Ready For A New Partnership
The EBC Report on the Japanese Business Environment
2018

The European Business Council in JapanThe European (EU) Chamber of Commerce in Japan

European Business Council in Japan
European (EU) Chamber of Commerce in JapanThe EBC is the trade policy arm of thefollowing European national chambers ofcommerce and business organisations inJapan:
Austrian Business Council
Belgium-Luxembourg Chamber of Commerce in Japan
British Chamber of Commerce in Japan
Czech Chamber of Commerce and Industry in Japan
Danish Chamber of Commerce in Japan
Finnish Chamber of Commerce in Japan
French Chamber of Commerce and Industry in Japan
German Chamber of Commerce and Industry in Japan
Greek Chamber of Commerce in Japan
Icelandic Chamber of Commerce in Japan
Ireland Japan Chamber of Commerce
Italian Chamber of Commerce in Japan
Netherlands Chamber of Commerce in Japan
Polish Chamber of Commerce & Industry in Japan
Spanish Chamber of Commerce in Japan
Swedish Chamber of Commerce and Industry in Japan
Swiss Chamber of Commerce and Industry in Japan

Executive Operating Board
Acting Chairman:
Michael A. Loefflad

First Vice-Chairman:
Michael A. Loefflad

Vice-Chairman:
Carl-Gustav Eklund

Treasurer:
Erik Ullner

Members:
Michael A. Loefflad (Austria)
Gregory Van Bellinghen (Belgium/Luxembourg)
Florian Kohlbacher (Britain)
Claus Eilersen (Denmark)Erik Ullner (Finland)
Guy Bonaud (France)
Marcus Schuermann (Germany)
Athanasios Fragkis (Greece)
Lorcan Brophy (Ireland)
Marco Zoli (Italy)
Kiminobu Yoshida (Netherlands)
Pawel Komender (Poland)
Takeshi Fujiwara (Sweden)
Masao (Mark) Torii (Switzerland)

Executive Director:
Francesco Formiconi

Policy Director:
Bjorn Kongstad

Communications Manager:
Yoko Hijikuro

About the EBC:The European Business Council (EBC) is the trade
policy arm of the 17 European national chambers ofcommerce and business associations in Japan.
Established in 1972, the EBC works to improve the tradeand investment environment for European companies
doing business in Japan.
The EBC currently represents some 2,500 local
European companies and individuals who are membersof their national chambers of commerce. Around 350
company executives participate directly in the EBC’s 24
industry committees, whose work aims to improve thelocal business environment in a wide variety of
economic sectors.
The EBC speaks from a platform based on member
consensus, representing the common view ofcompanies from a major economic region in the world
and one of Japan’s most important trading partners.
The EBC works closely with the Delegation of theEuropean Union in Japan and the embassies ofEuropean countries to co-ordinate policy proposals andfacilitate European business in Japan.
For more information on the EBC and its activities,
please contact the EBC secretariat at the following
address:
Sanbancho POULA Bldg. 2F
6-7 Sanbancho, Chiyoda-ku, Tokyo 102-0075
Tel: 03-3263-6222
Fax: 03-3263-6223
E-mail: ebc@ebc-jp.com
Web: https://www.ebc-jp.com

Ready For A New Partnership
The EBC Report on the Japanese Business Environment
2018

Editor and Principal Author: Bjorn Kongstad

Copyright © 2018 by the European Business Council in JapanAll rights reserved

Published by: The European Business Council in JapanThe European (EU) Chamber of Commerce in Japan
Sanbancho POULA Bldg. 2F, 6-7 Sanbancho, Chiyoda-ku, Tokyo 102-0075
Tel: 03-3263-6222 Fax: 03-3263-6223
E-mail: ebc@ebc-jp.com Web: https://www.ebc-jp.com

CONTENTS
Message from the EBC ................................................................................................... 6
Message from the EU Ambassador................................................................................. 7
Introduction................................................................................................................... 10
About the EBC .............................................................................................................. 11
Business fundamentals
Financial reporting .................................................................................................. 14
Human resources..................................................................................................... 16Intellectual property ................................................................................................ 18
Legal services ......................................................................................................... 20
Retail & wholesale .................................................................................................. 22
Tax .......................................................................................................................... 24
Financial services
Asset management .................................................................................................. 28
Banking ................................................................................................................... 30
Insurance ................................................................................................................. 32
Transportation and communications
Airlines ................................................................................................................... 36
Railways ................................................................................................................. 38
Telecommunications carriers .................................................................................. 40
Telecommunications equipment. ............................................................................ 42
Logistics & freight .................................................................................................. 44
Health science
IVD (In Vitro Diagnostics) ..................................................................................... 48
Medical equipment ................................................................................................. 50
Pharmaceuticals ...................................................................................................... 52
Vaccines .................................................................................................................. 54
Cosmetics & quasi-drugs ........................................................................................ 56
Consumer goods
Liquor ..................................................................................................................... 60
Food & agriculture .................................................................................................. 62
Industry
Automobiles ............................................................................................................ 66
Automotive components & aftermarket .................................................................. 68
Aeronautics ............................................................................................................. 70
Space ....................................................................................................................... 72
Defence & security ................................................................................................. 74
Materials ................................................................................................................. 76
Energy ..................................................................................................................... 78
Appendices
Pinnacle Sponsors ................................................................................................... 82
Gold Star Sponsors ................................................................................................. 84
Blue Star Sponsors .................................................................................................. 85
Special Sponsors ..................................................................................................... 87
Sponsors .................................................................................................................. 88
Supporters ............................................................................................................... 89
Executive Operating Board ..................................................................................... 90
Board of Governors ................................................................................................ 92

Contents
3

3

A SPECIAL THANK YOU TO OUR PINNACLE SPONSORS,
GOLD-STAR SPONSOR, AND BLUE-STAR SPONSORS
Pinnacle

Gold-Star

Blue-StarAll sponsors are listed in the appendix of this report. We thank everyone for
their support.
454

Messages

Message from the EBC
Welcome to “Ready For A New Partnership”, the 2018 Report of the European Business Council in Japan (EBC).
Just as previous years have been exciting so has 2018 in regards to the Europe-Japan relations. This was the year
when the EU-Japan Economic Partnership Agreement (EPA) was finally signed. Europe has now two distinct
agreements with Japan: the Switzerland-Japan Free Trade Agreement and the EU-Japan EPA.
The importance of the EPA to both EU and Japanese business is enormous. From an EU perspective, it promises
to boost exports in sectors such as food products, clothing and shoes, pharmaceuticals, medical devices, vehicles
and machinery. The result will be increased growth and more jobs, not only in companies that already have apresence in Japan but also in those entering this market for the first time thanks to the EPA. The benefits will be
felt across the EU and Japanese economies and significantly, amongst consumers, who will enjoy a wider choiceof competitively priced, quality products.
The EBC greatly appreciates the hard work on both sides to reach this point. We are proud of the contribution we
have been able to make to the process in offering insights and information from our own experience, and we are
keen to continue our support, as the Agreement is finalised and preparations are made for its implementation. In
fact, for the EBC, this is the most important phase, because, in the end, an agreement is only as good as its
implementation. For EU business, this means that tariff reduction and removal must be completed on time; current
non-tariff barriers must be lifted and not replaced by others; public procurement markets must become open andaccessible; and geographical indicators and intellectual property must be respected. What is more, the spirit of the
EPA must be translated into action within the machinery of government, with the authorities promoting closer
cooperation between EU and Japanese companies and ensuring both sides are represented in policy discussions.
For this purpose, the EBC and its Committees will dedicate significant time and resources to monitor the EPA
implementation.
Yet the work of the EBC does not end with the EPA: a significant number of issues hindering EU business inJapan lie outside the scope of the agreement. Some of these issues are specific to the EU, but very many affect allcompanies, domestic and foreign, and serve only to delay new products, inflate costs, and restrict consumer choice.
EBC expert Committees will, therefore, continue to highlight them and make practical recommendations for how
they should be resolved. The EBC does want to underline this message, that a great portion of ourrecommendations will benefit companies and consumers independent of nationality.
The EBC work is made possible by the continuing support of its stakeholders, especially the European national
Chambers of Commerce, their corporate members that join also EBC and other business organisations represented
in Japan. Together with the Delegation of the European Union to Japan and the European national embassies inTokyo, who keep offering their unique insights and guidance, we all work towards making European businessmore successful in Japan.
We also gratefully acknowledge all sponsors and supporters who have made this publication possible and whosenames are listed at the end of the Report. The EBC is committed to helping Europe and Japan reach new levels of
mutual trade and economic growth. We approach 2019 with new optimism as Europe and Japan are entering a
new partnership.

Michael Loefflad
Acting Chairman, European Business Council in Japan
European (EU) Chamber of Commerce in Japan(Representative Director & President, DKSH Japan, Ltd.)

6Francesco Formiconi
Executive Director
European Business Council in Japan
European (EU) Chamber of Commerce in Japan

Message from the EBC
1

Message from H.E. Dr. Patricia Flor, the Ambassador of
the European Union to Japan

It is my pleasure as the new Ambassador of the European Union to Japan to address “Ready For A New
Partnership”, the much-awaited 2018 report of the European Business Council (EBC) on the businessenvironment in Japan.
This is a very important moment for the EU - Japan relations. The signature of the Economic Partnership
Agreement (EPA) - which will enter into force early next year - sends a clear message to the rest of theworld that the European Union and Japan stand together to oppose protectionism, and will cooperate
even closer to promote an open, fair, sustainable and rule based trade which benefits both societies.
But first and foremost, the EPA - which covers 37% of world's trade and is the biggest trade agreement
ever concluded by the European Union - creates new opportunities for European companies to boost
their exports and expand their business in Japan. By eliminating or significantly reducing custom duties,
removing non-tariff barriers, simplifying export-import related procedures and enhancing EU-Japaneconomic cooperation, the EPA will open up the Japanese market of 127 million affluent consumers to awide range of European goods and services.
We should not forget, however, that the conclusion of the EPA is only the first step. In order for the EPA
to bring tangible economic benefits, we need to make sure that European companies - both small andlarge - are well aware of its existence and know how to make use of it. Subsequently, we will closely
monitor EPA's implementation and promptly address any difficulties that European companies may faceduring its application.
The EU Delegation to Japan greatly appreciates the ongoing cooperation with the EBC on supporting
European business in Japan. As far as the EPA is concerned, I believe that by disseminating knowledge
about the agreement within the European business community in Japan, and by closely following its
implementation, the EBC will play a key role in ensuring its success. The EU Delegation to Japan islooking forward to a close and fruitful cooperation with the EBC in that respect.

Patricia FLOR
Ambassador of the European Union to Japan
Head of the Delegation

Message from the EU Ambassador
2

7

Introduction

Mr. Bjorn Kongstad
Policy Director,
European Business Council in Japan
Sanbancho POULA Bldg. 2F
6-7 Sanbancho, Chiyoda-ku,
Tokyo 102-0075
Phone 03-3263-6222
Fax
03-3263-6223

INTRODUCTION
If everything goes according to plan, 2018 will be the last year where European and Japanese businesses trade without
a free trade agreement. At the time of writing, the European Parliament is debating the Economic Partnership
Agreement (EPA) with an aim of taking a vote in mid-December on ratification. In Japan the process is similar with
the Diet scheduled to ratify the EPA in the current session. Long has the European Business Council in Japan (EBC)
advocated for a trade agreement between EU and Japan. Long too has the EBC been closely involved in the
preparation for an agreement and also closely in involved in the negotiations, continuously providing the European
Commission with issues that affect European industry in Japan and technical expertise.
With this in mind, it is not surprising that a majority of the issues included in this report touches on the EPA in one
shape or form. This can be issues that are finally solved though the agreement or issues that has been included in theagreement but where the outcome is uncertain. With the agreement, EU supplier will have a much improved market
access in the food and beverage sectors. Many food products will see removed or drastically reduced tariffs, and thewine sector, both for still and sparkling wine will see completely removed tariffs from day one. The shoe and leather
industry will also see reduced tariffs. Tariffs that have long made European products far more expensive than theyneed to be. We have already seen changes and improvements to the pharmaceutical and medical devices markets. The
same can be said for labelling requirement for garments. Several of the issues for European automobile manufacturers
have also been implemented, which is not to say that all issues have been dealt with. Japan will also further open up its
public procurement market, and especially the railway equipment manufacturers is scheduled to see positive changes.
That being said, the success of the agreement is very much down to its implementation. It is here that both the EBC
and this report come into play. As the reader will see, many of the EBC committees comment on the many benefits andpositive changes that the agreement will bring, but also on the challenges and pitfalls that might appear if it is not
implemented in the spirit of the agreement. This means it must be consistently monitored and robustly implemented ontime and in good faith: there is no point in removing barriers, only to replace them with others. Consequently, the EBC
will be devoting considerable energy to monitor the progress of the EPA, not only as it works its way through thepolitical process but also, ultimately, as it enters into effect.
Moving away from the EPA, there are some dark clouds on the horizon which Japan has to tackle head-on in the near
future – demographics and in particular the labour shortage. Since 2011, Japan’s population has decreased for eachyear. More and more companies are experiencing difficulties in recruiting personnel. This is in particular felt in theservice sector which tends to be more labour intensive. Japan is, as this report is being produced, introducing
legislation in the parliament that will open up for labour immigration. This is a much needed reform and somethingthat is welcomed by the EBC and brought up in the Human Resource chapter. The EBC fully understands thesensitivities regarding immigration, but it still adamant that no stone can be left unturned.
To summarise and to end on a positive note because the EBC does believe that the future is bright, with the EPA, theEBC convinced that the EU and Japan will enter into a new partnership which will promote increased trade andintegration, not only as figures go, but also as two open economies that believe in free trade. This is very much neededin the current environment of more inward-looking policies around the globe. The EBC trusts that the ideas andrecommendations in this report will prove a positive contribution to the thinking of the Government of Japan, Europe
and all others who genuinely wish to see Europe-Japan trade and investment reach its full potential.

How this report is organised
Following this introduction, 28 chapters, each written by an EBC sector/expert committee, summarise the key issues
and developments in the Japanese business environment over the past year, and are accompanied by concrete
recommendations for reform.

10

ABOUT THE EUROPEAN BUSINESS COUNCIL
Founded in

1972

24
Industry
committees

The European Business Council in Japan (EBC) is the trade policy arm of 17 European national
Chamber of Commerce and business associations in Japan and has been working to improve thetrade and investment environment for European companies in Japan since 1972. The EBC wasregistered with the Ministry of Economy, Trade and Industry (METI) in 2008 as the European(EU) Chamber of Commerce in Japan.
The EBC currently represents around 2,500 local European corporate and individual members
through their respective national Chamber of Commerce. Some 350 executives of more than
200 companies participate directly in one or more of the EBC's 24 industry committees, whose
work covers a wide variety of economic sectors.
The EBC committees identify the issues keeping the companies from achieving their fullpotential in Japan and use the vast array of EBC’s lobbying tools, including the annual EBC
Report on the Business Environment, to bring change by eliminating the problems.

200
companies

The EBC works closely with the Delegation of the European Commission in Japan, the national
European Embassies, and other business organisations to co-ordinate policy proposals and makerecommendations to the Japanese Government on how to create an open environment for tradeand investment in Japan.

Be Part of the Change - Join the EBC
The EBC is a key actor in bringing change for good to the Japanese economy. By participating
in existing EBC committees, or by forming new committees, companies have the opportunity
not only to learn about the important changes taking place in Japan, but also to play a criticalrole in influencing the change themselves.
Joining an EBC committee gives you: influence on issues addressed in political forums;
 access to key information in your sector (implementation of the EPA); valuable contacts with other European professionals;
 advice in formulating and resolving your regulatory concerns under the EBC
umbrella; a direct channel to the Japanese Government officials and politicians.

To reach out to the EBC, please contact:
Francesco Formiconi, Executive Director
fformiconi@ebc-jp.com
03-3263-6225
Bjorn Kongstad, Policy Directorbkongstad@ebc-jp.com
03-3263-6224

About the EBC

11

Business
Fundamentals
Financial reporting
Human resourcesIntellectual property
Legal services
Retail & wholesale
TaxDr. Dirk Hermans
Chair, Financial Reporting Committee(Director, Accounting & Finance Advisory, Deloitte Touche Tohmatsu LLC)
c/o Deloitte Touche Tohmatsu LLC
Shin Tokyo Building, 3-3-1 Marunouchi
Chiyoda-ku, Tokyo 100-0005
Phone 03-6213-1231
Fax
03-6213-1235

FINANCIAL REPORTING
Introduction
Another successful year, with an increasing number of Japanese listed companies voluntarily adopting International
Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). The Tokyo
Stock Exchange (TSE) lists a total of 195 companies that have adopted or are to move to IFRS, and increasingly someof the larger ones, thereby representing about a third of the total market capitalisation. Further, TSE expects adoption of
IFRS to continue to increase in the next few years and soon represent half of the market capitalisation. The EBC
acknowledges the progress made since 2010 when Japan allowed its listed companies a range of accounting options,
including voluntary adoption of IFRS. This unique approach allows companies the freedom to decide the basis ofaccounting, but also allows them the ability to choose the time to transition away from Japanese Generally Accepted
Accounting Standards (J-GAAP) to IFRS. Listed companies have been well supported in this transition to IFRS by therelevant Japanese authorities like the capital markets regulators, accounting standard setters, and major stock exchanges.
The EBC notes the progressive efforts of the Accounting Standards Board of Japan (ASBJ) to enhance the use of IFRS,
and understands that the creation in 2015 of Japan’s Modified International Standards (JMIS) was intended to support
such efforts by adopting a local flavour of IFRS. This included only two exceptions: accounting treatment of goodwill
by a process of amortisation over a duration of time, and requiring the recycling of certain elements through theStatement of Other Comprehensive Income and not the Profit and Loss Account. However, Japanese companies clearly
prefer IFRS and not JMIS, as IFRS provides better global peer comparison and greater acceptance as qualitative
financial reporting. Accordingly, the EBC would recommend that Japan and the ASBJ consider limiting further
development of JMIS and focus its resources on the original goal of working to converge J-GAAP with IFRS. It is not
to say that the efforts put into developing JMIS were not completely unused, as the IASB as the standard setters for
IFRS is reconsidering if the amortisation of goodwill should be included in IFRS, and have noted Japan’s position.
In the meantime, the existing challenges remain for multinational companies headquartered in Europe that havesignificant subsidiaries domiciled in Japan. For Japanese statutory purposes these subsidiaries will likely continue toreport under J-GAAP, as published by the ASBJ, while having to maintain a dual set of detailed accounting records tobe able to produce IFRS based financial information for reporting to their parent for group reporting purposes. Whilesome significant differences have existed like depreciation periods and methods for assets, valuations principles andmethods, etc., this has become further complicated with the recent and more significant changes in IFRS effective from2018 onwards and in areas like recognising revenues from customers, and the recognition and accounting for financial
instruments. Further, with future changes like the accounting for leases (2019) and accounting for certain
industries/activities like insurance (2021), there is an increasing distance between IFRS and J-GAAP that needs to be
bridged. These recent changes to IFRS have taken a lot of management time and companies resources, and any move to
reduce the accounting differences will reduce undue management distraction, resource commitment, and administrative
burden of maintaining the two very distinct sets of accounting records. This convergence of accounting standards will
not only be useful to just European companies operating in Japan, but also for the increasing number of Japanese listedcompanies who have moved or are moving to IFRS as their primary reporting to the investors, as it will reduce theburden of dual reporting in J-GAAP for their regulatory reporting. Therefore, the efforts to reduce the differences
between the two accounting frameworks of J-GAAP and IFRS, would improve the quality of reporting, while also
reducing the volume and complexity of reconciliations currently required between the two standards. There will also bea direct contribution to corporate governance, an area of growing emphasis in Japan, as listed companies would be
operating with just one set of financial reports that will be easier to comprehend, bring greater transparency, and thereby
allow better governance.
The EBC acknowledges that any effort in convergence would need due consideration of Japanese corporate and tax
laws. Alignment efforts are generally hindered where tax and financial reporting requirements differ significantly, so the
EBC recommends that regulators avoid unfavourable tax consequences (from a time, cost and tax perspective).
Undoubtedly, efforts to converge the two accounting frameworks would also benefit the increasing number and larger
listed Japanese companies that have adopted or planning to adopt IFRS.

14EBC Financial Reporting Committee
Member Companies
The views expressed in this document are those of the EBC
Financial Reporting Committee and the individuals participating in
the Committee only and do not represent the official views of theorganisations these individuals work for or any of their affiliates.

Key Issues and Recommendations■

Dirk Hermans, Deloitte Touche Tohmatsu
Lars Lettner, Ernst & Young
Hiroyasu Naito, Intesa Sanpaolo s.p.A.
Srijit Banerjee, KPMG AZSA
Norichika Gohda , Nicole Racing
Masanori Fuse, Novartis Pharma

Approach of convergence
Yearly Status report: partial progress. ASBJ has been facing delays in its efforts to converge the standards at thepace that IFRS has been changing, especially in the more recent and significant areas. It has therefore become
increasingly burdensome to IFRS adopters that include both European companies operating in Japan and anincreasing number of Japanese listed companies, to maintain dual records, commit resources and management
attention. ASBJ should continue to look to innovative ways to help companies and users of financial information
by incorporating into J-GAAP, if not converge by updating J-GAAP to IFRS, particularly in areas where there
have been recent and significant changes to IFRS that are already implemented or soon to be implemented.
Recommendation:
ASBJ should look into bridging the differences via an appropriate combination of the following two
approaches to convergence, and continue their innovative manner to addressing these challenges. The EBC
acknowledges that ASBJ has to consider and address the concerns of the large number of Japanesecompanies that use only J-GAAP, and that incorporating sweeping changes to J-GAAP emanating from therecent changes to IFRS, would challenge the need for changes and also the ability of such companies tocommit significant resources required to adopt them.

ASBJ should continue to look to achieve convergence by replacing as much of the current J-GAAP with therecent updates to IFRS and eliminating prior differences
ASBJ could consider addressing the more recent and significant changes in IFRS, by looking at ways toblend IFRS into J-GAAP, thereby allowing some of the existing practices of J-GAAP as well as all ofcurrent IFRS to coexist, where and to the extent possible. Once key elements of both standards are carefully
blended into the updated J-GAAP, companies can be allowed to elect an accounting policy choice that best
suits their situation. Essentially this approach would be aligned with how listed companies are currently
making free choices to their financial reporting, by adopting standards they believe is better for them andalso choosing the time to convert.
This blended approach to convergence has recently been used with a fair degree of success for the changes in
J-GAAP for revenue from customers (issued in 2018), and needs to be actively pursued to bridge thedifferences in other existing and emerging areas like:— The long standing differences in the determination of useful lives and the allowable depreciation
methods for of property, plant and equipment— The guidance of fair value measurement and disclosure in IFRS 13 effective from 2013 in IFRS— The recognition, measurement and accounting for financial instruments effective in 2018 in IFRS— The account for leases per IFRS 16 that is to be effective from 2019 in IFRS— The accounting for insurance arrangements that is to be effective from 2021 in IFRS

■ Speed of convergence
Yearly Status report: partial progress. The ASBJ has to focus on reducing the time taken to achieve convergence,
given the difference between J-GAAP and IFRS is growing while the pace of revision of the J-GAAP standards isincreasingly falling behind. This makes maintaining even more details within the two sets of accounting records
by companies that are dual reportees, and is not a desirable situation for such European and listed Japanesecompanies reporting in IFRS.
Recommendation:In updating the J-GAAP standards to IFRS, there could be two dates to them being effective and enable thetransition. The primary effective date being the mandatory adoption of the updated J-GAAP standards by allcompanies in Japan using only J-GAAP, and such date could be several years from issuance of the updated
standards to allow the time to comprehend and change, assuming the updating is done soon to address theongoing delay in issuance of such updated standards. The alternative date being voluntary early adoption bycompanies that could be as close as possible to the current IFRS adoption date, to the extent possible. IFRS
preparers would then be able to reduce the duration and complexity of maintaining dual records by electing
to adopt the updated J-GAAP early.

Financial reporting15

Ms. Sonya Ito
Chair, Human Resources Committee(HR Manager, Japan and South Korea - Herbert Smith Freehills)
c/o Herbert Smith Freehills
Midtown Tower 41st FL, 9-7-1 Akasaka
Minato-ku, Tokyo 107-6241
Phone 03-5412-5412
Fax
03-5412-5413

HUMAN RESOURCES
Introduction
The EBC Human Resources Committee has been monitoring Japan’s demographic outlook for many years. Whilst the
government is taking greater initiatives, unfortunately a shortage of skilled and unskilled labour, an ageing population,
and a declining birth rate, together still present significant challenges for the long-term vitality of the economy ingeneral, as well as domestic and foreign business networks. Given the low unemployment rate, only limited sourcing ispossible from within the group of active job seekers.
The EBC is therefore pleased to see the various initiatives by Prime Minister Abe’s Government to increase theparticipation of women in the labour market. The Government’s initiatives include an overhaul of the current income
tax break given to taxpayers whose spouses do not work (or work only limited hours),to remove the incentive forspouses to work part-time. The Government also called on companies to employ more women and increase the numberof women in executive positions. Furthermore, Prime Minister Abe has talked of improving support for working
parents, which is clearly a step forward in the right direction, however it does require concrete follow-up for a
successful outcome. The Government needs, for instance, to find creative ways to offer more public child-care centres
and private child-minding services, and to support and encourage men to take child-care leave.
On a positive note, the EBC commends the Government and the Ministry of Justice for improving Japan’s attractivenessto foreign professionals through a new system covering re-entry permits and the extension of visa periods. This new
system is complemented by efforts to admit greater numbers of highly skilled workers. Together these measures will
benefit individual companies and the economy as a whole. There are indications that the Government is contemplating
introducing online visa applications, which would be a welcome step as the processes, including for extensions andchanges of visa status, are currently very time-consuming. In addition, the Japanese Government is in its final stages of
implementing a system that will open up immigration of less-skilled workers. Figures such as 345,000 workers havebeen mentioned. The EBC believes that despite the sensitivities and the challenges to integrate these workers into
Japanese society, such a policy is both needed and unavoidable. The EBC therefore appreciates the Government’s
initiative.
As for labour regulations, the EBC applauds the Government for introducing a longer period under which over-time canbe balanced. As this change has only recently been introduced, it is not clear exactly how this will be implemented byindustries. However it is clear that this will lead to a more flexible working style, something the Japanese Government is
promoting and the EBC supports. At the same time, the improved three months could still be considered as a rather
short period of time, as many projects run for a longer period.
Regarding pensions, Japan’s Defined Contribution Pension Law of 2001 enabled employers to offer more flexible andattractive pension schemes to employees. Given the current demographic trend and the inevitable stress this will placeon the Japanese social security system, it is imperative that further incentives are created to encourage individuals to
prepare financially for their own retirement. Meanwhile, Japan must ensure that its efforts to open up to more skilled
foreign workers are not undermined by its pension regulations. Amendments are still required to enable such workers to
get a full refund of all mandatory Japanese pension fund contributions when they finally leave the country, rather thanthe current limit of the last three years of premium payments. The Government should also act quickly to conclude
social security agreements with all remaining EU Member States, as well as with Norway and Iceland, to lessen theburden on both employers and employees, and to avoid double payments. It should be added though that the decrease
from 25 years to 10 years of payment of pension premium is something that the EBC support and praises.

16

EBC Human Resources Committee
Member Companies

Key Issues and Recommendations

CareerCross
Chanel Japan
Coloplast
DHL Global Forwarding
G&S Global Advisors
H&R Consultants
Herbert SmithFreehill
IKEA Japan
Mercedes-Benz Japan
Mitsubishi Fuso Truck and Bus■ Immigration legislation and policies
Yearly status report: good progress. Japan needs to take a more proactive approach to immigration policies.
Several sectors are currently restrained by the shortage of available labour. This holds true for both skilled labour
and unskilled labour.
Recommendations:
The Government of Japan should:Move forward with introducing on-line visa applications and visa extensions;
Lower the requirement for industry experience from ten to five years for those who do not have a relevant
university degree;Quickly implement the proposed policies of allowing visas to non-high skilled workers;Formalise visa procedures for partners that are not married or are in same-sex partnerships.
■ Labour market regulations and diversity
Yearly status report: some progress. Japan’s future prosperity depends greatly on maintaining an adequate
workforce that can support its ageing population and drive its economy. By far the easiest way to increase theworking population would be to increase female participation. The EBC strongly urges the Japanese Government
to continue to place more focus on flexibility for both employees and employers. This is needed both in terms oftime management as well restructuring of staff.
Recommendations:
Remove the spouse special income tax credit (haigusha-tokubetsu-kojo).
Vastly increase and improve the infrastructure necessary to ensure sufficient child-care facilities, systems
and staffing to support female participation in the workforce and male participation in the home.
Encourage companies to set up child-care facilities by offering them identical or similar financial
contributions to those given to public day-care centres.
Introduce employment legislation that encourages the creation of a competitive workforce based on
performance and not on long-term employment. Adequate protection of employees is required, but
employers also need a legal framework within which to remove non-performing workers.
Japan should allow for longer periods during which over-time can be balanced, up for six months to betteralign with longer projects and seasonal developments.
Allow for easier corporate restructuring, while setting up clear rules for compensation of regular employees
whose jobs disappear.

The Japanese Government and universities in Japan should promote the set-up of internship programmes foruniversity students.

Amend the employmentlegislation to expand the “highly skilled system” to include employees who earn lessthan the current system regulating highly skilled professionals, while keeping adequate protections of
employees. People with high skills and high motivation want to work based on output instead of work hours.
■ Pensions
Yearly status report: gradual progress. Social security agreements have been concluded or are being negotiatedwith several European countries, to the benefit of their citizens, whose mandatory contributions to Japanesepension plans can now be refunded in full. This is important not only with European countries but also withneighbouring countries, as this will make it easier to recruit foreign graduates from Japanese universities.
Recommendations:
Extend the payback period as well as expand pay-back to include the company contributions for ex-pats thatleave Japan before being able to benefit from payouts from the Japanese pension system.
Japan should move towards introducing more bilateral social security agreements, with a focus not only on
European countries but also neighbouring Asian countries, as nationals from these countries are becoming
more and more common to combat the labour shortage in Japan.

Human resources
217

Mr. Laurent Dubois
Chair, Intellectual Property Rights Committee(Representative, Union des Fabricants)
c/o Union des Fabricants
SK Bldg. 3F, 1-5-5 Hirakawacho
Chiyoda-ku, Tokyo 102-0093
Phone 03-3239-3110
Fax
03-3239-3224

INTELLECTUAL PROPERTY
Introduction
In Japan, luxury brand products reach consumers via one of the following two sales channels, regular distributors or
dealers in parallel imports. (Please note that the sale of parallel imported goods is not illegal in Japan.) While luxury
brands strive to develop sales through regular shops or internet sites, the need to protect the image of their productseems to hinder them from being active to further engage in e-commerce by using any other actors for distribution. As
in many other countries, the top producer and exporter of counterfeit goods distributed in Japan is China, accounting for
92.2% of all fake goods flowing into the country.
In 2017, more than 50,000 fake items were stopped at the border by Japan Customs. Given that it is impossible for
Customs to examine all imported goods, this figure is probably only the tip of the iceberg of fake items imported inJapan. As buying counterfeit products “for personal use” is not forbidden in Japan, fake items cannot be fully stopped
by Customs even if items appear to be obviously fake.
Until recently, many Japanese consumers purchased fake items knowingly. However, the main efforts today arefocussed on how to prevent consumers from accessing fraudulent websites (mostly operated abroad) which aredeceitfully selling counterfeit products to consumers who are deceived either into buying counterfeits despite their wish
to purchase authentic products, or into buying products that will never be delivered, or which intend to collect buyers’
information such as credit card information. The Government has ordered a third-party to study the feasibility ofblocking access to websites selling counterfeits fraudulently in particular.
Relevant ministries and agencies are making considerable efforts to protect IPR (Intellectual Property Right). The
Consumer Affairs Agency has set up a Cross-Border Consumer Center to provide assistance to consumers who haveunwittingly purchased counterfeit products. The Center publicises on its website the names of online stores sellingcounterfeit items. Moreover, the National Police Agency protects consumers by providing the global Anti-Phishing
Working Group with information about websites selling counterfeit products so that alerts can be displayed in web
browsers.
Major online retailers Yahoo! and Rakuten are also playing an important role in combating counterfeit products. For
example, these online retailers are endeavouring to clean up websites by regularly exchanging information on
counterfeits and criminal dealers with brands, via IP rights-holders’ associations. Further, in order to “clean up” their
shopping websites, site operators make a test purchase to verify the authenticity of the products, with the cooperation of
the relevant brand, when an item posted for sale is suspected of being a counterfeit product because of, inter alia, its
extremely low sale price or information given by a consumer. If the said item turns out to be counterfeit, the shop who
has put the counterfeit product for sale may be banned from the shopping website with immediate effect. As for the fastgrowing Flea market, some websites, who have been focusing on the eradication of counterfeit goods, have obtained
satisfactory results similar to those of existing auction services. On the other hand, some websites have been left far
behind in the efforts to fight against counterfeit products which continue to flood the market.
Finally, concerted efforts are being made by different sectors in Japan to set up a framework to eliminate counterfeit
products. Some of their approaches are more advanced than those implemented in Europe or the USA. However,problems still remain. Specifically, it is necessary to implement ‘internet blocking’ to protect consumers from illegal
websites or to consider how to prevent counterfeit products “for personal use” from penetrating into the market. Thisshould solve the issue of increasing sale of counterfeits on the internet.

18

EBC Intellectual Property Rights
Committee
Member Companies
ChanelSonderhoff&Einsel Law and Patent Office
Union des Fabricants

Key Issues and Recommendations■ Strengthened and continuous actions to eliminate counterfeit products from online

malls in Japan and abroad
Yearly status report: no progress. While major Consumer to Consumer websites have succeeded in reducing thepercentage of counterfeit products to less than 1%, some Business to Consumer websites have not taken
appropriate measures with the cooperation of relevant IP right-holders yet. This in spite of the approval inprinciple of such measures against counterfeit products. The delay in taking action by shopping websites can be
explained partly by the fact that most uploaded image data are showing authentic products exclusively and that it
is often necessary to make an actual test purchase to determine the authenticity of the product. Additionally,
countermeasures against counterfeit products have not yet taken place in respect of the internet flea markets,
where counterfeit products account for around 20% of the total merchandise on sale. Overall, initiatives against
counterfeit sales websites, fraudulent websites and spoof websites are progressing far too slowly. Measuresalready put in place by the relevant Japanese ministries and agencies, including the freezing of bank accounts
used by the operators of such websites, publication of their URLs, and display of alerts via security software orbrowsers and web blocking. However, web blocking, which is a fundamental solution to the problem, has notbeen implemented yet while the Government has already decided to consider its deployment in “2018 Intellectual
Property Strategy Program”. Given that public awareness of the need to protect IPR and consumer interest are
undoubtedly rising, now is the time to take bold and swift action to combat the sale of counterfeit products.
Recommendations: Japan’s Specified Commercial Transaction Law should be amended to strengthen checks on brand goods
sold online, with a view to eliminating counterfeit goods from Business to Consumer websites. In addition,
the Government should encourage internet service providers, distributors and IP rights-holders to establish
their own anti-counterfeit guidelines to promote private sector initiatives in this field.
 Radical measures should be taken against counterfeit sales websites, fraudulent websites, and spoof websites
hosted by foreign servers, for example: blocking access to them or removing them from search engines.
 Although the government has already endeavoured to call for the joining of non-participants ISP companies
to the dialogue forum where SP companies and right-holders discuss countermeasures against counterfeit
products, this policy should continue in the future.

■ Tighter definition of “for personal use”
Yearly status report: sign of progress. The fact that the importation and purchase of counterfeits “for personaluse” are lawful in Japan offers a loophole to dealers importing fake goods for commercial purposes. As a result,
the Customs Authorities, after having wasted manpower and time to detect counterfeit products, have no choice
but to grant importation. According to the above “2018 Intellectual Property Strategy Program”, the Government
has already decided to begin to consider how to restrict the importation of counterfeit products “for personal use”.
Revising the Trademark Act to restrict commercial transactions appears to be a highly controversial solution.
Dealers importing numerous counterfeit watches by postal mail several times a year, for example, could be
stopped simply by defining the minimum period of possession (such as one year) or the maximum number of
items presumed to be “for personal use”. Given that the importation of counterfeit products for “personal use”
may not be prohibited by the Trademark Act, it is necessary to take every measure to prevent such dealers fromstating that goods are “for personal use” by amending relevant laws and regulations accordingly.
Recommendations: The importation of counterfeit products, even “for personal use”, should be restricted by applicable laws andregulations.
 The current situation should be improved by tightening the definition of “for personal use” or by setting the
maximum number of items authorised to be imported under “personal use”.

Intellectual property
2

19Ms. Rika Beppu
Chair, Legal Services Committee(Partner, Squire Gaikokuho Kyodo Jigyo Horitsu Jimusho)
c/o Squire Gaikokuho Kyodo Jigyo Horitsu Jimusho
Ebisu Prime Square Tower 16F.
1-1-39 Hiroo, Shibuya-ku, Tokyo 150-0012
Phone 03-5774-1885
Fax
03-5774-1818

LEGAL SERVICES
Introduction
The EBC is delighted to hear of prospective changes in the laws of Japan in respect of the work experience requirement
for foreign-qualified lawyers to register as gaikokuho-jimu-bengoshi (foreign-qualified lawyers or “gaiben”). Currently
three of work experience is required, out of which two years have to come from overseas. The Ministry of Justice's
Review Committee for the Registered Foreign Lawyers System is now proposing that the overseas experience element
is reduced from two years to one year, as well as the ability of gaiben and bengoshi to establish a corporation together,subject to the implementation of the change in the law.
1. Further to deliberations by the above mentioned Committee which took place throughout 2015 and culminated in a
Report being issued on 5 July 2016, we understand that the following changes to the Act on Special Measuresconcerning the Handling of Legal Services by Foreign Lawyers (Act No. 66 of 23 May 1986) (the “Act”) are on theagenda for the parliamentary session in the fall of 2018.
1.1
The current three-year work experience requirement (two years of which must be experience
gained outside Japan) will be changed to three years (one year of which must be experience gained
outside Japan).
1.2
together.

It will become permissible under law for gaiben and bengoshi to establish a hojin (corporation)

1.3
The scope of “international arbitration cases” under the Act will be clarified so that gaiben will
be able to be involved in such cases. For example, (1) the condition that an “international arbitration case”
must have Japan as its chosen arbitration venue, as well as (2) the condition that the case must involve atleast one party whose main business location or head office is overseas is due to be changed to (1) the
chosen venue of arbitration does not need to be Japan, and (2) the majority of the shares or voting rights ofat least one of the parties are held by an entity or individual whose address is overseas.
2. Transparency of the gaiben registration system and making the registration process simpler: We would welcome any
updates from the forum which has been set up for discussions between the Ministry of Justice and the Nichibenren,
taking into account opinions from registrants as necessary. This with a view to making the registration process andtiming more transparent, simpler and faster.
The EBC welcomes the prospective changes to the law and implementation thereof to reflect the items in paragraphs 1.1,
1.2 and 1.3 above. Going forward, the EBC will continue to recommend that any requirement for work experience prior
to registration as a gaiben should be abolished. The EBC will continue to take a close interest in the roll-out of therecommendations as a whole, not least because the ultimate success will depend on the process being conducted fairly,
with proper participation by foreign lawyers and due consideration given to the views of the foreign legal community.

20

EBC Legal Services Committee
Member Companies
ARQIS Foreign Law Office
AshurstBaker & McKenzie
Clifford Chance Law OfficeFreshfields Bruckhaus Deringer
Herbert Smith Freehills

Hogan Lovells
Linklaters
Sonderhoff&Einsel Law and Patent Office
Squire Gaikokuho Kyodo Jigyo Horitsu Jimusho
TMI Associates
White & Case LLPKey Issues and Recommendations■ Recognition and approval as a foreign lawyer in Japan
Yearly status report: reasonable progress, pending enactment of the prospective changes in the law. In order tobecome registered as a gaiben in Japan, a foreign lawyer must have three years of professional experience in
his/her respective home law, of which two must have been obtained outside Japan. This rule is in stark contrast to
the rules governing bengoshi who are not required to have any post-qualification experience before being
recognised. The EBC believes that this practice is not only discriminatory, but also makes little sense, as foreign
lawyers are already recognised by their jurisdiction of qualification. If there is to be such a rule, what is importantis the experience in home jurisdiction law, not where it is practised. The procedure for admitting foreign lawyers
as gaiben also still imposes undue costs on foreign firms and individuals. A streamlined application form has, ingeneral, shortened the process, but the requirement for approvals from both the Ministry of Justice andcommittees at the Nichibenren and local bar associations inevitably gives rise to delays. After over 30 years ofoperation, the gaiben system is in need of a thorough overhaul. An overhaul of the system could resolve a numberof the current frustrations.
Recommendations:
The rule requiring a specific number of post-qualification years of experience should be abolished. At thevery least, experience in home jurisdiction law should be recognised regardless of where it has beenpractised.
Continuing focus is needed on accelerating the application procedure for gaiben registration to the greatest
extent possible.
An overhaul of the existing system should be undertaken to enable changes such as the registration of firms,
rather than individuals, which would do much to eliminate frustrations with the existing system.
■ Branches
Yearly status report: reasonable progress, pending enactment of the prospective changes in the law. Legislation
was finally passed in 2014, permitting a gaiben law firm to incorporate itself as a hojin, and thereby become
eligible to open more than one branch. However, the 2014 legislation did not permit gaiben and bengoshi together
to establish a hojin. The effect is to severely limit the usefulness of the new legislation.
Recommendation:
Amend the legislation to permit gaiben and bengoshi to establish a hojin together. Even better, abolish therestriction on branching, which is archaic and does not suit the needs of either domestic or international law
firms.
■ Limited liability
Yearly status report: no progress. The EBC continues to recommend the introduction of a limited liability
structure for lawyers in Japan, in line with the practice in many other countries, for the benefit not only of foreign
but also Japanese lawyers. For foreign lawyers, this could be achieved by permitting them to operate through abranch of their home entity, rather than as separate individuals.
Recommendation:

A limited liability structure should be made available in Japan for both foreign and domestic law firms, andforeign firms should be able to practise in Japan through branches of their international firms. This could beachieved by an overhaul of the existing gaiben system to permit foreign lawyers to operate in Japan throughbranches of their home entity.

Legal services
221

Mr.Karl Hahne
Chair, Retail & Wholesale Committee(President & Representative Director, Häfele Japan K.K.)
c/o Häfele Japan K.K.
14-17 Kami-shinano
Totsuka-ku, Yokoahama 244-0806
Phone 045-828-3117
Fax
045-828-3119

RETAIL &WHOLESALE
Introduction
The Japanese retail market remains one of the largest and most vibrant in the world. After many years during which thepresence of European retailers was more or less limited to the luxury sector, the last decade has seen the rapid
establishment of new European retailers both in fast fashion and home interiors. Their success clearly benefits Japanese
consumers by offering them greater choice, often better prices and, frequently, completely new products previously notavailable on the market. It also benefits the Japanese economy at large, by creating considerable employment andhelping to revitalise cities that were previously in decline. Japanese retailers and wholesalers themselves gain from thepresence of European competition as it provides incentives to further strengthen their global competitive edge.
With the implementation of the EU-Japan EPA, the market access for European products and services will improve.
Tariffs will be reduced. In most cases it will go down to zero already on the day of entry into force. The EBC is also
hoping for a more harmonisation of standards and regulations between the two economies. Where harmonisation isdifficult or requires time to implement mutual recogition of standards, approvals and test result shall be established to
improve the situations. The EBC would like to point out that the protection of the consumer will not be reduced as both
economies have robust systems in place to achieve this.
European wholesalers and retailers still face considerable barriers in the Japanese market that make it difficult to takeadvantage of global-scale logistics. This creates higher costs and therefore higher prices for Japanese consumers. The
Government of Japan still continues to insist on applying unique national rules and regulations to products that havealready met European standards. Japan’s reluctance to accept EN (European) and ISO standards or CE (conformité
européenne) markings delays the introduction of new products to the market and increases import costs. While sharing
the Government’s concerns regarding consumer protection, the EBC believes that European rules more than adequately
address these same concerns, ensuring safe and good-quality products. Mutual recognition of rules and regulations
therefore makes sense and would create a level playing field for all players. Just one example of the barriers
encountered by European retailers and wholesalers is the unique labelling rules, specified by Japan’s Consumer Affairs
Agency (CAA). Other examples include non-acceptance of non-SI units (International System of Units), importing
process for food contact products (UCP) regulated by Food Sanitation Law, and non-recognition of global standards andEuropean approvals. Furthermore, non-harmonised procedures for importing, certifying and labelling consumer
products are unnecessarily costly and complex.
The Japanese Electrical Appliance and Materials Safety Act, known as the Denan Law, is a further source of
unnecessary cost and complexity for retailers and wholesalers. The Ministry for Economy, Trade and Industry (METI)
lists various groups of products that fall within the scope of this Law. However, it is often difficult to decipher whether a
specific product is covered or not, resulting in uncertainty about test requirements. In addition, there has been a lack ofharmonisation in this field, and where the Japanese equivalent to the IEC (International Electrotechnical Commission)
standards is used, it is not always based on the most recently updated IEC standard.
Finally, the EBC is also concerned about Japan’s Antimonopoly Law, following an apparent relaxation of prohibited
vertical restraints with no safe harbour, and enforcement of the Subcontractor Law, without bright-line rules, against
retailers and wholesalers. As a result, application of the Law has become more unpredictable and non-transparent,
thereby increasing the difficulty of compliance. There is a real risk that this situation could be exploited and the market
manipulated, so we urge the Japan Fair Trade Commission (JFTC) to issue as soon as possible clear written guidance
that facilitates compliance
As stated above the EBC looks forward to the implementation of the EU-Japan EPA and believes this will further
reinvigorate the Japanese retail and wholesale sector to the benefit of the Japanese consumer.

22

EBC Retail & Wholesale Committee
Member Companies

Key Issues and Recommendations

ChanelElectrolux
Giorgio Armani Japan
Groupe SEB Japan
Häfele Japan
IKEA JapanLEGO JapanMETRO Cash & Carry Japan
Miele
Philip Morris Japan■ Prohibitive import, testing and certification procedures
Yearly status report: some progress. To the detriment of trade, the Government of Japan continues to insist on
applying unique national rules and regulations to many products that have already met European / international
standards. The EBC requests that the MHLW harmonises positive list for utensils, container and packaging(UCP) in the Food Sanitation Act with other countries.
Recommendations:
MHLW should make certain that the current draft positive list for food contact products is harmonised withother countries. It is furthermore of important that the list is also offered in English.
Japan should recognise EU related timber regulations as equivalent to the Clean Wood Act.
Japan should accept inclusion of common non-SI units on measuring devices when SI units are also used.
Japan should simplify its Denan Law, avoid introducing further unique Japanese requirements and makecertain that detailed information on standards and their application are readily available in English.
■ Labelling
Yearly status report: slight progress. The revised Household Goods Quality Labelling Act introduced some
improvements, however requirements remain too detailed and inflexible for retailers and labels too complex for
consumers.
Recommendation:The Labelling Act should be reformed to aid the consumer in understanding the product and to introduce
flexibility for the retailer.
■ Shoe quotas
Yearly status report: progress.With the implementation of the EPA, shoe quotas will be eliminated. In themeantime, management of such quotas is not transparent and allocations are not always awarded to real importersof shoes, leading to significant market distortions.
Recommendation:

Until the EPA enters into force, METI should monitor the system, reject applications from entities not
trading shoes, release their quotas, and implement stricter penalties for infringements.
■

Limitations on selling liquor via telecommunication channels
Yearly status report: no progress. The retail sale of liquor across prefectural borders via any telecommunication
channel (including the internet) is restricted. Furthermore, grandfathering old licences is unfair to new entrants.
Recommendations:Japan should abolish the telecommunication channel limitation within the liquor retail licence system.
Japan should stop the practice of grandfathering licences.

■

Competition law/Anti-trust legislation
Yearly status report: no progress. Japanese Competition Law includes recognition of “market power” with minor
shares in vertical restraint, and “superior bargaining power” irrespective of dependence, which differs from global
practice. The Subcontractor Law lacks bright-line rules, and “yellow card” infringement notices lack explanation.
Recommendations:Japanese Competition Law/Subcontractor Law should be harmonised with global practices.

The “yellow card” system, not transparent and lacks both a legal basis and bright-line rules, should be
abolished.

Retail & wholesale
223Mr. Hans-Peter Musahl
Chair, Tax Committee(Partner, Ernst & Young Tax Co.)
c/o Ernst & Young Tax Co.
Hibiya Mitsui Tower, Midtown Hibiya, 1-1-2 Yurakucho, Chiyoda-ku,
Tokyo 100-0006, Japan
Phone +81-90-9848-6525

TAX
Introduction
The EBC welcomes the Japanese Government’s continued efforts to increase Japan’s attractiveness to investors.
Reforms to date have reduced the overall effective corporate tax rate from 35.6% to 31% for large companies inmetropolitan areas and to 35% for SMEs. The Government plans to help restore the country’s finances through anincrease in the consumption tax rate from 8% to 10%. Japan still trails behind many European countries, including EU
Member States, in transitioning its tax profile from a focus on taxing income to a focus on taxing consumption.
Nevertheless, public statements made by Prime Minister Abe have indicated that Japan aims to take a lead amongst
global economies in contributing to growth and to reboot the economy to the greatest possible extent. Since none of its
policies to date involve significant curbs on expenditure, the growing deficit in the Government budget will at somepoint have to be made up from increased tax revenues. Consequently, the widening of the tax base that has occurred inrecent years is set to continue. Regrettably, despite specific policies such as the reduction in the corporate tax rate, theGovernment’s overall approach will inevitably have a negative impact on the attractiveness of Japan to potential
overseas investors.
This negative impact is reinforced by the Government’s increased focus on taxation of wealthy individuals and thosewith above average income, imposing inheritance, gift and income tax rates as high as 55% or more. The EBC
appreciates recent inheritance tax reforms that benefit short and mid-term residents. Also, the repeal of theextraterritorial inheritance and gift taxation of long-term residents is welcomed, which the EBC had asked to consider.
However, the Asian investment hubs of Hong Kong and Singapore will, overall, remain more attractive tax jurisdictions
for individuals, particularly for those wishing to reside long-term in the region.
Bilateral trade and investment between Europe and Japan benefits significantly from mutual elimination of double
taxation, as provided for in recent tax treaties between Japan and individual EU Member States and in the arbitration
provisions of the multilateral instrument developed under the OECD’s Base Erosion and Profit Sharing (BEPS) Action
Plan. However, Japan’s treaties with the majority of Member States (i.e. Bulgaria, Czech Republic, Finland, Hungary,
Ireland, Italy, Lithuania, Luxembourg, Poland Portugal, Romania and Slovakia) still lack exemptions in respect of areas
beyond the scope of the multilateral instrument, such as elimination of withholding tax on dividends, royalties andinterest. No treaties have been agreed with Greece, Croatia, Cyprus and Malta.
In summary, while the EBC considers that some of the tax reforms undertaken so far by the Japanese Government areheading in the right direction towards encouraging and supporting inward investment, others are likely to work directlyagainst those goals. Consequently, the growth anticipated by the Government may be difficult to achieve. This situation
will persist as long as the significant fiscal deficit remains to be addressed and tax revenues are used as the supposedsolution to this problem.

24

EBC Tax Committee
Member Companies

Key Issues and Recommendations

Bayer
Boehringer Ingelheim Japan
Deloitte Tohmatsu Tax
Ernst & Young Tax
Infineon Technologies Japan
KPMG Tax
Mercedes-Benz Japan
Mitsubishi Fuso Truck and Bus
PwC Tax Japan
Sanofi
Siemens Japan■ Tax policies to promote innovation
Yearly status report: little progress. Innovation-intensive industries are a key driver of growth and employment.
R&D and innovation promotion tax incentives are widely recognised as an effective instrument for encouraging
R&D activities and related (foreign) investments. While Japanese rules give some tax consideration to R&D andinnovation expenses incurred in Japan, the current tax credit is generally too restrictive in scope (both in terms ofaccess and benefit) to be a deciding factor in a foreign company’s choice between potential R&D locations.
Having said that, the decision to award higher credit rates to increased R&D expenses or newly started activities iswelcome and foreign companies reviewing their R&D policy in Japan could benefit from this, provided that R&D
cost are not borne centrally by the headquarter but locally by a Japanese entity. In general, however, Japan stillneeds to revise its current R&D tax policy if it wishes to maintain and improve its international attractiveness as alocation for R&D activities. In this respect, it should be noted that many other countries have in recent years
introduced some form of “back-end” Intellectual Property (IP) regime that applies to income earned after thecreation and exploitation of IP. Furthermore, the current R&D credit regime is not available to companies that are
not locally expensing R&D cost or are loss-making, and so is of little benefit to many foreign and start-up
companies.
Recommendation:

Revise the current R&D tax policy to maintain and improve Japan’s international attractiveness as a location
for R&D activities, paying particular attention to the specific position of foreign and start-up companies.
■

Directors’ compensation
Yearly status report: new issue. Recent tax reform has provided some degree of relief from unfavourable
directors’ compensation tax rules that limit the deductibility of performance-based directors’ compensation.
However, in practice the relief only applies to listed companies issuing securities reports. In particular, small andmedium-sized enterprises and foreign affiliated companies are unable to take advantage of the reforms, with theresult that these companies have to pay performance-based directors’ compensation from their after-tax income.
Recommendation:
Remove barriers to relief for small and medium-sized companies, as well as foreign affiliated companies, toenable the deduction of reasonable performance-based directors’ compensation.

■ Extended tax return filing periods
Yearly status report: some progress. Japanese rules require companies and individuals to file tax returns no later
than two to three months after the end of the calendar or fiscal year. The extremely short deadlines in Japan
compromise the quality of tax filings and the working and family lives of those preparing the returns, whiledriving up expenditure on overtime. Not surprisingly, international comparison of the cost incurred for tax
compliance shows that Japan has the highest level among developed countries. The 2017 tax reform introduced
measures intended to provide relief to corporates but not to individuals. However even for corporates measuresthis has proven impractical and have yet to be adopted by many Japanese taxpayers.
Recommendation:
Extension of tax return filing periods for individual income taxes should be granted until May 30 as in other
European countries. Where professional service providers are involved, a further extension by six months
should be allowed. Also, the law should allow individuals to apply for extensions in exceptional cases.

Tax

25

■

Income and Inheritance Taxes
Yearly status report: progress with drawbacks for long-term residents. With top rates of more than 55%, Japan’s
income, inheritance and gift taxes are the highest in Asia and, indeed, in the world. Foreign nationals are exempt
from Gift and Inheritance Tax for the first ten years of their stay in Japan. However, anyone who becomes a longterm resident is fully subject to Gift and Inheritance Tax. Moreover, Japan’s top inheritance tax rate applies toinheritance between close family members, and starts at much lower thresholds and allowances than in othercountries. Japan’s Gift and Inheritance Tax is negatively impacting the ability to retain long-term residents,
potentially triggering a loss in foreign intellectual capital and foreign investment.
Recommendation:

Align the categories of foreign nationals who are subject to Gift and Inheritance Tax with the categories offoreign nationals who are subject to exit tax, so that only foreign nationals who can reside permanently inJapan are subject to taxation on global assets.

■

Accountability
Yearly status report: no progress. The overall lack of transparency and systematic accountability in the domestic
tax regime continues to impede the development of business in Japan.
Recommendations:
The tax authorities in Japan should be obliged to accept and process applications for tax rulings, and tax law
should enshrine the right to request and obtain tax rulings. The system should be more user-friendly.
Consider the merits of introducing a system offering Horizontal Monitoring, Risk Rating and Senior
Accounting Officers, which have each helped to improve efficiency in the UK and The Netherlands.
Transparency would be enhanced, if the tax authorities allowed for communication in English.

■ Tax treaties
Yearly status report: progress. Japan recently concluded new tax treaties respectively tax treaties in principle with
Spain, Austria, Denmark, Estonia and Latvia which will come into force soon. The EBC welcomes treaties that
include the exemption of withholding tax on royalties and qualified dividends and interest. However, its treaties
with 12 other EU Member States still need to be renegotiated and no treaties have been concluded with four
countries, among them Greece and Croatia. Furthermore, employees’ contributions to social security systems
within the EU and Japan should be treated as tax deductible on a mutual basis.
Recommendations:
Any new or revised treaty should address the issue of withholding tax on royalties and qualified dividends
and interest, and contain arbitration provisions if not already covered by the multilateral instrument.
Treaties should be agreed with those countries having no agreement with Japan at present.
■ Centralise local tax
Yearly status report: new issue. Taxpayers who operate throughout Japan have to file local tax returns innumerous municipalities and have to make dozens, sometimes hundreds of tax payments three times a year, andto apply for tax refunds where applicable.
Recommendation:

The EBC recommends to centralise the administration of local taxes by the national Government or, as
similar to Consumption Tax, centralise tax payment by the local Government where the head office of thetax payer is located.
■

Abolishment of stamp tax
Yearly status report: new issue. Stamp duties as low as 200 JPY require significant additional administrative
efforts for internal processes and payment. The cost of administration is not in proportion to the tax revenues. An
abolition of the tax is also requested by numerous domestic business associations and publicly debated in the tax
reform discussion.
Recommendation:

The Government should consider to abolish the imposition of stamp tax.

26

Financial Services
Asset management
Banking
InsuranceMr. Nicolas Sauvage
Chair, Asset Management Committee(Representative Director, Amundi Japan Ltd.)
c/oAmundi Japan Ltd.
Hibiya Dai Bldg. 20F, 1-2-2 Uchisaiwai-Cho
Chiyoda-ku, Tokyo 100-0011
Phone 03-3593-5900
Fax
03-3593-5932

ASSET MANAGEMENT
Introduction
In the middle of 2018, the Japanese press, and not only the specialized one, reported two pieces of “shocking” news forthe asset management industry:
The Bank of Japan, compiling statistics about the financial savings of Japanese households, recognised that they had
overestimated ownership of funds by Japanese retail investors by almost 1/3, or 33 trillion yen (250 billion euros)! The
reason for this over-estimation is that some large AUM (Asset Under Management) invested in private placement funds
by Japanese financial institution(s) were counted as retail AUM for many years.
Indeed, this is a shock as it further confirms the low penetration rate of funds in Japan, and the urgency to build
financial assets for households to prepare for their future. Share of funds in Japanese households’ financial savings
remain below 5%, while in Europe, numbers vary between 10 to 20% according to each country, and this is well above
30% in the US. This is a problem not only for the individual households but also for the Government and society as awhole as more people will be dependent on the Government to provide for them to a higher degree after they stop
working. It will also mean that there will be a lower supply of capital available for companies from where to fundgrowth.
The Japanese regulator, the FSA (Financial Services Agency), also published a research paper regarding the total returnof retail investors, showing that 46% of retail investors owning funds have negative performances as of the end of
March 2018. If the holding period was long enough, in the market environment of the past few years, most holders
should be in positive territory. Such high percentage suggests that they owned the products only for a short period oftime, suggesting that some “churning” remains a practice at distributors. Behind these provocative headlines, the key
message is that long-term investing, including through regular saving schemes, has a much higher probability ofgenerating positive returns and therefore develop confidence in fund investing.
On a more positive note, 2018 has seen some positive developments in the field of stewardship and corporate
governance. The corporate governance code was revised this year (the stewardship code was revised the previous year)
and the interest for ESG (Environment, Social and Governance) and SDGs (Sustainable Development Goal) continue togrow.
Europe is well advanced in the ESG field and EBC members can certainly contribute to such developments in Japan.

28

EBC Asset Management Committee
Member Companies
Aberdeen Standard Investments
AEGON Sony Life Insurance
Allianz Global Investors Japan
Amundi Japan
AXA Investment Managers Japan
Barclays Funds and Advisory Japan
BNP Paribas Asset Management Japan
Deutsche Asset Management (Japan)
Eastspring Investments

HSBC Global Asset Management (Japan)
Lyxor Asset Management Japan
NN Investment Partners (Japan)
Pictet Asset Management (Japan)
PricewaterhouseCoopers Aarata
Robeco Japan
Schroeder Investment Management (Japan)
UBS Global Asset Management (Japan)

Key Issues and Recommendations■ Global competitiveness of Tokyo as an operational platform
Yearly status report: progress. The EBC Asset Management Committee has been active in 2018 on topics related
to our past recommendations for the improvement of the operational platform for the asset management industry
in Japan.
Several meetings with trust bank representatives were organised to discuss about the limitations of the operational
platform and more specifically about the practice in Japan for “dual NAV calculation”.
The EBC Asset Management Committee submitted its comment when JITA called for public comments in June2018 on this issue and this is available on JITA website.
JITA has published in September 2018 the results of the Governance Working Group on this issue and EBC AssetManagement Committee welcomes that fact that a new study working group will be established to review thepractical implications with a specific focus on studying European market practices such as in Luxembourg.
Recommendations:Continuous encouragement by authorities and industry associations to enable those working groups togenerate recommendations to be implemented.
In addition to the “Dual NAV calculation” topic, Japan should also investigate how to remove hurdles tomake fund mergers possible. This would help reducing the number of small funds in a constructive manner,
as well as simplifying the offering to retail investors.
■ Encouraging Japanese households to invest for the long-term
Yearly status report: no progress. A key challenge for Japanese society is building financial assets with a longterm perspective, in particular, to prepare for financial needs after retirement. Anecdotal evidence suggests that amajor obstacle to household investment in financial products is lack of financial education, resulting in confusion.
Independent financial advice provided by qualified professionals with a fiduciary duty would alleviate this issue.
However Japanese households have little or no access to such services. While platforms such as NISA (Nippon
Individual Savings Account), Junior NISA and DC (Defined Contribution) are proving more popular, all still
suffer from low annual ceilings with respect to tax savings. Moreover, a significant part of money allocated in the
DC schemes remain in cash or cash equivalent.
Recommendations:
Increase the maximum yen amounts that can be saved tax free in NISA, Junior NISA and DC platforms,
especially if those amounts are funded by conversion of deposits.
Change the default option for DC schemes to long-term financial investment products

The Japanese Government should foster and publicize provision of IFA (Independent Financial Adviser)
services – with services provided in-person or online – to help boost household investments.

Asset management29

Mr. Christopher Dark
Chair, Banking Committee(Managing Director, Morgan Stanley Japan Holdings, Co., Ltd.)
c/o Morgan Stanley Japan Holdings, Co., Ltd.
Otemachi Financial City South Tower
1-9-7 Otemachi, Chiyoda-ku, Tokyo 100-8109
Phone
03-6836-5000

BANKING
Introduction
Over the past 12 months, the Nikkei 225 reached its highest level since Japan’s ‘bubble’ years, first-half outbound
M&A volume tripled year-on-year for 2018, and Governor Koike released a plan to position Tokyo as a leading Global
Financial City. Initiatives to make Japan more attractive for international investors are starting to bear fruit as evidenced
by rising ROEs (Return On Equity) for major Japanese corporates. With encouraging economic figures and theupcoming Olympics set to shine a global spotlight on Tokyo, Japan’s banking sector is poised to grow stronger. The
EBC Banking Committee welcomes the recent regulatory changes and infrastructure enhancements; these represent
positive steps to stimulate growth for financial institutions and the overall economy. However, there are still several
important areas that make Japan a challenging market (e.g. labour market conditions, the speed of change, and the paceof internationalisation). European and other non-Japanese firms continue to contribute positively to the market, andstand ready to help Japan grow.
Tokyo’s standing as a financial hub consistently ranks behind London, New York, Hong Kong, and Singapore in the
Z/Yen Group’s Global Financial Centres Index. In September, Shanghai overtook Tokyo as Japan’s capital fell to 6th
globally and 4th in Asia. To reignite the push for Tokyo to be a Global Financial City, the Tokyo Metropolitan
Government (TMG) published a set of steps/goals to serve as its vision for structural reforms. This was borne out of an
Advisory Panel convened by Governor Koike and comprised of representatives from the financial community – both
Japanese and non-Japanese. The EBC strongly supports the goals and mission of the Panel, Governor Koike and the
TMG. The EBC encourages the Government to support this initiative with demonstrable and meaningful action.
The EBC is heartened by positive progress to maintain a healthy economy, and make Japan more attractive to investors.
The past introduction and subsequent revision of the Stewardship and Corporate Governance codes play an importantrole in this process. It is clear that the focus on ROE has yielded positive results with significant increases in recent
years. Many sectors have also seen ROE growth exceeding global peers. Important steps to open Japan to foreign
investors have begun to take shape including a rising number of companies that communicate with shareholders in
English, and those with a dedicated Investor Relations department. However, there are still hurdles to overcome.
The EBC welcomes the continued push to reduce cross-shareholdings amongst Japanese corporations and is encouragedby the sustained emphasis on the issue in the TSE’s (Tokyo Stock Exchange) revised corporate governance code. The
level of cross-shareholdings has often been seen as a key factor contributing to Japanese corporates’ weaker ROEs
versus those from other major countries, as friendly shareholders have not pressured managements to make necessarychanges. Continuing to reduce cross-shareholdings is critical to the continuing development of a strong corporate
governance framework.
As the EBC has stated in the past, fair disclosure is key to ensuring fair markets and that company-specific information
is properly distributed. In Japan, there has been a history of non-public information being disclosed to certain securities
companies, or disseminated through the media before an official public announcement. The EBC welcomes theintroduction of the Fair Disclosure Rules this past Spring and urges proper enforcement by the Financial Services
Agency (FSA) and the TSE.
The EBC is appreciative of the progress made in liberalising firewall constraints within the same financial group forcontrol and settlements functions in recent years, but there is still a prohibition on information sharing for sales staff.
The EBC continues to believe that this is unnecessary and that principle-based conflict management with appropriate
inspection/supervision practices should suffice including allowing sales staff to act as a ‘first line of defence’ and tocontribute to positive regulatory outcomes. This may also encourage firms to use Tokyo as its Asia base for specificbusiness lines.
The EBC Banking Committee stands ready to work with the Government, and other foreign industry associations, toensure a healthy and prosperous international banking market.

30

EBC Banking Committee
Member Companies
BNP Paribas Securities
Commerzbank
Credit Agricole Corporate & Investment BankING Bank
IntesaSanpaolo
Morgan Stanley Japan Holdings
SWIFT

Key Issues and Recommendations■ Tokyo as a financial centre
Yearly status report: progress. The EBC welcomes the renewed push by Governor Koike to make Tokyo a
Global Financial City. The transparent Advisory Committee process has resulted in several actionable
recommendations, but, as the decline to number 6 in the recent Global Financial Centres Index shows, significant
work remains to be done. Japan’s deep capital pools, diverse array of industries, and investable assets make it apromising candidate to become Asia’s financial hub. However, since the November 2017 report, there have been
few announcements in English: this restricts foreign investors’ ability to fully comprehend Tokyo’s commitment
to the initiative. While the EBC appreciates the interest from the TMG it still believes that the lack of“internationalisation”– including English levels trailing major competitors, restrictive labour regulations, and a“savings” as opposed to an “investment and asset building” mind-set - will hold the city back.
To maintain a healthy and competitive banking sector, Japan must be an attractive destination for both employers
and employees (e.g. inheritance tax). The current system may disincentivise skilled talent from staying in Japan.
Restrictive labour laws can also drive firms to build out overseas offices instead of increasing staff in Japan. A
more flexible labour market, including appropriate white collar exemptions, will help grow Japan’s banking
sector. With the proper reforms, Tokyo’s strength as a financial hub will support a healthy Japanese economy.
Recommendations:
The TMG should execute the steps recommended by the Committee and outlined in the ‘Vision’ paper. The
TMG should also release more English updates. For the initiative to be a success, it is crucial to retaininterest/momentum from overseas investors. The Government should support this initiative withdemonstrable and meaningful actions and, as Governor Koike said, avoid “No Action Talk Only”. The EBC
encourages cooperation with the national government, to achieve these goals.
Introduce further flexibility in the labour market to encourage foreign firms to expand their Tokyo offices.
The inability to adjust operations in-line with fast-changing markets can make firms hesitant to hire in Japan.
To attract global talent, it is advisable that Japan’s individual tax schemes align with other financial centres.
Without a skilled workforce, Japan will not be able to compete globally.

Encourage innovation in, and adoption of, technology that aligns with global standards, and allows Tokyo tocompete with other global financial centres; this includes attracting global industry events and conferences.
The EBC is encouraged by the focus on FinTech by the Advisory Panel, and in the TMG’s ‘Vision’ paper,and welcomes the growth of this sector in Tokyo.
■ Fair disclosure regime
Yearly status report: progress. Fair disclosure ensures that company-specific information is appropriately
distributed to all market participants without bias towards one securities company or media source over another.
The new “Fair Disclosure Rules” went into effect this spring. These rules are essential to maintaining a free andtransparent market. As in the past, the EBC believes that rigorous implementation is needed to stop information
being leaked to select parties ahead of its official release.
Recommendation:

The Japanese authorities should closely monitor progress and effectiveness of these rules. Ensuring propercompliance will give investors confidence in the markets and the effectiveness of the Japanese authorities.
■

Information sharing
Yearly status report: no progress. While the firewall between different entities within the same financial grouphas been liberalised for control and settlements functions in recent years, there is still a ban on information
sharing for sales staff. The EBC believes this is unnecessary and that a principles-based conflict management
regime combined with appropriate inspection/supervision practices should suffice. Taking down the firewall will
also allow sales staff to act as a ‘first line of defence’. This may encourage firms to leverage Tokyo for certain
business lines, and thus advance its campaign to become a Global Financial City.
Recommendation:
Remove the ban on information sharing within a financial group.

Banking2

31

Mr. Kazutaka Matsuda
Chair, Insurance Committee(Executive Officer, General Counsel,
Legal & Compliance, AXA Life Insurance Co., Ltd.)
c/o AXA Life Insurance Co., Ltd.
NBF Platinum Tower, 1-17-3 Shirokane
Minato-ku, Tokyo 108-8020
Phone 03-6737-7734; Fax 03-6737-5874

INSURANCE
Introduction
In recent years, the Japanese authorities have been gradually harmonising laws and regulations relating to the domestic
insurance market with global standards. However, foreign insurance company affiliates in Japan still encounter
obstacles that limit efficient development of their businesses. Examples include reserving and solvency regulations thatare inconsistent with international norms; the improving, but still lengthy product approval process; the Government’s
continuing majority ownership of Japan Post even beyond its privatisation; and the separate regulatory framework
applied to mutual aid cooperatives (kyosai). Future growth of the insurance market in Japan will come from the ageingof the population, which will drive a need for products dealing with extended retirement, changes to family structure
and rising demand for healthcare. The EBC urges the FSA (Financial Services Agency) to facilitate a truly open andcompetitive insurance market capable of meeting consumers’ needs.
In the development of Insurance Capital Standard (ICS) Version 1.0 for extended field testing and the years of fieldtesting preceding it, the IAIS has had appreciated both commonalities and differences in solvency regimes across thejurisdictions There are many practical implementation issues to consider for the ICS to be implemented as a Prescribed
Capital Requirement (PCR). The International Association of Insurance Supervisors (IAIS) is aware that stakeholders
have been calling for greater clarity on what the implementation of the ICS, following the completion of field testing in
2019, will mean in practice.
The IAIS has agreed that implementation of ICS Version 2.0 will be conducted in two phases. The first phase is“monitoring period”, during which ICS Version 2.0 will be used for confidential reporting to group-wide supervisorsand discussion in supervisory colleges, but not be used as a PCR triggering supervisory action. After five year
monitoring period, the second phase will start for “implementation of the ICS as a group-wide PCR”. They also proposethat national insurance regulatory bodies in each country increase information sharing with other regulators acrossborders.
In line with the changes of international regulatory environment, the EBC believes that as the regulator of Japan’s
financial market, the FSA should adopt the appropriate proposed policy measures and additionally shift to a post-funded
scheme for protecting policy holders.
While the FSA has made efforts to speed up the approval process through both a more efficient procedure and increased
staffing, the EBC still believes that a “file-and-use” system should be introduced for quicker approval of standard
products. This would free up resources for the FSA to focus its attention on more advanced products.
In parallel, the EBC believes that the FSA should accelerate de-regulation of distribution practices based on a risk-based
approach, to cater to the growing demand from consumers for better access to more convenient distribution channels
targeting their individual needs. This would also benefit the domestic financial services industry, Japanese consumers
and Japan’s ability to retain foreign investment.
As for Japan Post, even with the IPO (Initial Public Offering) implemented, the Government remains the majority
shareholder in Japan Post, and so the public continues to believe that it guarantees the various Japan Post entities. The
EBC considers this gives Japan Post Insurance (JPI) an unfair competitive advantage, which JPI is exploiting in its
intention to expand its product portfolio. The EBC believes the Government ownership in Japan Post has a negative
impact on the private sector.

32

EBC Insurance Committee
Member Companies
AXA Life
Cardif, BNP Paribas
Credit Agricole Life
Deloitte Touche Tohmatsu
Manulife Life
NN LifeSwiss ReKey Issues and Recommendations■ Harmonisation with global solvency and other regulatory standards
Yearly status report: some progress. The EBC appreciates the FSA’s willingness to take a leadership role amonginternational regulators. However, further alignment of local regulatory requirements with the approach ofSolvency II is crucial for European insurers in Japan as it would enable them to use the same methodologies in all
territories and better develop group-wide risk management strategies. Such a move would both encourage andreward improved risk management within insurance companies – a goal shared by the FSA and insurers – andhopefully reduce the overall regulatory reporting burden on insurers conducting business in multiple jurisdictions.
The EBC is in a position to provide the relevant information to the FSA on these issues.
Recommendations:Japan should accelerate reforms to achieve convergence between Japanese and global solvency standards.
Japan should consider the approval process of an internal model for risk calculation on new solvency
regulation to evaluate the risk characteristics of each insurer correctly.

The market-based Solvency Margin calculation methodology should be further aligned with Solvency II.

In adopting FSB/IAIS-proposed policy measures for the Japanese market, the Government should consider
the burden that risk management reporting and capital adequacy requirements could impose on businesses
and minimise any conflicting cross-border jurisdictional requirements.
Japan should reform the Policyholder Protection Corporation when introducing new solvency regulation.
■ Product approvals
Yearly status report: some progress. The advantages of simplicity in the approval process have been articulated in
our previous submissions. Incremental progress has been made however we continue to seek real enhancement in
the form of a file and use system. Not only does it enhance efficiency, but it also enables the FSA to allocate
resources to complex products that require more attention.
Moreover, real product innovation requires insurers to offer truly new proposition to customers. At this dynamic
era where our customers' needs are constantly changing due to lifestyles, ageing and technology, the insurance
industry needs to catch up in offering better coverage in new diseases/illnesses as well as play a more active rolein improving our customers' health. These initiatives often require global insights without necessarily locally
proven experience. The current FSA product approval philosophy is to focus on proven local data and experience,
this significantly hampers product innovation progress, this is not in line with practices by overseas regulators,
ultimately disadvantaging Japanese consumers. The EBC believes this recommendation to broaden thephilosophy does not only benefit foreign insurers, but also Japanese insurers.
Recommendations:
The FSA should introduce a system allowing insurers to register products, instead of having to obtain preapproval. The FSA could retain the authority to conduct post-checks and issue withdrawal orders.

The FSA should relax the requirement for new innovation to include global expertise and experience.
■ Fair competition in providing group insurance program to banks
Yearly status report: some progress. The EBC continues to be concerned by the strong influence of Japanese
insurers over Japanese banks as their major shareholders. The EBC appreciates the monitoring actions taken by
the FSA on this topic, wishes for the FSA to continue its attention as the concerned influence still exists. The
EBC firmly believes that the competition in this area should be based on the quality of products and services
rather than on the shareholding relationship which is irrelevant to the interest of Japanese consumers.
Recommendation:

The FSA should carefully ensure that competition is based on fair comparison of offers, and is not biased by
pre-existing shareholding relationships.
■ Liberalisation of sales through bank channel
Yearly status report: some progress. There are continued restrictions on the sale of insurance through bankchannel, which should be liberalised in the interest of Japanese consumers. Our concerns include the restriction
related to lending relationships as well as the use of personal financial data held by banks.

Insurance
2

33

Recommendations:
The FSA should allow banks to sell insurance to employees of companies where banks have a lending
relationship, as the current restriction deemed excessive and redundant.

The FSA should allow banks to use certain personal financial information of their existing customers inmarketing insurance products, as it could enhance the suitability of offers. The EBC would like to point out
that this is already allowed in the asset management sector products.

■ Digitalisation/Personal data
Yearly status report: new issue. The rapid advancement of technologies is clearly changing customers’
expectations on insurance. Today’s customers expect insurance services to be available real-time, on-demand,
contextual and personalised. The EBC believes that both customers and the industry would benefit by further
digitalisation and the proper use of personal data in rendering our services. Non-financial, e-commerce platform
players are gaining significant powers due to their big customer data, and already entering into financial services
leveraging such powers. The incumbent industry players should not be put at a structural disadvantage simply
because they are under the traditional financial industry regulations.
Recommendations:
The Government should accelerate the spread and usage of My Number for private sector services.

The FSA should continue to explore a more transversal regulatory approach to financial services based on
the types of transactions and services, and not on the category of providers, in order to make a level playing
field for both incumbents and new entrants.
■ Distribution practices
Yearly status report: some progress. Insurance sales by an incorporated insurance agency to members of its
parent and affiliated companies are restricted to so-called “third sector” products (“koseiin-kisei”) The EBC
considers, however, that the current rule could be a barrier for new entrants and may not be beneficial to Japanese
consumers, unbalancing with the potential risk of mis-selling. Furthermore, the EBC recognizes the FSA
encourages all insurers including insurance agency to conduct the fiduciary duties, which should be the right
direction for this element.
Recommendations:
Taking into account emerging new technology and evolving insurance distribution, the FSA should review
the related regulations, and present a roadmap for further deregulation for the benefit of Japanese consumers.
When looking into distribution practices, the FSA should put more emphasis on enabling the customer tochoose from a wider product portfolio.
■ Japan Post reform
Yearly status report: some progress. The Government remains the majority shareholder in Japan Post, and so the
public continues to believe that it guarantees the various Japan Post entities. The EBC believes the Government
ownership in Japan Post has a negative impact on the private sector.
Recommendations:
Until 100% of Japan Post’s shares are held privately, JPI’s product portfolio should not expand and its issue
limit should be capped at the current level. The Japanese Government should ensure a level playing field.

The Government should publish a clearer road map on how it intends to sell its shares.

The Government should adhere to its commitments under the WTO GATS.
■ KyosaiYearly status report: no progress. Currently kyosai are not subject to Japan’s Insurance Business Law. Instead,different ministries regulate the various kyosai depending on the sector in which the kyosai is active.
Recommendations:
Kyosai should be brought under FSA supervision, be covered by the Insurance Business Law, and not beallowed to expand their businesses until such provisions are in place.

The membership of kyosai should be further clarified and restricted, as originally intended, to a well-definedgroup, such as a certain profession.

34
3

Transportation &Communications
Airlines
Railways
Telecommunications carriers
Telecommunications equipment
Logistics & freightMr. Donald Bunkenburg
Chair, Airlines Committee(General Manager for Japan, Lufthansa German Airlines)
c/o Lufthansa German Airlines
3-1-13 Shibakoen, Minato-ku, Tokyo 105-0011
Phone 03-5402-5201
Fax
03-5402-5209

AIRLINES
Introduction
The volume of inbound air travel to Japan continued to grow in 2018. Working with airline partners and offices of theJapan National Tourist Organization (JNTO) around the world continue to be successful promoting tourist travel toJapan. In addition, investments continue to be made within Japan to improve infrastructure in order to ease access toregions beyond the large metro areas. The EBC supports these developments and the resulting steady increase in tourist
demand from Europe. It also supports the Government’s goal of reaching 40 million international inbound travellers by
2020.
Furthermore, demand for outbound travel from Japan to Europe increased in 2018 particularly on the touristic side.
Airline seat capacity, continued to expand in 2018. Both European and Japanese airlines added frequencies anddeployed larger aircraft types on existing routes to increase capacity. However, if Japan is to achieve its targets, the total
number of seats will need to continue to increase. An increase in the number of seats becomes even more important as
outbound travel from Japan continues to increase. Capacities will also need to be ramped up for the Olympics in2020.Business travel also continues to grow, with a forecast for further steady growth, reflecting an increase in overall
travel in preparation for the Tokyo 2020 Olympics, and the recent conclusion of the EPA between Japan and the EU.
The EBC urges the Government to continue to support the promotion of outbound travel to Europe and appreciates theinitiative to subsidise passport costs for young people, to encourage them to travel. Stronger demand for outbound travelfrom Japan to Europe will benefit domestic businesses, including travel agencies and tour operators in Japan that earncommission on sales, since their commission for European destinations tends to be higher than for other destinations.
Airport fees, particularly in Tokyo continue to be high in comparison to regional competitors in Asia which is also an
issue when airlines evaluate expansion. Higher fees were recently introduced for Haneda Airport (HND). The recent
agreement concluded between IATA (International Air Transport Association) and Narita Airport (NRT) is satisfactoryin that fees remain status quo, but there continues to be unusual charges such as a parking fee structure which does notconform to international norms. The EBC recommends refraining from any increase in current landing fees, navigation
charges, airport terminal rent, airport terminal common usage fees, and parking fees. In addition, the cost of thecontinued improvement of security needs to continue to be borne by airport operators and government, and not byairlines.
The EBC has continued concerns about the implementation of the Tourism Tax. The collection process burdens airlines.
In addition, there is no transparency as to the usage of the resulting funds. EBC advocates the use of the funds to benefit
transportation infrastructure. In addition, the current data requirements set up by the Japanese authorities and how todelivery the data are unclear and European airlines may not be in the position to deliver this requested data due to strict
EU data protection law. This needs to be urgently reviewed.
The EBC continues to support the further opening of HND, so long as this is based on fair and transparent distributionof additional slots. The EBC also encourages the Japanese Government to expand the infrastructure for catering andcargo facilities at HND. The current lack of proper infrastructure creates logistical impediments, resulting in higher
costs for operating airlines. Moreover, the EBC requests the Japanese Government to further clarify the application of
the so-called Shibari rule (the unofficial requirement for airlines to remain at NRT despite the expansion of flights at
HND). This undermines the ability of European airlines to operate efficiently to and from Tokyo
European airlines have taken numerous measures to lessen their impact on the environment, including the purchase of
new fuel- and noise-efficient aircraft, more efficient navigation technology, and bio-fuel testing. It follows that the EBC
fully supports the opening of new approach and departure patterns at HND in order to reduce fuel consumption andincrease cost efficiency. In line with this, the EBC recommends abolishing the early “gear down” policy at NRT, which
unnecessarily increases not only fuel usage, but also noise for local residents.

36

EBC Airlines Committee
Member Companies
Alitalia - Compagnia Aerea Italiana
Finnair
Lufthansa
Scandinavian Airlines System
Swiss International Air Lines

Key Issues and Recommendations■ Revitalisation of outbound tourism
Yearly status report: good progress. The Government continues to allocate substantial funds to promote Japan asa tourist destination. However, the EBC believes the expected demand for inbound travel, including for the 2020
Tokyo Olympics, cannot be sustainably met if outbound tourism is not also encouraged.
Recommendations:
The Japanese Government should continue to promote “exploring the world” initiatives with PR campaigns
and should work together with tour operators and travel agencies with a focus on Europe, which yields themhigher commissions.
 The Government should continue its subsidisation of passport costs for young people in order to encourage
travel abroad.
■ High costs at Japanese airports and new Tourism Tax proposal
Yearly status report: some progress. Operating costs at Japanese airports continue to be high in comparison
similar airports. While demand for outbound travel to Europe is strong, it is the commercial viability of flightsthat determines the addition of capacity. Recent negotiations with NRT held the line on prices. Added to such costissues, the Government continues to require airlines to file published fares and surcharges for approval prior tosale – a time-consuming and costly exercise not required in other major markets.
Recommendations: The EBC recommends that all airport fees remain stable. This will encourage airlines to maintain and growcapacity and frequencies, which will enable growth in traffic to and from Japan. Current airport fees are too
high, particularly in comparison with other airports in the region
 The decision by the Japanese Government to reduce specific fees at domestic airports in Japan to further
encourage travel should be used as a template to lower fees at international airports.
The EBC urges the Government to reconsider the value to consumers of insisting that airlines file publishedfares and surcharges for approval prior to sale.
The EBC was against the implementation of the new Tourism Promotion Tax as it burdens the airlines tocollect it and raises costs for the consumers. In the implementation phase, the EBC requests clarification ofdata requirements which may be in conflict with EU data protection laws and prohibit EU airlines fromdelivering it. Also needed is a transparency of usage for the collected revene.
■

Airport infrastructure
Yearly status report: limited progress. The EBC encourages the continued opening up of HND airport slots. In
addition, improved “on or near airport” facilities, including for catering and cargo are needed. We welcome theopening of the new air corridor at HND with its positive business and environmental impacts.
Recommendations:
HND should be fully opened up to all international traffic, including flights to and from Europe, on a nondiscriminatory basis.
More space for catering and cargo suppliers should be allocated at HND, in order to increase efficiency andreduce costs for operators.
Additional car park facilities should be added at HND to alleviate waiting times for parking spaces. This
would improve quick access to the airport.

Numbers of immigration staff should be increased at all international airports as waiting times are high.
The “early landing gear down” policy at NRT should be re-evaluated in consultation with local communities,
on environmental as well as cost grounds, as it results in higher fuel consumption and increases noise.

The Government should implement the opening of the new air corridor at HND as announced.

Airlines37

Mr. Shigetoshi Kawahara
Corporate Adviser
c/o European Business Council in Japan
Sanbancho POULA Bldg. 2F.
6-7 Sanbancho, Chiyoda-ku, Tokyo 102-0075
Phone 03-3263-6222
Fax
03-3263-6223

RAILWAYS
Introduction
Japan has long benefitted from an extensive railway network, connecting Kyushu in the south with Hokkaido in thenorth. The connection between these two islands, separated by the main island of Honshu, was enhanced by theextension of the Tohoku Shinkansen to join the Hokkaido Shinkansen. The Japanese railway sector has always been andcontinues to be dominated by domestic suppliers. Relatively few foreign players are present, a situation that is at its
most extreme in the rolling stock market, in which none of the major foreign players has any significant activities.
Nevertheless, Japan represents a large market that would benefit enormously from the technological expertise andinternational competitiveness that European manufacturers and service providers offer.
The EBC appreciates the work of both the European Commission and Japanese ministries in concluding the EU-Japan
EPA, both in terms of the technical work in harmonising standards and test methods, and in recognising the overseas
approvals, but also regarding the expansion of local entities that will be covered by the regulations on public
procurement. Not to forget is of course also the removal of the Operation Safety Clause (OSC). It is however important
to state that the success of the agreement will depend on the actual result of its implementation. So the EBC takes for
granted that the OSC will be implemented as stated in EPA within one (1) year after the entry into force of the EPA.
Furthermore, the Ministry of Land, Infrastructure, Transport and Tourism) shall support and make certain that cities dotake the necessary preparations to informed and include European companies in the railway related procurement.
Currently, products that have already been tested and certified according to international standards will not even beconsidered by Japanese railway operators without further extensive testing. (The only exception to this is products theoperators have sourced themselves from specific manufacturers.) The EBC strongly requests the Japanese Government
to improve this situation by introducing regulatory reforms that facilitate smoother imports and exports. It is of theutmost importance that when the Japanese and EU authorities consider harmonisation in the railway sector, they ensure
the Japanese standards and specifications under discussion are those actually used by the Japanese operators. It is,furthermore, important that standards and specifications are made publically available so that European manufacturers
have a genuine opportunity to meet and exceed these requirements. We believe that the technical working group set up
in the framework of the EU-Japan EPA negotiations is a good start towards achieving this goal, but more informationfrom the working group needs to be shared with industry, and industry should be more closely involved in this exercise.
The EBC furthermore hopes that the committee on technical rules set up during the EPA negotiations will continue its
work to further work for harmonisation and mutual recognition of standards and approvals.
On the same note, the EBC believes that the Japanese market would benefit from a national testing scheme which isused by all operators. This would not limit operators to differences in testing related to performance, but rather to testing
related to safety which should be the same for all operators in Japan. This would remove the need for testing to berepeated and would be beneficial to all suppliers in Japan, whether they are foreign or domestic. The EBC believes that
the MLIT together with Japanese operators should take a greater role to achieve this.
The EBC welcomes the EU-Japan EPA agreement and the progress achieved in regards to railways. We believe thatefforts should not stop with the agreement: It will be vital to further harmonise regulations and standards, and toeliminate double testing to make it easier for European companies to do business and invest in Japan. Only then willboth economies and passengers alike benefit from the technologies and knowledge that European and Japanesecompanies can provide.

38

EBC Railway Committee
Member Companies
Cembre S.p.A.
Infineon Technologies Japan
Knorr-Bremse Rail Systems Japan
Schunk Carbon Technology Japan
SoltonThales JapanTÜV SÜD JapanKey Issues and Recommendations■ Introduction of open integrated railway systems
Yearly status report: limited progress. Product development in Japan is dominated by operators who appoint
manufacturers to develop new products according to pre-set specifications within a closed and verticallyintegrated system, instead of allowing manufacturers the freedom to find the most appropriate solution. This
makes the Japanese market unique in comparison to other markets, where “buying off the shelf” is far morecommon.
Recommendations:
The Government of Japan should promote and encourage open integrated railway systems, as a way to boost
competition in the domestic market and export prospects for Japanese manufacturers.

The Japanese Government, research institutes, railway operators and industry should continue their dialogue
on this theme.
■ Conformity assessment and mutual recognition of testing and certification
Yearly status report: slight progress. Japan is an active participant in various international standardisation bodies,but there is very little movement towards applying common standards across its domestic railway market.
Moreover, Japan lacks a common conformity assessment scheme for this industry. The EBC believes that it will
be mutually beneficial for Japanese operators to work together with the EBC Railways Committee to define
common requirements. This issue has been discussed in the negotiations towards an EPA and the EBC is looking
forward to improvement in this area.
Recommendations:Japan should establish a working group to identify minimum common requirements acceptable to all
operators.

The Japanese authorities should take a more active role in setting up a conformity assessment scheme.
■ Operational Safety Clause (OSC) and public procurement
Yearly status report: progress. Japan and the EU are both signatories to the WTO’s Plurilateral Agreement on
Government Procurement (GPA). Despite this, Japan has exempted railway procurement from the provisions of
the GPA. With the EU-Japan EPA, the OSC will be removed within one year after the entry into force of theagreement. The EBC welcomes this and is also pleased that more cities will open up their procurement market to
EU suppliers.
Recommendations:Japan should swiftly remove the OSC as agreed in the EU-Japan EPA.
The Government of Japan should ensure that when planning new railway projects (such as LRT systems),
local governments abide by or use the GPA as guidance to set up a proper public procurement scheme, anddo not apply the OSC.
■ TendersYearly status report: slight progress. Japan has never had a system of tendering for railway-related projects. The
EBC, however, would like to commend JR East for recently issuing calls for tenders for rolling stock. The EBC
believes there is a clear business case for tendering and so urges that Japanese operators start to use tendering
procedures as the main method for procurement of railway-related products and services. We also hope thevoluntary code on publishing procurement plans will result in more transparency and better access to technicalspecifications, as well as information on how to meet and exceed any set requirements.
Recommendation:

The Government of Japan should encourage other operators to follow the example of JR East and promote
the use of tendering, as this will improve competition in the Japanese market, benefiting both operators andpassengers.

Railways39

Mr. Toshihiko Niizaki
Chair, Telecommunications Carriers Committee(President, BT Japan Corp.)
c/o BT Japan Corp.
ARK Mori Bldg. 24F., 1-12-32 Akasaka
Minato-Ku, Tokyo 107-6024
Phone 03-5562-6000
Fax
03-5562-0647

TELECOMMUNICATIONS CARRIERSIntroduction
The global economy is increasingly dependent on access to well-functioning networks. Whilst Japan has developed oneof the most sophisticated information infrastructures in the world, the EBC believes there are still some areas that can be
improved.
The notion of creating an independent electronic communications regulator has been widely discussed in Japan,
including in political debates. The EBC regards independence of the regulatory process to be good practice in order topromote decision-making that is objective, transparent and accountable, and to build trust and credibility within theindustry in order for different viewpoints and interests, including economic, social, and political objectives to be duly
considered. The EBC believes such independence should be reflected in the institutional organisation in Japan and in its
system of checks and balances. The resulting regulator should, furthermore, report directly to the Japanese Parliament.
Best practice globally has shown that an independent regulator is the preferred model.
Whilst recognising that the Ministry of Internal Affairs and Communications (MIC) has made tremendous progress inadvancing the Information and Communication Technology (ICT) industry, the EBC nevertheless believes there is aneed for an oversight body with a majority of independent members and due transparency of its proceedings anddecisions. This is particularly important in the light of Japan’s transition to the model of equivalence, nondiscrimination and functional separation. We believe that such a measure could provide more explicit assurances of fairtreatment to customers, incumbents and competitors.
The EBC has long argued that ensuring fair competition is essential if Japan is to remain a vibrant telecom market.
Creating an independent regulator is crucial, but only one of many elements that need to be put in place. There is also aneed for better transparency in the cost mechanism for interconnection charges. Moreover, universal service obligations
should reflect actual costs, thus helping to avoid unfair cross-subsidy. Japan has relatively high access prices comparedto neighbouring East Asian countries so it is important that a much more holistic approach is taken in order to maximise
competition in the market.
As large transfers of personal data between servers are becoming common and involve an increasing number ofcompanies as well as administrations both as users and as providers, authorities are looking into how big data should be
regulated. While by no means a new issue, the last couple of years have seen an immense increase in the volume of data.
The EBC fully understands the need for regulating this field, emphasising, however, that any regulation should bedesigned so as to fulfil the security requirements, while avoiding placing companies under an excessive complianceburden. The EBC believes that it is of the utmost importance for there to be flexibility and pragmatism and for new
rights and definitions to be clear. The process of formulating the regulations must be transparent and open to commentsfrom outsiders. Special care should be taken regarding the issue of international transfers of information, so thatcompanies can make full use of the advantages of cloud technologies. An appropriate balance should, therefore, be
struck between protecting and informing consumers and providing the right environment for companies to conductbusiness. As such, it is crucial that authorities do not work in isolation, but constantly communicate with each otherworldwide to learn from best practices.
The EBC Telecommunications Carriers Committee has high hopes of the benefits that an ambitious EPA between Japanand the EU can bring, and strongly believes that telecom issues should be covered, including detailed commitments andpro-competitive rules for the telecommunications and ICT services sector for business and end users. These
commitments should go beyond those made under the WTO Basic Telecoms Agreement of 1998 and its annexed
Reference Paper. They should, in particular, cover wholesale access regulation. The negotiations should also explore
whether there is a case for enshrining EU-Japan ICT policy and regulatory principles in the Agreement, given theexistence of EU-US and US-Japan ICT principles. It may also be instructive to consider if such broad principles can be
agreed in future regulatory harmonisation in important hi-tech related areas, such as cloud computing, transborder dataflows, data privacy, and cyber-security.

40

EBC Telecommunications CarriersCommittee
Member Companies
BT Japan

Key Issues and Recommendations■ Institutional reform
Yearly status report: no progress. The EBC believes that it is inappropriate for the Government of Japan to act asboth the regulator and a major shareholder in the Japanese telecommunications sector. Currently, however, MIC
continues to enjoy wide-ranging statutory powers of intervention and control. The issue of independence wasraised by the previous Government, but so far no discussion has taken place under the current Government. The
EBC recommends the creation of an independent government committee as an independent regulatory authority,with a mandate to monitor regulation and business practice within the communications sector from a consumer
perspective. The EBC cannot emphasise enough that best practice globally has shown an independent regulator tobe the preferred model.
Recommendation:
An independent, well-resourced and empowered telecommunications regulatory authority should beestablished with a pro-competitive mandate that measures its success in terms of a market that provides
choice and enables the rapid introduction of innovative new services as well as reliable and cost-effective
basic telecom/other services. To be independent, members should be selected from outside the Government
and the committee should report directly to Parliament, and not to the MIC.
■ Data protection for big data
Yearly status report: new issue. With vast amounts of personal data being sent between servers daily, authorities
have realised that there is a need to regulate this area. The EBC is keen to contribute to the policy debate,
believing that any changes should be straightforward and practical. Regulation should strike a careful balance
between protecting individual privacy and creating an environment that supports innovation of new products andservices driving economic growth and employment in Japan.
Recommendations:
New obligations on data processors should be clear and any definitions must provide clarity.

The authorities should avoid overly complex regulation that could inadvertently lead to increased cost and so
off-set the advantages of offering data processing.
Any new regulation should also provide a balanced approach to minimise the inherent conflict between
privacy for individuals and the need for companies to use information.
Special focus is needed on international transfers of data to make certain that data flows are not “stopped” atthe border, while at the same time introducing best practice to make certain that data are kept safe.
■ Fair competition
Yearly status report: some progress. The EBC believes it is of utmost importance to follow fair competition
principles based on global practices. These principles will ensure that future discussions on fair competition rules
will be successful.
Recommendations:
The Japanese Government should ensure the transparency and efficiency of the regulatory process, including
providing adequate time for consultation.

The Japanese Government should introduce open and simple licencing procedures with minimum service
and regulatory obligations.

Incumbent carriers should be obligated not to discriminate on price or other conditions between their own
businesses and those of competitors and to provide suitably separated published accounts.

There should be transparent control by the regulator of access to the radio frequency spectrum, to physicalrights of way and to the numbering plan.

There should be proactive regulatory oversight of the implementation of any schemes for “equal access” andnumber portability to support newcomers to the market.
To help avoid unfair cross-subsidisation, operators with significant market power should keep transparent,
publicly available, separate accounts.

Telecommunications carriers

41Mr. Yoshio Honda
Chair, Telecommunications Equipment Committee(General Manager, Standardization & Regulation,
Technology & Research, Ericsson Japan K.K.)
c/o Ericsson Japan K.K.
MOMENTO SHIODOME, 2-3-17 Higashi-Shimbashi
Minato-ku, Tokyo 105-0021
Phone 03-6721-3300; Fax 03-5408-9744

TELECOMMUNICATIONS EQUIPMENT
Introduction
Structural reforms under the Government of Japan’s ICT Strategy have supported the introduction of high-speed, largecapacity ICT infrastructure, the lowering of communications costs, and the development of e-commerce and egovernment. Internet access costs have decreased dramatically and access to broadband is now amongst the mostdeveloped in the world. With the Tokyo 2020 Olympics approaching, Japan is looking to showcase its latest technology
to the world. The Government has already announced its intention to have 5G up and running in time for the Games andis investigating how best to meet the growing need for more bandwidth for cellular applications. This is not limited tomore obvious telecommunication areas such as big data and the Internet of Things, but also includes areas such as
healthcare and transportation for both ground-based vehicles and drones.
The EBC appreciates the opportunity to contribute to the Ministry of Internal Affairs and Communications’ (MIC)
policy committees as an official participant and applauds the Government’s overall commitment to an industry-led,
global approach to standards and platform development. Important steps have already been taken to facilitate theproduct approval process, firstly by signing an EU-Japan mutual recognition agreement (MRA) for telecommunications
terminal equipment in 2001, and secondly by introducing a Supplier’s Self Verification of Conformity (SVC) in 2004,
similar to the Suppliers’ Declaration of Conformity (SDoC) introduced in Europe. Despite these significant
achievements, however, implementation to date has been disappointing. The number of accredited testing bodies
designated under the MRA remains low and the SVC still applies mainly to wired telecommunications terminals, withlimited application to wireless/radio equipment. Although some additional products have been added to the SVC’s
scope, many products are still not covered.
There are approximately 7.9 billion mobile phone subscriptions globally and 5.4 billion of these are connected to mobile
broadband, with overall mobile data traffic doubling each year. In Japan, which is considered a mature market
characterised by advanced data services and the introduction of Long-Term Evolution (LTE), smartphone penetration isalready at about 70% and is driving mobile broadband growth - traffic usage is projected to rise to 10GB/month per user
by 2020. Japan is promoting new wireless technologies for the Internet of Things (IoT), Intelligent Transportation
Systems (ITS) and 5G. Advanced wireless technologies can facilitate innovative use of ICT, and contribute to emerging
industries and economic growth.
Applications used on smartphones, such as video and social networks, and machine-to-machine communication place
different demands on the network. Japan has played an active role in efforts to harmonise the spectrums used forInternational Mobile Telecommunications (IMT) systems at the global level. It is important that MIC continues tochampion this goal at the World Radiocommunication Conference 2019 (WRC-19), especially in relation to theidentification of new harmonised spectrums for IMT above 24GHz (Conference agenda item 1.13). This would bringenormous benefits to the IMT industry and its customers by eliminating the need to develop local variations of new
telecommunications equipment. The EBC strongly supports this work and hopes that Japan will continue to implement
new spectrum bands that are harmonised with other markets.
The telecommunications industry is based on technical standards covered by so-called Standard Essential Patents (SEP),
which commit the patent holder to licensing on Fair and Reasonable, And Non-Discriminatory (FRAND) terms. The
Japan Patent Office (JPO) introduced in 2018 guidance for SEP licensing negotiations and a process for essentiality
evaluation. The impact of these measures should be closely monitored in the coming years.

42

EBC Telecommunications
Equipment Committee
Member Companies
Ericsson Japan
Nokia

Key Issues and Recommendations■ Establishing common technical standards and certification procedures
Yearly status report: some progress. The EU and Japan maintain different technical standards for the same
products and, although the differences are not substantial, they lead to double testing and certification for
manufacturers. The current EU-Japan MRA provides only for recognised certification organisations to test for
both markets. The EBC is disappointed that the SVC system in Japan is limited to wired telecommunications
terminals in general and that it has not been expanded to other telecommunications equipment (except for
3G/LTE and WiFi functions in mobile terminals),thus excluding radio base stations for mobile networks.
Recommendations:
The EU and Japan should mutually accept each other’s technical standards and certifications fortelecommunications equipment.

SDoCs issued by European producers should be accepted in Japan without further testing or administrativerequirements, not only in respect of wired terminals, but also in respect of specified radio equipment.

The application of SVC should be expanded to all equipment in the category, “Specified Radio Equipment”.
■ Harmonisation of spectrum for IMT (IMT-2000, IMT-Advanced, and IMT-2020/5G)
Yearly status report: some progress. The EBC is pleased that MIC is working to ensure additional spectrum
allocation bands to address the increasing demand for mobile broadband and emerging new use cases of thevertical industries. The EBC recognises MIC’s plan to allocate spectrum bands for IMT-2020 before March 2019.
Recommendations:Japan should continue working for globally or regionally harmonised spectrum allocations for mobile use.
Japan should engage actively in agenda item 1.13 of WRC-19.

Japan should accelerate the process for allocating 5G spectrum, to facilitate the development of 5G
equipment for its planned commercial service in or before 2020.
■ Future-proof radio regulation for mobile equipment
Yearly status report: some progress. The EBC believes that Japanese radio regulation is not sufficiently flexible
and, by stipulating technical requirements based on specific technology on each frequency band, risks delaying
the launch of new wireless technologies.
Recommendations:Japan should adopt future-proof radio regulation for mobile equipment so that emerging technologies can beswiftly deployed. It is worth studying the technology-neutral approach, especially for unlicensed bands suchas 5GHz.
Japan should review its radio regulation to ensure it avoids imposing undue requirementson radio basestations, especially in respect of AAS (Active Antenna Systems).In particular, the periodical inspection ofradio performance at antenna or equivalent monitor ports should be carefully reviewed.
■ IP (Intellectual Property) policy for SEP (Standard Essential Patents)
Yearly status report: progress. Japan Patent Office’s “Guide to Licensing Negotiations involving Standard
Essential Patents” released in June 2018 has received a positive reception from the industry. The “Essentiality
Determination of Standard Essential Patents” process, which received less attention, established in April 2018 by
JPO. As it still waits for its first case the effectiveness and fairness cannot be verified. EBC will monitor the
impact and fairness of these the newly established principle sand processes in regards to the European
telecommunication industry.
Recommendation:
Japan should continue the communication with European Commission, European Patent Office, and other
European organisations to harmonise the regulations related to Standard Essential Patent licensing.

Telecommunications equipment
243

Mr. RIchard Van Schie
Chair, Logistics & Freight Committee(General Manager, Schenker-Seino Co., Ltd.)
c/o Schenker-Seino Co. Ltd.
Tennoz Central Tower 15F., 2-2-24 Higashi-Shinagawa
Shinagawa-ku, Tokyo 140-0002
Phone 03-5769-7365
Fax
03-5769-7361

LOGISTICS & FREIGHT
Introduction
European logistics and freight companies offer consumers the benefits of access to their worldwide logistics operations.
This has been even more evident in the last couple of years as e-commerce and home deliveries have increased
exponentially. Moving forward there are no signs that this trend is receding, and companies in the logistics and freightsector are struggling. This is true both from a regulatory perspective but also due to the labour shortage and thefragmented digitalisation. Moreover, companies struggle with Japan’s high cost base, inadequate infrastructure, heavily
congested ports, and rigid customs clearance procedures. They also have to deal with outdated restrictions on foreignowned companies engaging in the domestic freight forwarding business, and unfair competition caused by differences in
the rules and regulations applied to carriers providing the same service, resulting in inefficiencies and higher prices forusers. The EBC appreciates the Government’s efforts as of late, and believes that it is on the right track. However, if theGovernment truly wants Japan to become a viable logistics hub for regional trade, it must now take account of all
stakeholder perspectives and ensure the right regulation and infrastructure are in place.
The current demographic situation in Japan, with an ageing population and shrinking workforce, combined with an
expanding e-commerce sector, is placing logistics and freight companies under increasing pressure. As a result, somemajor domestic companies have already announced drastic changes to their activities. The EBC calls upon the
Government to accelerate policy and regulation, both short- and long-term, that will enable companies to meet thechallenges. It is indeed positive that the Government is attaching importance to this issue, but unfortunately a sense ofurgency is missing as well as a more comprehensive solution.
It is clear that the logistics and freight sector needs to modernise and make further efficiency gains. While part of thesolution must lie with companies themselves, the role of Government is also crucial, for example in speeding up andsimplifying the process for “open” parcel locker subsidies, changing the legislative framework for autonomous driving,
and allowing larger vehicles. The non-proprietary “open” parcel lockers might alleviate some of the problems withfailed deliveries and it has been well received by both consumers and business. The EBC believes a new and crossministry approach is required, for example, to improve the sustainability and effectiveness of last mile delivery, and it isessential that relevant policies are enacted without delay.
Companies expected the introduction of the Authorised Economic Operator (AEO) concept in Japan to lead tosimplification of many of the transport and customs processes they need to undertake. Unfortunately, the new system
has missed this target: instead of streamlining these processes, it has burdened companies with an increase inadministrative tasks and compliance requirements in order to achieve AEO status. The EBC believes that more
simplifications should be introduced, similar to those proposed when the AEO concept was first presented.
Finally, while MLIT has introduced positive reforms aimed at improving Japan’s overall business infrastructure there is
still some to do to remedy the challenges to shipping services. The Super Core Port initiative, announced by the
Ministry of Land, Infrastructure, Transport and Tourism (MLIT) as far back as November 2002, has yet to yield tangible
improvements to the high-cost structure of Japan’s ports. The development of Japanese container terminals is being
initiated by local authorities rather than by central Government, such that anticipated economies of scale andefficiencies will remain difficult to achieve. Data show Japan’s decline in port activity: Kobe Port, for instance, dropped
in the Asian rankings from fourth place in 1980 to 59th place in 2015. Tokyo and Yokohama ports combined only
ranked in 20th place globally in 2015 based on containers moved. Structural improvements are desperately needed if
Japan wants to remain a vibrant shipping country.

44

EBC Logistics & Freight Committee
Member Companies

Key Issues and Recommendations

AGS Four Winds Japan
A.P. Moller-Maersk A/SCMA CGM JapanDHL Global Forwarding
DHL Supply Chain
IKEA JapanJAS Forwarding
Lufthansa Cargo
Rhenus Sankyo Logistics
Schenker/Seino
TNT Express Worldwide■ Future delivery modernisation
Yearly status report: new issue. The final mile delivery in Japan can be hugely challenging, with service
providers working extended hours and dealing with re-deliveries as a result of the consignee being away fromhome or unable to receive the delivery, even if the delivery is made within the agreed time window. Against thebackground of an overall tightening of the labour market and, in particular, a well publicised driver shortage, theEBC believes that a new approach is required to improve the sustainability and effectiveness of final miledeliveries.
Recommendations:
The Government of Japan should: Enable use of larger vehicles for inter-city movement to reduce the number of vehicles and drivers required.
 Allow and encourage the use of autonomous vehicles by delivery companies.
 Increase the subsidy for non-proprietary “open” parcel lockers and simplify the application process for such
subsidies. In particular switching from the pre-installation to a post-installation application process should
accelerate the deployment of parcel lockers.
 Educate the public about socially responsible delivery arrangements by highlighting the social andenvironmental costs of failed delivery attempts and encouraging the consignee to be home and able toreceive the delivery within the requested time window or to choose alternative “delivery options”.
■ Labour shortage
Yearly status report: limited progress Given Japan’s projected population decline and ageing society, it isanticipated that the current shortage of available labour will continue, severely impacting the logistics sector as
expansion of e-commerce drives up demand. The logistics sector is especially vulnerable as many of the longhaul drivers it employs have reached or are reaching retirement age. In order to continue meeting the demand forlogistics services, it is important that the Government puts in place practical strategies to improve the availabilityof labour in the short- and medium-term. The EBC appreciates the various initiatives put forward by theGovernment. However, many of them do not quite hit the target but are held back by limitations either in scope orby administrative restrictions. There is a particular concern around the short-term challenge, since potential
solutions such as the use of new technologies, including autonomous driving. and increased use of automation in
freight handling will only become available in the long term.
Recommendations: Japan should ease its visa requirements to allow foreign temporary labour, particularly during peak periodsof demand, such as Golden Week and around the end of the year.
 Japan should make it easier for logistics companies to use the Technical Intern Trainee Program.
 The authorities should support companies in setting up childcare provision, including through access totraining and certification for child care workers, to facilitate the employment of women in the sector.
 Japan should promote the importance of the logistics sector to encourage more female participation.

Logistics & freight
2

45

■

Authorised Economic Operator (AEO)
Yearly status report: some progress. The current system of AEO has not led to the anticipated easing of theadministrative burden. In many cases, the burden has increased. The EBC seeks a system giving companies a
simplified process and extended powers to handle matters without the involvement of the authorities in every
single case, provided operators can demonstrate sufficient control over the flow and that traceability is ensured.
Recommendations: The AEO concept should focus more on offering simplifications, provided the operator meets the agreed
criteria for tracing each product and adhering to the agreed process flow.
 The Government should introduce more benefits for imports handled by AEOs, including but not limited to: Enabling access to NACCS from servers outside Japan Allowing quarantine checks at transporters’ own bonded warehouses
 Reducing the physical examination of shipments Allowing the use of digital archives■ Port costs and development
Yearly status report: limited progress. Port costs in Japan continue to be high in comparison to other advanced
economies. High port costs also undermine the competitive position of Japanese ports in Asia, for example in theprovision of transshipment services, since South Korea and China offer more competitive condition. Foreign
shipping lines are still not allowed to transship their own overseas cargo on their own vessels in Japan, thus
encouraging them to transship cargo elsewhere, reducing business at Japanese ports. While similar restrictions
apply in Europe, it is nevertheless possible for a Japanese carrier to transport its cargo across borders within theEU, for example from Germany to France, thereby meeting business requirements. That said, we have seen
positive development on the transportation of empty containers where European shipping lines are now permitted
to process/facilitate the movement of empty containers throughout Japan.
Recommendations:Japan should continue to address the high cost of the port operations structure within its Asia Gateway
Strategy Council.

Rules and regulations that prevent container lines from offering intermodal-through-transportation in Japan
should be reviewed and brought in line with international standards.
■ Digitalisation
Yearly status report: new issue. With ever increased traffic, of not only physical goods, but also of accompanying
documents, logistics companies are under increasing strains. While the core of the problem does not lie with aregulation or a standard, but rather with the behavour of the stakeholders, the Japanese Government should
support and promote a digitalisation of the sector. Currently, there are still many situations where orders are madeeither over fax or over phone or where documents are delivered physically. With an improved digitalisation, notonly will logistics cost go down, but times from order to delivery will do the same. Many neighbouring countries
are far ahead of Japan in this area. Needless to say digitalisation will also help cope wth the labour shortage.
Recommendation:

The Japanese Government together with the various applicable sector organisations should work to enhance
digitalisation within the logistics sector. This would improve the competitive advantage of the Japanesemarket.

46
3

Health Science
IVD (In Vitro Diagnostics)
Medical equipment
Pharmaceuticals
Vaccines
Cosmetics & quasi-drugs

Mr. Shuichi Hayashi
Vice-Chair, Medical Equipment & Diagnostics Committee(Industry Affairs Advisor, Roche Diagnostics K.K.)
c/o Roche Diagnostics K.K.
Shinagawa Season Terrace, 1-2-70, Konan, Minato-ku,
Tokyo, 108-0075
Phone 03-6634-1111
Fax
03-5479-0532

IVD（IN VITRO DIAGNOSTICS）
Introduction
Healthcare in Japan is suffering as the social security system comes under increasing pressure from the effects of anageing society, declining birth rate, and rising national healthcare costs. It is clear the Japanese Government needs toreform the way the healthcare system operates while also re-evaluating its purpose. The EBC considers serious
discussions on the value and role of clinical examinations (specimen examinations), which already play a significant
part in medical practice, are crucial to achieving the Government’s objectives of “improvement of the quality of medicalcare” and “optimisation of medical costs”. It is imperative that healthcare in Japan continues not only to benefit fromclinical examinations but also to realise their full potential in respect of improved diagnosis, treatment and prevention.
This will only be possible through re-evaluation of their value and role by both medical care providers and medical
system operators.
The medical reimbursement system for clinical examinations has been under discussion since 2007 between theJapanese Promotion Council for Laboratory Testing (JPCLT), in vitro diagnostic (IVD) industry associations, and theMinistry of Health, Labour and Welfare (MHLW). Since then, the results of an investigation into current problems andissues as well as possible future directions have been announced, opinions have been exchanged and proposals andrecommendations have been made both at “study sessions on medical diagnostics” and at “periodical meetings on the
medical reimbursement system”. The EBC applauds the fact that the Government has already recognised what isreferred to in periodical medical reimbursement price revisions as the need for “quality enhancement of clinicaldiagnostics and faster examination” and that this led to a continuous rise in IVD fees between 2008 and 2016.
Furthermore, the medical reimbursement revision of 2016 introduced “Global Standard Examination Management
Additions”. Whether or not a facility qualifies for these additions depends on its ability to demonstrate “approved
technological competence based on global standards” and on the quality of its examinations. This too has had a positiveeffect on the medical diagnostics sector.
Cooperation between the medical diagnostics industry and the pharmaceutical industry, and consultations with theGovernment are progressing on the increasingly important topics of personalised healthcare and companion diagnostics.
The final objective is the introduction of relevant approval processes and the establishment of an insurance
reimbursement system linked to drugs. The clinical application of advanced technologies, such as next-generation
sequencing, is rapidly advancing. A system to evaluate the accuracy and quality of the tests made available throughthese technologies is required. Against this background, it is essential that the current medical system is streamlined andreformed so that personalised treatment can be expanded, the quality of medical diagnostics and medical care can be
maintained and improved, and clinical diagnostics can continue to play their value-added role. Other major
improvements needed to enhance the quality of medicine and deliver the latest medical care to patients include
providing prompt access to new IVD tests and setting Health Insurance Points (HIP) based on their latest clinical value.
The EBC Medical Equipment & Diagnostics Committee and its IVD Sub-committee continue to advocate the value ofclinical diagnostics in cooperation with the JPCLT and other IVD industry groups. We are also continuously ready towork with the MHLW and the PMDA (Pharmaceuticals and Medical Devices Agency).

48

EBC Medical Equipment & Diagnostics Committee
Member Companies

Key Issues and Recommendations■

B. Braun Aesculap Japan
bioMerieux Japan
Biotronik Japan
ColoplastDornier MedTech Japan
Draeger Medical Japan
Edaptechnomed
ElektaHollisterIntegralJapan Lifeline

Japan MDC
JIMRO
Laerdal Medical Japan
Lima Japan
LivaNova Japan
Medical U&A
Medis Medical Imaging Systems
Medtronic Japan
Molnlycke Health Care
Nippon Becton Dickinson
Nippon BXINobel Biocare Japan
Novocure
Otto Bock Japan
Philips Japan
Radiometer
Roche Diagnostics
Siemens Healthcare
Smith & Nephew
Teijin Pharma
Thermo Fisher Diagnostics
TKB

Approval examination and safety measures
Yearly status report: progress. The EBC, jointly with the Japan Association of Clinical Reagents Industries(JACRI) and the IVD Committee of the American Medical Devices and Diagnostics Manufacturers’ Association(AMDD), presented the following recommendations in a periodical opinion exchange meeting (6 Aug. 2018) with
the MHLW’s Pharmaceutical Safety and Environmental Health Bureau and the PMDA, to discuss the approval
examination and safety measures.
Recommendations:
The definition of IVDs needs to be re-defined in other to take in consideration diagnostics pharmaceuticals
and Therapeutical Drug Monitoring which are used in the selection of a remedy or in treatment policies suchas dose adjustment.

Request for revision of the qualification requirements of the business condition administrator of IVDs, not tobe limited to pharmacists as at present, and to enhance governance, considering the completion of
specialized courses or practical experience required to fulfill the responsibilities as administrator.

Request for revision of the conditions so that QMS (Quality Management System) conformity research may
be omitted. There has been discussion overseas regarding the omission of QMS research through the use of
the MDSAP (Medical Device Single Audit Program) certificate, so from the same viewpoint, it is also
requested that the omission of research on factories through more effective utilisation should be investigated.
Japan should revise the requirement so to promote greater utilisation of digital media. While is allowed, it isunfortunately burdensome due to the applicable requirements.

Request for notification of the contents of the agreement and precise implementation in order to accelerate
the approval process and improvement of operation.

MHLW and PMDA should continue its efforts to resolve approval examination and safety measure issues.
Japan should conform with EU’S In-Vitro Diagnostics Medical Device Regulation (IVDR) and the handlingof the MDSAP.

■ Issues and recommendations concerning medical reimbursement of IVDs
Yearly status report: progress. The EBC has set up a joint medical policy committee with JACRI and the IVD
Committee of AMDD and discussed methods of medical reimbursement. Furthermore, at the regular meeting (3Sept. 2018) with the Economic Affairs Division of the Health Insurance Bureau of the MHLW, the EBC maderecommendations and presented opinions regarding the following medical reimbursements.
Recommendations:Japan should include evaluation results in the deliberations of the insurance medical material special
committee, as it is currently not explained how “innovation” of new innovative products is evaluated.
In some items, IVDs approved as pharmaceuticals and LDT (Laboratory Developed Tests) coexist, so the
EBC requests clarification in the future to give priority to IVDs and to sort out corresponding LDT.

It has become necessary to select application destinations when listing new insurance, and the EBC
requested that the selection of application destinations be done following an appropriate point standard,taking into account not only similarities in the measurement principles but also clinical positioning.

It is necessary to enhance home healthcare and strengthen the function of family doctors in order to constructcommunity-based integrated care, and the EBC requests that a system be created under which thisexamination that requires labour and high cost would be implemented appropriately when necessary.
 In the 2018 medical reimbursement price revision, an “Antimicrobial Stewardship addition” was established,however, the implementation requirements are not clear, and each facility interprets and implements this in
their own way. The EBC requests that the implementation of the examination mentioned in the guidance be
added to the requirements.
Preventive medicine and pre-emptive medicine are in a category outside the medical reimbursement system.
However, it is a problem that risk diagnosis using genes is becoming widely used without regulations. The
EBC requests that discussions be started on how to promote the usage of specimen examination in thiscategory appropriately.

IVD (in vitro diagnostics)
249

Mr. Hideaki Mori
Chair, Medical Equipment & Diagnostics Committee(President & CEO, Siemens Healthcare K.K.)
c/o Siemens Healthcare K.K.
Gate City Osaki West Tower,
1-11-1 Osaki, Shinagawa-ku, Tokyo 141-8644
Phone 03-3493-7500
Fax
03-3493-7654

MEDICAL EQUIPMENT
Introduction
The national cost of medical care for Japan in the 2016/17 fiscal year was 41.3 trillion yen, down 0.4% from theprevious year. The slight fall is regarded as temporary and due to a significant decrease in anti-viral drug charges,
including for hepatitis C drug treatments. In many other respects, the main challenges remain as before, includingchanges to the overall disease profile driven by the ageing of the population and a rise in chronic conditions, and thepromotion of medical innovation in parallel with controls on medical costs. However, healthcare delivery is becoming
extremely complex, because of labour shortages stemming from the decreasing birth rate and ageing population,shortages of specialists in ICU (Intensive Care Unit) pathology, and the decline in business or business failure of asignificant number of hospitals and clinics.
In order to improve the situation, it is important to move from a primary focus on the treatment of disease to a more
holistic approach aimed at health maintenance and disease prevention; to utilise medical information and improve theefficiency of medical services in parallel, and to promote healthcare reform and technical innovation. Medical costs
should be reduced by a combination of detecting abnormalities at an early stage through health monitoring, delivering
accurate and specific diagnoses, sharing diagnostic results among healthcare institutions, and realising timely andefficient medical services, as well as by deploying and disseminating these improvements throughout the healthcare
system. These actions will, in turn, reduce the burden on patients and increase the health of the general population andlabour force, thereby contributing to social and economic growth.
Innovative European medical equipment, materials and services can help Japan to meet its healthcare challenges. In
particular, effective accident and emergency care, telemedicine and nursing care using IT medical technology, should be
introduced as soon as possible. Furthermore, digitalisation of efficient medical data should be provided using IoT andAI equipped medical devices with appropriate measures for cyber security and GDPR (General Data Protection
Regulation) as implemented in Europe. To do this, Japan should align its regulations and processes with international
standards, allow use of European approvals and data, and improve the predictability of the reimbursement system.
Moreover, information on the Japanese medical care system should be provided internationally in multiple languages toencourage more overseas businesses to participate in the Japanese market. Japan should continue to introduce measures
to improve the Foreign Direct Investment (FDI) environment as this has proved to be a real driver for investments in thedomestic market.
The EBC Medical Equipment & Diagnostics Committee intends to continue working in cooperation with the Japanese
Government, especially the Ministry of Health, Labour and Welfare (MHLW) and the Pharmaceuticals and Medical
Devices Agency (PMDA) and other associated industrial organisations, and will present recommendations in order tohelp reform the Japanese medical system and industrial structure. The aim will be the deployment in Japan of not only
excellent medical equipment but also advanced healthcare models and effective medical systems, where we believe
Europe has much to offer.

50

EBC Medical Equipment & Diagnostics Committee
Member Companies

Key Issues and Recommendations■

B. Braun Aesculap Japan
bioMerieux Japan
Biotronik Japan
ColoplastDornier MedTech Japan
Draeger Medical Japan
Edaptechnomed
ElektaHollisterIntegralJapan Lifeline

Japan MDC
JIMRO
Laerdal Medical Japan
Lima Japan
LivaNova Japan
Medical U&A
Medis Medical Imaging Systems
Medtronic Japan
Molnlycke Health Care
Nippon Becton Dickinson
Nippon BXINobel Biocare Japan
Novocure
Otto Bock Japan
Philips Japan
Radiometer
Roche Diagnostics
Siemens Healthcare
Smith & Nephew
Teijin Pharma
Thermo Fisher Diagnostics
TKB

Revision of insurance coverage and functional classification of insurance medical
material
Yearly status report: slight progress. In the 2018 medical reimbursement price revision, the insurance coverageclassification was revised and B3 for re-evaluation of innovation was established. As a result of revision of thefunctional classification of insurance coverage material, six classifications were added. A regulation for
exceptional rules still remains an issue.
Recommendations:Japan should ppropriately handle the price research associated with the consumption tax hike.
Appropriate reimbursement for innovative technologies through more detailed functional classifications.

Improvement of the insurance reimbursement price system based on the product characteristics.

■

Deployment of Japanese-version HTA for medical equipment
Yearly status report: some progress. The cost effectiveness evaluation targeting five equipment items started in
April 2016 as a trial. The detailed method of incorporating results is currently under deliberation with the Central
Social Insurance Medical Council (CSIMC).
Recommendation:

HTA should be deployed carefully taking into account the inappropriateness of application of QALY
(quality adjusted life year), uncertainty as to the results depending on the skill of examiners or data, and theshort improvement cycle of medical equipment.

■

Streamlining the foundation of medical technology using ICT
Yearly status report: ongoing. Laws concerning the use of big data including the next-generation healthinfrastructure law are being developed and institutionalisation of online diagnosis is also being promoted. On theother hand, migration to the cloud by medical organisations is slow.
Recommendation:
MHLW should promote and support the use of cloud services by medical organisations.

■Mutual recognition and global standards for clinical evaluation
Yearly status report: some progress. Japanese authorities encourage the usage of the prior consultation service of
the PMDA in order to promote the use of overseas clinical evaluation results when applying for equipment.
Recommendation:

The EBC request that the Japanese authorities continue the very successful work of promoting the use ofoverseas data.

■

QMS mutual recognition and global standards
Yearly status report: some progress. Some progress was shown in conformity with the global standards. Formal
participation in the MDSAP assists further development of discussions for conformity with the global standards.
Recommendations:Japan should dispatch information through a formal QMS ministerial ordinance in English for conformity
with the QMS global standards.
Japan should eliminate the differences in requirements of the OMS ministerial ordinance, and conform withthe global standards for the product group classification.

■

Mutual recognition and global standards of medical equipment license
Yearly status report: some progress. The approval examination period of the PMDA was shortened byenforcement of the Japanese PMDA law and performance was improved.
Recommendation:
Japan should recognise EU approvals for Class 2 products as equivalent to Japanese approval.

Medical equipment
Unrestricted2

51

Dr. Ole Mølskov Bech
Chair, EFPIA Japan(President & Representative Director, Novo Nordisk Pharma Ltd.)EFPIA Office:Meiji Yasuda Seimei Bldg., 2-1-1, Marunouchi, Chiyoda-ku, Tokyo 100-0005
Phone: 03-6266-1000
Fax: 03-6266-1800

PHARMACEUTICALSIntroduction
Although overall healthcare costs in Japan are rising as the population ages, and use of innovative pharmaceuticals is
growing significantly, total pharmaceutical spending has been well under control.
Japan’s healthcare spending in fiscal year 2017 increased by 2.3% (0.9 trillion yen) to 42.2 trillion yen. The amountspent on dispensing fees also increased by 3.1%. The 10-year market simulation study conducted by EFPIA Japan
indicates that the Japanese pharmaceutical market will shrink at an annual rate of 1.5% from 2017. In spite of strong
increases in total medical expenditures driven by an ageing population and the progress of medical technology, thecurrent pricing system and measures such as greater generic use are proving sufficient to control the drugs bill.
The Price Maintenance Premium (PMP) system was launched in 2010 to shrink the “drug lag” and to promote thedevelopment of new drugs in Japan. Since the launch of the system, the PMP has successfully achieved this. However,this drastic pricing system reform in April 2018 also brought the devaluation for innovation with t narrower scope of
PMP products as well as unpredictable PMP company criteria. Any significant reduction in the PMP eligibility would
reverse the substantial progress already made.
Drug price revisions should continue to be conducted in two-year cycles, linked to the revision of medical service fees.
Even if price revisions in “off” years are to be conducted from 2021, the scope of drugs for the revision should be
limited to a small number of products with large discount rates from the list price to minimize disruption to the market.
Because the total drug budget is already well controlled under the current drug pricing system excessive costcontainment measures on drug cost will not be sustainable and could lead to sharp negative growth in thepharmaceutical market. This would conflict with Government’s policy of pharmaceuticals as a strategic growth industry
and reduce the incentive to invest in Japan from overseas.
Price revision will be executed for three consecutive years from 2018 and will result in a negative impact to the industry
within a very short timeframe. Additionally, this will cause huge burden to healthcare providers, wholesalers andpharmaceutical companies. EFPIA has strong concerns that discussions will be directed towards a full scale pricerevision in the “off” years from 2021 onward, based on a 3-year consecutive full scale revision. The price revision in2019 should be positioned as an exceptional price revision in conjunction with the consumption tax hike.
For the first 12 months after a drug is launched it can only be prescribed for a maximum of 14 days, after which afurther prescription is required. As a result, many physicians have limited use of the new products for a year after pricelisted. Given that Japan has robust safety measures, including the Risk Management Plan (since 2013), this 14-day rulefor new drugs is outdated, preventing patients from accessing the treatments they need. The Government’s own Council
for Regulatory Reform recommended the revision or elimination of this rule, and EFPIA supports their position.
Japan introduced a form of CEA/HTA (Cost-Effectiveness Analysis/Health Technology Assessment) from April 2016
on a trial basis. Full-scale implementation is postponed to April 2019. Unfortunately, the European experience showsthat CEA/HTA can become a barrier preventing patient access to medicines and be a major administrative burden for
academia, government and industry. Japan has sufficient measures to control drug expenditures, so CEA/HTA should
not be allowed to become cost-containment measure. EFPIA believes that Japan should take into account the experience
gained in the trial study and Europe when designing and implementing CEA/HTA.
Japanese Good Clinical Practice (GCP) in clinical trials is now steadily aligning with global standards, although action
is still needed to reduce differences between Japanese medical institutions in the efficiency of the clinical trials they
conduct. Japan introduced expanded clinical trials for compassionate use, the Sakigake designation system, and optimaluse promotion guidelines, and a conditional early approval system. The impact of these measures on patient accessneeds to be further reviewed and the initiative may need to be considered. The scope of Mutual Recognition Agreement
was extended to include the product such as active pharmaceutical ingredients, sterile formulation, and biological
medicines in July 2018. The full implementation should be ensured.

52

EFPIA Japan
Member Companies

Key Issues and Recommendations

Actelion Pharmaceuticals Japan
AstraZeneca
Bayer Yakuhin
Bracco-Eisai
Chugai Pharmaceutical
CSL Behring
Ferring Pharmaceuticals
Galderma
GE Healthcare Japan
GlaxoSmithKline
Guerbet Japan
Ipsen Pharma Japan

Janssen Pharmaceutical
LEO Pharma
Lundbeck Japan
Merck Serono
Mylan EPD
Nihon Servier
Nippon Boehringer Ingelheim
Novartis Pharma
Novo Nordisk Pharma
SanofiShire JapanUCB Japan■ Drug pricing system
Yearly status report: negative progress and new issue. The price maintenance premium (PMP) introduced in 2010
was drastically revised with a negative outcome with drug pricing system reform in 2018. The target scope of
PMP was substantially narrowed in addition to the introduction of company criteria leading to a broken down theprice maintenance schema. In addition, discussion on the “off” years price revision has progressed similar to anannual price revision. The more severe pricing environment for innovative drugs is reducing the attractiveness of
the Japanese market.
Recommendations:
The PMP, which provides appropriate reward for innovative new medicines, should be continued without
any reduction in the level of support for innovative products. Innovation should be appropriately rewarded.
In terms of “off” years price revision, annual price revision based on the survey of actual market prices
should not be concluded by the actual situation of three year’s continuous price revision from 2018-2020.
Generic erosion has been drastically increased and a new target of 80% has been set for the near future. Thismeans that there is huge saving money and these savings should be allocated for the rewarding of innovative
drugs.
■ Cost-Effectiveness Analysis / Health Technology Assessment (HTA)
Yearly status report: minimum progress. There is significant room to improve to implement the full-scale
implementation of this system.
Recommendations:
Any approach based largely or entirely on cost per QALY (quality-adjusted life year) thresholds risks
inappropriate appraisal of drug value. Thus, additional factors should be adequately incorporated in theappraisal.
The number of products assessed should be limited as Japan does not yet have a well-established HTA
capability and at present is unable to assess a large number of products.

HTA should not restrict or delay patients’ access to new drugs.
■ International harmonisation (clinical trial environment)
Yearly status report: some progress. There is scope to improve the efficiency of clinical trials in Japan.
Recommendations:Japan should carry out specific actions to further enhance efficiency in clinical trials, in accordance with theGovernment’s initiatives 2011 and 2012 “Report concerning Enhancement of Efficiency in Clinical Trials”
and the “Action Plan for the Five-Year Program toward the Revitalization of Clinical Studies and Trials”.
Japan should enhance efficiency of drug development further with taking advantage of the new guidelines on
multi-regional clinical trials (ICH E17, GENERAL PRINCIPLES FOR PLANNING AND DESIGN OF
MULTI-REGIONAL CLINICAL TRIALS) reached Step 5 and was published in June.
■ New systems related to new drug review and approval
Yearly status report: some progress and new issues. There are limitations to the improvement in patient accessthat can be achieved by drugs under development through clinical studies sponsored under GCP.
Recommendations:
Expanded clinical trials: Alternative compassionate use systems should also be considered.
“Sakigake” designation system: Japan should make the system permanent and provide adequate resources torelevant organisations beyond the current pilot introduction.
Optimal use promotion guidelines and conditional early approval system: These should be carefully
reviewed and improved in order to enhance patient access to new drugs. To facilitate the success of them,
incentives to drug developers need to be considered.
General principle on planning/designing of ICH-E17: The actual implementation of clinical studies based in
the new principle should be facilitated to improve the drug development in Japan.

Pharmaceuticals

53

Dr.Jun Honda
Chair, Vaccine Sub-committee, Biologics Committee, EFPIA Japan(Senior Expert, GlaxoSmithKline K.K.)
c/o GlaxoSmithKline K.K.
1-8-1 Akasaka, Minato-ku, Tokyo 107-0052
Phone 03-4231-5000
Fax
03-4231-5977

VACCINES
Introduction
Access to vaccines in Japan started to improve rapidly from 2008 onwards, following the sequential introduction ofseveral new vaccines. Before then, Japan had suffered from a significant vaccine gap. By October 2016, many vaccines
had been designated an integral part of “routine immunisation”, and they are, therefore, included in the suite of vaccinesstrongly recommended, as well as funded, by the government. The rotavirus and mumps vaccines are the only
remaining WHO (World Health Organization)-recommended vaccines excluded from Japan’s routine immunisation
programme. The only other gap remaining derives from shortcomings in the development of combination vaccines,
which would alleviate the congested immunisation schedule for infants. For example, the combined MMR vaccine(mumps, measles and rubella), and the 5- or 6-in-1 combination vaccine (where hepatitis B and/or Hib vaccines areadded to the 4-in-1 DTaP-IPV-diphtheria, tetanus, pertussis and inactivated polio) are still not available in Japan.
Concerning the inclusion of mumps vaccine into routine immunisation, the Expert Council on Promotion of
Vaccination, comprising 17 academic societies, sent a petition to Ministry of Health, Labour and Welfare (MHLW) in
May 2018, mentioning that during 2015 and 2016, there were at least 348 patients who suffer from mumps deafness
which is one of the complications of mumps infection. Coincidentally, the popular NHK morning drama, which aired in
the first half of FY2018, had a main character that suffered from this complication. Furthermore, there was a nationwide
outbreak of measles originated from a tourist from Taiwan in March 2018. Considering the recent increase of inboundtourists to Japan, recurrence would be consequential, with mumps having an endemic cycle of 5- to 6-year intervals.
Japan would be putting the health of the people, including visitors from abroad, who continues to increase (28.7 million
in 2017), at risk if the Tokyo Olympic Games are held without taking any action. Japan experiences vaccine supply
issues all the time, due to a mix of sporadic endemics, manufacturing issues and natural disasters. A recent example ofthis is the supply issue of flu vaccines in the 2017/18 season. As part of crisis management, adding vaccines into routine
immunisation and improving vaccine supply issues need to be addressed urgently.
The process for recommending vaccines into the routine immunisation programme is not clear, and the outcome can bedifficult to predict, thus increasing the risk for manufacturers considering the development of vaccines in Japan. Thishas been a problem and was mentioned in this report last year. Uncertainty is further increased by the decision firstmade in June 2013, and still in force as of September 2018, that active recommendation for human papillomavirus
vaccination be suspended, even though a causal relationship between the various symptoms reported and the vaccination
has not been medically and scientifically proven. This in addition to reconfirmation by various reports such as Cochranereview on efficacy and safety of these vaccines. Again, we have not seen any changes in this area since last year. If
companies are to develop vaccines smoothly in Japan, an infrastructure must be created that will allow the regulatory
authorities to make decisions and implement policies based on scientific judgements. Women in Japan should not be
deprived of the opportunity to prevent cervical cancer, and the current situation should be promptly rectified.
Another issue is in the regulation (conditions for review and development) upon introduction and development ofvaccines, which has always been the case for import vaccines, and prompt improvement is needed. Specifically, theneed for compliance with domestic requirements such as Minimum Requirements for Biological Products andRequirements for Biological Ingredients. There are cases where compliance with the same requirements as the domestic
vaccines is requested, regardless of its influence on vaccine efficacy or safety. This makes introduction of vaccines
impossible despite their needs.
That being said, the perception on these issues by regulatory authorities are changing, and considerations are being
made to establish a forum for periodic discussion on these issues with four vaccine related industry groups including
EFPIA. EFPIA will continue to make proposals to various stakeholders including the utilisation of this forum in order topromote progress in revision of the vaccination system and vaccine policy in Japan.

54

EFPIA Japan
Member Companies

Key Issues and Recommendations

Actelion Pharmaceuticals Japan
AstraZeneca
Bayer Yakuhin
Bracco-Eisai
Chugai Pharmaceutical
CSL Behring
Ferring Pharmaceuticals
Galderma
GE Healthcare Japan
GlaxoSmithKline
Guerbet Japan
Ipsen Pharma Japan

Janssen Pharmaceutical
LEO Pharma
Lundbeck Japan
Merck Serono
Mylan EPD
Nihon Servier
Nippon Boehringer Ingelheim
Novartis Pharma
Novo Nordisk Pharma
SanofiShire JapanUCB Japan■ Incorporation of WHO-recommended vaccines into routine immunisation andpromotion of development of combination vaccines
Yearly status report: no progress. As from October 2016, hepatitis B vaccine is included in Japan’s routine
immunisation programme, and the Vaccination and Vaccine Subcommittee of the Health Science Council isconsidering the recommendation that the remaining rotavirus and mumps vaccines be included, but with noprogress. They have also proposed that the early development of combination vaccines should be treated as an
issue of high priority.
Recommendation:
The remaining approved and WHO-recommended rotavirus and mumps vaccines should be included inroutine immunisation without further delay. In addition, combination vaccines that are not available in Japan
should be promptly introduced and/or developed.

■

Securing a stable supply of vaccines
Yearly status report: no progress. Concerns have arisen that Japanese public health could be adversely impacted
by issues such as problems with manufacturing processes or the occurrence of natural disasters that lead to an
unstable supply of vaccines. In fact, the 2017/18 season saw supply issues in flu vaccines. For important vaccines
like those in the routine immunisation programme, diversifying supply sources to multiple manufacturers, both
domestic and global, would allow a stable vaccine supply in Japan. Also, long-term supply purchase agreements
and stockpiling should be considered.
Recommendations:
Diversify vaccine suppliers to multiple domestic and global manufacturers, securing stable supply routes.

Investigate long-term supply purchase agreements and stockpiling by the government.

■

Elimination of the “structural vaccine gap”
Yearly status report: some progress. It is difficult to predict whether the regulatory authorities will recommendthat a particular vaccine be part of the routine immunisation programme or not, and companies are hesitant todevelop vaccines in Japan because of this uncertainty. As a result, there is a risk that the vaccine gap in the
product portfolio may re-emerge. EFPIA invited an expert from the German Standing Committee on Vaccination(STIKO) and provided some insights at MHLW’s Health Science Council in May 2017. As a result, it was
decided at the Council in June 2018, citing the document EFPIA provided, that “We [the Council] will continue
discussions by hearing more from the vaccine industry groups and to take into account the measures takenoverseas”.
Recommendation:
The routine immunisation process should continue to be streamlined and an environment created where clear
policy decisions can be made based on sound medical and scientific evidence.

■ Promotion of international harmonisation of regulatory requirements including

Mutual Recognition Agreement (MRA) and Minimum Requirements for Biological
Products (MRBP)
Yearly status report: progress. The number of EU Member States covered by the EU-Japan MRA on GMP (GoodManufacturing Practise) was expanded in April 2016, and vaccines have come into scope in July 2018, which isconsidered a major progress. However, a great deal of time and effort is still needed to introduce and supply
vaccines due to pharmaceutical regulations such as the lack of clarity in MRBP related to the timing of reviews,
revision procedures, and criteria for listing. Also, even if the MRA is fully in effect, national testing remains, thus
it can still take more than 6 months before a vaccine is released to the market after importation.
Recommendation:

The current MRBP should be abolished and its contents consolidated and integrated into the JapanesePharmacopoeia.

Vaccines55

Dr. Nobuyuki Hagiwara
Chair, Cosmetics & Quasi-Drugs Committee(Head, Regulatory Affairs, Johnson & Johnson K.K.
Consumer Company)
c/o Johnson & Johnson Family of Companies
First Chiyoda Bldg. 15F, 3-5-2 Nishi-Kanda
Chiyoda-ku, Tokyo 101-0065
Phone 03-4411-6118; Fax 03-4411-7149

COSMETICS & QUASI-DRUGSIntroduction
The European Cosmetic and Quasi-Drugs sector works to ensure the quality, efficacy, safety, and environmental
sustainability of its products by investing in the research and development of new ingredients, monitoring global
developments in science, providing information to consumers, and meeting or exceeding strict post-marketingsurveillance and control requirements in accordance with Good Vigilance Practice (GVP) and Good Quality Practice(GQP). The sector produces a wide variety of innovative and safe cosmetic and quasi-drug products that contribute toconsumers’ quality of life, for example by helping them stay clean and healthy, protecting them against the damaging
effects of extreme weather, preventing dental cavities, and enhancing their appearance. These outcomes fit well with theefforts being made by the Japanese Government to promote self-care and, where appropriate, self-medication, so thatpeople in Japan can enjoy the best possible health and avoid placing unnecessary strain on the national healthcare
budget. Many cosmetic and quasi-drug products can assist in these efforts.
Shipments of cosmetics in Japan were worth a total of 1,629 billion yen in 2017. In the same year, Japan imported
cosmetics valued at about 267 billion yen, of which some 98 billion yen came from Europe, indicating that European
cosmetic and quasi-drug products are popular with Japanese consumers as they account for a considerable share ofimports. The import process was made easier in 2016, when the Ministry of Health, Labour and Welfare (MHLW)
abolished import notifications and eased the rules relating to Partial Change Approval for prescription drugs. It is now
possible for the applicant to decide the timing of a product change. The EBC applauds Ministry of Health, Labour andWelfare for these actions.
However, European companies still face challenges in bringing cosmetic and quasi-drug products to Japanese
consumers in an efficient manner, due to Japan’s lack of regulatory transparency, the low degree of harmonisation
between its product standards and those used in other parts of the world, and its unnecessarily complex approval andmanufacturing requirements. As a result, the launch of many European cosmetic products in Japan is severely delayed,even when the same products are already in global use and have clinically proven efficacy. Some quasi-drugs even need
to be reformulated because their global version uses new active ingredients or excipients for which obtaining approval is
too time-consuming or difficult in Japan. European and Japan also maintain different rules governing which ingredientsare allowed in cosmetics. Even if an ingredient does not require regulatory approval in Japan when used in a cosmetic,the use of the same active ingredient in a quasi-drug often requires a lengthy approval process. It is therefore considered
to be difficult to deploy into the Japanese market promptly. Hence there is no choice but to change the ingredients insome cases. Furthermore, disclosure of information on effective ingredients and additives in quasi-drugs that are alreadyapproved in Japan is extremely limited, which is one of the reasons why such quasi-drugs require a long time to be
introduced onto the market.
Parallel imports currently account for a substantial portion of the Japanese luxury cosmetics market. Some studies
indicate that 11% of the units sold are parallel imports. Most are sold online via e-commerce portals. As these imports
were not produced for the Japanese market, there is a risk that they are either not approved for Japan or do not have theproper labelling. There is also a risk that the imports may be expired products or products that have not been transported
or stored properly and so could cause harm to consumers. The EBC calls on the Japanese authorities to make certain that
all cosmetics sellers are subject to the same high standards when it comes to consumer products, with a particular focus
on formula registration, laboratory facilities, and labelling.
The EBC believes that Europe and Japan have an opportunity to lead the way in the global cosmetics and quasi-drugs
market, by bilaterally negotiating faster registration of quasi-drugs, expanding efficacy claims, and harmonisingingredients that are allowed for cosmetics and quasi-drugs. In addition, the EBC would welcome greater leadership byEuropean and Japan in the International Cooperation on Cosmetic Regulation, which meets to discuss how to promote
multilateral regulatory coordination and harmonisation to minimise barriers to trade, while maintaining the highest levelof global consumer protection.

56

EBC Cosmetics & Quasi-Drugs
Committee
Member Companies
Bluebell Japan
ChanelClarins
ELGC
Johnson & Johnson
LVMH Cosmetics
Nihon L'Oreal K.K.

Key Issues and Recommendations■

Reform of the quasi-drug approval system
Yearly status report: slight progress. The Director of the MHLW’s Evaluation and Licensing Division issued a“Notification concerning approval and review of medicated soap” in March 2018 to specify the review guideline
for medicated soap. Additionally, the PMDA holds an explanatory meeting every year for staff in charge withregard to points to be noted when creating application forms and the review policy. While such actions will leadto improvement in the quasi-drugs review system, it is not guaranteed that this would shorten the review period.
Furthermore, the review is conducted based on material from the explanatory meeting for staff in charge,
however, the positioning of such material is not clearly indicated. For instance, a new item is approved because it
is identical to an already approved quasi-drug only when the precedent of approval has been presented, however,this is not mentioned at all in the notification, etc. issued by the MHLW.
Recommendations:
MHLW should shorten the review period for quasi-drugs for which review guidelines have been created andwhich are believed to be identical to already-approved quasi-drugs.
When submitting an application related to a quasi-drug that uses ingredients of the same standard as thosecontained in quasi-drugs already approved, re-examination of the pertinent contents mentioned in theseparate sheet standard should be omitted in order to improve efficiency and shorten the review.
When ideas concerning the review change, this should not only be announced at the explanatory meeting for
PMDA staff in charge but also be announced by issuing a notification or clerical communication aftergaining understanding from the applicants through the collection of opinions, etc. using public comments inadvance.

■ Harmonisation of quasi-drug and cosmetic ingredients
Yearly status report: progress. The EU and Japan maintain different rules governing the type and quantity ofingredients allowed in cosmetics and quasi-drugs. The effectiveness of fluoride in preventing tooth decay has
been scientifically verified: it is important for the health of the mouth and the entire body and is therefore key toself-care. Japan used to permit a maximum of 1,000 ppm of fluoride in toothpaste sold as a quasi-drug as an
approval standard, while concentrations of fluoride of up to 1,500 ppm are allowed in Europe. In March 2017,
MHLW approved the sale of products containing a maximum of 1,500 ppm fluoride, in line with the international
standard (ISO) used in other countries.
Mouthwash with fluoride concentrations of 226 ppm is sold at drugstores and supermarkets throughout Europe
and the United States. However, Japan approved the use of fluoride in mouthwash for general consumption in2015 as a drug requiring guidance, and at last it has just been included as a general drug (category-1 OTC drug)
this year. The EBC notes that the Japan Society for Oral Health suggested at an academic meeting in February
2017 that the environment should be improved for older people’s oral care, including through deregulation, sothat drug products containing fluoride can be developed and used more effectively.
Recommendation:
MHLW should revise the medicated dentifrice approval standard in line with international norms, raising theupper limit of fluoride concentration allowed in medicated toothpaste (a quasi-drug) and allowing the use offluoride in mouthwash (another quasi-drug) without restrictions.
■ Expansion of advertising representation for cosmetics and quasi-drugs
Yearly status report: no progress. Fifty-five efficacy claims were defined as permissible for cosmetics in Japan in
2000. In 2011, a further efficacy claim of “making fine wrinkles due to dryness less noticeable” was added to thelist. Yet the scope of efficacy claims approved in Japan is still narrower than in Europe, which hinders foreignmade cosmetics based on the latest research and technology from entering the Japanese market. Sector
associations are currently studying the efficacy claim of “prevention of ultraviolet ray-derived photo-ageing”
which may lead to a further expansion. However, current advertising regulations still do not permit claims
relating to the significance of daily care using cosmetics or quasi-drugs such as moisturising creams for atopic

Cosmetics & quasi-drugs
257

skin or sunscreen products to prevent skin cancer, despite the fact that this plays an important role in maintaining
health and preventing illness.
Recommendation:Advertising claims connected to the maintenance of health and prevention of illness should be deregulated
so that the significance of daily care using cosmetics and quasi-drugs can be claimed.

■ Online notifications and applications for approval of cosmetics and quasi-drugs
Yearly status report: no progress. The Government enacted the “Basic Act on the Advancement of Public andPrivate Sector Data Utilization” in December 2016, which stipulates the use of necessary measures fordetermining online usage for administrative procedures in principle. However, with regard to cosmetics andquasi-drugs, notification and application should be made using floppy discs or in paper form excluding the export
report for which NACCS (Nippon Automated Cargo and Port Consolidated System) can be used, so theprocedure remains unchanged compared with other countries. Furthermore, the prefectural authorities, the PMDA
and Customs are not linked, so separate procedures are required for notification and application concerning the
manufacturing and sales of cosmetics and quasi-drugs, and presentation of the necessary material for importcustoms clearance. The MHLW included the promotion of online application and notification procedures as a
new item in the budget request for 2019, so it is expected that application and notification procedures will becomecompletely online.
Recommendation:

An online notification and application system should be established for submitting Notifications on the
Manufacture and Sale of Cosmetics and Applications for Approval of Quasi-Drugs. This system should belinked to the Customs clearance system to provide a one-stop service for application procedures.

■

Applying the same standards to all market participants
Yearly status report: new issue. Ensuring safety is crucial, both from a legal and, more importantly, from a
consumer perspective. Manufacturers and importers of cosmetics and quasi-drugs are therefore required to spend
considerable resources implementing post-marketing surveillance and control schemes to monitor safety andquality. However, parallel importers do not always comply with these requirements, sometimes illegally using
registered trademarks, importing versions of products that are not approved in Japan, and selling products withdamaged or missing labels or that have passed their expiry dates.
Recommendations:Japan should ensure that everyone involved in the sale of cosmetics and/or quasi-drugs complies with thesame legal requirements related to safety and quality.

The authorities should support an industry-led campaign to educate consumers so that they have a better
understanding of products sold by authorised suppliers and those that are not.

■ Establishment of alternatives to animal testing
Yearly status report: progress. MHLW issued a new guidance in January 2018 concerning the evaluation system
in which multiple in vitro alternatives are combined. This opened up the possibility to use an alternative skinsensitisation test without the need for animal testing. However, when submitting an application related to quasidrugs containing new ingredients in Japan it is required to submit the results of animal testing as a hazard
evaluation for ingredients. The ban on animal experiments and shift to alternative testing that started in Europe isspreading throughout the world, and so ideas regarding safety evaluation need to change significantly.
Recommendation:
Japan should proactively promote the development of alternatives that use no animals so that thesealternatives can be used in applications related to quasi-drugs. Japan should also establish a risk evaluation
method for the final products without depending on safety data based on animal experiments.

58
3

Consumer Goods
LiquorFood & agriculture

Mr. Bruno Yvon
Chair, Liquor Committee(President, MHD Moët Hennessy Diageo K.K.)
c/o MHD Moët Hennessy Diageo K.K.
13F Jimbocho Mitsui Bldg.
1-105 Kandajimbocho, Chiyoda-ku, Tokyo101-0051
Phone 03-5217-9723
Fax
03- 5217-9751

LIQUOR
Introduction
Europe is the leading exporter of liquor and wine worldwide. The Japanese liquor market is one of the largest in theworld with estimated annual sales of 4 trillion yen and growing consumption in several categories. Despite such figures,in terms of value, foreign liquor imports in 2017, at 286.4 billion yen (according to Japan Customs), accounted for amere 7% of the total Japanese liquor market, including beer and beer-like products.
The EBC welcomes the EU-Japan EPA agreement in principle, and looks forward to its smooth implementation. Of
particular interest is the complete removal of tariffs on wine (15% or 125 yen/litre whichever is lower) and sparklingwine (182 yen/litre) at the entry into force of the EPA. While no specific information has been officially released
regarding white spirits, the EBC assumes that the tariff on white spirits of EU origin will be permanently removed. The
agreed mutual protection of geographical indications (GIs) will ensure the protection of 139 liquor GIs from the EU.
Significant additives to wine were approved by both Japan and the EU (25 items by Japan and 28 items by the EU),
making it possible for Japan to import wines that use EU-approved additives. Separately, the Ministry of Health, Laborand Welfare (MHLW) surveyed possibly deleting existing additives out of the 365 existing food additives. The EBC
liaised with SpiritsEUROPE's and Comité Européen des Entreprises Vins (CEEV) to urge MHLW to accept theirrequests on keeping the existing additives, and it was successfully achieved.
In Japan, the display of producer lot codes (traceability information) is not compulsory under the Food Sanitation Law,although it is recommended in the administrative guidelines of the Ministry of Health, Labour and Welfare (MHLW).
By contrast, the EU makes it obligatory to display lot codes on food and beverage products as such codes fulfil an
important role in any effective and efficient product recall or withdrawal process. Despite the fact that most importers of
EU liquor products ensure that lot codes are in good order when the products are marketed and put into distribution in
Japan, it is common practice for some opportunistic traders, prioritizing business profit over consumer safety, to importproducts with lot codes that have been erased, tampered with or covered up. The EBC encourages the Japanese
Government to take more proactive measures to protect the safety of Japanese consumers since 2010. The EBC
appreciates the notice issued by the National Tax Agency (NTA) in September 2014 and the new liquor sales
management training textbook/DVD, which was produced by the NTA in April 2017 and includes these concerns.
Furthermore, the EBC recognizes the notice issued by the Ministry of Economy, Trade and Industry (METI), MHLW,
and the Ministry of Agriculture, Forestry and Fisheries (MAFF) in July 2017, stating their concern regarding thepresence of liquor products with erased lot codes in the market. The EBC continues to urge the Japanese Government totake further proactive measures to ensure the display of product lot codes for traceability. Japan Wines and Spirits
Importers’ Associations (JWSIA) submitted the request letter including legal expert’s opinion paper regarding thequality assurance role of production lot codes as an integral element of a brand's trademark on 23rdJune 2018. The EBC
supports JWSIA’s action that the NTA will establish notice under article 86 of the Liquor Trade Association Act andintroduce the legal regulations to eradicate the distribution of imported liquor without production lot codes.
A new liquor tax policy was formulated to reduce the tax on beer and to increase the taxes on happoshu and “newgenre” beverages in three phases (in 2020, 2023, and 2026), ultimately making the tax rate for all these beverages a
uniform 157 yen/litre. While this will eliminate the current complex tax system for beer, the EBC continues to urge
Japan to work on lowering its high tax rates. The tax on wine will be raised in two phases (in 2020 and 2023), ultimately
making it equal to the reduced tax rate for sake. Although taxes on spirits will not be subject to the upcoming tax hikes,
they are quite high at 370 yen/litre for products with less than 37% ABV (Alcohol By Volume) plus an additional 10
yen/litre for each additional percentage of ABV. The EBC objects to the increase in the tax on wine and urges Japan toreduce taxes on spirits.

60

EBC Liquor Committee
Member Companies

Key Issues and Recommendations

Bacardi Japan
Baron Philippe De Rothschild, Orient
Diageo Japan
Heineken Kirin
Japan Europe Trading
MHD Moët Hennessy Diageo
Pernod Ricard Japan
Vranken Pommery Japan■ Decoded products
Yearly status report: slow progress. Original production lot codes fulfil an important role in any effective andefficient product recall or withdrawal process. However, the official notices2014/2017and liquor sales
management training from 2017have no binding force to prohibit the import and sales of any such products withlot codes that have been erased, tampered with or covered up. In June 2018, JWSIA submitted the request letter
including Legal expert’s opinion paper regarding the quality assurance role of production lot codes as an integral
element of a brand's trademark. The EBC liquor committee support JWSIA’s action.
Recommendation:

The Government of Japan should issue legislation, reinforced by penalties, that forbids the wholesale orretail of liquor bottles whose lot codes have been erased, tampered with or covered up.
■ Tariff on wine and white spirits
Yearly status report: good progress. Tariffs on wine will be abolished at the entry into force of the EU-Japan
EPA. The temporary zero tariff on white spirits, rum, gin, vodka and liqueurs should be made permanent.
Recommendations:
The EBC urges Japan to completely remove all tariffs on wine as anticipated.

The EBC urges Japan to change the tariff lines for white spirits to become permanently zero.
■ Liquor taxes
Yearly status report: no progress. Japan will reduce the tax on beer and increase the taxes on happoshu and “newgenre” beverages in three phases (2020, 2023, and 2026), ultimately to 157 yen/litre. However, taxes on wine will
be raised in two phases (2020 and 2023), making it equal to the reduced tax rate for sake, at 100 yen/litre. Taxeson spirits, not subject to the upcoming tax hikes, are high at 370 yen/litre if less than 37% ABV plus an additional
10 yen/litre for each additional percentage of ABV.
Recommendations:Japan should promptly revise its liquor tax system for beer in accordance with the 2017 tax reform.

The EBC objects to the increase in the tax on wine and urges Japan to reduce taxes on spirits.
■

Additives
Yearly status report: progress. Wine additives were approved in the EPA negotiations, making it possible forJapan to import wines that use EU-approved additives. Separately MHLW surveyed possibly deleting existing
additives out of the 365 existing food additives in 2018. However, kaolin, spice extracts, rice bran oil extract,
powdered stevia, tannins (extracts), mastic gum, L-lysine and rutin (extract) are in the list.
Recommendations:Japan should swiftly approve additives that are in common use among other industrialized countries.

The EBC urges to remain spititsEUROPE’s and CEEV’s requests in the list.

■ Wine and whisky definition
Yearly status report: no progress. A loose wine definition opens the door for different products to be sold as“wine” misleading Japanese consumers and creating unfair competition for European wines, which meet theinternational accepted definition. The same is also true for whisky.
Recommendations:Japan should implement the wine definition in conformity with international specifications as used in the EU
and the US and endorsed by the International Federation of Wines and Spirits.
Japan should implement a stricter definition of “Japanese whisky”.
■ Geographical indications
Yearly status report: good progress. The mutual protection of GIs agreed upon through the EU-Japan EPA will
ensure protection of geographical indications for 139 liquor products from the EU.
Recommendation:

The EBC urges and looks forward to the smooth implementation of the EU-Japan EPA.

Liquor2

61

Mr. Olivier Convert
Chair, Food & Agriculture Committee(Managing Director, Roquette Japan K.K.)
c/o Roquette Japan K.K.
2F. KDX Kasuga Bldg., 1-15-15 Nishikata
Bunkyo-ku, Tokyo 113-0024
Phone 03-3830-1510
Fax
03-3830-1525

FOOD & AGRICULTURE
Introduction
Despite theirglobal presence, European food and agricultural products have had difficulty penetrating the Japanesemarket. Although they can be found in regular supermarkets, the selectionavailable is, with a few exceptions, limited toonly a fraction of the potential. The situation is better in upscale and gourmet specialist shops, where price matters less.
However, there is no reason why imported European food should be either so expensive or exclusively upscale.
With the implementation and entry into force of the EU-Japan EPA just around the corner, the EBC have high hopes ofa much improved market access for EU products. For this to happen though, not only tariffs will be removed or reducedin accordance with the agreement, but also the management regarding the TRQs (Tariff Rate Quota) need to be
published so that both exporters and importers can make use of the system from day one. There is currently very little
information on the how, the when and the where in this area. We believe that is of utmost importance that this is done ina timely matter as well as in a transparent way. Only then can the Japanese consumers reap the full benefit of the EPA.
Apart from tariffs, various non-tariff food-related issues also impact the availability of European products in Japan. For
example, Japan remains “out of sync” with other countries, in thatit has still not approved the majority of food additives
and enzymes declared safe by the Food and Agriculture Organisation (FAO) and the World Health Organisation(WHO). Sanitary and phytosanitary issues are of course included in the EPA. It should, however, be stated that theagreement currently only includes very general wording on what benefits suppliers and importers can foresee. It istherefore important that the two authorities continue to work in this field to improve the current situation, where
duplicate testing has to be done for imported goods due to lack of harmonisation or mutual recognition of approvals of
test methods.
An example of an area that could benefit from harmonisation is for food contact materials. Japan is currently exploring
the possibility of introducing a positive list system similar to what is in use in the EU and the US. This is something that
the EBC support. It is furthermore important that Japan is studying the issue of the use of materials that are not in thelist. Both the EU and the US have provisions for this.
A further issue is the new Labelling Act requirement for labels specifying the origin of all ingredients. Although thisrequirement is currently only applicable to domestically produced food, the EBC noteswith dismay the imposition of yet
another administrative burden as well as the huge cost of compliance, as the same ingredients (for example berries orsugar) can be sourced from multiple countries.
The EBC is very keen to work closely with all relevant parties in the Government of Japan and the European
Commission to help bring about effective and positive change to support the goal of providing consumers in Japan witha much wider variety of safe, high-quality food. We very much hope that the EU-Japan EPAwill ensure that tariffs are
abolished, standards harmonised and the market authorisations of both regions mutually recognised. The EBC Food &Agriculture Committee firmly believes this can be achieved without compromising food safety. Furthermore, it will leadto more choice in supermarkets, stimulating healthy competition in the food and agricultural sectors of both zones, andto European food becoming more accessible, something we know Japanese consumers would appreciate.

62

EBC Food & Agriculture Committee
Member Companies

Key Issues and Recommendations

ARYZTA Food Solutions Japan
Corbion Japan
Danisco Japan
Danone JapanDSM Japan
IKEAJapan
Japan Europe Trading
Lactalis Japon
MIE PROJECT

Nestle Japan
Perfetti Van Melle Japan Services
PinguinLutosa Japan
Puratos Japan
Roquette JapanSAVENCIA FROMAGE & DAIRY JAPONSKW East Asia
ValrhonaJapon■ Tariffs & quotas
Yearly status report: good progress. With the implementation of the EU-Japan EPA, and the removal or reductionof tariffs, EU products will have an improved market access. The EBC has big hopes that this will also translate
to more European food products in the shopping bags of Japanese consumers. It is however important that theseliberalisations are implemented without the use of stringent safeguard measures. Furthermore, the tariff quota
system must be easy to use and information on how to use them must be made public early.
Recommendations:Japan should abolish its tariffs in accordance with the EPA without delay and refrain from the use ofsafeguard measures.
The information regarding the newquotas for EU products shall be made public immediately so that thesecan uses when the agreement enters into force.

It is of utmost importance that the quota management system is transparent, easy to use and that information
on how to use it is released as soon as possible.
■ Food additives, enzymes and processing aids
Yearly status report: progress. Differences in the lists of additives and enzymes approved by Japan and othermajor markets are still common. While the EBC has seen progress in Japan’s approval of additives, the approval
process still remains an obstacle, and an overall lack of transparency. EU and Japan should use the EPA to further
strengthen the work in this field.
Recommendations:Japan should harmonise its definition of food additives to exclude processing aids which as per its definition
do not remain in the product after it has been produced. MHLW and the FSC should ensure that standards ofuse in Japan are not in conflict with international standards of use.
The EU-Japan EPA should guarantee that food enzymes in wide use in the EU and accepted as safe by the
FAO/WHO Joint Expert Committee on Food Additives will be approved for immediate use in Japan.

MHLW should put the same focus on enzymes as it has on food additives and actively approve enzymes thatare well established in other major markets.
■ Beefand processed food including beef and by-products (casings, gelatines)
Yearly status report: progress. While for many years the approval process was slow, to the credit of the Japanese
authorities, the number of EU Member States approvedtoexport beef to Japan has recently increased. There are
however still Member States waiting to gain such approval. The EBC notes that several of these Member States
are designated as having “negligible BSE (Bovine Spongiform Encephalopathy) risk” - the same status as Japan.
Recommendations:Processed food containing beef, bovine gelatines, or products made with beefcasings, should be approvedfor
importto Japan, as they are widely used in the European food industry, which has already established highsafety standards.

The Ministry of Agriculture, Forestry and Fisheries (MAFF) and MHLW should speed up the approval
process in respect of the EU Member States that have already submitted data.
■ Malt and quota management system
Yearly status report: progress. Japan has a tariff quota system for brewing-malt to balance the demand fromdomestic beer manufacturers for cheap malt and the perceived need to protect domestic barley farmers and malt
manufacturers. Historically, to make use of the quota, a company must manufacture beer or import malt
exclusively for the use of a particular brewery. In addition, a companycan only apply for the quota twice a year,
meaning that any imports using the quota must be based on forecasts and not on actual short-term demand. With
the EPA EU origin malt will have its own tariff quota. This will be a first-com first-serve quota for EU origin
malt. The new quota, however, only covers 70% of the current imports from the EU. Furthermore, the allocating
mechanism is still unknown at the time of production of this report. It is therefore doubtful whether malt export

Food & agriculture
2

63

from the EU to Japan will increase. Furthermore, due to the lack of information on the management of the EU
quota, there are some concerns that the quota will share some of the limitations as the general quota.
Recommendations:Japan should abolish the tariff on EU malt so thatthere is no need for European suppliers to use the quota.
This would be beneficial not only to European supplier but also to especially Japanese breweries withsmaller production capacities.
In the meantime, Japan shouldincrease the volume of the quota and at the same time make certain that it does
not have the same limitations as the general quota.

■

Origin labelling of ingredients
Yearly status report: no progress. The Government of Japan is planning to introduce a requirement that the originof all ingredients in food and certain beverages must be listed. This new requirement will apply to domestically
produced food. The EBC stresses that it should not be extended to goods produced overseas, where multiple
sourcing of ingredients is far more common and the cost implications would be severe and potentiallydiscriminatory.
Recommendation:
Japan should not include overseas products in the scope ofingredient origin labelling as this would imposea
disproportionate administrative burden and additional cost on European suppliers.

■ Food contact
Yearly status report: new issue. Materials that come in contact with food, such as wrapping, packaging, plates,
cupsetc has to fulfil the rules set out by the Food Sanitation Act. Japan is currently planning to introduce a
positive list of materials that are allowed to be used for the above-mentioned purpose. Several other markets arealso using positive lists. The MHLW has for this purpose asked some domestic business organisation for lists ofresins currently inuse, and has then compiled a list of 32 resins. If there is no harmonisation as well as aprocedure of exemptions as is the case in the EU and the US, European suppliers and Japanese buyers run the riskof not being able to import the products to Japan.
Recommendations:Japan should allow resins allowed in the EU and the US.
Japan should also introduce a system where materials can still be used without being on the positive list,
similar to the EU and the US.
Japan should furthermore make use of ISO standards as tests methods, as to avoid specific testing for theJapanese market.
■ Testing and approvals
Yearly status report: new issue. Many European products undergo frequent and expensive testing to be approvedfor either important or for selling on the Japanese market. Examples of these are: cyanide testing, radioactivity
testing, microbiological testing etc. The EBC believes that in many cases it should be possible to use approvals
and testing carried out in Europe. This is currently not possible in many cases due to non-harmonised test
methods and standards.
Recommendations:Japan and the EU should use the EPA to streamline test procedures by looking into what tests are necessary
to eliminate double testing. The goal should be that products approved for consumption in one market shouldbe allowed for consumption in the other market.
Japan should furthermore make use of ISO standards as tests methods, as to avoid specific testing for theJapanese market.

64
3Industry
Automobiles
Automotive components & aftermarket
Aeronautics
Space
Defence & security
Materials
EnergyMr. Kintaro Ueno
Chair, Automobile Committee(President and CEO, Mercedes-Benz Japan Co., Ltd.)
c/o Mercedes-Benz Japan, Co., Ltd.
Shinagawa Seaside Park Tower
4-12-4,Higashi Shinagawa, Shinagawa-ku, Tokyo 140-0002
Phone 03-6369-7200
Fax
03-6369-7126

AUTOMOBILES
Introduction
In the first half of 2018, the sales of passenger cars in Japan were 2,292,025 units. Sales of the foreign-brands, mainly
from Europe were up by 0.5 percent from a year earlier to 151,803 units, posting the 3rd highest figure ever for a firsthalf period. Moreover, total imported vehicle sales including the Japanese brands were up by 5.0 percent from a year
earlier to 182,519 units. For the second half of this year, the imported vehicle market will likely continue posting
positive results. The new models that were launched in the first half will further improve the figures.
The Economic Partnership Agreement (EPA) between the EU and Japan was signed on July 17, 2018. The agreement
will create a massive free trade zone accounting for 37 percent of the world’s trade by value. The EBC Automobile
Committee appreciates the efforts and contribution of all the parties concerned. The EU-Japan EPA agreement is, an
important achievement, signalising to the world that both the EU and Japan remain open for international business in atime when protectionism is rising and the risk to multilateral trade is under a growing threat.
Non-tariff measures (NTMs) add to the cost of doing business for European importers of both passenger cars andcommercial vehicles. The EBC Automobile Committee has been calling for the harmonisation of Japanese regulations
with international norms and therefore welcomes the importance given to the elimination of NTMs in the automobile
sector in the EU-Japan EPA agreement.
One of the concrete outcomes of the EPA is the provisional harmonisation on the use of hydrogen container for fuel cellvehicles to the restricted vehicles such as PR demonstration cars or test vehicles. Further efforts/studies are needed toreach the complete international harmonisation as a GTR (Global Technical Regulation).
Although major NTMs are abolished through the EPA agreement, there still remain NTMs in some areas includingcommercial vehicles. Most of Heavy Duty Vehicle importers in Japan, for example, homologate the vehicles by thePreferential Handling Procedure (PHP). PHP still requires HDV emission Conformity of Production sample test using
an engine bench which means dismantling the engine unit from the vehicle. The number of emission test for thehomologation of HDVs by Parallel Import (PI) are more than that of passenger cars. There are still some more NTMs on
importing HDVs.
Technical harmonisation alone is not sufficient to open up markets. Currently, the unique Japanese system of classifying
vehicles shuts European compact cars out of some 37% of the passenger car market. As noted in previous EBC annual
reports, Japan’s specifications for kei-cars reduce the market opportunities for foreign compact cars. Furthermore,keicars receive preferential tax treatment that undermines the competitiveness of imported cars with similar performanceand pre-tax price. The EBC urges the Japanese Government to take further steps, as recommended by the Ministry of
Economy, Trade and Industry (METI), to narrow the gap between the level of taxation of kei-cars and of compact cars.
The process for reviewing the targets of parties to the Paris climate change agreement for curbing their emission of
global warming gases has gotten underway. In 2017, the European Commission proposed a Post 2021 CO2 regulation
for passenger vehicles and vans, and deliberations have been conducted with the stakeholders. At the same time, theJapanese Government started in March 2018 the deliberation of its Post 2020 Fuel Efficiency regulation for passenger
vehicles. The EBC Automobile Committee requests that the Japanese Government should take these international
developments into consideration when setting up new fuel efficiency standards.
The EBC Automobile Committee continues to support the aim of the EU and Japan of realising a truly fair and open
market.

66

EBC Automobile Committee
Member Companies
Audi JapanBMW Japan
FCA Japan
Mercedes-Benz Japan
Nicole Racing Japan

Porsche Japan
ScaniaJapanUD Trucks
Volkswagen Group Japan
Volvo Car JapanKey Issues and Recommendations■ Future Implementation of International Whole Vehicle Type Approval (IWVTA)
Yearly status report: some progress. The implementation of a partial IWVTA system in July 2018, marked an
important step towards mutual recognition of vehicle certification between Japan and the EU. However, Japan
still retains unique national regulations.
Recommendations: Japan should abolish its remaining unique regulations.
 Japan should work closely with the European Commission to extend the scope of the IWVTA system so thatit covers all the requirements of the Japanese type approval system.
■ Post 2020 Fuel Efficiency regulation
Yearly status report: new issue. The Japanese government has started the deliberation of Post 2020 Fuel
Efficiency regulation for passenger vehicles aiming at setting the target in March 2019.
Recommendations: Japan should harmonise its regulation with the EU Post 2021 CO2 regulation.
 Japan should accommodate the deliberation based not only on powertrain developments such as Plug-inHybrids and Electric Vehicles but on other technologies as well.
■

Tax reform, including kei cars
Yearly status report: little progress. Compared with other countries, Japan imposes an excessively heavy tax on
the purchase and ownership of motor vehicles. There is unfortunately also an artificial differentiation between
kei-cars and other registered vehicles, which distorts competition
Recommendations: The Government of Japan should reduce the Automobile Tax rate and abolish the Tonnage Tax in order tolower the tax burden on vehicle owners and ensure fair tax treatment of registered vehicles and kei-cars. It
should furthermore harmonise parking and insurance regulations between the two different vehicle classes.
 The Japanese authorities should simplify the structure of automobile taxation and reduce the overall tax
burden on motorists in line with international best practice.
 Japan should adopt and implement, in step with the EU, internationally harmonised standards for measuring
fuel efficiency and exhaust emissions as used to assess tax incentives for environmentally friendly vehicles.
 Japan should produce guidelines of tax reduction direction for the next 5-10 years. Two years are too short toadhere to the conditions of the tax reduction for Clean Energy Vehicles.

■

Automated and connected driving
Yearly status report: new issue. SIP-adus, the Japanese Government’s Strategic Innovation Program for
automated driving technologies, has started the second programme in parallel with its first programme. Japanaims to realise automated driving at SAE Level 3 on highways and SAE Level 4 in restricted areas by 2020, and
SAE Level 4 on highways by 2025. For this purpose, the "safety guideline for automated driving vehicle" waspublished in September 2018.
Recommendation:
 Japan should lead the international harmonisation on standardisation on safety, infrastructures and necessary
wireless communication technologies.
 The Government of Japan should share information about the progress of reviewing the related institutional
development in a timely manner, for the chance of feedback from overseas to promote policy and regulatory
harmonisation. EBC requests that importers have the same opportunities as domestic OEMs.
 Japan should support the promotion of automated driving e.g. by publishing a roadmap of the introduction ofOTA (Over-the Air) wireless software update in line with real market needs, even before the international
standards are completely formulated.
 Japan should harmonise the requirements with EU’s Event Data Recorder (EDR) and DSSAD (Data Storage
System for Automated Driving) for automated driving features.

Automobiles
267Mr. Joaquin Martori
Chair, Automotive Components & Aftermarket Committee(Managing Director, Mahle Trading Japan Co. Ltd.)
c/o Mahle Trading Japan Co. Ltd.
3-2-6 Mita
Minato-ku, Tokyo 108-0073
Phone 03-6809-4382
Fax
03-3453-7887

AUTOMOTIVE COMPONENTS & AFTERMARKET
Introduction
The EBC Automotive Components & Aftermarket Committee welcomed the announcement, on 6 July 2017, that theEuropean Union and Japan had reached an agreement in principle on an Economic Partnership Agreement (EPA).
Shared values and a firm belief in the advantages of common standards are the foundations of this historic outcome.
While work continues to bring the EPA negotiations to a final successful conclusion, the prospect of reduced tariffs andtrade barriers between two such important markets is now real and promises to benefit business and consumers alike.
The process of globalisation and intense competitive pressures have together caused the outsourcing of automobile
component development and supply to emerge as a clear trend in the European automobile industry, fostering anenvironment of low risks, reasonable prices and flexibility. In the past, European component manufacturers that hadenjoyed success with Japanese transplants in Europe were seldom able to build on this base to become suppliers of theparent company in Japan. However, European firms are finding that, as a result of recent changes in the Japanese
automobile manufacturing sector, new opportunities are surfacing. An increasing number of companies are therefore
dedicating resources to attracting business in Japan, investing in local infrastructure, andbuilding knowledge of local
technical requirements, with the goal of promoting more direct contact and closer relationships with Japanese clients.
Against this background, the EBC greatly values the ongoing, regular dialogue between European component
manufacturers and Japanese carmakers as a vital mechanism for sharing information and promoting understanding. It is
hoped that this will, over time, foster increased opportunities for mutually beneficial business development.
One area where regulatory change would ultimately benefit Japanese and foreign firms is the auto components
independent aftermarket (IAM). The EBC supports the position paper issued by the European Association ofAutomotive Suppliers (CLEPA) earlier this year, calling for a level playing field in Japan’s IAM. At present, business isseriously constrained by restrictive practices; for example, when carmakers in Japan enter into supply contracts, theyroutinely prohibit the suppliers from selling the parts independently, a practice at odds with the situation in Europe andthe US. In fact, EU law prohibits carmakers from imposing such restrictions in their parts-supply contracts. The EBC
urges Japan to introduce a similar legal framework, allowing healthy competition and fair opportunities for all, so thatend customers have a wider choice.
The EBC recognises that the Japanese authorities have been making efforts towardregulatory harmonisation related totyres. In addition to the implementation of UN/ECE (United Nations Economic Committee for Europe)regulation R11702 (rolling sound emission, wet traction, and rolling resistance) by the Ministry of Land, Infrastructure, Transport andTourism (MLIT) in October 2015, 3PMSF (3 Peak Mountain Snow Flake) marked tyres have recently been recognizsd
as Wwnter tyres by Japan Automotive Tire Manufacuter Association (JATMA)–Tire Industry and Standard
Organisation in Japan. 3PMSF marked tyres have been approved in Europe through a regulation test to guarantee theright level of performance under winter condition. This decision also removes the necessity of additional winter testingfor importedtires and is a very fair decision for import tire distributors.
It should be noted that the tyre market consists of both new vehicle (original equipment) and replacement markets. For
the replacement market, the timeline for implementation of the above-mentioned UN/ECE regulation R117-02 remains
undecided. There are, furthermore, barriers in the replacement market because of the peculiarities of the Japanesedistribution environment, which is fragmented andonly partially integrated,making itdifficult for foreign companiesto
access. Distributors in many other countries in Europe, and even in Korea, have opened up their brand policies frommono-brand to multiple-brands in retail in order to offer more choices to consumers.
Accessing consumers via garages, repair shops, and tyre shops is a critical factor for success in the Japanesereplacement market. Arecent survey by the Japan Fair Trade Commission (JFTC) shows that domestic brands stillaccount for most of the market: around 90% in all tyre segments (truck/bus, light truck and passenger tyres). The EBC
would welcome action aimed at limiting exclusive distribution arrangements and facilitating access for all firms,
domestic and foreign, to the fragmented distribution market.

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EBC Automotive Components &Aftermarket Committee
Member Companies

Key Issues and Recommendations■

A.Raymond Japan
ArcelorMittal Japan
MAHLE
Nihon Michelin Tire
Schaeffler
Seric
ThyssenKrupp Japan
Vodafone Automotive JapanZF Japan

Aftermarket
Yearly status report: no progress. Currently automotive components companies supplying Japanese vehicle
manufacturers are restricted in respect of where they can sell their products on the Japanese aftermarket. As aresult, in many cases Japanese consumers can only purchase original high-quality spare parts from dealerships
tied to a specific car manufacturer. Strangely, no such restrictions apply to companies that make copies or nonoriginal parts, which leads to the independent aftermarket being characterised by potentially lower quality andless safe products.
Recommendations:Japan should set up a legal framework that allows automotive components manufacturers to sell on theaftermarket similar to the EU’s Motor Vehicle Block Exemption legislation. This would increase the options
for Japanese consumers wishing to source original high-quality vehicle parts.
Components suppliers should be permitted to apply their own trademarks or logos and their own partnumbers to goods supplied to vehicle manufacturers.

■ TyresYearly status report: progress. The EBC appreciated the recent actions taken regarding UN/ECE regulation
R117-02 by the MLIT and also the 3PMSF marking for winter tyres by JATMA in Japan. However, the EBC
notes that foreign manufacturers still face difficulties in gaining access to replacement market sales channels inthis sector.
Recommendations:Further accelerate regulatory harmonisation for not only new vehicles but also the replacement market.
Limit exclusive distribution and facilitate access to the fragmented distribution market.
■ Globalisation of the automobile industry and promoting information exchange
Yearly status report: progress. The EBC welcomes the opportunity that globalisation presents for innovative
European firms to strengthen their relationship with Japanese automobile manufacturers in developing new
products and sharing technical expertise. Japanese automobile manufacturers are increasingly making use offoreign tie-ups to develop their business and respond to competitive pressures both at home and abroad.
Nevertheless, European automotive component and system manufacturers continue to face numerous challenges
in promoting European technical expertise to automobile manufacturers in Japan. It is of crucial importance, bothfor Japanese and foreign firms, that Japan harmonises its regulatory framework to better accommodate theglobalisation of the automotive components sector.
Face-to-face meetings between the European Association of Automotive Suppliers and Japanese car
manufacturers were established in 1995 to promote information exchange between European and Japanesecompanies. These meetings have proven to be a highly effective venue for discussing issues of mutual concern
relating to products, platforms, global strategies and other important matters affecting the industry. The EBC alsosees considerable potential value in the Japan Society of Automotive Engineers’ (JSAE) Automotive Engineering
Exhibition and the annual congress/paper presentation scheduled for 22 May 2019 in Yokohama.
Recommendations:
Encourage the Japanese automobile industry, when procuring components and systems, to focus on thetechnical, commercial and logistics aspects of automobile production and to avoid excessive reliance on
affiliated companies. Increased purchasing on a global basis and more emphasis on single platform
development would improve the cost-effectiveness of the Japanese industry.

Recognise foreign test results from accredited European agencies to avoid the necessity of re-testing for theJapanese market.
Continue face-to-face meetings between leading representatives of European suppliers and the Japanese
automobile industry, as these have led to increased understanding. The EBC also recommends that the scopeof these meetings is expanded in future to include opportunities to meet at Japanese venues.

Automotive components & aftermarket

69Mr. Stephane Ginoux
Chair, Aeronautics,Space, Defence &Security Committee(President, Airbus Japan KK)
c/o Airbus Japan KK
Roppongi Hills Mori Tower, 19F
6-10-1 Roppongi, Minato-ku, Tokyo 106-6119
Phone 03-5775-3300
Fax
03-5775-0123

AERONAUTICS
Introduction
Politics have long influenced the aeronautical industry in Japan, sometimes favouring the long-term relationship with
the US over business realities. The Airbus A350 selection by Japan Airlines (JAL), and selection of the A320 neo and
the A380 by All Nippon Airways are signs that traditional Japanese corporations may now be thinking differently. The
private sector is expected to make business decisions based on economic grounds rather than politics, creating
opportunities for Europe and Japan to develop new commercial and industrial ties. The military sector was thought asincreasingly open to consider cooperation with European manufacturers but still needs to be validated in real business
opportunities. In addition, the Aeronautics, Space, Defence & Security Committee is looking positively at the newdevelopment of cooperation in the UAV / Urban Mobility domain initiated by the Ministry of Economy Trade andIndustry. The EBC is actively supporting these deveoplements.
Historically dominated by US manufacturers since the beginning of the 1950s, the Japanese commercial aircraft andhelicopter market is among the largest in the world. The EBC welcomes the decision by the two major Japanese airlines
to choose European products. This is clear evidence that Europe can lead the way when it comes to high technology,
quality, customer services, and cost-effectiveness.
There are several examples of successful cooperation between our industries. Kawasaki Heavy Industries (KHI) and
Airbus Helicopters on the BK117 helicopter co-development programme, collaboration between various Japaneseindustries and Rolls-Royce on the Trent engines, and other cooperations between Safran and Leonardo with theirrespective Japanese partners, are encouraging examples of successful collaboration between the European and Japanese
aeronautics industries. The Government of Japan and European Governments have signed various bilateral agreementsthat have led to increased engagement and project discussions. The EBC expects positive results deriving from concrete
programmes of Europe-Japan co-development.
The EBC strongly believes that shifting from a policy of sole domestic development to one of international
co-development will create superiority in the technological field, and expand Japan’s market in both volume and rangeof products. Proactive collaboration with successful European companies would enable Japanese corporations tostrengthen their positions in commercial aeronautics. By joining a wider range of projects, Japanese firms would be able
to expand their international business opportunities and further develop their technological base. The EBC feels that
there are considerable opportunities for large-scale joint development programmes between Japanese and European
industries, especially in the field of transport aircraft, and urges Japan’s Government and aerospace players to support
such initiatives.
As part of the Aviation Strategy adopted on 7 December 2015, the European Commission "recommended that the EU
negotiates further bilateral aviation safety agreements with important aeronautical manufacturing nations such as
Japan". In March 2016, the 28 EU Member States authorised the European Commission to do so on behalf of the entire
European Union. The European Commission is supported by the European Aviation Safety Agency, which is recognised
throughout the world as the EU's aviation safety and aircraft certification body, to negotiate with its Japanesecounterpart, the Japan Civil Aviation Bureau. The EBC encourages this initiative which will remove the duplication ofoversight activities and support mutual safety recognition between the EU and Japan.

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EBC Aeronautics, Space, Defence &Security Committee
Member Companies

Key Issues and Recommendations

Airbus Japan
Arianespace
BAE Systems
Dassault Systems
Leonardo Japan
Rolls Royce
SafranThales Japan■ Promoting partnerships with the EU
Yearly status report: progress. The aeronautics market is becoming more and more global, and Europe has strong
technological advantages. For example, European companies have experience in the area of high-end
technologies that are environmentally friendly. Procurement decisions should be made taking into consideration
both competitive and technological advantages. European manufacturers of commercial aircraft, engines,
components, and navigational equipment offer state-of-the-art technology at internationally competitive prices.
The EBC consistently requests Japan to modernise its air traffic management system. Some of the European
companies are recognised worldwide as setting state-of-the-art standards, yet they face great difficulty in evenbeing considered in the process for new equipment procurement in Japan such as for the air traffic management
system. The EBC deplores this situation, which may be keeping Japan from benefiting from the latest advances insafety standards.
Recommendations:
The EBC encourages Japanese firms to diversify their sources of supply and consider the advantages ofEuropean products in the aeronautics field for the benefit of their customers, the general public, andshareholders.

The EBC urges the Japanese authorities to facilitate greater use of equipment from European manufacturers
who can help them address the need for improvements in air transport safety.
■ Supporting BASA negotiation between EU and Japan
Yearly status report: progress. In March 2016, the European Commission was authorised by the 28 member
states to open negotiations with a view to concluding a Bilateral Air Safety Agreement (BASA) between theEuropean Aviation Safety Agency and its Japanese counterpart, the Japan Civil Aviation Bureau. Such an
agreement will enhance air safety worldwide and enable cooperation in the aviation safety domain, including
certification, testing and maintenance of aeronautical components, air operations, flight crew licensing, air traffic
management and airports. It will also reduce the transaction cost of exporting aircrafts, while ensuring high levelsof safety in partner countries and helping to harmonise product standards worldwide. Despite exchanges between
Japan and Europe, slow progress has been made on this topic.
Recommendations:
The EBC encourages the EU and Japan to conclude negotiations with the goal of finalising a Bilateral Air
Safety Agreement as soon as possible in order to develop business opportunities between the EU and Japanby removing administrative hurdles. To support such discussions, the EBC committee has draftedrecommendations pertaining to this agreement which reflect the position of the EBC Aeronautics Committee
member companies. These recommendations have been communicated to the various competent authorities.

The committee is looking for the finalisation of this agreement which has been scheduled end 2018.
■ Promoting the use of large aircraft at Haneda Airport
Yearly status report: limited progress. The Tokyo 2020 Olympics now less than two years away, and with thenumber of foreign visitors to Japan already exceeding 28million in 2017, the new target set by the Japanese
Government is up to 40 million visitors in 2020. Accordingly, it is crucial for Haneda Airport, now the preferredairport in Tokyo, to be able to accommodate the increase in traffic. The EBC welcomes the decision to allow
Lufthansa to operate the Boeing 747-8i at Haneda, but the airlines should also be allowed to operate the Airbus
A380.At least five A380 operators have expressed interest in operating the A380 at Haneda by 2020. In addition,with ANA planning to use the A380 aircraft between Tokyo and Honolulu from 2019, Haneda must be available
for such operations. The decision to allow day-time A380 operations at Haneda will increase the number ofpassengers using Haneda without having to provide additional landing and take-off slots. An added advantage isthat the A380 has the lowest noise footprint among the new generation aircraft.
Recommendation:

The EBC urges the Japanese authorities to engage potential A380 operators in a discussion on the use ofHaneda by the A380 aircraft as soon as possible.

71

Aeronautics
2Mr. Stephane Ginoux
Chair, Aeronautics, Space, Defence &Security Committee(President, Airbus Japan KK)
c/oAirbus Japan KK
Roppongi Hills Mori Tower, 19F.
6-10-1 Roppongi, Minato-ku, Tokyo 106-6119
Phone 03-5775-3300
Fax
03-5775-0123

SPACE
Introduction
The Committee on National Space Policy and the National Space Policy Secretariat (NSPS) established in the Cabinet
officeset Japan’s space policies across all ministries and agencies. Space is treated as an important industrial andcommercial sector, and now officially as a national security asset. In an attempt to maintain a healthy domestic spaceindustry, Japan’s administration actively seeks growth in export markets, although the industry is still mostly geared
towards domestic government contracts. A major evolution of government policy is to emphasise practical downstream
applications of existing infrastructure while encouraging private startup-type initiatives in the areas of small satellites
and launchers.
The Ministry of Economy, Trade and Industry (METI) actively helps all-Japanese industry consortia to supply satellite
systems to emerging countries through Official Development Assistance (ODA) funding. The packages often include
satellites, launch services, operations, data analysis, maintenance, training, technology transfers, and other services.
Contrary to EU policy, Japan's ODA is tied, which means that contracts must be awarded to its domestic industry,
resulting in a distorted market that basically excludes foreign manufacturers and service providers. In August 2015, theCabinet Office launched a joint government-industry task force on the export of space-related products.
The private satellite market is ostensibly open. Satellites with business and practical applications of former government
monopolies have been procured through international tenders since 1990. These now only relate to the Multi-functional
Transport Satellite (MTSAT)/ Meteorological satellite series and most of the broadcasting satellite (BSAT) series.
Direct bids in government tenders are generally not possible for foreign companies. No-tender government programmes
include the science and technology satellites of the Japan Aerospace Exploration Agency (JAXA), some programmes
under METI, and the defence-purpose remote-sensing Information Gathering Satellites (IGS). The NSPS’s priority is
the Quasi-Zenith Satellite System (QZSS), a Japanese positioning, navigation and timing satellite system. A defence
communications satellite programme is also underway; two satellites have already been launched. The next major themeof interest for Japan's space authorities will be debris and space situational awareness. Japan's willingness to cooperatein satellite development programmes, however, still rarely extends to European companies.
Regarding launchers, more mutually beneficial bilateral cooperation is possible. Arianespace and Mitsubishi Heavy
Industries already have experience in operation cooperation, including a backup agreement. Currently, Japan isdeveloping the H3 launch vehicle and Europe is developing Ariane 6, both of them due for a first launch in 2020. This
coincidence makes it possible to cooperate in developing future improved versions of both launchers and enhance theircompetitiveness and international contribution. The past talks between the Japanese and European space authorities
towards a mutual back-up of government launch missions should also be given a new impetus.
A continuing risk in Public-Private Partnership (PPP) projects is that satellites with both government and commercial
payloads could be declared “governmental” as far as building and launching them is concerned. Foreign satellite makers
and launchers could thus be excluded from Japan’s commercial market in a piecemeal fashion.
Japanese investment in ground equipment has been spurred by its move into security and defence applications. Japan's
space activities increasingly require ground equipment for image processing and interpretation, and for applications inagriculture, fisheries and geophysics. In addition, homeland security-type applications enhance defence capability.
Protectionist procurement methods are still being used in this area to the disadvantage of foreign suppliers.
While respecting Japan's space policies, the EBC believes that fewer all-Japanese consortia, less tied ODA and morework with Europe would bring gains in terms of budgets, national security, technology, and commercial success.

72

EBC Aeronautics, Space, Defence &Security Committee
Member Companies

Key Issues and Recommendations

Airbus Japan
Arianespace
BAE Systems
Dassault Systems
Leonardo Japan
Rolls Royce
SafranThales Japan■ General environment
Yearly status report: protectionist risk. The new approval system for satellite projects and the handling of future
PPP projects still hold risks of protectionism. The EBC advocates increasing, not reducing, trade and cooperation.
More openness to European industry would benefit Japan. In addition, Europe provides many technologies freefrom “black-box” technology concealment policies.
Recommendations:Satellite projects with both government and commercial aspects should not be declared “governmental” forthe purpose of excluding the participation of foreign industry.

The EBC urges more Japanese cooperation with European space agencies. Space agencies on both sides
should compare their projects at an early stage and take greater advantage of cooperation opportunities.
Japan should also encourage more cooperation between the Japanese and European space industries onsatellite platforms and ground systems.

The EBC recommends Europe-Japan coordination and cooperation in space-related ODA worldwide.
■ Satellites
Yearly status report: no progress. Japan is mostly interested in high technology components (solid state
recorders, star trackers etc) for supporting its domestic programmes. The space agencies of both the EU and Japan
cooperate and share data in science and research, but have almost no industrially meaningful cooperation.
However, the quantity of inquiries and topics under investigation are significantly increasing
Recommendations:
The EBC advocatescloser space agency cooperation in satellite technology development and applications,with pro-active promotion and execution of industrially and commercially meaningful cooperation projects.

The Government of Japan should increase cooperation with Europe through the procurement of high-quality
satellite systems or equipment in fields related to national security. This includes the joint development ofhigh-quality sensors or their production by Japanese industry under licensing arrangements.

Government procurement methods, terms and conditions should not put European makers at a disadvantage.
■ Launchers
Yearly status report: no progress. Although Europe and Japan are developing their respective next generation
launchers almost simultaneously, there is no industrially significant cooperation in that area. A plan for abalanced mutual backup agreement to reduce delays in launching government satellites was evaluated positively
by Japan’s space authorities in 2002, but no agreement is in sight due to lack of political leadership.
Recommendations:
Government satellite programmes increasingly require timely launches. The EBC urges Japan and Europe tobring about an effective, formal back-up cooperation between Japanese and European satellite launchers.
Europe and Japan should also consider cooperating on the development of the evolutions of their respective
new generation launchers. The creation of Ariane Group and a new launcher development organisation in
Europe make it easier to realise industry-led cooperation on development.
■ Space debris and situational awarenessYearly status report: new issue. Near-Earth space is a key resource for society, as crucial as Earth-boundresources. Space debris threaten vital current space systems and the availability of the resource for future projects.
New micro-satellite constellations and other projects make a strong "space situational awareness" indispensable.
Recommendation:
Japan and Europe should dramatically increase the scope of their cooperation in space situational awareness.

Space
2

73

Mr. Stephane Ginoux
Chair, Aeronautics, Space, Defence & Security Committee(President, Airbus Japan KK)
c/o Airbus Japan KK
Roppongi Hills Mori Tower, 19F
6-10-1 Roppongi, Minato-ku, Tokyo 106-6119
Phone 03-5775-3300
Fax
03-5775-0123

DEFENCE & SECURITY
Introduction
In recent years, the security challenges and issues, which Japan has been facing, are becoming extremely complex anddiverse. There has been an increasing number of cases of unilateral actions in an attempt to change the status quo by
enforcement without respecting the existing international law.
The emergence of state expansionism and increased uncertainly in certain parts of the world including the east Asian
region combined with the shift in US foreign policy to focus more on the US mainland have changed the security
environment for Japan. The prolonged Syrian civil war cast a light upon the dysfunction of an international order andpresented challenges concerning "human security" in the form of a refugee problem throughout the world. Furthermore,
the menace of terrorism and asymmetric warfare are growing in gravity, while the importance of the new security
domains such as Cyber and Space are rapidly emerging in addition to the traditional domains of Land, Sea and Air.
Thus, national security can no longer be addressed and understood only from a traditional geopolitical perspective, andare difficult to be solved by individual countries.
Under the circumstances, while keeping Japan-US alliance as the fundamental and the crucial part of Japanese national
security strategy, Japan recognises the increasing need for international cooperation and is trying to position itself within
a broader global security relationship with its focus on enhancing the bilateral defence cooperation. Specifically, Japan
has recently enhanced bilateral defence relationships from traditional exchanges to deeper cooperation in a phasedmanner by appropriately combining various means including joint exercises and capacity building assistance, defence
equipment and technology cooperation.
Especially in terms of the defence equipment and technology collaboration, Europe has been playing a very importantrole as Japan’s one of the closest and oldest allies that shares universal values and playing a central role in working toaddress common challenges to global security.
In this regard, the progress has been very remarkable. The Japanese Government made an important commitment toEurope by concluding with the UK its first bilateral agreement on defence equipment collaboration ever after its
agreement with the US. After that, similar agreements were concluded with Spain in 2014, France in 2015, and withGermany and Italy in 2017. Further discussions towards bilateral agreements with other European countries such as
Sweden are now underway.
The EBC welcomes this trend of enhancing the bilateral defence cooperation and expects the Government of Japan tomore actively promote the defence equipment and technology aspect of the collaboration, which would open up awindow for European companies to participate in the international co-development programs.

74

EBC Aeronautics, Space, Defence &Security Committee
Member Companies

Key Issues and Recommendations

Airbus Japan
Arianespace
BAE Systems
Dassault Systems
Leonardo Japan
Rolls Royce
SafranThales Japan■ Procurement
Yearly status report: some progress. The EBC appreciates the fact that introduction of European products in theland domain has been increasing. To the contrary, the visibility of European products in the sea and air domains isextremely limited. As this trend may be derived from Japanese traditional preference of having US defence
equipment, the EBC believes that the transparency of the procurement in those domains shall be improved, andmore fair opportunity shall be given to European company.
Recommendation:

The Government of Japan should regard the use of European defence equipment as a part of fostering thesecurity collaboration with European nations, and should strategically promote it. It would significantly
benefit the operation of the Self-Defence Forces in terms of Life Cycle Cost reduction and would benefit
both European and Japanese industries throughout the increased international collaboration opportunities.
■

Industrial collaboration
Yearly status report: no progress. The EBC notices that a few Japanese companies are trying to play in a global
market. However, strict export control, especially in terms of third country transfer, is discouraging thecompanies and eventually missing the collaboration opportunity with European companies.
Recommendation:

The Government of Japan should clarify its political policies regarding transfer to third-party countries andshould either operate the three principles of defence equipment transfer in a more flexible way or revise
them, to avoid their becoming an obstacle to cooperation between Japanese and European companies.

Defence & security 75

Mr. Carl-Gustav Eklund
Chair, Materials Committee(Representative Director, President, Hoganas Japan K.K.)
c/o Hoganas Japan K.K.
Akasaka Shasta East 6F, 4-2-19 Akasaka
Minato-ku, Tokyo 107-0052
Phone 03-3582-8280
Fax
03-3584-9087

MATERIALS
Introduction
Japan has developed vast knowledge and expertise in processing and recycling materials and is at the forefront of manytechnologies, such as those used to produce rechargeable batteries for hybrid vehicles, nanotechnologies for
manufacturing semiconductors, and products related to environmental technology. These advanced technologies dependon key raw materials and Japan’s ability to secure a stable, high-quality supply. It is, therefore, of the utmost importancethat Japan adopts a strategy based on security of supply at competitive prices, which can only be achieved by allowing
overseas suppliers unrestricted access to its domestic market. A shift in strategy among Japanese companies has alreadytaken place to minimise risk and dependency on unstable sources, leading them to diversify purchases despite existing
tariffs. Ultimately, however, their competitiveness is compromised and their future threatened because these tariffs haveto be passed on to their customers.
It is against this backdrop that the Economic Partnership Agreement will come into play. While this has not been
ratified at the time of the production of this report, the two authorities, the European Commission and the Japanese
Government have agreed to remove tariffs immediately for products that are of interest to member companies of the
EBC. We believe that this will be very beneficial for the Japanese industry who are dependent on the imports of theseproducts. This is especially true for the battery industry and manganous manganic oxide as the domestic production only
covers 10% of the demand. The same is true for the Japanese stainless steel industry which needs processed nickel atcompetitive prices to be able to compete with overseas producers, in particular from South Korea and China. It should
be added though that many European companies have a global presence and both complete production and part of the
supply chain might be located outside of the EU.
The prospective EU-Japan Economic Partnership Agreement will in general, remove tariffs in the materials sector. This
will give European suppliers a competitive edge in the Japanese market. Moreover, it will give a boost to Japaneseindustries able to source key materials at lower prices. However, not all imports will benefit from tariff removal, since
many European companies have a global presence and not all their production is conducted within the EU.
Tariffs are not the only barrier to increasing trade between Europe and Japan. Non-tariff barriers, in the form ofadministrative burdens, regional differences in registration procedures and inconsistent use of classifications all makedoing business in Japan unnecessarily costly and difficult for foreign companies. The benefits of eliminating tariffs andof harmonising and simplifying classifications and procedures would be felt not only by European suppliers, but evenmore by Japanese industry, making it more competitive.
Chemicals normally fall within the competency of the Ministry of Economy, Trade and Industry (METI), which is
involved in the task of harmonising rules regulating chemicals. However, some years ago, the Ministry of Health,Labour and Welfare (MHLW) initiated a discussion on how to label chemical products that could be harmful to people
handling them. Unfortunately, MHLW’s work seems to have been conducted in isolation and its new system, which
entered into force on 1 July 2016, lacks logic. As an example, products that are not registered in Japan, despite having a
CAS (Chemical Abstract Service) number, could now be labelled as harmful since MHLW’s warning labels are based
either on the product’s chemical components (rather than on the final substance), or on the most similar substancealready registered in Japan. Additionally, it remains unclear whether or not the results of testing conducted in Europe
under REACH (Registration, Evaluation, Authorisation, and Restriction of Chemicals) can be used.
One example of the issues raised by the MHLW approach relates to a European cement containing aluminium oxide(CAS 1344-28-1). According to the MHLW list, any product containing more than 1% of aluminium oxide must have alabel warning how it should be handled. The problem arises from the fact that this particular substance (CAS 1344-28-1)
is not regarded or registered as hazardous in Europe. As a result, the same product ends up with a number of nonhomogeneous labels, pictograms and safety data sheets that create unnecessary doubts and confusion about its safety.

76

EBC Materials Committee
Member Companies
Alteo-Alumina
Elkem Japan
Eramet International
Hoganas Japan
Imerys High Resistance Minerals Japan
Kerneos
Plansee Japan Ltd

Key Issues and Recommendations■ Tariff issues
Yearly status report: progress. Currently, Japan imposes tariffs on some metals. These metals are in many cases
essential for Japan’s core industries, including the vehicle, battery and more traditional steel industries. Tariffs
constrain the competitiveness of Japanese manufacturing, a sector already under pressure from low-cost
countries. With the entry into force of the EU-Japan EPA, however, tariffs will be removed on almost all metals
with EU origin. This is something that will not only benefit European suppliers of said metals but also the Japan
industry that is depended on these products. It should be added though that due to the global nature of the material
sector some metals will not be able to benefit from the lower tariff in the EU-Japan EPA. For this to be achieved
Japan will have to remove tariffs on a worldwide basis. Moreover, industrial materials imported into Japan areoccasionally subjected to arbitrary tariff classifications and revisions. Regional Customs offices do not apply
classification rules on a consistent basis and the appeal mechanism is both time-consuming and costly, without
any guarantee that the outcome will be in line with international practice. This is a problem not only for products
entering the market for the first time, but also for well-established products subject to arbitrary classification
reviews.
Recommendations:
The Government of Japan should remove import tariffs from all industrial raw materials, irrespective of thesite of production.

The Government of Japan should rationalise its tariff classification regime and develop a comprehensive
strategy to improve consistency between regional Customs offices in classification rulings and to strengthenand simplify dispute resolution mechanisms.
■ Chemical Substance Control Law
Yearly status report: some progress. With both the EU and Japan now having introduced their own chemical
substance registration systems, producers, exporters and importers are faced with re-testing, double submissions
and an increased administrative burden to fulfil the respective regulations. On top of this, the EBC is concernedthat in some cases, in order for a European product to be tested and approved for sale in Japan, commerciallysensitive information has to be handed over to Japanese competitors. This gives the competitors an undeserved
advantage and creates unfair competition.
Recommendation:
Japan and the EU should harmonise their registration systems or mutually recognise test results andsupporting documents to avoid unnecessary re-testing and administrative burdens, and also make certain that
products are not classified differently in the two jurisdictions.
■ Workers’ safety labelling for chemicals
Yearly status report: no progress. When products are not registered in Japan, despite having a CAS number,
MHLW does not consider the actual nature of the substance but applies a warning label based either on theindividual components or on the most similar substance that is already registered in Japan. This can lead tocompounds being unnecessarily labelled as dangerous. There is, furthermore, a lack of information in English on
this legislation.
Recommendations:
MHLW should give due consideration to compounds not currently registered in Japan that nevertheless havean international CAS number.

MHLW should provide proper information on how importing companies should comply with its regulations,
including in English.

Materials

77Mr. Taku Niioka
Chair, Energy Committee(Manager, Business Development Dept.
Power Grids Division, ABB K.K.)
c/o ABB K.K.
ThinkPark Tower 22F., 2-1-1 Osaki, Shinagawa-ku, Tokyo 141-6022
Phone 03-4523-6000
Fax
03-4523-6190

ENERGY
Introduction
Japan’s electrical utility industry used to be run by ten regional Electrical Power Companies (EPCOs). Whileliberalisation of the electricity markets was initiated in the 1990s, real change was only triggered through reforms
introduced by the Ministry of Economy, Trade and Industry (METI) following the 2011 Great East Japan Earthquake,
which revealed weaknesses in the existing system.
As the first step to address those weaknesses, the Organization for Cross-regional Coordination of Transmission
Operators (OCCTO) was formed in April 2015 and, subsequently, in September that year, an Electricity Market
Surveillance Commission (EMSC) was established under METI to monitor and regulate the market. A second step was
taken in April 2016, when full retail liberalisation was introduced as part of the Electricity Market Reform planned by
METI’s Agency for Natural Resources and Energy (ANRE). The third step, legal unbundling of the transmission anddistribution sector from the EPCOs, is scheduled for 2020.The creation of non-fossil value trading in May 2018 and theimplicit auctions starting from October the same year are certainly a progress. The ongoing discussion about how toestablish capacity, ancillary-service, real-time markets are expected to result in fair and transparent processes enabling
healthy competition.
Following the 1970s oil crisis, Japan set out to reduce its dependency on imports of gas, oil and coal through increased
use of nuclear energy, such that by 2010, nuclear energy accounted for 26% of the power generation energy mix.
However, after May 2012, all Japan’s nuclear plants were shut down and a programme of safety reviews and upgrades
was initiated, which is still ongoing. Two reactors, Sendai 1 and 2, were the first to be brought back on grid in 2015,
followed by Ikata 3 in 2016, Takahama 3 and 4 in 2017, and finally Ohi 3 and 4, and Genkai 3 and 4 in 2018 bringing
the number of reactors restarted to nine as of September 2018.
In July 2018, the Japanese Cabinet approved the 5th Strategic Energy Plan which is a policy document formulated by theGovernment under the Basic Act on Energy Policy from 2002. The plan presents the basic direction of Japan's energy
policy, based on fundamental principles, namely, "safety," "energy security," "improvement of economic efficiency,"
and "environmental suitability", named 3E+S. The 5th Plan consist of:






Renewable energy: Lay foundations to use as major power source with cost reduction, overcome system constraints
and secure flexibility of thermal power
Nuclear power: Lower dependency on nuclear power generation to the extent possible and restart of nuclear power
plants and continuous improvement of safety
Fossil fuels: Promote independent development of fossil fuels upstream, etc., effective use of high-efficiency
thermal power generation and enhance response to disaster risks, etc.
Energy efficiency: Continued thorough energy efficiency and integrated implementation of regulation of Act on
Rationalizing Energy Use and support measures
Promotion of hydrogen/power storage/distributed energy

The new plan aims for a reduction of greenhouse gas (GHG) of 26% in 2030 (from the base year 2013) and 80% by
2050. The concerns about the investments in new coal-fired power plants were reviewed and some have been cancelledwhich is in line with the global direction coping with Sustainable Development Goals (SDGs).
The EBC believes that the ties between Europe and Japan in the energy area should be further strengthened to facilitatecommercial exchange, achieve consensus on common standards, enable attainment of the CO2 emissions targets of
COP21, and facilitate access to energy at the lowest possible cost based on Cost Benefit Analysis (CBA).

78

EBC Energy Committee
Member Companies
ABB
EDF Japan
Equinor Japan
Mecal
Orano Japan
Siemens
Total Japan
TÜV Rheinland JapanKey Issues and Recommendations■

Transmission and distribution
Yearly status update: some progress. Japan’s transmission network is centred on its production sites, with themain transmission at 500kV. The frequency convertor stations (FC) connecting the 50Hz and 60Hz networks offer
only limited additional capacity. Furthermore, the limited interconnections between the individual EPCOs
represent a real risk to security of supply. In contrast, European and US grids have extensive plans for use of High
Voltage Direct Current (HVDC), which offers more flexibility in energy flows between regions, enables large
integration of renewable into the system and also enables long cable connection by subsea or land.
Recommendations:
As part of the preparations for legal unbundling in 2020, Japan should implement regulations that will ensure
security of supply and fair market mechanisms based on wider grid interconnections by especially enhancing
further FC capacity and connection to Hokkaido and Kyushu.
Japan should do more to increase interconnection capacity between Transmission and Distribution System
Operators (TDSOs), achieving fair electricity transactions and encouraging mergers between TDSOs.
The Japanese authorities should ensure that electricity interconnections are developed at national andinternational levels based on HVDC. Firstly through the “invest and connect” model, then moving onto a“connect and manage” model, which in Europe is based on CBA and not only the initial grid investment
cost.

■

Nuclear energy and nuclear safety
Yearly status update: some progress. In its revised Basic Energy Plan (2018), the Japanese Government
confirmed that the nuclear closed-fuel cycle policy would continue and that while nuclear power would be
reduced as much as possible, a certain amount would be preserved with regards to security of supply and costs.
Since nuclear energy will remain a core constituent of the Japanese energy mix, it is essential that its long-termsustainability is based on a reliable and efficient approach to safety concerns, smooth implementation of aback-end policy for recycling spent fuel, and final disposal of radioactive waste. Since it was not mentioned in therevised Basic Energy Plan, it will also be necessary in the near future to address the issue of ageing plants, notonly through plant lifetime extensions, but also through replacement of reactors, some set to be 60 years old by
the mid-2030s.
Recommendations:Japan should increase cooperation and transparent exchange with international organisations such as theInternational Atomic Energy Agency (IAEA) and World Association of Nuclear Operators (WANO) to
improve worldwide nuclear safety levels.
 Japan should develop complete interim and final waste repositories for spent fuel and radioactive waste.
 Japan should address the issue of ageing reactors and develop a long-term plan for their replacement to
uphold the latest energy mix target for nuclear power.

■

Wind energy
Yearly status update: some progress. The development of wind energy is essential for Japan to reach its CO2
emissions targets. Modern and cost-efficient wind turbines now contain sophisticated technology that works wellwith established power grids of all kinds, ranging from large transmission systems to isolated local grids. Tohoku
EPCO’s “grid access process”, NEDO’s “floating wind farm demonstration” and the “new law for off shore windfarm development” were encouraging.
Recommendations:Japan should facilitate the development of on-shore as well as off-shore wind farms by reducing unnecessary
regulations that add to their cost and development time, especially in relation to environmental impact
assessment requirements.
Japan should adopt and recognise internationally accepted certification standards and international
accreditation for wind turbines and their componentry. This would increase both domestic and foreign direct
investment, and support Japanese technology exports.

Energy

79




■

Japan should focus on and officially support development in the Hokkaido / Tohoku area to enable investors
to build utility-scale wind farms utilising the optimum wind conditions in Japan.
Since Japan's offshore wind potential is located in deeper waters, Japan should continue to play an activerole in supporting the development of the floating offshore wind industry. As this is globally an emerging
technology and industry, Japan can still position itself as an industrial hub (supply chain) for this industry.
The focus should gradually shift from technology demonstration to cost improvements through changing the
support focus to larger scale floating wind farms.

Solar energy
Yearly status update: some progress. The principal impediments to sustainable growth of utility andcommercial-grade solar energy are: the so far rather discouraging reverse auction system, cumbersome procedurefor obtaining special permits for land re-zoning for non-agricultural use, and the prospect of potential curtailment
in certain power grids, which affects project financing. Additional challenges that Japanese utility companies
may soon encounter are managing cost effective solutions to integrate de-centralised and intermittent renewablegenerations into the existing power grid.
While Japan has focused extensively on solar power as a renewable energy source, the EBC believes that it must
continue to encourage development of this important source of renewable energy. This must be carried out
ambitiously with realistic targets, aimed at increasing the safety and reliability of the energy supply.
Recommendations:
Adopt and recognise internationally accepted certification standards for solar modules, system components
and design qualifications, rather than enforcing existing “Japan-only” component and certification standards.

Adopt an accreditation scheme to support the acceptance of test results, reports and certificates from any
accredited certification body, whether domestic or foreign, based on available international standards.
Incentivise and create standardisation programmes for the EPCOs to use to contract PV project construction
to an emerging class of engineering and design companies, with the aim of reducing grid connection costs
and lead times.

Incentivise rooftop PV installation as an alternative to power plants in remote areas requiring substantial
land conversion.

Encourage further grid interconnections, utilise existing pump storage power generation plants, use andimprove battery storage, and consider new technologies, such as conversion to hydro for further PV
integration.
Legislative bodies should avoid imposing additional or differing safety requirements on the emerging 1500V
technology in order to facilitate plant development applying this latest technology without making changes
to the relevant authorisation process.

■Environmental suitability
Yearly status update: new issue. The development of clean renewable electricity is contributing to energy
independence and to a low carbon mix but it needs to be supplemented with other sources of electricity.
Recommendations:Japan should through incentive schemes put greater efforts in energy efficiency through smart managementof demand, energy storage, low consumption technologies and CO2 sequestration/capture and storage.

The Government should use low carbon fossil, mainly natural gas in a context of a growing and mature
market with reliable suppliers; new thermal power plants should be with high efficiency and clean gas, andto put target for CO2/kWh.

As the development of hydrogen energy is likely to take time before demand and supply volumes will drivecompetitive cost Japan will have to have clear incentives and compensations will have to be in place toattract sufficient investment from private industries.

Promote early phase assessments of the use of hydrogen and ammonia in natural gas and coal fired power
plants, the use of existing gas transportation and distribution infrastructure for hydrogen distribution, and theuse of hydrogen in heavy transport (particularly shipping) through appropriate regulations and support
mechanisms.

803

Appendices
Pinnacle Sponsors
Gold Star Sponsors
Blue Star Sponsors
Special Sponsors
Sponsors
Supporters
Executive Operating Board
Board of Governors

PINNACLE SPONSORS

82
1

PINNACLE SPONSORS

Pinnacle Sponsors
2

83

GOLD STAR SPONSOR

84
3

BLUE STAR SPONSORSBlue Star Sponsors
485BLUE STAR SPONSORS

86
5

SPECIAL SPONSORS

Airbus Japan K.K.

Danone Japan Co., Ltd.

LVMH Moët Hennessy Louis Vuitton Japan K.K.

Philips Japan, Ltd.

Speical Sponsors
687

SPONSORS
B. Braun Aesculap Japan Co., Ltd.
Hoganas Japan K.K.
ING Bank N.V.
Johnson & Johnson K.K., Consumer Company
Lufthansa German Airlines
MHD Moët Hennessy Diageo K.K.
Roche Diagnostics K.K.
Schenker-Seino Co., Ltd.

88
7

SUPPORTERS

Delegation of the European Union to Japan
Intesa Sanpaolo s.p.A.
Ireland Japan Chamber of Commerce
METRO Cash & Carry Japan K.K
Nihon Michelin Tire Co., Ltd.
Scandinavian Airlines System
Solton Co., Ltd.
Spanish Chamber of Commerce in Japan
Swiss Business Hub Japan
Swiss Chamber of Commerce & Industry in Japan

Supporters
8

89

EXECUTIVE OPERATING BOARD
EBC Acting Chairman
Michael A. Loefflad
Representative Director & President
DKSH Japan K.K.
DKSH Mita Building
3-4-19 Mita, Minato-ku, Tokyo 108-8360
Tel: 03-5441-4511

EBC First Vice-Chairman

EBC Vice-Chairman

EBC Treasurer

Michael A. Loefflad (Austria)

Carl-Gustav Eklund

Erik Ullner (Finland)

Representative Director & President
DKSH Japan K.K.
DKSH Mita Building
3-4-19 Mita, Minato-ku, Tokyo 108-8360
Tel: 03-5441-4511

Representative Director, President
Hoganas Japan K.K.
Akasaka Shasta East 6F
4-2-19 Akasaka Minato-ku,
Tokyo 107-0052
Tel: 03-3582-8280; Fax: 03-3584-9087

President, EU Japan Consulting &Associates Co., Ltd.
5-49-12-2F, Matsubara Setagaya-ku,
Tokyo 156-0043
Tel: 03-6379-4931

EOB Members
Gregory Van Bellinghen (Belgium/Luxembourg)

Marcus Schuermann (Germany)

Director
Belgian-Luxembourg Chamber of Commerce in Japan
Dai10 Daitetsu Bldg. 5F.
Arakicho 23, Shinjuku-ku, Tokyo 160-0007
Tel: 03-6457-8662; Fax: 03-6457-8663

Chief Executive Officer / Delegate of German Industry andCommerce in Japan, German Chamber of Commerce andIndustry in Japan
Sanbancho KS Bldg, 5F
2-4 Sanbancho, Chiyoda-ku, Tokyo 102-0075
Tel: 03-5276-8723; Fax: 03-5276-8736

Florian Kohlbacher (Britain)

Athanasios Fragkis (Greece)

Director, Corporate Network, North Asia
The Economist Corporate Network
Yurakucho Denki Bldg. North Tower 15F
1-7-1 Yurakucho, Chiyoda-ku, Tokyo 100-0006
Tel: 03-5224-6113; Fax: 03-5223-8104

Managing Director
Nostimia Co., Ltd.
1808-5 Godai, Naka-shi, Ibaraki 311-0111
Tel: 029-298-2464; Fax: 029-298-2575

Claus Eilersen (Denmark)Lorcan Brophy (Ireland)

c/o Danish Chamber of Commerce in Japan
c/o Royal Danish Embassy
29-6 Sarugaku-cho
Shibuya-ku, Tokyo 150-0033
Tel: 03-3780-8729; Fax: 03-3476-4234

c/o Ireland Japan Chamber of Commerce
Ireland House 4F, 2-10-7 Kojimachi,
Chiyoda-ku, Tokyo 102-0083
Tel: 03-3263-8520; Fax: 03-3265-2275

Guy Bonaud (France)

Marco Zoli (Italy)

Representative Director, General Delegate Safran Japan
Safran Turbomeca Japan
Loykrathong Toranomon Bldg. 3F
4-1-9 Toranomon, Minato-ku, Tokyo 105-0001
Tel: 03-5408-1083; Fax: 03-5408-1085

President
MARPOSS K.K.
5-34-1 Minamimagome
Ohta-ku, Tokyo 143-0025
Tel: 03-3772-7011; Fax: 03-3772-7093

90
9

EXECUTIVE OPERATING BOARD
Kiminobu Yoshida (Netherlands)

Takeshi Fujiwara (Sweden)

Head of Government and Public Affairs
Philips Japan, Ltd.
Philips Bldg.
2-13-37 Konan, Minato-ku, Tokyo 108-8507
Tel: 03-3740-5850; Fax: 03-3740-5206

President
B. Braun Aesculap Japan Co., Ltd.
JEI Hongo Bldg.
2-38-16 Hongo, Bunkyo-ku, Tokyo 113-0033
Tel: 03-3814-2948

Pawel Komender (Poland)

Masao (Mark) Torii (Switzerland)

PartnerPJK Strategy and Marketing Specialists LLP
2302 River City 21 East Towers II
2-1-2 Tsukuda, Chuo-ku, Tokyo 104-0051
Tel: 090-6560-0262

President & Representative Director
Novartis Holding Japan K.K.
Toranomon Hills Mori Tower
1-23-1 Toranomon, Minato-ku, Tokyo 105-6333
Tel: 03- 6899-8259; Fax: 03- 6257-3603

Executive Operating Board
10

91

BOARD of GOVERNORSATIONAL CHAMBERS
EBC Acting Chairman
Michael A. Loefflad
Representative Director & President
DKSH Japan K.K.
DKSH Mita Building
3-4-19 Mita, Minato-ku, Tokyo 108-8360
Tel: 03-5441-4511

EBC First Vice-Chairman

EBC Vice-Chairman

EBC Treasurer

Michael A. Loefflad (Austria)

Carl-Gustav Eklund

Erik Ullner

Representative Director & President
DKSH Japan K.K.
DKSH Mita Building
3-4-19 Mita, Minato-ku,
Tokyo 108-8360
Tel: 03-5441-4511

Representative Director, President
Hoganas Japan K.K.
Akasaka Shasta East 6F,
4-2-19 Akasaka, Minato-ku,
Tokyo 107-0052
Tel: 03-3582-8280; Fax: 03-3584-9087

President, EU Japan Consulting &Associates Co., Ltd.
5-49-12-2F, Matsubara Setagaya-ku,
Tokyo 156-0043
Tel: 03-6379-4931

Austria(ABC)

President

Representative

Peter Aldrian
Managing Director, Head of Business Unit
SemiconPLANSEE Japan Ltd.
Ark Hills Sengokuyama Mori Tower
1-9-10 Roppongi, Minato-ku, Tokyo 106-0032
Tel: 03-3568-2451; Fax: 03- 3568-2450

Ingomar Lochschmidt
Commercial Counsellor, Head of Commercial
Section, Austrian Embassy
3-13-3 Motoazabu
Minato-ku, Tokyo 106-0046
Tel: 03-3403-1777; Fax: 03-3403-3407

Belgium/
Luxembourg(BLCCJ)

President

Senior Representative

Fabrice D. Tilot
President, Triple-A Management, Ltd.
Isobe Bldg. 7F.,13 Samoncho
Shinjuku-ku, Tokyo 160-0017
Tel: 03-3225-8402; Fax: 03-3341-4550

Sophie Bocklandt
Dai 10 Daitetsu Bldg. 5F
23 Arakicho
Shinjuku-ku, Tokyo 160-0007
Tel: 03-6457-8662; Fax: 03-6457-8663

Britain(BCCJ)

President

Executive Director

David Bickle
Director, Business Tax Services
Deloitte Tohmatsu Tax Co.
Shin Tokyo Bldg. 5F, 3-3-1 Marunouchi
Chiyoda-ku, Tokyo 100-8305
Tel: 03-6213-3743; Fax: 03-3101-8751

Lori Henderson
Ark Hills Front Tower RoP
2-23-1, Akasaka, Minato-ku
Tokyo, Japan 107-0052
Tel: 03-6426-5739; Fax: 03-6426-5749

Czech(CCCIJ)

President

Executive Director

Roman Watanabe
CEO of Japanese Branch, Asia Regional
Manager, Zoner L.L.C.
2-4-21 Kohama
Suminoe-ku, Osaka 559-0001
Tel: 06-4701-7373; Fax: 06-4701-7374

Pavel Zahorsky
c/o Kazelfa Corporation Office
2-24-17, Hiyoshi
Kokubunji, Tokyo 185-0032

Denmark(DCCJ)

President

Executive Directors

Stefan Linde Jakobsen
President & Representative Director
Coloplast K.K.
11F., 2-1-30 Kudan Minami
Chiyoda-ku, Tokyo 102-0074
Tel: 03-3514-4141; Fax: 03-3514-4187

Leon Esben Ota, Nanami Mie Brandt& Serena Iida
c/o Royal Danish Embassy
29-6 Sarugaku-cho
Shibuya-ku, Tokyo 150-0033
Tel: 03-3780-8729; Fax: 03-3476-4234

92
11

BOARD of GOVERNORSATIONAL CHAMBERS
Finland(FCCJ)

President

Executive Director

Masaoki Fujita
President, Coil Center0 Fujita Co., Ltd.
3-22-7, Honjo
Sumida-ku, Tokyo 130-0004
Tel: 03-3625-3346; Fax: 03-3622-7727

Clas G. Bystedt
Forest View Meguro 101
5-11-17, Shimomeguro
Meguro-ku, Tokyo 153-0064
Tel: 03-5725-9596; Fax: 03-5725-9597

France(CCIFJ)

President

Director GeneralArmel Cahierre
CEO, B4F KKFonte Nishi Harajuku Bldg. 5F.
1-13-9 Tomigaya,
Shibuya-ku, Tokyo 151-0063
Tel: 03-5738-5350

Nicolas Bonnardel
Iida Bldg.
5-5 Rokubancho,
Chiyoda-ku, Tokyo 102-0085
Tel: 03-3288-9622; Fax: 03-3288-9558

Germany(AHK Japan)

President

Chief Executive Officer / Delegateof German Industry & Commercein Japan

Donald Bunkenburg
General Manager for Japan
Lufthansa German Airlines
3-1-13 Shibakoen
Minato-ku, Tokyo 105-0011
Tel: 03-5402-5201; Fax: 03-5402-5209

Marcus Schürmann
Sanbancho KS Bldg. 5F, 2-4 Sanbancho
Chiyoda-ku, Tokyo 102-0075
Tel: 03-5276-8723; Fax: 03-5276-8736

Greece(GrCCJ)

President

Executive Director

Tony Andriotis
Counsel, Hughes Hubbard & Reed LLP
Kojimachi Place 9F.
2-3 Kojimachi, Chiyoda-ku, Tokyo 102-0083
Tel: 03- 6272-5831

Konstantinos-Makoto Suwamoto
c/o Economic and Commercial Section,
Embassy of Greece
3-16-30 Nishi Azabu, Minato-ku,
Tokyo 106-0031
Tel: 03-3404-5853

Iceland(ISCCJ)

President

Secretariat

Bolli Thoroddsen
Managing Director, Takanawa Partners
c/o Embassy of Iceland, 4-18-26 Takanawa
Minato-ku, Tokyo 108-0074
Tel: 03-3442-1975

Halldor Elis Olafsson
c/o Embassy of of Iceland
4-18-26 Takanawa
Minato-ku, Tokyo 108-0074
Tel: 03-3447-1944; Fax: 03-3447-1945

Ireland(IJCC)

President

Executive Secretary

Paul Gilsenan
Property Leader, Properties, GE Japan
Akasaka Park Bldg., 5-2-20 Akasaka
Minato-ku, Tokyo 107-6115
Tel: 03-5544-3182; Fax: 03-3588-5270

Ayumi Miyano
Ireland House 4F.
2-10-7 Kojimachi
Chiyoda-ku, Tokyo 102-0083
Tel: 03-3263-8520; Fax: 03-3265-2275

Italy(ICCJ)

President

Secretary General

Francesco Tiberio
MM Powertrain Japan, Chief Technical
Officer, Magneti Marelli Japan K.K.
Shinyokohama Square Bldg. 13F.
2-3-12 Shinyokohama, Kohoku-ku,
Yokohama 222-0033
Tel: 045-478-0045; Fax: 045-478-0095

Davide Fantoni
FBR Mita Bldg. 9F
4-1-27 Mita
Minato-ku, Tokyo 108-0073
Tel: 03-6809-5802; Fax: 03-6809-5803

Board of Governors
1293

BOARD of GOVERNORS
President
Netherlands
ATIONALCHAMBERS(NCCJ)

Office Manager

Jorg van Leeuwen
Manager, International Tax Services
PwC Tax Japan
Otemachi Park Bldg., 1-1-1 Otemachi
Chiyoda-ku, Tokyo 100-0004
Tel: 080-4085-1794; Fax: 03-6212-6901

Kaori Kimura
7F-2 Shinjuku Komuro Building
4-1-22 Shinjuku
Shinjuku-ku Tokyo 160-0022
Tel & Fax: 048-952-3250

Poland(PCCIJ)

ChairmanOperation Manager

Piotr R. Suszycki
Chairman, Polish Chamber of Commerce &Industry in Japan
2F, Kobunecho 243 Bldg., 7-2 Nihonbashi
Kobune-cho, Chuo-ku, Tokyo, 103-0024
Tel: 03-3665-1991; Fax: 03-6203-8165

Taiko Niimi
2F, Kobunecho 243 Bldg.,
7-2 Nihonbashi Kobune-cho,
Chuo-ku, Tokyo, 103-0024
Tel: 03-3665-1991; Fax: 03-6203-8165

Spain(SpCCJ)

President

Executive Director

Guillermo Gutierrez
Member of the Board, Vice President
Chanel K.K.
3-5-3 Ginza, Chuo-ku, Tokyo 104-0061
Tel: 03-5159-5201

Moe Kato
c/o Embassy of Spain 3F.
1-3-29 Roppongi
Minato-ku, Tokyo 106-0032
Tel: 03- 3505-1730

Sweden(SCCJ)

President

Executive Director

Thomas Östergren
Representative Director, General Manager
Holding Japan, Atlas Copco K.K.
Sumitomo Fudosan Shiba Bldg. 4, 11F.
2-13-4 Shiba, Minato-ku, Tokyo 105-0014
Tel: 03- 5765-7806; Fax: 03- 3455-0369

Martin Koos
c/o Embassy of Sweden
1-10-3-403 Roppongi
Minato-ku Tokyo 106-0032
Tel: 03-5562-5140; Fax: 03-5562-5160

Switzerland(SCCIJ)

President

General Manager

Michael Mroczek
Attorney at law (Switzerland)
Okuno & Partners
Kyobashi TD Bldg. 8F
1-2-5 Kyobashi, Chuo-Ku, Tokyo 104-0031
Tel: 03-3274-3807; Fax: 03-3272-2245

Liselotte Schneider
Burex Kojimachi 209
3-5-2 Kojimachi
Chiyoda-ku Tokyo 102-0083
Tel: 03-6256-9012; Fax: 03-6256-9013

Carl-Gustav Eklund
Committee
Representative Director, President
Chairmen
Hoganas Japan K.K.
Representative Akasaka Shasta East 6F, 4-2-19 Akasaka
Minato-ku, Tokyo 107-0052
Tel: 03-3582-8280; Fax: 03-3584-9087

Stephane Ginoux
Committee
President, Airbus Japan K.K.
Chairmen
Roppongi Hills Mori Tower, 19F.
Representative 6-10-1 Roppongi
Minato-ku, Tokyo 106-6119
Tel: 03-5775-3300; Fax: 03-5775-0123

Karl Hahne
Committee
President & Representative Director, Hafele
Chairmen
Japan K.K.
Representative 14-17 Kami-shinano
Totsuka-ku, Yokohama 244-0806
Tel: 045-828-3117; Fax: 045-828-3119

94
13