11/13/97 12:25 PM

SUBMISSION BY THE GOVERNMENT OF THE UNITED STATES TO THE
GOVERNMENT OF JAPAN REGARDING DEREGULATION, COMPETITIONPOLICY, AND TRANSPARENCY AND OTHER GOVERNMENT PRACTICESIN JAPAN
November 7, 1997

The Government of the United States of America (USG) is pleased to present to
the Government of Japan (GOJ) this submission which addresses specific matters of
deregulation, competition policy, and transparency and other government practices inJapan. The proposals it contains are presented in the context of the Enhanced Initiativeon Deregulation and Competition Policy ("Enhanced Initiative") under the U.S.-Japan
Framework for a New Economic Partnership, and are keyed to the working groups whichmeet under the Enhanced Initiative.
The USG recognizes the commitment made by the GOJ to deregulation. We areencouraged by the strong statements of support for deregulation by Prime Minister
Hashimoto and members of his administration. This submission was prepared recognizingthat the GOJ is currently engaged in its own deregulatory process and is now completing
work under the three-year Deregulation Action Plan initiated on March 31, 1995.
This submission is intended as a list of requests and recommendations by the
USG, building on and supplementing previous lists submitted to the GOJ in November
1994, April 1995, November 1995, and November 1996, and taking into consideration
specific comments from interested domestic and foreign parties. Many of the
deregulation, competition policy and administrative reform recommendations made by the
USG in 1994, 1995, and 1996 remain valid. This submission is not intended to be an
exhaustive list of issues in Japan of concern and interest to the USG. The fact that an
item from earlier submissions does not appear in this document should not be taken to
indicate that the USG is no longer interested in that item, particularly in the case of issues
which do not fall under one of the Enhanced Initiative working groups. Rather, thissubmission reflects the interest of the USG in focusing the current discussion on issues ofprimary concern under the Initiative. The USG and GOJ will also continue to pursue
deregulation in other sectors through separate fora.
The USG looks forward to continuing its dialogue with the GOJ on deregulation,competition policy, and transparency and other government practices under the Enhanced
Initiative. As confirmed by President Clinton and Prime Minister Hashimoto in June
1997, deregulation should proceed with a view to meeting consumers' interests and to
improving market access for foreign companies and foreign goods and services. Thissubmission is presented with those goals in mind.

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BASIC PRINCIPLES...................................................................................................................................... 3
DEREGULATION PROCESS ....................................................................................................................... 5
FINANCIAL SERVICES................................................................................................................................ 6
HOUSING ....................................................................................................................................................... 7
MEDICAL DEVICES/PHARMACEUTICALS........................................................................................... 10
STRUCTURAL ISSUES ............................................................................................................................... 13
DISTRIBUTION ................................................................................................................................................. 13
COMPETITION LAW & POLICY .......................................................................................................................... 16
LEGAL SERVICES .............................................................................................................................................. 19
TELECOMMUNICATIONS........................................................................................................................ 20
TRANSPARENCY AND OTHER GOVERNMENT PRACTICES............................................................ 27-2-

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BASIC PRINCIPLESThe USG reaffirms the basic principles laid out in its submissions to the GOJ of
November 1994, and November 1995, and November 1996. The United States continues tobelieve that effective deregulation in Japan will enhance competition; provide greater market
access for foreign goods, services and investment; provide greater benefits to Japanese
consumers, producers and service providers through enhanced efficiency, lower prices andgreater product and service choice and availability in the marketplace.
The USG urges the GOJ to extend its commitment to deregulation by adopting fully
the following principles:A.

BROAD AND CONTINUOUS REVIEWAll regulations in Japan, whether formal or informal, or whether characterized as social
or economic in nature, should be reviewed on a continuous basis as an integral part of the
GOJ’s efforts to open Japan’s economy to competition.
B.

FREEDOM FROM REGULATION IN PRINCIPLE, WITH REGULATION THE
EXCEPTION

Although the GOJ has enunciated this principle, it has yet to fully carry it out.
Regulations should be closely and directly linked to recognized public policy interests such asprotection of health, safety or the environment; protection of national security; or protection of
consumers against deception. Regulations not meeting these limited criteria should be revisedor eliminated.
C.

ENHANCE TRANSPARENCY AND ACCOUNTABILITY

Regulations should be based on the principles of transparency and non-discrimination,and regulatory officials should be clearly accountable for their actions. All formal and informal
regulations should be in writing and published in publicly-available sources.
D.

PROHIBITION OF DELEGATION OF GOVERNMENT AUTHORITY

Delegation of actual or de facto regulatory authority to quasi or non-governmental
entities, including nonprofit organizations, tokushu-hojin, and industry associations should bestrictly prohibited if not based on formal and transparent delegation of authority authorized by
the Diet.
E.

NON-BURDENSOME LOCAL REGULATION

Local governments should be encouraged to review and eliminate unnecessary andburdensome local regulations wherever appropriate. Guidelines prohibiting institution of new
local regulations that would have the effect of negating or undermining, in whole or in part,-3-

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deregulatory efforts at the national level should also be adopted.
F.

INCLUSION OF SUNSET PROVISIONS

Sunset provisions, which specify a fixed lifetime of a particular regulation, should be
included wherever appropriate, in regulations issued in the future and should also be
incorporated into existing regulations when they are reviewed.
G.

PROMOTION OF MARKET MECHANISM

The market mechanism, supplemented by an active and effective antimonopoly
enforcement policy, should be relied upon to determine the best and most efficient allocation of
resources and the success or failure of individual firms. Private practices that unfairly restrict
competition should not be allowed to replace or supplement official regulation.

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DEREGULATION PROCESSThe United States Government believes that deregulation must be a dynamic process if it
is to be responsive to changing circumstances. To this end, the USG recommended to
the GOJ in its 1994, 1995, and 1996 submissions that the GOJ's deregulation efforts
include provisions for a private sector participation mechanism, periodic solicitation of
public comments, the issuance of a directive to protect private firms and individuals thatprovide comments from harassment and retaliation, and preparation of annual
deregulation reports. Once again, we strongly reiterate these recommendations.
We believe it is critical to establish a permanent administrative mechanism to ensure continued
high-level focus on deregulation beyond the scheduled termination of the current Action Plan.
As such, the USG supports the creation of a permanent successor to the Administrative
Reform Council (ARC, Gyosei Kaikaku Iinkai) under the Prime Minister’s Office. This
successor body should be given a mandate to 1) generate new deregulation commitments
through a public process that allows participation by all interested parties; and 2) recommend
and direct, subject to Cabinet approval, implementation by ministries and agencies of measures
addressing deregulation, competition policy, and transparency and other government practices.
In addition, an ambitious reform agenda must focus more on substantive changes, with firm
deadlines for enacting specific measures and remedies, and less on general statements of intent,vague implementation deadlines and the simple numerical analysis of adding up “actions”
taken. Progress should be measured solely on the degree to which impediments to open andcompetitive markets are identified, specific reform measures implemented, and evaluation of
the effectiveness of these measures in achieving the desired goal.

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FINANCIAL SERVICESThe USG continues to monitor implementation of the 1995 agreement "Measures by theGovernment of the United States and the Government of Japan Regarding Financial
Services," and results thus far have been very satisfactory. The measures andliberalizations carried out under the agreement have resulted in substantially improvedcommercial opportunities for foreign financial services providers in the Japanese market.
The GOJ is committed to further deregulation in the financial services area and the USG
anticipates increased opportunities for foreign firms in the Japanese market. In particular,
the USG has advocated, and the GOJ has indicated, further liberalization in the following
areas:
A. liberalization of restrictions on product innovation (allowing such financial
derivatives as stock options, introduced this summer),B. expansion of the scope of business for securities companies to include foreignexchange activities and new products, such as wrap accounts and over-the-counterequity derivatives,
C. further development of the asset-backed securities market,
D. new opportunities to distribute investment trust products through banks, andE. improved transparency and disclosure.
In the process of implementing these reforms, the GOJ should:
A. Solicit and incorporate the views of foreign and domestic firms in the drafting of
implementing laws and regulations, and make regulations available in draft form forcomment before they become final.
B. Publish applicable regulations in advance of the date of liberalization, to allow firms
to develop, and make operational, information systems necessary for new products
and activities.
C. Adopt international standards in the design and tax treatment of financial
instruments so as to encourage the widest possible internationalization of, andforeign participation in, the Japanese financial market.
In addition, the U.S. welcomes efforts the GOJ is making as part of the Big Bang initiative
to revise and strengthen financial market regulatory structures.

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HOUSINGThe United States seeks the following results from the US-Japan dialogue on deregulation in
the Housing Sector under the Enhanced Initiative, and Japan’s agreement to these goals at theearly November senior officials meeting:
By December 31, 1997
A. Approve the American Lumber Standards Committee (ALSC) and Western
Wood Products Association (WWPA) applications to the Ministry ofConstruction (MOC) for recognition of U.S.-grademarked machine stress-rated
lumber (MSR) and finger jointed lumber. These applications had been filed in
December and November of 1996, respectively. At the July Expert-Level Housing
meeting, the Japanese delegation provided assurances that final processing of theseapplications would proceed expeditiously. Five Canadian agencies have alreadyreceived recognition for MSR. Approval of these applications will authorize WWPA
and rules-writing and grading agencies accredited by the ALSC to provide abovementioned products to Japan without having to grade to the JAS standard. Similar
approval was granted by the Japan for visually graded U.S.-manufactured lumber inJanuary 1996. Japan’s March 1996 Deregulation Action Program on Housing statedthat “measures shall be implemented soon” to accept grademarks for U.S. building
products pursuant to requests from WWPA, APA, and other U.S. organizations.
B. Endorse the APEC initiative for forest products trade liberalization and forregional cooperation towards performance-based building standards. The
nomination for forest products trade liberalization has been co-sponsored by the UnitedStates, Canada, New Zealand and Indonesia, with other ASEAN countries expressing
strong support. Trade liberalization in this sector is consistent with Prime Minister
Hashimoto’s Imported Housing Initiative. The nomination envisages the elimination oftariffs for wood products in the 2002-2004 time frame. Existing tariff escalation forwood products creates distortions to trade and substantially raises housing costs toJapanese consumers.
By March 31, 1998
A. Finalize and implement testing methods and procedures for the performancebased alternative in Notification 56 (American-style 2x4 construction), including
construction of 3-story, multi-family, commercial and mixed-use, wood-frame
structures in quasi-fire protection zones. Afford timely and meaningful
opportunity for U.S. comment. In Japan’s March 1996 Deregulation Action
Program on Housing, Japan announced that performance based standards for American
style 2x4 construction would be implemented by the end of the fiscal year 1996, andthat the possibilities for three-story wooden construction would be expanded. Japan
subsequently added a provision for performance based 2x4 construction under
Notification 56 and recently removed the prohibition for three-story wooden-7-

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construction in semi-fire protection zones (which covers the area with the majority ofJapanese population). However, the utility of these changes will be very limited (ifany) until the Ministry of Construction has published a manual for testing methods andprocedures which are acceptable in such construction. This manual has undergone
several revisions and U.S. experts have provided comments with a view to ensuringthat high safety standards are met without imposition of excessively burdensome,
expensive and duplicative testing requirements, consistent with international practice.
B. Approve Underwriters Laboratories’ (UL) application to the Ministry ofConstruction (MOC) for accreditation of UL testing methods and procedures.
This application was filed in June 1997, and all the information requested by Japanese
authorities has been provided. Products covered will include fire-rated doors andwallboard. The application also includes accreditation for certain construction methods
that will greatly reduce fire risk.
C. Eliminate police registration requirements for cordless portable impulse nailers inJapan. Currently these nailers are only manufactured in the United States under apatent and their sales in the United States, Europe and many Asian countries are
growing rapidly. These nailers are considered as safe or safer than their corded
counterparts and promote cost saving and efficiency in 2x4 construction. Japan is the
only country which treats them as a “weapon,” and the requirement that they beregistered under the Firearms and Sword Possession Control Law has resulted in zerosales of this product in Japan. U.S. industry representatives have provided substantial
information to Japanese officials demonstrating the efficiency and safety of thisproduct.
D. Approve the Engineered Wood Products Association’s (APA’s) application to the
Ministry of Construction for recognition of APA-grademarked structural panels.
This application was filed in November 1996. Its approval will allow structural panels
to compete on an even footing with lumber, consistent with Japan’s intent not todiscriminate among product types which perform at the same level.
E. Submit legislation to the Diet to effect necessary changes in the BuildingStandards Law (BSL) to make it performance-based. In Japan’s March 1996
Deregulation Action Program on Housing, Japan announced its intent to make the BSL
performance-based. The Building Council has made recommendations on how thisshould be accomplished which are currently under review in Japan.
F. Issue a notification for the establishment by December 31, 1998, of a centralized,
uniform, system in Japan for acceptance and evaluation of test data (including
foreign test data). Under the current system, Japan has no centralized system forevaluating such data, so that decisions on the acceptability of a building product orsystem need to be obtained, and can vary, locality by locality, adding unnecessarily tothe expense and difficulty of gaining approval, particularly for foreign producers.

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G. Issue a notification for the revision of the system of building code enforcement toensure uniform application and compliance at the local level across Japan by
December 31, 1998. Similarly, building code enforcement varies greatly locality tolocality and is based on “end-product” inspection rather than progressive inspections
which can better detect possible construction issues. Uniform application will improvesafety and consumer confidence on a non-discriminatory basis.
H. Recognize U.S. nails grademarks. Japan is in the process of revising its nails
grademarks. The United States has requested changes which will accommodate the useof narrower nails. Existing Japanese requirements for use of thicker nails were set
with post and beam construction in mind and are not suited to American-style 2x4
construction. As with lumber, use of nails approved for use under the Model Building
Codes should be accepted for use in 2x4 construction without the additional “JIS”
mark.
I. Implement performance-based testing methods and procedures under the revised
Building Standards Law, and afford timely and meaningful opportunity for U.S.
comment. Once the BSL revision is made, it will not be practical for builders to use
the new performance-based alternative until further guidelines are issued about
acceptable testing methods and procedures. These should be published expeditiously
and meaningful and timely opportunity should be provided for comment by U.S.
experts.

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MEDICAL DEVICES/PHARMACEUTICALSThe United States seeks the following actions by the Government of Japan:
A.

Expedite the new drug application (NDA) process in Japan to conformwith international standards for drug introduction. Japan lags seriously behind
other developed markets in the launching of new drugs and must decrease the timefrom application to approval and insurance reimbursement listing. U.S. approval times
for “priority” drugs have preceded Japanese approvals by an average of 22.4 months,
according to results of a survey of American and European pharmaceutical companies(between 1991-94). This “drug lag” is exacerbated for foreign companies who areoften forced to introduce products late in their life cycle due to lengthy clinical trial
delays, caused by non-acceptance of foreign clinical data.

B. Improve the application and transparency of the premium pricing system for new
and innovative pharmaceutical products. Despite MHW’s creation of pricing
premiums ostensibly to induce and reward companies for introducing innovate andcost-saving drugs to the Japanese market, no foreign or even domestic drugs have been
deemed to meet the full criteria in recent years, which has reduced the incentives tocompanies to introduce new and innovative drugs to Japan’s health care system. The
research and development intensive pharmaceutical industry should receive adequate
compensation to reflect significant improvements in efficacy and safety, as well as longterm savings for the health care system.
C. Improve the implementation of the by-function reimbursement system bycreating new functional categories for new products in a timely fashion. A highproportion of medical devices on the Japanese market fall under the by-function pricing
system, which assigns a newly introduced product to categories of like products andgives them the same price. For products with significant improvements over existing
technologies, new functional classifications with higher reimbursement are supposed tobe created to reflect the improvement in treatment, efficiency, long-term cost savingsfor the health care system, etc. However, Japan fails often to create new functional
categories when appropriate. This penalizes new and innovative products by failing todistinguish them from existing technologies, and by improperly reimbursing them at thesame rate.
D.

Greatly expand the acceptance of foreign clinical data. Japan’s nonacceptance of foreign clinical data requires companies to perform additional costly
clinical trials on many products, which can significantly delay the entry of new products
into Japan's market. The delays and costs created by having to repeat clinical trials inJapan helps undermine efficiency in the health care system This remains one of the key
areas in which deregulatory changes in current practices would lead to significant costsavings for drug and device manufacturers, and ultimately, savings for the Japanese
health care system.

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E. Take necessary measures to permit local and prefectural governments to utilize
overall greatest value methodology (OGVM) in procuring medical devices. Thismethodology is already in use at the national level, and has been well received by
procuring entities. This measure would allow local and prefectural governments tomake procurement decisions based on best overall value for their needs over the lifecycle of the product, not simply initial costs.
F. Establish a grouping system to allow chemical disinfection solution
manufacturers to obtain MHW approvals for use for all brands of contact lenses
in a group by testing one representative lens in the group. Currently, Japan stilluses the approval system where each chemical disinfection solution must be tested withall individual styles and brands of contact lenses. In addition to cost and being timeconsuming for both lens manufacturers and solution manufacturers, this system does
not allow solution manufacturers to seek approvals independent of lens manufacturers
for their products based on their own safety and efficacy data only. FDA followed thissystem until 1985 when FDA introduced the lens grouping system by lens material,water content, and mechanism of hydration. FDA developed four groups, and knowing
the behavior characteristics of one lens in a group, the system allows solution
manufacturers (as well as lens manufacturers) to accurately predict the performance of
all lenses in that group.
G.

Regulate In-Vitro Diagnostics (IVDs) as medical devices. An IVD is a kit
containing reagents and is used for diagnostic testing outside of the body (as opposed
to in-vivo, or in-the-body testing). Performance of an IVD is reflected in theinteraction of the components of the system as a whole. Separately regulating thereagents as drugs and the kits as devices is neither cost effective nor in the best interestof patient protection. Safety, efficacy and quality cannot be assessed by individuallyassessing the reagents or engineering specifications of the equipment. The more
flexible approach to device quality systems/ISO9000 can address all aspects of thesystem as well as the performance of the system as a whole, giving much better
assurance of product quality and patient protection.

H.

Eliminate the Highly Advanced Medical Technologies system (HAMT).
This is an unnecessary system which discriminates against new and innovativetechnologies and penalizes manufacturers by requiring redundant, non-reimbursed trials
that have already been performed during the approval process. HAMT represents theworst case reimbursement scenario for device companies by providing often lengthy
testing of certain new products prior to approving reimbursement for widespread use.
The criteria, and certainly the system for exiting the HAMT, are less than transparent.
Foreign firms with innovative technologies are particularly disadvantaged by thissystem for a number of reasons: innovative device life-cycles can be very short; thecompany is expected to provide the product without reimbursement for an
undetermined amount of time; and ultimately there is no guarantee of ever entering into

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the general reimbursement system, despite having already received product approval(shonin).

I. Implement fully the measures recommended by the Office of the Trade andInvestment Ombudsman to fully liberalize the nutritional supplements market(vitamins, herbs, minerals, and non-active ingredients) in Japan. Traditionally,
the restrictions on shape, dosages, and retail format have made the Japanese market
costly and difficult for most foreign nutritional supplement firms to participate in.
Measures adopted this past April, while a positive step, were very limited and do not
represent a substantial market opening. MHW should act expeditiously to implement
the Office of Trade and Investment Ombudsman recommendation that items treated as
foods overseas be treated as foods in Japan. Restrictions on the use of capsules andtablets should also be eliminated because clear labeling requirements prevent confusionof supplements with drugs. Limits on the use of capsules and tablets increase costs,
discriminate against imports, and are without scientific or legal basis anywhere else in
the world.
J. Increase the transparency of the decision-making process regarding regulations
and reimbursement, and ensure meaningful foreign access to this process. MHW
should make a firm commitment to increase the level of access for the medical device
and pharmaceutical industries in the decision-making process, particularly regarding thereform of the drug benefit and insurance systems. This commitment should include a“place at the table” for all discussions on health care and reimbursement reform whichhave particular relevance for these industries, especially discussions involving thedetermination of the future of the R-zone, the future of the NHI drug reimbursement
system, etc.

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STRUCTURAL ISSUESDistribution
Japan suffers from abnormally high costs of distribution resulting from slow processing by
customs and other agencies' inspection authorities, high transportation and warehousing
costs, and excessive regulatory restrictions in the retail and automotive repair sectors.
Liberalization would improve market access for competitive foreign goods, clearly benefit
business, and greatly benefit the consumer.
I.

Customs/Import Processing
Slow processing, mostly by inspection authorities other than Customs, anduncoordinated import procedures hamper on-time delivery and keep prices high.
Processing time for catalog purchases and other direct mail merchandising could bevastly improved, making them much more attractive options for the Japanese
consumer. The GOJ should undertake the following:A.

Priority: By December 1997, expedite the process of issuing tariff rulings bymaking binding rulings available by facsimile or e-mail.

B.

Priority: Continue progress in integrating the NACCS system with otheragencies to permit a single automated submission to all concerned agencies by
the year 2000.

C.

Expand pre-arrival review and clearance-upon-arrival.

D.

Improve coordination with other agencies, including unified coordination with
the Ministry of Health and Welfare and the Ministry of Agriculture, Forestry and
Fisheries.

E.

Take measures to expedite catalog sales processing.

F.

Simplify, expand, and coordinate inspection services for import clearance offoodstuffs.

G.

Significantly increase the diminimus threshold on personal and commercial
import shipments on which duty is not collected from the current ¥10,000.

H.

Make the requirements of the new Additional Tax System that went into effecton October 1, 1997 transparent by disseminating them via the internet andcustoms circulars. Translate all relevant public materials into English and otherlanguages for the benefit of firms exporting to Japan.

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II.

Retailing and Services
The Large-Scale Retail Store Law and similar laws serve as market access barriers toforeign products and investment by limiting competition, prolonging distribution
inefficiencies, and discouraging expansion plans of large retail stores. Japanese
shoppers would enjoy lower prices, more selection, and greater convenience if the law
were abolished. The GOJ should take the following actions:A.

Priority: Repeal the Large Scale Retail Store Law (LSRSL) (Law No. 109 of1973). Pending elimination of the LSRSL, by March 1998, eliminate all
restrictions on existing stores, including permitted hours of operation andnumber of days closed. Furthermore, by the same date, abolish all restrictions on
the opening of stores with total floor space of 3,000 square meters or less andshorten the processing period for opening large stores to three months. The
application process should be expedited by:1.

providing for concurrent processing by local and prefectural authorities;2.

reducing the number of licenses required to market different kinds ofproducts including, but not limited to, fresh foods, pharmaceuticals, liquor,
and cigarettes;

3.

reducing delays resulting from MITI processing of notification andcompliance with local prefectural regulations.

B.

Priority: Repeal the Bunyaho (Law No. 74 of 1977). Take immediate
measures to ensure that the law is not used to restrict the opening of multiplex
theaters.

C.

Priority: Take immediate steps to ensure transparency in the GOJ's efforts topromote commercial activities in central urban areas, particularly in terms of new
zoning restrictions. To this end, the GOJ should establish a central repository of
local city planning and zoning regulations with regular (at least annual) reports
on how many localities have such regulations and the content of such
regulations. In addition, the GOJ should provide a national-level complaint andappeal mechanism for retailers which, as a result of such regulations, face
problems opening new stores or expanding existing ones.

D.

Priority: Take immediate measures to prevent local jurisdictions fromintroducing new restrictions on new entrants, including large-scale stores. If
necessary, the GOJ should ensure through national legislation that local practices
are not stricter than or otherwise inconsistent with national laws.

E.

The GOJ should take immediate action to work with movie cineplex firms torelax a number of laws and regulations as recommended in the 1996 report to
MITI by the Cinema Invigoration Research Council.

F.

By the end of FY 1997 Eliminate all other market adjustment laws, including the
Shochoho (Law No. 155 of 1959: The Retail Trade Adjustment Law).

G.

To promote a free, transparent, and competitive distribution system, ensure that
the Japanese business community adheres to MITI's 1990 Guidelines on Business
Practices.
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III. Transportation and Warehousing
Japanese laws limit competition and raise costs in the trucking business by, inter alia,
requiring new entrants to meet minimum-number-of-vehicle restrictions and by
imposing burdensome rate filing requirements on companies.
A.

Priority: By May 1998, create a generally available nationwide trucking
operating license that would be available to international companies serving
Japan that wish to engage in intermodal shipping operations.

B.

Priority: By December 1998, completely deregulate the harbor transport sector,
including elimination of supply/demand restrictions and other cumbersome
restrictions on licensing of new market entrants.

C.

Remove immediately any district licensing requirements for trucking services thatspecify a minimum number of vehicles that must be operated.

D.

Eliminate pricing restrictions on freight forwarding.

E.

Reduce significantly the restrictions on entry into the warehouse industry,including licensing and notification requirements, with the goals of reducing
shortages of storage space, lowering high fees, and minimizing burdens forforeign firms related to the distribution of their products.

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Competition Law & Policy
I.

Wholesale Distribution: Structurally Exclusionary Markets

Several Japanese markets (e.g., flat glass, paper, and photographic film) have common
characteristics often associated with noncompetitive performance, including: (1) highly
oligopolistic market structures; (2) a high degree of vertical integration between the main
manufacturers and primary distributors or de facto exclusive arrangements between the
manufacturer and primary distributors; (3) use by manufacturers of various measures (e.g.,security deposits, rebates) to hinder primary distributors from distributing competitors’
products beyond a token level; (4) a history of collusion; and (5) low import competition.
A.

II.

Priority: The JFTC should establish an Antimonopoly Act compliance initiativeby April 1998. Under this initiative, initially the JFTC would review thecompetition law compliance programs of influential firms in industries
manifesting the characteristics stated above. The JFTC should review theeffectiveness of influential firms’ compliance programs against a rigorous set ofcompliance standards and procedures, which are aimed at ensuring that, forinstance:
1.

company employees or agents do not act inconsistently with the
Antimonopoly Act (AMA) (Law No. 54, 1947) (e.g., a high-levelcompany employee should oversee the compliance program);2.

when company employees or agents act inconsistently with the AMA,
the conduct is detected and disciplined (e.g., monitoring and auditing
systems should be in place to detect improper acts and disciplinary
mechanisms should be consistently applied); and3.

the company has set up internal mechanisms to facilitate reporting acts
which may be inconsistent with the AMA (e.g., a reporting systemshould be in place and communicated to employees and agents so thatthey can report improper conduct without fear of retribution).

Enforcement PolicyA.

Priority: The JFTC should annually prepare a public report on its actions (e.g.,
recommendations, warnings) taken pursuant to the 1991 AMA Guidelines onDistribution Systems and Business Practices, beginning April 1998.

B.

Priority: The JFTC should announce, by April 1998, that it will investigate
aggressively the use of retaliatory threats against distributors by influential
manufacturers when the threats are intended to hinder competition.

C.

When the JFTC conducts industry surveys, it should implement a follow-up- 16 -

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business practices in accordance with measures recommended or suggested by
the JFTC. To ensure transparency, the JFTC should publicly disclose as muchas possible all information regarding the measures taken.
III.

IV.

Private Remedies
A.

Priority: The GOJ should enact appropriate legislation to permit private
parties to sue for injunctions in actions based upon AMA violations, by April
1999.

B.

The GOJ should amend the AMA to create a rebuttable presumption that trade
has been unreasonably restrained and direct purchaser plaintiffs have sustained
injury as a result of anticompetitive practices when the JFTC concludes throughrecommendation, recommendation decision, or hearing decision, an AMA
violation.

C.

The GOJ should amend the AMA and Civil Code to:1.

make it easier for plaintiffs in civil damage actions based on AMA
violations to: (a) meet their burdens of proof on the amount of damages;and (b) prove the causal connection between the AMA violation and thedamages; and2.

establish a damage calculation methodology for private actions based
upon AMA violations.

Antimonopoly Act Exemptions
A.

Priority: The GOJ should review all exemptions in the AMA, especially § 24-2
(Resale Price Maintenance), and the Act Against Unjustifiable Premiums andMisleading Representations Act (PMRA) (Law No. 134, 1962) with a view
towards eliminating such exemptions, by April 1998. Particular attention
should be directed at eliminating AMA §24-3 (Depression Cartels), §24-4(Rationalization Cartels), and PMRA §10-5 (Fair Competition Codes).

B.

The GOJ should enact legislation to eliminate or substantially reduce all
exemptions in the Antimonopoly Exemption Act (Law No. 138, 1947).

C.

The GOJ should repeal §7 of the Business Reform Law (Law No. 61, 1995)
and in its place: (1) require any Minister receiving a business reform plan
application to send a copy to the JFTC; and (2) state explicitly that no businessactivities taken under the BRL are exempt from the AMA. Pending this action,
the GOJ should ensure that the JFTC reviews all applications, especially joint
applications, submitted under the BRL and publicize any JFTC advice regarding- 17 -

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applications.
V.

VI.

Bid-rigging
A.

Priority: By April 1998, the GOJ should require all entities covered by the
WTO Agreement on Government Procurement to adopt a program to monitor
and report unusual or suspicious bidding patterns. Under such a program: (1) aprocurement official should be designated to monitor bidding patterns andreport to the JFTC when unusual or suspicious bidding patterns are detected;(2) the JFTC should provide training to procurement officials to detect bidrigging; and (3) with JFTC advice, the GOJ should require all entities coveredby the WTO Agreement on Government Procurement and engaged in public
procurement to revise their bid-rigging manuals to ensure that the manuals
effectively prevent AMA violations. After implementation of such a program,the GOJ should issue a report on the measures taken.

B.

The GOJ should require all bidders on public projects to attest through a
Certificate of Independent Pricing Decision (CIPD) to the fact that they havenot consulted with other bidders regarding any aspect of the bid. The GOJ
should amend the penal code to make it a crime to submit a false CIPD.

C.

In principle, the GOJ should ban firms from bidding for one year on all
procurements throughout Japan when they have engaged in any bid-rigging
activities in Japan. Before companies that have engaged in bid-rigging may
submit future bids, they should be required to pay restitution to the government
for the proportionate share of damages incurred as a result of the bid-rigging.

JFTC’s Budget, Resources, and Position
A.

Priority: The GOJ should increase substantially the JFTC’s FY 1998 budget,taking into consideration that revenues from surcharges far exceed the existing
budget, and that increasing investigative staff will likely increase collectedsurcharges. The GOJ should increase the JFTC’s staff to 700 and allot moststaff increases to investigatory sections.

B.

The GOJ should ensure that the JFTC Chairman is invited to attend all
Cabinet meetings regarding economic policy.

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Legal Services
It is essential that the liberalization of Japanese legal services keep pace with ongoing
deregulation and market liberalization to ensure that both Japanese and foreign parties are able
to obtain fully integrated transnational legal services in Japan, as well as for cross-bordertransactions. Rapid changes in Japan's financial sector will further increase demand for legal
services providers with international experience in structuring legally complex financial services
products.
However, unreasonable and unnecessary restrictions on the provision of legal services prevent
both foreign and Japanese lawyers from offering clients integrated transnational advice. Thevery limited recommendations of the Ministry of Justice's Study Committee on Foreign
Lawyers (the "Study Committee") in its October 30, 1997, final report were a great
disappointment.
A.

Priority: The GOJ should allow partnerships between bengoshi and foreign legal
consultants (gaikokuho-jimu-bengoshi) and the employment of bengoshi by foreign
legal consultants, just as bengoshi are allowed to hire foreign legal consultants. The
USG is disappointed that the Study Committee's report did not recommend removal of
the severe limitations on business ties between foreign legal consultants and bengoshi.

B.

The GOJ should allow foreign legal consultants to advise on third country law to thesame extent as bengoshi.

C.

The GOJ should reduce the five-year legal experience requirement to no more than two
years and give full credit to the time spent working in the offices of bengoshi andforeign legal consultants in Japan, as well as in offices of transnational firms in othercountries. The USG regards the recommendation of the Study Committee that theexperience requirement be reduced to three years as a positive but incomplete step.

D.

The GOJ should significantly increase the number of bengoshi by increasing the numberof trainees admitted to the Supreme Court’s Legal Research and Training Institute to
not less than 1500 trainees per year, beginning on April 1, 1998.

E.

The GOJ should also remove restrictions on the employment of quasi-legal
professionals and on the representation by foreign legal consultants of clients before
Japanese governmental entities.

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11/13/97 12:25 PM

TELECOMMUNICATIONSOver the past several years, the Government of Japan has shown a welcome
recognition that obtaining the full economic benefits of a dynamic
telecommunications sector requires vigorous competition and broad market
participation. As reflected in the WTO Basic Telecommunications agreement, a global
consensus has developed that such competition requires both deregulation and thealignment of regulatory goals and methods more closely with market forces.
Through implementing its WTO commitments and through independent
initiatives, Japan has taken several significant measures to foster a more procompetitive regulatory regime in the telecommunications sector. Given the rapidchanges sweeping this sector, however, regulatory reform in telecommunications is anever ending process. The following submission by the Government of the UnitedStates is an attempt to suggest further areas for such reform, which, will benefit all
market participants: foreign and Japanese, consumers and suppliers.
Below is a list of priorities we have identified which we believe would
significantly increase competition and market opportunities in Japan.
I. Interconnection

While the MPT has made laudable progress in developing interconnection rules
intended to foster greater competition, the nature of the rules it has chosen, theirscope, and the time frame in which they will be implemented could be significantly
improved. The USG is concerned that the MPT's decision to implement an Activitybased Costing (ABC) could unnecessarily slow the process of moving towards a truly
cost-based interconnection regime.
A.

Priority: Implementation within CY 1998 of forward-looking costing for
determining interconnection rates with NTT. This is the only
methodology which can ensure the fair pricing of interconnection andthe efficient allocation of infrastructure investment.

B.

Priority: If Activity Based Costing is introduced as an interim measure,the MPT should mandate extensive disclosure of the costs NTT uses tojustify interconnection charges to ensure that unrelated costs are notincluded and that competing carriers have the opportunity to challenge
NTT’s cost-allocation decisions.

C.

Prior to introducing forward-looking costing of interconnection, use of
proxy interconnection rates taking into account international bestpractices (e.g. the EU recommendations).

D.

Establishment within FY 1997 of an open and transparent process, with
MPT oversight, for developing interfaces and for choosing points ofinterface at any technically feasible point in the network.

E.

Enforcement of NTT’s obligation to enter good-faith negotiations on theterms and conditions for interconnection at any time (i.e., even prior to a
firm receiving a license) and regardless of carrier type (i.e., Type I or
Type II). Similar obligations should apply to KDD.

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11/13/97 12:25 PM

F.

Establishment within CY 1997 of cost-based tariffs for use of NTT’spoles, conduits, buildings and other facilities controlled by NTT andother relevant entities (e.g., power companies).

G.

Elimination within FY 1997 of R&D as a cost incorporated into
interconnection rates.

H.

Establishment within FY 1997 of procedures ensuring
nondiscriminatory, cost-based access to KDD’s cable landing station
and backhaul facilities (circuits to the PSTN).

I.

Incorporation of right-of-way provisions (e.g., digging rights) into a TypeI license; establishment of a mechanism to coordinate administrative
action required to facilitate access to rights-of-way, to prevent undue
delay of infrastructure deployment.

J.

Elimination of discriminatory charges levied by NTT uponinterconnecting carriers for services such as directory assistance.

K.

Introduction of cost-based tariffs within CY 1997 for NTT’s completionof international calls, on terms and conditions no less favorable thanthose offered to incumbent international carriers in Japan.

L.

Introduction within CY 1998 of price-cap regulation (or similar incentivebased regulation) for NTT. This would reduce NTT’s incentive tomaximize profits by introducing unnecessary costs into its rate base.
Such costs drive up both consumer prices and interconnection rates.

M.

Facilitation of transit arrangements using New Common Carriers by
eliminating the MPT requirement that all carriers involved haveinterconnection agreements with each other.

N.

Definition of basic network functions (for which NTT has to pay the costfor network modification to permit interconnection) to include allservices currently available to NTT customers.

O.

By CY 1999, implementation of local number portability with costs
shared widely across the entire customer base.

P.

Confirmation that from CY 1998, interconnection obligations will apply to
KDD.

Q.

Establishment within FY 1997 of an open process for introducing
number dialing parity, with a goal of completing such systems within FY
1998.

II. Direct to Home Satellite Services (DTH)

The United States Government believes that the condition for an innovativeand dynamic DTH sector is broad deregulation, contrasting with the current regime
which is both rigid and unnecessarily burdensome. The DTH market risks facing the
problems encountered early on in the CATV industry, where the MPT took similar
measures which prevented the emergence of viable operators. The regulatory- 21 -

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framework for DTH should function in a way that accommodates current and futureadvances in technology and allows the market to determine the success of any
service.
A.

Priority: Within FY 1997, permit DTH consignors to offer an unlimited
number of channels.

B.

MPT should remove itself from the role of approving the financial
arrangements among consignors of DTH providers. The MPT has notconvincingly demonstrated that these commercial facets of a DTH
provider’s business are subject to MPT jurisdiction.

C.

Permit 100% foreign ownership in DTH service providers and allow
foreigners to serve as directors of DTH companies within FY 97.

D.

To encourage more efficient use of transponders and spectrum, permit
unlimited movement of consignor programming among transponders
and eliminate remaining restrictions on statistical multiplexing.

E.

Consider licensing consignors by bandwidth, rather than bytransponders or number of channels

F.

Eliminate within FY 1997 the requirement that DTH providers offer
channels to be purchased individually, so called “a la carte” pricing.

G.

Implement plans to abolish the comprehensive cost system forcalculating transponder lease fees in favor of market-based pricing
within FY 97.

H.

Implement within CY 1997 plans to permit simulcasting (i.e. two
consignors providing the same programming) and remove therequirement for editing.

I.

Eliminate the sequential nature of licensing procedures for consignors
within FY 97. Given the capital needs for launching a satellite andpreparing uplinks and programming, MPT should issue broadcasting
licenses to consignors before a satellite is launched.

III. International Simple Resale (Ko-Sen-Ko)

As noted in comments filed with the MPT on September 4, the United States
Government believes that the rules MPT is considering for regulating ISR could
undermine the competitive benefits and market opportunities of this service andwould be inconsistent with GOJ pledges to liberalize this service.
A.

Priority: As of the beginning of CY 1998: permit international simple
resale outside of the international settlement regime.

B.

Introduction in CY 1998 of wholesale tariffs for international leased lines,
which would be available to companies seeking to provide ISR.

C.

Ensure by the end of CY 1997 timely, nondiscriminatory provision ofaccess codes and interconnection for domestic and international KoSen-Ko services.

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11/13/97 12:25 PM

D.

Require, by the end of CY 1997 that NTT and KDD publish all non-tariffbased contracts, and make the terms and conditions of such contracts
available to all carriers (regardless of type) on a nondiscriminatory basis.

IV. Foreign Investment restriction in NTT & KDD

The GOJ has never satisfactorily explained the rationale for retaining foreign
investment limits in NTT and KDD. The opening up of all major markets to increased
foreign investment with the implementation of the WTO Basic Telecommunications
Agreement makes the current 20 percent limit on foreign investment in NTT and KDD
a major anomaly among developed nations. The ability of these Japanese carriers toinvest in other markets, while they are essentially protected in their home markets,
creates a significant imbalance in competitive opportunities.
A.

Priority:
1998.

Permit 100% foreign investment in NTT and KDD within CY

B.

As an interim step, commit within FY 1997 to permit unlimited foreign
investment in those successor companies resulting from therestructuring of NTT which will not be subject to the NTT Law.

V. The 100-destination rule for international services

Based on the so-called “100-destination rule,” MPT prohibits international Type
1 carriers from entering into transit agreements with foreign carriers to terminate
international traffic until the Type I carrier has established direct circuit facilities with
one hundred or more destinations. This restriction will greatly hamper the
introduction of competitive international services as envisaged in the WTO Basic
Telecommunications Agreement. The USG is aware of no other regulator which
considers such a requirement to be necessary.
A.

Priority: Elimination of the 100-destination rule in CY 1997 for new
Type I entrants.

VI. Licensing and tariff procedures

The MPT’s publication of “Market Entry Manuals” has greatly improved thetransparency of its licensing procedures. New entrants, however, report a broad
range of additional, unpublished requirements they must meet to be eligible for alicense.
A.

Priority: Within CY 1997, streamline the Type I licensing process andeliminate all economic needs tests, such as the requirement to provide
business plans proving profitability.

B.

Publish all the standards, criteria and other requirements that MPT will
use to evaluate applications for licenses, authorizations and otherapprovals, as well as the material and information that applicants will be
required to submit as part of the application process.

C.

To facilitate the acquisition of rights-of-way, grant Type I operators
licenses prior to negotiating rights-of-way; include in such licenses road
opening rights and authority for a carrier to negotiate with other- 23 -

11/13/97 12:25 PM

agencies; and empower MPT to play a coordinating role in facilitatingrights-of-way.
D.

Eliminate registration requirements for Type II applicants not offering
basic voice services.

E.

Permit the filing of rates on a notification basis by non-dominant carriers
unaffiliated with a dominant carrier in Japan; eliminate the need to prove
profitability for services.

F

For non-dominant carriers, permit introduction of new services andgeographical expansion on a notification basis.

VII. Restructuring of NTT

The planned restructuring of NTT offers an opportunity to reduce potentiallyanti-competitive cross-subsidies between NTT units currently operating in bothmonopoly and competitive markets.
A.

Priority: Prior to NTT's restructuring, establishment of safeguards toeliminate anti-competitive cross-subsidization between restructured
corporate units through:1. strict accounting separation and public financial reporting
requirements for each unit;
2. strict division of operations and assets;
3. prohibition on joint marketing and transfer of personnel between
corporate units; and4. establishment of safeguard procedures to prevent abuse of accessto competitors’ information.
VIII. MPT's Notice and Comment procedures

The MPT has been one of the most progressive ministries in Japan inproviding public notice of its proposed regulations and providing opportunities forinterested parties, including foreign interests, to provide comments on the proposed
regulations. The following suggestions are intended to make this process broader
and more effective.
A.

Priority: Commitment within FY 1998 to introduce notice and comment
procedures for all rulemaking;B.

Priority:

Provide, at a minimum, 30-day comment periods;

C.

Priority:

Publicly disclose all comments; andD.

Priority: Ensure fully nondiscriminatory participation in all steps of rulemaking

IX. CATV Services- 24 -

11/13/97 12:25 PM

MPT regulatory reform of this sector, particularly the decisions to permit multiservice operators and cable telephony, have been greatly beneficial. Lifting foreign
investment limits in companies offering cable telephony was also very welcome.
A.

Priority: Within CY 1998, permit 100 percent foreign investment andunlimited foreign board membership in all CATV companies.

B.

Priority: Introduce, within CY 1998, nationwide licenses for CATV
services.

C.

Within CY 1998, establish procedures for ensuring CATV companies fair
access to the poles of NTT and power companies.

D.

To facilitate the most efficient development of robust CATV sector,
consider permitting the transfer, selling and trading of existing CATV
licenses.

E.

Streamline the CATV licensing procedure by eliminating all but the mostessential details regarding an applicants business and infrastructuredevelopment plans.

F.

Eliminate requirement for MPT inspection of CATV facilities.

G.

Discontinue the use of administrative guidance to prevent CATV
companies from using certain channels (14-17; 24-27; and 55-63) which
are allegedly subject to interference problems. With quality
maintenance such problems will not arise, so there is no need toperemptorily ban the use of valuable spectrum.

X. MKK testing and certification procedures

In its deregulation report earlier this year, the MPT agreed to consider the
Keidanren request that radio equipment from ISO 9000 certified companies not be
subject to MKK-mandated quality-control tests as part of the MKK certification process.
In addition, the American Electronics Association submitted a list of proposedchanges early this year that deserves serious consideration.
A.

Priority: Eliminate MKK’s quality-control testing for ISO 9000-certified
companies within CY 1997.

B.

To create a more efficient conformity assessment process, introduce
within CY 1998 procedures to authorize independent laboratories toprovide conformity assessment and certification equivalent to thatprovided by MKK.

C.

Speed up examinations and reduce fees for testing and certification.

D.

Eliminate requirements for recertification of approved products which
undergo design changes not affecting performance relating tomandatory standards.

E.

Limit the number of units tested to no more than five.

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TRANSPARENCY AND OTHER GOVERNMENT PRACTICES
Improvements in the transparency of the public policy process and increased opportunities
for public participation in the administrative system are necessary counterparts of sectoral
deregulation in Japan. Such improvements could play an important role in reducing market
access problems of foreign firms and their need to seek the assistance of the USG in
addressing them.
I.

Information Disclosure
A.

Priority: Enactment of an Information Disclosure Law. The USG
strongly supports the efforts of Japan to prepare information disclosure
legislation for submission to the Diet by March 31, 1998. The UnitedStates urges the expeditious enactment and implementation of such
legislation. To provides the public with effective access to government
information, the law should:
1.

apply to all central government entities and government-related
entities, including special public corporations (tokushu hojin);2.

mandate the disclosure in a timely manner of all requested
information that is in the possession or under the control ofgovernmental entities unless it meets very narrow and precisely
defined exceptions;3.

require governmental entities that withhold information fromdisclosure to provide a written justification for non-disclosure to therequesting party;

4.

ensure that the courts provide full and effective review of the refusalof governmental entities to disclose requested information; and5.

allow requests for disclosure to be filed by foreign companies andforeign individuals.

B.

Increased Availability of Government Information -- The United Statesrecognizes that governmental entities are making strides to make more
information available to the public, such as through home pages. However,it believes that the GOJ could substantially enhance governmenttransparency by requiring all entities to maximize the information that they
make available to the public outside of a formal information disclosuresystem. Such information should be made available to the public in a userfriendly manner.

C.

Equal Access to Government Information -- The GOJ should ensure that- 27 -

11/13/97 12:25 PM

foreign companies are accorded access to government information on abasis that is comparable to that accorded Japanese firms in the UnitedStates, and that is equal to access provided to domestic companies andJapanese industry associations.
II.

Priority: Adoption of a Rulemaking Process That Allows for Public
Participation. Consistent with the recommendations of the Conference on
Administrative Reform (Gyosei Kaikaku Kaigi) in its Interim Report of September
3, 1997, the GOJ should adopt a rulemaking process that enables interested parties
to participate effectively in the development of regulations. Under such a process,all governmental entities would be required to: (1) publish proposed regulations in
the Kampo or other widely available publication; (2) provide a reasonable time
period for the general public, experts and interested parties to comment on the
proposed regulation; (3) make all comments available to the public for review; and(4) give serious consideration to the comments when preparing the final regulation.
Pending the adoption of such a rulemaking process, government entities should be
encouraged to follow the examples of the Fair Trade Commission and the Ministryof Posts and Telecommunications in seeking public comments on draft regulations
and policies.

III.

Priority: Improvement of Application Process. Despite the provisions of the
Administrative Procedure Law (APL) that apply to applications for authorizations,licenses, permits and other approvals (hereinafter collectively referred to as“approvals”), U.S. firms have repeatedly complained about the burdensome andunpredictable nature of the application process in Japan. Potential applicants often
must engage in extensive prior consultations with governmental entities, which may
take six months to 12 months or more, and satisfy numerous requests for additional
information before the entity will allow them to submit their application. To
remedy this problem, the GOJ should require governmental entities to:

IV.

1.

publish in the Kampo all standards, criteria and other requirements that they
will use in deciding whether to grant approvals, as well as the process forthe review of applications to determine their adequacy, including the time
period for the review;

2.

receive all applications submitted to them for approval and, promptly after
receipt, inform the applicant of any specific deficiencies in the application,
and allow the applicant to make the necessary corrections, with theassurance that if such deficiencies are addressed, formal processing of theapplication will commence immediately; and3.

base determinations on whether or not to grant approvals based solely on
the published requirements for such applications.

Advisory Councils (Shingikai, etc.) Consistent with the interim recommendations- 28 -

11/13/97 12:25 PMof the Conference on Administrative Reform (Gyosei Kaikaku Kaigi), the GOJ
should reform its advisory councils, including shingikai, kenkyukai, kondankai andbenkyokai (hereinafter collectively referred to as “shingikai.”) The GOJ should
also enhance the transparency and objectivity of shingikai, by taking measures:V.

1.

to prohibit former and current governmental officials from serving aschairpersons of the shingikai, and further reduce the number of former
governmental officials serving as members of shingikai;

2.

to allow foreign non-governmental persons and foreign companies toparticipate either as members of shingikai or as observers at shingikai
meetings;

3.

to enable shingikai to engage in deliberations and the development ofrecommendations and reports independent from the influence ofgovernment officials and governmental entities; and4.

to require all shingikai to publish advance notice of their meetings; to open
all meetings to the public except in very exceptional, narrowly definedcases; and to make the minutes and reports of their meetings readily andeasily accessible to the public.

Industry Associations With regard to industry associations, the GOJ should:
1.

refrain from formally or informally delegating governmental or public policy
functions, such as product certifications or entry authorizations, to industry
associations;2.

where there is a demonstrated and appropriate need for industry
associations to participate in granting permissions or approvals, establishingstandards, issuing certifications or engaging in similar public or quasi-public
functions, the relevant governmental entity should exercise adequate
supervision over the association to ensure that its activities are conducted in
an open, transparent and non-discriminatory manner and do not restrict thebusiness activities of firms that are not members of the association;3.

ensure that regulations, guidelines and other procedures adopted or used byindustry associations that may affect the conduct of business in Japan reflect
the opinions of non-members, including the foreign business community;
and4.

ensure that when government entities provide information to industry
associations, the entities make the same information readily available tocompanies in that industry that are not members of the industry association,
including foreign companies.

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VI.

Administrative Guidance To enhance further the transparency of administrative
guidance issued for multiple persons under Article 36 of the Administrative
Procedure Law, the GOJ should: (1) make information publicly available on thesubjects of such guidance and upon request, expeditiously provide a copy of theguidance to any requesting person; and (2) clarify that administrative guidance thatis given to an industry association with the intent that it will be followed by themembers of the association is covered by Article 36 of the APL, and is required to
be issued in writing and made available to the public.

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