Recommendationsof theEU-Japan Business Round Table
to the Leaders of the European Union and Japan
Brussels, 15 May 2019
Working Party 1
Trade Relations; Investment and Regulatory Cooperation; Financial
Services, Accounting and Taxation

Working Party Leaders:
Co-ChairMr. Michael MROCZEKChairmanEuropean Business Council (EBC)in Japan

Co-ChairMr. Hitoshi KAWAGUCHI
Senior Vice President/Chief
Sustainability Officer
NISSAN MOTOR Co., Ltd.

Vice Co-Chair
Mr. Markus BEYRER
Director General
BUSINESS EUROPE

Vice Co-Chair
Mr. Shinji FUKUKAWA
Senior Advisor
Global Industrial and Social
Progress Research InstituteWorking Party 1: Trade Relations; Investment and Regulatory Cooperation; Financial Services, Accounting and Taxation
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List of Abbreviations
Abbreviation
AEOs
APA
ATP
BEPS
BPR
CAA
CbCR
CCCTB
CE
CLP
CMR
CoRAP
DDA
ECHA
EIOPA
EN
EP
EPA
EU
FDI
FSA
FTA
FTT
G8
G20
GATS
GDP
GHS
GoJ
GPA
GPS
HSE
ICTs
IEC
IPM
ISO
JAS
JELMA
JET
JETRO
JIS
JR
KPIs
LED
LoA

Meaning
Authorised Economic Operators
Advance Pricing Agreement
Adaptation to Technical ProgressBase Erosion and Profit Shifting
Biocidal Products Regulation
Consumer Affairs Agency
Country by Country reporting
Common Consolidated Corporate Tax Base
Conformité Européenne (European Conformity)
Classification, Labelling and Packaging
Carcinogenic Mutagenic or Reprotoxic
Community Rolling Action Plan
Doha Development Agenda
European Chemical Agency
European Insurance and Occupational Pensions Authority
European Norms (European Standards)
European Parliament
Economic Partnership Agreement
European Union
Foreign Direct Investment
Financial Services Agency
Free Trade Agreement
Financial Transaction Tax
Group of EightGroup of Twenty
General Agreement of Trade in Services
Gross Domestic Product
Globally Harmonized System of Classification and Labelling of Chemicals
Government of Japan
Agreement on Government Procurement
Gross Product Strategy
Health Safety and Environment
Intra-Corporate Transferees
International Electrotechnical Commission
Interface Public Members
International Organisation for Standardisation
Japan Agricultural Standard
Japan Electric Lamp Manufacturers Association
Japan Electrical Safety & Environment Technology Laboratories
Japan External Trade Organisation
Japan Industrial Standard
Japan Railways
Key Performance Indicators
Light-Emitting Diode
Letter of AccessWorking Party1: Trade Relations; Investment and Regulatory Cooperation; Financial Services, Accounting and Taxation
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MAFF
METI
NTM
NOL
OECD
OR
PPPR
PSE
R&D
REACH
RoHS
SDS
SIEF
SMEs
SVHC
UNECE
VAT
WCO
WHO
WTO
WP

Ministry of Agriculture, Forestry and Fisheries
Ministry of Economy, Trade and Industry
Non-Tariff Measure
Net Operating Loss
Organisation for Economic Co-operation and Development
Only Representative
Plant Protection Products Regulation
Electrical Appliance and Material Safety Law
Research & Development
Registration, Evaluation, Authorization and Restriction of Chemicals
Restriction of Hazardous Substances
Safety Data Sheet
Substance Information Exchange Forum
Small and Medium size Enterprises
Substance of Very High Concern
United Nations European Commission for Europe
Value Added Tax
World Customs Organisation
World Health Organization
World Trade Organization
Working Party

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Introduction
Japan is the EU’s sixth largest trading partner and the EU ranks as Japan’s thirdlargest trading partner. While already significant, this trade relationship has
considerable upwards potential and the benefits of the EU-Japan Economic
Partnership Agreement will stretch beyond the many European and Japanesecompanies already operating in each other’s home markets to all those, attracted to
the new opportunities it creates. Working Party 1 stresses that the implementation of
the agreement must address the specific concerns of European and Japanesebusinesses reflected in this and previous reports. With so much at stake, we areurging the authorities on both sides to ensure that the necessary progress is made.
Many reforms are required to secure a fair and competitive environment for business.
They have been identified based on the extensive first-hand operational experienceof Working Party 1 members in the Japanese and European markets. This reportsets out concrete recommendations addressing the following key issues:

Creation of a common regulatory environment, mutual recognition of regulations,standards and market authorisations to the extent possible, adoption ofinternational standards and enhancement of regulatory cooperation

Elimination of unnecessary barriers and bureaucracyEnsuring fair competition and equal treatment of all companies, domestic&
foreignEnsuring fairer and more open competition in services



Improving conditions for foreign direct investment
and finally,

Pursuing simpler, lighter and sensible tax systems, including theimplementation of the BEPS Actions without additional administrative burden

To highlight priority issues in the text that follows, one asterisk (*) indicates “priority”
recommendations. (e.g. WP 1/ # 01* / EJ to EJ)

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Recommendations from both
European and Japanese industries
WP-1 / # 01* / EJ to EJ
Post –EPA

Strengthening the EU-Japan Economic Relationship

The BRT praises both the European Commission, its member states, and theJapanese Government for realising the early entry into force of the EU-Japan EPA.
At the same time, the BRT would like to emphasise that more can be done in order to
get the most out of the agreement and also to build on the agreement to further profit
from synergies. Hence the BRT recommends the following:
Enhancing Regulatory cooperation
The BRT calls on the EU and Japanese Authorities to:Continue to further strive for free trade between the EU and Japan without
obstacles by pursuing regulatory cooperation, harmonisation and mutual
recognition of international regulations and testing procedures.

The BRT believes that:

Regulatory cooperation will help the EU and Japan to take the lead in setting
global standards and regulations, and will benefit not only companies but also theeconomies and society as a whole;Stronger trade and further integration of our economies will also act as acounterweight to protectionist undercurrents.

Encouraging the use of EU-Japan EPA, particularly by SMEs
The BRT calls on the EU and Japanese Authorities to:Take great care to ease the use of the agreement, particularly by SMEs.



Proactively inform industry of the benefits and how to use those benefits andpreferences

In particular, jointly release information on the Rules of Origin, and what
documentation is needed to certify origin.

The BRT believes that:

SMEs are an important and integral part of both the EU and Japanese
economies. At the same time, they tend to face bigger difficulties in utilising a

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complex system due to lack of resources. Getting them on board is necessary to
make the trade between EU and Japan reach its full potential.


Different treatment by the authorities in regards to the Rules of Origin will bedevastating for the utilisation rate of the agreement. It is therefore crucial that theauthorities minimise differences in treatment

Joint investment in 3rd countries
The BRT calls on the EU and Japanese authorities:


To continue to support the EU and Japanese industry to make joint investments
in 3rd countries.

The BRT believes that:This is in particular important in developing countries where investment can help
the country in question raise its standard of living dramatically;

It is furthermore important that the EU and Japan continue to have a global
presence to stay competitive.

Minimising the impact of Brexit
The BRT calls on the EU, and the UK Authorities to:Work together to safeguard and promote free and fair trade through broad anddeep economic partnership across all trade of goods, services and investments
including frictionless trade such as no tariff, effective regulatory alignment andminimum customs procedures between EU and UK;

Maintain/restore a favourable business environment including unfetteredinvestment, smooth services, and financial transactions, harmonised regulationand standards, and access to workforce with necessary skills.

The BRT calls on the Japanese Authorities to:Reach an agreement with the UK as early as possible in order to realise free
trade between Japan and the UK, once UK’s departure from the EU is confirmed.

The BRT believes that:

Brexit is impacting not only the EU, Japan, and the UK separately but also the
EU-Japan relationship;

Clear indication on the future relationship between the EU and the UK with
sufficient transition periods is necessary to address the wider concerns acrossthe industries on a global scale;

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

Fair and free trade among the EU, Japan and the UK will not only help businessactivities but also benefit the wider area of cooperation and mutual interests
including the welfare of consumers and society as a whole while also
continuously encouraging the rules-based international order, the rule of law andpromotion of democracy.

WP-1 / # 02* / EJ to EJ
Recommendations for an ambitious multilateral tradeagenda following the WTO Ministerial Conference in Buenos Aires
Under the growing pressure of protectionism in the world and the prevalence oftrade-distorting practices, the EU and Japan must together defend with other WTO
members the centrality of the WTO as the guardian of the multilateral trading system,and the value of WTO agreements as a basis of fair rules to maintain order in global
trade and to promote further liberalization. It is therefore crucial that the WTO and its
members to take into account concerns expressed against trade and globalisation,
while ensuring that the multilateral trading system remains relevant and is updated tobetter respond to current challenges.
The BRT calls on the EU and Japan to:

Reinforce the negotiating pillar of the WTO to better disseminate the benefitsof global value chains. The EU and Japan must play a central role in thisregard.



Safeguard the proper functioning of the enforcement pillar of the WTO, its
Appellate Body. The current deadlock in the appointment of new judges
means that the body is at risk of being paralysed by the end of this year,
undermining the possibilities for effective dispute settlement and encouraging
WTO members to go beyond WTO rules in their attempts to remedy tradeissues.



Explore further topics that are essential for the smooth functioning of global
value chains together with other WTO members. These could include, forexample, industrial subsidies, the reduction of export restrictions, investment
facilitation and competition.



Revitalise plurilateral negotiations and create momentum for negotiations tomove forward for the Trade in Services Agreement (TiSA), or, alternatively,
explore other ways to achieve liberalization in the field of services.



Lead the discussion of further expanding the product coverage andmembership countries and regions for the Information Technology Agreement(ITA), as agreed in December 2015.

The BRT believes that:

The launch of negotiations for an agreement on e-commerce by 76 WTO
members is an important step in the right direction for the rule-making pillar of
the WTO and the BRT calls for an ambitious and comprehensive outcome.

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It is important to realise global free trade in goods and services under the
auspices of the WTO. This should include goods over the whole value chain tohave a real impact and to take into account the globalisation of the value
chains. Liberalisation should also include environmental goods, so long as it
does not discriminate unfairly between products and sectors.

Further progress should be achieved in the negotiation on other agenda items
such as non-agricultural market access (NAMA), agriculture, non-tariff barriers(NTBs) and export subsidies at the next WTO Ministerial Conference on 8-11
June 2020 in Kazakhstan.

WP-1 / # 03* / EJ to EJ Applying
regulatory cooperationinternational

standards

andenhancing

The BRT believes that regulatory cooperation will be key to the economic prosperityof the two economies. Given the successful entry into force of the EU-Japan EPA thisFebruary, it will be more important than ever not only to ensure that new regulations
do not nullify or impair the market access benefits under the agreement or create
new barriers to bilateral trade, but also to further expand and strengthen theregulatory cooperation between the two economies so that the EU and Japan will beable to create a seamless business environment and eventually expand suchcooperation to other bilateral and multilateral relations.
General recommendations
The BRT calls on the EU and the Japanese authorities to:Building on the EPA, jointly pursue the harmonisation of rules, regulations andstandards. While the EPA has certainly provided great success in this regard,
the BRT believes that the work has to continue to deal with areas not coveredby the EPA as well as new areas and technologies.



Increase their understanding of existing and upcoming regulations of the othersideWhere international standards have not yet been developed, when possible,
and appropriate, to accept the mutual approval of the import, sale or use of
products that have been approved on the basis of functionally equivalentrequirements.

Study the possible impact of new regulatory developments on domestic andforeign business to avoid taking initiatives that might unwittingly create barriers
to trade and investment.

To establish a close dialogue with industry regarding the harmonisation ofregulations and standards.

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The BRT believes that:1.

The EPA creates a perfect platform for regulatory cooperation, but that further
efforts are needed to keep the momentum up.

A similar mind-set as was shown during the negotiations is needed so that an
enforceable harmonisation of regulations can be realised.

Continued dialogue is needed, but that clear goals are defined as to avoid a
dialogue without results
Create a common chemicals regulation
The BRT calls on EU and Japanese authorities to: Establish a common list of restricted substances and a common approachto the evaluation and sharing of data, and the hazard classification.
 As a first step towards complete recognition set up a system where test
results carried out in either the EU or Japan to be recognised as carriedout in the other region.
The BRT believes that: The EPA provided a good platform with progress made forbiodegradability of organic chemicals. However, more efforts are needed
to harmonise or mutually recognise the two systems.
 A common regulatory environment will not only benefit the industries
through cost mitigation but also benefit users and consumers throughlower prices and consistent protection.

2.

Create a common resource efficiency policy
The BRT calls on the EU and Japanese authorities to: Promote the concept of resource and energy efficiency, using the rightincentives, standardised test methodologies, criteria and a common format
of environmental products declaration between the EU and Japan andcooperate with each other so that such policies are internationally shared.
Areas, where regulatory harmonisation should be pursued, are thematerial recycling and energy recovery fields which are essential for both
EU and Japan economies if they are to become circular.
 Work together at the multilateral level to promote international
harmonisation of energy efficiency regulations, relevant labelling rules,
and environmental and carbon footprint schemes.
The BRT believes that: Only through a common approach can many of the energy andenvironment related issues be solved. It is therefore vital that the EU andJapan show leadership in the field at ISO and IEC level.

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3.

Expand the benefits of AEOs
The BRT calls on the EU and Japanese authorities to: Aim at introducing further regulatory cooperation in order to give more
concrete benefits to AEOs.
 Focus on introducing real advantages without increasing theadministrative burden for companies, giving them freedom andsimplification and responsibility in terms of imports.
The BRT believes that: A smoother logistical system where benefits are given to companies thatcan show that they have the capacity to properly trace each shipment.
 This is also beneficial for the authorities as they will be able to focus more
on illegal shipment and to support companies that have less capacity
regarding traceability.

4.

Adoption of UN Regulations and promotion of regulatory cooperation in
the automobile sector
The BRT calls on the EU and Japanese authorities to: Continue to work and promote the UNECE as a forum for global
harmonisation of the vehicle regulations.
 Furthermore, accelerate their adoption of the UN Regulations to lower thecost of regulatory compliance for both European and Japanese automobile
exports by extending the benefits of mutual recognition.
 Work together to establish internationally harmonised technicalrequirements and testing procedures that will encourage the smoothmarket adoption of environmentally friendly and safety vehicle
technologies, such as electric, clean diesel, hybrid and fuel cell vehicles,
autonomous and connected driving technologies.
The BRT believes that: A common regulatory framework will send a strong signal to the rest of theworld that harmonisation and the UNECE is the right forum for this.

WP-1 / # 04 / EJ to EJ

Avoiding double contributions on social security

The BRT welcomes the conclusion of social security agreements between Japan and
13 EU Member States. Negotiations or preliminary talks are under way between
Japan and some EU Member States.
The BRT calls on the EU Members States and Japan to: Swiftly conclude bilateral agreements so that double pension payments are notneeded.

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As an interim measure, introduce regulation that either exempts employees andemployers from pension premiums or returns the paid amount of both the person
and the employer when the person leaves the country.

The BRT believes that: With increased labour mobility, the need for companies to both transfer andrecruit globally will increase.
WP-1 / # 05* / EJ to EJ
IssuesRecommendation on BEPS Action Plan and Other Tax

The BRT supports the creation of an internationally fair taxation framework and levelplaying field. At the same time, the BRT believes that taxation system should be as
simple as possible and should not create excessive administrative burden on
businesses.
BEPS Action Plan
The BRT calls on the EU and Japanese Authorities to:Ensure that the implementation of BEPS Actions should not create additional
administrative burden on businesses;

Request to file CbCR only to MNE’s top parent company but not to MNE’s
subsidiaries in accordance with the OECD suggested protocol;

Aim at facilitating the conclusion of bilateral and multilateral APAs;



Not to implement the European Commission’s proposal for Public CBCR as it
breaches the confidentiality of information on taxpayers;Keep confidentiality of information concerning taxpayers as BEPS Action 13
demands;Give specific consideration to the global trading business model broadly
conducted by the financial services industry in terms of Permanent Establishment(“PE”) that the tax authorities in European Countries give utmost consideration
before making any tax assessment based on the determination that a trader
booking into an offshore booking entity under the global trading business should
qualify as dependent agent;Give utmost consideration to the implementation requirements in otherjurisdictions before implementing new tax rules, which may or not be BEPS
Action 13 and 7 related;Avoid unnecessary uncertainty for compliant taxpayers and unintended double
taxation as was agreed by OECD/G20 countries in 2013.

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Other Tax Issues
The BRT calls on the EU and Japanese Authorities to:Include all EU Member States and Japan in the mandatory binding MAP
arbitration in their bilateral tax treaties which the commitment was made by 20
countries including Japan and 13 EU Member States (Austria, Belgium, France,
Germany, Ireland, Italy, Luxembourg, the Netherlands, Poland, Slovenia, Spain,
Sweden, and the UK) as a mechanism to guarantee the resolution of treatyrelated disputes within a specified timeframe;Pursue simpler, lighter and sensible tax systems which will lead to growth andinnovation, and furthermore, reduce time and cost for both businesses to comply
and tax authorities to enforce;Promote healthy competition on tax, human resources, and infrastructure which
are decisive factors in attracting investments;

Eliminate double taxation and modernise tax treaties between EU Member States
and Japan to ensure that royalty, interest and dividend payments are exemptedfrom withholding taxes to the greatest possible extent.

WP-1 / # 06* / EJ to EJ

Recommendation on Rules of Origin

With the entry into force of the EU-Japan Economic Partnership Agreement, Rules ofOrigin will play a vital role. Producers will have to fulfil these rules for the product tobenefit from the preferences given by the agreement.
The BRT calls on the EU and Japanese authorities to:Jointly publish handbooks on how to utilise the agreement from the perspectiveof Rules on Origin.



Pay special attention to the certification of origin as this ultimately decides
whether a product can or cannot benefit from the preferential treatment offeredby the agreement.



Jointly clarify what is needed to support the statement on origin issued by theexporter as well as clarify when origin is certified by the importerAddress concerns expressed by business regarding the possible transmission ofconfidential information from the exporter to the importing customs authority inorigin verification investigations.

The BRT believes that: The lack of clarity and lack of detailed information on the treatment of both thestatement of origin issued by the exporter and the equivalent version made outby the importer is of concern, in particular whether additional supporting
documents are required at the time of import declaration.
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The BRT fully understands that it is difficult to present information that would cover
every eventuality, but illustrative examples would help to improve the utilisation rateof the EPA.
WP-1 / # 07* / EJ to E

Recommendation on Financial Transaction Tax

The BRT calls on the EU and Japanese authorities to: Minimise the negative impact of the Financial Transaction Tax, especiallyregarding the possibility of reduced volume of financial transactions anddecreased liquidity.
Take great care to make certain that funding cost does not increase and that
impairment of legitimate hedging activities is not hindered.



Carefully consider the ongoing discussion on scope of transaction, country oftaxation and tax rate in one harmonised tax regime so as to develop andintegrate capital markets in the EU.

The BRT believes that: While clear and transparent regulations are not an issue, the Financial
Transaction Tax risks decreasing the liquidity in the market which have anegative effect to not only the financial institutions but other companies andconsumers as well.

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Recommendations from
European industry to Japan
WP-1 / # 08* / E to J
Harmonisation & mutual recognition of standards andproduct certifications; acceptance of international standards where applicable
Industry still faces standards and products certifications that are not harmonised withinternational standards or regulations. Furthermore, some overseas approvals,
despite having being issued in accordance with EN and/or ISO, are not recognisedby the Japanese authorities. This leads to delays in the introduction of innovative
new products to the market and increases import costs. While accepting the need tosafeguard consumer health and safety, the BRT urges Japan to promote theharmonisation of standards and certification procedures, the mutual recognition of
product certification and, in areas where harmonized standards do not exist, themutual approval of the import, sale or use of products that have been approved on
the basis of functionally equivalent requirements, so that products certified for one
market are automatically accepted in the other market. The BRT recommends theJapanese Government to place particular emphasis on:
Automobiles
The EPA agreement in principle ensures that “both Japan and the EU will fully alignthemselves to the same international standards on product safety and the protectionof the environment, meaning that European cars will be subject to the samerequirements in the EU and Japan, and will not need to be tested and certified again
when exported to Japan”.
However, in this area a big gap has to be seen between the ambition of theAgreement and the reality. This is due to the transition periods of up to 7 years,
several exemptions and specific provisions in some areas. All in all, the Agreement
does not significantly change the current status to an improved situation.
It has to be feared that under the current provisions of the Agreement, improvements
will be seen only gradually and slowly. Especially in the important area ofemissions/fuel consumption, the discrepancy is expected to last.
The BRT calls on Japanese authorities to:

Shorten the transition periods,

Promote further harmonization in areas currently not covered by the agreement,

Change optional to mandatory conditions regarding the approval of EU
certificates, especially in the area of emissions/fuel consumption to ensure that –as intended by the EPA – vehicles will not need to be tested and certified again
when exported to Japan,

Use the Automotive Working Group to increase the benefits in this area by
speeding up the envisaged changes and widen the harmonization efforts.

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Railways
The BRT calls on Japan to: To be more involved in introducing a national system for conformity assessment
and to encourage mutual recognition of testing and certification. The BRT
believes that a working group led by the Japan authorities including both
domestic and foreign companies from all railway related sectors should beestablished.


Take extra care that standards and testing required by Japanese operators arecommunicated in a transparent manner so that European suppliers can meet andexceed these requirements.

The BRT believes that: A national testing scheme would lower the costs for suppliers and would at thesame time make it easier for the authorities to make certain that railway relatedcompanies fulfil the proper safety requirements.
Processed food
While the EPA offers lower tariffs, the regulatory situation for companies still remains
the same. This means that companies have to spend significant resources andmoney to fulfil requirements that are often unique to Japan.
The BRT calls on Japan in collaboration with the European authorities to: Recognise European approvals and test methodsHarmonise with internationally approved food additives and enzymesAbolish the system where some products receiving benefits under the EU-Japan
EPA have to be imported by ALIC.

The BRT believes that: With more recognition of European approval and test results, Japanese
consumers will benefit from more and cheaper European products.

WP-1 / #09* / E to J

Self-verification and risk assessment

Risk assessment and self-verification become more and more common as production
cycles become shorter. This in order to offer a way to shorten the time to introduce a
product to the market and at the same time ensuring that proper responsibility istaken by companies. While self-verification is used in Japan too, government or third
party approval is often the norm.
The BRT calls on Japanese authorities to:Expand the use of self-verification while ensuring that proper care is taken toprotect the safety of human life, as well as animals and plants.

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WP-1 / # 10* / E to J

Automobiles

Kei cars and other motor vehicles continue to be subject to different treatments interms of tax, insurance and parking rules. Although METI and JAMA have suggested
reducing the level of discrepancy in taxation to the order of 1:2, for the time being,
the discrepancy in the base level of taxation of kei cars and subcompact cars at 1:3.3
remains unacceptably wide.
The BRT calls on Japanese authorities to:

Put kei cars and other motor vehicles on the same fiscal and regulatory footing.

WP-1 / # 11* / E to J

Freight and logistics

Further to the WP-1 / # 03 / EJ to EJ, the BRT recommends that Japan revises its
AEO system to introduce real benefits for operators regardless of whether they are
forwarders, customs brokers or importers. Furthermore, the administrative loadneeds to be lessened if companies are to be truly attracted to the AEO status.
The BRT calls on Japanese authorities to:Allow a bonded warehouse to act as a port of first entry in regards to products
covered by quarantine related regulations.



Promote Electronic Delivery Order for ocean freight

Take the lead in trying to digitalise the logistics industry as currently many
Japanese companies, including large companies, are still using fax and paper
orders.



Allow smartboxes to be part of the container. Only in Japan does this has to be
declared as part of the cargo, hence it has to be declared for import.

The BRT believes that: A more seamless and flexible transport sector will have a positive impact on thegeneral flow of trade and better facilitate the improved market access offered by
the EPA.
WP-1 / # 12* / E to J

Retrospective application of the EPA

Many importers in Japan have struggled to utilise the preferential treatment offeredby the EPA due to Japan Customs asking for additional information. This information
has in many cases either been confidential, the importer has not had possession ofsuch information due to other reasons or imports were time sensitive and therefore
the importer did not want to take the risk of a delay due to missing information
requests. Unfortunately because of this some companies have opted for importing
the products outside of the agreement paying the WTO tariff. With the announcement
made by Japan Customs stating that the submission of additional information is not
obligatory it should now be possible to import the very same products. While the EU
has a tradition of retrospective application Japan has not.
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The BRT calls on Japanese authorities to:Allow for the retrospective application of the agreement so that products that doindeed have origin in the EU can make use of the agreement as was always
intended.

WP-1 / # 13* / E to J

Aeronautics

Haneda D runway weight restrictions are an obstacle to the use of European-madeaeroplanes and an obstacle to further development of international traffic at Haneda.
These weight restrictions should be re-examined to allow the operations of new andlarger aeroplanes such as Airbus-made A380 and A350.
The BRT calls on Japanese authorities to:Re-examine the weight restrictions to allow the operations of new and larger
aeroplanes such as Airbus-made A380 and A350. This should be in line with theapproval of the 747-8i which is in the same category as the A380 (code F
aircraft).

The BRT believes that:With the increasing number of tourists coming to Japan, which will increase
thanks to both the Rugby World Cup and the 2020 Olympics, in combination withthe difficulties of increasing the number of slots, larger aircraft would play animportant role in overcoming these challenges.

WP-1 / # 14 / E to J

Financial reporting

Differences in financial reporting often force companies to draw up multiple financial
reports. This is, in particular, the case for multinationals
The BRT calls on Japanese authorities and the ASBJ to:

Give greater priority to attaining alignment of JGAAP with IFRS, thereby reducing
the need for cumbersome reconciliations.

Consider adjusting tax and company laws to facilitate financial reporting
convergence where there are close ties between them. That way companies cankeep existing tax accommodations while obtaining the aforementioned benefits offinancial reporting alignment.

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The BRT believes that:This will contribute to reduced costs, improved data transparency and accuracy,
and at the same time strengthen the attractiveness of the Japanese financial
market by improving the comparability of Financial Statements.

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Recommendations fromJapanese industry to the EU
WP-1 / # 15 / J to E

Chemical Regulations

REACH
The BRT calls on the EU authorities to:European Commission is planning to review the REACH regulations, and it
includes the establishment of the registration rules for polymers. Polymer
registration rules should be applied only for the polymers which have highconcern for human health and the environment, and not applied for the low
concern polymers, same as the other nation rules.



The definition of the low concern polymers should be based on scientificallyreasonable standards.



The abolition of the current constitution monomer registration rules for imported
polymers, instead of the introduction of the new polymer registration rules.

The BRT believes that:

The monomers registration rules are not an impartial system, because it ismandatory only for companies which import polymers from outside of EU, andnot necessary for polymer procurement from EU inside. In many cases, non-EU
chemical manufacturers do not produce polymers by themselves but purchasefrom outside and prepare them, so they have to ask upward of supply chains forvarious kinds of monomer information necessary for registration. It becomes aheavy burden for non-EU companies, and acts as a kind of non-tariff barrier.

The BRT calls on the EU authorities to:

There are many and well-reliable chemical data in the REACH, and the EU
authorities have a privilege to take an initiative on the international actions fordata sharing. Given this situation, they should encourage the REACH registrant
to share the data with the applicants in the other chemical regulations outside ofEU, for instance, by the preparation of the rules or guidance designated for theinternational data sharing.

The BRT believes that:

For protection of human health and the environment, it is significant to utilize thephysical and hazardous data of REACH registration for the chemical regulationsin the other nations. In addition, from the viewpoint of animal welfare, it isimportant to avoid unnecessary animal studies by utilizing them as much as
possible. But in reality, troubles happen in some cases now. For example, in
Korea, when the negotiations between the REACH registrant and theWorking Party 1: Trade Relations; Investment and Regulatory Cooperation; Financial Services, Accounting and Taxation
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representative for registration of K-REACH are in difficulty, Korean companies
are eventually forced to do the test by themselves and it causes the problems. It
is not clear with whom we should negotiate, and there are no rules forappropriate cost sharing.
The BRT calls on the EU authorities to:

Mitigate the negative effect of the withdrawal of the UK from EU on theimplementation of REACH.



Settle the transitional measures to prevent the expiration of the OR change incase of a no-deal Brexit in which UK exits the REACH regulation at the sametime.

The BRT believes that:

As the withdrawal of UK becomes imminent, too many non-EU companies which
appoint UK consulting companies as the only representative (OR) request tochange OR to EU consulting companies. As a result, some OR in UK whichplanned to finish the procedure before the Brexit cannot settle the procedures intime, and there is concern that some non-EU companies may not be able tofinish changing OR before Brexit.

Appropriate approach to endocrine disruptors
The BRT calls on the EU authorities to:

The substance which may have a potential for endocrine disrupting effect shouldbe evaluated and eventually nominated as SVHC with special care as much as
possible.

Promote the action to make subjects about the low dose effect by endocrine
disruptor clear with a tangible deadline.

The BRT believes that:

Some substances, like “3-BENZYLIDENE CAMPHOR” evaluated as SVHC fromJanuary 2019, are evaluated as such based on the endocrine disrupting potential
for human and environment, by the reason that the potential can be observed insome kinds of creatures, although the subjects mentioned as following are notreached a clear scientific conclusion. On the other hands, in reality, markets tend
to eliminate the substances listed on the SVHC list before actual hazard level
becomes clear, in case of the possibility to be added them to authorization in the
future.



The subjects about potency of endocrine disruptors are not reached clear
scientific conclusions yet, like it can be settled any thresholds of endocrine
disruption or not, and the thresholds can be measured or not.

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RoHS
The BRT calls on the EU authorities to:

Stay harmonized and consistent in the operation of RoHS and REACH, and aim
to do prior confirmation and adjustment to prevent confusion in thecorrespondence of supply chain, like the past case of the SVHC concentration
criteria in goods where multiple interpretations existed and where problems
occurred.

Nanomaterial
The BRT calls on the EU authorities to:

The enforcement date (1st January, 2020) of the REACH ANNEXES, which
newly regulate the necessary subjects for registration dossier about nanoforms,
should be deferred until all the knowledge and tools, such as the OECD test
guideline and grouping tools applicable to them can be available for theregistrants.

The BRT believes that:

The test methods or tools of nanoforms which REACH ANNEX requests areunder developing.

WP-1 / # 16 / J to E

Common Consolidated Corporate Tax Base (CCCTB)The BRT urges the authorities of the EU to adopt the second step CCCTB
proposal swiftly after the adoption of the first step CCTB proposal because the
BRT thinks that the substantial benefits to businesses are mostly in the second
step.



The BRT hopes that, in the deliberations of the proposals of CCCTB in theCouncil, the Member States will keep the tax system simple and sensible, andfocus on fostering growth and investment.



The BRT would like to suggest that, if the Member States should find it difficult toagree on the CCTB/CCCTB proposals, they should move on to the enhanced
cooperation procedure swiftly so that CCCTB would be first implemented by theMember States that support them.



The BRT encourages the EU to aim at making the Best Practice corporate tax
system in the world to which countries around the world would aspire.

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WP-1 / # 17 / J to E

Sustainable European Future

Policy on the Sustainable Development Goals (SDGs) and Corporate Social
Responsibility (CSR) / Responsible Business Conduct (RBC)
The BRT calls on the authorities of the EU to:Integrate SDGs/CSR in the EU policy-making and take the lead in policy
discussions on how to encourage the uptake of SDGs/CSR and promote bothindividual and collective actions to maximise positive impacts while mitigating
negative ones.



Build an open platform beyond EU Multistakeholder Platform on SDGs: theEuropean Commission should open up dialogues and consultations beyond the
EU Multi-stakeholder Platform on SDGs. Japan is a key partner of the EU,
especially thanks to the comprehensive partnership under the bilateral EPA. It
would be particularly beneficial not only to exchange best practices between
Japan and the EU, but also to gather views on the future policy trajectory in thetwo regions and globally. The EU-Japan CSR Working Group, one of thetechnical working groups set up by DG GROW and METI within the EU-Japan
Industrial Policy Dialogue, could serve as a vital bilateral platform for dialogue tosupplement other multi-stakeholder mechanisms.

Take care not to reinvent the wheel, but build on the past experiences. Manyframeworks and collaboration platforms on sustainability involving companies
and stakeholders following EU CSR/RBC policy exist. We should focus on thesecollective achievements in CSR/RBC and address the SDGs in separate,
dedicated for ato identify best practices and share knowledge for further
innovation and collaboration to achieve the SDGs.

The BRT believes that:

The Commission’s reflection paper published on 30 January “Towards a
Sustainable Europe by 2030” provides welcome impetus to the next Commission
to carry this work forward and to ensure consistent sustainability policies acrossthe board and therefore a stable business environment.

Responsible supply chain management
The BRT calls on the authorities of the EU to:Promote internationally recognized frameworks in the EU that take a risk-based
approach instead of adopting the EU-specific conditions. A globally coherent
framework is a pre-condition to enable companies to take a global approach aswell as meaningful local actions. Such frameworks include the UN Guiding
Principles on Business and Human Rights and the OECD Guidance forMultinational Enterprises.

Working Party1: Trade Relations; Investment and Regulatory Cooperation; Financial Services, Accounting and Taxation
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Page 22 of 23Take leadership in closing the governance gap between countries and regions inorder to effectively address the fundamental problems on the ground. The BRT
recognises that the efforts of industry alone cannot ensure responsible sourcingof products and services from such regions. It is crucial that national
governments get involved and collaborate and thus EU diplomacy has animportant role to play. The BRT supports dialogue and engagement withstakeholders. It is the best method to drive collaboration across different culturesand systems and to create value for business and society.

Create an environment where companies are encouraged to nurture responsible
supply chains. The EU should recognise company efforts to make progress innurturing competitive, value-creating supplier networks and to put in placeenabling management processes, as opposed to a punishing framework.

Disclosure and transparency
The BRT calls on the authorities of the EU to:Emphasise dialogue as an equally valuable means for companies to strengthen
the trust of their investors and stakeholders and leverage the improvements ofcompanies' internal practices by incorporating dialogue into the PDCA
management cycle. Dialogue is a powerful tool in fostering a culture of risk
management and innovation, whereby companies across different cultures can
exchange views on potential future risks as well as explore collaborative
opportunities;

Envisage non-financial reporting as a meaningful channel for companies andinvestors to discuss/exchange value creating processes, but not as anadministrative tool cultivating a compliance mind-set. Disclosure of information is
an important means for companies to communicate about the value they createand has a potential to generate trust among stakeholders. However, materiality
differs for each company, depending on the nature of its business, theperspective of top management and corporate culture. Due to the Different ways
materiality can be defined, companies should be given flexibility to decide what
they report to best demonstrate the company’s value creation and retain
discretion in determining content and recipients of the information. A principlebased approach is the only viable way for companies to meaningfully explain
their business in a dynamic and changing environment.



Foster innovation and growth by motivating companies to integrate CSR/SDGs
into daily business to become more innovative and competitive in the global
context. This includes open exchanges among stakeholders, partner countries orregions, governments and suppliers.

Not create and impose EU-only monitoring/reporting mechanism for companies
regarding their contribution towards SDGs. Monitoring is a meaningful tool if it isfocused on the impacts and improvements that are important to companies.
Rather than acting independently, the EU should collaborate with other countries
such as Japan to create a widely applicable monitoring mechanism.

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