Trade & Customs
2022
Contributing editor
Gary N Horlick© Law Business Research 2021

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Trade & Customs
2022
Contributing editor
Gary N Horlick
Law Offices of Gary N Horlick

Lexology Getting The Deal Through is delighted to publish the tenth edition of Trade & Customs,
which is available in print and online at www.lexology.com/gtdt.
Lexology Getting The Deal Through provides international expert analysis in key areas oflaw, practice and regulation for corporate counsel, cross-border legal practitioners, and company
directors and officers.
Throughout this edition, and following the unique Lexology Getting The Deal Through format,
the same key questions are answered by leading practitioners in each of the jurisdictions featured.
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LondonJuly 2021

Reproduced with permission from Law Business Research Ltd
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1© Law Business Research 2021

Contents
Overview3

Japan50

Gary N Horlick
Law Offices of Gary N Horlick

Yuko Nihonmatsu and Fumiko Oikawa
Atsumi & Sakai(CP) TPP, RCEP, EU-Japan and other trade agreements

6

Jordan58

Gary N Horlick
Law Offices of Gary N Horlick

Baha’a Al-Armouti
AL Armouti Lawyers & ConsultantsBrazil9

Malaysia63

Mauro Berenholc, Renê Guilherme Medrado, Cora Mendes andCarol Sayeg
Pinheiro Neto Advogados

Lim Koon Huan and Manshan SinghSKRINE

China18

M Fevzi Toksoy, Bahadir Balki and Ertuğrul Can Canbolat
ACTECON

Turkey70Frank PanXin Bai Law Firm

Ukraine78

Colombia26
Olga Lucía Salamanca, Luis Ricardo Lopez, Yenny Palacios andMaria Margarita Vesga
Araújo Ibarra International Trade Consultants SAS

United Kingdom

Eurasia32
Edward Borovikov, Igor Danilov, Taras Povorozniuk andMaria Krestiyanova
Dentons

European UnionNataliia Isakhanova and Andrii Pylypenko
Sergii Koziakov & Partners

Jessica Gladstone, Michael Lyons, Kieran John McCarthy,
Jeremy Stewart and Federico Ortino
Clifford Chance

United States
42

91

99

Yohai Baisburd
Cassidy Levy Kent LLP

Laurent Ruessmann and Jochen Beck
Fieldfisher Belgium LLP

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JapanYuko Nihonmatsu and Fumiko Oikawa
Atsumi & Sakai

LEGAL FRAMEWORK
Domestic legislation
1

What is the main domestic legislation as regards trade
remedies?

business environment for companies in countries party to the agreements, and by actively utilising these agreements, it is expected thatbusiness opportunities will expand for Japanese companies.
Since January 2020, Japan has been negotiating EPAs or FTAs
with three counterparties, including China and South Korea, Colombia,
and Turkey.

The main domestic legislation regarding trade remedies is as follows:•
the Customs Tariff Act; and•the Cabinet Order on Anti-Dumping Duties.

TRADE DEFENCE INVESTIGATIONS (OUTSIDE THE WTODISPUTE SETTLEMENT SYSTEM)International agreements

Government authorities

2

3

In general terms what is your country’s attitude tointernational trade? Has it raised tariffs in the last year?

Japan became a signatory to the General Agreement on Tariffs andTrade (GATT) in September 1955. Under GATT, Japan gradually liberalised trade and reaped many benefits as a nation from trade liberalisation
generally. This helped Japan achieve the transition from post-Second
World War recovery to industrial development.
Since the 1990s, the network of free trade agreements (FTAs)
around the world has grown significantly. Even in Japan, a nationthat has been a staunch supporter of multilateral trade arrangements
under GATT and World Trade Organization (WTO), calls for FTAs haveincreased, and in January 2001, Japan began negotiating an economic
partnership agreement (EPA) with Singapore, which was concluded in
November 2002, becoming Japan’s first EPA. By January 2021, Japan
had EPAs in place with 21 other countries.
Japan’s EPAs tend to extend beyond customs duties and liberalisation of services to cover investment, government procurement,
intellectual property rights, migration and the business environment
and are aimed at expanding both trade and investment between the
countries, with the more comprehensive EPAs extending to topics notcovered under WTO rules.
The Comprehensive and Progressive Agreement for Trans-PacificPartnership (CPTPP) between 11 member countries entered into force
on 30 December 2018. The CPTPP is a significant agreement, as its
members account for 12 per cent of world gross domestic product. It
also has a level of liberalisation (rate of tariff elimination) in market
access for goods higher than those of conventional FTAs and EPAs andcovers the environmental, labour, intellectual property, competition ande-commerce matters.
Also, on 1 February 2019, the Agreement between the European
Union and Japan for an Economic Partnership entered into force. The
European Union is an important trading partner for Japan, accounting
for approximately 11 per cent of exports and 12 per cent of imports.
The European Union is the second-largest destination for Japanese
investment after the United States, and the largest source of inward
investment. The CPTPP and the Agreement between the European
Union and Japan for an Economic Partnership will create a better

Which authority or authorities conduct trade defence
investigations and impose trade remedies in your jurisdiction?

The Ministry of Finance (MOF) and the Ministry of Economy, Trade andIndustry (METI) are the authorities that conduct trade defence investigations and enforce the Customs Tariff Act in Japan.

Complaint filing procedure
4

What is the procedure for domestic industry to start a trade
remedies case in your jurisdiction? Can the regulator start aninvestigation ex officio?

Those with interests in Japanese industry (a domestic producer offoreign goods in the same category as the goods under investigation,
or a producer that produces at least 25 per cent of the total domestic
production of those goods) can make a complaint to the Minister ofFinance for anti-dumping duties upon submission of the necessary
documents with adequate evidence to establish the following facts:•name and address or residence of the applicant;•name, brand, product type and characteristics of the goods thathave been dumped;name of the supplier of the dumped goods and the country of origin;••background to the complainant’s interests in industry in Japan;•
outline of the facts regarding the import of the dumped goods,
and the effective damage, that the imports have caused to theindustry in Japan;•
if requesting that any of the matters provided in the documents
submitted, or all or part of the evidence submitted, be handledin confidence, a statement to this effect, and the reasons forrequesting the same;•the state of support for duties from related producers, or related
labour unions; and•other relevant matters.
The authority responsible for investigating the request will confirm
that the necessary documents have been submitted that adequately
evidence the above matters. Once they are satisfied, they will begin
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takes about two months, and once an investigation starts it will generally be completed within one year after commencing the investigation(and no more than 18 months).
The guidelines for preparing the documents required whenrequesting anti-dumping duties can be found on the METI website.

Contesting trade remedies
5

What is the procedure for foreign exporters to defend a trade
remedies case in your jurisdiction?

Once a decision has been made to commence an investigation, theMinister of Finance will promptly notify directly interested parties (theimporters of the goods under investigation) and the party or parties thatrequested the investigation in writing, providing the name of the goods
to be investigated and the estimated term of the investigation, and will
also announce this publicly in the Official Gazette. For a period specified
by the MOF after the investigation starts, interested parties may makewritten representations to the Minister of Finance giving their opinions
regarding the investigation.
The Minister of Finance will also notify directly interested parties
in writing of important facts that form the basis of a final decision onwhether to impose duties or the tariff rate to apply (reasons for a duty or
dumping margin, etc). In response, directly interested parties may makecounterarguments in writing within a designated period.

WTO rules
6

Are the WTO rules on trade remedies applied in national law?

industry as a result; the Minister of Finance will then investigate theclaim and may extend the dumping duty period for a further period of
up to five years.

Revision of the duty as a result of changed circumstancesInterested parties may request the revision or abolition of a dumping
duty not less than one year from the start of the designated period of
duties concerning designated goods, if it is accepted, upon submitting
adequate evidence, that the circumstances have changed regarding:•
dumping of the designated goods; or•the facts of the actual damages caused to the Japanese industry asa result of the importation of the designated goods.
A determination of whether or not to revise or abolish the dumping duty
generally takes no more than one year.

Refund of anti-dumping duties
If the amount of the anti-dumping duty paid by the importer of designated goods can be shown to be more than the actual amount of thedifference that arose through the dumping of the designated goods,
then the importer may request a refund of the dumping duty from theJapanese government upon presenting adequate evidence to support
the request. Instigation of the request may result in either refunding the
dumping duty up to the amount requested, or rejection if there is insufficient reason for doing so.

Compliance strategies
9Japan is a member of the World Trade Organization.
The Customs Tariff Act incorporates into Japanese law theprovisions of article 6 of the General Agreement on Tariffs and Trade
Agreement on Implementation of article VI of the General Agreement on
Tariffs and Trade 1994 (the Anti-dumping Agreement).

Appeal7

What is the appeal procedure for an unfavourable trade
remedies decision? Is appeal available for all decisions? How
likely is an appeal to succeed?

A party subject to a dumping duty (ie, the importer) may appeal to the
Minister of Finance within three months from the day after becoming
aware of the unfavourable trade remedies. If the Minister’s decision on
the appeal is also unfavourable, the party may then take the matter tocourt to seek to have the trade remedies annulled, which must be done
within six months from the day after becoming aware of the Minister’s
decision. If there are valid reasons for doing so, the process of appeal to
the Minister may be bypassed, instead of going straight to an appeal tothe court. However, generally speaking, it is highly unlikely that a trade
remedy decision could be overturned by such appeal or court litigation process.

Review of duties/quotas
8

How and when can an affected party seek a review of the dutyor quota? What is the procedure and time frame for obtaininga refund of overcharged duties? Can interest be claimed?

Extension of the duty period
Anti-dumping duties can be imposed for a maximum of five years, but
this may be extended if an interested party can submit evidence to the
Minister of Finance (no later than one year before the end of the duty
period) that adequately shows that actual damage would continue to be
incurred, or would be incurred again, as a result of the importation of
the designated goods to which the dumping duty applies or to Japanese

What are the practical strategies for complying with an antidumping/countervailing/safeguard duty or quota?

To date, the Japanese government has only conducted eight antidumping investigations, seven of which led to anti-dumping duties being
imposed. In the past, Japan had been reticent about using anti-dumping
duty measures, as they might have placed Japanese businesses in adifficult position. Also, the Japanese government has only conducted
one countervailing duty and one safeguard duty.
In recent years, there has been an increase in concern over export
dumping conduct globally, as economic growth in developing countries has slowed and industries find themselves with overcapacity, andJapanese companies have begun to take measures to fight dumping.
The Japanese government has streamlined the process for companies to petition for an anti-dumping investigation, simplified how theinvestigations themselves are conducted, and taken other measures toimprove the domestic anti-dumping system.

CUSTOMS DUTIESNormal rates and notification requirements
10 Where are normal customs duty rates for your jurisdiction
listed? Is there an exemption for low-value shipments, if so,
at what level? Is there a legally binding system of information
for applied tariffs or similar in place? Are there priornotification requirements for imports?
Based on the principle of no taxation without legislation, some specificlaws or treaties stipulate six main different customs duty rates:•
general rate (the Customs Tariff Act): a rate that is set from a longterm perspective based on the state of domestic industry;•
temporary rate (the Act on Temporary Measures concerning
Customs): a provisional, flexible rate applied in special
circumstances;•
generalised system of preferences (GSP) rate (the Act on Temporary
Measures concerning Customs): a rate that is applied to imported

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goods where the country of origin is a developing country that hasrequested preferential tariffs and Japan has accepted this request(generalised system of preferences beneficiary);
least developed countries (LDCs) preferences rate (the Act on
Temporary Measures concerning Customs): this is a rate thatapplies specifically to imported goods for which the country oforigin is a preferential beneficiary and also an LDC, in which casethe tax rate is zero. The LDC preferences rate (zero tax) will also
apply in the case of the importation of general preferential goods
originating from an LDC;World Trade Organization (WTO) treaty tariff rate: this is a rate thatis agreed (binding rate) as the maximum duty applicable to imported
goods originating from a WTO member country. It also applies tocountries with beneficial customs duty treatment or countries withmost-favoured-nation status under bilateral treaties; andeconomic partnership agreement (EPA) tariff rate: this is a rate thatis set out in specific EPAs between Japan and certain other countries. Certain duties are reduced or eliminated for goods originatingfrom such countries according to a schedule in the relevant EPA.

The rates described in the list above are set out in the Customs Tariff Act
or other related laws and treaties based on the International Convention
on the Harmonised Commodity Description and Coding System (the HS
Treaty); Japan’s customs tariff schedule as of 1 April 2020 can be foundon the Japan Customs website (https://www.customs.go.jp/english/
tariff/2021_4/index.htm).
Goods with a total customs value of ¥10,000 or less per parcel orcustoms declaration are exempted from customs duty and consumption
tax, save that:•
alcoholic beverages are subject to liquor tax and tobacco (of whatever value) is subject to tobacco tax and special tobacco surtax; and•the exemptions do not apply to goods such as leather bags, leather
shoes and knitted apparel, as they are considered inappropriate
from the viewpoint of their impact on domestic industries or othercircumstances.
General import freight and international parcels with a total customs
value of not more than ¥200,000 are subject to simplified tariffs, whichsometimes leads to the application of customs rates lower than thegeneral customs and other tariff rates. For example, cheese subject tosimplified tariffs has a customs rate of 5 per cent, although the generalcustoms and other tariff rates for cheese are in the range of 16.8 percent to 40 per cent. However, the simplified tariff rates do not apply topersonal items and unaccompanied baggage, goods exempt from tariffs
or duty-free, and any goods for which it is not appropriate to apply thesimplified tariff rates considering the impact on Japanese industries.
An importer may make an enquiry with Customs about the tariffclassification (tariff code) and the tariff rate that would be applied to
products that the importer is planning to import and obtain a written
ruling in response, before commencing the importation (AdvanceClassification Ruling System). The tariff classification, tariff rate andstatistical code listed on this Advance Classification Ruling System arethen applied to the import declaration.

Special rates and preferential treatment
11 Where are special tariff rates, such as under free trade
agreements or preferential tariffs, and countries that are
given preference listed?
All tariff rates, including preference rates under EPAs, are outlinedin the customs tariff schedule (https://www.customs.go.jp/english/
tariff/2021_4/index.htm) on the Japan Customs website, and the list of
GSP beneficiaries (countries and territories).

12 How can GSP treatment for a product be obtained or
removed?
To receive preferential tariff treatment, an importer must submit a certificate of origin, the generalised system of preferences (GSP) (Form A), at
the time of import declaration. This certificate must be issued at the timeof exportation by customs authorities or any other officially authorised
body, such as a chamber of commerce and industry in the country oforigin, based on the declaration made by the exporter. The goods must
be imported directly to Japan for preferential tariff treatment.
There is also a system whereby preferential tariffs are no longer
available for products that originate from preferential treatment beneficiary countries or regions once the country’s or region’s economy has
developed or achieved a high level of global competitiveness.

Entire graduation
A beneficiary country or region ('beneficiary') is excluded from the list of
beneficiaries of Japan’s GSP scheme for all items when:•
the beneficiary has been continuously classified as a high-income
country in the World Bank Statistics, published by the International
Bank for Reconstruction and Development (the 'the World Bank
Statistics') for three years up to the previous; or•the beneficiary has been continuously classified as an uppermiddle-income country as well as the value of exports of thebeneficiary is no less than 1 per cent of the total value of worldwide exports in the World Bank Statistics for three years up to
the previous.

Partial graduation
Products originating from a beneficiary are excluded from preferential
treatment when:•(i) the beneficiary is classified as a high-income country in the WorldBank Statistics of the previous year, or (ii) the beneficiary is classified as an upper-middle-income country as well as the value of its
exports being no less than 1 per cent of the total value of worldwide exports in the World Bank Statistics of the previous year; and•the value of Japan’s imports of the product originating from such
Beneficiary exceeds ¥1 billion and 25 per cent of the total value ofJapan’s worldwide imports of the product in the trade statistics forthe previous two years.
Certain countries or certain products originating from the beneficiary
countries or regions are excluded from preferential treatment whencertain conditions are met.

13 Is there a duty suspension regime in place? How can duty
suspension be obtained?
Currently, there is no formal duty suspension regime in Japan.
Japan does have a tariff quota system under which a specified
quota of certain products may be imported without tariffs or with low
tariffs (primary tariff rate) to meet domestic demand for low-priced
imported products, but once this quota is met, a relatively high tariff(secondary tariff rate) is applied to further imports to protect domestic
producers. This tariff quota system differs from the duty suspension
regime in that there is a limit to the number of imported goods.

14 Has your country applied tariffs for ‘national security’reasons?
There are currently no cases where the Japanese government hasapplied tariffs for ‘national security’ reasons.

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Challenge
15 Where can customs decisions be challenged in yourjurisdiction? What are the procedures?
Any person who is not satisfied with an administrative disposition takenby the Director-General of Customs under the Customs Act or otherrelated laws and regulations may file a protest within three months
from the day following the day of the receipt by the petitioner of thenotification of the disposition (request for reinvestigation). For a request
for reinvestigation, the Director-General of Customs reviews the validityof the administrative disposition and notifies the petitioner of the resultwith a copy of the decision letter.
If the petitioner is still not satisfied with the decision in response
to a request for reinvestigation, it may file an appeal with the Ministerof Finance within one month from the day following the day of thedelivery of the decision letter. Instead of requesting an investigation,
any person who is not satisfied with an administrative disposition takenby the Director-General of Customs may also directly file an appeal to
the Minister of Finance within three months from the day following the
day of the receipt by the petitioner of the notification of the administrative disposition. These procedures are called a ‘request for review’. Ina request for review, the Minister of Finance reviews and examines thevalidity of the administrative disposition and notifies the petitioner of theresult with a copy of the written verdict.
If the petitioner is still not satisfied with the decision made by the
Ministry of Finance it may file an appeal to the court within, in principle,
six months from the day of the receipt of the written verdict.

TRADE BARRIERS
Government authorities
16 What government office handles complaints from domestic
exporters against foreign trade barriers at the WTO or underother agreements?
The government offices that handle complaints from domestic exporters
against foreign trade barriers at the World Trade Organization (WTO)
or under other agreements are the Ministry of Economy, Trade andIndustry (METI), Ministry of Finance (MOF) and other ministries responsible for the specific industry in Japan.
In particular, METI publishes a ‘Report on Compliance by Major
Trading Partners with Trade Agreements – WTO, free trade agreement
or economic partnership agreement (EPA) and IIA’ and ‘METI Priorities
Based on the Report’, to improve compliance among major trading partners whose trade policies and trade measures might not be consistent
with the international rules of the WTO. The Multilateral Trade System
Department and Office for WTO Compliance and Dispute Settlement,
Trade Policy Bureau within METI has a website dedicated to dealing withenquiries regarding trade policies and measures of foreign countries
that are faced by companies and business operators. This office willconsider whether the foreign government’s measures are consistent
with WTO and other international rules and provide advice, including,in some circumstances, assisting with the launch of WTO dispute settlement procedures.

Complaint filing procedure
17 What is the procedure for filing a complaint against a foreign
trade barrier?
The Japanese government takes the approach of using the WTO andother international trade rules to settle disputes regarding international
economic issues. When a company, export cooperative or other interested party is faced with a foreign trade barrier and brings the matterto the attention of the ministry responsible for that particular industry,
the ministry will interview the interested parties to ascertain the facts.
If necessary, the ministry will collaborate with METI and other relevant
ministries to handle the matter consistently from the Japanese government’s perspective, which can include requesting discussions with therelevant foreign government and failing a satisfactory outcome throughsuch negotiations, filing a complaint through dispute resolution procedures under the WTO or the relevant EPA.

Grounds for investigation
18 What will the authority consider when deciding whether tobegin an investigation?
When a company, export cooperative or other interested party is facedwith a foreign trade barrier and brings the matter to the attention of
METI, MOF and other Japanese ministries responsible, the Japanese
government will look at the evidence provided and decide whether
to begin an investigation based on whether the foreign government’s
actions violate WTO or other international rules.

Measures against foreign trade barriers
19 What measures outside the WTO may the authority
unilaterally take against a foreign trade barrier? Are any suchmeasures currently in force?
Japan also uses international trade rules outside the WTO to resolve
disputes relating to international economic matters.
If the relevant government authority determines that there isa foreign trade barrier that is against an international trade rule, theJapanese government will conduct bilateral negotiations with the othercountry and take other appropriate measures, such as investor-state
arbitration (where a bilateral investment treaty (BIT) exists) and other
EPA or BIT dispute settlement processes.
The 2018 edition of the Government White Paper on Unfair Trade
noted that, in recent years, due to market distortionary measures bysome emerging-market countries, there have been growing concernsthat the competitive basis or function of the markets underlying themultilateral free trade system may be being distorted, and there is also
a warning that in some developed countries there is a swing back to theresult-oriented concept that evaluates the trade policies and measuresof other countries as unfair based only on the disadvantageous result oftrade with specific partners.
In contrast, METI is promoting comprehensive efforts to secure
a level playing field through the Trilateral Trade Ministers’ Meeting
between Japan, the European Union and the United States and so on,
and for reciprocal countermeasures that do not conform to the WTO
rules that will not benefit any country, the ministry is responding to thestructural issues faced by the multilateral free trade system, such as byimproving the WTO dispute resolution procedures and working on theimportance of maintaining and strengthening it in various places. Also,
for individual projects, the ministry has indicated that it will actively
seek solutions while continuing to make use of bilateral and multilateral
consultations and WTO dispute resolution procedures.
In December 2017, 70 WTO member countries and regions
announced the Joint Ministerial Statement on Investment Facilitation for
Development and called for the start of discussions to develop a multilateral and regional framework on investment facilitation. However, since
there is a history of the launch of negotiations being postponed, negotiations on investment rules in the WTO have never been agreed. Also,in these discussions, given that market access, investment protection
and investor-state dispute settlements are excluded from the debate,
and those negotiations in the WTO cannot proceed without consensus
among all member states and regions, methods outside the WTO, such

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as bilateral agreements and multilateral discussions, are even now still
considered more effective.

Private-sector support

EXPORT CONTROLSGeneral controls
22 What general controls are imposed on exports?

20 What support does the government expect from the private
sector to bring a WTO case?
If an industry wishes to bring a WTO case, it must discuss the case withthe relevant government authority in detail. As a part of this consultation process, the industry would be required, at its own cost, to collectdata, conduct research and provide the necessary information to enable
the authority to determine whether or not to begin an investigation andbring a WTO case.

For exports from Japan, an export declaration, inspection and permit
are required under the Customs Act. An export declaration requires
submission of an export declaration in a prescribed form, an invoice, apacking list and other documents. When an exporter wishes to export
cargo (or technology; hereinafter the same) that requires a permit orapproval under laws or regulations other than the Customs Act, theexporter must be able to prove to customs that these requirements
have been met.

Notable non-tariff barriers

Government authorities

21 What notable trade barriers other than retaliatory measures
does your country impose on imports?

23 Which authorities handle the controls?

Under the Customs Act, any person wishing to import goods must
declare them to Customs, obtain an import permit and make payment ofcustoms duty and excise taxes after necessary examination of goods asa general rule (Import Declaration).
The Customs Act prohibits the importation of the following goods:•
heroin, cocaine, methylenedioxymethamphetamine, opium,cannabis, stimulants, psychotropic substances and other narcotic
drugs (excluding those designated by Ministry of Health, Labourand Welfare Ordinance);•
firearms (pistols etc), ammunition (bullets) thereof and pistol parts;•
explosives (dynamite and gunpowder, etc);•
precursor materials for chemical weapons;•
germs that are likely to be used for bioterrorism;•
counterfeit, altered or imitation coins, paper money, banknotes or
securities, and forged credit cards;•
books, drawings, carvings and any other goods that may harm
public safety or morals (obscene or immoral materials, eg,
pornography);•child pornography;•
goods that infringe upon intellectual property rights; and•goods that constitute unfair competition under the Unfair
Competition Prevention Law.
The Foreign Exchange and Foreign Trade Act and other laws and regulations control the import of cargoes that harm the economy, industries,
sanitation, health, public safety or public morals in Japan by requiring
permits, approvals or inspections by administrative agencies or satisfaction of other conditions on the import of such cargoes. For example,
imported plants are required to go through plant quarantine, and theimportation of certain plants from specific areas, harmful plants andanimals such as insects, mites or bacteria, and soil and plants to whichsoil is attached is banned unless permission is obtained for use intesting and research (the Plant Protection Act). Also, to prevent theinvasion of infectious animal diseases from overseas, imports of clovenhoofed animals such as cattle, pigs and sheep, equine animals andfowl are banned unless a certificate of import quarantine is obtained
upon inspection by the Animal Quarantine Service of the Ministry ofAgriculture, Forestry and Fisheries or a permit is obtained from the
Minister of Agriculture, Forestry and Fisheries (the Act on Domestic
Animal Infectious Diseases Control).
The importing of endangered animals and plants is subject torestrictions under the Convention of International Trade in Endangered
Species of Wild Fauna and Flora (the Convention) and it is necessary toobtain an export permit issued by the government authority as stipulated by the Convention, as well as an import licence issued by METI.

The Customs and Tariff Bureau of the Ministry of Finance (MOF) handles
export customs clearance procedures, although permits and approvals
for export of certain cargo are governed by other government agencies;
the most important of these is the Foreign Exchange and Foreign Trade
Act (the Foreign Exchange Act), the Ministry of Economy, Trade andIndustry (METI) being the government agency responsible for permits
and approvals for export of cargo under the Foreign Exchange Act.

Special controls
24 Are separate controls imposed on specific products? Is alicence required to export such products? Give details.
For security purposes, the Foreign Exchange Act controls the export ofcertain cargo using two methods: list control and catch-all control.
Specific cargo such as military equipment and dual-use equipment
subject to export controls are designated in the Export Trade Control
Order (Export Order) and the Foreign Exchange Order. List control
requires exporters to obtain an export permit from METI if their export
cargo is on the control list and falls within the specifications set out
in the Ordinance of the Ministry Specifying Goods and Technologies
Pursuant to Provisions of the Appended Table 1 of the Export Control
Order and the Appended Table of the Foreign Exchange Order. Basedon international export control regimes, the said list includes arms andother dual-use equipment that may be used for the development of
weapons of mass destruction.
Catch-all control is a system whereby exporters must obtain apermit from METI for their export cargo other than those included in
the control list (excluding food and timbers) if notified by METI to apply
for an export permit (inform requirement) or if it is judged, based on
expected usage and the end user, that such cargo might be used for thedevelopment of weapons of mass destruction.

Supply chain security
25 Has your jurisdiction implemented the WCO’s SAFE
Framework of Standards? Does it have an AEO programme orsimilar?
To implement the WCO’s Framework of Standards to Secure andFacilitate Trade (SAFE), Japan amended the Customs Tariff Act andrelevant laws in 2012 to introduce advance filing rules, which require
shipping companies to submit information electronically to customs formaritime container cargo to be loaded on a vessel bound for a port inJapan at least 24 hours before departure of the vessel from the port ofloading. Also, the Customs and Tariff Bureau of the MOF implemented theauthorised economic operator (AEO) programme, a system conformingwith international standards. Under this programme, companies that

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have well-organised cargo security management and compliancesystems are given the benefit of simple and reduced customs clearance
procedures. By May 2022, Japan has signed mutual recognition of this
AEO programme with 11 other countries and regions.

Applicable countries
26 Where is information on countries subject to export controls
listed?
The catch-all control described in ‘Government authorities’ only applies
to exports shipped to certain regions, and the Export Order exempts
certain countries (white countries) from the catch-all control. Someof the catch-all control provides various cases where prior permits
are required for cargo exported to countries and regions subject to a
United Nations arms embargo, as listed in Appended Table 3-2 to the
Export Order.
For national security and international cooperation, the Foreign
Exchange Act requires exporters to obtain approval from METI for theexport of cargos to certain regions. The destinations subject to thisrequirement are listed in the Export Order.

FINANCIAL AND OTHER SANCTIONS AND TRADE EMBARGOES
Government authorities
29 What government offices impose sanctions and embargoes?
The Ministry of Finance (MOF) and the Ministry of Economy, Trade andIndustry (METI) have the authority to implement economic sanctions if
they are deemed necessary to perform international agreements; they
are deemed necessary for Japan to contribute to international efforts
for world peace, or a cabinet decision is made to take countermeasuresdeemed necessary to maintain the peace and safety of Japan.

Applicable countries
30 What countries are currently the subject of sanctions orembargoes by your country?
Currently, comprehensive economic sanctions are in force in respect ofNorth Korea, and partial economic sanctions are in force in respect ofIran, Iraq, Libya, Somalia, Syria and Ukraine. Details can be found on the
METI website.

Named persons and institutions

Specific individuals and companies

27 Does your jurisdiction have a scheme restricting or banning
exports to named persons and institutions abroad? Givedetails.

31 Are individuals or specific companies subject to financial
sanctions?
Yes. See the ‘List of economic sanctions and individuals/activities
subject thereto’ (from 7 May 2021) on the MOF website.

METI publishes an end-user list, which lists foreign companies andorganisations believed to be involved in the development of weaponsof mass destruction. The end-user list is not an embargo list, although
export to companies and organisations on the list requires a permit
from METI unless it is clear that the export cargo is not to be used forthe development of weapons of mass destruction based on how thecargo will be used, how the cargo is traded, the terms of the transaction
and other factors.

Other trade remedies and controls

Penalties

Not applicable.

28 What are the possible penalties for violation of export
controls?

UPDATE AND TRENDS

The Customs Act

Recent developments•

33 Are there any emerging trends or hot topics in trade andcustoms law and policy in your jurisdiction? What effects are
Brexit, the withdrawal of the US from TPP and TTIP, RCEP
and negotiations of FTAs (such as the EU–Japan Free Trade
Agreement, the Pacific-Alliance, etc) expected to have on yourjurisdiction?

••

ten years' imprisonment with labour or a fine of not more than ¥30
million, or both for an individual;
forfeiture of the embargoed goods and non-permitted export
goods; anddual liability also applies.

OTHER RELEVANT ISSUES

32 Describe any trade remedy measures, import or export
controls not covered above that are particular to yourjurisdiction.

The Foreign Exchange Act•••

A fine of not more than ¥1 billion (in the case of a juridical person)and 10 years imprisonment with labour and or a fine of not morethan ¥30 million (in the case of an individual), if five times the priceof the subject of the violation exceeds ¥1 billion (in the case of ajuridical person), ¥30 million (in the case of an individual), the fineincreases to not more than five times that price;administrative sanction for banned export of cargos for a maximumof three years, and a prohibition on taking office as an officer incharge of another company; anddual liability also applies.

Japan-UK EPA
After the UK’s withdrawal from the EU on 31 January 2020, the tariff rates
between Japan and the UK during the ‘transition period’, which ended
31 December 2020 were subject to the tariff rates under the Japan-EU
economic partnership agreement (EPA) pursuant to the Withdrawal
Agreement between the EU and the UK. However, after the transition
period, the tariff rates between Japan and the UK would revert to the tariff
rates that had been effective before the effectuation of the Japan-EU EPA.
For this reason, the Japanese and UK governments focused their effortson the EPA negotiations with a view to bringing the Japan-UK EPA into
force in January 2021. As a result, following the agreement in principle
reached on 11 September 2021 and the approval by both governments
at their Diet and Parliament in December 2020, the Japan-UK EPA cameinto effect on 1 January 2021. The Japan-UK EPA, replaces the Japan-EU
EPA, setting forth a new framework for trade and investment between
Japan and the UK after the UK’s withdrawal from the EU. While thewww.lexology.com/gtdt

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Japan-EU EPA provides for elimination of high-level tariffs and improvement of access to markets in the fields of investment and services, suchhigh-level market access for the UK and high-level rules are still maintained in the Japan-UK EPA. Thus, the Japan-UK EPA basically follows theJapan-EU EPA. Therefore, business entities that have profited under theJapan-EU EPA are able to continue their business as before. For example,
for tariff rates already being decreased in stages under the Japan-EU
EPA, the decreased tariff rate will also be applied between Japan and theUK, and eventually the tariff rate between Japan and the UK in general
will catch up with the tariff rate and tariff elimination period under theJapan-EU EPA. Specifically, the 10 per cent tariff on EU ‘vehicles’ under theJapan-EU EPA will be decreased in stages and eventually be eliminated in
February 2026 which is the eighth year from the coming into effect of theJapan-UK EPA. From 1 January 2021 the applicable tariff reduction rate
became 7.5 per cent, which is the same as the tariff reduction rate under
the Japan-EU EPA as of the same date, and from 2 February 2021, thethird year of the Japan-EU EPA, the tariff was reduced at the same paceas the reduction under the Japan-EU EPA. In addition, rules that were notfound in the Japan-EU EPA are now in place under the Japan-UK EPA. For
example, Trade and Women’s Economic Empowerment was newly added,
which provides for recognition of the significance of equal opportunities
for women to participate in domestic and global economies, etc. The UK isJapan’s 12th largest export partner, and the 20th largest import partner(trade statistics of 2019), and it is expected that the Japan-UK EPA willserve as an important basis to further strengthen and develop the good
relationship between Japan and the UK.

TPP • CPTTP
The Trans-Pacific Partnership (TPP) is an economic partnership agreement to reduce tariffs, promote the liberalisation of services andinvestments and establish rules suited for the 21st century for a wide
range of fields, including intellectual property and financial services, in
the Asia-Pacific region. Although 12 countries, including Japan, signed
the TPP Agreement in February 2016, as the US declared its withdrawal in January 2017, ultimately a substitute agreement, the CPTPP(Comprehensive and Progressive Trans-Pacific Partnership), cameinto effect on 30 December 2018, with the participation of 11 countries,
including Japan. While the return of the US to the TPP/CPTPP remains
unclear, as both the post-Brexit UK and China are showing interest in
joining the TPP/CPTPP, there is much interest in future developmentsin this area.

Japan–US trade agreements
After the United States withdrew from the Trans-Pacific Partnership
Agreement (TPP) in January 2017, discussions on trade relations
between Japan and the United States have been held within a bilateralframework. On 7 October 2019, the Trade Agreement between Japan andthe United States (the Japan–US Trade Agreement) and the Agreement
between Japan and the United States concerning Digital Trade (theJapan–US Digital Trade Agreement) were signed in Washington DC, andboth agreements entered into force on 1 January 2020. The US–Japan
Trade Agreement abolishes or reduces tariffs on agricultural and industrial products to expand bilateral trade between Japan and the UnitedStates, which accounts for approximately 30 per cent of global grossdomestic product, in a strong, stable and mutually beneficial manner.
Specifically, the United States will abolish or reduce tariffs mainly on
industrial products, while Japan is required to abolish or reduce tariffs
on certain agricultural products and processed foods, including pork
and beef. Also, the Japan–US Digital Trade Agreement provides rules topromote smooth, reliable, and free digital trade between the two countries. Given that the agreement stipulates rules at a level equal to or
higher than the TPP, the business community hoped that Japan would
contribute to discussions on the formulation of e-commerce rules led

Yuko Nihonmatsuyuko.nihonmatsu@aplaw.jp

Fumiko Oikawa
fumiko.oikawa@aplaw.jp
Fukoku Seimei Bldg. (Reception: 16F)
2-2-2 Uchisaiwaicho
Chiyoda-ku
Tokyo 100-0011
Japan
Tel: +81 3 5501 2111
www.aplaw.jp

by the World Trade Organization and G20. However, there is differing
opinion between countries concerning the distribution and protectionof digital data, for example, the United States places emphasis on free
data distribution, the European Union aims for reliable data protection and China seeks data management based on national sovereignty.
Therefore, how to adjust the position of each country is a future issue.

RCEP
On 15 November 2020, the RCEP (Regional Comprehensive Economic
Partnership Agreement) was signed by 15 countries, namely Japan,
ASEAN nations (10 countries), China, South Korea, Australia and New
Zealand. The RCEP will come into effect 60 days after domestic procedures are completed by a majority of the ASEAN members and a majorityof the other five countries, which, at the earliest, could be at the end of
2021. When the RCEP comes into effect, it will create a giant economic
region covering approximately 30 per cent of the world’s GDP, volumeof trade, and population.
The RCEP consists of three pillars:•
gradual elimination of tariffs on the trade in goods;•
liberalisation of the trade in services and investment; and•establishment of common business rules, such as customs procedures and intellectual property protection.
With respect to (1) (elimination of tariffs), although the subject items
and elimination schedule would vary depending on the counterparty,
tariffs will ultimately be eliminated on 91 per cent of the products in theparticipating countries. However, five sensitive agricultural productsthat Japan has claimed for exemption (rice, wheat, beef and pork, dairy
products and sugar) were excluded from tariff reductions.
For Japan, RCEP will be the first economic partnership agreement
to be executed with China and South Korea. China and South Korea will
abolish their tariffs on auto parts in stages over 20 years, at most. The
percentage of industrial products which will become subject to zero
tariffs will increase from 8 per cent to 86 per cent for China, and from
19 per cent to 92 per cent for South Korea. Thus, the RCEP will serveas an important basis for promotion of Japan’s trade with China andSouth Korea. The structuring of (2) (liberalisation of trade of services
and investment), and (3) (establishment of common business rules suchas customs procedures and intellectual property protection) is expectedto accelerate economic development among the participating countries.

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Coronavirus
34 What emergency legislation, relief programmes and otherinitiatives specific to your practice area has your state
implemented to address the pandemic? Have any existing
government programmes, laws or regulations been amended
to address these concerns? What best practices are advisable
for clients?
Covid-19 has been designated as a designated infectious disease inJapan and the Act on Special Measures against Novel Influenza, etc, andits Enforcement Regulations have been amended and are now applicable to covid-19. In addition, the Quarantine Act and its Enforcement
Regulations have been revised, but no new legislation has been enacted
at present.
To protect businesses, employment and the general standard ofliving, support measures are being implemented, including support forleave allowances through employment adjustment subsidies, financial
aid to restaurants that closed their business in response to government’s requests, monthly support for businesses affected by the stateof emergency measures, financial aid to large-scale facilities thatshortened their business hours in response to government’s requests,
support measures for liquor sellers, support for expenses due to cancellation of events, and support for local tourism.
Regulatory measures include immigration restrictions, strengthened quarantine systems and limitations on the number of airports
where aircraft may arrive from overseas.

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