WORLD TRADE  
ORGANIZATION  G/SCM/Q2/JPN/39 
10 April 2006 
 (06-1657) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
Questions Posed by the UNITED STATES  
Regarding the New and Full Notification of JAPAN1 
 
  The following communication, dated 7 April 2006, is being circulated at the request of the Permanent Delegation of the United States.  
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I. INDUSTRY  
 
General
 
 
 For many programs, the form of the subsidy is listed as “contract.”  Please explain how the 
subsidy is provided in the form of a cont ract for each of the relevant programs.   
 Contract for Exchanging Electronic Data for Trade-related Procedures
 
 
1. Please provide further details regarding th e policy objectives regarding this program. 
 2. What types of companies are eligible for this assistance, e.g., trading companies, 
manufacturers and/or producers?  What are the specific eligibility requirements for the 
recipients? 
 
Commission on the Research for the Manufacturing Industries Technology
 
 1. Please provide further details regardi ng the policy objectives of this program. 
 
Contract for Development of Information Processing System and for Related Purposes
 
 1. Please provide further details regarding th e policy objectives regarding this program. 
 2. Please provide the specific eligibility requiremen ts and describe the industries that benefit.  
 
Contract for the Equipment of Infrastructure Concerning Information and Economy
 
 1. Please provide further details regarding th e policy objectives regarding this program. 
 2. Please provide the specific eligibility requiremen ts and describe the industries that benefit.  
                                                     
 
1 G/SCM/N/123/JPN G/SCM/Q2/JPN/39 
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Subsidies for Interest on Loans to  Introduce Specific Facilities Suitable for Alternative Energies to Oil
 
 1. What are the eligibility requirements for this  program?  Please further clarify who receives 
funding under this program, e.g., which industries. 
 
2. Do Japanese steel companies, including compan ies affiliated with the steel industry, receive 
assistance under the program? 
 3. What would constitute as a “specific facility” under the program? 
 
 
II. FINANCE  
 
Special Depreciation on Certain Machinery Used for Advanced Technology Industries in Certain 
Advanced Technology Industrial Group-site Areas  
 1. Please explain what types of machinery qua lify for the special depreciation under this 
program.  What are the principal industries or sectors which have benefitted from this program? 
 
2. What criteria must be met in order to be a  “qualified advanced technology industry?”  Please 
explain what qualifies as an “industrial group site area.” 
 Additional Depreciation on Fishing Boat (owned by  persons or corporations which execute the 
management improvement plan of fishing industry)  
 
1. Please describe what the “management improve ment plan” of the fishing industry includes 
and requires? 
 2. What is total amount of depreciation permitte d over the useful life of the fishing vessel as 
compared to the purchase price of the vessel?  
 
3. Does this program promote the construction or purchase of new vessels?  Additional Depreciation on the Machinery of Corpora tion which is provided in the plans to strengthen 
the management base  
 
1. Please explain what types of “certain buildi ngs and machinery” qualify for the additional 
depreciation. 
 2. What is total amount of depreciation permitted over the useful life of the relevant machinery 
as compared to the purchase price of the machinery?  
          
3. Does this program promote the construction or purchase of new fishing vessels?  Does this 
program promote new fish-processing capacity, or the maintenance/modernization of existing processing capacity? 
 
Agriculture, Forestry and Fisheries Finance Corporation Subsidy
 
 1. What is the form of the subsidy provided to fishermen under this program?     G/SCM/Q2/JPN/39 
 Page 3 
 
 
  III. ADDITIONAL SUBSIDIES PROGRAMS  
 
A. National Programs  
 1. Regional Programs Tax Programs 
 
 It is our understanding the following programs pr ovide special tax treatment to companies in  
designated rural areas.  For each of the below programs, please provide the information required under Article 25 of the SCM Agreement or explain why these programs are not subject to the notification requirements under the SCM Agreement. 
 
• Rural Industrial Act 
• Underdeveloped Area Industrialization Act 
• Peninsula Development Promotion Act 
• High-Tech Industrial Zone Promotion Act (Technopolis Act) 
• New Industrial Cities Promotion Act 
• Knowledge-Intensive Industry Location Act 
• Industrial Relocation Promotion act 
• Chubu Region Development Act 
• Law on Special Measures on Tax, Article 34.65-7  
 
2. National Research Development Programs   For each of the below programs, please provi de the information required under Article 25 of 
the SCM Agreement or explain why these programs are not subject to the notification requirements 
under the SCM Agreement. 
 "Focus 21" Program  It is our understanding that "Focus 21" is  centered on the provision of funds to support 
research and development in priority areas.  This program includes funds to develop key areas such as 
semiconductor mirco-processing, next-generation robot technology, high-speed communication 
equipment, nano-technology, etc.  Local Industrial Cluster Program It is our understanding that this program seeks to create local industrial agglomerations (clusters) 
focused on new and high-technology industries. 
 B. Prefecture Administered Programs
 
  It is our understanding that there are numerous  programs administered by Japan’s prefecture 
governments.  Information obtained from public sources indicates that many of these programs 
benefit high-tech companies or industries.   Below are examples of some of the prefectural programs 
for which information is available from public so urces.  Please provide the information required under 
Article 25 for these and other prefecture administered programs, or explain why these programs are not subject to the notification requirements under the SCM Agreement.  
 Aichi Prefecture Subsidies  
  
• Industrial Facilities Tax Abatement Program 
• Subsidies for Actively Inviting Leading-Edge Industries 
• Fund Loan Program for Actively Inviting Companies 
• Long-Term Installment Payment Plan for Land Purchase 
• Tax Incentives in Depopulated Areas G/SCM/Q2/JPN/39 
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Akita Prefecture Subsidies  
 
• Subsidies for Investments in Equipment and Facilities 
• Assistance for Site Acquisition in Industrial Parks 
• Low Interest Loans 
• Tax Exemptions 
 
Mie Prefecture  
 
• Subsidies to Flat-Screen TV Producers 
• Subsidy System for New Business Development 
• Subsidies for the Establishment of Factories and Research Institutes 
 
C. Other Programs  
 
 Responding to questions from the United States, Japan described several fishery programs in 
G/SCM/Q2/JPN/38, which had not been notified.  Please explain why the following programs are not required to be notified or provide the necessary info rmation in accordance with Article 25 of the SCM 
Agreement.   
• Programs to support constructing/maintaining fishing ports or installing their related 
facilities, or conserving/rehabilitating the marine environment 
• Fishing vessel insurance and reinsurance programs 
• Programs to “support fisheries organizations in stocking their members’ catches”  
• Programs to reduce or reimburse fuel taxes for the fishing industry 
• Fishery research and development 
• Fishing vessel buyback programs 
• Interest rate subsidies for fi shermen to purchase fishing vessels 
• Rural development programs that provi de assistance to fishing villages and 
communities 
  
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