AGREEMENT BETWEENJAPAN AND THE STATE OF KUWAITFOR THE PROMOTION AND PROTECTION OF INVESTMENT

AGREEMENT BETWEENJAPAN AND THE STATE OF KUWAITFOR THE PROMOTION AND PROTECTION OF INVESTMENT
The Government of Japan and the Government of theState of Kuwait,
Desiring to further promote investment in order tostrengthen the economic relationship between Japan and
the State of Kuwait (hereinafter referred to as “theContracting Parties”);
Intending to create stable, equitable, favourable andtransparent conditions for greater investment by investorsof a Contracting Party in the Area of the other Contracting
Party;
Recognising the growing importance of the progressive
liberalisation of investment for stimulating initiative ofinvestors and for promoting prosperity in the Contracting
Parties;
Recognising that these objectives can be achieved
without relaxing health, safety and environmental measuresof general application;
Recognising the importance of the cooperative
relationship between labour and management in promoting
investment between the Contracting Parties;
Wishing that this Agreement will contribute to thestrengthening of international cooperation with respect
to the development of international rules on foreign
investment; andBelieving that this Agreement marks the beginning of
new economic partnership between the Contracting Parties;
Have agreed as follows:
Article 1
Definitions
For the purposes of this Agreement,(a)

The term “investment” means every kind of asset
owned or controlled, directly or indirectly, by
an investor, including:

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(1)

an enterprise and a branch of an enterprise;(2)

shares, stocks or other forms of equity
participation in an enterprise, including
rights derived therefrom;(3)bonds, debentures, loans and other forms ofdebt, including rights derived therefrom;(4)

rights under contracts, including turnkey,
construction, management, production orrevenue-sharing contracts;(5)claims to money and to any performance undercontract having a financial value;(6)

intangible assets such as intellectual
property rights, including copyrights andrelated rights, patent rights and rights
relating to utility models, trademarks,
industrial designs, layout-designs ofintegrated circuits, new varieties ofplants, trade names, indications of source
or geographical indications and know-how orother undisclosed information, as well as
goodwill;(7)

rights conferred pursuant to laws andregulations or contracts such asconcessions, licences, authorisations
and permits, including those for the
exploration, prospect, exploitation andextraction of natural resources; and(8)any other tangible and intangible, movableand immovable property, and any related
property rights, such as leases, mortgages,
liens and pledges;

An investment includes the amounts yielded by aninvestment, in particular, profit, interest,
capital gains, dividends, royalties and fees. Achange in the form in which assets are invested
does not affect their character as an investment.
(b)

The term “investor of a Contracting Party” means:(1)

the Government of that Contracting Party;(2)

a natural person having the nationality ofthat Contracting Party in accordance with
its applicable laws and regulations; or

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(3)

an enterprise of that Contracting Party,

that seeks to make, is making, or has madeinvestments in the Area of the other Contracting
Party;(c)

The term “enterprise of a Contracting Party”
means any legal person or any other entity duly
constituted or organised under the applicablelaws and regulations of that Contracting Party,
whether or not for profit, and whether privateor government owned or controlled, including
any corporation, trust, partnership, sole
proprietorship, joint venture, association,organisation or company;(d)

The term “investment activities” means
establishment, acquisition, expansion, operation,
management, maintenance, use, enjoyment and saleor other disposal of investments;(e)the term “Area” means:(1)with respect to Japan: its territory,
and the exclusive economic zone and thecontinental shelf with respect to which
Japan exercises sovereign rights or
jurisdiction in accordance withinternational law; and(2)with respect to the State of Kuwait: theterritory of the State of Kuwait including
any area beyond the territorial sea which inaccordance with international law has beenor may hereafter be designated under thelaws of the State of Kuwait, as an area overwhich it may exercise sovereign rights or
jurisdiction;(f)

The term “existing” means being in effect on thedate of entry into force of this Agreement;(g)

The term “freely usable currency” means freely
usable currency as defined under the Articles ofAgreement of the International Monetary Fund; and(h)The term “the WTO Agreement” means the Marrakesh
Agreement Establishing the World Trade
Organization, done at Marrakesh, April 15, 1994.

- 3 -Article 2
National Treatment
1.
Each Contracting Party shall in its Area accord toinvestors of the other Contracting Party and to theirinvestments treatment no less favourable than the treatment
it accords in like circumstances to its own investors andto their investments with respect to investment activities.
2.
Notwithstanding paragraph 1, each Contracting Party
may prescribe special formalities in connection withinvestment activities of investors of the other Contracting
Party in its Area, provided that such special formalities
do not impair the substance of the rights of such investors
under this Agreement.
3.
Paragraph 1 does not prevent either Contracting Party
from differentiating between treatments accorded inaccordance with its laws and regulations relating to taxes.
Article 3
Most-Favoured-Nation Treatment
1.
Each Contracting Party shall in its Area accord toinvestors of the other Contracting Party and to theirinvestments treatment no less favourable than the treatment
it accords in like circumstances to investors of a third
party and to their investments with respect to investment
activities.
2.
Paragraph 1 shall not be construed so as to oblige aContracting Party to extend to investors of the other
Contracting Party special tax advantages accorded toinvestors of a third party, on the basis of reciprocity
with the third party or by virtue of any agreement relating
to taxes in force between the former Contracting Party andthe third party.
Article 4
General Treatment
1.
Each Contracting Party shall in its Area accord toinvestments of investors of the other Contracting Party
treatment in accordance with international law, including
fair and equitable treatment and full protection andsecurity.
2.
Neither Contracting Party shall, within its Area, in
any way impair the operation, management, maintenance, use,enjoyment and sale or other disposal of investments ofinvestors of the other Contracting Party by arbitrary
measures.

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3.
Each Contracting Party shall observe any obligation
it may have entered into with regard to investments andinvestment activities of investors of the other Contracting
Party.
Article 5
Access to the Courts of Justice
Each Contracting Party shall in its Area accord toinvestors of the other Contracting Party treatment no lessfavourable than the treatment which it accords in likecircumstances to its own investors or investors of a third
party with respect to access to the courts of justice andadministrative tribunals and agencies in all degrees ofjurisdiction, both in pursuit and in defence of suchinvestors’ rights.
Article 6
Prohibition of Performance Requirements
1.
Neither Contracting Party shall impose or enforce,as a condition for investment activities in its Area of
an investor of the other Contracting Party, any of thefollowing requirements:(a)to export a given level or percentage of goods
or services;(b)to achieve a given level or percentage ofdomestic content;(c)to purchase, use or accord a preference to goods
produced or services provided in its Area, or topurchase goods or services from natural or legal
persons or any other entity in its Area;(d)to relate in any way the volume or value ofimports to the volume or value of exports or to
the amount of foreign exchange inflows associatedwith investments of that investor;(e)

to restrict sales of goods or services in its
Area that investments of that investor produce orprovide by relating such sales in any way to thevolume or value of its exports or foreignexchange earnings;(f)to restrict the exportation or sale for export;(g)

to appoint, as executives, managers or membersof boards of directors, individuals of any
particular nationality;

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(h)

to transfer technology, a production process orother proprietary knowledge to a natural or legal
person or any other entity in its Area, except
when the requirement:(1)

is imposed or enforced by a court,
administrative tribunal or competition
authority to remedy an alleged violationof competition laws; or(2)concerns the transfer of intellectual
property rights which is undertaken in amanner not inconsistent with the Agreement
on Trade-Related Aspects of Intellectual
Property Rights in Annex 1C to the WTO
Agreement (hereinafter referred to as “theTRIPS Agreement”);(i)to locate the headquarters of that investor for a
specific region or the world market in its Area;(j)to hire a given number or percentage of its
nationals;(k)to achieve a given level or value of research anddevelopment in its Area; or(l)to supply one or more of the goods that theinvestor produces or the services that theinvestor provides to a specific region or theworld market, exclusively from the Area of theformer Contracting Party.

2.
Paragraph 1 does not preclude either Contracting Party
from conditioning the receipt or continued receipt of anadvantage, in connection with investment activities in its
Area of an investor of the other Contracting Party, oncompliance with any of the requirements set forth insubparagraphs 1(g) through (l).
Article 7
Reservations and Exceptions
1.

Articles 2, 3 and 6 shall not apply to:(a)any existing non-conforming measure that ismaintained by the central government of aContracting Party, as set out in the Scheduleof each Contracting Party in Annex I;

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(b)

any existing non-conforming measure that ismaintained by a local government of a Contracting
Party;(c)the continuation or prompt renewal of any nonconforming measure referred to in subparagraphs(a) and (b); or(d)an amendment or modification to any nonconforming measure referred to in subparagraphs(a) and (b), provided that the amendment or
modification does not decrease the conformity ofthe measure as it existed immediately before theamendment or modification with Articles 2, 3 and6.

2.
Articles 2, 3 and 6 shall not apply to any measurethat a Contracting Party adopts or maintains with respect
to sectors, sub-sectors or activities set out in its
Schedule in Annex II.
3.
Neither Contracting Party shall, under any measure
adopted after the date of entry into force of thisAgreement and covered by its Schedule in Annex II, require
an investor of the other Contracting Party, by reason of
its nationality, to sell or otherwise dispose of aninvestment that exists at the time the measure becomes
effective.
4.
In cases where a Contracting Party makes an amendment
or a modification to any existing non-conforming measure
set out in its Schedule in Annex I or where a Contracting
Party adopts any new or more restrictive measure withrespect to sectors, sub-sectors or activities set out in
its Schedule in Annex II after the date of entry into forceof this Agreement, the Contracting Party shall, prior to
the implementation of the amendment or modification or the
new or more restrictive measure, or in exceptional
circumstances, as soon as possible thereafter:(a)notify the other Contracting Party of detailed
information on such amendment or modification, or
such measure; and(b)hold, upon request by the other Contracting
Party, consultations in good-faith with that
other Contracting Party with a view to achieving
mutual satisfaction.

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5.
Each Contracting Party shall endeavour, whereappropriate, to reduce or eliminate the reservations
specified in its Schedules in Annexes I and II
respectively.
6.
Articles 2, 3 and 6 shall not apply to any measure
covered by the exceptions to, or derogations from,obligations under Articles 3 and 4 of the TRIPS Agreement,as specifically provided in Articles 3 through 5 of the
TRIPS Agreement.
7.
Articles 2, 3 and 6 shall not apply to any measurethat a Contracting Party adopts or maintains with respect
to government procurement.
Article 8
Transparency
1.
Each Contracting Party shall promptly publish, orotherwise make publicly available, its laws, regulations,administrative procedures and administrative rulings andjudicial decisions of general application as well asinternational agreements which pertain to or affect theimplementation and operation of this Agreement.
2.
Each Contracting Party shall, upon request by theother Contracting Party, promptly respond to specificquestions and provide that other Contracting Party withinformation on matters set out in paragraph 1, includingthat relating to contract each Contracting Party enters
into with regard to investment.
3.
Paragraphs 1 and 2 shall not be construed so as tooblige either Contracting Party to disclose confidential
information, the disclosure of which would impede law
enforcement or otherwise be contrary to the public
interest, or which would prejudice privacy or legitimate
commercial interests.
Article 9
Measures against Corruption
Each Contracting Party shall ensure that measures andefforts are undertaken to prevent and combat corruption
regarding matters covered by this Agreement in accordancewith its laws and regulations.

- 8 -Article 10
Entry, Sojourn and Residence of Investors
Each Contracting Party shall, in accordance with
its applicable laws and regulations, give sympathetic
consideration to applications for the entry, sojourn andresidence of a natural person having the nationality of theother Contracting Party who wishes to enter the territoryof the former Contracting Party and to remain therein forthe purpose of investment activities.
Article 11
Expropriation
1.
Neither Contracting Party shall expropriate or
nationalise investments in its Area of investors of theother Contracting Party or take any measure equivalent to
expropriation or nationalisation (hereinafter referred toas “expropriation”) except:(a)for a public purpose;(b)in a non-discriminatory manner;(c)upon payment of prompt, adequate and effective
compensation pursuant to paragraphs 2 through 4;
and

(d)

in accordance with due process of law and
Article 4.

2.
The compensation shall be equivalent to the fairmarket value of the expropriated investments at the time
when the expropriation was publicly announced or when the
expropriation occurred, whichever is the earlier. The fairmarket value shall not reflect any change in value
occurring because the expropriation had become publicly
known earlier.
3.
The compensation shall be paid without delay and shall
include interest at a commercial rate established on amarket basis, taking into account the length of time until
the time of payment. It shall be effectively realisable
and freely transferable and shall be freely convertible
into the currency of the Contracting Party of the investors
concerned and into freely usable currencies, at the market
exchange rate prevailing on the date of expropriation.

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4.
Without prejudice to the provisions of Article 16,
the investors affected by expropriation shall have aright of access to the courts of justice or administrative
tribunals or agencies of the Contracting Party making the
expropriation to seek a prompt review of the investors’
case and the amount of compensation in accordance with theprinciples set out in this Article.
Article 12Compensation for Losses or Damages
1.
Each Contracting Party shall accord to investorsof the other Contracting Party that have suffered loss
or damage relating to their investments in the Area ofthe former Contracting Party due to armed conflict or astate of emergency such as revolution, insurrection,
civil disturbance or any other similar event in the Areaof that former Contracting Party, treatment, as regards
restitution, indemnification, compensation or any othersettlement, that is no less favourable than that which it
accords to its own investors or to investors of a third
party, whichever is more favourable to the investors of
the other Contracting Party.
2.
Any payment as a means of settlement referred to inparagraph 1 shall be effectively realisable, freelytransferable and freely convertible at the market exchange
rate prevailing at the time of payment into the currency of
the Contracting Party of the investors concerned and freely
usable currencies.
Article 13
Subrogation
If a Contracting Party or its designated agency makes
a payment to any investor of that Contracting Party under
an indemnity, guarantee or insurance contract, pertaining
to investments of such investor in the Area of the other
Contracting Party, the latter Contracting Party shallrecognise the assignment to the former Contracting Partyor its designated agency of any right or claim of suchinvestor on account of which such payment is made and shallrecognise the right of the former Contracting Party or its
designated agency to exercise by virtue of subrogation any
such right or claim to the same extent as the originalright or claim of the investor. As regards payment to bemade to that former Contracting Party or its designatedagency by virtue of such assignment of right or claim andthe assignment of such payment, Articles 11, 12 and 14
shall apply mutatis mutandis.

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Article 14
Transfers
1.
Each Contracting Party shall ensure that all transfers
relating to investments in its Area of an investor of theother Contracting Party may be freely made into and out of
its Area without delay. Such transfers shall include, inparticular, though not exclusively:(a)the initial capital and additional amounts tomaintain or increase investments;(b)

profits, interest, capital gains, dividends,
royalties, fees and other current incomes
accruing from investments;(c)payments made under a contract including loan
payments in connection with investments;(d)proceeds of the total or partial sale or
liquidation of investments;(e)earnings and remuneration of personnel engaged
from the other Contracting Party who work inconnection with investments in the Area of theformer Contracting Party;(f)payments made in accordance with Articles 11 and
12; and(g)payments arising out of the settlement of adispute under Article 16.

2.
Each Contracting Party shall further ensure that suchtransfers may be made without delay in freely usable
currencies at the market exchange rate prevailing on thedate of each transfer.
3.
Notwithstanding paragraphs 1 and 2, a Contracting
Party may delay or prevent a transfer through theequitable, non-discriminatory and good-faith applicationof its laws and regulations relating to:(a)bankruptcy, insolvency or the protection of therights of creditors;(b)issuing, trading or dealing in securities;(c)criminal or penal offences; or(d)ensuring compliance with orders or judgements in
adjudicatory proceedings.

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Article 15
Settlement of Disputes between the Contracting Parties
1.
Each Contracting Party shall accord sympathetic
consideration to, and shall afford adequate opportunity for
consultations through diplomatic channels regarding, such
representations as the other Contracting Party may makewith respect to any matter affecting the application ofthis Agreement.
2.
Any dispute between the Contracting Parties as tothe interpretation or application of this Agreement, notsatisfactorily adjusted by diplomacy within six months,
shall be referred for decision to an arbitral tribunal.
Such arbitral tribunal shall be composed of threearbitrators, with each Contracting Party appointing one
arbitrator within a period of sixty (60) days from thedate of receipt by either Contracting Party from the other
Contracting Party of a note requesting arbitration of the
dispute, and the third arbitrator to be agreed upon as
Chairman by the two arbitrators so chosen within a further
period of sixty (60) days, provided that the third
arbitrator shall not be a national of either Contracting
Party.
3.
If the third arbitrator is not agreed upon between thearbitrators appointed by each Contracting Party within thefurther period of sixty (60) days referred to in paragraph
2, the Contracting Parties shall request the President of
the International Court of Justice to appoint the third
arbitrator who shall not be a national of either
Contracting Party.
4.
If the President of the International Court of Justiceis a national of either Contracting Party or if he isotherwise prevented from discharging the said function, theVice-President of the Court shall be invited to make thenecessary appointments. If the Vice-President of the Court
is a national of either Contracting Party or if he, too, isprevented from discharging the said function, the member of
the Court next in seniority who is not a national of either
Contracting Party shall be invited to make the necessary
appointments.
5.
The arbitral tribunal shall within a reasonable periodof time take its decision by a majority of votes. Suchdecision shall be made in accordance with this Agreement
and applicable rules of international law. Such decision
shall be final and binding on both Contracting Parties.

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6.
Each Contracting Party shall bear the costs of themember of the arbitral tribunal of its choice, as wellas the costs for its representation in the arbitration
proceedings. The expenses incurred by the Chairman as wellas any other costs of the arbitration proceedings shall beborne in equal parts by the two Contracting Parties.
However, the arbitral tribunal may, at its discretion,
direct that a higher proportion or all of such other costsof the arbitration proceedings be paid by one of theContracting Parties. In all other respects, the arbitral
tribunal shall determine its own procedure.
Article 16
Settlement of Investment Disputes
between a Contracting Party and an Investorof the Other Contracting Party
1.
For the purposes of this Article, an “investment
dispute” is a dispute between a Contracting Party and an
investor of the other Contracting Party that has incurred
loss or damage by reason of, or arising out of, an alleged
breach of any obligation of the former Contracting Party
under this Agreement with respect to the investor of that
other Contracting Party or its investments in the Area ofthe former Contracting Party.
2.
Subject to subparagraph 7(b), nothing in this Article
shall be construed so as to prevent an investor who is aparty to an investment dispute (hereinafter referred toin this Article as “disputing investor”) from seeking
administrative or judicial settlement within the Area of
the Contracting Party that is a party to the investment
dispute (hereinafter referred to in this Article as“disputing Party”).
3.
Any investment dispute shall, as far as possible,
be settled amicably through consultations between thedisputing investor and the disputing Party (hereinafterreferred to in this Article as “the disputing parties”).
4.
If the investment dispute cannot be settled throughsuch consultations within three months from the date on
which the disputing investor requested in writing the
disputing Party for consultations, the disputing investor
may, subject to subparagraph 7(a), submit the investment
dispute to one of the following international conciliations
or arbitrations:- 13 -

(a)conciliation or arbitration in accordance with
the Convention on the Settlement of Investment
Disputes between States and Nationals of Other
States, done at Washington, March 18, 1965
(hereinafter referred to in this Article as“the ICSID Convention”), so long as the ICSID
Convention is in force between the Contracting
Parties;(b)conciliation or arbitration under the Additional
Facility Rules of the International Centre for
Settlement of Investment Disputes, so long as the
ICSID Convention is not in force between theContracting Parties;(c)arbitration under the Arbitration Rules of theUnited Nations Commission on International Trade
Law, adopted by the United Nations Commission on
International Trade Law on April 28, 1976; and(d)if agreed with the disputing Party, any
arbitration in accordance with other arbitration
rules.

5.
Each Contracting Party hereby consents to thesubmission of investment disputes by a disputing investor
to conciliation or arbitration set forth in paragraph 4
chosen by the disputing investor.
6.
Notwithstanding paragraph 5, no investment disputes
may be submitted to conciliation or arbitration set forthin paragraph 4, if more than five years have elapsed since
the date on which the disputing investor acquired or shouldhave first acquired, whichever is the earlier, theknowledge that the disputing investor had incurred loss ordamage referred to in paragraph 1.
7.

(a)

In the event that an investment dispute has been
submitted to courts of justice or administrative
tribunals or agencies or any other binding
dispute settlement mechanism established under
the laws and regulations of the disputing Party,
any conciliation or arbitration set forth inparagraph 4 can be sought only if the disputing
investor withdraws, in accordance with the laws
and regulations of the disputing Party, its claim
from such domestic remedies before the final
decisions are made therein.

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(b)In the event that an investment dispute has been
submitted for resolution under one of theconciliations or arbitrations set forth inparagraph 4, the same investment dispute shallnot be submitted for resolution under courts ofjustice, administrative tribunals or agencies or
any other binding dispute settlement mechanism
established under the laws and regulations of the
disputing Party.

8.
An arbitral tribunal established under paragraph 4
shall decide the issues in dispute in accordance with thisAgreement and applicable rules of international law.
9.
The disputing Party shall deliver to the other
Contracting Party:(a)written notice of the investment disputesubmitted to the arbitration no later than thirty(30) days after the date on which the investment
dispute was submitted; and(b)copies of all pleadings filed in the arbitration.

10. The Contracting Party which is not the disputing Party
may, upon written notice to the disputing parties, makesubmissions to the arbitral tribunal on a question ofinterpretation of this Agreement.
11. Unless the disputing parties agree otherwise, thearbitration shall be held in a country that is a party to
the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, done at New York, June 10, 1958
(hereinafter referred to in this Article as “the New York
Convention”).
12. The award rendered by the arbitral tribunal shall befinal and binding upon the disputing parties. This award
shall be executed by the applicable laws and regulations aswell as relevant international law including the ICSID
Convention and the New York Convention, concerning theexecution of award in force in the country where suchexecution is sought.
13. Notwithstanding paragraph 4, the disputing investor
may initiate or continue an action that seeks interim
injunctive relief that does not involve the payment ofdamages before an administrative tribunal or agency or a
court of justice under the law of the disputing Party.

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14. The disputing Party may not assert, as a defence,
counterclaim, right of set-off or otherwise, that the
disputing investor has received or will receive
indemnification or other compensation for all or part of
the alleged damages pursuant to an insurance or guarantee
contract.
Article 17
General and Security Exceptions
1.
Subject to the requirement that such measures are
not applied by a Contracting Party in a manner which
would constitute a means of arbitrary or unjustifiable
discrimination against the other Contracting Party, or a
disguised restriction on investments of investors of theother Contracting Party in the Area of the former
Contracting Party, nothing in this Agreement other than
Article 12 shall be construed so as to prevent the former
Contracting Party from adopting or enforcing measures:(a)necessary to protect human, animal or plant lifeor health;(b)necessary to protect public morals or to maintainpublic order, provided that the public order
exception may only be invoked where a genuine andsufficiently serious threat is posed to one of
the fundamental interests of society;(c)necessary to secure compliance with the laws or
regulations which are not inconsistent with theprovisions of this Agreement including thoserelating to:

(d)

(1)

the prevention of deceptive and fraudulent
practices or to deal with the effects of a
default on contract;(2)

the protection of the privacy of theindividual in relation to the processing anddissemination of personal data and theprotection of confidentiality of personal
records and accounts; or(3)safety;which it considers necessary for the protectionof its essential security interests:(1)taken in time of war, or armed conflict, orother emergency in that Contracting Party or
in international relations; or- 16 -

(2)relating to the implementation of national
policies or international agreements
respecting the non-proliferation of weapons;(e)in pursuance of its obligations under the United
Nations Charter for the maintenance ofinternational peace and security; or(f)imposed for the protection of national treasuresof artistic, historic or archaeological value.

2.
In cases where a Contracting Party takes any measure,pursuant to paragraph 1, that does not conform with the
obligations under this Agreement other than Article 12,that Contracting Party shall, prior to the entry into forceof the measure or as soon thereafter as possible, notify
the other Contracting Party of the following elements ofthe measure:(a)sector and sub-sector or matter;(b)

obligation or article in respect of the measure;(c)legal source of the measure;(d)

succinct description of the measure; and(e)purpose of the measure.
Article 18
Temporary Safeguard Measures

1.
A Contracting Party may adopt or maintain measures notconforming with its obligations under Article 2 relating tocross-border capital transactions and Article 14:

2.

(a)

in the event of serious balance-of-payments andexternal financial difficulties or threat
thereof; or(b)in cases where, in exceptional circumstances,
movements of capital cause or threaten to cause
serious difficulties for macroeconomic
management, in particular, monetary and exchange
rate policies.

Measures referred to in paragraph 1:(a)shall be consistent with the Articles ofAgreement of the International Monetary Fund, solong as the Contracting Party taking the measures
is a party to the said Articles;- 17 -

(b)shall not exceed those necessary to deal with thecircumstances set out in paragraph 1;(c)shall be temporary and shall be eliminated assoon as conditions permit;(d)shall be promptly notified to the other
Contracting Party; and(e)shall avoid unnecessary damages to thecommercial, economic and financial interests of
the other Contracting Party.

3.
Nothing in this Agreement shall be regarded asaltering the rights enjoyed and obligations undertaken by aContracting Party as a party to the Articles of Agreementof the International Monetary Fund.
Article 19
Prudential Measures
1.
Notwithstanding any other provisions of thisAgreement, a Contracting Party shall not be prevented
from taking measures relating to financial services forprudential reasons, including measures for the protectionof investors, depositors, policy holders or persons to whoma fiduciary duty is owed by an enterprise supplying
financial services, or to ensure the integrity andstability of its financial system.
2.
Where the measures taken by a Contracting Party
pursuant to paragraph 1 do not conform with this Agreement,
they shall not be used as a means of avoiding theobligations of the Contracting Party under this Agreement.
Article 20
Intellectual Property Rights
1.
The Contracting Parties shall grant and ensure theadequate and effective protection of intellectual property
rights, and promote efficiency and transparency inadministrations of intellectual property protection system.
For this purpose, the Contracting Parties shall promptly
consult with each other at the request of either
Contracting Party. Depending on the results of theconsultations, each Contracting Party shall, in accordancewith its applicable laws and regulations, take appropriate
measures to remove the factors which are recognised ashaving adverse effects to investments of investors of theother Contracting Party.

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2.
Nothing in this Agreement shall be construed so as toderogate from the rights and obligations under multilateralagreements in respect of protection of intellectual
property rights to which the Contracting Parties are
parties.
3.
Nothing in this Agreement shall be construed so as
to oblige either Contracting Party to extend to investorsof the other Contracting Party and their investments
treatment accorded to investors of a third party and theirinvestments by virtue of multilateral agreements in respectof protection of intellectual property rights, to which theformer Contracting Party is a party.
Article 21
Taxation
Nothing in this Agreement shall affect the rights
and obligations of either Contracting Party under any
convention for the avoidance of double taxation. In theevent of any inconsistency between this Agreement and any
such convention, that convention shall prevail to theextent of the inconsistency.
Article 22
Joint Committee
1.
The Contracting Parties shall establish a Joint
Committee (hereinafter referred to as “the Committee”) witha view to accomplishing the objectives of this Agreement.
The functions of the Committee shall be:(a)to discuss and review the implementation andoperation of this Agreement;(b)

to review the exceptional measures maintained,
amended, modified or adopted pursuant toparagraph 1 of Article 7 for the purpose ofcontributing to the reduction or elimination ofsuch exceptional measures;(c)to discuss the exceptional measures adopted or
maintained pursuant to paragraph 2 of Article 7
for the purpose of encouraging favourable
conditions for investors of the Contracting
Parties; and(d)to discuss any other investment-related mattersconcerning this Agreement.

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2.
The Committee may, as necessary, make appropriate
recommendations by consensus to the Contracting Parties forthe more effective functioning or the attainment of theobjectives of this Agreement.
3.
The Committee shall be composed of representatives of
the Governments of the Contracting Parties. The Committee
may, upon mutual consent of the Contracting Parties, invite
representatives of relevant entities other than the
Governments of the Contracting Parties with the necessary
expertise relevant to the issues to be discussed, and holdjoint meetings with the private sectors.
4.
The Committee shall determine its own rules ofprocedure to carry out its functions.
5.
The Committee may establish sub-committees anddelegate specific tasks to such sub-committees.
6.
The Committee and the sub-committees establishedpursuant to paragraph 5 shall meet upon the request ofeither Contracting Party.
Article 23
Health, Safety and Environmental Measuresand Labour Standards
Each Contracting Party recognises that it isinappropriate to encourage investment by investors of theother Contracting Party and of a third party by relaxing
its health, safety or environmental measures, or bylowering its labour standards. To this effect, eachContracting Party should not waive or otherwise derogate
from such measures and standards as an encouragement for
the establishment, acquisition or expansion of investments
in its Area by investors of the other Contracting Party andof a third party.
Article 24
Denial of Benefits
1.
A Contracting Party may deny the benefits of thisAgreement to an investor of the other Contracting Party
that is an enterprise of the other Contracting Party and to
its investments if the enterprise is owned or controlled byan investor of a third party and the denying Contracting
Party:(a)does not maintain diplomatic relations with thethird party; or- 20 -

(b)adopts or maintains measures with respect to thethird party that prohibit transactions with theenterprise or that would be violated or
circumvented if the benefits of this Agreement
were accorded to the enterprise or to its
investments.

2.
Subject to prior notification and consultation, aContracting Party may deny the benefits of this Agreement
to an investor of the other Contracting Party that is anenterprise of the other Contracting Party and to its
investments if the enterprise is owned or controlled byan investor of a third party and the enterprise has no
substantial business activities in the Area of the other
Contracting Party.
3.

For the purposes of this Article, an enterprise is:(a)“owned” by an investor if more than fifty (50)percent of the equity interest in it is owned by
the investor; and(b)“controlled” by an investor if the investor has
the power to name a majority of its directors orotherwise to legally direct its actions.
Article 25
Headings

The headings of the Articles of this Agreement are
inserted for convenience of reference only and shall notaffect the interpretation of this Agreement.
Article 26
Entry into ForceThe Governments of the Contracting Parties shallnotify each other, through diplomatic channels, of thecompletion of their respective legal procedures necessary
for the entry into force of this Agreement. This Agreement
shall enter into force on the thirtieth day after thelatter of the dates of receipt of the notifications.
Article 27
Duration and Termination
1.
This Agreement shall remain in force for a period ofthirty (30) years after its entry into force and shallcontinue in force unless terminated as provided for inparagraph 2.

- 21 -

2.
A Contracting Party may, by giving one year’s advancenotice in writing to the other Contracting Party, terminate
this Agreement at the end of the initial thirty (30) year
period or at any time thereafter.
3.
In respect of investments acquired prior to the dateof termination of this Agreement, the provisions of thisAgreement shall continue to be effective for a period oftwenty (20) years from the date of termination of thisAgreement.
4.
This Agreement shall also apply to all investments ofinvestors of either Contracting Party acquired in the Areaof the other Contracting Party in accordance with theapplicable laws and regulations of that other Contracting
Party prior to the entry into force of this Agreement.
5.
This Agreement shall not apply to claims arising outof events which occurred, or to claims which had been
settled, prior to its entry into force.
6.
The Annexes to this Agreement shall form an integral
part of this Agreement.
Article 28
Amendment
Either Contracting Party may at any time request
consultations with the other Contracting Party for the
purpose of amending this Agreement.
IN WITNESS WHEREOF, the undersigned, being duly
authorised by their respective Governments, have signed
this Agreement.
Done at Tokyo on this twenty-second day of March 2012,
in two originals in the Japanese, Arabic and English
languages, all the three texts being equally authentic. In
case of any divergence in interpretation, the English text
shall prevail.

For the Governmentof Japan:

For the Governmentof the State of Kuwait:‫ﺍﻟﺠﺎﺭﺍﷲ‬山根隆治- 22 -

Annex I
Reservations for Measures referred toin paragraph 1 of Article 7
1.
The Schedule of a Contracting Party sets out, pursuant
to paragraph 1 of Article 7, the reservations taken by thatContracting Party with respect to existing measures that do
not conform with obligations imposed by:

2.

(a)

Article 2 (National Treatment);(b)

Article 3 (Most-Favoured-Nation Treatment); or(c)

Article 6 (Prohibition of Performance
Requirements).

Each reservation sets out the following elements:(a)“Sector” refers to the general sector in which
the reservation is taken;(b)“Sub-Sector” refers to the specific sector inwhich the reservation is taken;(c)“Industry Classification” refers, whereapplicable, and only for transparency purposes,to the activity covered by the reservationaccording to domestic or international industry
classification codes;(d)“Type of Reservation” specifies the obligations
referred to in paragraph 1 for which thereservation is taken;(e)“Measures” identifies the existing laws,
regulations or other measures for which thereservation is taken. A measure cited in the“Measures” element:

(f)

(1)

means the measure as amended, continued, or
renewed as of the date of entry into forceof this Agreement; and(2)

includes any subordinate measure adopted or
maintained under the authority of andconsistent with the measure; and“Description” sets out, with regard to the
obligations referred to in paragraph 1, the nonconforming aspects of the existing measures forwhich the reservation is taken.

- 23 -

3.
In the interpretation of a reservation, all elementsof the reservation shall be considered. A reservation
shall be interpreted in the light of the relevant
provisions of this Agreement against which the reservation
is taken. The “Measures” element shall prevail over all
the other elements.
4.
For the purposes of this Annex, “JSIC” means Japan
Standard Industrial Classification set out by the Ministryof Internal Affairs and Communications, and revised on
November 6, 2007.

- 24 -

Schedule of Japan1

Sector:Agriculture, Forestry and Fisheries(Plant Breeder’s Right)

Sub-Sector:
Industry
Classification:

JSIC 0119

Miscellaneous crop
farming

JSIC 0243

Tree seed gathering andforest nursery services

JSIC 0413

Seaweed aquaculture

JSIC 0415

Seed aquaculture

Type of
Reservation:

National Treatment (Article 2)

Measures:

Seeds and Seedlings Law(Law No. 83 of 1998), Article 10

Description:

A foreign person who has neither adomicile nor residence (nor the placeof business, in the case of a legal
person) in Japan cannot enjoy a plant
breeder’s right or related rights
except in any of the following cases:

Most-Favoured-Nation Treatment(Article 3)(a)where the country of which theperson is a national or thecountry in which the person has
a domicile or residence (or its
place of business, in the caseof a legal person) is acontracting party to theInternational Convention for theProtection of New Varieties ofPlants of December 2, 1961, as
Revised at Geneva on November
10, 1972, on October 23, 1978,and on March 19, 1991;- 25 -

(b)where the country of which theperson is a national or thecountry in which the person has
a domicile or residence (or its
place of business, in the caseof a legal person) is acontracting party to theInternational Convention for theProtection of New Varieties ofPlants of December 2, 1961, as
Revised at Geneva on November
10, 1972, and on October 23,
1978(hereinafter referred to inthis Annex as “the 1978 UPOV
Convention”), or a country in
relation with which Japan shallapply the 1978 UPOV Conventionin accordance with paragraph (2)of Article 34 of the 1978 UPOV
Convention, and further provides
the protection for plant genus
and species to which theperson’s applied variety
belongs; or(c)where the country of which theperson is a national provides
Japanese nationals with theprotection of varieties under
the same condition as its own
nationals (including a country
which provides such protection
for Japanese nationals under thecondition that Japan allows
enjoyment of the plant breeder’sright or related rights for thenationals of that country), andfurther provides the protection
for plant genus and species towhich the person’s appliedvariety belongs.

- 26 -

2

Sector:Finance

Sub-Sector:

BankingIndustry
Classification:

JSIC 622

Banks, except central
bank

JSIC 631

Financial institutions
for small-businesses

Type of
Reservation:

National Treatment (Article 2)

Measures:

Deposit Insurance Law (Law No. 34 of
1971), Article 2

Description:

The deposit insurance system only
covers financial institutions whichhave their head offices within thejurisdiction of Japan. The deposit
insurance system does not coverdeposits taken by branches offoreign banks.

- 27 -

3

Sector:Heat Supply

Sub-Sector:
Industry
Classification:

JSIC 3511

Heat supply

Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in heat supply
industry in Japan.

- 28 -

4

Sector:Information and Communications

Sub-Sector:

Telecommunications

Industry
Classification:

JSIC 3700

Head offices primarily
engaged in managerial
operations

JSIC 3711

Regional
telecommunications,
except wire broadcast
telephones

JSIC 3731

Services incidental totelecommunications

Type of
Reservation:

National Treatment (Article 2)

Measures:

Law Concerning Nippon Telegraph andTelephone Corporation (Law No. 85 of
1984), Articles 6 and 10

Description:

1.
Nippon Telegraph and Telephone
Corporation may not enter the nameand address in its register ofshareholders if the aggregate of theratio of the voting rights directly
and/or indirectly held by the
persons set forth in subparagraphs(a) through (c) reaches or exceeds
one third:

Prohibition of Performance
Requirements (Article 6)(a)a natural person who does nothave Japanese nationality;(b)a foreign government or its
representative; and(c)a foreign legal person or aforeign entity.

2.
Any natural person who does nothave Japanese nationality may notassume the office of director or
auditor of Nippon Telegraph andTelephone Corporation, Nippon
Telegraph and Telephone East
Corporation and Nippon Telegraphand Telephone West Corporation.

- 29 -

5

Sector:Information and Communications

Sub-Sector:

Telecommunications and Internet
Based Services

Industry
Classification:

JSIC 3711

Regional
telecommunications,
except wire broadcast
telephones

JSIC 3712

Long-distancetelecommunications

JSIC 3719

Miscellaneous fixed
telecommunications

JSIC 3721

Mobiletelecommunications

JSIC 401

Internet based services

Note: The activities covered by thereservation under JSIC 3711,
3712, 3719, 3721 or 401 arelimited to the activities
which are subject to theregistration obligation
under Article 9 of theTelecommunications Business
Law (Law No. 86 of 1984).
Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in telecommunications
business and internet based services
in Japan.

- 30 -

6

Sector:Manufacturing

Sub-Sector:

Drugs and Medicines Manufacturing

Industry
Classification:

JSIC 1653

Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign Trade
Law (Law No. 228 of 1949), Article 27

Biological preparations

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261 of
1980), Article 3
Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in biologicalpreparations manufacturing industry
in Japan. For greater certainty,“biological preparations
manufacturing industry” deals witheconomic activities in an
establishment which mainly produces
vaccine, serum, toxoid, antitoxin andsome preparations similar to theaforementioned products, or blood
products.

- 31 -

7

Sector:Manufacturing

Sub-Sector:

Leather and Leather Products
Manufacturing

Industry
Classification:

JSIC 1189

Textile apparel andaccessories, n.e.c.

JSIC 1694

Gelatine and adhesives

JSIC 192

Rubber and plastic
footwear and its
findings

JSIC 2011

Leather tanning andfinishing

JSIC 2021

Mechanical leather
products, except gloves
and mittens

JSIC 2031

Cut stock and findings
for boots and shoes

JSIC 2041

Leather footwear

JSIC 2051

Leather gloves andmittens

JSIC 2061

Baggage

JSIC 207

Handbags and smallleather cases

JSIC 2081

Fur skins

JSIC 2099

Miscellaneous leather
products

JSIC 3253

Sporting and athletic
goods

Note 1:

The activities covered by thereservation under JSIC 1189
or 3253 are limited to theactivities related to leather
and leather products
manufacturing.

- 32 -

Note 2:

The activities covered by thereservation under JSIC 1694
are limited to the activities
related to animal glue(nikawa) and gelatine
manufacturing.

Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign Trade
Law (Law No. 228 of 1949), Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261 of
1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in leather and leather
products manufacturing industry inJapan.

- 33 -

8

Sector:Matters Related to the Nationalityof a Ship

Sub-Sector:
Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Measures:

Ship Law (Law No. 46 of 1899),
Article 1

Description:

The Japanese nationality shall begiven to a ship whose owner is aJapanese national, or a company
established under Japanese laws andregulations, of which all the
representatives and not less than
two-thirds of the executives
administering the affairs are
Japanese nationals.

Prohibition of Performance
Requirements (Article 6)- 34 -

9

Sector:MiningSub-Sector:
Industry
Classification:

JSIC 05

Type of
Reservation:

National Treatment (Article 2)

Measures:

Mining Law (Law No. 289 of 1950),
Chapters 2 and 3

Description:

Only a Japanese national or aJapanese legal person may havemining rights or mining leaserights.

- 35 -

Mining and quarrying ofstone and gravel

10

Sector:Oil Industry

Sub-Sector:
Industry
Classification:

JSIC 053

Crude petroleum andnatural gas production

JSIC 1711

Petroleum refining

JSIC 1721

Lubricating oils andgreases (not made inpetroleum refineries)

JSIC 1741

Paving materials

JSIC 1799

Miscellaneous petroleum
and coal products

JSIC 4711

Ordinary warehousing

JSIC 4721

Refrigerated
warehousing

JSIC 5331

Petroleum

JSIC 6051

Petrol stations(gasoline service
stations)

JSIC 6052

Fuel stores, except
gasoline service
stations

JSIC 9299

Miscellaneous businessservices, n.e.c.

Note 1: The activities covered by
the reservation under JSIC
1741, 1799, 4711, 4721 or
6052 are limited to theactivities related to oil
industry.
Note 2: The activities covered by
the reservation under JSIC
9299 are limited to theactivities related toliquefied petroleum gas
industry.
Type of
Reservation:

National Treatment (Article 2)- 36 -

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in oil industry inJapan. All organic chemicals suchas ethylene, ethylene glycol andpolycarbonates are outside the scopeof the oil industry. Therefore,prior notification under the Foreign
Exchange and Foreign Trade Law is
not required for the investments inthe manufacture of these products.

- 37 -

11

Sector:Agriculture, Forestry and Fisheries,
and Related Services (except
Fisheries within the TerritorialSea, Internal Waters, Exclusive
Economic Zone and Continental Shelf
provided for in the reservation
No. 7 in the Schedule of Japan in
Annex II)Sub-Sector:
Industry
Classification:

JSIC 01

Agriculture

JSIC 02

Forestry

JSIC 03

Fisheries, except
aquaculture

JSIC 04

Aquaculture

JSIC 6324

Agricultural
cooperatives

JSIC 6325

Fishery and fisheryprocessing cooperatives

JSIC 871

Agriculture, forestry
and fisheries
cooperative
associations, n.e.c.

Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3- 38 -

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in agriculture, forestry
and fisheries, and related services(except fisheries within the
territorial sea, internal waters,
exclusive economic zone andcontinental shelf provided for in
the reservation No. 7 in the
Schedule of Japan in Annex II) in
Japan.

- 39 -

12

Sector:

Security Guard Services

Sub-Sector:
Industry
Classification:

JSIC 9231

Guard services

Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign Trade
Law (Law No. 228 of 1949), Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261 of
1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in security guard
services in Japan.

- 40 -

13

Sector:Transport

Sub-Sector:

Air Transport

Industry
Classification:

JSIC 4600

Head offices primarily
engaged in managerial
operations

JSIC 4611

Air transport

Type of
Reservation:

National Treatment (Article 2)
Most-Favoured-Nation Treatment(Article 3)
Prohibition of Performance
Requirements (Article 6)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261 of
1980), Article 3
Civil Aeronautics Law (Law No. 231
of 1952), Chapters 7 and 8

Description:

1.
The prior notification
requirement under the Foreign
Exchange and Foreign Trade Law
applies to foreign investors who
intend to make investments in airtransport business in Japan.
2.
Permission of the Minister ofLand, Infrastructure, Transport andTourism for conducting air transportbusiness as a Japanese air carrier
is not granted to the following
natural persons or entities applying
for the permission:(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or aforeign public entity or its
equivalent;- 41 -

(c)a legal person or other entity
constituted under the laws of
any foreign country; and(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which more than one-third of
the members of the board of
directors are composed of thenatural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which more than onethird of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

In the event an air carrier falls
into a natural person or an entity
referred to in subparagraphs (a)through (d), the permission willlose its effect. The conditions forthe permission also apply tocompanies, such as holding
companies, which have substantial
control over the air carriers.
3.
A Japanese air carrier or thecompany having substantial control
over such air carrier, such as aholding company, may reject therequest from a natural person or anentity set forth in subparagraphs2(a) through (c), who owns equity
investments in such air carrier orcompany, to enter its name andaddress in the register ofshareholders, in the event such air
carrier or company falls into alegal person referred to in
subparagraph 2(d) by accepting such
request.
4.
Foreign air carriers are
required to obtain permission of the
Minister of Land, Infrastructure,
Transport and Tourism to conduct
international air transportbusiness.

- 42 -

5.
Permission of the Ministerof Land, Infrastructure, Transport
and Tourism is required for theuse of foreign aircraft for airtransportation of passengers or
cargoes to and from Japan for
remuneration.
6.
A foreign aircraft may not be
used for a flight between points
within Japan.

- 43 -

14

Sector:Transport

Sub-Sector:

Air Transport

Industry
Classification:

JSIC 4600

Head offices primarily
engaged in managerial
operations

JSIC 4621

Aircraft service,
except air transport

Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign Trade
Law (Law No. 228 of 1949), Article 27

Prohibition of Performance
Requirements (Article 6)

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Civil Aeronautics Law (Law No. 231 of
1952), Chapters 7 and 8
Description:

1.
The prior notification
requirement under the Foreign
Exchange and Foreign Trade Law
applies to foreign investors who
intend to make investments in aerial
work business in Japan.
2.
Permission of the Minister ofLand, Infrastructure, Transport andTourism for conducting aerial workbusiness is not granted to thefollowing natural persons or entities
applying for the permission:(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or a foreign
public entity or its equivalent;(c)a legal person or other entity
constituted under the laws of
any foreign country; and- 44 -

(d)a legal person represented by
the natural persons or entities
referred to in subparagraph (a),(b) or (c); a legal person ofwhich more than one-third of themembers of the board of
directors are composed of thenatural persons or entities
referred to in subparagraph (a),(b) or (c); or a legal person ofwhich more than one-third of thevoting rights are held by thenatural persons or entities
referred to in subparagraph (a),(b) or (c).

In the event a person conducting
aerial work business falls into anatural person or an entity referred
to in subparagraphs (a) through (d),the permission will lose its effect.
The conditions for the permission
also apply to companies, such as
holding companies, which havesubstantial control over the person
conducting aerial work business.
3.
A foreign aircraft may not be
used for a flight between points
within Japan.

- 45 -

15

Sector:Transport

Sub-Sector:

Air Transport (Registration of
Aircraft in the National Register)Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Measures:

Civil Aeronautics Law (Law No. 231
of 1952), Chapter 2

Description:

1.
An aircraft owned by any of
the following natural persons or
entities may not be registered in
the national register:

Prohibition of Performance
Requirements (Article 6)(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or aforeign public entity or its
equivalent;(c)a legal person or other entity
constituted under the laws of
any foreign country; and(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which more than one-third of
the members of the board of
directors are composed of thenatural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which more than onethird of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

2.
A foreign aircraft may not beregistered in the national register.

- 46 -

16

Sector:Transport

Sub-Sector:

Freight Forwarding Business(excluding freight forwarding
business using air transportation)

Industry
Classification:

JSIC 4441

Collect-and-deliver
freight transport

JSIC 4821

Deliver freighttransport, except
collect-and-deliver
freight transport

Type of
Reservation:

National Treatment (Article 2)
Most-Favoured-Nation Treatment(Article 3)
Prohibition of Performance
Requirements (Article 6)

Measures:

Freight Forwarding Business Law(Law No. 82 of 1989), Chapters 2
through 4
Enforcement Regulation of Freight
Forwarding Business Law (Ministerial
Ordinance of the Ministry ofTransport No. 20 of 1990)

Description:

The following natural persons or
entities are required to beregistered with, or to obtain
permission or approval of, theMinister of Land, Infrastructure,
Transport and Tourism for conducting
freight forwarding business using
international shipping. Suchregistration shall be made, or suchpermission or approval shall be
granted, on the basis ofreciprocity:(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or a foreign
public entity or its
equivalent;- 47 -

(c)a legal person or other entity
constituted under the laws of
any foreign country; and(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which more than one-third of
the members of the board of
directors are composed of thenatural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which more than onethird of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

- 48 -

17

Sector:Transport

Sub-Sector:

Freight Forwarding Business (onlyfreight forwarding business using
air transportation)

Industry
Classification:

JSIC 4441

Collect-and-deliver
freight transport

JSIC 4821

Deliver freighttransport, except
collect-and-deliver
freight transport

Type of
Reservation:

National Treatment (Article 2)
Most-Favoured-Nation Treatment(Article 3)
Prohibition of Performance
Requirements (Article 6)

Measures:

Freight Forwarding Business Law(Law No. 82 of 1989), Chapters 2
through 4
Enforcement Regulation of Freight
Forwarding Business Law (Ministerial
Ordinance of the Ministry ofTransport No. 20 of 1990)

Description:

1.
The following natural persons
or entities may not conduct freight
forwarding business using airtransportation between points within
Japan:(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or foreign
public entity or its
equivalent;(c)a legal person or other entity
constituted under the laws of
any foreign country; and- 49 -

(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which more than one-third of
the members of the board of
directors are composed of thenatural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which more than onethird of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

2.
The natural persons or entities
referred to in subparagraphs 1(a)through (d) are required to beregistered with, or to obtain
permission or approval of, theMinister of Land, Infrastructure,
Transport and Tourism for conducting
freight forwarding business using
international air transportation.
Such registration shall be made, orsuch permission or approval shall be
granted, on the basis ofreciprocity.

- 50 -

18

Sector:Transport

Sub-Sector:

Railway Transport

Industry
Classification:

JSIC 421

Railway transport

JSIC 4851

Railway facilities
services

Type of
Reservation:

National Treatment(Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in railway transportindustry in Japan. The manufactureof vehicles, parts and components
for the railway transport industry
is not included in railway transportindustry. Therefore, priornotification under the Foreign
Exchange and Foreign Trade Law is
not required for the investments inthe manufacture of these products.

- 51 -

19

Sector:Transport

Sub-Sector:

Road Passenger Transport

Industry
Classification:

JSIC 4311

Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27

Common omnibus
operators

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in omnibus industry inJapan. The manufacture of vehicles,
parts and components for omnibus
industry is not included in omnibus
industry. Therefore, priornotification under the Foreign
Exchange and Foreign Trade Law is
not required for the investments inthe manufacture of these products.

- 52 -

20

Sector:Transport

Sub-Sector:

Water Transport

Industry
Classification:

JSIC 452

Coastwise transport

JSIC 453

Inland water transport

JSIC 4542

Coastwise ship leasing

Type of
Reservation:

National Treatment(Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in water transportindustry in Japan. For greatercertainty, “water transportindustry” refers to oceangoing/
seagoing transport, coastwisetransport (i.e. maritime transport
between ports within Japan), inland
water transport and ship leasing
industry. However, oceangoing/
seagoing transport industry and shipleasing industry excluding coastwise
ship leasing industry are exemptedfrom the prior notification
requirement.

- 53 -

21

Sector:Transport

Sub-Sector:

Water Transport

Industry
Classification:
Type of
Reservation:

National Treatment(Article 2)

Measures:

Ship Law (Law No. 46 of 1899),
Article 3

Description:

Unless otherwise specified in thelaws of Japan, or international
agreements to which Japan is a party,
ships not flying the Japanese flagare prohibited from entering Japanese
ports which are not open to foreigncommerce and from carrying cargoes orpassengers between Japanese ports.

Most-Favoured-Nation Treatment(Article 3)- 54 -

22

Sector:

Water Supply and Waterworks

Sub-Sector:
Industry
Classification:

JSIC 3611

Water for end users,
except industrial users

Type of
Reservation:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign Trade
Law (Law No. 228 of 1949), Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in water supply andwaterworks industry in Japan.

- 55 -

Annex II
Reservations for Measures referred toin paragraph 2 of Article 7
1.
The Schedule of a Contracting Party sets out, pursuant
to paragraph 2 of Article 7, the reservations taken by thatContracting Party with respect to specific sectors, subsectors or activities for which it may maintain existing,or adopt new or more restrictive, measures that do notconform with obligations imposed by:

2.

(a)

Article 2 (National Treatment);(b)

Article 3 (Most-Favoured-Nation Treatment); or(c)

Article 6 (Prohibition of Performance
Requirements).

Each reservation sets out the following elements:(a)“Sector” refers to the general sector in which
the reservation is taken;(b)“Sub-Sector” refers to the specific sector inwhich the reservation is taken;(c)“Industry Classification” refers, whereapplicable, and only for transparency purposes,to the activity covered by the reservationaccording to domestic or international industry
classification codes;(d)“Type of Reservation” specifies the obligations
referred to in paragraph 1 for which thereservation is taken;(e)“Description” sets out the scope of the sector,
sub-sector or activities covered by thereservation; and(f)“Existing Measures” identifies, for transparency
purposes, existing measures that apply to thesector, sub-sector or activities covered by thereservation.

3.
In the interpretation of a reservation, all elementsof the reservation shall be considered. The “Description”
element shall prevail over all the other elements.
4.
For the purposes of this Annex, “JSIC” means Japan
Standard Industrial Classification set out by the Ministryof Internal Affairs and Communications, and revised on
November 6, 2007.

- 56 -

Schedule of Japan1

Sector:All Sectors

Sub-Sector:
Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

When transferring or disposing of
its equity interests in, or theassets of, a state enterprise or agovernmental entity, Japan reserves
the right to:

Prohibition of Performance
Requirements (Article 6)(a)prohibit or impose limitations
on the ownership of suchinterests or assets byinvestors of the State of
Kuwait or their investments;(b)

impose limitations on theability of investors of theState of Kuwait or theirinvestments as owners of suchinterests or assets to control
any resulting enterprise; or(c)adopt or maintain any measure
relating to the nationality of
executives, managers or membersof the board of directors of
any resulting enterprise.

Existing
Measures:- 57 -

2

Sector:All Sectors

Sub-Sector:
Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

In the event where the supply oftelegraph services, postal services
and betting and gambling services,manufacture of tobacco products,
manufacture of Bank of Japan notes,
minting and sale of coinage inJapan, which are restricted todesignated enterprises orgovernmental entities, areliberalised to those other than thedesignated enterprises orgovernmental entities, or in theevent where such designatedenterprises or governmental entities
no longer operate on a noncommercial basis, Japan reserves theright to adopt or maintain any
measure relating to those
activities.

Prohibition of Performance
Requirements (Article 6)

Existing
Measures:- 58 -

3

Sector:All Sectors

Sub-Sector:
Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

National Treatment and MostFavoured-Nation Treatment may not be
accorded to investors of the Stateof Kuwait and their investments withrespect to subsidies.

Most-Favoured-Nation Treatment(Article 3)

Existing
Measures:- 59 -

4

Sector:Aerospace Industry

Sub-Sector:

Aircraft Industry
Space Industry

Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

Japan reserves the right to adopt ormaintain any measure relating toinvestment in aircraft industry andspace industry.

Existing
Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Articles 27 and 30

Prohibition of Performance
Requirements (Article 6)

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Articles 3 and 5- 60 -

5

Sector:Arms and Explosives Industry

Sub-Sector:

Arms Industry
Explosives Manufacturing Industry

Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

Japan reserves the right to adopt
or maintain any measure relating toinvestment in arms industry andexplosives manufacturing industry.

Existing
Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Articles 27 and 30

Prohibition of Performance
Requirements (Article 6)

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Articles 3 and 5- 61 -

6

Sector:EnergySub-Sector:

Electricity Utility Industry
Gas Utility Industry
Nuclear Energy Industry

Industry
Classification:
Type of
Reservation:

National Treatment(Article 2)

Description:

Japan reserves the right to adopt
or maintain any measure relating toinvestment in the energy industry
listed in the “Sub-Sector” element.

Existing
Measures:

Foreign Exchange and Foreign Trade
Law (Law No. 228 of 1949), Articles
27 and 30

Prohibition of Performance
Requirements (Article 6)

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Articles 3 and 5- 62 -

7

Sector:Fisheries

Sub-Sector:

Fisheries within the TerritorialSea, Internal Waters, Exclusive
Economic Zone and Continental Shelf

Industry
Classification:

JSIC 031

Marine fisheries

JSIC 032

Inland water fisheries

JSIC 041

Marine aquaculture

JSIC 042

Inland wateraquaculture

JSIC 8093

Recreational fishingguide businessType of
Reservation:

National Treatment (Article 2)
Most-Favoured-Nation Treatment(Article 3)
Prohibition of Performance
Requirements(Article 6)

Description:

Japan reserves the right to adopt ormaintain any measure relating toinvestment in fisheries in the
territorial sea, internal waters,
exclusive economic zone andcontinental shelf of Japan.
For the purposes of thisreservation, the term “fisheries”
means the work of taking andcultivation of aquatic resources,
including the following fisheries
related activities:(a)investigation of aquatic
resources without taking such
resources;(b)luring of aquatic resources;(c)preservation and processing offish catches;(d)transportation of fish catches
and fish products; and- 63 -

(e)Existing
Measures:provision of supplies to othervessels used for fisheries.

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Law for Regulation of Fishing
Operation by Foreign Nationals (Law
No. 60 of 1967), Articles 3, 4 and 6
Law concerning the Exercise ofSovereign Rights concerning
Fisheries in the Exclusive Economic
Zones (Law No. 76 of 1996), Articles
4, 5, 7, 8, 9, 10, 11, 12 and 14- 64 -

8

Sector:Information and Communications

Sub-Sector:

Broadcasting Industry

Industry
Classification:

JSIC 380

Establishments engaged
in administrative or
ancillary economic
activities

JSIC 381

Public broadcasting,
except cablecasting

JSIC 382

Private-sector
broadcasting, except
cablecasting

JSIC 383

CablecastingType of
Reservation:

National Treatment (Article 2)

Description:

Japan reserves the right to adopt
or maintain any measure relating toinvestment in broadcasting industry.

Existing
Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27

Prohibition of Performance
Requirements (Article 6)

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Radio Law (Law No. 131 of 1950),
Article 5
Broadcast Law (Law No. 132 of 1950),
Articles 93, 116, 125, 159 and 161- 65 -

9

Sector:Land Transaction

Sub-Sector:
Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

With respect to the acquisition orlease of land properties in Japan,
prohibitions or restrictions may be
imposed by Cabinet Order on foreign
nationals or legal persons, where
Japanese nationals or legal persons
are placed under identical orsimilar prohibitions or restrictionsin the foreign country.

Existing
Measures:

Alien Land Law (Law No. 42 of 1925),
Article 1

Most-Favoured-Nation Treatment(Article 3)- 66 -

10

Sector:Public Law Enforcement andCorrectional Services and Social
Services

Sub-Sector:
Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)
Most-Favoured-Nation Treatment(Article 3)
Prohibition of Performance
Requirements (Article 6)

Description:

Japan reserves the right to adopt ormaintain any measure relating toinvestment in public law enforcement
and correctional services, and insocial services such as income
security or insurance, social
security or insurance, social
welfare, primary and secondary
education, public training, healthand child care.

Existing
Measures:- 67 -

Schedule of the State of Kuwait
1

Sector:Oil and Gas Industry

Sub-Sector:

Crude Oil and Natural Gas Production

Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

Permission of exploration andexploitation of crude oil and natural
gas is not granted to foreign
investor.

Existing
Measures:

Law No. 8 of 2001 (Regulating
Direct Foreign Capital Investment),
Article 3
Council of Ministers Resolution
No. 1006/1 of 2003

- 68 -

2

Sector:Manufacturing

Sub-Sector:

Oil Refining

Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

Permission of oil refining is notgranted to foreign investor.

Existing
Measures:

Law No. 8 of 2001 (Regulating
Direct Foreign Capital Investment),
Article 3
Council of Ministers Resolution
No. 1006/1 of 2003

- 69 -

3

Sector:Information Production andDistribution

Sub-Sector:

Newspaper Publishers and Other
Publishers

Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

Foreign investor may not issue anddistribute newspapers and magazines,
and may not conduct publishingbusiness in the State of Kuwait.
Foreign investor may not makeinvestments in any Kuwaiti company
which issues and distributes
newspapers and magazines, andconducts publishing business.

Existing
Measures:

Law No. 8 of 2001 (Regulating
Direct Foreign Capital Investment),
Article 3
Council of Ministers Resolution
No. 1006/1 of 2003

- 70 -

4

Sector:Acquisition and Possession of Land

Sub-Sector:
Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

Foreign nationals or legal persons
may not acquire or possess land
properties in the State of Kuwait.

Existing
Measures:

Law No. 8 of 2001 (Regulating
Direct Foreign Capital Investment),
Article 3
Council of Ministers Resolution
No. 1006/1 of 2003

- 71 -

5

Sector:Real Estate

Sub-Sector:

Real Estate Agencies

Industry
Classification:
Type of
Reservation:

National Treatment (Article 2)

Description:

Foreign investor may not hold the
majority of share of any Kuwaiti
company which transacts real estate.

Existing
Measures:

Law No. 8 of 2001 (Regulating
Direct Foreign Capital Investment),
Article 3
Council of Ministers Resolution
No. 1006/1 of 2003

- 72 -