Japan WT/TPR/S/243 
 Page 31 
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Since its previous Trade Policy Review in 2009, Japan has refrained from introducing new 
trade barriers;  on the other hand, it has introduced few measures aimed at further liberalizing its trade 
and related regimes.  The Government introduced  expansionary fiscal measures in FY2009 and in 
FY2010 in order to recover from the latest recessi on, but it is ambiguous whether these measures are 
temporary, and some state-owned bodies were estab lished to inject funds into private companies, 
perhaps in the context of industrial policies.  Although "buy Japanese" programmes are not prevalent, 
there are some programmes that aim to promote the consumption of domestic goods (timbers).  
2. The tariff continues to be Japan's main border rest riction.  In fiscal year (FY) 2010, the simple 
average applied MFN tariff rate was 5.8%, down from 6.1% in FY2008, reflecting an average decrease of ad valorem  equivalents of non- ad valorem  duties.  Non- ad valorem  duties, which account 
for 6.6% of Japan's tariff lines, tend to involve high ad valorem  equivalents, and are an important 
feature of Japan's tariff, particularly for agricultu ral products.  Whereas the simple average tariff rate 
under the GSP is 4.6% (down from 4.9% in FY2008) , that for LDCs is 0.5% (same as in FY2008).  
Japan's simple average tariff rat es under bilateral FTAs range from 2.9% (Malaysia and Thailand) to 
3.4% (Brunei).   
3. Japan's non-tariff border measures include some  import prohibitions and quantitative import 
restrictions (for example, import quotas on some fish).  State trading involves leaf tobacco, opium, rice, wheat and barley, and milk products.   
4. Japan makes little use of contingency measures.  It has continued to apply two anti-dumping 
measures during the review period, but eliminated  one countervailing measure;  it has not imposed 
any safeguard measures since 2001, when it applied them on Welsh onions, Shiitake mushrooms, and 
tatami-omote. 
5. No preferences are granted to domestic suppliers  with regard to procurement covered by the 
Agreement on Government Procurement.  Nonethel ess, it would appear that government procurement 
is used as an instrument of economic policy, partic ularly in some sectors (e.g. timber) and for SMEs.  
The share of foreign suppliers in the total value of government procuremen t was 3.0% in 2009, down 
from 3.7% in 2008.  The share of procurement of  overseas goods and services, supplied by domestic 
or foreign suppliers, declined to 7.1% in 2008 (from 9.1% in 2007) in terms of value.  In 2008, the 
share of open tendering in total procurement rose to  63.5% compared with 58.6% in 2007.  It would 
appear that Japan will start giving preferences for th e use of domestic wood in public procurement.   
6. About 46% of Japanese Industrial Standards (JIS) were aligned to international standards in 
2009 (unchanged since 2008).  Although Japan maintain s that its SPS measures are based on scientific 
grounds to assess risks, it has apparently not co nducted cost-benefit analyses to justify such risk 
factors. 
7. Japan maintains certain export controls on nati onal security and public safety grounds and to 
preserve natural resources.  Export finance, insura nce, and guarantees are available.  Duty drawback 
schemes are available on selected inputs for certain  manufacturing;  they do not necessarily refund 
100% of duties paid.  The Government has recently  begun promoting agricultural exports, mainly by 
providing information to consumers overseas. 
8. Although the amount of taxes collected in rela tion to GDP is relatively low in Japan, in 
compared with other OECD countries, Japan has rela tively high statutory rates of corporate taxes.  WT/TPR/S/243 Trade Policy Review 
Page 32 
 
 
Japan recognizes a need to broaden the income tax b ase and cut corporate tax rates, thereby rendering 
the income tax system more neutral.  It has also introduced plans to reduce tax incentives.   
9. Various laws on intellectual property rights (IPRs ) have been amended since Japan's previous 
Review with a view to, inter alia,  strengthening the role of Customs in enforcement, and expanding 
the scope of application of criminal penalties for infringement of trade secrets.  Japan remains an 
active participant in multinational and regional di scussions on agreements to promote international 
harmonization of regimes protecting IPRs. 
10. It would appear that the pace of Japan's trad e-related regulatory reforms has slowed, if not 
reversed, since 2009.  In June 2010, it introduced a New Growth Strategy, focusing on seven priority 
areas.  It remains to be seen whether the measures  to be adopted in accordance with the strategy 
involve policies to "pick winners".  It has con tinued to implement regulatory reforms in selected 
regions under the scheme of special zones for structural reform;  some of these reforms have now been implemented nationwide. 
11. The authorities intend to continue to strengthen competition policy.  In this regard, the Anti-
monopoly Act (AMA) was ame nded in June 2009 to, inter alia,  introduce a surcharge (fine) in respect 
of practices involving exclusionary types of private monopolization, and a 50% increase in the 
surcharge on businesses that have played a lead ing role in cartels and bid-rigging.   
12. To improve the transparency of listed compan ies, Japan increased the coverage of items 
subject to disclosure requirement;  these include di rectors' remuneration, information on cross-share 
holding, and matters pertaining to the exercise of voting rights.  
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs clearance procedures and valuation  
13. The Japanese Customs, part of the Ministry of Finance, is in charge of administering and 
enforcing customs legislation.  The formal venues fo r consultations with the private sector on customs 
matters include the commission on trade facilitation and customs administration.1  C u s t o m s  
regulations are contained in the Customs Law and th e Customs Tariff Law, and other related laws and 
regulations.  The Customs publishes all its decisions , rulings, regulations, and regulatory proposals on 
customs matters online, except for t hose containing private information.2    
14. There are no special registration requirements for importers upon importation;  the use of a 
customs broker is optional.  Those who wish to ope rate as customs brokers must obtain approval from 
the Director of Customs where they wish to operate.3  There is no nationality requirement to obtain 
licences.  
15. Since the previous review of Japan, time requi red for customs clearance has been reduced for 
sea cargo, but increased for air cargo.  The latest avai lable data indicate that, in 2009, the average time 
between arrival of goods and the granting of impor t permission was 62.4 hours (63.8 hours in 2006) 
                                                      
1 Ministry of Finance online information (in Japanese).  Viewed at:  http://www.mof.go.jp/singikai/ 
boueki_enkatsu/top.htm [18.08.2010]. 
2 Customs online information (in Japanese).  Viewed at:  http://www.customs.go.jp/koukai/top.htm. 
[18.08.2010]. 
3 Article 3, the Law of Customs Brokerage. Japan WT/TPR/S/243 
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for sea cargo and 16.0 hours (14.4 hours in 2006) for air cargo (including time required under the 
"immediate import permission system upon arrival").4 
16. In July 2009, Japan's Authorized Economic  Operator (AEO) programme was extended to 
manufacturers.5  As a result, manufacturers, warehouse operators, customs brokers, and logistics 
operators are eligible to become AEOs.  Under the AEO programme, importers with cargo security 
management and a good compliance record are permitte d to file the import declaration and customs 
duty declaration separately, enabling them to have  their goods released prior to filing the customs 
duty declaration.  These importers are allowed to f ile import declarations before the cargo arrives;  
they also receive the benefit of bonded transportati on without obtaining individual permission.  Japan 
concluded mutual recognition arrangements on AEO programmes with New Zealand (May 2008)6, 
the United States (June 2009)7, the European Union8, and Canada9 (both in June 2010).  Under the 
mutual recognition arrangements, Japan Customs tak es into account the status of the members of the 
other AEO programme when conduc ting its own risk assessment.  
17. All importers must file a declaration with Customs;  for most goods, the declaration must be 
made after the goods have been taken into a hozei  (bonded) area or other designated place.  Items to 
be imported by certain importers a pproved by the Director-General of Customs can be declared before 
they are taken to the hozei  area.10 
18. Imports are valued according to their c.i.f. value (which is taken to be the transaction value of 
the imports).   
19. Customs duty can be paid through a multi-payment network system11, which connects teller 
institutions (government authorities) with financial in stitutions.  No fee is charged by the Government 
for the use of this system12;  the financial institutions involved  may collect variable fees.  Written 
advance rulings are issued at the written request of importers and other parties concerned;  the 
authorities state that these rulings are published, in  principle, on the Customs website.  Advanced 
rulings are not legally binding.  The Common Po rtal for the Next Generation Single Window was 
                                                      
4 Based on the 9th Time Release Survey by the Customs.  Im porters must file a preliminary declaration 
online through the Nippon Automated Cargo Clearance System (NACCS) in order to be eligible for the 
immediate import permission system upon arrival, under which import permission may be granted as soon as cargo entry is confirmed.  Customs examines the docum ents and materials submitted before cargo entry, and 
provides the results of the examination. 
5 See the Japan Customs online information(in Ja panese).  Viewed at: http://www.customs.go.jp/ 
zeikan/seido/aeo/leaflet_21-07maker.pdf [05.07.2010]. 
6 MOF online information (in Japanese).  View ed at: http://www.mof.go.jp/jouhou/kanzei/ka2005 
14.htm [17.08.2010] 
7 MOF online information (in Japanese).  View ed at: http://www.mof.go.jp/jouhou/kanzei/ka2106 
26.htm  [17.08.2010]. 
8 MOF online information (in Japanese).  View ed at: http://www.mof.go.jp/jouhou/kanzei/ka2206 
24.htm [17.08.2010]. 
9 MOF online information (in Japanese).  Viewed  at: http://www.mof.go.jp/jouhou/kanzei/ ka2206 
25.htm [17.08.2010]. 
10 Japan Customs online information (in Japanese).   Viewed at: http://www.customs.go.jp/zeikan/ 
seido/index.htm#e [14.7.2010].  There are five types of hozei  area:  designated hozei  area, hozei  warehouse, 
hozei  manufacturing warehouse, hozei  display area, and integrated hozei  area.    
11 The system is managed by the Japan Multi-payment Network Management Organization (JAMMO);  
only financial institutions that participate in the organization may use the system.  One foreign bank (locally established) has participated in this system to date.  See JAMMO online information (in Japanese).  Viewed at:  
http://www.jammo.org/index.html [10.6.2010]. 
12 Customs clearance fees include an inspection fee if inspection is at  a place other than a designated 
area (¥5,000/hour).   WT/TPR/S/243 Trade Policy Review 
Page 34 
 
 
completed in February 2010;  it has unified electronic application formalities among various 
agencies.13  Seven customs offices are open 24 hours per day.14  
20. There have been no changes to the compla int and appeal process for Japan's customs 
procedures during the review period.  Articles 89- 93 of the Customs Law, Articles 14 and 45 of the 
Administrative Appeal Act, and  Article 14 of the Administrative Cases Litigation Law specify 
procedures for administrative review  of certain customs decisions.15  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 within one month of the decision by the 
Director-General of Customs.  A law suit may be filed against the Minister's decision within six 
months of the decision.16  In 2009, there were 20 complaints (25 in 2008), and 3 appeals (2 in 2008);  
no law suits were filed in 2009 (1 in 2008). 
(ii) Tariffs 
(a) Bound tariff 
21. Japan's tariff schedule comprised 8,826 lines at the HS nine-digit level in FY2010.17  Japan 
has bound 98.8% of lines (108 lines are unbound) (Table III.1);  unbound lines relate mainly to 
fisheries (fish, crustaceans, seaweed), petroleum oils, and wood and articles thereof.  Ad valorem rates 
account for 8,159 bound lines (92.4%);  212 lines (2.4%) carry specific rates, 57 lines (0.6%) compound rates, and 290 lines (3.3%) have alternate rates of duty.  The average bound MFN tariff 
(5.9%) in FY2010 remained very close to the av erage applied MFN tariff (5.8%), suggesting a high 
degree of predictability in the tariff.
18  Japan has not used this gap to raise tariffs since its previous 
Review.  The average bound rate is considerably high er for agricultural products (WTO definition), at 
16.0%, than for non-agricultural products, at 3.5%;  without further commitments in tariff reduction, 
this average for agricultural products is expected  to remain unchanged, as Japan completed the 
implementation of its Uruguay Round commitments in 2009.  
                                                      
13 Japan Customs online information (in Japanese).  Viewed at:  http://www.customs.go.jp/tetsuzuki/ s 
w/index.htm [22.07.2010]. 
14 Tokyo Customs Headquarters, Tokyo Air Cargo Sub-branch Customs, Narita Air Cargo Sub-branch 
Customs, Narita Nanbu Air Cargo Sub-branch Customs, Kansai Airport Branch Customs, Chubu Airport 
Branch Customs, and Naha Airport Branch Customs. 
15 See Japan Customs online information.  Viewed at:  http://www.customs.go.jp/english/c-
answer_e/sonota/9401_e.htm [14.12.2010]. 
16 District courts have jurisdiction over such law suits  as first instance.  The decisions by those courts 
may be appealed to High Courts  and then the Supreme Court. 
17 Excluding in-quota lines (in-quota lines subject to state trading are included in the calculations).  The 
Japanese tariff schedule has three distinct sets of rates:  statutory rates (which include both general and 
temporary rates);  WTO bound rates;  and preferentia l rates (under the GSP, the JSEPA, JUMSEPA, the 
JMEPA, JCEPA, JTEPA, JPEPA, JIEPA, JBEPA, JVEPA, and JSFTEPA).  In the case of statutory rates, the 
"temporary" rate, which is reviewed annually, is normally  used instead of the higher general rate;  the lower of 
the statutory and WTO bound rates are applied to WTO Members on an MFN basis,  except when preferential 
rates are applied.  Where the temporary, general, or pref erential rate is above the WTO bound rate, the latter rate 
applies to WTO Members.  Currently, 475 lines (including in-quota lines) or 308 lines (excluding only in-quota rates not subject to state trading) or 283 lines (excluding all in-quota rates) at the HS nine-digit level are subject 
to temporary rates;  the effective period of these rates was extended until the end of FY 2010. 
18 Whereas bound and applied MFN rates coincide for most lines, bound 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 produc ts (Section 6), plastics and rubber (Section 7), textiles 
and clothing (Section 11), and base metals (Section 15) .  Gaps between bound and applied rates range from 
0.3 percentage points to 40 percentage points.   Japan WT/TPR/S/243 
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Table III.1 
Structure of the MFN tariff, 2006-10 
(%) 
  MFN applied 
    FY2006a FY2008b FY2010c Final 
boundd 
1. Bound tariff lines (% of all tariff lines) 98.8 98.8 98.8 98.8 
2. Simple average rate 6.5 6.1 5.8 5.9 
    Agricultural products (HS01-24) 17.1 15.7 14.7 15.1 
    Industrial products (HS25-97) 3.7 3.6 3.4 3.5 
    WTO agricultural products 18.8 17.1 15.7 16.0 
    WTO non-agricultural products 3.6 3.5 3.5 3.5 
        Textiles a nd clothing 6.6 6.7 6.6 6.6 
    ISIC 1 - Agriculture, hunting, fishing 6.9 5.0 4.4 4.3e 
    ISIC 2 - Mining 0.1 0.1 0.1 0.1 
    ISIC 3 - Manufacturing 6.5 6.3 6.0 6.1 
        Manufacturing excluding food processing 3.8 3.7 3.5 3.6 
    First stage of processing 9.0 8.1 5.7 5.7 
    Semi-processed products 4.8 4.7 4.7 4.8 
    Fully processed products 7.0 6.6 6.7 6.8 
3. Domestic tariff "peaks" (% of all tariff lines)f 6.3 6.6 6.6 6.7 
4. International tariff "peaks" (% of all tariff lines)g 7.5 7.5 7.4 7.5 
5. Overall standard deviation of tariff rates 25.2 19.9 16.0 16.1 
6. Coefficient of variation of  tariff rates 3.9 3.3 2.7 2.7 
7. Tariff quotas (% of all tariff lines) 1.7 1.8 1.8 1.8 
8. Duty free tariff lines (% of all tariff lines) 41.7 41.4 41.4 40.5 
9. Non- ad valorem  tariffs (% of all tariff lines) 6.7 6.7 6.6 6.4 
10. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 1.5 1.4 2.0 1.9 
11. Nuisance applied rates (% of all tariff lines)h 1.1 1.3 1.3 1.2 
a Using AVEs based on 2005 import data, as available, provided by the Japanese au thorities.  In case of unavailability, the ad 
valorem part is used for compound and alternate rates. 
b Using AVEs based on 2007 import data, as available, provided by the Japanese au thorities.  In case of unavailability, the ad 
valorem  part is used for compound and alternate rates. 
c Using AVEs based on 2008 import data, as av ailable, provided by the Japanese au thorities.  In case of unavailability,  
 the ad valorem  part is used for compound and alternate rates. 
d Calculations are based onl y on bound tariff lines.  The implementation of the UR was reached in 2004, except for one 
 industrial product, which was implemented in 2009.  Calc ulations are based on FY2010 ta riff schedule, including AVEs. 
e The simple average final bound rate is lower than the simple  average MFN applied rate in FY2010 because calculations for the 
former do not include unbound tariff lines. 
f Domestic tariff peaks are defined as those exceeding three ti mes the overall simple average applied rate (indicator 3). 
g International tariff peaks are defined as those exceeding 15%. 
h Nuisance rates are those greater than zero, but less than or equal to 2%. 
Note: All tariff calculations exclude in-quota lines.  FY2006 ta riff schedule is based on HS02 nomenclature, consisting 
of 8,914 tariff lines;  FY2008 and FY2010 tariff schedules are based on HS07 nomenclature, consisting, respectively, of 
8,841 and 8,826 tariff lines. 
Source:  WTO calculations, based on data provided by the Japanese authorities. 
(b) Applied MFN tariff 
Structure 
22. The structure of Japan's MFN applied tariff h as remained largely unchanged since 2008.  Of 
the 8,826 tariff lines, 93.4% involve ad valorem  rates, 2.3% are specific, 3.3% alternate, and 0.6% are WT/TPR/S/243 Trade Policy Review 
Page 36 
 
 
compound rates;  0.4% of tariff lines have other rates (differential duties and sliding duties).19  The 
non-ad valorem  rates of duty (6.6% of all tariff lines) apply mainly to fats and oils, footwear, prepared 
foods, live animals and animal products, textiles and clothing, vegetables, and mineral products 
(Chart III.1);  ad valorem  equivalents were provided by the authorities for 408 lines, as a result of 
which, the tariff analysis is based on 98.9% of the 8,826 tariff lines.20  Currently, 155 tariff lines 
(1.8%) are subject to tariff-rate quotas;  for 38 of these lines the out-of-quota rates are ad valorem . 
23. Japan unilaterally eliminated applied MFN tariff s on yarn spun from silk waste  (not for retail 
sale) in FY2009;  in FY2010, it reduced applied MF N tariffs on petroleum products and certain ethyl 
alcohol;  for example, the applied MFN rate is  10% (16.9% in FY2008) for ethyl alcohol, and 
between ¥375 to ¥995 per kilo litre for petroleum products.21 
24. Around 41.4% of Japan's tariff is at the zero rate;  around 24.5% is subject to rates greater 
than zero but less or equal to 5%, and 21.2% to rate s greater than 5% but less than or equal to 10%.  
Some 1.8% of all Japan's tariff lines are subject to tariff-rate quotas.  All in-quota rates but only 24.5% of out-of-quota rates are ad valorem .  There is also a significant difference between the 
average rates:  in-quota rates aver age 18.3%, while out-of-quota rat es average 77.4%.  The authorities 
state that it has no concrete plans to reform its existing tariff quotas on leather and leather footwear 
for historic and social reasons.
22  Since Japan's previous Review, there has been no change in the 
quota allocation method, which still tends to be intricate.23   
Tariff averages 
25. In FY2010, Japan's overall simple average a pplied MFN tariff was 5.8%, down slightly from 
FY 2008 (6.1%), reflecting a decrease in the average of ad valorem  equivalents (AVEs) of non- ad 
valorem  duties.  Agricultural products receive much higher tariff protection than non-agricultural 
products:  the simple average for agriculture (WTO definition) is 15.7% compared with 3.5% for non-
agricultural products.  Simple average applied MFN ta riffs for footwear and headgear, prepared foods, 
vegetables, live animals, hides and skins, arms an d ammunition, and textiles and clothing are also 
relatively high (Chart III.2). 
 
 
 
                                                      
19 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 
both ad valorem  and specific rates.  A differential duty involves a specific rate charged per kg of imports with 
the rate varying directly with the di fference between the standard import price, set by the authorities, and actual 
import price.  A sliding duty involves a specific tariff rate for imports valued up to a certain threshold;  the rate declines as the value exceeds the thres hold and becomes zero at a certain point. 
20 Ad valorem  equivalents were provided by the authorities for 408 out of 584 non- ad valorem  tariff 
lines.  For 56 lines that carry alternate rates of duty, and 25 lines with compound rates, the ad valorem  part of 
the line was used in the tariff analysis. 
21 In FY2008, they ranged from ¥434 to ¥1,614 per kilolitre. 
22 WTO document WT/TPR/M/211/Add.1, 22 May 2009. 
23 See WTO (2001), p. 42, for details of the quota allocation method. Japan WT/TPR/S/243 
 Page 37 
 
 
(0) (0) (0) (0) (0)(29)(74)
(57)(36)
(123)
(20)
(3) (0) (0) (0) (0)(215)(25)
(584)
(0)(2)(0)
051015202530354045
Live animal & 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 III.1
Share of non- ad valorem  duties, by HS section, FY2010
Per cent
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 (lines subject to state trading are included).
WTO Secretariat estimates, based on data provided by the Japanese authorities.
 
26. Ad valorem  equivalents (AVEs) based on import data for 2008 were provided by the 
authorities for approximately 69.9% of the non-ad  valorem  rates.24  The simple average rate for all the 
AVEs supplied is 32.0%, although the highest rate is  458%, for broad beans (out-of-quota rate);  92 of 
the 100 highest tariffs had non- ad valorem  rates.25  The simple average of ad valorem  rates was 4.4% 
in FY2010.  Thus, non- ad valorem  rates tend to conceal tariff peaks;  however, the authorities do not 
consider that applying a non- ad valorem tariff in itself is necessarily a burden on consumers, and it 
has certain advantages, such as administrative simplicity. 
 
                                                      
24 According to the authorities, AVEs for the remaining non- ad valorem  tariff lines were not available 
due to lack of imports of an unspecified number of these items, which suggests that the tariffs involved may be prohibitive, or because some products are not interna tionally traded or there is little demand for the particular 
products in Japan.   
25 In comparison, the simple average of the AVEs supplied by the authorities, based on imports in 
2007, was 34.6%.   WT/TPR/S/243 Trade Policy Review 
Page 38 
 
 
051015202530
Live animal & 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 III.2
Simple average applied MFN tariff rates, by HS section, FY2008 and 2010
Per cent
Excluding in-quota rates (lines subject to state trading are included).  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 :FY2008
FY2010
 
27. Data on tariff escalation show no overall consis tent pattern other than higher overall tariff 
protection for primary agricultural products than for semi-processed products.  Tariff escalation from 
semi-processed to final goods is present in some sectors, notably textiles, petroleum refineries, and 
industrial chemicals.  In other sectors, including food products and manufacturing, leather products, 
wood and paper products, and other chemicals, protection for fully processed goods is lower than for 
semi-processed products, while esc alation from primary to semi-processed and final products is 
evident only for rubber and its products (Table AIII.1). 
Tariff reductions and exemptions 
28. Customs duty reductions and exemptions amount ed to ¥179 billion in FY2009 (about 24.4% 
of tariffs actually collected).26 
(c) Preferential rates 
29. Preferential tariff rates are offered unde r the GSP to 140 developing countries and 
14 territories, including additional preferences for 49 least developed countries.  In addition to the 
                                                      
26 For details of existing duty reductions and exemptions.  See Customs online information.  Viewed at:  
http://www.customs.go.jp/eng lish/c-answer_e/imtsukan/ 1602_e.htm [12.10.2010]. Japan WT/TPR/S/243 
 Page 39 
 
 
preferential access under FTAs for imports from Si ngapore, Mexico, Malaysia, Chile, Thailand, 
Indonesia, and Brunei, Japan has granted preferen tial access for imports from Switzerland under the 
Japan-Switzerland FTA since September 2009, an d from Viet Nam under the Japan-Viet Nam FTA 
since October 2009 (Chapter II(4)). 
30. Simple average tariff rates under all preferen tial arrangements (GSP, LDC, and FTAs) are 
lower than the simple average applied MFN rates, although there are wide variations from one 
product group to another.  In par ticular, while the overall simple av erage preferential rates range from 
0.5% to 4.6%, agriculture is subject to rates fro m 1.8% to 14.7% (Table III.2).  Tariffs under these 
arrangements are also high for certain processed a nd industrial goods, such as leather, rubber, 
footwear and travel goods, and textiles and clot hing imports (under GSP);  items such as dairy 
products, some footwear, and textiles and clothing ar e not included in the GSP scheme for developing 
countries and are therefore subject to applied MFN rates of duty.  
Table III.2 
Preferential tariff rates, FY2010 
(Per cent) 
 Ad 
valorem  
ratesa Duty- 
free 
ratesa Overall 
simple 
average WTO 
agriculture Dairy 
products WTO non-
agriculture Fish and 
fishery 
products Leather, 
rubber 
footwear, & 
travel goods Textiles 
& 
clothing 
Applied MFN 93.4 41.4 5.8 15.7 59.8 3.5 5.7 14.5 6.6 
GSP 94.0 61.2 4.6 14.7 59.8 2.3 5.4 13.1 4.9 
LDC 99.5 98.2 0.5 1.8 0.0 0.2 1.6 2.4 0.1 
JSEPAb 96.4 82.1 3.3 13.8 59.8 0.9 4.6 14.4 0.1 
JUMSEPAc 95.5 81.2 3.3 14.1 59.8 0.8 2.3 12.1 0.3 
JMEPAd 96.6 82.3 2.9 13.2 59.8 0.5 4.2 5.7 0.1 
JCEPAe 96.4 81.4 3.0 13.6 59.8 0.6 4.9 6.1 0.1 
JTEPAf 96.5 82.0 2.9 13.3 59.8 0.5 4.2 6.1 0.1 
JIEPAg 96.3 81.8 3.1 13.9 59.8 0.6 4.9 6.6 0.1 
JBEPAh 96.1 81.5 3.4 14.1 59.8 1.0 4.9 14.4 0.1 
AJCEPi 96.4 81.6 3.1 14.0 59.8 0.6 4.8 7.3 0.1 
JVEPAj 96.4 81.7 3.1 14.0 59.8 0.6 4.7 7.2 0.1 
JPEPAk 96.3 81.7 3.0 13.5 59.8 0.6 4.0 6.7 0.1 
JSFTEPAl 96.4 81.3 3.3 14.4 59.8 0.7 5.4 7.7 0.1 
a Per cent of all tariff lines. 
b Japan-Singapore Economic Agreement for a New Partnership. 
c Agreement between Japan and the Un ited Mexican States for the Strengthe ning of the Economic Partnership. 
d Japan-Malaysia Economic Partnership Agreement. 
e Japan-Chile Economic Partnership Agreement. 
f Japan-Thailand Economic Partnership Agreement. g Japan-Indonesia Economic Partnership Agreement. 
h Japan-Brunei Economic Partnership Agreement. 
i ASEAN-Japan Comprehensive Eco nomic Partnership Agreement. 
j Japan-Viet Nam Economic Partnership Agreement. 
k Japan-Philippines Economic Partnership Agreement. 
l Japan-Switzerland Economic Partnership Agreement. 
Note: Product classification in accordance with the WTO definition is adopted in this ta ble.  Calculations exclude in-quota rat es and 
include AVEs as available. 
Source: WTO calculations, based on data provided by the authorities. WT/TPR/S/243 Trade Policy Review 
Page 40 
 
 
31. Nearly 210 tariff lines, including certain meat, fruit juice, leather, and leather products, are 
subject to tariff-rate quotas created under the FTA  between Japan and Mexico (JUMSEPA);  these 
lines are not subject to tariff-rate quotas under applie d MFN rates, and the in-quota rates for these 
lines under the JUMSEPA are lower than the correspondi ng applied MFN rates.  Under the FTA with 
Malaysia (JMEPA), fresh bananas are subject to a tariff quota, where the in-quota rate is zero.  The 
tariff quota on bananas is also applied under the JU MSEPA, JIEPA, and JTEPA.  Furthermore, under 
the JCEPA, nearly 30 lines, including mainly meat and meat preparations, are subject to tariff quotas.  
Under the JTEPA, five lines involving fresh bananas, fresh pineapples, two lines on meat preparations 
of swine, and modified starch, are subject to tariff quotas. 
32. China remains the largest beneficiary of pr eferential access to the Japanese market;  it 
accounted for about 78% of all preferential impor ts under the GSP scheme in FY2008, up from 64% 
in FY2006 (Chapter II(4)(iv)).27  
(iii) Rules of origin 
33. Japan has preferential rules of origin under va rious free-trade agreements (FTAs), in addition 
to those under the Generalized System of Preferences.   Certificates of origin issued by authorized 
institutions in the exporting country are required fo r preferential duties under FTAs and the GSP, as a 
proof that the product concerned is "basically wholly  obtained" or "substantially transformed" (i.e. 
change of tariff classification at the HS 4-digit or 40 % of value added).  Preferential rules include lists 
of exceptions for some goods;  the exceptions involve specific criteria for some goods, such as 
processing rules and value added on a product-by-pro duct basis. Rules of origin under FTAs and the 
GSP adopt this criterion for many products, as we ll as the processing operations criterion and the 
value-added criterion.  
34. Japan's MFN rules of origin to, inter alia,  determine whether to apply MFN rates (as opposed 
to general rates) are stipulated in Article 4-2 of  the Cabinet Order for Enforcement of the Customs 
Law and Articles 1-5 and 1-6 of the Ordinance for Enforcement of the Customs Law.28  To apply 
MFN tariff rates, the country of origin for importe d goods is defined as the country in which the good 
concerned has been basically wholly obtained or has last undergone substantial transformation.  The 
change of tariff classification at the HS 4-digit level is used as a reference point for such transformation.     
(iv) Non-tariff border measures  
35. Japan prohibits imports of some products in accordance with Article 69-11 of the Customs 
Law.  Its Foreign Exchange and Foreign Trade La w governs import licensing procedures (Chart III.3).  
Imports of narcotics, certain weapons, and anim als or plants listed in the appendices of the 
Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), among 
others, may be prohibited or subject to import licen sing in order to ensure national security, safeguard 
consumer health and well-being, or to preserve dom estic plant and animal life and the environment.  
Some commodities, including certain fish, are subject to import quotas.   
                                                     
 
27 Other major beneficiaries of Japan's GSP scheme include ASEAN countries, for example the 
Philippines (5.9% of total imports under preferential treatment), Viet Nam (2.5%), and Indonesia (2.4%).  India 
also accounts for 2.4% of all preferential imports under the GSP scheme in FY2008. 
28 The MFN rules of origin are also used to determin e the country of origin fo r trade remedy measures 
and import trade statistics. Japan WT/TPR/S/243 
 Page 41 
 
 
Sourc e:   Information provided by the Japanese authorities.Note:        Act No. 228 of 1 December 1949 (Foreign Exchange and Foreign Trade Law);  Cabinet Order No. 414 of  29 December 19 49 
                  (Import Trade Control Order);  and Public Notice of the Ministry of International Trade and Industry No. 170 of 
                  30 April 1966 (notice on items of goods subject to import quotas, places of origin or places of shipment of g oods requiring
                  permission for import, and other necessary matters concerning import of goods).a                Mainly concerning the duties of the Ministry of Economy, Trade and Industry (METI).Chart III.3
Import control system, 2010a
Scheme of import control (Foreign Exchange and Foreign Trade Act)
Goods subject to
 import quotas (IQ)Control procedure Law
Public announcement of IQGoods subject to 
import approvalArticle 52 of Act No. 228 and Article 3 of 
Order No. 414 stipulate that those who 
plan to import certain goods must obtain 
approval in advance.  The goods subject 
to approval are listed in METI Public 
Notice No. 170.
IQ applicationImport announcement
   Reception of IQ application
   Delivery of certificateArticle 9 of Order No. 414 stipulates that 
the importers of goods subject to import 
quotas must obtain quotas from the 
authorities before applying for import 
approvals.
Customs clearingImport approval 
application   Reception of import approval application   Delivery of certificate
Confirmation by CustomsArticle 15 of Order No. 414 and Article 
70 of Custom Law stipulate customs 
procedures after the approval has been 
granted.Article 4 of Order No. 414 stipulates the 
procedure for the authority's granting of 
approval, as required by Article 3 of the 
Order.
 
(a) Import prohibition and licensing  
36. There has been no change in the list of items  requiring import approval since the previous 
Trade Policy Review of Japan.29  Products currently subject to import approval or prohibition include 
certain marine products, medicines and chemic al products, propellant powders, nuclear goods, 
weapons, animals and plants, substances that depl ete the ozone layer, specified hazardous wastes, 
waste chemical weapons goods, alcohol, rough di amonds, cultural property illegally removed from 
Iraq, all goods from North Korea, weapons and other items related to nuclear programmes or ballistic 
missile programmes from Iran, and weapons and othe r items from Eritrea.  Licences are issued at no 
cost. 
                                                      
29 See WTO document G/LIC/N/3/JPN/8, 7 October 2009 for products subject to Japan's current import 
licensing regime. WT/TPR/S/243 Trade Policy Review 
Page 42 
 
 
(b) Import quotas 
37. Japan continues to use quantitative restricti ons on imports (import quotas);  the authorities 
maintain that the quotas are based on the WTO Agre ements.  There has been no change in products 
subject to import quotas.  Quotas are currently imposed on certain fish products and controlled 
substances listed in the Montreal Protocol on Substances that Deplete the Ozone Layer.   
38. The import quota system is administered by the METI, which issues eligible importers with a 
certificate of import quota allocation.  The method a llocating quotas, which tends to be intricate, is 
specified in METI notices.30  The quota amount to be allocated is decided annually.  Fish-related 
quotas are determined by the METI, with the consen t of the Ministry of Agriculture, Forestry and 
Fisheries (MAFF), according to domestic supply an d demand, e.g. the amount of imports, domestic 
production, consumption, and prices in the previous  year, as well as projections for the coming year.  
Quotas are allocated to applicants who meet various criteria and, for some items, on a first-come first-
served basis31;  when the amount applied for exceeds rema ining unallocated quota, the latter quotas 
are allocated by lottery.   
39. Unused quota entitlements may not be carried over to the next period.  They are not 
transferable and the Government does not reallo cate unused quotas.  A certificate of import quota 
allocation, normally with a validity of four or six months, is issued by the METI to eligible importers. 
(c) Import surveillance  
40. Since 2009, there has been no change in Japan's system of prior confirmation to collect data 
on certain imports.  The system is intended to ensu re that these imports are for specific uses, and to 
verify documentation and origin requirements.  Pr ior confirmation is required from the Minister of 
Economy, Trade and Industry, or other relevant minister;  some items require confirmation at 
Customs (customs confirmation).  The system is used, inter alia , for goods where fraudulent 
declarations have been found in the past or are deemed more likely.  These include:  vaccine of microbial origin for experimental use;  antisera;   uranium catalysts;  specified foreign cultural 
property;  tuna;  marlin;  whales;  Class III psychot ropics;  poppy and hemp seeds;  certain substances 
listed in Annex E of the Montreal Protocol;  radi oisotopes;  diamonds;  and various other chemicals 
and pharmaceutical products. 
(v) Contingency measures  
41. Since its previous Review, Japan has made little use of contingency measures. 
42. The Customs Tariff Law and the relevant Cabine t Orders and Guidelines define Japan's legal 
framework regarding the use of anti-dumping, countervailing, and safeguard measures.  On 
                                                     
 
30 See WTO (2001), and METI online information (in Japanese).  Viewed at:  http://www.meti.go.jp/ 
policy/external_economy/trade_control/marine_products/index.html [18.08.2010]. 
31 In general, an applicant must be:  an importer who has in the past obtained a certificate of import 
quota and actually imported the item;  an importer who is delegated by a government-approved industrial 
association to obtain materials for food processing;  or an importer who plans to import items subject to the import quota. Japan WT/TPR/S/243 
 Page 43 
 
 
1 April 2009, Japan amended the relevant Cabinet Orders and Guidelines relating to anti-dumping, 
countervailing, and safeguard measures with a view  to improving the procedures of investigation.32 
43. Currently, Japan maintains six anti-dumping measures.  Two involve anti-dumping duties 
imposed on certain polyester staple fibre from th e Republic of Korea and the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu on 26 July 2002;  the level of duties applied is 
between 6% and 13.5%.  Four other measures c oncern anti-dumping duties levied on electrolytic 
manganese dioxide originating from the Republic of South Africa, Australia, China, and Spain;  the 
measures were imposed on 1 Septem ber 2008 and the level of duties applied is between 14.0% and 
46.5%.33 
44. Japan's countervailing duty rate applied sin ce 27 January 2006 on dynamic random access 
memories (DRAMs) imported from the Republic of  Korea was reduced from 27.2% to 9.1% on 
1 September 2008, with a view to implementi ng the relevant DSB recommendations and ruling.34  On 
23 April 2009, the Japanese Investigating Authoritie s terminated the countervailing measure pursuant 
to a change in circumstances.    
45. Japan has not imposed any safeguard measure s since 2001, when measures were applied on 
Welsh onions, Shiitake mushrooms and tata mi-omote imported mainly from China.35 
(vi) Government procurement 
46. According to an OECD study, Japan spends about 16.8% of its GDP on government 
procurement.36  The stated purpose of Japan's government pr ocurement policy is to ensure the fairness 
and impartiality of the contracts by public entiti es, the equality of opportunity, and the effective 
execution of the budget.  Nonetheless, it would appear that government procurement is also used as an 
instrument of industrial policy for some sectors, including wood and wood products (see below), and 
to support SMEs. 
47. Japan is a party to the WTO Agreem ent on Government Procurement (GPA).37  During the 
period under review, Japan made notificati ons under the GPA on:  national legislation38, statistics for 
the period 2007 and 200839, and modifications to Appendix I.40  All the proposals for modifications to 
Appendix I notified since January 2009 have been certified. 
                                                      
32 For example, the decision on whether to initiate an investigation must be made within approximately 
2 months of the date of submission of the document by the domestic industry. See WTO document 
G/ADP/N1/JPN/2/Suppl.6 (G/SCM/N /1/JPN/Suppl.6, G/SG /N/1/JPN/2/Suppl.2 ), 17 August 2009. 
33 WTO document G/ADP/N/188/JPN/Suppl.1, 3 September 2009. 
34 WTO documents WT/DS/336/1-23. 
35 WTO (2003), p. 35. 
36 OECD online information.  Viewed at:  h ttp://www.oecd.org/dataoecd/34/14/1845927.pdf 
[11.11.2010]. 
37 There is no single electronic portal that covers all entities listed in Japan's Annexes to the GPA.  
There is a single portal for the central government entities.  Local governments covered by the GPA publish 
notices of intended procurements.   
38 WTO documents GPA/37/Add.6, 23 July 2009;  and GPA/37/Add.7, 6 July 2010. 
39 WTO documents GPA/84/Add.4, 13 March 2009;  GPA/88/Add.3, 13 March 2009;  GPA/91/Add.2, 
13 March 2009;  GPA/94/Add.2, 9 April 2009;  and GPA/102/Add.2, 29 January 2010. 
40 WTO documents GPA/MOD/JPN/34, 20 February  2009; GPA/MOD/JPN/36, 21 April 2009;  
GPA/MOD/JPN/37, 27 April 2009;  GPA/MOD/JP N/38, 4 September 2009;  GPA/MOD/JPN/39, 
17 September 2009;  GPA/MOD/JPN/40, 17 September 2009;  GPA/MOD/JPN/42, 1 February 2010;  GPA/MOD/JPN/43, 1 February 2010;  GPA/MOD/JPN/ 46, 29 March 2010;  GPA/MOD/JPN/46/Corr.1, WT/TPR/S/243 Trade Policy Review 
Page 44 
 
 
48. The Account Law and relevant ordinances specify the procurement procedures for central 
government entities, while the Local Autonomy Law a nd relevant ordinances stipulate the procedures 
for local governments.  Japan's GPA coverage encompasses all central government entities, all 
47 prefectures, 12 designated cities (shitei toshi) , and certain public corporations.41  Japan's thresholds 
for GPA coverage expressed in Special Draw ing Rights (SDRs) have remained unchanged 
since 2009.42  Thresholds for central government entities (Annex I) are equal to or slightly lower than 
some other developed Members;  for sub-central government entities (Annex II) and all other entities 
(Annex III), its thresholds for products and some  services are equal to some other developed 
Members, while those for some other servi ces and construction are substantially higher.43  Japan 
considers that its government procurement is conduc ted without restriction on suppliers' nationality or 
on the origin of products or services, based on th e principle of non-discrimination, and that all 
relevant entities have thoroughly implemented the GPA;   no price or other preferences are granted to 
domestic suppliers in tenders covered by the GPA.  According to the authorities, no preference is granted to public procurement below the GPA threshold.   With respect to "articles and services of 
central government", companies need to be regist ered to participate in  tenders for government 
procurement.  The criteria for registration are published in official gazettes and online.
44  
49. In addition to its commitment under the GPA, Ja pan has chapters on government procurement 
in nine of its FTAs45;  the Japan – Malaysia FTA does not have  such a chapter.  For example, the 
Japan- Singapore FTA stipulated that the Japan's SDR threshold is lowered to 100,000 SDR from 
130,000 SDR (Japan's threshold under the GPA).  
50. A specific contractor may be selected under the "single tendering" contract method if, inter 
alia, the nature or objectives of the law does not allo w competition, or competition is not possible or 
disadvantageous to the Government be cause of the urgent nature of th e contract, or the contract value 
is small, in accordance with clau se 4 or 5 of Article 29.3 of the A ccounts Law.  The authorities state 
that single tendering corresponds to "limited tendering" stipulated in the GPA.   
51. The proportion of single tendering contracts to total central government contracts decreased 
from 46% in FY2005 to 18% in FY2008, in terms of the number of contracts, and from 46% to 22% 
in terms of the value of contracts.46  Since its previous review, all of Japan's central government 
agencies have been reviewing and examining whethe r their use of single tendering contracts can be 
justified, with a view to making single tende ring contracts "more appropriate" in terms of 
transparency and efficiency, and to "eliminate w asteful expenditures" in public procurement.  On 
16 December 2008, the Ministry of Internal Affairs and Communications made recommendation 
based on a review of government efforts to improve  competitiveness and transparency in procurement 
procedures, which included the introduction of ope n tendering and the establishment of a third-party 
                                                                                                                                                                     
30 March 2010; GPA/MOD/JPN/47, 13 April 2010;  GPA/MOD/JPN/50, 31 May 2010;  GPA/MOD/JPN/51, 
15 June 2010; and GPA/MOD/JPN/52, 22 June 2010. 
41 MIC online information (in Japanese).  Viewed  at:  http://www.soumu.go.jp/shitei/index.html 
[21.06.2010].  The 19 cities have populations over 500,000 and are designated by a relevant Cabinet Order.  As 
of October 2010, there are 19 designated cities;  the 7 newer designated cities are not yet listed in Japan's 
Annex 2 to the GPA. 
42 WTO documents GPA/W/299/Add.5, 8 February 2008, and GPA/W/309/Add.5, 11 February 2010.   
43 See, for example, WTO documents GPA/W/309/Add.5, 11 February 2010, GPA/W/309/Add.1, 
17 December 2009, and GPA/W/ 309/Add.4, 5 February 2010. 
44 Japanese Government online information (in Japane se).  Viewed at:  https://www.chotatujoho.go.jp/ 
va/com/KOUJI.html [12.10.2010]. 
45 Japan's FTAs with Indonesia, the Philippines, Viet Nam, Switzerland, Singapore, Mexico, Chile, 
Brunei, and Thailand have chapters on government procurement. 
46 Cabinet Secretariat online information (in Japanese ).  Viewed at:  http://www.cas.go.jp/jp/seisaku/ 
tyoutatu/090724fu_gai.pdf [20.10.2010]. Japan WT/TPR/S/243 
 Page 45 
 
 
body (in each central-government entity) to monitor all the entity's procurement contracts.  The 
review, which did not involve cost-b enefit analyses, stated that the majority of selected procurement 
procedures of government projects had been improved.47  The authorities state that local government 
procurement procedures are basically the same as t hose of the central govern ment, except for Japan's 
voluntary measures.48  
52. The Government announced in 2010 that it would promote the use of domestic wood, with a 
target of covering more than half of domestic demand for wood with domestic supply.49 On 
19 May 2010, Japan also established a law promoti ng the use of wood in the construction of public 
buildings.  As the implementing regulation of the law is to be issued by the Government no later than 
six months from the day of entry into force of th e law, it remains to be seen how Japan intends to 
achieve the target.  While government procurement is  thus used as an instrument of economic policy 
in Japan, quantitative evaluations of th e instrument are rarely published. 
53. In accordance with the Basic Guideline for Public Procurement of Information Systems, 
adopted in March 2007, procurement under the basic guidelines may not exceed ¥500 million per 
contract;  any planned procurement in excess of this threshold must be divided.  Government 
organizations are also required to formulate procurement plans. 
54. The total value of procurement above the threshold level of SDR 100,000 specified under 
Japan's unilateral 1994 Action Program on Gove rnment Procurement Procedures was about 
¥1.36 trillion in 2008 (down by 2.8% from 2007).50  In 2008, open tendering accounted for 63.5% of 
the total (compared with 58.6% in 2007).  During the same period, the share of selective tendering in 
terms of value increased from 1.2% to 1.5%, and that of single tendering decreased from 40.2% to 
35.0%. Procurement of overseas goods and services, s upplied by either domestic or foreign suppliers 
decreased from 9.1% to 7.1% in terms of value.  Procurement of foreign goods amounted to 9.1% of the total in 2008, compared with 14.5% in 2007 (Table III.3).
51  Procurement from foreign suppliers 
increased from 1.8% in 2007 to 2.0% in 2008 in contract terms, but decreased from 3.7% to 3.0% in 
value terms during the same period.  The shares of  foreign suppliers in contracts resulting from open 
and single tenders, respectively, were 1.1% and 4. 3% in 2009 (0.8% and 4.1% in 2008).  As of 
16 September 2010, 59,915 firms (of which 394 were eith er wholly or partially owned by foreigners) 
have central-government-wide unified qualificati on for participating in tendering contracts for 
manufacturing and sales of products. 
                                                      
47 See MIC online information (in Japanese).  Viewed at:  http://www.soumu.go.jp/main_content/0000 
75749.pdf [19.10.2010]. 
48 Japan's voluntary measures include improved mark et access and the Action Program on Government 
Procurement.  In addition,  there are voluntary measures pertaining to individual sectors, such as super 
computers, non-R&D satellites, computer products and se rvices, telecommunication, and medical technology.  
Except for these voluntary measures, certain designated local authorities (designated cities), as defined under a 
relevant cabinet order, must comply with the GPA, as mentioned above. 
49 This policy goal is written in the New Growth Strategy, which was decided by the Japanese 
government on 18 June 2010.  The Cabinet online inform ation (in Japanese).  Viewed at: http://www.kantei.go. 
jp/jp/sinseichousenryaku/sinseichou01.pdf [18.06.2010]. 
50 See WTO (2001) for details of the Action Program.  Procurement for public works (including 
architectural planning and consultanc y) is excluded from the programme. 
51 Foreign suppliers are defined under the Action Program as a "corporation in which approximately 
more than 50% of shares are owned by foreign investors/capital".  Total goods procurement rose from 
¥753.0 billion in 2008 to ¥844.3 billion in 2009, and the largest increase was in office machines and data processing equipment.  However, the number of contracts decreased from 8,748 to 8,481 over the same period.  
The number of services contracts increased from 4,154 in 2008 to 4,260 in 2009, while the value of such 
contracts decreased from ¥650.8 billion to ¥520.5 billio n.  The Cabinet Secretariat online information (in 
Japanese). Viewed at: http://w ww.kantei.go.jp/jp/kanbou/21tyoutatu /index.html [11.06.2010]. WT/TPR/S/243 Trade Policy Review 
Page 46 
 
 
Table III.3 
Procurement by product and by origin, 2007 and 2008 
(¥100 million and %)  
2007  2008 
No. Products Total  
value Foreign 
share  Total 
value Foreign 
share 
1 Products from agriculture, and from agricultural and food processing  3.3 0.0  4.4 9.7 
2 Mineral products 320.5 69.2  476.8 30.1 
3 Products of the chemical and a llied industries 61. 8 18.4  102.0 1.2 
4 Medicinal and pharmaceutical  products 312.8 25.9  251.2 39.7 
5 Artificial resins; rubber, raw hide s and skins; leather; and articles 
thereof 14.5 0.0  11.5 0.0 
6 Wood and articles of wood;  pa per making material; paper and 
paperboard and articles thereof 194.5 0.2  131.6 0.2 
7 Textiles and textile articles; thr ead for spinning and weaving; and 
articles thereof 38.8 0.6  43.3 4.0 
8 Articles of stone, of cement and similar materials; ceramic products; 
glass and glassware;  and articles thereof   6.7 13.9  2.4 0.0 
9 Iron and steel and articles thereof 158.4 0.8  287.0 1.4 
10 Non-ferrous metals and artic les thereof 55.4 0.0  42.6 1.2 
11 Power generating machinery and equipment 72.9 22.6  65.4 17.1 
12 Machinery specialized for partic ular industries 63.2 6.8  76.4 2.8 
13 General industrial machinery and equipment 73.2 0.7  62.4 2.5 
14 Office machines and automatic data pr ocessing equipment 2,666.0 1.1  3,298.7 2.1 
15 Telecommunications and sound r ecording and reproducing apparatus 
and equipment 670.6 1.5  681.1 4.7 
16 Electrical machinery, apparatus and appliances, and electrical parts 
thereof 181.1 2.2  376.7 0.8 
17 Road vehicles 358.0 1.3  213.6 1.9 
18 Railway vehicles and associat ed equipment 53.3 70.1  64.3 17.6 
19 Aircraft and associated equipment 76.3 97.4  59.9 83.9 
20 Ships, boats and floating structures 304.1 76.7  72.7 0.0 
21 Sanitary, plumbing, and heati ng equipment 5.4 0.0  19.7 0.0 
22 Medical, dental, surgical and vete rinary equipment 509.6 47.0  517.0 35.8 
23 Furniture and parts thereof 85.1 0.5  58.4 0.0 
24 Scientific and controlling instrume nts and apparatus 589.4 16.5  779.0 14.1 
25 Photographic apparatus and equipment, op tical goods, and clocks 59.3 16.8  53.6 3.6 
26 Miscellaneous articles 595.5 2.0  691.3 5.5 
  Total 7,529.8 14.5  8,443.0 9.1 
Source:  Government of Japan (2010), Japan's Government Procurement:  Po licy and Achievements Annual Report , 
Toward Government Procurement Open to the World.  Vi ewed at:  http://www.kantei .go.jp/jp/kanbou/21tyoutatu/  
55. Open tendering is the norm in Japan's governme nt procurement.  However, for procurement 
contracts between the Government and a Coopera tive Association or Federation of Cooperative 
Associations of small and medium enterprises (S MEs), the Government can use limited tendering 
procedures, in line with Cabinet Order Stipulating Special Procedures for Government Procurement of 
Products or Specified Services (Cabinet Order 300,  18 November 1980).  Procurement from SMEs is 
"encouraged" under the Law on Ensuring the Receipt  of Orders from the Government and Other 
Public Agencies by Small and Medium Enterpri ses (enacted in 1966);  under the Law, the 
Government, local authorities and other public ag encies must endeavour to expand procurement 
opportunities for SMEs, by way of inter alia,  providing information on procurement plans. 
Nonetheless, no tendering is reserved exclusively fo r SMEs.  According to the authorities, these laws 
and regulations apply equally to domestic and foreign SMEs. Japan WT/TPR/S/243 
 Page 47 
 
 
56. Most cases of proven infringement of Japan's An ti-monopoly Act (AMA) c ontinue to involve 
bid-rigging related to public work s, and various cases of bid-rigging involving government officials 
have been made known to the public in recent year s (section (4)(vi)).  The Act for Promoting Proper 
Tendering and Contracting for Public Works, as amended in March 2007, defines major policy 
instruments for preventing bid-rigging and other improper actions.  These include notification of 
improper actions to the JFTC.  Furthermore, a law concerning the elimination and prevention of 
government employees' involvement in bid rigging, inter alia,  authorizes the JFTC to formally 
demand heads of ministries and agencies to im prove administrative measures adopted by the 
ministries and agencies with regard to bidding and contracts, to eliminate involvement of their 
officials in bid-rigging.52  The heads must also conduct an inves tigation if requested by the JFTC, take 
action to eliminate involvement of their officials in  bid-rigging, if its existence becomes evident, and 
publicize the results of the investigation and ac tions taken in response to the investigation. 
57. As regards Japan's bid-challenge procedures, co mplaints about procurement procedures by the 
Central Government and public corporations are processed by the Office for Government 
Procurement Challenge System (C HANS) and considered by the G overnment Procurement Review 
Board (GPRB), under the Council on Government Proc urement Review, which is headed by the Vice-
Minister of the Cabinet Office.  The procuring entity is expected to follow the recommendations voluntarily.  One complaint has been filed sin ce 2008, concerning procurement for the design and 
development of an advanced information processing system for motor car registration and safety checks, to be procured by the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT).  The 
case was reviewed by the GPRB, which found that the MLIT did not follow the voluntary measures 
on government procurement and proposed a re-b idding procedure without altering the bidding 
conditions.  Each local government covered by the GPA has its own review body and its own 
regulation on the structure and administration of its  review body.  The authorities state that members 
of the body are selected in line with Article 20.6 of the GPA. 
(vii) State trading 
58. Current state-trading activities in Japan involve leaf tobacco, opium, rice, wheat and barley, 
and milk products, the same as in 2009.
53  While the authorities maintain  that the aims of Japan's 
state-trading activities are to "stabilize the supply and price of these commodities and protect consumer interests", prices of these commodities in  Japan tend to be higher than the world prices. 
State-trading activities are generally underpinned by legislated import or export rights and, in some 
cases, by specific monopoly rights over domestic production and distribution.  
59. The Tobacco Business Law requires the Japan Toba cco Inc. (JT) to purchase all leaf tobacco 
grown in Japan specifically for the purpose of selli ng it to JT, based on an agreement between JT and 
the tobacco cultivators, except for le af tobacco not deemed suitable as  raw material for manufactured 
tobacco.
54  This requirement is stipulated apparently  as a quid pro quo to the JT's monopoly in the 
domestic production of cigarettes and other tobacco products.55  Although anybody may import leaf 
tobacco in Japan, this monopoly effectively renders all the imports of leaf tobacco for the manufacture 
of tobacco in Japan dependent upon subsequent  purchase by JT.  In 2009, the average price of 
                                                      
52 JFTC online information.  Viewed at:  http://w ww.jftc.go.jp/e-page/legislation/ama/ aepibr.pdf 
[23.11.2010]. 
53 WTO document G/STR/N/13/JPN, 11 October 2010. 
54 Articles 3.1 and 3.4, the Tobacco Business Law. 
55 Article 8, the Tobacco Business Law. WT/TPR/S/243 Trade Policy Review 
Page 48 
 
 
domestically produced leaf tobacco was ¥1,910.52 per kg56, while the average price of imported leaf 
tobacco was ¥546.09 per kg.57 
60. In the Law for Stabilization of Supply-Demand and Price of Staple Food, rice, wheat and 
barley are defined as staple food for the Japanese pe ople and as important agricultural products.  The 
objective of the law is to implement various policy measures, including state trading, in order to 
"stabilize supply-demand situations and prices of th ese products" with a view to contributing to the 
"stabilization of the lives of Japanese people and th e national economy";  nonetheless, domestic prices 
of these commodities are well above world prices. 
61. On dairy products, the Agriculture & Livestock Industries Corporation (ALIC) is authorized 
to take measures to "stabilize supply-demand situati ons and prices for milk products" with a view to 
"promoting sound development of dairy and related industries and to improve national diet" in 
accordance with the Manufacturing Milk Producer Co mpensation Temporary Law and the Agriculture 
and Livestock Industries Corporation Law.  As a pa rt of such measures, th e ALIC, as a state trading 
enterprise, imports designated dair y products with a view to "ens uring proper and smooth operation of 
the system to stabilize supply-demand and pr ices of the designated milk products".  
(viii) Standards, technical regulations, and sanitary and phytosanitary measures 
(a) Standards and technical regulations 
62. Technical regulations and conformity assessm ent procedures are adopted by the central 
government in accordance with various relevant la ws and regulations, including the Pharmaceutical 
Affairs Law, the Industrial Standardization Law, and the Law Concerning St andardization and Proper 
Labelling of Agricultural and Forestry Products (JAS Law).58  These laws are the legal basis for 
implementing the TBT Agreement in Japan.  While  regulatory impact assessments are conducted by 
each ministry on technical regulations, no cost-ben efit analyses are conducted.  The lead agencies for 
coordinating and developing intern ational trade policy on standard s activities and in discussions and 
negotiations with foreign countries are the Minist ries of Foreign Affairs;  Economy, Trade and 
Industry;  Agriculture, Forestry and Fisheries;  Health, Labour and Welfare;  Internal Affairs and 
Communications;  and Land, Infrastructure and Transport.  Japan submitted a notification on the 
implementation and administration of  the TBT Agreement in June 1996.59  Its enquiry points under 
the Agreement are the Standards Information Servi ce within the International Trade Division of the 
Ministry of Foreign Affairs (mainly handling enquiries on drugs, cosmetics, medical devices, 
foodstuffs, food additives, telecommunication facilities,  motor vehicles, ships, aircraft, and railway 
equipment (excluding enquiries concerning certain  JIS handled by JETRO);  and the Standards 
Information Service within the Information Serv ice Department of the Japan External Trade 
Organization (JETRO) (mainly handling enquiri es on electric equipment, gas appliances, 
                                                      
56 Average purchase price per kg recommended by  the Leaf Tobacco Deliberative Council for 
agreements between the JT and tobacco growers. 
57 Average import price per kg of leaf tobacco (HS 240110, 240120, 240130, 240391) based on Japan's 
Trade Statistics. 
58 Other relevant laws and regulations include the Building Standard Law,  the Pharmaceutical Affairs 
Law, the Food Sanitation Law, the El ectrical Appliance and Material Safety  Law, the Consumer Product Safety 
Law, the High Pressure Gas Safety Law, the Road Vehi cle Law, the Safety Regulations for Road Vehicles, the 
Rational Use of Energy Law, and the Fire Service Law, the Law concerni ng the Safety Assurance and Quality 
Improvement of Feed, the Law concerning Examination and Regulation of Chemical Substances and Regulation 
of their Manufacture, the Industrial  Safety and Health Law, the Telecommunications Business Law, the Radio 
Law, and the Fertilizer Control Law. 
59 WTO document G/TBT/2/Add.10, 11 June 1996. Japan WT/TPR/S/243 
 Page 49 
 
 
measurement scales, foodstuffs, food additives, and JI S related to medical devices, motor vehicles, 
ships, aircraft, and railway equipment).60  The Ministry of Foreign Affairs is Japan's notification 
authority under the Agreement. 
63. As part of the process for the  adoption of technical regulations and conformity assessment 
procedures, the agency responsible must publish proposed regulations and provide any interested 
persons an opportunity for comment.61  Since October 2007, based on the MIC's Implementation 
Guidelines for ex-ante Evaluation of Regulations, regulatory impact assessments have been made 
compulsory for the adoption of regulations through a law or a cabinet order (as well as for amendments or abolition).
62  Regulatory impact analyses have not been conducted when adopting 
some regulations through ordinance inferior to a cabinet order.63     
64. Japan made 51 notifications of technical regul ations to the WTO between January 2009 and 
July 2010.64  The average period for comment specified in the notifications was around 56 days;  the 
TBT Committee's recommended period is 60 days.65 
Voluntary standards 
65. In 2009, voluntary standards comprised 10, 179 Japanese Industrial Standards (JIS) and 
214 Japan Agricultural Standards (JAS) (Table III.4) .  The authorities indicate that Japan has been 
aligning JIS to international standards if correspondi ng international standards exist, with a view to 
ensuring compliance with the TBT Agreement;  about  48% of JIS are comparable to international 
standards, and 96% of these were aligned with inte rnational standards in 2009 (no change since 2008).  
Consequently, about 46% of all JIS were aligne d with international standards in 2009. From 
April 2008 to February 2010, 597 JIS items were revised, 297 withdrawn, and 412 newly established.   
66. The Japan Agricultural Standards Law stipulat es that, in order to establish or revise JAS 
standards, international standard s (such as Codex) must be "taken into account";  accordingly, 
relevant parts of international st andards are referred to as a basis for establishing or revising JAS.  The 
authorities state that, for example, organic JAS st andards were established in accordance with the 
Codex "Guidelines for Production, Processing, Labe lling and Marketing of Organically Produced 
Foods".  Since 2008, two new JAS items have been established and two have been abolished, while 
39 have been revised.  
67. About 8,300 domestic and 600 foreign factories in 19 countries and economies are certified to 
affix JIS marks (JIS Mark scheme).  The JIS Mark  scheme is voluntary unless relevant regulations 
                                                      
60 WTO document G/TBT/2/Add.10, 11 June 1996. 
61 The procedure applies when technical regulations and conformity assessment procedures fall within 
certain categories specified in admini strative orders under the Administrative Procedure Act.  The agency 
responsible is required to provide at least 30 days for comments. 
62 Regulations subject to compulsory  RIAs are stipulated in Article 3 of Cabinet Order for Enforcement 
of the Government Policy Act (in Japanese).  Viewed at:  http://www.soumu.go.jp/main_content/000082217.pdf 
[19.10.2010].  See also Ministry of Internal Affa irs and Communications online information, the "Annual 
Report on Policy Evaluation in FY2008 (Summary)", for the details of policy evaluation conducted in FY2008.  
Viewed at:  http://www.soumu.go.jp/main_sosiki/hyouk a/seisaku_n/pes/ annual_rp2008.pdf [19.10.2010]. 
63 WTO document G/TBT/W/287, 6 June 2008. 
64 These are WTO documents G/TBT/N/JPN/290-340. 
65 The Secretariat estimated this figure by aver aging the periods between the date on which a 
notification was issued, and the "final date for commen ts" specified in that notif ication.  The Secretariat 
considered notifications contained in WTO documents G/TBT/N/JPN/290-339, excluding documents with the 
symbols "Add" and/or "Corr", and G/TBT/N/JPN/332, which state that the final date for comments is "not applicable. WT/TPR/S/243 Trade Policy Review 
Page 50 
 
 
require JIS for domestic sales.  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 Guid e 65.  Currently, 25 organizations are accredited 
as JIS mark certification bodies.
66 
68. Compliance with the JAS is not required for im ports into Japan.  Under the JAS Law (the 
Law Concerning Standardization a nd Proper Labelling of Agriculture and Forestry Products), third-
party organizations are entitled to certify operators  (e.g. manufacturers) to affix JAS marks.  The  
Minister of Agriculture, Forestry and Fisheries as well as Registered Certifying Bodies and Registered Overseas Certifying Bodies (RCBs and ROCBs) ar e responsible for monitoring and managing JAS 
marks.  The Minister is authorized to order certif ying bodies to comply with the registration criteria 
and improve services.  The JAS Law incorporates ISO Guide 65 as registration criteria for certifying bodies.  For example, during the accreditation of a certifying body, applicants' relationships with 
producers and compliance with ISO Guide 65 is ev aluated.  Foreign producers or manufacturers 
certified by RCBs and ROCBs may conduct their ow n grading and affix the JAS marks to their 
products.  There are currently 27 ROCBs (18 for organic products and 9 for forestry products).
67  
Under the JAS Law, foreign enterprises certifying op erators that produce, process, and/or distribute 
agricultural or forestry products in conform ity with the JAS may be accredited as ROCBs.  
Table III.4 
Main standards and technica l regulations in Japan, 2009 
(%) 
 Number of 
standards/ 
regulations Corresponding 
to 
international 
standardsa Equivalent 
to 
international 
standards Acceptance 
of overseas 
certificationb Acceptance 
of overseas 
test datab 
A.  Mandatory technical regulations      
Pharmaceutical Affairs Law 1,954 .. .. .. .. 
Food Sanitation Law 618 .. .. .. .. 
Electrical Appliance and Materials Safety 
Law 454 .. .. 
.. .. 
Consumer Product Safety Law 9 0 0 0 .. 
High Pressure Gas Safety Law 2 .. .. .. 100 
Building Standard Lawc .. .. .. .. .. 
Safety Regulations for Ro ad Vehicles 237 29 4 11 33 
Law concerning the Safety Assurance and 
Quality Improvement of Feed .. .. .. .. .. 
Law concerning Examin ation and Regulation 
of Chemical Substan ces and Regulation of 
their Manufacture  7 .. .. .. 100 
Industrial Safety and Health Law ..     
Table III.4 (cont'd) 
                                                      
66 These include three foreign accredited certification bodies (two Korean and one Australian).  JIS 
online information (in Japanese).  Viewed at:  http://www.jisc.go.jp/app/pager  [14.06.2010].   
67 The newly accredited ROCBs (since 2008) for orga nic products are:  Instituto Mediterraneo di 
Certificazione (Italy);  Suolo e Salute S.r.I (Italy);  Canadian Seed Institute (Canada);  Pro-Cert Organic 
Systems Ltd. (Canada);  OneCert Inc (t he United States);  NASAA Certified Organic, Pty, Ltd. (Australia);  and 
The Organic Food Chain Pty, Ltd. (Australia). Japan WT/TPR/S/243 
 Page 51 
 
 
 Number of 
standards/ 
regulations Corresponding 
to 
international 
standardsa Equivalent 
to 
international 
standards Acceptance 
of overseas 
certificationb Acceptance 
of overseas 
test datab 
Telecommunications Business Lawd .. .. .. .. .. 
Radio Lawe .. .. .. .. .. 
Fertilizer Control Law .. .. .. .. .. 
B.  Voluntary standards       
Japan Industrial Standards (JIS)  10,179 48 96 .. .. 
Japan Agricultural Standards (JAS) 214 32 74 .. .. 
.. Not available.  
a Defined as "primary aspects sharing a common scope". 
b Where applicable. 
c Building Act Code. d According to the authorities, the number of mandatory technical regulations is not available because the scope and definition  of 
mandatory technical regulations are ambiguous ; the technical conditions of terminal e quipment in Japan generally comply with 
ITU-T/ITU-R Recommendations and Radio Regulations, and international harmonization is given consideration. 
e According to the authorities, the number of mandatory technical  regulations is not available because the scope and definition  of 
mandatory technical regulations are ambiguous;  the technical conditi ons of radio stations in Japan generally comply with ITU-R  
Recommendations and Radio Regulations, and international harmonization is given consid eration.  Regarding the system for the 
certification of radio equipment the Radio La w was amended to establish the system fo r accepting foreign test results and forei gn 
certification (promulgated in 1998 and went into effect in 1999). 
Source:  Information provided by the Japanese authorities.  
Mandatory technical regulations 
69. In response to a series of accidents involving electric appliances and illegal sales of 
contaminated rice, Japan has been revising laws  to introduce various technical requirements for 
product safety and distribution.68  Regulations to implement these la ws have been coordinated by the 
Consumer Affairs Agency and other government bodi es since 1 September 2009.  In addition, in order 
to evaluate the risks of all chemical substances,  the Chemical Substances Control Law was amended 
in 2009 and partially entered into force on 1 April 2010.69  On 1 April 2009, oil-fired boilers and oil-
stoves were made subject to the technical regul ations under the Consumer Product Safety Act.70  On 
27 August 2009, mandatory technical regulations for organic plants were revised; some substances 
were added to or deleted from the list of substa nces permitted for the production of organic plants.71  
On 12 May 2010, pressure cookers and autoclaves ( certain containers) for home use, and helmets 
were made subject to technical regulati ons under the Consumer Product Safety Act.72  
70. Data provided by the authorities indicate that  there were 237 regulations on road vehicle 
safety standards in 2009, of which 29% corres ponded to international standards (20% of 
204 regulations in 2005).  Japan is a party to th e Agreement on Uniform Technical Prescriptions for 
Vehicles.  It has applied 40 regulations unde r the agreement to its domestic regulations.     
                                                      
68 For example, a law entered into force on 1 October 2010 obliging all business entities dealing with 
selected rice and rice products to keep transaction records and relay place of origin information of these goods;  its aim is to prevent distribution of rice and rice products that do not meet safety standards and to ensuring 
proper labelling.  See WTO document G/TBT/N/ JPN/289/Add.1, 24 June 2009 for details. 
69 The law is to enter into force fully on 1 April 2011. 
70 METI online information (in Japanese).  Viewed  at: http://www.meti.go.jp/p roduct_safety/producer/ 
shouan/sekiyu_shitei.htm [08.07.2010]. 
71 WTO document G/TBT/N/JPN/298, 24 April 2009. 
72 WTO document G/TBT/N/JPN/328, 5 February 2010. WT/TPR/S/243 Trade Policy Review 
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Conformity assessment  
71. Foreign manufacturers of electrical products and consumer products can undergo conformity 
assessment and certification conducted in foreig n countries by foreign registered conformity 
assessment bodies, in accordance with relevant laws (e .g. the Electrical Appliance and Material Safety 
Law and the Consumer Product Safety Law).  Fore ign manufacturers of containers and designated 
equipment for high pressure gas are allowed to self-certify their products if they are registered with the Government, in accordance with the High Pressur e Gas Safety Law.  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 c oncerning the Mutual Acceptance of Data in the 
Assessment of Chemicals.
73   
72. METI has designated 22 inspection bodies (down from 26 in 200974), 7 of which are foreign, 
for testing based on the major standards and certi fication systems under the METI's jurisdiction.  
These include:  7 designated inspection bodies under the Consumer Product Safety Law, 12 under the 
Electrical Appliance and Material Safety Law, 2 under the Law Concerning the Securing of Safety 
and Optimization of Transaction of Liquefied Pe troleum Gas, and 2 under the Gas Utility Industry 
Law.  In 2010, approximately 9% of all JIS were designated in Japanese laws and 
government/ministerial ordinances as mandatory techni cal regulations.  Based on the Industrial Safety 
and Health Law, the "designated foreign bodies for in spection" system allows persons who intend to 
import boilers, pressure vessels or electrical equipmen t for use in an explosive atmosphere to have 
them inspected by foreign inspection bodies desi gnated by the Minister of Health, Labour and 
Welfare for compliance with Japan ese standards.  The result of the inspection is submitted to 
competent Japanese authorities or inspection bodies fo r examination.  The Third Party Certification 
System for medical devices was introduced in April 2005.  Currently, 13 bodies are registered (6 are 
foreign).  As for the JAS, there are 25 register ed overseas certifying bodies as of in March 2010.  
(b) Sanitary and phytosanitary measures  
73. Since 2009, there have been several revisions to Japan's food specifications and standards, 
which are established under its Food Sanitation Law.   Revisions include changes to maximum 
residue limits (MRLs) for pesticides and amendments  on food additives.  According to the authorities, 
Japan has systematically reviewed the MRLs for the target compounds or components based on risk 
evaluation from a purely scientific standpoint, but not  involving cost-benefit analyses, taking into 
consideration the food intake of the Japanese popula tion, and that some of the MRLs have been 
modified.  When it introduced the positive list syst em in 2006, Japan established provisional MRLs 
for 758 agricultural compounds or components, based mainly on Codex standards and other countries' 
MRLs, without conducting risk assessment, with a vi ew to reducing the time required for standard 
setting.  For example, the maximum residue li mits for azoxystrobin, flusilazole lufenuron 
propamocarb were raised, and those for metalaxy l and mefenoxam, trifloxystrobin, colistin, and 
cyflufenamid were lowered.  New food additives, such as phenethylamine and butylamine have been 
allowed.75  During the period under review, the MAFF established import requirements to allow the 
importation of fresh fruits from some of Japan's trading partners including Australia (grapefruit)76, 
                                                      
73 Based on the Chemical Substances Control Law. 
74 Two bodies have discontinued operation in accord ance with the Consumer Pr oduct Safety Act, and 
two others have been removed from the list, in accordan ce with the Electrical Appliances and Materials Safety 
Act, due to non-conformity. 
75 WTO document G/SPS/N/JPN/254, 1 July 2010. 
76 Plant Protection Station online information (in Japanese).  Viewed at:  http://www.pps.go.jp/law_ 
active/Notification/basis/6/46/history/1287.pdf [30.08.2010]. Japan WT/TPR/S/243 
 Page 53 
 
 
Chinese Taipei ( Hylocerus undatus )77, Colombia (Tommy Atkins mango)78, Peru (Kent mango)79, 
South Africa (Barlinka grape), Turkey (grapefruit)80 the United States (sweet cherries), and Viet Nam 
(Hylocerus undatus ).  On the other hand, one food add itive (sodium starch phosphate), which was 
determined to be no longer marketed and to have been replaced by newly designated modified starch, 
was withdrawn from the list of permissible food a dditives.  Japan considers that MRLs under its 
positive list system, introduced in May 2006, are base d on Codex standards and, to a lesser degree, on 
standards established by countries/economies where MRLs are assumed to be established based on 
toxicity study data equivalent in quantity to t hose used in scientific evaluations by the Joint 
FAO/WHO Meeting on Pesticide Residues (JMPR) and the Joint FAO/WHO Experts Committees on 
Food Additives (JECFA).81 
74. The establishment of SPS measures is governed  by a number of laws and regulations, 
including:  the Food Sanitation Law, the Quarantine Law, the Plant Protection Law, and the Domestic Animal Infectious Diseases Control Law.  The aut horities state that Japan carries out risk assessments 
and publishes their results when introducing, amending,  or abolishing laws and regulations related to 
SPS measures.
82  The Guidelines for Implementation of the Monitoring and Guidance under the Food 
Sanitation Law (Ministry of Health, Labour and Welfare Public Notice No.301, 2003) specifies 
inspection methods and approaches for domestic and imported agricultural products;  under the 
Guideline, these products are inspected according to  the same inspection methods and approaches. 
The Quarantine measures on plants and animals ar e implemented, respectively, by the Plant 
Protection Station and the Animal Quarantine Service,  both attached to the Ministry of Agriculture, 
Forestry and Fisheries.83 
75. Since 2009, Japan has submitted to the WTO 39 no tifications (up to 31 October 2010) on new 
or modified SPS measures.84  The average period for comment sp ecified in these notifications was 
61 days.85 
                                                      
77 Plant Protection Station online information (in Japanese).  Viewed at:  http://www.pps.go.jp/law_ 
active/Notification/basis/6/237/html/237.html [30.08.2010]. 
78 Plant Protection Station online information (in Japanese).  Viewed at:  http://www.pps.go.jp/law_ 
active/Notification/basis/6/226/history/1259.pdf [30.08.2010]. 
79 Plant Protection Station online information (in Japanese).  Viewed at:  http://www.pps.go.jp/law_ 
active/Notification/basis/6/231/history/1269.pdf   [13.10.2010]. 
80 Plant Protection Station online information (in Japanese).  Viewed at:  http://www.pps.go.jp/law 
_active/Notification/basis/6/240/history/1292.pdf  [13.10.2010]. 
81 Australia, Canada, the European Union, New Zealand, and the United States. 
82 For example, the Standard Procedure for Approval for Import of Designated Items into Japan to be 
Quarantined, and the Procedures for Lifting the Ban of Im portation specify steps to co nduct risk assessment for 
removing restrictions on designated items.  The conclusion of risk assessment is published on the MAFF website. 
83 Plant Protection Station online information.  Viewed at:  http://www.pps.go.jp/english/index.html 
[30.08.2010].  Animal Quarantine Service online informa tion.  Viewed at:  http://www.maff.go.jp/aqs/english/ 
index.html [30.08.2010]. 
84 WTO documents G/SPS/N/JPN/223-261. 
85 The Secretariat estimated this figure by aver aging the periods between the date on which a 
notification was issued, and the "final date for commen ts" specified in that notif ication.  The Secretariat 
considered notifications contained in WTO docu ments G/SPS/N/JPN/223-261, excluding documents 
G/SPS/N/JPN/230, 238, 239, 245, 248-250 , 256, and 261, which state that th e final date for comments is "not 
applicable.  The SPS Agreement oblig es Members to allow a reasonable period of time for submission, 
discussion, and consideration of comments, and it is recommended that Members normally allow a period of at least 60 calendar days for comments. WT/TPR/S/243 Trade Policy Review 
Page 54 
 
 
76. Japan's enquiry point and national notificati on authority under the SPS Agreement is the 
Standards Information Service within the Intern ational Trade Division of the MOFA's Economic 
Affairs Bureau.86  The Act on Ensuring of Safety of Pet Animals Feed, which entered into force on 
1 June 2009, set standards for pet foods and sti pulated manufacturing and import regulations.  There 
have been no major changes to Japa n's quarantine arrangements since 2009.   In the Committee on 
Sanitary and Phytosanitary Measures, Members ha ve complained that, in many cases, Japanese SPS 
regulations are more stringent than interna tionally established guidelines and risk assessment 
procedures87;  these include maximum residue limits.   
77. The authorities in charge of Japan's SPS meas ures include the Ministry of Agriculture, 
Forestry and Fisheries, and the Ministry of Hea lth, Labour and Welfare, as well as the Food Safety 
Commission.  The MAFF is responsible for ensuri ng safety of domestically produced food products, 
through the improvement of practices at vari ous stages from production to consumption.  Its 
responsibilities include animal health and plant prot ection.  The responsibility of the MHLW is to 
protect public health.  The FSC conducts risk ass essment in response to requests made by "risk 
managers" (i.e. MAFF and MHLW), and sends the outcomes of the assessments back to the risk 
managers.  Safety assessments on ge netically modified (GM) foods are conducted by the Food Safety 
Commission in accordance with Codex guidelines.88    
78. Japan currently imposes import prohibitions on beef and poultry from various countries to 
prevent the spread of BSE and avian flu.89  The authorities maintain that the process of lifting the 
import ban includes technical consultations, c onsideration of import requirements, and the 
implementation of risk assessment that takes due account of the OIE code90, and involves consultation 
with relevant domestic industries, consumers, and requesting countries.  Since December 2005, Japan 
has allowed beef imports from the United States and Canada under the condition that "specified risk 
material" (SRM) is removed from all the cattle, and all beef products exported to Japan are from cattle 
of 20 months of age or younger.91 
Conformity assessment 
79. In accordance with the Food Sanitation Law, 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.
92  These inspection bodies must be 
                                                      
86 WTO document G/SPS/ENQ/25, 15 October 2009. 
87 Members have complained that Japans SPS regu lations are in certain cases in excess of OIE 
guidelines and Codex standards. 
88 See WTO (2009) for the details of the Food Safety Commission.   
89 At the end of June 2010, imports of beef we re prohibited from Austria, Belgium, the Czech 
Republic, Denmark, Finland,  Germany, Greece, France, Ireland, Israel , Italy, Liechtenstein, Luxembourg, the 
Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom.  
Imports of poultry were prohibited from 56 countries/re gions.  For the current list of countries/regions from 
which imports of poultry are prohibited, see Animal Quarantine Service of Japan online information (in 
Japanese).  Viewed at:  http://www.maff.go.jp/aqs/topix/im//hpai.html [14.10.2010]. 
90 WTO document WT/TPR/M/211/Add.1, 22 May 2009. 
91 See MAFF online information. (in Japanese).  Viewed at: http://www.mhlw.go.jp/topics/2005/12/dl/ 
tp1212-1b.pdf [18.08.2010]. 
92 Items whose results are subject to change duri ng transportation (bacteria,  mycotoxin, etc.) are 
excluded. Japan WT/TPR/S/243 
 Page 55 
 
 
registered with the Government of Japan, through the government of the exporting country.93  As of 
June 2010, 3,778 such laboratories were  registered with the Government.94   
(c) Bilateral, regional, and multinationa l arrangements on TBT and SPS measures 
80. Since 2009, Japan has concluded two FTAs that  include SPS and TBT chapters:  the Japan-
Switzerland FTA, which entered into force on 1 September 2009, and the Japan-Viet Nam FTA, 
which entered into force on 1 October 2009.  Japan  also has mutual recognition agreements (MRAs) 
on conformity assessment procedures with the European Union for electrical products,  
telecommunications terminal equipment and radio eq uipment, good laboratory practice for chemicals, 
and good manufacturing practice for medicinal prod ucts (since January 2002);  with Singapore for 
electrical products, telecommunications termin al equipment, and radio equipment (since 
November 2002);  and with the United States for te lecommunications terminal equipment and radio 
equipment (since January 2008). 
81. Japan states that it will negotiate mutual rec ognition agreements based on industries' requests 
with countries or regions where technical barriers to  trade will be truly expect ed to be reduced, and on 
the premise that the compatibility of both sides' re gulations and the equality of both sides' competence 
in accreditation and supervision are confirmed.95 
82. Japan is a member of the Codex Alimentari us Commission and the World Organization for 
Animal Health (OIE), and a contracting party to th e International Plant Protection Convention (IPPC).  
Its  contact points are:  Director of Plant Quarantine Office, Plant Protection Division, Food Safety and Consumer Affairs Bureau, the MAFF (in relation to  IPPC);   Director of Animal Health Division, 
Food Safety and Consumer Affairs Bu reau, the MAFF (in relation to OIE);  and Director of Office for 
Resources, Policy Division, Science and Technology  Policy Bureau, the Ministry of Education, 
Culture, Sports, Science and Technology (in relation to  Codex).  Japan participates in the International 
Conference on Harmonization toward the harmonizati on of pharmaceutical standards/regulations.   
(d) Labelling and packaging requirements 
83. The main changes to Japan's labelling require ments since 2008 include:  elimination of the 
Quality Labelling Standards for Shor tening, Refined lard, Kamaboko (steam ed fish paste) with special 
package and Flavoured Kamaboko (on 31 August 2009) , and the unification of the Quality Labelling 
Standard for raw-type instant noodles with that for instant noodles (on 9 May 2009).  These labelling 
requirements are imposed on importers into Japan.  
84. Food labelling in Japan is subject to the JAS La w and the Food Sanitation Law.  A total of 
54 technical regulations are in force based on the JAS Law.  They include: cross-category quality 
labelling standards for processed foods, fr esh foods, and genetically modified foods
96;  individual 
                                                      
93 Results of examinations based on the AOAC (Association of Analytical Communities) method, 
which are either endorsed or established by the exporting country, are accepted. 
94 For the list of these laboratories, see Ministry of  Health, Labour and Welfare online information (in 
Japanese). Viewed at: http://www.mhlw.go.j p/topics/yunyu/5/index.html [16.06.2010]. 
95 WTO document WT/TPR/M/211/Add.1, 22 May 2009. 
96 Cross-category quality labelling standards are provid ed for all processed foods and beverages (except 
alcohol and medical drugs).  Fresh food s must be labelled with their name and place of origin.  Processed foods 
must be labelled with the name, the list of ingredients, the net content, the date of minimum durability or use-by 
date, instructions for storage, the name and address of the manufacturer, and the country of origin (only for imported products). WT/TPR/S/243 Trade Policy Review 
Page 56 
 
 
quality labelling standards97;  and standards for organic plants and organic processed foods (made of 
plants).  Any food containing additives must also be labelled with the names of all additives included.  
Imported processed food is excluded from the ma ndatory labelling of place of origin of the 
ingredients (see below).  All organic plants and or ganic processed foods to be sold in Japan must 
comply with the JAS organic standards and carry the JAS organic mark.98   
85. Under the Food Sanitation Law, any allergenic substances contained in processed foods must 
be indicated on the labels.  Currently, 26 items are designated for inclusi on in the description of 
ingredients:  eight are obligatory (eggs, milk, wheat , buckwheat, peanuts, prawns, crab, and shrimps) 
and 18 are recommended (abalone, squid, salmon roe,  oranges, kiwifruit, beef, walnuts, mackerel, 
salmon, gelatine, soybeans, chicken, pork, matsutake-mushrooms, peaches, yams, apples, and 
bananas). 
86. Mandatory labelling for genetically modified (GM) foods is regulated under the Food 
Sanitation Law and the JAS Law;  the list comprises seven crops (soybeans, corn, rape seed, potatoes, 
cotton seed, alfalfa, and sugar beet) and 32 kinds of designated processed food mainly made of 
soybeans or corn, as well as the newly added suga r beets, high lysine corn, and processed foods 
containing it as a main ingredient.  The Minist ry of Health, Labour a nd Welfare does not permit 
imports of GM foods that do not meet its safety requirements.   
(ix) Import promotion measures 
87. Programmes to promote imports in Japan ar e mainly implemented by the Manufactured 
Imports and Investment Promotion Organization (MIP RO).  They include free consultation regarding 
small-lot imports;  providing reference materials,  such as wholesale catalogues, import guides, and 
import handbooks;  conducting semina rs in Japan;  and business mi ssions to international trade 
shows.99  
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures 
88. Since Japan's last Review, in 2009, the only major change in its export procedures has been 
the expansion of the Authorised Economic Oper ator (AEO) programme, in operation for exporters 
since March 2006.  The AEO covers warehouse opera tors, customs brokers, logistics operators, and 
manufacturers.  An AEO authorized by the Director -General of Customs as a logistics operator with 
cargo security management and a good compliance record may benefit from bonded transportation 
without obtaining individual permission, and may transport goods consigned by exporters, from areas 
other than Customs areas (e.g. from the premises of exporters to the loading port).   
89. The AEO was extended to cover manufacturers in  July 2009, in accordance with the Customs 
Law, as amended.  Under the amendment, goods manufactured by an AEO manufacturer with cargo 
security management and a good compliance record may be declared for export by an exporter other 
than the authorized manufacturer before bei ng placed in a Customs area.  The authorized 
manufacturer must consign the exports to an expor ter with a good compliance record.  The authorities 
                                                      
97 Specific labelling requirements are provided as qu ality labelling standards for individual products 
depending on their characteristics. 
98 To label food as "organic", certification is needed from a registered certifying body or a registered 
overseas certifying body that the food meets certain JAS requirements.  Only certified food is allowed to be 
distributed with a JAS organic mark. 
99 MIPRO online information.  Viewed at:  http://www.mipro.or.jp/english [16.06.2010]. Japan WT/TPR/S/243 
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consider that this amendment has made the AE O programme comprehensiv e, covering almost all 
trade-related businesses in a supply chain. 
90. At the time of exportation, the following documen ts must, in principle, be submitted to the 
Customs:  export declaration (Customs form C-5010), invoice, and certifications, permits, or 
approvals required by various  laws and regulations.  
91. For the purpose of implementing FTAs currently  in force between Japan and some of its 
trading partners, the Ministry of Economy, Trade and Industry (METI) is th e competent authority for 
issuing certificates of origin.  The METI has designated the Japan Chamber of Commerce and Industry (JCCI) as an issuing body for certificates of origin. 
(ii) Export taxes, charges, and levies 
92. There are no export taxes or levies in operation in Japan.   
(iii) Border adjustment in respect of internal taxes and import duties (relating to exports)   
(a) Consumption tax 
93. The consumption tax is zero-rated on e xported goods, international aviation and 
transportation services, and selling or licensing pate nts to foreigners;  domestic components and raw 
materials used in exported goods are el igible for refund of consumption tax.
100  For a refund of the 
consumption tax, a declaration must be made to  the tax authorities with the proof of export. 
(b) Import duties  
94. Import duties (tariffs) levied on raw material s used in the production of certain exported 
goods may be exempted, reduced, or refunde d, as determined by the Government.101 
95. The authorities state that these schemes, who se basic structure remains unchanged since the 
1950s, are intended to remove impediments to tr ade by reducing the tariff burden for imported 
materials to be used in the production of export goods ;  the products eligible for the schemes reflect 
the needs of the industries concerned. 
Exemption and reduction of import duties  
96. In accordance with paragraph 1 of Article 47 of the Cabinet Order for Enforcement of the 
Customs Tariff Law, the following items are fully ex empted from tariffs:  lead (for the production of 
alloys using lead and antimony);  cotton seed oil (for fish products (canned or bottled));  soya bean oil 
cake, certain starches and molasses (for the production of monosodium glutamate);  sugar (for refined sugar);  certain starches (for caramels);  molasses (for lysine);  certain starches (for refined glucose);  and inputs approved by Customs (for export goods approved by Customs).   
97. In accordance with paragraph 2 of Article 47 of  the Cabinet Order, reduced tariff rates apply 
to certain inputs at the time of importation.  The re duced tariff rates are app lied to wheat flour (for the 
production of monosodium glutamate);  and certain  starches (for the production of vitamin C, 
crystallized glucose, and eythorbate or sorbitol).     
                                                     
 
100 JETRO online information (in Japanese).  View ed at:  http://www.jetro.go.jp/world/japan/qa/ 
export_10/04A-011045 [26.08.2010]. 
101 Article 19, the Customs Tariff Law. WT/TPR/S/243 Trade Policy Review 
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98. In order to be eligible for this tariff exemp tion or reduction, manufacturers require approval 
from Customs as a "manufacturing factory" (as defined in Article 19 of the Customs Tariff Law), and manufactured goods need to be exported within two years of importation of relevant inputs.
102  The 
manufacturers must submit an import declaration and other relevant documents for the imports to be 
used as inputs (as prescribed in the Cabinet Order for the enforcement of the Law), and obtain import 
permission for the relevant materials. 
Refund of import duties 
99. Import tariffs applied to sugar (for the produc tion of canned fruits, confectioneries, syrup, 
etc.) are fully or partially refundable depending on its sucrose content.103  In order to be eligible for 
such a refund, manufacturing factories require  approval from Customs, and must keep a 
manufacturing record of the products for two years;  the record must be submitted to Customs at the 
time of exportation of the product.   
100. Re-exported imports that involve no change in nature and form, or de terioration and damage, 
or claims are eligible for refund of the import tariff.104 
(iv) Export prohibitions, restrictions, and licensing  
101. Items subject to export controls, as set out in  the Foreign Exchange and Foreign Trade Law 
and the Export Trade Control Order, include ar ms and certain dual-use items based on the UN 
Security Council Resolution 1540 and other relevant international commitments, such as international 
export control regimes, and some other items under the Convention on International Trade in 
Endangered Species of Wild Fauna and Flora (CITES).105  The authorities maintain that the main 
purpose of Japan's export controls is to preserve limited natural resources106 and ensure national 
security;  export controls are also applied to cer tain products under Japan's  free-trade agreements. 
102. Since 2009, the METI has amended the foreign ex change and export control order to include 
some products subject to export licence, under international export control regimes.107  In addition, on 
16 June 2009, the METI announced a ban on exports of all items to North Korea.108  METI amended 
                                                      
102 Article 19, the Customs Tariff Law. 
103 Article 52, the Cabinet Order for Enforcement of the Customs Tariff Law. 
104 Articles 10, 19, 19-3 and 20 of the Customs Ta riff Law (in Japanese).  Viewed at: http://law.e-
gov.go.jp/htmldata/M43/M43HO054.html [07.07.2010] 
105 For an unofficial English translation of the Export Control Order, see Cabinet Office online 
information.  Viewed at:  http://www.cas.go.jp/jp/seisaku/hourei/data/ETCO.pdf  [20.08.2010].  Other export items requiring permission from the Minister of Economy, Trade and Industry (METI) include:  certain seeds, 
endangered animals, and plants specified  in international treaties;  narcotics;  designated art works;  counterfeit 
currencies;  and other products associat ed with criminal offences in Japan.  For certain agricultural products, 
including wheat bran, rice bran, oat bran, clams, mussels and eels, the Minister of Economy, Trade and Industry 
also needs the consent of the Minister of Agriculture, Forestry and Fisheries prior to granting export approval.  
Export controls (prior appr oval) are maintained to ensure national security and public safety and to ensure 
adequate domestic supplies of certain agricultural and other primary products (Article 48, Foreign Exchange and 
Foreign Trade Law). 
106 The authorities state that export items that are regul ated to preserve limited natural resources include 
those listed in Appendix I, II, III of the CITES. 
107 METI has amended the order twice on 1 Oct 2009 and on 1 April 2010.  The 'international export 
control regimes' referred to are the Nuclear Suppliers Group, Australia Group, Missile Technology Control 
Regime, and Wassenaar Arrangement.   
108 METI online information. Viewed at: http://www.meti.go.jp/english/press/data/20090616_02.html 
[17.06.2010]. Japan WT/TPR/S/243 
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the foreign exchange and foreign trade law, eff ective 1 November 2009, to expand the coverage of 
export controls to exports of technology by non-residents in Japan.109   
(v) Export cartels 
103. While export cartels are exempted from the ge neral prohibition of cartels under Japan's Anti-
monopoly Act, the authorities indicate that there are no known export cartels in Japan.110  T h e  
authorities do not consider that sh ipping cartels (e.g. liner conferences), which are exempt from the 
Anti-monopoly Act under the Marine Transportation Law, constitute export cartels (section (4)(vi)).    
(vi) Export promotion schemes 
(a) Export subsidies, finance, insurance, and guarantees 
104. The authorities indicate that Japan has no su bsidy or tax concession schemes to promote 
exports.   
105. Japan provides medium- and long-term export cred its.  These are administered by the Japan 
Bank for International Cooperation (JBIC) (a gove rnment-affiliated financia l institution), and Nippon 
Export and Investment Insurance (NEXI) (an independent  administrative instituti on, insuring risks not 
covered by existing private insurance institutions).  The authorities maintain that provision of these 
credits is  based on the terms and conditions of  the OECD Arrangement on Officially Supported 
Export Credits.  Standard forms of export credit extended by JBIC include buyer credits and bank-to-
bank loans.  In FY2008, JBIC's export credits amou nted to ¥27.6 billion and the total amount insured 
by NEXI stood at ¥9.7 trillion. 
(b) Other export promotion schemes 
106. Export promotion schemes handled by the Japan External Trade Organization (JETRO) 
include provision of information, market and co mpany studies, and support for participation at 
international trade fairs.  No changes have  been introduced during the review period. 
107. The Ministry of Agriculture, Forestry and Fish eries provides support to agricultural exporters 
through information-sharing on Japanese agricultura l products and foodstuff.  Support includes setting 
up Japanese pavilions at international exhibitions and promotion abroad of Japanese foods including 
agricultural products.  The budget for export promotion was ¥1.2 billion for FY2010, down from 
¥2.0 billion in FY2009. 
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax-related assistance 
108. Direct taxes, which include personal and corpor ate income taxes, are expected to account for 
about 53.5% of total tax revenue in FY2010 (ab out 59.6% in FY2009) according to annual budgets 
                                                      
109 Non-residents in Japan include foreigners making a business trip to Japan. METI online information 
(in Japanese). Viewed at: http://www.meti.go.jp/ press/20090227002/20090227002.html [17.06.2010]. 
110 The Export and Import Transaction Law stipulates that prior notification must be given, for 
approval, to the Minister of Economy, Trade and I ndustry before establishing an export cartel.   WT/TPR/S/243 Trade Policy Review 
Page 60 
 
 
(Table III.5).111  Indirect taxes, which include consum ption tax (VAT) and excise taxes (applied, 
inter alia, to liquor, tobacco, gasoline, and automobiles), account for the remainder of total tax 
revenue in FY2010.  The highest personal income tax rate, including local taxes, is 50%, and the 
highest corporate tax rate (including local taxes) is 40% (FY2009).112  All income earned in Japan is 
taxable for both residents and non-residents and the co rporate income tax rate is the same for foreign 
and domestic corporations.  With regard  to indirect taxes, consumption tax, which is levied at a rate of 
5% on goods and services transactions, is the largest  component, contributing nearly 24.4% of total 
tax revenue in FY2010.113 
109. Japan's tax to GDP ratio is one of the low est by international standards (18% in 2007)114;  tax 
revenue in Japan has been decreasi ng and this has contributed to high public debt.  Japan also has the 
highest (40%) statutory corporate tax rate within  the OECD and the neighbouring Asian region.  
Furthermore, less than half of personal income is taxed, perhaps because of exemptions and tax 
avoidance or evasion, compared with an OECD aver age of over 80%.  This data suggest a need to 
broaden the income tax base.  This issue is r ecognized by the Government, as its FY2010 Tax Reform 
Programme intends to broaden the tax base.115  The Government is currently considering whether to 
lower its statutory corporate tax ra te, which tends to be higher than in Japan's main trading partners116, 
in line with the New Growth Strategy, taking into account ways to secure revenues.  
110. There is scope to improve transparency, especially  with regard to taxes;  for example, the 
local tax system comprises 30 different taxes117, and could be simplified and thus made more 
transparent.  However, the authoriti es do not consider that Japan's lo cal tax system is complicated or 
lacks transparency due to the number of different lo cal taxes, partly because the local tax system is 
integrated into the Local Tax Law encompassing all taxes imposed by local authorities across the 
nation.118 
Table III.5 
National government tax revenue, FY2009 and FY2010 
(¥ billion and per cent) 
FY2009 Budget  FY2010 Budget 
Tax item 
Amount Percentage  Amount Percentage 
Direct taxes 28,511 59.6  21,128 53.5 
Personal income tax 15,572 32.6  12,614 32.0 
Corporate income tax 10,544 22.1  5,953 15.1 
Special corporate income taxa, b 873 1.8  1,290 3.3 
Inheritance tax 1,522 3.2  1,271 3.2 
Table III.5 (cont'd) 
                                                      
111 On the basis of settlement account, direct ta xes accounted for about 52. 9% in FY2009, compared 
with 57.7% in FY2008.  The authorities consider that the decrease of the share of direct taxes was due mainly to 
lower corporate tax revenue, refl ecting global economic stagnation. 
112 For comparisons of corporate tax rates in selected  countries, see MOF online information.  Viewed 
at: http://www.mof.go.jp/jouhou/syuze i/siryou/084.htm. [14.07.2010]   
113 For the details of exempted transactions, see WTO (2009).  The 5% consists of the national 
consumption tax (4%) and a local consumption tax (1%).   
114 IMF (2010). 
115 See Cabinet Office online information (in Japanese).  Viewed at: http://www.cao.go.jp/zei-cho/etc/ 
pdf/211222taikou.pdf [14.07.2010]. 
116 See, for example, METI online in formation (in Japanese).  Viewed at:  http://www.meti.go.jp/ press/ 
20100607004/20100607004-1.pdf, p.42. [11.11.2010] 
117 Ministry of Internal Affairs and Communications online information (in Japanese).  Viewed at: 
http://www.soumu.g o.jp/main_sosiki/jichi_zeisei/czaisei/czaise i_seido/ichiran01.ht ml [25.06.2010]. 
118 WTO document WT/TPR/M/211/Add.1, 22 May 2009. Japan WT/TPR/S/243 
 Page 61 
 
 
FY2009 Budget  FY2010 Budget 
Tax item 
Amount Percentage  Amount Percentage 
Indirect taxes 19,305 40.4  18,334 46.5 
Customs duty 846 1.8  756 1.9 
Consumption tax 10,130 21.2  9,638 24.4 
Liquor tax 1,420 3.0  1,383 3.5 
Tobacco tax 843 1.8  827 2.1 
Gasoline tax 2,628 5.5  2,576 6.5 
Liquefied petroleum gas tax 13 0.0  12 0.0 
Aviation fuel tax 83 0.2  77 0.2 
Petroleum  and coal tax 510 1.1  480 1.2 
Promotion of power resources development tax 351 0.7  330 0.8 
Motor vehicle tax 646 1.4  447 1.1 
Tonnage tax 10 0.0  8 0.0 
Stamp tax 985 2.1  1,024 2.6 
Local Gasoline taxa, b 281 0.6  276 0.7 
Liquefied petroleum gas taxa, b 13 0.0  12 0.0 
Aviation fuel taxa, b 15 0.0  14 0.0 
Motor vehicle taxa, b 323 0.7  307 0.8 
Special tonnage taxa, b 13 0.0  10  0.0 
Special tobacco surtaxb 195 0.4  158 0.4 
Total 47,816 100.0  39,462 100.0 
a Local transfer tax. 
b Revenues are distributed to special accounts.  
Note: Figures are based on Japan's offici al tax revenue prospects, announced in January 2009 (for FY2009) and January 2010 (for  
FY2010). 
Source: Ministry of Finance online information (in Japanese).  View ed at: http://www.mof.go.jp/ jouhou/ syuzei/siryou/008 a21a.pdf, and 
http://www.mof.go.jp/jouhou/syuzei/sir you/008a 22a.pdf [20.10.2010].  
Tax incentives 
111. The system of tax incentives in Japan re mains complex and opaque, and thus perhaps 
distorting;  the Government recognizes this problem;  the Tax Reform Programme states that "Japan's 
current tax system is unfair and non-transparent".  The focus of the incentives is on achieving various 
policy objectives, including investment to a ddress environmental concerns or promote R&D.119  The 
incentives are detailed in the Special Taxation M easures Law, which stipulated 241 special tax 
measures (in FY2009) involving, inter alia,  accelerated depreciation, tax credits, and reduced tax 
rates.  In order to improve the transparency of those measures, Japan adopted the Law to Improve Transparency of Special Tax Measures, which ente red into force on 1 April 2010. The law includes 
the establishment of a mechanism that discloses how  special taxation measures are applied, with a 
view to examining the effects of those measures.  Japan decided to review all of its special tax 
measures by FY2013. The authorities estimate that forgone tax revenues will be ¥4,988 billion in 
FY2010 (¥5,121 in FY2009).
120  The authorities publish detailed tax expenditure accounts containing 
                                                      
119 Under the special tax measures aiming at promo ting investment, reserve accounts prepared for the 
loss of share value of oil exploitation companies are tax deductible.  Foreign limited partners' profits from 
domestic limited partners (LPS) are exempted from income tax. 
120 The Ministry of Finance report ed that the changes in special  tax measures in FY2010 would 
increase tax revenue by ¥74 billion.  For FY2009 data , see Secretariat of the House of Councillors online 
information (in Japanese).  Viewed at: http://www.sa ngiin.go.jp/japanese/annai/chousa/keizai_prism/back 
number/h21pdf/ 20097201.pdf [25.06.2010]. WT/TPR/S/243 Trade Policy Review 
Page 62 
 
 
information on revenue forgone as a result of vari ous tax measures;  however , it would appear that 
they do not conduct rigorous cost-benefit analysis of these measures, to the detriment of transparency.  
In the absence of convincing evidence to the cont rary, tax incentives are seldom cost-effective.   
Recent reforms 
112. Tax reforms undertaken in FY2009 were inte nded mainly to promote consumption and 
environment-friendly investment.  The reforms included, inter alia,  introduction of immediate 
depreciation with regard to investment in energy -saving and new-energy facilities, and reduction of 
the tax burden on the purchase of environment-frie ndly automobiles  The reform also included a 
measure to treat dividends received from overseas subsidiaries as non-taxable income.121 
113. Tax reforms in FY2010 included the elimina tion of some special tax measures and the 
adoption of the Improving Transparency of Special Taxation Measures Law. 122  In order to prevent 
domestic companies from avoiding tax through transac tions with their foreign subsidiaries, the 
income of foreign subsidiaries located in countri es where the corporate tax rate was less than 25% 
was previously regarded as domestic income and su bject to domestic corporate tax;  this threshold 
was reduced to 20% in FY2010.  With the reduction, the income of Japanese subsidiaries in certain 
countries, for example China, South Korea, and Viet Nam, are exempted from Japanese corporate 
tax.123 
(ii) Subsidies and other financial assistance 
114. Japan has notified various specific subsidy programm es to the WTO.  In its latest notification, 
Japan indicated 68 subsidy schemes to assist agricultu re, forestry, and fisheries, industry, finance, and 
transport sectors.124  Changes since 2009, as noted in the notification, include elimination of the 
subsidy for the promotion of advanced research and development in salt manufacturing technology 
and the subsidy for promoting bio-fuel in March 2009. 
115. With a view to stimulating the domestic economy, the Japanese government introduced 
subsidies for purchasing new environmentally friendl y vehicles in April 2009.  The scheme is in two 
parts.  If a vehicle is older than 13 years and tr aded in for a new car listed by the authorities as an 
"environmentally friendly car", a subsidy of ¥125,000 would be provided for a light vehicle and 
¥250,000 for a registered vehicle.  The subsidy amount for heavy-duty vehicles, such as trucks and buses, ranges from ¥400,000 to ¥1,8 00,000 depending on the tonnage of the vehicle.  The second 
avenue does not require scrapping an old vehicle;  a subsidy is provided just for the purchase of a new 
vehicle that meets certain fuel efficiency  and (in some cases) emission standards.
125   For passenger 
cars the subsidy is ¥50,000 for a light vehicle and ¥100,000 for a registered vehicle;  for heavy-duty 
vehicles, the subsidy ranges from ¥ 200,000 to 900,000 depending on the tonnage of the vehicle.  The scheme is available to qualifying vehicles irrespec tive of origin;  data provided by the authorities 
indicate that approximately 43% of imported vehicles are eligible for the subsidy. 
                                                     
 
121 Ministry of Finance online information.  Viewed at: http://www.mof.go.jp/english/tax/tax2009/tax 
2009a.pdf [25.06.2010]. 
122 Ministry of Finance online information.  View ed at:  http://www.mof.go.jp/english/tax/tax2010/tax 
2010a.pdf [14.10.2010].  For example, the special tax measure offered for the next generation broadband 
network infrastructures was abolished in April 2010. 
123 Ministry of Finance online information.  Viewed at: http://www.mof.go.jp/english/tax/tax2010/tax 
2010a.pdf [25.06.2010]. 
124 WTO document G/SCM/N/186/JPN, 25 June 2009. 
125 In order to qualify for the subsidy, passenger vehicles must be 15% more fuel efficient than the 
standards prescribed for 2010 fuel efficiency. Japan WT/TPR/S/243 
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116. Under the new Growth Strategy, adopted by th e Cabinet on 18 June 2010, the Government 
has concentrated its resources into the developmen t of "seven strategic areas" (environment and 
energy, medical and health care, economic integr ation with other Asian countries, tourism and 
revitalization of regional economies, science a nd technology, human re sources, and financial 
services.126  The strategy indicates that potentia l demand is largest in these seven areas.127  Although 
the details of implementing measures are yet to be decided, the strategy suggests a policy to "pick 
winners", such as the preferential use of domestic wood.128  
(iii) State-owned enterprises, corporatization, and privatization 
117. The State retains a stake in major companies in  several sectors, through which it may directly 
affect production and trade;  it also influences various semi-governmental bodies.129  These companies 
include Nippon Telegraph and Tele phone Corporation (NTT), Japan Tobacco Inc. (JT), Narita 
International Airport Corporation, and Kansai Inte rnational Airport Co., Ltd.  As of March 2010, the 
Government held:  33.8% of the stock of NTT;  50. 0% of JT;  66.6% of Kansai International Airport 
Co., Ltd;  100% of Narita International Airport Corporation;  29.4% of INPEX Corporation;  and 
34.0% of Japan Petroleum Exploration Co. Ltd.  All shares of Hokkaido Railway Company, Shikoku 
Railway Company, Kyushu Railway Company, and Japan Freight Railway Company are held by 
Japan Railway Construction, Trans port and Technology Agency, a govern ment-affiliated corporation.   
118. On 27 July 2009, the Government established the Innovation Network Corporation of Japan 
(INCJ);  ¥82 billion (89.1%) of its capital was financed by the Government.130  The INCJ aims to 
promote innovation by investing in what is deemed as promising projects in areas of environment, 
energy, infrastructure, and others.131 
119. There are also SOEs that aim to provide assist ance to private firms.  The Deposit Insurance 
Corporation of Japan (DICJ), a semi-governmental co rporation partially financed by the Government, 
holds shares of certain commercial banks, su ch as Resona Bank, for prudential reasons 132  In addition, 
the DICJ has injected ¥20 billion of capital into  the Enterprise Turnaround Initiative Corporation 
(ETIC), which was established on 14 October 2009 as a state-owned enterprise to "turnaround" 
private companies.133     
                                                      
126 Prime Minister's Office online information.  Viewed at:  http://www.kantei.go.jp/foreign/kan/topics/ 
sinseichou01_e.pdf  [14.10.2010]. 
127 Cabinet Office online information.  Viewed at:  http://www5.cao.go.jp/keizai2/2010/0618 
reference.pdf [14.10.2010]. 
128 National Policy Unit online information.  Viewed  at:  http://www.npu.go.jp/policy/policy04/pdf/ 
20100618_shinseityou_gaiyou_eigo.pdf [14.10.2010]. 
129 A list of these entities was not made available in English to the Secretariat.  The authorities find it 
difficult to prepare such a list because of the vast number of such entities. 
130 The liabilities of the INCJ are to be backed by the Government up ¥800 billion. INCJ online 
information.  Viewed at: http://www.incj.co.jp/english/ [18.06.2010]. 
131 Until June 2010, the INCJ had invested in five companies, including an aqueduct company and a 
wind electricity company.  See the INCJ online informat ion.  Viewed at: http://www.incj.co.jp/english/ news. 
html [18.06.2010]. 
132 The DICJ had injected ¥12.7 trillion of capita l into commercial banks until 31 March 2010. The 
DICJ online information (in Japanese).  Viewed at: http://www.dic.go.jp/english/e_katsudou/e_katsudou3-6.html [18.06.2010]. 
133 Half of the injection was financed by the Government.  In addition, the ETIC's liability will be 
insured up to ¥3.0 trillion by  the Government.  The ETIC online inform ation.  Viewed at: http://www.etic-j.co. 
jp/pdf/091016newsrelease-e.pdf [18.06.2010]. WT/TPR/S/243 Trade Policy Review 
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120. Based on the Reorganization and Rationalization Pl an for Special Public Institutions, adopted 
on 18 December 2001, 148 public corporations (out of 163 subject to reform) had been reformed by 
1 October 2009.134  Nine public corporations are still to  be reformed (including the Kansai 
International Airport and NTT).  On 1 October 2008 , four administrative financial agencies (National 
Life Finance Corporation, Agriculture Forestry and Fisheries Finance Corporation, Japan Finance 
Corporation for Small and Medium Enterprise, and th e international financial operations of the Japan 
Bank For International Corporation) were integrated  into Japan Finance Corporation.  The authorities 
maintain that the mandates of state-owned banks ("policy financial institutions") are to supplement 
activities of private financial institutions in funding support for SMEs and personal businesses, and 
financing for securing overseas resources.  By contrast, the Development Bank of Japan and the 
Shoko Chukin Bank became stock corporations on 1 Oc tober 2008.  The authorities state that there 
are no plans to adopt a new privatizati on programme for public corporations.   
121. Under the Reorganization and Rationalization Plan  for Incorporated Administrative Agencies 
adopted by the Government on 24 December 2007 to reorganize/rationalize 101 incorporated 
administrative agencies, the number of agencies was to be reduced to 85 by end-March 2011 by 
abolishing and merging agencies.  The new admini stration that started in September 2009 froze this 
plan and began reviewing clerical work and projects, and the current system of the incorporated administrative agencies, including its management  and operation, in accordance with the 
"Fundamental Review of Incorporated Administ rative Agencies" adopted by the Cabinet on 
25 December 2009. 
(iv) Intellectual property rights 
(a) Recent developments 
122. The legal framework on intellectual property ri ghts protection has remained unchanged since 
the previous Trade Policy Review of Japan
135, although there have been some amendments to laws 
(Table AIII.2).  Backlogs of applications at th e JPO amounted to 717,000 for patents and 42,000 for 
trademarks at the end of 2009, down from 888,000 and 70,000 at the end of 2007.   
123. An amendment to the Patent Act, which entere d into force fully on 1 April 2009, established a 
new licence registration system.  A licence may be re gistered if the applicant has an agreement with 
the patent applicant on the use of the intellectual pr operty.  Once the patent is granted, the registered 
licensee may continue to use the intellectual pr operty in accordance with the terms of the prior 
agreement.  The amendment to th e Patent Act also restricted the disclosure of information on 
licensees (users) of a pending patent to persons w ith a "legitimate interest", reduced the fees for 
registration and maintenance of patent rights and tr ade mark rights, and extended the period for filing 
an appeal against the examiner's decision from 30 days to three month.136 
124. Amendments to the Copyright Law entered into  force on 1 January 2010, and to the Unfair 
Competition Prevention Act on 1 July 2009.  The amendment to the Copyright Law, inter alia,  
allowed certain use of copyrighted works by Intern et search service providers without the consent of 
                                                      
134 The Japanese government online information(in Japanese).  Viewed at: http://www.gyoukaku.go.jp/ 
siryou/tokusyu/seiri_gouri.pdf [18.06.2010]. 
135 Since 1995, patent applications filed in English have been accepte d.  In 2009, the Japan Patent 
Office received 4,454 patent applications in English, accounting for about 1. 28 % of all patent applications. 
136 METI online information.  Viewed at: http ://www.meti.go.jp/english/newtopics/data/nBackIssue 
20080201_03.html [21.06.2010]. Japan WT/TPR/S/243 
 Page 65 
 
 
copyright holders, and the amendment to the Unfair Competition Prevention Act expanded the scope 
of application of criminal penalties for infringement of trade secrets.137 
125. The Intellectual Property Strategic Progra mme (IPSP) 2010 was adopted by the IP 
Headquarters on 21 May 2010.138  It aims, for example, to promote the establishment of international 
standards that would enhance Japan's competitiveness, particularly in the areas of advanced medicine, 
water, next-generation automobiles, railways, ener gy management, media contents, and robotics.  The 
IPSP also aims to strengthen the global IP strategy, including promoting initiatives for establishing a globally unified patent system, and strengthening e fforts to tackle counterfeit and pirated goods;  and 
promoting a strategy to develop the content industr ies, such as supporting the overseas distribution of 
Japanese content (e.g. animation). 
126. Between April 2009 and March 2010 (FY2009),  there were 367,000 "first actions" 
(completion of first examinati ons of patent applications)
139, up from 348,000 in FY2008, and the 
average waiting period for "first action" was about 29 months (same as in FY2008).  The Government 
aims to shorten the average waiting period for "fir st action" to 11 months or less by 2013.  The 
number of patent examiners increased to 1,703 in FY2010, from 1,692 in FY2009. In addition, the 
IPO outsourced prior art searches to eight register ed search organizations with a view to "pursuing 
efficiency" of patent examination.  In FY2009, 233,000 prior art document searches were outsourced 
(225,000 in FY2008).  The total IP-related budget in FY2010 amounted to  about ¥71.0 billion, 
substantially lower than the FY2009 figure (¥214.8 billion). 
127. Under the Trademark Act, certain trade marks,  including those recognized in the domestic 
market as indicating common names (e.g. names comm only designating products of biodiversity), raw 
materials, or quality of goods, are not eligible for trade mark registration.   
128. Parallel imports are allowed in Japan in acco rdance with the principle of "international 
exhaustion".140  Japan considers that parallel imports of goods manufactured under the foreign patent 
do not infringe a corresponding Japanese patent if ther e was no mutual agreement between the patent 
holder and transferees of patented goods that exclude Japan from the sales territory. 
129. Under articles 83, 92, and 93 of the Patent Ac t, compulsory licences may be granted after at 
least three consecutive years if a patent is not work ed, if it is thought to be necessary for the public 
welfare, or if the patent is need ed to be worked for another patent  and its owner is  unwilling to allow 
use of it.  As of August 2010, Japan h as never granted any compulsory licences. 
130. Geographical indications (GIs) are protected in  Japan under the Trademark Act and the Unfair 
Competition Prevention Act.  In addition, GIs relating to wines and spirits are protected under the 
Law Concerning Liquor Business Association and Measures for Securing Revenue from Liquor Tax, through its Labelling Standard C oncerning Geographical Indications.
141  Five GIs for Japanese liquors 
                                                      
137 MEXT online information (in Japanese).  Viewed at: http://www.mext.go.jp/b_menu/houan/an/ 
171/1251917.htm [21.06.2010].  METI online informati on (in Japanese).  Viewed at: http://www.meti.go.jp/ 
press/20090227001/20090227001.html [21.06.2010]. 
138 The Intellectual Property Strategy Headquarters online information.  Viewed at: http://www.kantei. 
go.jp/jp/singi/titeki2/2010chizaisuisin_plan.pdf [14.10.2010]. 
139 Actions by the JPO in response to a request for patent examination. 
140 Under international exhaustion, the right of the patent holder relating to the patented product is 
exhausted by putting the patented product on any market anywhere in the world. 
141 For a description of the system under the Law and Labelling Standard, see WTO document 
WT/TPR/M211/Add.1, 22 May 2009, pp. 256-257. WT/TPR/S/243 Trade Policy Review 
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have been designated in Japan.142  Furthermore, under FTAs signed by Japan, various GIs for foreign 
spirits are recognized as GIs referred to in paragr aph 1 of Article 22 of the TRIPs Agreement.   
131. Any party that opposes the patent of another party can request an  invalidation trial at any time 
after the grant of a patent.  The period for filing an appeal against an examiner's decision of refusal in 
the patent system was extended from within 30 days to within 3 months in April 2009, as stipulated in 
the amendments to the Patent Act in 2008. 
132. About 1,000 applications have been received fo r "regionally-based collective trademarks", as 
provided under the Trademark Act, of  which 459 have been registered.143  Regionally-based collective 
trade marks may relate to products other than wines and spirits as well as services. 
(b) International harmoniza tion and cooperation 
133. Japan participates in the WIPO Standing Committe e on the Law of Patents (SCP), a forum to 
discuss issues, facilitate coordina tion, and provide guidance concer ning the progressive international 
development of patent law.144 
134. Japan has been involved in the mutual coope ration of the Trilateral Offices (IP-related 
authorities of Japan, the United States, and the EU) with a view to addressing common problems in 
the area of patents.  In addition, the JPO has b een discussing issues of mutual interest with the 
USPTO, the EPO, the Korean Intellectual Property Office (KIPO), and China's State Intellectual Property Office (SIPO).  These issues include the necess ity for cooperation in order to respond to the 
increasing number of patent applications. At the firs t meeting held in October 2008, the five countries 
agreed on ten projects aimed at promoting work-sharing.
145  At the deputy-head level meeting held in 
September 2009, working groups were established to promote implementation of these projects.  The 
JPO, the USPTO, and the EC Office for Harmonizati on in the Internal Market (Trade Marks and 
Designs) (OHIM) have been meeting regularly to discuss trade mark issues, including the Trilateral 
Identification Manual Project, to consider whethe r certain English identifications of goods and 
services proposed by each office is acceptable by  all three offices, and cooperation with China.146  
Japan also participates in discussions in the WI PO Standing Committee on the Law of Trademarks, 
Industrial Designs and Geographical Indications, concerning, inter alia,  the revision of the Trademark 
Law Treaty and the substantive harmonization of trade mark laws. 
135. Regarding copyrights and related rights, the Ag ency for Cultural Affairs has held regular 
bilateral consultations with its counterparts in Chin a and the Republic of Korea to exchange views on 
current issues, including enforcement.  The four th Japan-Korea Copyright Consultation Meeting was 
held in Tokyo in November 2009;  the fifth Japan-C hina Copyright Consultation Meeting was held in 
October 2009 in Beijing and the si xth in March 2010 in Tokyo.   
                                                      
142 They are:  IKI, KUMA, RYUKYU, SATSUMA (spirits) and HAKUSAN (sake). 
143 For a description of this category of trad e marks, see, for example, WTO document 
WT/TPR/M/175/Add.1, 5 April 2007, p. 87. 
144 WIPO online information.  Viewed at:  http:// www.wipo.int/patent-law/en/scp.htm [12.11.2010]. 
145 The ten projects (so called "foundation project s") include the establishment of a common 
application format, common access to search and exam ination results, and a common document database.  
METI online information.  Viewed at: http://www.me ti.go.jp/english/press/data/nBackIssue20081028_01.html 
[21.06.2010]. 
146 Strategic working group meetings were held in  December 2008, while a meeting of deputies of 
patent offices was held in  December 2009. Japan WT/TPR/S/243 
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136. Japan is party to the Anti-Counterfeiting Trade Agreement (ACTA), negotiations among 
several countries with the intention of concluding  a treaty to "combat counterfeiting and piracy".147  A 
consolidated draft text was released in April 2009 following the eighth round of negotiations in New 
Zealand. 
137. All of Japan's bilateral FTAs to date (with ten countries) include provisions on intellectual 
property, such as simplifying procedures and e nhancing the transparency of procedures;  
strengthening the protection of intellectual propert y rights;  and strengthening enforcement.  The 
authorities consider that Japan's obligations under these provisions are often beyond those of the 
TRIPS Agreement.  For example, the Japan-Switzer land FTA has an intellectual property chapter with 
23 articles including enhancement of efficiency of pr ocedural matters;  transparency;  copyrights and 
related rights;  trademarks;  industr ial designs;  patents;  new varieties of plants;  unfair competition;  
enforcement-border measures;  enforcement-civil re medies;  and enforcement-criminal remedies.  
(c) Enforcement 
138. The Intellectual Property (IP) High Court, a sp ecial branch within the Tokyo High Court, 
deals with appeals against trial/appeal decisions made  by the JPO on patent actions and suits.  The IP 
High Court also deals with all other cases related to intellectual property brought to the Tokyo High 
Court.  Data provided by the authorities indicate th at 88 suits were filed in 2009 and 90 cases were 
decided;  in addition, 443 decisions made by the JPO were appealed, while 442 appeals were disposed 
of the average time interval from commencement to disposition in 2009 was 8.8 months in JPO, 
7.5 months in suits against decisions made by JPO,  and 10.0 months in IP-related appeal cases in the 
IP High Court (as court of second instance).  
139. Cases of IPR violations at the border decr eased from 22,661 in 2007 to 21,893 in 2009 
(Table III.6).148  With regard to goods deemed to be in fringing IPRs and thus suspended, Customs 
makes a determination whether th e suspended goods are infringing goods  or not.  Under the Customs 
Law, the placement of goods that infringe IPRs  into bonded areas for transhipment and customs 
transit is prohibited. 
Table III.6 
Suspension of imports likely to infrin ge intellectual property rights, 2007-09 
Category Main items 2007 2008 2009 
Products concerned ('000 units)  
Tobacco and smoking implements Tobacco, tobacco cases 4 99 260 
Clothing T-shirts, sweatshirts, jeans 81 81 112 
Medicine Medicine 97 95 85 
Accessories Necklaces, rings, charms 37 26 80 
Bags Handbags, purses 259 141 72 
CDs, records DVD 1 35 67 
Clothing equipment Zippers 102 133 65 
Household utensils Thermo s bottles, mirrors - - 28 
Shoes Sports shoes 48 52 26 
Hats Hats, caps 23 16 23 
Other Straps, key cases, watches 387 269 226 
Total  1,039 944 1,044 
Table III.6 (cont'd) 
                                                      
147 MOFA online information.  Viewed at:  http://www.mofa.go.jp/announce/announce/2010/4/0416_ 
2.html [12.11.2010].  
148 Details of Japan's judicial measures regardi ng IPR enforcement are prov ided in WTO document 
IP/N/6/JPN/1, 18 February 1997 (the latest available notification). WT/TPR/S/243 Trade Policy Review 
Page 68 
 
 
Category Main items 2007 2008 2009 
Types of violation (No. of cases)  
Patent rights  15 27 15 
Utility model rights  0 0 0 
Design rights  54 80 88 
Trade mark rights  22,447 26,140 21,415 
Copyright (related rights)  214 227 423 
Plant breeders' rights  0 0 0 
Unfair competition  0 4 19 
Total  22,661 26,415 21,893 
Source:  Information provided by the Japanese authorities. 
140. Infringement of IPRs, such as patents, utility models, designs, or trade marks may result in 
criminal penalties of either imprisonment or a fi ne.  In 2009, 364 cases were filed under intellectual 
property rights law and 620 people were a rrested (385 cases and 710 arrests in 2008).  
(v) Regulatory reform 
141. Since its previous Trade Policy Review, Japan h as continued to pursue partial reforms of its 
regulatory system.  Nonetheless, it would appear that few measures are related to trade and the pace of 
reforms has slowed, in not reversed.  On 18 J une 2010, the Government issued a new regulatory 
reform programme149, whose main objectives are to review regulations concerning environment and 
energy, medical and elderly care services, and agri culture. The authorities state that the Government 
intends to promote growth in these sectors by, inter alia,  reviewing and amending existing regulations 
and various systems that have become obstacles to new entry and innovation.150 
142. Under the current regulatory reform programme , recommendations for trade-related measures 
include reviewing safety regulation on buildings , using domestic wood in order to increase the 
consumption of domestic wood, easing the requireme nt for issuing visas to persons accompanying  
patients to Japan for medical treatment, review ing the exemption from th e AMA for agricultural 
cooperatives and international shipping activities, and improving procedures for exports, for example 
studying the feasibility of allowing business operators  to file export reports before placing goods in a 
bonded area. 
143. The Government Revitalization Unit (GRU), es tablished on 18 September 2009, is the central 
body for promoting regulatory reform.  The Subc ommittee on Regulatory and Institutional Reform 
under the GRU has three working groups (WGs) to  examine regulations:  the Green-Innovation WG, 
Life-Innovation WG, and Agriculture, for estry and regional development WG.151 
144. Under the Special Zone for Structural Reform Act, approved "special zones" are exempted 
from certain regulations according to the zone's spec ific circumstances.  In order to obtain approval, 
draft plans must be submitted by municipal bodies.  The zones have been granted exemptions from 
regulations governing education, urban renewal, distribution, agriculture, medical care, industry-
academic cooperation, the environment, and othe r areas.  Some proposals have been opposed by 
                                                      
149 The Cabinet Office online information (in Japanese).  Viewed at:  http://www.cao.go.jp/sasshin/ 
kisei-seido/publication/p_index.html [22.06.2010]. 
150 The Cabinet Office online information.  Viewed at:  http://www.cao.go.jp/gyouseisasshin/contents/ 
05/reform-of-regulations-and-systems.html [15.10.2010]. 
151 The GRU online information (in Japanese).  Viewed at: http://www.cao.go.jp/sasshin/kisei-
seido/index.html [22.06.2010].  The previous Council for the Promotion of Regulatory Reform was abolished on  31 March 2010. Japan WT/TPR/S/243 
 Page 69 
 
 
central government ministries responsible for the existing regulations.  Between October 2002 and 
June 2010, out of 691 measures adopted in the speci al zones, 466 were accepted and implemented on 
a nationwide basis.  
(vi) Competition policy 
(a) Recent developments 
145. Over the years, the growing importance of competition in the Japanese economy has led to an 
increase in the size of the Japan Fair Trade Comm ission (JFTC).  The budget allocated to the JFTC in 
FY2010 amounted to about ¥9.0 billion (¥8.4 billion  in FY2009).  Japan maintains that the AMA 
accords independence to the JFTC, which is administ ratively attached to the Cabinet Office;  the 
chairman and the commissioners perform their duti es independently and canno t be removed against 
their will, during their term of office. 
146. An amendment to the Anti-monopoly Act (AMA) wa s adopted by the Diet in June 2009, and 
entered into force in January 2010. The amendment expanded the coverage of fines (surcharges) to 
inter alia  exclusionary types of private monopolizati on, abuse of superior  bargaining position, 
discriminatory pricing, concerted refusal to trade, and resale price restriction.  The amendment also 
introduced a 50% increase in surcharges on enterprises that have played a leading role in cartels and 
bid-rigging.  Furthermore, the amendment exte nded the maximum period between the dates of 
termination of infringement and issuance of an administrative order from three to five years;  it also modified regulations on business combinations, su ch as the introduction of an approval requirement 
(prior notification) for share acquisitions over certain thresholds.
152  The amendment also required that 
where the total amount of a foreign company's grou p sales in Japan (including its "ultimate parent" 
company and subsidiaries) exceed ¥20 billion, it must submit to the JFTC a prior notification before 
acquiring another company whose sales in Japan (including those of its subsidiaries), exceed 
¥5 billion;  the previous threshold of sales in Jap an for an acquired company was ¥1 billion.  The 
JFTC considers that this change will align Japan 's requirement for a foreign company's acquisition 
with international standards.  
147. A bill to further amend the AMA was submitted to the Diet on March 2010 but has not yet 
been adopted.  The bill seeks to abolish the JFTC 's hearing procedure for administrative appeals 
before imposing surcharges on enterprises, and the cu rrent administrative appeal procedure itself.  
Instead, the bill intends to have courts receive all appeals.153   
(b) Exemptions from the AMA prohibition of cartels 
148. Since the previous Trade Policy Review of Japan, no changes have been made to the 
Anti-monopoly Act exemptions;  21 practices under 15 laws are exempt under these provisions 
(Table III.7).  In response to a request by th e Japan Fair Trade Commission (JFTC), a committee 
under the Ministry of Land, Infrastructure, Tr ansport and Tourism (MLIT) reviewed the AMA 
                                                      
152 Other than these changes, the amendment exempted notification of mergers and acquisitions within 
a corporate group (i.e. a number of enterprises that are operationally independent, but coordinated by a central body, such as conglomerates).  The le niency programme was also amended to allow for joint application by two 
or more violators within the same company group, upon certain conditions being met, and the expansion of the 
number of leniency applicants from three to five.  JF TC online information. Viewed  at: http://www.jftc.go.jp/e-
page/pressreleases/2009/June/090603-1.pdf, and http://w ww.jftc.go.jp/e-page/pressreleases/2009/June/090603-
2.pdf [23.06.2010]. 
153 JFTC online information.  Viewed at:  http ://www.jftc.go.jp/e-page/pressreleases/2010/March/ 
0312a.pdf, and http://www.jftc.go.jp/e-page/press releases/2010/March/ 0312c.pdf [23.06.2010]. WT/TPR/S/243 Trade Policy Review 
Page 70 
 
 
exemption for international shipping activities in 2007;  based on the result of the review, which 
highlighted the necessity for the exempti on, the MLIT has retained the exemption.154  In June 2010, 
the MLIT abolished some exemptions for interna tional aviation from the AMA;  as a consequence, 
the common fares set by the IATA tariff coordinati ng conference and the agreements on air transport 
services, such as code share and frequent flier pr ogrammes, have been subject to the AMA since 
15 June 2010.  On 18 June 2010, the Government ma ndated the JFTC to review the validity of the 
exemption of the Japan Agricultural Co operatives from the AMA during FY2010. 
Table III.7 
Exemptions from the Anti-monopoly Act, June 2010 
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 pric e maintenance contracts 
2.   Exemptions under various i ndividual laws (14 laws, 18 systems)  
Financial Services Agency Insura nce Business Law Insurance cartels 
 Law Concerning Non-Life Insurance Rating 
Organizations Exemptions concerning compulsory 
automobile insurance and earthquake 
insurance 
Ministry of Justice Corporation Reorganization Law Acquisition of shares of companies under 
reorganization 
Ministry of Finance Law 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 commercial usage of 
music records 
Ministry of Health, Labour, Welfare Law Concerning Coordination and Improvement 
of Hygienically Regulated Business Cartels to prevent excessive competition 
Ministry of Agriculture, Forestry and 
Fisheries of Japan Agricultural Cooperative Association Law Fe deration of agricultural cooperatives;  
Agricultural Association corporation 
Ministry of Economy, Trade and Industry Export-import Trading Law Cartels on export 
 Law on the Cooperative Association of Small 
and Medium Enterprises Federation of small business associations 
 Law on Cooperatives of Small and Medium-
Sized Enterprises Joint economic undertakings 
Ministry of Land, Infrastructure,  
Transport and Tourism Marine Transportation Law Mar itime transportation cartels 
(international);  Maritime transportation 
cartels (coastal service) 
 Road Transportation Law Transportation cartels 
 Civil Aeronautics Law Aviation car tels (international);  Aviation 
cartels (domestic) 
 Coastal Shipping Association Law Mar itime transportation cartels (coastal 
service);  Joint shipping businesses 
Source:  Information provided by the Japanese authorities. 
                                                      
154 Although the committee intended to continue discussion on the impact of eliminating the exemption 
on Japan's economy, and  the international harmonization of the legal framework for shipping, there has been no 
further discussion in the committee since December 2007.   MLIT online information (in Japanese). Viewed at: 
http://www.mlit.go.jp/singikai/koutusin/kaiji/kokusai/07 /toshin.pdf [17.06.2010], and JFTC online information 
(in Japanese). Viewed at: http://www.jftc.go.jp/pr essrelease/06.december/06 120602.html [1 7.06.2010]. Japan WT/TPR/S/243 
 Page 71 
 
 
(c) Holding companies, and mergers and acquisitions 
149. Chapter 4 of the AMA prohibits mergers and acquis itions if they lead to a substantial restraint 
on competition.155  All planned mergers and acquisitions that exceed specified thresholds must be 
notified to the JFTC no later than 30 days before the merger/acquisition takes place.  The thresholds 
for mergers are:  ¥20 billion for the total amount of domestic sales of a company group of an 
acquiring company (including its "ultimate parent co mpany" and subsidiaries);  and ¥5 billion for the 
total domestic sales of an acquired company and its subsidiaries.  In addition, the 2009 amendment of 
the AMA modified the percentage thresholds of  shares from three steps (10%, 25%, and 50% on the 
basis of voting rights held solely by an acquiring corporation) to two steps (20% and 50% of the basis 
for voting rights held by a 'corporate group' as a whole).  The scope of exemptions from the 
notification requirement was also expanded.  Mergers, and acquisitions of businesses among 
corporations within a 'corporate group' are exempted  from notifications.  Provisions on notifications 
for joint share transfers were introduced, along with a prior notification system for share acquisitions.  
In accordance with the 2009 amendment to the AM A, the JFTC revised the Guidelines to the 
Application of the AMA concerning Review of Busi ness Combinations, in January 2010, to improve 
predictability and transparency, and to sp eed up its merger review for enterprises.156    
150. Excessive concentration of power, through a holding company, and through mergers and 
acquisitions other than from the creation of a holding company, is also restricted by the AMA.  Holding companies not deemed to constitute an "excessive concentration of economic power" are 
permitted.
157  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.158  In FY2009, 93 business reports were submitted under Section 9 of the AMA 
(29 holding companies), compared with 92 (26 holding companies) in FY2008.  
(d) International arrangements 
151. Japan participates in OECD committees a nd working groups established to increase 
cooperation in competition policy.  All of Japan's fre e-trade agreements provide for each party to take 
appropriate measures against anti-competitive activiti es in accordance with its  laws and regulations, 
and to cooperate in controlling anti-competitive ac tivities, e.g. by notifying the other party of 
enforcement activities, cooperati on, coordination, requests for enforcement activities, and 
consideration of the other party's interests.159  Japan has three other bilateral cooperation agreements 
on anti-competitive activities,  with Canada, th e European Union, and the United States.  
                                                      
155 "Substantial restraint" on competition is when a mark et structure changes as a result of a merger and 
specific companies can control the market by influenc ing variables such as price, quality, and quantity. 
156 The JFTC online information.  Viewed at: http://www.jftc.go.jp/e-page/legislation/ama/Revised 
MergerGuidelines.pdf [23.06.2010]. 
157 "Excessive concentration of economic power" is defined in the AMA (Article 9) as a situation 
where significant effects on the national economy and impediments to the promotion of free and fair 
competition are observed due to the overall scale of business of a company, its subsidiaries, and other 
companies in Japan controlled by the company by means of holding of stock;  large influence of these companies on other enterprises due to transactions relating to finance;  or the occupancy by these companies of 
influential positions over a significant number of fields of business.   
158 A newly established company that corresponds to any of these thresholds must submit a notification 
to the JFTC, for its approval, within 30 days of establishment. 
159 Chapter 10 of the FTA with Switzerland; Chapter 10  of the FTA with Viet Nam; Chapter 11 of the 
FTA with Indonesia;  Chapter 12 of the FTA with Thailand;  Chapter 14 of the FTA with Chile;  Chapter 12 of the FTA with the Philippines;  Chapter 10 of the FTA with  Malaysia;  Chapter 12 of the FTA with Mexico;  and WT/TPR/S/243 Trade Policy Review 
Page 72 
 
 
(e) Enforcement 
152. An investigation into possible violations of the AMA may be initiated as a result of:  a report 
from the general public, detection by the JFTC itself, notification by the Small and Medium 
Enterprise Agency, or a report by leniency applican ts.  The AMA provides three types of measures to 
penalize and thereby deter violations of the Act:  administrative measures,  such as surcharges and 
orders to take "elimination measures" (ceas e and desist orders);  criminal penalties160, and private 
damages actions.  With the entry into force of th e 2009 amendment to the AMA in January 2010, the 
period of imprisonment for unreasonable restraint of trade increased from three years to five years. 
153. In FY2008, the JFTC took legal measures against 49 entrepreneurs in 17 cases.161  In addition, 
it received 85 leniency applications (applications filed between January 2006 and March 2009 totalled 
264).  It took an average of 11 months for the JFTC to process cases where legal measures were taken.  
With regard to surcharge payment orders, 59 orders  were issued and ¥27.0 billion were collected in 
FY2008 (Table III.8).162  In FY2008, there was one criminal  accusation concerning a price-fixing 
cartel over galvanized steel sheets.163  Under Section 8 −4 of the AMA, the JFTC continues to monitor 
highly oligopolistic markets, and may order meas ures to restore competition in the event of a 
"monopolistic situation".164  Currently, 27 industries are subject to monitoring.165 
                                                                                                                                                                     
Chapter 12 of the FTA with Singapore.  MOFA and JFTC  online information.  Viewed at:  http://www.mofa. 
go.jp, and http://www.jftc.go.jp/e-page/internationalrelations/index.html [20.10.2010]. 
160 Criminal penalties currently include imprisonment of up to five years or a fine of up to ¥5 million 
for private monopolies and unreasonable restraint of trade, and imprisonment of up to two years or a fine of up 
to ¥3 million for international agreements constituting unr easonable restraint of trade and unfair trade practices, 
restrictions of the number of members of trade associations, and violations of final decisions by the JFTC.  Criminal proceedings may be initiated only after an accusa tion is filed by the JFTC with the Public Prosecutor 
General.  Appeals are available with the High Courts and eventually the Supreme Court.   
161 These included 1 case of private monopolization, 2 cases of bid-rigging, 8 cases of price fixing 
cartels, 1 case of other types of cartel, and 5 cases of unfair trade practices. 
162 JFTC online information, "Enforcement Status of the Antimonopoly Act in FY2008 (Summary)".  
Viewed at:  http://www.jftc.go.jp/e-page/pre ssreleases/2009/June/090603.pdf [30.06.2010]. 
163 The JFTC online information.  Viewed at: http://www.jftc.go.jp/e-pa ge/pressreleases/2008/ 
November/081111.pdf [24.06.2010]. 
164 Monopolistic situation in a particular industry (where the total output of the industry exceeds 
¥100 billion) is defined as circumstances in which all of the following market structures and "undesirable 
market performances" exist:  (1) where the share of a single entrep reneur exceeds 50% (or 75% for 
two entrepreneurs combined in a particular field of bu siness;  (2) where conditions make it extremely difficult 
for any other entrepreneurs to be newly engaged in the particular field of business;  and (3) where, for a 
considerable period of time (i) the in crease in the price has been remarkable or the decrease in the price has been 
slight in the light of the changes that occurred in, inter alia , the supply and demand, and (ii) profit or 
expenditure (e.g. on advertising and marketing) is far in excess of standard levels in the industry.  "Undesirable 
market performance" includes such factors as barriers to  entry, extraordinary price increases, and extremely high 
profit rates. 
165 The 27 industries are:  chewing gum;  beer;  whisky;  cigarettes;  polypropylene;  plastic bottles for 
beverages;  gypsum board and its products;  pig gold;   vending machines for beverages;  electric lighting 
fixtures for automobiles;  central processing units;  radiators;  shock absorbers;  air-conditioners for 
transportation machines;  contact lenses;  household TV game players;  portable ga me players;  cassettes for 
games;  fixed telecommunications services;  mobile telecommunications services;  operating software;  railway freight;  scheduled domestic passenger flights;  wholesale of books and journals;  dust control;  medical office 
work services;  and administration of music copyright.  The industries subject to monitoring are to be reviewed 
in 2010.  JFTC online information (in Japanese).  Viewed at: http://www.jftc.go.jp/pressrelease/10june/ 
100624.pdf [24.06.2010]. Japan WT/TPR/S/243 
 Page 73 
 
 
Table III.8 
Enforcement of competition policy, 2005-09 
Fiscal year Details 
2005 2006 2007 2008 2009  
(A)  Cases in which legal measures were taken against acts prohibited by the Anti-monopoly Act  
Number of legal measures 19 13 24 17 26 
Private monopolization 0 0 0 1 0 
Cartels 17 9 20 11 22 
Price cartels 4 3 6 8 5 
Collusive tendering 13 6 14 2 17 
Other types of cartela 0 0 0 1 0 
Unfair trading practices 2 4 3 5 4 
Others 0 0 1 0 0 
(B)  Surcharge payment orders      
Payment orders      
Number of cases 20 13 20 11 24 
Number of company operators 399 119 165 59 85 
Surcharge amount (in ¥ billi on) 18.87 9.26 11.29 27.03 36.07 
Decisions to initiate hearings 8 3 2 2 0 
(C)  Recently processed investigation cases      
Cases investigated      
Carry-overs from the previous fiscal year 19 18 28 18 19 
New cases begun during the current fiscal year 88 141 132 124 133 
Total 107 159 160 142 152 
Cases processed      
Legal measures      
Recommendations 17 .. .. .. .. 
Cease and desist orders 2 12 22 16 26 
Decision to commence hearingsb (3) .. .. .. .. 
Surcharge payment ordersc 0 1 2 1 0 
Sub-total 19 13 24 17 26 
Others      
Warnings 7 9 10 4 9 
Cautions 47 74 88 87 69 
Discontinued casesd 16 35 20 15 26 
Sub-total 70 118 118 106 104 
Total 89 131 142 123 130 
Carry-overs to the next fiscal year 18 28 18 19 22 
Criminal accusations 2 2 1 1 0 
.. Not available. 
a Other types of cartel include restrictions on sa les volume and restrictions on business clients. 
b Decision to commence hearing procedures was made from recommendations. 
c Cases in which surcharge payment orders were made  without a recommendation or cease and desist order. 
d These were discontinued due to lack of evidence of wrong-doing. 
Source:  Information provided by the Japanese authorities. 
(f) Distribution measures 
154. Since its previous Trade Policy Review, Japan has made no major changes to its regulations 
on distribution.  The opening and expansion of la rge-scale retail stores is regulated by the Law 
Concerning Measures by Large Scale Retail Stores for the Preservation of the Living Environment;  
the City Planning Law and the Building Standard La w regulate zones where large-scale retail stores 
(exceeding 10,000 m2) may be established.166  The implementing guidelines for the law encourage 
                                                      
166 Large-scale retail stores are allowed in thr ee categories of zones (neighbourhood commercial, 
commercial, and qu asi-industrial). WT/TPR/S/243 Trade Policy Review 
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operators to take into consideration factors concerning facilities and business operations, such as 
adequate parking spaces and cooperatio n with the local communities.   
(vii) Corporate governance 
155. A continued awareness that ineffective corpor ate governance may have contributed to the 
misallocation and excessive use of capital and lab our in the corporate sector has prompted the 
Government to implement various policy measures since its previous review.   
156. Under the Companies Act, the boards of large companies167 (or the directors in the case of 
corporations without a board) must decide on a basi c framework for their internal control systems and 
disclose a summary of this decisi on to their shareholders in their business reports.  The authorities 
intend to review these measures continuously.   
157. Article 821 of the Companies Act stipulates that a foreign company (i.e. a company 
established under foreign law and not under Japanese la w) that "has its head o ffice in Japan or whose 
main purpose is to conduct business in Japan" may not carry out transactions continuously in Japan.168  
The authorities maintain that this provision is s tipulated to avoid situations where a company is 
established under foreign law for the purpose of circ umventing the application of Japanese law;  they 
do not consider that the Article prevents forei gn companies that are duly conducting business outside 
Japan from establishing a branch in Japan.169 
158. Under the Financial Instruments and Exchange  Act, the management of listed companies 
must implement assessments of internal controls over financial reporting, and these assessments must 
be audited by certified public accountants (Internal  Control Report System).  Furthermore, listed 
companies must submit annual reports certified by the management (Certification Report System). 
159. The listing rules of stock exchanges in Japan re quire listed companies to publish reports (on 
the stock exchange's website) describing their cor porate governance structure, including:  the reasons 
for adopting an in-house auditor or committee-style g overnance structure;  whether they have outside 
directors;  and whether they adopt any measu res to prevent takeovers.  In addition, from 
31 March 2010, listed companies are required to di sclose information on remuneration for directors 
and statutory auditors, cross-shareholdi ng, and the exercise of voting rights.170 The authorities 
consider that this additional information im proves the transparency of listed companies. 
160. The authorities maintain that Japan' s Generally  Accepted Accounting Principles (GAAP) are, 
taken as a whole, equivalent to the Internati onal Accounting Standards (IAS), while acknowledging 
limited differences in certain areas.  The authoriti es state that Japan's accounting standards are in the 
process of being integrated further into the global accounting standard.  In this context, the Business 
Accounting Council, an advisory body to the Commi ssioner of the Japan.  Financial Services Agency, 
published "Japan's Roadmap for application of IFRS " on 30 June 2009.  The document states that:  it 
is appropriate that a voluntary application of IFRS for the consolidated financial statements of certain 
listed companies whose financial or business activiti es are conducted internationally is allowed from 
the fiscal year ending in March 2010;  a decision re garding mandatory application of IFRS for listed 
                                                      
167 Corporations with ¥500 million or more of capital or ¥20 billion or more of liabilities on their most 
recently audited and approved balance sheets are considered to be large companies. 
168 Ministry of Justice (Japanese Law Translation)  online information.  Viewed at:  http://www. 
japaneselawtranslation.go.jp/law/detail/?p rintID=&id=149&re=02&vm=02 [21.08.2010]. 
169 WTO document WT/TPR/M/211/Add.1, 22 May 2009. 
170 The Financial Service Agency online information.   Viewed at: http://www.fsa.go.jp/en/news/2010/ 
20100326-1.html [24.06.2010]. Japan WT/TPR/S/243 
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companies is expected to be made around 2012;  an d if the decision is made, the mandatory use of 
IFRS will start from 2015 or 2016.  Subseque ntly, in December 2009, the FSA published, inter alia,  a 
set of revised Cabinet Office Ordinances for voluntary application of IFRS in Japan.  With these revisions, companies listed in Japan that meet ce rtain requirements are to be given the option to 
prepare their financial statements, starting from th e consolidated fiscal years ending on or after 
31 March 2010, by applyi ng certain IFRSs, in accordance with the revised Cabinet Office Ordinance 
and other relevant rules.