national treatment , which cross -refers to the horizontal limitation 
"unbound for research and development subsidies". This binding is on a  status quo basis as 
it reflects the applied regime of this sector in Japan.  
4.104.   Japan h as not listed, unlike many other WTO members, a GATS MFN exemption for 
co-production agreements, as Japan has not signed any co -production agreements so far except 
for one with Canada50 and one signed between Japan's designated body Unijapan and the French 
Centre National du Cinéma .51 
4.105.   Japan has indicated that it considered the provision of motion picture projection services 
under mode 1 technically unfeasible ("unbound*") for both market access and national treatment. 
There are however no  legal limitations to  the provision of cross -border point -to-point digital 
                                                
49 Item 9 611 of the CPC provisional classification, "Motion picture and video production and distribution 
services", is defined as the combination of promotion and advertising services (CPC 96111), of motion picture 
and video -tape production services (CPC 96112, i. e. production services of theatrical and non -theatrical motion 
pictures, whether on film or on video tape, for direct projection in theatres, for broadcasting on television, or 
for sale or rental to others; the products may be full -length and short theatri cal films for public entertainment, 
for advertising, education, training and news information as well as religious pictures, animated cartoons of 
any kind, etc .), motion picture or video tape distribution services (CPC 96113, i.e. distribution services of  
motion pictures and video tapes; this involves the sale or rental of movies or tapes to other industries for 
public entertainment, television broadcasting, or sale or rental to others) and other services in connection with 
motion picture and video tape pro duction and distribution (CPC item 96114, i.e. film dubbing, film title printing, 
editing, cutting, etc .). 
50 The 1994 Common Statement of Policy on Film, Television and Video Coproduction Between Canada 
and Japan, amended in 1995. Viewed at: http://www.tel efilm.ca/document/en/04/traites/japan.pdf  (for the 
original text), and http://www.telefilm.ca/document/en/04/traites/Amendment_Japan.pdf  (for the 
amendment) .  
51 Japan -France cinematographic cooperation memorandum, May 2005. Viewed at: 
http://unijapan.org/english/pdf/BusinessReport2004.pdf .  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  transmission to cinemas. Japan has also undertaken full commitments in mode 2 for market and 
national treatment as well as for mode 3 under market access. Mode 3 for national treatment 
commitments cross -refer to the horizontal limitation "unbound for subsidies for research and 
development".  
4.106.   Liberalization under certain FTAs to which Japan is party goes beyond its GATS regime 
where positively -listed commitments contain partially improved (agreement with S ingapore) or full 
commitments (agreements with Brunei Darussalam, India, Indonesia Malaysia, Mongolia, 
Philippines, Thailand and Viet  Nam52), while negatively -listed commitments under certain FTAs 
(with Australia, Chile, Mexico, Peru and Switzerland) do not  contain any reservation s regarding the 
film sector for either production distribution or projection.  
4.107.   Public assistance  to the sector , including by local governments, is relatively limited. There 
are no tax incentives for film production, and subsidies by local film commissions are minimal , 
except to a certain extent for those provided by the Okinawa film commission.53 
4.108.   As to the Government's financial assistance to the sector, the Ministry of Economy , Trade 
and Industry (METI), which focuses on the promotion  of the content industry, has two different 
budget allotments to support the industry. The first , amount ing to ¥650 million in 2015, aims to 
boost the content industry . This budget contributes to promoting expansion to foreign markets and 
co-production in the content industry and helping  young producers study abroad.  The second 
budgetary allotment is dedicated to the "Cool Japan  Fund" , whose capital is ¥52,300  million, 
79.5% of which is from the Government and the remainder from banks and the private sector , and 
of which ¥7,500  million is lent to SDI media Group Inc., which is the world leading provider of 
media localization services (e.g.  dubbing and subtitling). It would appear that the Agency for 
Cultural Affairs has budget allotments for the sector, such  as those aimed at promoting Japanese 
films54; according to the authorities, however, the Agency does not have preferential measures or 
subsidies for production or distribution of films in terms of promoting growth in the Japanese film 
industry.  
4.109.   Furthermore , Unijapan is in charge of the promotion of Japanese cinema abroad (including 
subsidizing subtitles and participation in foreign film festivals), organization of the Tokyo 
International Film Festival (TIFF), the TIFFCOM market place for films and TV in Asi a, and issuance 
of the certificate that determines  eligibility for the Bunka Cho coproduction subsidy scheme55. 
Unijapan is a non -profit organization established by the cinema industry in 1957 under the 
auspices of the Ministry of Foreign Affairs and the ME TI. In 2016, 45 % of its ¥1,274 million 
budget (i.e. ¥577 million) was provided by the Bunka Cho ( ¥193 million) and the METI 
(¥384.5  million). The remaining 55% of the budget was provided by the private sector 
(¥527 million), the Japan Foundation (¥140 million), and the Tokyo Metropolitan Government 
(¥30 million).  
4.110.   There are no compulsory quotas for film production or investment imposed on 
TV broadcasters. TV broadcasters play a large role in the financing of the production of domestic 
films; they do so on a voluntary basis.  
4.6.3.2   Television services  
4.6.3.2.1   Economic structure  
4.111.   The TV industry in Japan can be divided into several broadcasting segments, namely  
terrestrial TV, satellite TV, cable TV and on demand/streaming/Internet protocol TV. TV production 
                                                
52 For four of these agreements (those with Malaysia, Mongolia, the Philippines and Thailand) full 
commitments are made on a standstill basis, the unu sual possibility of listing standstill commitments being one 
of the original  elements of recent positively listed Japanese FTAs.  
53 Up to ¥15 million per project. For a detailed description of the film commissions system in Japan, see 
Japan Film Commission (2015), Guide to filming in Japan . Viewed at: 
http://www.japanfc.org/en/pdf/jfc_handbook_e.pdf  (in particular,  page 45 for the incentives provided).  
54 Agency for Cultural Affairs online infor mation (in Japanese). Viewed at: 
http://www.bunka.go.jp/seisaku/bunka_gyosei/yosan/pdf/h28_yosan.pdf . 
55 Unijapan online information. Viewed at: http://www.unijapan.org/english/production/certificate.html  
(For a detailed description of the conditions required to obtain th e certificate).  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  and TV distribution have been, to a large extent, vertically integrated with broadcasting, for 
historical and regulatory reasons, although recent changes to the regulatory framework have 
allowed their unbundling (see below).  
4.112.   Chart 4.13 describes th ese segments , as well as their free and paying sub -segments, 
number of viewers and corresponding licensing regime, which will be described below in the 
regulatory section.  
Chart 4.13 Television transmission industry, 2014  
Source:   Information provided by the authorities.Chart 4.[] Television Broadcasting Industry, 2016 
Basic Terrestrial (406) Video -on-demand
Over-the-top servicesBasic Satellite (43)
Area broadcasting
e.g. local governmentVOD, OTT services
which require the 
receiver's access to 
the server of the 
transmitter are not 
classified as 
"Broadcasting" and 
are not regulated by 
the Broadcast Act.
e.g. Hulu, Netflix
CS124 / CS128
e.g. Sky Perfect -TV 
Premium Service: 
1.2 million households as 
of March 2016General TerrestrialBasic Broadcasting
General Broadcasting54.2 million households as of March 2012
e.g. NHK, NTV, TBS, TV Asahi, Fuji TV, 
Tokyo TVFree (BS):
40.4 million households as of December 2015
e.g. BS Japan, BS Fuji
Pay TV (BS/CS110):
e.g. WOWOW and Sky Perfect TV, 
respectively, 2.8 million and 2.2 million 
households as of March 2016
Number of cable TV
subscribers: 2.9 million 
households as of March 2016
e.g. J:COMCATV (510) General Satellite (5)
( ) = Number of companies.Broadcasting
 
() = Number of companies.  
Source:  Information provided by the authorities.  
4.113.   Table 4.14 describes the economic contribution of each of these broadcast ing segments as 
well of TV production and TV distribution to the Japanese economy in 2014 in terms of gross 
output, value added, labour income, tax revenue, and employment.  
Table 4.14 Economic contribution of the television sector to the Japanese economy, 
2014  
(in ¥ billion unless otherwise specified)  
Sector  Gross output  Value added  Labour 
income  Tax revenue  Employment  
Direct  Total  Direct  Total  Direct  Total  Direct  Total  Direct  Total  
TV production  390.1  789.5  176.8  398.0  87.4 194.4  25.9 63.3 14,270 persons  34,913 persons  
TV distribution  328.9  665.6  149.1  335.5  73.7 163.9  21.8 53.4 14,270 persons  34,913 persons  
Public terrestrial  
broadcasting  674.8  1,341.6  380.6  743.5  169.5  352.4  61.8 122.1  11,794 persons  46,047 persons  
Private  
terrestrial 
broadcasting  2,208.3  5,092.8  837.4  2,325.1  347.7  1,070.8  160 408.6  46,918 persons  173,177 persons  
CATV 
broadcasting  497.5  960 297.3  541.9  120.1  241.6  47.2 88.4 18,215 persons  39,400 persons  
Satellite 
broadcasting  366.1  788.7 164.1  382.8  19.5 126.4  44.5 80.4 1,625 persons  20,459 persons  
Online service  161.4  326.6  75.4 169.2  42.2 88.1 13.6 29.8 4,098 persons  11,793 persons  
Total  4,627.1  9,964.8  2,080.7  4,896.0  860.1  2,237.6  374.8  846 111,190 persons  360,702 persons  
Sourc e: Mitsubishi Research Institute, Inc., (2015) , Economic Contribution of the Japanese Film and 
Television Industry , p.18. Viewed at: http://www.jimca.co.jp/research_statistics/index.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.6.3.2.2   Regulatory framework  
4.114.   Japan has not undertaken any GATS commitments for the three five digit CPC items 
covering television services, namely CPC 96132 "television services"56, CPC  96133 "combined 
programme making and broadcasting services"57, and  CPC 75241  "television broadcast 
transmission services".58 
4.115.   Except in the case of an agreement with Viet Nam, which, like Japan's GATS commitments, 
contains no commitment regarding television, the regime contained in Japan's FTA s is slightly 
more liberal than in GATS fo r positive listing with the addition of a full commitment in mode 2 for 
the three television items. The three other modes remain unbound for agreements with 
Brunei  Darussalam, India, Indonesia, Malaysia, Mongolia, the Philippines, Singapore and Thailand. 
In addition, for agreements with positively -listed commitments that also have an investment 
chapter (Brunei  Darussalam, Indonesia, Malaysia, Mongolia, Philippines and Singapore), there is 
an investment reservation for future measures in broadcasting, whose scope in terms of obligation 
varies depending of the agreement (e.g. national treatment only for Malaysia and Brunei 
Darussalam, national treatment and prohibition of performance requirements for Singapore, the 
Philippines, Indonesia and Mongolia). Broadca sting is defined in this reservation by reference to 
Japanese law and hence encompasses production, distribution and radio transmission services.  
4.116.   The regime negatively listed in some of Japan's FTAs  (with Switzerland, Chile, Peru, Mexico 
and Australia) is  more liberal , since it contains only a reservation for future measures for 
broadcasting.59 There again broadcasting is defined by reference to Japanese law.  
4.117.   In terms of the regime applied , the Broadcasting Act of 1950 and the Radio Act of 1950 
were last amended in November 2010 so as to create a streamlined regime for broadcasting 
"approvals" (i.e. licences). The new regime distinguishes two categories of approvals. The first is 
"the basic broadcasting approvals" covering terrestrial broadcasting and broad casting through the 
so-called BS satellites (i.e. geo -stationary broadcasting and co mmunication satellites over 
110 degrees east), and the second is the "general broadcasting approvals" covering broadcasting 
through other satellites, and cable TV. Both typ es of approval are granted by the Ministry of 
Internal Affairs and Communications (MIC). Radio waves for broadcasting (and 
telecommunications) are allocated by the authorities in accordance with the provisions of the Radio 
Act; while the authorities have c onsidered the possibility of introducing the auctioning of radio 
waves, it has not been adopted to date.60 
4.118.   Regarding basic broadcasting, a new feature of the amended Broadcasting Act is that 
terrestrial broadcasters can now distribute their programming thro ugh third party terrestrial 
wireless transmission facilities (previously, they were required to own and operate such facilities). 
This possibility to unbundle is aimed at providing flexibility to the management of TV companies 
and to increase competition b y decoupling the ownership of broadcasting facilities from the 
production of broadcasting content.  
4.119.   Basic broadcasting approvals are renewed every five years.  Under the circular notice of the 
Ministry of Internal Affairs and Communications No.  68 of 200161, the Government may renew the 
approval of a terrestrial basic broadcaster only if the ratio of educational programmes exceeds 
                                                
56 Defined as the production of television programmes whether live  or on tape or another recording 
medium for subsequent broadcast.  
57 Defined as combined services of both producing and transmitting radio and television programmes.  
58 Defined as network services necessary for the transmission of television signals, i rrespe ctive of the 
type of technology (network) employed. This subclass does not include satellite -to-cable services where the 
provider sells T.V. signals via satellite to cable companies – as opposed to selling use of satellite facilities – nor 
does it include DTH (direct -to-home) satellite services where the provider sells television programm e packages 
directly to households located in remote areas.  
59 The type of obligations for which Japan has made this reservation varies depending of the 
agreements: market ac cess and national treatment for Switzerland;  national treatment, prohibition of 
performance requirements, local presence and senior management and board of directors for Australia, Chile 
and Mexico;  national treatment, market acc ess and local presence for Peru; and  market access, national 
treatment, prohibition of performance requirements, local presence and senior management and board of 
directors for Australia.  
60 MIC online information. Viewed at: http://www.soumu.go.jp/main_content/000121939.pdf . 
61 MIC online information. Viewed at: http://www.soumu.go.jp/main_content/000120084.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  10% and that of cultural programmes exceeds 20% . The Broadcasting Act contains no  quantitative 
restriction s on the categories that  television broadcasting companies may disseminate and hence 
no quantitative restriction on foreign -produced programmes. Basic broadcasting companies must 
however maintain a mutual balance between the broadcast programmes (Article 106 of the 
Broadcast ing Act). They also have the obligation to publicize the ratio and total hours of 
programmes by category  (culture, education, news, entertainment, TV shopping and others  – 
Article  107 and Article 6 , Para. 6 of the Broadcast ing Act). They must make efforts to pr oduce 
programmes that meet the demand of the audience in the areas they broadcast.  
4.120.   There are non -discriminatory limits on the ownership of multiple broadcasts networks 
based on competition policy considerations. These limitations include limits on the owne rship of 
share s, on board seats and on the use of satellite transponder capacity. Furthermore a single 
person or entity cannot have a relationship of control over three businesses (newspaper business, 
television business and radio business) in the same bro adcasting target region. In addition a single 
person  or entity  cannot hold more than one third of the voting rights in an approved broadcasting 
holding company.  
4.121.   The broadcasting law and the radio law contain a relatively complex series of limitations on 
foreign ownership, which varies according to the type of activity (production or transmission62), to 
the type of licen ce (basic or general) and to the mean s of transmission (terrestrial, satellite, or 
cable). Table 4.15 describes in detail those limitations.  
Table 4.15 Restrictions on foreign ownership applying to TV broadcasting companies  
Restrictions on foreign ownership of broadcasting companies  
 Basic  General  
Terrestrial  Radio wave transmission activities:  
Under 20%  (Radio Act Art.5 , Para. 4, 
items 2 and 3) 
e.g. NHK and the five commercial 
terrestrial broadcasters  
 
Production activities:  
Under 20%  (Broadcasting Act Art.  93, 
Para. 1, item 6(4)(5))  
e.g. NHK and the five commercial 
terrestrial broadcasters  Radio wave transmission activities:  
Under one third (Radio Act Art.  5, 
Para. 1, item 4)  
e.g. area broadcasting operators 
(local governments etc .)  
 
Production activities:  
No restrictions (Broadcasting Act Art.  
133) 
e.g. area broadcasting operators 
(local gover nments etc .) 
Satellite  (BS/ CS110)63 
Radio wave transmission activities  
Under 33%  (Radio Act Art.  5, Para. 1, 
item 4)  
i.e. Broadcasting Satellite System 
Corporation, Sky Perfect JSAT  
Production activities  
Under 20%  (Broadcasting Act Art.  93, 
Para. 1, item 6(4)) 
e.g. BS Asahi, WOWOW  (CS124/CS128)  
Radio wave transmission activities   
No restrictions  
(Radio Act Art.  5, Para. 1, item 2) 
i.e. Sky Perfect JSAT  
 
Production activities   
No restrictions (Broadcasting Act Art.  
126) 
e.g. Sky Perfect Broadcasting, USEN  
Cable  Irrelevant  Production activitiesa 
No restrictions (Broadcasting Act Art.  
126 and 133) 
e.g. J:COM  
a Licences and limitations for radio transmission activities are irrelevant in the case of cable TV, since 
cable operators do not use radio transmissi on for signal but either copper cables or optical fibre.  
Source:  WTO secretariat, based on data provided by the authorities of Japan.  
4.122.   In cases where foreign ownership is limited, the ratio of foreign nationals in board 
members is restricted and the firm's voting share directly owned by foreign nationals or entities 
                                                
62 For transmission activities the exact leg al term used by the laws is "radio wave transmission 
business" defined as "the business to transmit radio waves on behalf of broadcasting companies". For 
production activities the legal term used is "broadcasting business" defined as "the business to produ ce and 
disseminate programs".  
63 BS stands for broadcasting satellites, CS for communication satellites, and 110, 124 and 128 for their 
various geo -stationary positions.   WT/TPR/S/ 351/Rev.1  • Japan  
 
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  must not exceed the specified limit (20 or one third  depending of the case) in order for the firm to 
hold or receive a licen ce. Furthermore, indirect foreign ownership of 20% or more through a 
subsidiary or an affiliate is not permitted for terrestrial basic broadcasting. In practice, the five 
terrestrial commercial networks and BS satellite licen ce holders, being publicly listed, have a 
certain degree of foreign ownership within the threshold. MI C approval is required in case of 
mergers or divestiture for hold ers of basic broadcasting licenc es. 
4.123.   Video -on-demand OTT services are not considered as "broadcasting" services, and are not 
subject to foreign ownership restrictions. Examples include the U .S. IPTV provider Hulu, which 
offered its services as of 2011, on a 100% US owned basis until its takeover by Nippon National 
Television Networks in 2014, or Netflix which launched a similar multi -device streaming service 
without a local shareholding partner  in September 2015 .  
4.124.   General broadcasters  are divided into two categories depending of the broadcasting areas 
and the impact on viewers: those subject to registration and those subject to notification. General 
broadcasters subject to registration hold thei r licen ce permanently unless their registration is 
revoked following a breach of laws and regulations. Some rules concerning the programme 
standards are applied to general broadcasters subject to notification whereas they are all applied 
to general broadca sters subject to registration; in both instances there are no limitations on 
multiple network ownership.  
4.125.   Pursuant to the Foreign Exchange and Foreign Trade Act, certain acquisition of shares in 
broadcasting licen ces is subject to prior filing for assessme nt in terms of national security, etc.64 
This so -called prior notification requirement for investment (applied to all broadcasting licen ces, 
basic or general), as in the case of some other sectors , has n ot given rise to any refusal s since 
2015.  
4.6.3.3   Radio servi ces 
4.126.   There are three types of radio companies in Japan. First ly, 99 AM/ FM commercial radio 
operators, secondly, the public broadcaster Japan Broadcasting Corporation ( Nippon Hoso Kyokai  – 
NHK),  and thirdly 303 Community FM radio operators . Commercial radios  are financed by 
advertisements. They represent 2 .0% of total advertisement spending, a sum in  decline as , since 
2010, internet advertisement spending has surpassed that of radio . 
4.127.   In response to the worsening business conditions for radio broadcasters, the  MIC amended 
its regulation in 2011 in order to relax cross -ownership restrictions on radio broadcasting approval 
holders. As a consequence, one entity can now control up to four licen ce holders.  
4.128.   In terms of broadcasting licen ces/approvals the regime is t he same as for basic licences for 
terrestrial television i.e. a limitation of foreign ownership to 20% for both transmission and 
production activities. As in the case of television broadcasting licences, pursuant to the Foreign 
Exchange and Foreign Trade A ct, certain acquisition of shares in broadcasting  licenses is subject to 
prior filing for assessment in terms of national security, etc.65. This so -called prior notification 
requirement for investment has never given rise to any refusal since 2015. Although  foreign 
investment is allowed within limits there is virtually no such foreign investment in  this sector.  
4.129.   Japan's  GATS and FTA commitments regarding radio services are identical to those for 
television described above , since the classification used (CPC provisional and JSIC) group s 
together TV and radio.  
                                                
64 This notably concerns the acquisition of 10% or more shares of a licence holder whos e shares are 
traded on the stock exchange or over –the-counter market, and the acquisition from a Japanese party of any 
shares in such a licen se holder whose shares are not traded on a stock exchange or over -the-counter market.  
65 As in the case of televisio n, this notably concerns the acquisition of 10% or more shares of a licence 
holder whose shares are traded on the stock exchange or over –the-counter market and the acquisition from a 
Japanese party of any shares in such a licence holder whose shares are no t traded on a stock exchange or 
over-the-counter market.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.6.3.4   Sound recording services  
4.130.   In 2014, Japan was the largest physical market for CDs in the world and the second 
largest market for digitalized music accounting for 20 % of the latter market. Thus it has an 
important upstream sound recording sector, since a large part (87% in value in 2014) of musical 
sales is produced locally.  
4.131.   Japan has undertaken full market access commitments for sound recording services under 
modes 1, 2 and 3, as well as full commitments for  national treatment under modes 1 and 2. For 
mode 3, national treatment commitments cross refer to the horizontal limitation "unbound for 
research and development subsidies". This binding is on a status quo basis as it reflects the 
applied regime of this s ector in Japan. This liberal GATS regime is echoed in Japan's FTAs which 
when positively listed contain commitments similar to Japan GATS  commitments (complemented in 
four cases – Malaysia, Mongolia, the Philippines and Thailand – by standstill  commitments ) and , 
when negatively listed , do not contain any reservation s regarding sound recording.  
4.6.4   Health -related services  
4.132.   Table 4.16 describes the main economic indicator s of Japan's health sector.66 While Japan  
has detailed commitments for various categories of medical personnel (doctors, dentists, nurses, 
physiotherapist and care -workers) under the GATS and in its FTAs (see below), no detailed 
statistics are available for each of those categories. Chart 4.14 provides aggregated statistics for 
all types of medica l personnel by geographical origin as at December  2015. These figures include 
foreign applicants/candidates to the various types and levels of Japanese examinations for medical 
professional/personnel.  
Table 4.16 Main economic indicators of the health sector in Japan, 2010 -12 
Selected indicators  2010  2011  2012  
Total expenditure on health (THE) as % of GDP  9.6 10.1 10.2 
General government expenditure on health (GGHE) as % of 
THE 82.1 82.6 82.7 
Social security  funds as % of GGHE  87.6 87.5 87.4 
Private expenditure on health (PvtHE) as % of the THE  17.9 17.4 17.3 
Private insurance as % of PvtHE  13.5 14.0 14.0 
Private out -of-pocket payment as % of PvtHE  80.6 80.2 80.2 
Total expenditure on hospitals as % of THE  46.3 46.1 46.2 
Total expenditure on inpatient care as % of THE  39.5 39.2 39.3 
Prevention and public health services as % of THE  2.9 2.9 2.9 
Total expenditure on health / capita at exchange rate (JPY ) 360,817  371,440  378,919  
Source:  Institute for Healt h Economics and Policy and Ministry of Health online information (in Japanese). 
Viewed at: https://www.ihep.jp/publications/report/search.php .  
                                                
66 The following services will be described under this section: medical and dental services 
(MTN.GNS/W/120 item 1.A.h, CPC 9312), services provide by midwives, nurses, physiotherapists and 
paramedica l personnel (MTN.GNS/W/120 item 1.A.j, CPC 93191), -private -hospital services (part of 
MTN.GNS/W/120 item 8.A, part of CPC 9311), "other human health services" (MTN.GNS/W/120 item 8.B, part 
of CPC9319 ), social services (MTN.GNS/W/120 item 8.C, CPC 933) an d other health related and social services 
(MTN.GNS/W/120 item 8.D, undefined by the CPC).  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart 4.14 Foreign medical personnel in Japan, as of December 2015  
Chart 4. [medical]    ....TITLE
Source:  Other 1.8%
Korea, Rep. of
3.8%3,008
Source:  China
25.2%Philippines
28.3%
Viet Nam
2.0%Indonesia
31.0%
Note:    Other includes Malaysia (0.17%), Thailand (0.17%), Mongolia (0.13%), Nepal (0.13%), 
and other countries not specified (1.2%).
 
Note:  Foreign medical personnel include  foreign doctors, nurses, care -workers  and candidates to become 
nurses/care -workers  in Japan. " Other" includes Malaysia (0.17%), Thaila nd (0. 13%), Mongolia 
(0.13%), Nepal (0.13%), and other countries not specified (1.2%).  
Source:  Ministry of justice  online information on the number of foreigners according to the residence 
permissions (in Japanese), Statistics No.  15-12-01-2. Viewed at: http://www.e -
stat.go.jp/SG1/estat/List.do?lid=000001150236 . 
4.133.   Chart 4.15 describes the evolution over the last decade of so -called "registered foreign 
personnel with medical status", i.e. foreign personnel having qualified either through Japanese 
examinations or through recognition and that have remained in Japan to practice . Chart 4.16 
describes the origin of such registered medical personnel as at June 2014.  
Chart 4.15 Number of registered foreign personnel with medical status, 2004 -June 2014  
0100200300400500600700800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 June 2014
Source: ..Chart 4    Registered foreign nationals in medical services, 2004 -June 2014
 
Source:  International Organization for Migration –Ministry of Foreign Affairs 2014 Workshop on Foreign 
Nationals and Foreign Human Resources in the Field of Me dical Care – Beyond  Language and 
Cultural Barriers. IOM online information (in English and in Japanese). Viewed at: 
https://www.iom.int/speeches -and-talks/keynote -international -workshop -acceptance -foreign -
nationals -and-their-integration ; and http://www.iomjapan.org/img/usr/workshop_houkoku06.pdf .  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Chart  4.16 Number and origin of registered foreign personnel with medical status, as of 
June 2014  
Chart 4. [medical 1b]    Origin of foreign doctors, as at June 2014
Source:  Other 4.5%
Korea, Rep. of
12.1%710
Note:   Including companions.
Source:  China
76.3%Philippines 1.0%
Viet Nam 2.0%Thailand 0.7%
Indonesia 3.4 %
Note:   Including companions.
 
Source:  International Organization for Migration –Ministry of Foreign Affairs 2014  Worksho p on Foreign 
Nationals an d Foreign Human Resources in the Field of Medical Care – Beyond Language and 
Cultural Barriers . IOM online information (in English and in Japanese). Viewed at: 
https://www.iom.int/speeches -and-talks/keynote -international -workshop -acceptance -foreign -
nationals -and-their-integration ; and http://www.iomjapan .org/img/usr/workshop_houkoku06.pdf .  
4.6.4.1   Medical and dental services  
4.134.   Japan has not undertaken any GATS commitments regarding medical and dental services.  
4.135.   With regard to the negative listing agreement s under some of Japan's FTAs  (with 
Switzerland, Chile, Per u Mexico and Australia), there are no reservation s, existing or future, 
specific to medical and dental services. However, it was difficult for the Secretariat to assess to 
what extent, if any, medical and dental services have been liberalized in view of th e broadly 
encompassing nature of the standard reservation on social services included by Japan in all of 
these agreements, which stipulates that "Japan reserves the right to adopt or maintain any 
measures relating to the supply of services in  […] social se rvices such as income security or 
insurance,…, social security or insurance, social welfare […] health and child  care".67 The same 
remark is valid for all health and social services described below. Qualification requirements are of 
the essence in the case of medical services; doctors and dentists originating from Japan's FTA 
partners do not benefit in that regard from any preferential treatment and are required to go 
through one of the first four of the five channels listed below (Table 4.17).  
4.136.   For positivel y listed commitments under certain Japan's FTAs (with Brunei, India, 
Indonesia, Malaysia, Mongolia,  the Philippines and Singapore), there are basically three cases. The 
first case is seen in the FTA with Thailand, for which, like for GATS, there is no spec ific 
commitment. The second case is observed in the FTA with Singapore, where there are limited 
commitments for mode 268 and for mode 369. The third is that of all other positively listed FTA 
partners for which there are full mode 2 commitments70 and the same  limited mode 3 
commitments as for Singapore71. In addition , some of the positively listed commitments in FTAs 
that additionally contain an investment chapter (Malaysia, Mongolia, the Philippines and 
                                                
67 The obligations to which this reservation applies vary depending on the agreement: MFN, market 
access and national treatment for Switzerland; MFN, national treatme nt, performance requirements, senior 
management/boards of directors and local presence for Chile and Australia; MFN, market access, national 
treatment and local presence for Peru; national treatment, senior management/ board of directors and local 
presence  for Mexico.  
68 Market access: "services must be supplied by a natural person"; and national treatment: "none 
except that medical expenses covered by social welfare schemes are not the same as those covered in Japan".  
69 Market access and national treatment:  "unbound except that there is no limitation on the participation 
of foreign capital".  
70 These mode 2 commitments bind the regime applied erga omnes  i.e. for medical care that was 
received in foreign cou ntries, the insured persons who are enrolled in medic al insurance in Japan can make a 
claim for the overseas medical expenses . However,  in such cases  the insurer uses the medical fee system of 
Japan to determine the reimbursement amount for the medical care received. Therefore, there are  times when 
the reimbursement amount differs between  cases in which medical care was received abroad and in cases 
where it was received in Japan.  
71 Unbound except that there is no limitation on the participation of foreign capital.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Singapore) include a reservation for future measures for health and social services drafted in 
exactly the same terms as for the negatively listed agreement described above.72 The agreements 
with Indonesia and Brunei Darussalam, which also contain an investment chapter, do not have a 
health and social services re servation for future measures whereas they did have one for 
broadcasting ( Section  4.6.3).  
4.137.   In terms of the regime applied , the opportunities for foreign doctors to provide medical 
services in Japan are basically limited to the following six channels:  
• following th e entire  Japanese medical curriculum,  passing exam ination s and obtaining 
qualifications under  the same conditions as Japanese nationals;  
• seeking authoriz ation from the Ministry of Health, Labour and Welfare (MHLW), based 
on qualifications obtained abroad, to take the final national Japanese examination for medical 
practitioners in the Japanese language;  
• in the absence of recognition of qualifications obtained abroad by the MHLW, seeking 
authorization by the MHLW to first take a preliminary exam ination and then , if success ful, 
complete  a traineeship of one year and take the final Japanese medical exam ination  in the 
Japanese language;  
• benefitting from a traineeship programme allowing a degree of practice in Japanese 
hospital s under the supervision of Japanese doctors , but without obtaining formal licen ces to 
practice in Japan for a period of two years , extendable to four;  
• benefitting from a special programme to instruct advanced techniques to Japanese 
doctors allowing a degree to practice in Japanese hospitals, but without obtaining formal licences 
to practice in Japan for a period of two years, extendable to four; or  
• benefitting from one of the five sectoral bilateral agreements signed by Japan allowing 
foreign nationals to practice in certain Japanes e hospitals after passing the Japanese national 
medical examination to be sat in English, but without obtaining formal Japanese medical licences . 
4.138.   Japan has signed four such bilateral sectoral agreements allowing the practice of medicine 
by foreign doctors in Japan, namely with the United Kingdom (1964), the United States (1971), 
France (1996) , and Singapore (2002). Table 4.17 describes the main conditions and procedures 
foreseen by these agreements as well as the number of foreign doctors effectively exerci sing 
within the framework of these agreements as of October 2015.  
Table 4.17 Main conditions and procedures under  bilateral medical recognition 
agreements signed by Japan, as of 2015  
Country  Limitations on 
the number of 
practitioners 
allowed  Number  
of practitioners 
as of 
October  2015  Geographical 
limitations  Common cumulative 
operating  conditions  
United Kingdom  7 3 3 hospitals  (1) Authorization by the 
MHLW, based on the 
educational and 
professional backgrounds  
of foreign doctor applicants 
to take the National 
Examination for Medical 
Practitioners in the English 
language (Article 11, item 
3 of the Medical 
Practitioners' Act)  
 
(2) Success in this exam  
 United States  No limitations  2 1 hospital  
France  No limitations  1 2 hospitals  
Singapore  7 doctors  
3 dentists  0 
0 No limitations 
on hospitals but 
practice limited to 
five prefectures  
                                                
72 There again the obligation s to which this reservation applies vary depending of the agreement: MFN 
and national treatment for Malaysia; MFN, market access and national treatment for Singapore; MFN, national 
treatment and prohibition of performance requirements for the Philippines and Mongolia . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Country  Limitations on 
the number of 
practitioners 
allowed  Number  
of practitioners 
as of 
October  2015  Geographical 
limitations  Common cumulative 
operating  conditions  
(3) Obligation to work in 
hospitals designated by the 
MHLW  
(4) Prohibition from 
practising under the 
coverage of National 
Healthcare Insurance  
 
(5) Prohibition from 
treating Japanese patients  
Source:  WTO Secretariat, based on data provided by the authorities of Japan.  
4.139.   Individuals can practice individually without creating a legal entity. They have to undergo a 
registration proc edure at prefect ural level so as to verify  their qualifications. There are no 
differences of treatment between Japanese doctors and foreign doctors provided that the latter 
have a Japanese doctor's licen ce. 
4.6.4.2   Services provided by midwives, nurses, physiother apists and paramedical 
personnel73 
4.140.   The pattern and texts of the GATS and FTA commitments for th ese services are identical to 
those for medical services described above. For positive -listed commitments in FTAs, there are no 
commitments under  GATS and the FTA  with Thailand, limited commitments in the FTA with 
Singapore in mode 274 and for mode 375, and full mode 2 commitments and the same limited 
mode 3 commitments76 as for Singapore for all other positively  listed commitments for 
FTA partners (Brunei  Darussalam,  India, Indonesia, Malaysia, Mongolia, the Philippines and 
Viet Nam). As in the case of medical services, the four positive -listed agreements that also contain 
an investment chapter (Malaysia, Mongolia, the  Philippines,  and Singapore) have a generic 
reserv ation for future measures listed for health and social services.  
4.141.   For negatively listed commitments in certain FTAs (i.e. with Switzerland, Chile, Mexico, 
Peru and Australia), there are no specific reservation s, existing for future, regarding this subsecto r 
of midwives, nurses and paramedical services but only the generic reservation for future measures 
regarding health and social services.  
4.142.   In addition, six positively listed commitments in certain FTAs (with Brunei, India, 
Indonesia, Malaysia, Mongolia and Thailand) contain a commitment for "services supplied by 
physiotherapists qualified as rigaku ryouhoushi  under the Japanese law". The substance of this 
commitment is identical to that of commitments for midwives , nurse s and paramedical personnel 
(i.e. none  for mode 2 and unbound except that there is no limitation on the participation of foreign 
capital for mode 3), but this commitment is further substantiated by the possibility of a recognition 
of foreign qualifications under certain conditions like for med ical services. The Act on 
Physiotherapists and Occupational Therapists  (Law No. 137 of 1965, last amended in 2014)  
provides in its article 11 -3 that persons who graduated from foreign physiotherapy schools can 
take the national exam of rigaku ryohoushi  if they are authorized to do so by the Minister of 
Health, Labour and Welfare (MHLW) after an examination of their qualifications.  This possibility is 
open to all nationalities regardless of the existence or absence of an FTA. In practice though, no 
foreign p erson that has taken the exam in the past 5 years.  
                                                
73 In order to avoid repetition, this subsection will deal with certified care -workers  that Japan has 
classified as belonging to social services since the substantial concessions made by Japan for nurse s and 
care-workers  in some of its FTAs are basically ident ical and follow the same internal regime. It will also deal 
with physiotherapists that Japan has singled out in its positive listing FTA commitments and for which it has 
created a specific recognition regime.  
74 Market access: "services must be supplied by a natural person" ; national treatment: " none except 
that medical expenses covered by social welfare schemes are not the same as those covered in Japan" . 
75 Market access and national treatment: "unbound except that there is no limitation on the participatio n 
of foreign capital" . 
76 Market access and national treatment: "unbound except that there is no limitation on the participation 
of foreign capital" . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.143.   Regarding this subsector, four agreements  (those with the Philippines, Indonesia, Viet  Nam 
and Thailand ) contain mode 4 commitments for nurses and/or care -workers . In the case of the 
FTA with Thailand , it only stipulate s that the parties shall enter into negotiations regarding the 
possibility of acceptance of Thai certified care -worker s in Japan with a view to conclud ing those 
negotiations within one or two years . Those negotiations are still ongoing.  In the case of Viet Nam, 
the commitment is twofold: first ly, the granting of entry for one to three years for a natural person 
of Viet Nam who has qualified under the Japanese law by passing the kangoshi examination in 
Japanese and second ly, an undertaking to negotiate within two years from the entry in to force of 
the agreement the possibility of acceptance of Vietnamese qualified nurses (and certified 
care-workers, see below). On 18 April 2012, diplomatic notes of "Entry and Temporary Stay of the 
Natural Perso ns of Viet Nam Who Engage in Supplying Services as Nurses or Certified Care 
Workers or Related Activities in Japan" were exchanged, and were put into effect on 17 June of the 
same year. Japan began accepting Vietnamese candidates for nurses and care -worker s from 
6 June 2014  
4.144.   In the case of FTAs with the Philippines and Indonesia, the agreements are almost the 
same and contain a detailed and relatively complex regime.77 They grant access to qualified nurses 
and qualified care -workers  selected and presented by  the administration of their country of 
origin78, to first learn the Japanese language over a period of six months and then during a period 
of one year (renewable ) follow a training course within a designated Japanese medical institution 
to prepare for the Japanese examination for nurses or care -workers . Beneficiaries can take the 
examinations up to three times and durations of stay are extendable proportionally. More 
favourable stay conditions are granted to persons having successfully passed the exams in o rder 
to exercise in Japan. Japan can set annual quotas for the two categories of applicants to the 
examinations as well as global quotas whose periodicity is not precisely detailed for the totality of 
three categories concerned. In addition, Japan can with draw these quotas by invoking a 
mechanism akin to a safeguard. According to 2015 statistics, there are over 1,500 persons 
benefitting from these regimes (Chart 4.17).  
Chart 4.17 Origin of foreign nurses and ca re-workers  under EPAs, as at June 2014  
Source:  Indonesia
49.3%Philippines
41.6%
Viet Nam
9.1%1,521Chart 4. [medical nurse]   Origin of foreign nurses and care workers under EPA, as at June 2014
Source:  
 
Source:  International Organization for Migration –Ministry of Foreign Affairs 2014  Workshop  on Foreign 
Nationals and Foreign Human Resources in the Field of Medical Care – Beyond Language and 
Cultural Barriers , P.5 o f the Statistics Part. Viewed at: 
http://iomjapan.org/img/usr/workshop_houkoku06.pdf . 
4.145.   Altogether, there are about 3,000 foreign persons with a medical status (including doctors 
in a limited  but unknown number) (Table 4.18). It would appear that the number of medical 
personnel from China in Japan is nearly equivalent to that of the Philippines and that from Korea 
nearly doubles that of Viet Nam; the bulk of medical personnel from these two co untries is 
composed of nurses and care -workers that have passed Japanese qualification examinations.  
                                                
77 MOFA online information. Viewed at: http://www.mofa.go.jp/region/asia -
paci/indonesia/epa0708/annex10.pdf  (Section  6, pp. 923 -926 for Indonesia), and 
http://www.mofa.go.jp/region/asia -paci/phil ippine/epa0609/annex8.pdf  (Section 6, pp. 931 -933 for the 
Philippines).  
78 Their necessary qualifications in the country of origin are specified in detail.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table 4.18 Conditions to take the national nurses and caretakers exams  
 Country  Total number of 
foreign do ctors, 
nurses, caretakers 
and 
nurses/caretaker 
candidates  Conditions to take the national 
exams for (1) nurses (2) 
caretakers  Period of stay  
EPA Indonesia  933 (1) Qualification as a nurse in 
Indonesia, professional experience 
of at least 2 years and some basic 
knowledge of Japanese language 
equivalent to N5 (entry level)  
(2) (a) Completion of studies at a 
higher educational institution and a 
qualification as a caretaker in 
Indonesia, or (b) Completion of 
studies at a nursing school in 
Indonesia  
 Under the status 
of residence of 
"Designated 
Activities (EPA)" 
6 months/  
1 year/3 years 
per stay  
Unlimited 
number of 
renewals of a 
permission of 
stay (after 
passing the 
Japanese 
national 
examinations for 
nurses or 
certified care 
workers)  
 
Under the status 
of residen ce of 
"Medical 
Services"  
3 months/  
1 year/3 years / 
5 years  per stay  
Unlimited 
number of 
renewals of a 
permission of 
stay  Philippines  852 (1) Qualification as a nurse in the 
Philippines and professional 
experience of at least 3 years  
(2) (a) Completion of 4 years of 
study at university and a 
qualification as a caretaker, or  
(b) Completion of studies at a 
nursing school in the Philippines  
 
Viet Nam  296 (1) Completion of 3 years/4 years 
of study in nurses' schools, 
qualification as a nurse in Vietnam 
and professional experience of at 
least 2 years  
(2) Completion of 3 years/4 years 
of study at a nursing school  
 
Non-EPA China  758 (1) Authorization by the MHLW, 
based on educational backgrounds, 
a qualification as a nurse in a 
foreign country and a good 
command of the Japanese language 
equivalent to N1 level (the highest 
level)  
(2) Completion of studies in a 
caretakers' school in Japan  
 Under the status 
of residence of 
"Medical 
Services"  
3 months/  
1 year/3 years / 
5 years  per stay  
Unlimited 
number of 
renew als of a 
permission of 
stay. Korea, Republic of  114 
Malaysia  5 
Thailand  5 
Mongolia  4 
Nepal  4 
others  37 
 Total  3008   
Note:  Foreign workers in the medical service industry include foreign doctors, nurses, caretakers and 
nurse/careta ker candidates in Japan.  
The number in non -EPA countries refers to foreign nationals with the status of residence of "Medical 
Services."  
The number in EPA countries is the total of foreign nationals with the status of residence of "Medical 
Services" and th ose with the status of residence o f "Designated Activities (EPA )". 
The total period of stay as candidates for nurses does not exceed 3 years, and that as candidates for 
certified care workers does not exceed 4 years.  
Source:  Ministry of Justice online info rmation on the number of foreigners according to the residence 
permissions. Statistics No.  15-12-01-2. Ministry of Health, Labour and Welfare (MHLW) online 
information. Viewed at: http://www.mhlw.go.jp/file/06 -Seisakujouhou -11650000 -
Shokugyouanteikyokuhake nyukiroudoutaisakubu/epa_base5_270825.pdf  and 
http://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000112866.html . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.146.   The rate of success in the examinations is around 35% for caretak ers and slightly over 
10% for nurses. Table 4.19 details the number of candidates and the number of persons having 
successfully passed the examination by EPA partner and for the  last seven years. These mode 
4 concessions are a quasi -unique example of detai led preferential sectoral mode 4 commitments. 
At the same time, the numerical importance of nurses and care -workers originating from non -EPA 
benefitting partners shows that the liberalization undertaken by Japan goes beyond the strictly 
preferential contex t. 
Table 4.19 Foreign nurse and care -worker candidates, 2008 -14 
  2008  2009  2010  2011  2012  2013  2014  Total 
(Passed)  Total 
(Candidates)  
 Nurses  
Passed (Test takers)   
 0 (82)  3 (254)  16 (398)  47 (415)  30 (311)  32 (301)  26 (357)  154 839 
 Indonesia  0 (82)  2 (195)  15 (285)  34 (257)  20 (173)  16 (151)  11 (174)  98 481 
 Philippines  .. 1 (59)  1 (113)  13 (158)  10 (138)  16 (150)  14 (163)  55 337 
 Viet Nam  .. .. .. .. .. .. 1 (20)  1 21 
 Care-workers  
Passed (Test takers )   
  
 .. .. .. 36 (95)  128 (322)  78 (215)  78 (174)  320 1,501  
 Indonesia    .. .. 35 (94)  86 (184)  46 (107)  47 (85)  214 754 
 Philippines  .. .. .. 1 (1) 42 (138)  32 (108)  31 (89)  106 630 
 Viet Nam  .. .. .. .. .. .. .. 0 117 
.. Not available.  
Note:  The total number of candidates doesn't correspond to the sum of test takers because a candidate 
can take exams multiple times.  
 Only those who have completed the traineeship of at least 3 years can take the care -workers exam.   
Source:  MHLW online information . Viewed at: http://www.mhlw.go.jp/file/06 -Seisakujouhou -11650000 -
Shokugyouanteikyokuhakenyukiroudoutaisakubu/epa_base5_270825.pdf . 
4.6.4.3   Hospital and other human health services  
4.147.   Japan's GATS commitments for hospital and other human health services are limited t o the 
item 8.A, hospital services, and there are none for mode 2 for both market access and national 
treatment (mode 1 deemed technically unfeasible), or for mode 3 under both market access and 
national treatment, which are "unbound except that there is no  limitation on the participation of 
foreign capital". Positively listed commitments for hospital services in certain FTAs (i.e. with 
Thailand, Singapore, the Philippines, Mongolia, Malaysia, Indonesia, Brunei Darussalam and India) 
are identical to those of  Japan's GATS commitments, with two additions. Firstly, for Mongolia, this 
commitment is bound on a standstill basis. Secondly, the agreement with Thailand contains an 
additional commitment on the portability of Japanese national health insurance (i.e. the  
reimbursement by the Japanese health insurance of hospital expenses incurred abroad)79.  
4.148.   In addition, positively listed commitments in certain FTAs contain commitments on 
ambulance services and on blood collection services with the same entries as for hosp ital services 
(i.e. none for mode 2 and unbound except no limitation on the participation for foreign capital for 
mode 3) and the same standstill for Mongolia.  
4.149.   The positively listed commitments in certain FTAs that also contain an investment chapter 
(Mala ysia, Mongolia, the  Philippines and Singapore) have the same generic reservation on health 
services as described above and the same is true for negatively listed commitments in certain FTAs 
(i.e. with Switzerland, Chile, Mexico, Peru and Australia). These negative listings do not contain 
any reservations specific to hospital and other human health services.  
                                                
79 The precise wording of this additional commitment is the following: "The reimbursement of expense s 
for medical treatment received by Japanese nationals in Thailand shall be permissible. Such reimbursement 
shall be made in accordance with Japan's law and regulations" . WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.150.   In terms of the regime applied, the establishment of private clinics, including foreign 
owned and managed clinics, is allowed in Japan provided the tech nical terms and conditions for 
opening clinics are fulfilled. In terms of qualifications and procedures required, doctors who 
qualified in Japan and completed a clinical traineeship of at least 2 years can establish their own 
medical institution  without  permission from the governor or the mayor. However, if a person who is 
not a clinical traineeship graduate wishes  to open a medical institution, he/she must obtain the 
permission of the prefectural governor, the city mayor or the ward mayor.  
4.151.   In both instanc es the authorities will check the fulfilment of the technical requirements 
(Article 27 of the Medical Treatment Act). Even if the planned clinic satisfies the technical 
requirements, the authorization will be granted only if the number of beds in hospitals  and clinics 
in the region concerned does not exceed the standard fixed by the prefecture government 
(Articles  30-4 and 30 -7 of the Medical Treatment Act). This st andard applies to both 
Japanese -owned and foreign -owned clinics.  
4.152.   To obtain the coverage of t he national healthcare insurance, the owners of the clinics must 
request designated clinic status from the National Healthcare Insurance Authorities under the 
National Healthcare Insurance Act (Article 65), which is conditional on meeting legal requirement s. 
4.153.   In practice, the number of foreign clinics is limited compared with the size and level of 
development of the country. The Secretariat has identified only one foreign  clinic, the American 
Clinic Tokyo, while a second one, the British Clinic of Tokyo has just closed its doors.  
4.154.   Chart 4.18 also describes health -related movements of persons to Japan under mode 2 
(consumption abroad) and their origin. They appear relatively marginal compared with the size of 
Japan and with the quality level of its health syst em.  
Chart 4.18 Number and origin of foreign patients treated in Japan (including their 
companions), as at June 2014  
Chart 4. [medical 1b]    Origin of registered foreigners by medical stay, as at June 2014
Source:  China
57.6%Other
13.3%
Philippines
8.9%Mongolia 3.7%
Korea, Rep. of
6.1%Myanmar 3.5%
Russian Federation
4.2%Pakistan 2.6%
427
Note:   Including companions.Chart 4. [medical 1b]    Origin of registered foreigners by medical stay, as at June 2014
Source:  China
57.6%Other
13.3%
Philippines
8.9%Mongolia 3.7%
Korea, Rep. of
6.1%Myanmar 3.5%
Russian Federation
4.2%Pakistan 2.6%
Note:   Including companions.
 
Source:  International Organization for Migration –Ministry of Foreign Affairs 2014 Workshop  on Foreign 
Nationals and Foreign Human Resources in the Field of Medical Care – Beyond Language and 
Cultural Barriers , P.5 of the Statistics Part. Viewed at: 
http://iomjapan.org/img/usr/wor kshop_houkoku06.pdf . 
4.6.4.4   Social services  
4.155.   Japan's GATS schedule does not include commitments for social services (8.C). By 
contrast, the positively listed commitments under the FTAs with Thailand, the Philippines, 
Mongolia, Malaysia, Indonesia, and Brunei cont ain commitments on a large part of social services 
("social services - including services supplied by certified care -workers, excluding child day care 
services - CPC 933 except 93321") modelled on those for hospitals (i.e. none for mode 2 and 
unbound excep t no limitation on the participation for foreign capital for mode 3) and the same 
standstill for Mongolia. There are no specific reservations regarding social services in negatively 
listed commitments under certain FTAs other than the generic health and so cial services 
reservation and the same is true for the investment chapter of the positive listing agreements that 
contain such a chapter.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  4.156.   The main commercial segment of social services is retirement home services. Although it is 
a relatively recent market in Japan, due perhaps to the strength of traditional family ties, it is a 
booming business (12.7% of annual revenue growth between 2010 and 2013) due to the 
increasing geographical mobility of the working population and to the ageing of the population. In 
2005, Japan became the country with the highest percentage of the population over 65 years old 
at 20.1%; this percentage reached 24.1% in 2012 and is expected to rise to 39.9% in 2060.80 
4.157.   To take into account this evolution, the Diet approved a mandatory lon g-term care policy 
for the elderly in April 2000, the "long -term care insurance system" with the triple aim of shifting 
the burden from the family to the State, establishing a relationship between benefits received and 
cost sharing via insurance premiums a nd co -payments, and integrating medical care and welfare 
services into a unified financing model. The reform also partially opened the market for medical 
care and welfare facilities to the private for -profit sector, which was previously banned. This 
for-profit market was then valued at ¥4 trillion.  
4.158.   In 2013, the Japanese senior care market rose above ¥10 trillion, of which ¥5.6 trillion can 
be attributed to senior housing alone (the private sector accounting for ¥1.3 trillion (25%) of this). 
Several foreign firms attracted by this market have bought u p existing retirement home facilities, 
essentially under the legal form of health dedicated real estate investment trust (health REIT), 
notably AIP healthcare from the US and Parkway REIT from Singapore. While major domestic 
companies present in other sect ors have also invested in the ownership and management of such 
facilities, such as the education service provider Benesse  and the food service provider Watami . 
Nonetheless, the market remains fragmented: in 2013, there were 4,762  operators and the top 5 
operators, all Japanese (Message co, Benesse , Nichii Gakan, Best Life Inc and Watami No Kaigo), 
accounted for only 13 % of the market.  
4.159.   There are basically three types of senior housing (plus a large and heterogeneous "other" 
category) (Table 4.20).  
Table 4.20 Main types of senior accommodation in Japan, 2013  
 Characteristics  Condition of 
establishment  Nursing care 
financing 
modea Number of 
rooms  Size and 
growth rate of 
the market  
Licensed 
retirement 
home 
(tokutei 
shistesu )  24-hour nursing  - Licensing at prefectural 
level (municipal level for 
small facilities accepting 
generally only local 
residents  (micchakugata )  
- Limited amount of 
authorizations available  
- Bidding procedure  Reimbursement 
for nursing 
services directly 
from 
government to 
the operator 
with a 10% co -
payment for the 
resident   
 
 
 
 
 
 
 
 
 
 
 
 314,000   
 
 
 
 
 
 
 
 ¥1,328 
 billion  
 
 12.7% 
 annual 
 growth 
 between 
 2000 and 
 2013 Residential 
style 
retirement 
home 
(jutakugata ) Day-to-day 
support and 
meal services  No licence but rules and 
controls on quality , e.g.:  
Regarding staff more 
than 1 office worker 
(seikatsu sodanin) per 
100 users and more than 
1 nursing or care -giving 
staff per 3  users who 
require care, regarding 
facilities: fire safety 
standards   
Prefectures can instruct 
the operator to improve 
in case they find that the 
operator conduct unfair 
or disadvantageous 
actions towards users  The operator 
has to submit a 
"customer care 
plan" and 
receives 30 to 
40% less than 
the licensed 
retirement 
home o perator, 
the rest being 
paid by the 
resident in the 
form of 
co-payments  
                                                
80 Harvard Business School (2015) case study "AIP Healthcare Japan: investing in Japan 's retirement 
home market". Viewed at: https://hbr.org/product/aip -healthcare -japan -investing -in-japan -s-retirement -
home -market/515102 -PDF-ENG. WT/TPR/S/ 351/Rev.1  • Japan  
 
- 132 - 
 
   Characteristics  Condition of 
establishment  Nursing care 
financing 
modea Number of 
rooms  Size and 
growth rate of 
the market  
Elderly only 
apartments  
(sakoju ) Remote/on call 
nursing care 
provider often 
affiliated with 
the apartment 
operator  No licence  If the elderly 
only apartments 
are within a 
license d 
retirement 
home, nursing 
care fees are 
paid with 
insurance 
premiums  77,000  ¥142.4 bn in 
2014 
+ 17.3 
annually 
between 2010 
and 2013  
Others     172,000  ¥726 bn  
Total    563,000  ¥2,196 bn  
a The housing fees strictly speaking are paid by an upfront fee (" moving in fee") and by monthly 
rental and administration fees both paid by residents with their pension and savings.  
Source:  Harvard Business School case study "AIP Healthcare Japan: investing in Japan's retirement home 
market" . 
4.160.   In terms of the regime appl ied, there are no restrictions in the GATS sense for foreign 
operators of REIT and retirement homes including licensed retirement homes. The Government 
has recently taken measures to encourage the construction of new facilities and the renovation 
and exten sion of existing ones. Retirement housing is one of the sectors – with hospitals – that 
can benefit from the Fund for Ensuring Regional Access to Medical Care and Long -Term Care, 
established by the Act on Ensuring Regional Access to Medical Care and Long -Term Care of 
25 June 2014, amending Law No.  64 of 1988. This fund is financed by the consumption tax and 
contributions to its budget are split between the central state (two thirds) and each prefecture 
(one third). Its budgetary allotment was of ¥162.8 bill ion nationwide in 2015 of which ¥72.4 billion 
was for elderly care services. The guidelines for the usage of this fund81 published by the Ministry 
of Health, Labour and Welfare (MHLW) contain no discriminatory provisions reserving the benefit 
of those funds  for Japanese nationals or Japanese companies. In addition,  in its December  2013 
"outline of economic measures for realization of positive cycles" the Government encouraged 
private funds and banks to invest in high growth projects (e.g. healthcare industry  targeting 
elderly people).  
4.161.   In terms of qualifications required from national or foreign REIT operators, the 
1951 Investment Trust and Investment Company Law, last amended in 2013, stipulates that an 
asset manager of a REIT must have real estate transactio n agency service approval. The Real 
Estate Transaction Business Act requires an real estate transaction agency service applicant to 
have the necessary knowledge and experience to conduct the business fairly and adequately 
(Article 50 -2-3 (iii)).  Further, i n 2014, the Government issued the Home Care Rehabilitation  
guidelines which provide a detailed interpretation of the notion of "necessary knowledge and 
experience" for REITs that invest in healthcare.  
 
                                                
81 MHLW online information (in Japanese).  Viewed at:  http://www.mhlw.go.jp/file/05 -Shingikai -
12401000 -Hokenkyoku -Soumuka/0000057828.pdf . WT/TPR/S/ 351/Rev.1  • Japan  
 
- 133 - 
 
  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by product group, 2011 -15 
 2011  2012  2013  2014  2015  
Total exports (US$ billion)  823.2  798.6  715.1  690.2  624.9  
 (% of total)  
Total primary products  5.9 5.8 6.6 6.5 5.9 
 Agriculture  1.3 1.4 1.5 1.5 1.7 
 Food 0.6 0.6 0.6 0.7 0.8 
 Agricultural raw material  0.8 0.8 0.9 0.9 0.8 
 Mining  4.6 4.4 5.1 5.0 4.3 
 Ores and other minerals  0.7 0.9 0.9 0.8 0.7 
 Non-ferrous metals  1.9 1.9 1.9 1.9 1.8 
 Fuels 2.0 1.7 2.3 2.3 1.8 
Manufactures  88.1 88.9 87.6 87.6 87.2 
 Iron and steel  5.7 5.5 5.4 5.4 4.9 
 Chemicals  10.3 9.9 10.6 10.4 10.1 
 5112 Cyclic hydrocarbons  0.9 0.9 1.3 1.0 0.9 
 5822 Other plastics, flat shapes, 
 non-cellular and not reinforced, etc.  1.0 1.0 0.9 0.9 0.8 
 Other semi -manufactures  4.8 4.9 4.9 4.7 4.7 
 Machinery and tran sport equipment  58.3 59.6 57.9 58.0 58.7 
 Power generating machines  1.7 1.8 1.8 1.8 1.8 
 Other non -electrical machinery  15.4 14.6 13.5 14.0 13.8 
 7284 Machinery and appliances for 
 particular industries, n.e.s.  3.4 2.8 2.5 2.7 2.8 
 7232 Mechanical shov els, etc., self -
 propelled  1.2 1.3 1.0 1.1 1.0 
 7285 Parts, n.e.s. of 
 machines/appliances of 723.48, 
 727.21, 728.41 to 728.49  0.8 0.8 0.7 0.8 0.8 
 Agricultural machinery and tractors  0.3 0.3 0.3 0.3 0.3 
 Office machines & telecommunication 
 equipment  10.6 10.3 9.8 9.5 9.6 
 7764 Electronic integrated circuits 
 and microassemblies  3.6 3.5 3.5 3.4 3.5 
 7763 Diodes, transistors, etc.  1.2 1.1 1.0 1.0 1.0 
 7649 Parts and accessories for 
 apparatus of division 76  1.0 0.9 0.9 0.9 1.0 
 Other electrical mach ines 6.2 6.3 6.3 6.4 6.5 
 7725 Switches, relays, fuses etc. for 
 a voltage not exceeding 1000 V  1.0 1.1 1.1 1.1 1.1 
 Automotive products  18.3 20.8 21.2 21.0 21.9 
 7812 Motor vehicles for the 
 transport of persons, n.e.s.  10.6 12.2 12.8 12.8 13.8 
 7843 Other motor vehicle parts and 
 accessories of 722, 781 to 783  4.6 5.0 4.9 4.7 4.6 
 7821 Goods vehicles  1.4 1.6 1.4 1.5 1.5 
 Other transport equipment  6.2 5.8 5.3 5.2 5.1 
 7932 Ships, boats, etc. (excl. 
 pleasure craft, tugs, etc.)  3.1 2.7 2.1 1.8 1.8 
 7139 Parts, n.e.s., for piston 
 engines of 713.2, 713.3,713.8  1.1 1.1 1.1 1.0 0.9 
 7929 Parts, n.e.s., (excl. tyres, 
 engines, electrical parts) of 792  0.4 0.5 0.6 0.8 0.8 
 Textiles  1.0 1.0 1.0 1.0 1.0 
 Clothing  0.1 0.1 0.1 0.1 0.1 
 Other consumer good s 7.9 7.9 7.7 8.0 7.9 
 8719 Liquid crystal devices, n.e.s.; 
 lasers (excl. laser diodes)  1.0 1.0 0.9 1.1 0.9 
 8746 Automatic regulating and 
 controlling instruments  0.6 0.7 0.8 0.7 0.7 WT/TPR/S/ 351/Rev.1  • Japan  
 
- 134 - 
 
   2011  2012  2013  2014  2015  
 8841 Optical fibres and optical fibre 
 bundles; optical fibre cable s other 
 than those of heading 773.1; sheets 
 and plates of polarising material; 
 lenses, prisms, mirrors and other 
 optical elements, unmounted, other 
 than such elements of glass  0.7 0.8 0.8 0.8 0.7 
Other  6.0 5.3 5.8 5.9 6.8 
 9710 Gold, non -monetary (e xcl. 
 gold ores and concentrates)  1.2 0.9 0.7 0.7 0.9 
Source : UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 135 - 
 
  Table A1. 2 Merchandise imports by product group, 2011 -15  
  2011  2012  2013  2014  2015  
Total imports (US$ billion)  855.4  886.0  833.2  812.2  625.6  
 (% of total)  
Total primary products  51.4 51.3 50.5 48.8 38.7 
 Agriculture  11.2 10.6 10.3 10.1 11.8 
 Food 9.2 8.9 8.6 8.5 10.0 
 Agricultural raw material  2.0 1.7 1.7 1.6 1.8 
 Mining  40.1 40.7 40.2 38.7 26.8 
 Ores and other mineral s 5.4 4.7 4.6 4.5 4.2 
 2831 Copper ores and concentrates  1.3 1.9 1.3 1.2 1.3 
 2815 Iron ores and concentrates, not agglomerated  2.3 1.3 1.9 1.7 1.2 
 Non-ferrous metals  2.6 1.9 1.8 1.9 2.2 
 6841 Aluminium and aluminium alloys, unwrought  0.8 0.7 0.6 0.8 0.8 
 Fuels 32.1 34.1 33.8 32.3 20.5 
 3431 Natural gas, liquefied  7.0 8.5 8.7 9.1 7.3 
 3330 Crude oils of petroleum and bituminous minerals  16.6 17.3 17.5 16.1 7.2 
 3212 Other coal, whether or pulverized, not agglomerated  3.5 3.2 2.7 2.3 2.5 
 334 Petro leum oils, other than crude  3.3 3.4 3.2 3.1 2.3 
 3421 Propane, liquefied  1.0 1.1 1.0 1.0 0.7 
Manufactures  47.1 47.2 48.0 49.8 59.5 
 Iron and steel  1.4 1.1 1.0 1.1 1.1 
 Chemicals  8.8 8.3 7.9 7.9 10.2 
 5429 Medicaments, n.e.s.  1.3 1.6 1.5 1.4 2.4 
 5416 Glycosides; glands, etc. and extracts; 
 antisera/vaccines, etc.  0.6 0.6 0.6 0.6 0.8 
 Other semi -manufactures  3.5 3.5 3.5 3.7 4.3 
 Machinery and transport equipment  20.8 21.5 22.7 24.0 28.2 
 Power generating machines  0.9 0.9 0.9 1.0 1.3 
 Other non -electrical machinery  3.3 3.1 3.3 3.6 4.5 
 Agricultural machinery and tractors  0.1 0.1 0.1 0.1 0.1 
 Office machines & telecommunication equipment  10.2 10.2 10.9 11.3 12.9 
 7764 Electronic integrated circuits and microassemblies  2.1 2.0 2.0 2.1 2.7 
 7643 Rad io or television transmission apparatus  1.1 1.6 2.0 2.0 2.3 
 7763 Diodes, transistors, etc.  0.4 0.5 0.9 1.2 1.1 
 7522 Data processing machines, with at least processing, 
 input and output units  1.0 1.0 1.0 1.1 1.1 
 7649 Parts and accessories for apparat us of division 76  1.0 1.0 0.9 0.8 1.0 
 Other electrical machines  3.4 3.6 3.6 3.9 4.7 
 7731 Insulated wire, cable etc.; optical fibre cables  0.7 0.7 0.8 0.8 1.0 
 Automotive products  2.0 2.3 2.5 2.6 3.1 
 7812 Motor vehicles for the transport of persons, n.e.s.  1.0 1.2 1.3 1.3 1.4 
 7843 Other motor vehicle parts and accessories of 722, 781 
 to 783  0.7 0.8 0.9 0.9 1.2 
 Other transport equipment  1.0 1.4 1.5 1.5 1.8 
 Textiles  1.1 1.0 1.1 1.1 1.3 
 Clothing  3.9 3.8 4.0 3.8 4.6 
 8453 Jerseys, pullovers, car digans, etc., knitted/crocheted  0.6 0.6 0.6 0.6 0.7 
 Other consumer goods  7.6 7.9 7.9 8.1 9.8 
 8722 Instruments used in medical, surgical or veterinary 
 sciences  0.5 0.6 0.6 0.5 0.7 
Other  1.6 1.5 1.4 1.4 1.8 
Source : UNSD, Comtrade database (SITC Rev.3) . WT/TPR/S/ 351/Rev.1  • Japan  
 
- 136 - 
 
  Table A1. 3 Merchandise exports by destination, 2011 -15  
 2011  2012  2013  2014  2015  
Total exports (US$ billion)  823.2  798.6  715.1  690.2  624.9  
 (% of total)  
 America  21.7 24.2 24.8 24.7 25.8 
 United States  15.5 17.8 18.8 18.9 20.2 
 Other America  6.2 6.4 6.0 5.8 5.6 
 Mexico  1.2 1.3 1.4 1.5 1.7 
 Canada  1.1 1.3 1.2 1.2 1.2 
 Europe  13.3 11.2 11.0 11.3 11.5 
 EU-28 11.7 10.2 10.0 10.4 10.6 
 Germany  2.9 2.6 2.7 2.8 2.6 
 The Netherlands  2.2 2.0 1.9 1.9 1.9 
 United Kingdom  2.0 1.7 1.6 1.6 1.7 
 France  1.0 0.8 0.9 0.9 0.8 
 Belgium  0.8 0.8 0.7 0.8 0.8 
 EFTA 1.3 0.7 0.6 0.6 0.6 
 Other Europe  0.4 0.3 0.3 0.3 0.4 
 Commonwealth of Independent States (CIS)  1.7 1.8 1.8 1.6 1.0 
 Africa  1.6 1.6 1.6 1.5 1.4 
 Middle East  3.0 3.5 3.6 4.1 4.2 
 United Arab Emirates  0.9 1.1 1.2 1.4 1.4 
 Saudi Arabia  0.8 1.0 1.0 1.1 1.1 
 Asia 58.7 57.6 57.2 56.7 56.1 
 China  19.7 18.1 18.1 18.3 17.5 
 Korea, Republic of  8.0 7.7 7.9 7.5 7.0 
 Chinese Taipei  6.2 5.8 5.8 5.8 5.9 
 Hong Kong, China  5.2 5.1 5.2 5.5 5.6 
 Thailand  4.6 5.5 5.0 4.5 4.5 
 Singapore  3.3 2.9 2.9 3.0 3.2 
 Australia  2.2 2.3 2.4 2.1 2.1 
 Viet Nam  1.2 1.3 1.5 1.7 2.0 
 Malaysia  2.3 2.2 2.1 2.0 1.9 
 Indonesia  2.2 2.5 2.4 2.1 1.8 
 Philippines  1.4 1.5 1.4 1.4 1.5 
 India 1.3 1.3 1.2 1.2 1.3 
Memorandum :      
 APEC 76.1 77.6 78.4 77.8 77.8 
Source:  UNSD Comtrade database.  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 137 - 
 
  Table A1. 4 Merchandise imports by origin, 2011 -15  
  2011  2012  2013  2014  2015  
Total imports (US$ billion)  855.4  886.0  833.2  812.2  625.6  
 (% of total)  
 America  14.3 14.0 13.9 13.9 16.2 
 United States  8.9 8.8 8.6 9.0 10.9 
 Other America  5.4 5.2 5.3 4.9 5.3 
 Canada  1.5 1.4 1.4 1.4 1.5 
 Brazil  1.5 1.3 1.3 1.2 1.2 
 Europe  10.7 10.7 10.6 10.8 13.0 
 EU-28 9.4 9.4 9.4 9.5 11.4 
 Germany  2.7 2.8 2.9 3.0 3.2 
 France  1.4 1.4 1.4 1.4 1.5 
 Italy 1.0 1.1 1.1 1.1 1.2 
 Ireland  0.5 0.5 0.4 0.4 1.2 
 United Kingdom  0.8 0.8 0.8 0.8 1.0 
 EFTA 1.2 1.2 1.1 1.2 1.5 
 Switzerland  0.9 0.9 0.9 0.9 1.2 
 Other Europe  0.1 0.1 0.1 0.1 0.1 
 Commonwealth of  Independent States (CIS)  2.3 2.5 3.0 3.2 2.8 
 Russian Federation  2.2 2.3 2.8 3.0 2.5 
 Africa  2.0 2.4 2.3 2.1 1.8 
 Middle East  18.8 19.2 19.3 18.4 9.1 
 United Arab Emirates  5.0 5.0 5.1 5.1 3.8 
 Qatar  3.5 4.1 4.4 4.1 2.6 
 Saudi Arabia  5.9 6.2 6.0 5.8 0.4 
 Asia 51.8 51.2 50.9 51.6 57.1 
 China  21.5 21.3 21.7 22.3 25.7 
 Australia  6.6 6.4 6.1 5.9 5.6 
 Korea, Republic of  4.7 4.6 4.3 4.1 4.3 
 Chinese Taipei  2.7 2.7 2.8 3.0 3.7 
 Malaysia  3.6 3.7 3.6 3.6 3.4 
 Thailand  2.9 2.7 2.6 2.7 3.3 
 Indonesia  4.0 3.6 3.5 3.2 3.2 
 Viet Nam  1.4 1.7 1.7 1.9 2.4 
 Philippines  1.0 1.1 1.1 1.3 1.4 
 Singapore  1.0 1.0 0.9 1.0 1.3 
Memorandum :      
APEC 65.2 64.5 64.3 65.4 72.5 
Source : UNSD Comtrade database.  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 138 - 
 
  Table A2. 1 WTO dispute settleme nt cases active 1 January 2015 -8 July 2016  
(Reverse chronological order)  
Subject  Respondent/  
complainant/  
appellant  
Request 
received for 
consultation  
Status  
(as at 8 July 2016)  
WTO 
document 
series  
Japan as respondent      
None     
Japan as complainant      
Anti-Dumping Duties on Pneumatic Valves from Japan  Korea, Republic 
of 15/03/2016  Panel established  
04/07/2016  DS504  
Certain Measures Concerning Taxation and Charges  Brazil  02/07/2015  Panel composed 
29/09/2015  DS497  
Import Bans, and Testing and Certifi cation Requirements 
for Radionuclides  Korea, Republic 
of 21/05/2015  Panel composed 
08/02/2016  DS495  
Definitive Safeguard Measures on Certain Passenger Cars  Ukraine  30/10/2013  Panel Report 
circulated 
26/06/2015  DS468  
Measures Imposing Anti -Dumping Duties on High -
Performance Stainless Steel Seamless Tubes ("HP -SSST") 
from Japan  China  20/12/2012  Panel composed 
29/07/2013  DS454  
Measures Affecting the Importation of Goods  Argentina  21/08/2012  Panel report 
circulated 
22/08/2014  DS445  
Source:  WTO Secretariat.  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 139 - 
 
  Table A2. 2 Selected notifications under WTO Agreements (1  January  2015 -
11 October  2016), or last notification if applicable  
WTO Agreement  Description of requirement  Document symbol and date of 
most recent notification  
Agricult ure   
Article 18.2  Domestic support (DS:1)  G/AG/N/JPN/191, 31/03/2014  
Article 18.2  Domestic support (DS:2)  G/AG/N/JPN/192, 02/04/2014  
Article 18.2  Information on tariff quotas administration 
(MA:1)  G/AG/N/JPN/1 43, 26/02/2009 
Article 18.2  Volume of impo rts under tariff quotas (MA:2)  G/AG/N/JPN/ 210, 07/03/2016 
Article 5.7  Volume -based special safeguard (MA:3)  G/AG/N/JPN/ 214, 05/10/201 6 
Article 5.7  Price-based special safeguard (MA:4)  G/AG/N/JPN/ 213, 27/09/201 5 
Articles 5.7 and 
18.2 Special safeguard (M A:5) G/AG/N/JPN/ 211, 22/04/201 6 
Articles 10 
and 18.2 Export subsidies (outlays and quantities) (ES:1)  G/AG/N/JPN/ 212, 23/05/2016 
Article 10  Volume of food aid in the context of export 
subsidy commitments (ES:3)  G/AG/N/JPN/1 98, 16/ 10/2014 
Article 16.2  Measures concerning the possible negative effects 
of the reform programme on least developed and 
net food importing developing countries (NF:1)  G/AG/N/JPN/1 99, 20/1 0/2014 
Anti-dumping    
Article 16.4  Anti-dumping actions taken  G/ADP/N/2 86/JPN, 27/07/201 6 
Article 16.5  Domestic procedures and authorities competent 
to initiate and conduct investigation  G/ADP/N/14/Add.29  
(G/SCM/N/18/Add.29), 22/04/2010  
Article 18.5  Laws and regulations (and changes)  G/ADP/N/1/JPN/2/Suppl.8  
G/SCM/N/1/JPN/2/Suppl.8, 
07/10/2016  
GATT 1994 (Article VII: Customs Valuation)   
Article 22.2  Amendments  G/VAL/N/1/JPN/2, 20/09/2013  
 Checklist of issues  G/VAL/N/2/JPN/2, 18/09/2013  
GATT 1994 (Article XVII:4(a) Understanding on the Interpretation of Article XVII)  
 Notification of produc ts traded by state 
enterprises  
State trading activities  G/STR/N/16/JPN, 05/07/2016  
Government Procurement (Revised GPA entered into force in 
April 2014)   
Revised Article 
19.1(a)  Modification to Annex 3 of Appendix I  GPA/MOD/JPN/82, 29/06/2016  
Article 19 .5 Modification of statistics on government 
procurement  GPA/108/Add.4, 23/02/2012  
Article 24.5(b)  
Revised article 
22.5 Notification of national implementing legislation  
Laws and regulations (and changes)  GPA/W/314/Add.5, 06/02/2012  
GPA/117, 22/04/2013  
GPA/37/Add.13, 14/07/2016  
Article 24.6(a)  
 Modifications to Annex 1 and 3 of Appendix I  
 GPA/MOD/JPN/52, 22/06/2010  
GPA/W/309/Add.5, 11/02/2010  
GPA/MOD/JPN/67, 09/03/2012  
GPA/MOD/JPN/66, 14/02/2012  
Paragraph 2 of 
Annex F in 
Appendix 2  Exclusions and restri ctions in the Annexes to 
Appendix I  GPA/WPS/EXCS/3/Rev.1, 
08/12/2014  
Paragraph 2 of 
Annex D in 
Appendix 2  Statistics on procurement  GPA/WPS/STAT/4, 25/06/2015  
Paragraph 3.2 of 
Annex C in 
Appendix 2  Questionnaire; work programme on SMEs  GPA/WPS/SME/3, 04/ 08/2015  
Annexes 1, 2 and 
3 of Appendix I  Thresholds  GPA/W/337, 05/02/2016  
Import Licensing Procedures  
Articles 1.4(a) and 
8.2(b)  Laws and regulations relevant to import licensing   G/LIC/N/1/JPN/2/Rev.1, 
26/02/1997  
Article 5.1 and 5.3  Notification of li censing procedures and changes   G/LIC/N/JPN/3, 27/04/2001  
Article 7.3  Questionnaire; rules and information concerning 
procedures for the submission of applications  G/LIC/N/3/JPN/15, 05/10/2016  
Subsidies and Countervailing Measures   
Article 32.6  
 Laws an d regulations  G/ADP/N/1/JPN/2/Suppl.7, 
(G/SCM/N/1/JPN/2/Suppl.7),  
29/08/2011  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 140 - 
 
  WTO Agreement  Description of requirement  Document symbol and date of 
most recent notification  
Article 25.11  Countervailing duty actions taken  G/SCM/N/235/Add.1, 24/04/2012  
Article 25.1  Subsidies programmes  G/SCM/N/284/JPN, 30/06/2015  
Article 25.12  Notification of domes tic procedures and 
authorities competent to initiate and conduct 
investigations  No notification  
Safeguards    
Article 12.6  Laws and regulations  G/SG/N/1/JPN/2/Suppl.3, 
20/05/2016  
G/SG/N/1/JPN/3/Corr.1, 
20/05/2016  
Article 12.5  Notification of termination of safeguard 
investigation  No notification  
Sanitary and Phytosanitary Measures   
Article 6,  
Annex B  Notification of emergency measures  G/SPS/N/JPN/358/Add.1, 
18/09/2015  
Article 5, Annex  B Notification of sanitary and phytosanitary 
measures  2014 – 23 notifications  
2015 – 56 notifications  
2016 – 44 notifications  
Technical Barriers to Trade  
Article 15.2  Laws and regulations on the implementation 
and administration of the TBT Agreement  G/TBT/2/Add.10, 11/06/1996  
Article 2.10  Urgent technical regulations  G/TBT/N/JPN/ 528, 28/06/2016 
Article 2.9  Technical regulations  2014 – 4 notifications  
2015 – 24 notifications  
2016 – 21 notifications  
Article 5.6  Conformity assessment procedures  G/TBT/N/JPN/505, 25/11/2015  
G/TBT/N/JPN/522, 01/04/2016  
Article 5.7  Urgent c onformity assessment procedures  No notifications  
TRIMs    
Article 5.1  Investment measures  No notifications  
TRIPS    
Article 63.2  Design Act, updated text  IP/N/1/JPN/D/7, 30/05/2016  
 Trademark Act, updated text  IP/N/1/JPN/T/7, 30/05/2016  
 Patent Act, up dated text  IP/N/1/JPN/P/12, 30/05/2016  
 Law Concerning International Applications, etc. 
pursuant to the Patent Cooperation Treaty  IP/N/1/JPN/P/11, 07/07/2015  
 Laws and regulations  IP/N/1/JPN/12, 12/06/2013  
 Other laws and regulations  IP/N/1/JPN/11, 03/0 5/2012  
 Unfair Competition Prevention Act  IP/N/1/JPN/O/9, 27/01/2016  
Article 69  Contact points  IP/N/7/Rev.3, 17/02/2010  
General Agreement on Trade in Services (GATS)   
Article III:3  Changes to laws and regulations affecting 
services  S/C/N/659, 05/11/201 2 
S/C/N/660, 05/11/2012  
 Notifications of preferential treatment to services 
and service suppliers of least developed countries  S/C/N/820, 31/07/2015  
Regional Trade Agreements  
 Notification of regional trade agreement  WT/REG373/N/1, 02/06/2016  
WT/REG361 /N/1, 13/01/2015  
 Notification of changes affecting the 
implementation of a regional trade agreement  No notifications  
Source:  WTO documents.  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 141 - 
 
  Table A3. 1 Japan's tariff summary, FY2016  
 Number 
of lines  Average 
(%) Range 
(%) Standard 
deviation  Duty 
free 
(%) Non-ad valorem  
rates (%)  
Total 9,071  6.1 0-389 16.7 40.1 6.8 
HS 01 -24 2,158  14.5 0-389 30.2 18.5 14.2 
HS 25 -97 6,913  3.5 0-
235.5  7.7 46.9 4.5 
By WTO category        
WTO agricultural products  1,788  16.3 0-389 33.4 25.5 17.5 
  Animals and products 
 thereof  222 10.2 0-50 12.8 34.7 14.9 
  Dairy products  64 57.4 8.4-
206.8  50.2 0.0 70.3 
  Fruit, vegetables, and 
 plants  495 13.7 0-389 37.4 15.2 3.0 
  Coffee and tea  62 19.5 0-
107.1  17.5 11.3 9.7 
  Cereals and preparations  342 26.7 0-
370.2  40.5 9.9 27.8 
  Oilseeds, fats, oil and 
 their products  130 5.5 0-
312.4  28.0 41.5 30.8 
  Sugars and 
 confectionary  49 32.8 0-
114.2  26.6 6.1 59.2 
  Beverages, spirits and 
 tobacco  146 17.2 0-68.9 13.0 21.9 24.7 
  Cotton  5 0.0 0-0 0.0 100.0 0.0 
  Other agricultural 
 products, n.e.s.  273 5.5 0-
303.5  23.1 61.9 5.1 
WTO non -agricultural 
products  7,283  3.6 0-
235.5  7.1 43.7 4.2 
  Fish and fishery products  493 6.2 0-15 3.7 4.3 0.2 
  Minerals and metals  1,254  0.9 0-10 1.6 72.3 2.4 
  Chemicals  and 
 photographic 
 supplies  1,157  2.5 0-6.5 1.8 30.0 0.7 
  Wood, pulp, paper and 
 furniture  451 1.8 0-10 2.8 65.6 0.0 
  Textiles  1,474  5.6 0-25 2.5 4.3 14.0 
  Clothing  508 9.2 0-13.4 2.0 0.8 0.0 
  Leather, rubber, 
 footwear and 
 travel goods  318 15.0 0-
235.5  27.7 39.3 7.9 
  Non-electric machinery  601 0.0 0-0 0.0 100.0  0.0 
  Electric machinery  314 0.1 0-4.8 0.6 97.8 0.0 
  Transport equipment  134 0.0 0-0 0.0 100.0  0.0 
  Non-agricultural 
 products, n.e.s.  409 1.3 0-8.4 2.3 71.6 0.4 
  Petroleum  90 1.5 0-7.9 1.9 32.2 36.7 
       
By ISIC sector        
  ISIC 1 – Agriculture, 
 hunting and fishing  662 5.8 0-
303.5  19.0 44.9 5.1 
  ISIC 2 – Mining  109 0.1 0-4.1 0.5 96.3 0.9 
  ISIC 3 – Manufacturing  8,300  6.2 0-389 16.7 39.0 7.0 
    Manufacturing 
 excludi ng food 
 processing  6,718  3.6 0-
235.5  7.7 45.5 4.6 
       
By stage of processing        
  First stage of processing  1,156  7.5 0-389 33.4 50.4 4.9 
  Semi-processed products  3,393  4.7 0-
158.3  7.3 27.0 8.6 
  Fully processed products  4,522  6.7 0-
252.9  15.3 47.3 6.0 
       
By HS Section        
 01 Live animals and 
 products  695 10.8 0-
206.8  22.1 16.5 11.1 WT/TPR/S/ 351/Rev.1  • Japan  
 
- 142 - 
 
   Number 
of lines  Average 
(%) Range 
(%) Standard 
deviation  Duty 
free 
(%) Non-ad valorem  
rates (%)  
 02 Vegetable products  585 15.1 0-389 46.9 31.3 11.3 
 03 Fats and oils  89 4.1 0-29.8 4.4 24.7 41.6 
 04 Prepared food, 
 beverages and tobacco  789 18.3 0-
252.5  20.0 10.1 16.0 
 05 Mineral products  251 0.7 0-7.9 1.4 67.7 13.9 
 06 Chemicals and 
 products thereof  1,058  2.4 0-25.2 2.3 35.7 0.5 
 07 Plastics, rubber, and 
 articles thereof  293 2.4 0-6.5 1.9 35.2 2.0 
 08 Raw hides and skins, 
 leather, and its products  193 10.5 0-30 10.8 33.7 0.0 
 09 Wood and articles of 
 wood  265 3.4 0-10 3.0 35.8 0.0 
 10 Pulp of wood, paper 
 and paperboard  167 0.0 0-0 0.0 100.0  0.0 
 11 Textiles and textile 
 articles  1,965  6.7 0-103 5.6 4.2 10.8 
 12 Footwear, headgear, 
etc. 104 29.4 0-
235.5  42.3 4.8 24.0 
 13 Articles of stone, 
 plaster, cement  163 1.2 0-8 1.7 60.7 0.0 
 14 Precious stones and 
 metals, pearls  76 1.4 0-10 2.3 71.1 0.0 
 15 Base metals and 
 articles thereof  846 0.9 0-7.5 1.6 72.0 3.3 
 16 Machinery, electrical  
 equipment, etc.  917 0.0 0-4.8 0.3 99.2 0.0 
 17 Transport equipment  145 0.1 0-8.4 0.7 99.3 0.0 
 18 Precision equipment  260 0.2 0-16 1.5 96.5 0.0 
 19 Arms and ammunition  22 6.9 5.4-8.4 1.5 0.0 0.0 
 20 Miscellaneous 
 manufactured 
 articles  181 1.8 0-6.6 2.1 55.8 1.1 
 21 Works of art, etc.  7 0.0 0-0 0.0 100.0  0.0 
Note:  Excluding in -quota lines and including AVEs, as available, provided by the authorities of Japan. In 
case of unavailability, the ad valorem  part is used for compound and alternate rates.  
Source:  WTO Secretariat calculations, based on data provided by the authorities of Japan.  WT/TPR/S/ 351/Rev.1  • Japan  
 
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  Table A4. 1 Special safeguard, FY2014/15   
HS Description  Type of 
SSG Date or period 
of application  
FY2014  
040221119  Milk powder, not con taining added sugar or other sweetening 
matter  
- of a fat content, by weight, exceeding 5% but not exceeding 
30% Price 09/07/2014  
040291129  Milk and cream, concentrated, not containing added sugar or 
other sweetening matter  
- of a fat content, by weight , exceeding 7.5%  Price 09/07/2014,  
15/01/2015  
040299129,  
040299290  Condensed milk  Volume  01/10/2014 to 
31/03/2015  
071335299  Cow peas ( Vigna unguiculata ) Price 09/07/2014  
110100200  Wheat or meslin flour  Price 18/06/2014  
110820090  Inulin  Price 25/08/2014 , 
24/10/2014, 
19/01/2015, 
20/03/2015  
190190179  Food preparations of flour, meal, or starch, containing groats, 
meal, pellets or starch of rice, wheat, triticale, barley, which 
total weight is more than 85% of the articles  
- mostly containing starch (exclu ding wheat starch)  Price 16/04/2014, 
22/04/2014, 
27/06/2014, 
04/07/2014  
500100090  Silk-worm cocoons suitable for reeling  Volume  01/01/2015 to 
31/03/2015  
FY2015  
040120190  Milk and cream, not concentrated nor containing added sugar 
or other sweetening mat ter 
- of a fat content, by weight, exceeding 1% but not exceeding 
6%: sterilized, frozen or preserved  Volume  01/12/2015 to 
31/03/2016  
040140190, 
040150119, 
040150129  Milk and cream, not concentrated nor containing added sugar 
or other sweetening matter  
- of a fat content, by weight, exceeding 6%: sterilized, frozen 
or preserved; other cream of a fat content, by weight, of 13% 
or more (other than sterilized, frozen or preserved)  Volume  01/10/2015 to 
31/03/2016  
040221119  Milk powder, not containing added su gar or other sweetening 
matter  
- of a fat content, by weight, exceeding 5% but not exceeding 
30% Price 13/04/2015, 
22/10/2015, 
27/01/2016  
040291129  Milk and cream, concentrated, not containing added sugar or 
other sweetening matter  
- of a fat content, by weight, exceeding 7.5%  Price 02/10/2015  
040299129, 
040299290  Condensed milk  Volume  01/08/2015 to 
31/03/2016  
040390113, 
040390118, 
040390123, 
040390128, 
040390133, 
040390138  Buttermilk, curdled milk and cream, kephir and other 
fermented or acidified milk and cream, sterilized, frozen, 
preserved, concentrated or containing added sugar or other 
sweetening matter, flavouring, fruits or nuts  Volume  01/11/2015 to 
31/03/2016  
040510129  Butter  
- of a fat content, by weight, not exceeding 85%  Price 15/10/2015  
071333229  Kidney beans, including white pea beans ( Phaseolus vulgaris )  
 Price 20/05/2015  
071335299  Cow peas ( Vigna unguiculata ) Price 13/04/2015  
110290190  Barley flour  Price 14/12/2015  
110812090  Maize (corn) starch  Volume  01/02/2016 to 
31/03/2016  
110814 090 Manioc (cassava) starch  Price 24/09/2015  
110819099  Other starches (excluding Sago starch)  Price 01/05/2015, 
10/06/2015, 
18/12/2015  
110820090  Inulin  Price 13/05/2015, 
07/08/2015, 
30/10/2015, 
08/12/2015, 
10/03/2016  WT/TPR/S/ 351/Rev.1  • Japan  
 
- 144 - 
 
  HS Description  Type of 
SSG Date or period 
of application  
190120159, 
190190179  Food preparatio ns of flour, meal, or starch, which contain 
more than 85% by weight of flour, groats, meal and pellets of 
rice, wheat, triticale or barley, starch, or any combination 
thereof, excluding cake -mixes and a kind used as infant food 
or dietetic purpose  
- mostl y containing starch (excluding wheat starch)  Volume  01/12/2015 to 
31/03/2016  
190190179  Food preparations of flour, meal, or starch, which contain 
more than 85% by weight of flour, groats, meal and pellets of 
rice, wheat, triticale or barley, starch, or an y combination 
thereof, excluding cake -mixes and a kind used as infant food 
or dietetic purpose  
- mostly containing starch (excluding wheat starch)  Price 01/07/2015, 
30/07/2015  
190410212  Prepared foods containing not less than 50% by weight of 
those obtai ned by merely swelling or roasting of rice, wheat, 
triticale or barley, of rice  Price 02/12/2015  
Source:  WTO notifications G/AG/N/JPN/203 of 1 May 2015 and G/AG/N/JPN/211 of 22 April 2016.  
 
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