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TREATIES AND OTHER INTERNATIONAL ACTS SERIES 20-101.1 

TRADE AND INVESTMENT 

Digital Trade 

Agreement Between the 

UNITED STATES OF AMERICA 

and JAPAN 

With Exchange of Letters 

Signed at Washington October 7, 2019 

Entered into force January 1, 2020 
NOTE BY THE DEPARTMENT OF STATE 

Pursuant to Public Law 89—497, approved July 8, 1966 

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued

under the authority of the Secretary of State shall be competent 

evidence . . . of the treaties, international agreements other than 

treaties, and proclamations by the President of such treaties and 

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime 

jurisdiction, and in all the tribunals and public offices of the 

United States, and of the several States, without any further proof 

or authentication thereof.”
AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND JAPAN 

CONCERNING DIGITAL TRADE 

The United States of America and Japan (''the Parties") have agreed as follows: 

Article 1 

Definitions 

For the purposes of this Agreement: 

(a) "algorithm" means a defined sequence of steps, taken to solve a problem or 

obtain a result; 

(b) "computing facilities" means computer servers and storage devices for 

processing or storing information for commercial use; 

(c) "covered enterprise" means, with respect to a Party, an enterprise in its territory, 

owned or controlled,.directly or indirectly, by an investor of the other Party, in 

existence as of the date of entry into force of this Agreement or established, 

acquired, or expanded thereafter; 

( d) "covered fmancial service supplier" means: 

(i) a financial institution of the other Party; or 

(ii) a financial service supplier of the other Party, other than a financial 

institution of the other Party, that is subject to regulation, supervision, 

and licensing, authorization, or registration by a financial regulatory 

authority of the Party; 

( e) "covered person" means: 

(i) covered enterprise; or 

(ii) person of the other Party; 

(t) "customs duty" includes any duty or charge of any kind imposed on or in 

connection with the importation of a good, and any surtax or surcharge imposed 

in connection with such importation, but does not include any: 

1 
(i) charge equivalent to an internal tax imposed consistently with paragraph 

2 of Article III of the GAIT 1994; 

(ii) fee or other charge in connection with the importation commensurate 

with the cost of services rendered; or 

(iii) antidumping or countervailing duty; 

(g) "digital product" means a computer program, text, video, image, sound 

recording, or other product that is digitally encoded, produced. for commercial 

sale or distribution, and that can be transmitted electronically; 1 

(h) "electronic authentication" means the process or act of verifying the identity of 

a party to an electronic communication or transaction and ensuring the integrity 

of an electronic communication; 

(i) "electronic signature" means data in electronic form that is in, affixed to, or 

logically associated with· an electronic. document or message and that may be 

used to identify the signatory in relation to the electronic document or message 

and indicate the signatory's approval of the information contained in the 

electronic document or message;2 

G) "electronic transmission" or "transmitted electronically" means a transmission 

made using any electromagnetic means; 

(k) "enterprise" means any entity constituted or otherwise organized under 

applicable law, whether or not for profit, and whether privately or 

governmentally owned or controlled, including any corporation, trust, 

partnership, sole proprietorship, joint venture, association, or similar 

organization; 

(1) "enterprise of the other Party" means an enterprise which is constituted or 

otherwise organized under the law of the other Party and is engaged in 

substantive business operations in the territory of the other Party; 

(m) "existing" means in effect on the date of entry into force of this Agr~ment; 

1 A digital product does not include a digitized representation of a financial instrument, including money. 

2 For Japan. an electronic signature shall fulfill the requirement that such data can confirm that the information in 

the electronic document or message has not been altered. 

2 
(n) 

( o) 

(p) 

( q) 

"fmancial institution" means a financial intermediary or other enterprise that is 

authorized to do business and is regulated or supervised as a financial institution 

under the law of the Party in whose territory it is located; 

"financial institution of the other Party" means a fmancial institution, including 

a branch, located in the territory of a Party that is controlled by a person of the 

other Party; 

"financial market infrastructure" means a multi-participant system in which a 

covered financial service supplier participates with other financial service 

suppliers, including the operator of the system, used for the purposes of clearing, 

settling, or recording payments, securities, derivatives, or other fmancial 

transactions; 

"financial service" means a service of a financial nature. Financial services 

include all insurance and insurance-related services and all banking and other 

fmancial services ( excluding insurance), as well as services incidental or 

auxiliary to a service of a financial nature. Financial services include the 

following activities: 

Insurance and insurance-related services 

(i) direct insurance (including co-insurance): 

(A) life; and 

(B) non-life; 

(ii) reinsurance and retrocession; 

(iii) insurance intermediation, such as brokerage and agency; and 

(iv) services auxiliary to insurance, such as consultancy, actuarial, risk 

assessment, and claim settlement services; 

Banking and other financial services (excluding insurance) 

(v) acceptance of deposits and other repayable funds from the public; 

(vi) lending of all types, including consumer credit, mortgage credit, 

factoring, and financing of commercial transactions; 

(vii) financial leasing; 

3 
(viii) all payment and money transmission services, including credit, charge 

and debit cards, travellers checks, and bankers drafts; 

(ix) guarantees and commitments; 

(x) trading for own account or for account of customers, whether on an 

exchange, in an over-the-counter market or otherwise, the following: 

(A) money market instruments 

certificates of deposits); 

(including checks, bills, and 

(B) foreign exchange; 

(C) derivative products, including futures and options; 

(D) exchange rate and interest rate instruments, including products 

such as swaps and forward rate agreements; 

(E) transferable securities; and 

(F) other negotiable instruments and fmancial assets, including 

bullion; 

(xi) participation in issues of all kinds of securities, including underwriting 

and placement as agent (whether publicly or privately) and supply of 

services related to these issues; 

(xii) money broking; 

(xiii) asset management, such as cash or portfolio management, all fonns of 

collective investment management, pension fund management, 

custodial, depository, and trust services; 

(xiv) settlement and clearing services for fmancial assets, including securities, 

derivative products, and other negotiable instruments; 

(xv) provision and transfer of financial information, and financial data 

processing and related software by suppliers of other financial services; 

and 

(xvi) advisory, intermediation, and other auxiliary financial services on all the 

activities listed in subparagraphs (v) through (xv), including credit 

reference and analysis, investment and portfolio research and advice, 

advice on acquisitions, and on corporate restructuring and strategy; 

4 
(r) "financial service computing facility" means a computer server or storage device 

for the processing or storage of information for the conduct of business within 

the scope of the license, authorization, or registration of a covered financial 

service supplier, but does not include a computer server or storage device of, or 

those used to access: 

(i) financial market infrastructure; 

(ii) exchanges or markets for securities or for derivatives such as futures, 

options, and swaps; or 

(iii) non-governmental bodies that exercise regulatory or supervisory 

authority over covered financial service suppliers; 

(s) "financial service supplier of the other Party" means a person of a Party that 

supplies or seeks to supply a financial service within the territory of the other 

Party or to a person of the other Party; 

(t) "fraudulent and deceptive commercial activities" means those fraudulent and 

deceptive commercial practices that cause actual harm to consumers, or that pose 

an imminent threat of such harm if not prevented, for example: 

(i) a practice of making misrepresentations of material fact, including 

implied factual misrepresentations, that cause significant detriment to the 

economic interests of misled consumers; 

(ii) a practice of failing to deliver products or provide services to consumers 

after the consumers are charged; or 

(iii) a practice of charging or debiting consumers' financial, telephone, or 

other accounts without authorization; 

(u) "GATS" means the General Agreement on Trade in Services, set out in Annex 

lB to the WTO Agreement; 

(v) "GATT 1994" means the General Agreement on Tariffs and Trade 1994, set out 

in Annex lA to the WTO Agreement; 

(w) "government information" means non-proprietary information, including data, 

held by the central government; 

(x) "information content provider" means a person or entity that creates or develops, 

in whole or in part, information provided through the Internet or another 

interactive computer service; 

5 
(y) '"interactive computer service" means a system or service that provides or 

enables electronic access by multiple users to a computer server; 

(z) "investor of the other Party" means a natural person of the other Party or an 

enterprise of the other Party, that seeks to make, is making, or has made, an 

investment in the territory of the Party; 

(aa) "measure" means any measure by a Party, whether in the form of a law, 

regulation, rule, procedure, decision, administrative action, or any other form; 

(bb) "natural person of the other Party" means a natural person who under the law of 

the other Party is a national of the other Party; 

(cc) "person" means a natural person or an enterprise; 

( dd) "personal information" means any information, including data, about an 

identified or identifiable natural person; 

( ee) "person of the other Party" means a natural person of the other Party or an 

enterprise of the other Party; 

(fl) "person of a Party" means a natural person or enterprise of a Party; 

(gg) "service supplied in the exercise of governmental authority" means any service 

that is supplied neither on a commercial basis nor in competition with one or 

more service suppliers; 

(hh) '4tax convention" means a convention for the avoidance of double taxation or 

other international taxation agreement or arrangement; 

(ii) '4taxes" and '4taxation measure(s)" include excise duties, but do not include: 

(i) a "customs duty" as defined in subparagraph (f) of this Article; or 

(ii) the measures listed in subparagraphs (f)(ii) and (iii) of this Article; 

(jj) "unsolicited commercial electronic message" means an electronic message 

which is sent for commercial or marketing purposes to an electronic address, 

without the consent of the recipient or despite the explicit rejection of the 

recipient, through an Internet access service supplier or other 

telecommunications service; and 

(kk) "WTO Agreement" means the Marrakesh Agreement Establishing the World 

Trade Organization, done at Marrakesh on April 15, 1994. 

6 
Article 2 

Scope 

1. This Agreement shall apply to measures adopted or maintained by a Party that affect 

trade by electronic means. 

2. This Agreement shall not apply: 

(a) to government procurement; 

(b) to a service supplied in the exercise of governmental authority; or 

( c) except for Article 20, to information held or processed by or on behalf of a Party, 

or measures related to that information, including measures related to its 

collection. 

Article 3 

General Exceptions 

1. For the purposes of all provisions other than Article 21, paragraphs (a) through (c) of 

Article XIV of the OATS are incorporated into and made part of this Agreement, mutatis 

mutandis. 

2. For the purposes of Article 21, Article XX of the GAIT 1994 and its interpretative notes 

are incorporated into and made part of this Agreement, mutatis mutandis. 

Article 4 

Security Exceptions 

Nothing in this Agreement shall be construed to: 

(a) require a Party to furnish or allow access to any information the disclosure of 

which it determines to be contrary to its essential security interests; or 

(b) preclude a Party from applying measures that it considers necessary for the 

fulfilment of its obligations with respect to the maintenance or restoration of 

international peace or security, or the protection of its own essential security 

interests. 

7 
Article S 

Prudential Exception and Monetary and Exchange Rate Policy Exception 

1. Notwithstanding any other provisions of this Agreement, a Party shall not be prevented 

from adopting or maintaining measures for prudential reasons,3 including for-the protection of 

investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial 

institution or financial service supplier, or to ensure the integrity and stability of the financial 

system. If these measures do not conform with the provisions of this Agreement, they shall 

not be used as a means of avoiding the Party's commitments or obligations under those 

provisions. 

2. Nothing in this Agreement shall apply to non-discriminatory measures of general 

application taken by any public entity in pursuit of monetary and related credit policies or 

exchange rate policies. 

Article 6 

Taxation 

I. Except as provided in this Article, nothing in this Agreement shall apply to taxation 

measures. 

2. Nothing in this Agreement shall affect the rights and obligations of either Party under 

any tax convention. In the event of any inconsistency between this Agreement and any such 

tax convention, that convention shall prevail to the extent of the inconsistency. 

3. Subject to paragraph 2: 

(a) Article 8 shall apply to all taxation measures, other than those on income, on 

capital gains, on the taxable capital of corporations, on the value of an 

investment or property4 (but not on the transfer of that investment or property), 

or taxes on estates, inheritances, gifts, and generation-skipping transfers; and 

3 The Parties understand that the term "prudential reasons" includes the maintenance of the safety, soundness, 

integrity, or financial responsibility of individual financial institutions or financial service.suppliers as well as the 

safety, and fmancial and operational integrity of payment and clearing systems. 

4 This is without prejudice to the methodology used to determine the value of such investment or property under 

the laws and regulations of each Party. 

8 
(b) Article 8 shall apply to taxation measures on income, on capital gains, on the 

taxable capital of corporations, or on the value of an investment or property5 

(but not on the transfer of that investment or property), that relate to the purchase 

or consumption of particular digital products, except that nothing in this 

subparagraph shall prevent a Party from conditioning the receipt or continued 

receipt of an advantage relating to the purchase or consumption of particular 

digital products on requirements to provide the digital product in its territory, 

but nothing in Article 8 shall apply to: 

(c) any most-favored-nation obligation with respect to an advantage accorded by a 

Party pursuant to a tax convention; 

( d) a non-conforming provision of any existing taxation measure; 

( e) the continuation or prompt renewal of a non-conforming provision of any 

existing taxation measure; 

(f) an amendment to a non-conforming provision of any existing taxation measure 

to the extent that the amendment does not decrease its conformity, at the time of 

the amendment, with that Article; 

(g) the adoption or enforcement of any new taxation measure aimed at ensuring the 

equitable or effective imposition or collection of taxes, including any taxation 

measure that differentiates between persons based on their place of residence for 

tax purposes, provided that the taxation measure does not arbitrarily discriminate 

between persons, goods, or services of the Parties;6 

(h) a provision that conditions the receipt or continued receipt of an advantage 

relating to the contributions to, or income of, a pension trust, pension plan, 

superannuation fund, or other arrangement to provide pension, superannuation, 

or similar benefits, on a requirement that the Party maintain continuous 

jurisdiction, regulation, or supervision over that trust, plan, fund, or other 

arrangement; or 

(i) an excise duty on insurance premiums to the extent that the excise duty would, 

if levied by the other Party, be covered by subparagraph (d), (e), or (t). 

5 This is without prejudice to the methodology used to determine the value of such investment or property under 

the laws and regulations of each Party. 

6 The Parties understand that this subparagraph must be interpreted by reference to the footnote to subparagraph 

( d) of Article XIV of the GA TS as if the latter subparagraph was not restricted to services or direct taxes. 

9 
Article 7 

Customs Duties 

Neither Party shall impose customs duties on electronic transmissions, including content 

transmitted electronically, between a person of a Party and a person of the other Party. 

Article 8 

Non-Discriminatory Treatment of Digital Products 

1. Neither Party shall accord less favorable treatment to a digital product created, 

produced, published, contracted for, commissioned, or first made available on commercial 

terms in the territory of the other Party, or to a digital product of which the author, performer, 

producer, developer, or owner is a person of the other Party, than it accords to other like digital 

products.7 

2. This Article does not apply to subsidies or grants provided by a Party, including 

government-supported loans, guarantees, and insurance. 

3. For greater certainty, n9thing in this Article prevents a Party from adopting or 

maintaining measures that limit the level of foreign capital participation in an enterprise 

engaged in the supply of broadcasting8• 

4. With respect to intellectual property rights, paragraph l shall not apply to the extent of 

any inconsistency with the rights and obligations in any bilateral agreement between the Parties 

with respect to intellectual property or, if no such bilateral agreement exists, with the rights and 

obligations in any international agreement with respect to intellectual property to which both 

Parties are party. 

Article 9 

Domestic Electronic Transactions Framework 

1. Each Party shall maintain a legal framework governing electronic transactions 

consistent with the principles of the UNCITRAL Model Law on Electronic Commerce 1996. 

7 For greater certainty, to the extent that a digital product of a third country is a "like digital product", it will qualify 

as an "other like digital product" for the purposes of this paragraph. 

8 For the purposes of this paragraph, for Japan, "broadcasting" means the transmission of telecommunications 

with the aim of direct reception by the public (paragraph I of Article 2 of the Broadcast Law (Law No. 132 of 

1950)) and does not include on-demand services including such services supplied over the Internet. 

10 
2. Each Party shall endeavor to: 

(a) avoid unnecessary regulatory burden on electronic transactions; and 

(b) facilitate input by interested persons in the development of its legal framework 

governing electronic transactions. 

Article 10 

Electronic Authentication and Electronic Signatures 

1. Except as provided for under its laws and regulations, a Party shall not deny the legal 

validity of a signature solely on the basis that the signature is in electronic form. 

2. Neither Party shall adopt or maintain any measure for electronic authentication or 

electronic signatures that would: 

(a) prohibit parties to an electronic transaction from mutually determining the 

app:ropriate electronic authentication methods or electronic signatures for that 

transaction; or 

(b) prevent parties to an electronic transaction from having the opportunity to 

establish before judicial or administrative authorities that their transaction 

complies with any legal requirements with respect to electronic authentication 

or electronic signatures. 

3. Notwithstanding paragraph 2, a Party may require that, for a particular category of 

transactions, the electronic authentication methods or electronic signatures meet certain 

performance standards or are certified by an authority accredited in accordance with its laws 

and regulations. 

Article 11 

Cross-Border Transfer of Information by Electronic Means 

1. Neither Party shall prohibit or restrict the cross-border transfer of information, including 

personal information, by electronic means, if this activity is for the conduct of the business of 

a covered person. 

2. Nothing in this Article shall prevent a Party from adopting or maintaining a measure 

inconsistent with paragraph 1 that is necessary to achieve a legitimate public policy objective, 

provided that the measure: 

(a) is not applied in a manner which would constitute a means of arbitrary or 

unjustifiable discrimination or a disguised restriction on trade; and 

11 
(b) does not impose restrictions on transfers of information greater than are 

necessary to achieve the objective.9 

Article 12 

Location of Computing Facilities 

1. Neither Party shall require a covered person to use or locate computing facilities in that 

Party's territory as a condition for conducting business in that territory. 

2. This Article does not apply with respect to covered financial service suppliers, which 

are addressed by Article 13. 

Article 13 

Location of Financial Service Computing Facilities for Covered Financial Service Suppliers 

1. The Parties recognize that immediate, direct, complete, and ongoing access by a Party's 

financial regulatory authorities to information of covered financial service suppliers, including 

information underlying' the transactions and operations of such covered financial service 

suppliers, is critical to financial regulation and supervision, and recognize the need to ·eliminate 

any potential limitations on that access. 

2. Neither Party shall require a covered financial service supplier to use or locate financial 

service computing facilities in that Party's territory as a condition for conducting business in 

that territory, so long as the Party's financial regulatory authorities, for regulatory and 

supervisory purposes, have immediate, direct, complete, and ongoing access to information 

processed or stored on financial service computing facilities that the covered financial service 

supplier uses or locates outside the territory of the Party. 10 

9 A measure does not meet the conditions of this paragraph if it accords different treatment to data transfers solely 

on the basis that they are cross~border in a manner that modifies the conditions of competition to the detriment of a covered person. 

1

° For greater certainty, a Party may adopt or maintain a measure that is not inconsistent with this Agreement, 

including any measure consistent with Article 5. 

12 
3. Each Party shall, to the extent practicable, provide a covered financial service supplier 

with a reasonable opportunity to remediate a lack of access to information as described in 

paragraph 2 before the Party requires the covered financial service supplier to use or locate 

financial service computing facilities in the territory of the Party. 11 

Article 14 

Online Consumer Protection 

I. The Parties recognize the importance of adopting and maintaining transparent and 

· effective measures to protect consumers from fraudulent and deceptive commercial activities 

when they engage in digital trade. 

2. Each Party shall adopt or maintain consumer protection laws to proscribe fraudulent and 

deceptive commercial activities that cause harm or potential harm to consumers engaged in 

online commercial activities. 

Article 15 

Personal Information Protection 

1. Each Party shall adopt or maintain a legal framework that provides for the protection of 

the personal information of the users of digital trade. 12 

2. Each Party shall publish information on the personal information protections it provides 

to users of digital trade, including how: 

(a) natural persons can pursue remedies; and 

(b) an enterprise can comply with any legal requirements. 

3. Recognizing that the Parties may take different legal approaches to protecting personal 

information, each Party should encourage the development of mechanisms to promote 

interoperability between these different regimes. 

11 For greater certainty, so long as a Party's fmancial regulatory authorities do not have access to infonnation as 

described in paragraph 2 of this Artic]e, the Party may require a covered fmancial service supplier to use or locate 

financial service computing facilities in the territory of the Party. 

12 For greater certainty, a Party may comp]y with the obligation in this paragraph by adopting or maintaining 

measures such as comprehensive privacy, personal infonnation, or persona] data protection laws, sector-specific 

laws covering privacy, or laws that provide for the enforcement of voluntary undertakings by enterprises re1ating 

to privacy. 

13 
4. The Parties recognize the importance of ensuring compliance with measures to protect 

personal information and ensuring that any restrictions on cross-border flows of personal 

information are necessary and proportionate to the risks presented. 

Article 16 

Unsolicited Commercial Electronic Messages 

1. Each Party shall adopt or maintain measures regarding unsolicited commercial 

electronic messages that: 

(a) require suppliers of unsolicited commercial electronic messages to facilitate the 

ability of recipients to prevent ongoing reception of those messages; or 

(b) require the consent,. as specified in its laws and regulations, of recipients to 

receive commercial electronic messages. 

2. Each Party shall provide recourse against suppliers of unsolicited commercial electronic 

messages that do not comply with the measures adopted or maintained purs~t to paragraph 

1. 

Article 17 

Source Code 

1. Neither Party shall require the transfer of, or access to, source code of software owned 

by a person of the other Party, or the transfer of, or access to, an algorithm expressed in that 

source code, as a condition for the import, distribution, sale, or use of that software, or of 

products containing that software, in its territory. 

2. This Article does not preclude a regulatory body or judicial authority of a Party from 

requiring a person of the other Party to preserve and make available 13 the source code of 

software, or an algorithm expressed in that source code, for a specific investigation, inspection, 

examination, enforcement action, or judicial proceeding, subject to safeguards against 

unauthorized disclosure. 

13 This making available shall not be construed to negatively affect the software source code's status as a trade 

secret, if such status is claimed by the trade secret owner. 

14 
Article 18 

Interactive Computer Services14 

1. The Parties recognize the importance of the promotion of interactive computer services, 

including for small and medium~sized enterprises, as vital to the promotion of digital trade. 

2. To that end, other than as provided in paragraph 4, neither Party shall adopt or maintain 

measures that treat a supplier or user of an interactive computer service as an information 

content provider in determining liability for harms related to information stored, processed, 

transmitted, distributed, or made available by the service, except to the extent the supplier or 

user has, in whole or in part, created or.developed the information.15 

3. Neither Party shall impose liability on a supplier or user of an interactive computer 

service on account of: 

(a) any action voluntarily taken in good faith by the supplier or user to restrict access 

to or availability of material that is accessible or available through its supply or 

use of the interactive computer services and that the supplier or user considers 

to be harmful or objectionable; or 

(b) any action taken to enable or make available the technical means that enable an 

information content provider or other persons to restrict access to material that 

it considers to be hannful or objectionable. 

4. Nothing in this Article shall: 

(a) apply to any measure of a Party pertaining to intellectual property, including 

measures addressing liability for intellectual property infringement; or 

(b) be· construed to enlarge or diminish a Party's ability to protect or enforce an 

intellectual property right; or 

( c) be construed to prevent: 

14 For greater certainty, Article 18 is subject to Article 3, which, among other things, provides that, for the purposes 

of this Agreement, the exception for measures necessary to protect public morals pursuant to paragraph (a) of 

Article XIV of the GA TS is incorporated into and made part of this Agreement, mutatis mutandis. The Parties 

agree that measures necessary to protect against online sex trafficking, sexual exploitation of children, and 

prostitution, such as U.S. Public Law 115•164, the Allow States and Victims to Fight Online Sex Trafficking Act 

o/2017, which amends the Communications Act of 1934, are measures necessary to protect public morals. 

15 For greater certainty, a Party may comply with this Article through its laws or regulations or through existing 

legal doctrines applied through judicial decisions. 

15 
(i) a Party from enforcing any criminal law; or 

(ii) a supplier or user of an interactive computer service from complying 

with a specific, lawful order of a law enforcement authority. 

Article 19 

Cybersecurity 

1. The Parties recognize that threats to cybersecurity undennine confidence in digital trade. 

Accordingly, the Parties shall endeavor to: 

(a) build the capabilities of their respective competent authorities responsible for 

computer security incident response; and 

(b) strengthen existing collaboration mechanisms for cooperating to identify and 

mitigate malicious intrusions or dissemination of malicious code that affect 

electronic networks, and use those mechanisms to swiftly address cybersecurity 

incidents, as well as for the sharing of infonnation for awareness and best 

practices. 

2. Given the evolving nature of cybersecurity threats, the Parties recognize that risk-based 

approaches may be more effective than prescriptive regulation in addressing those threats. 

Accordingly, each Party shall endeavor to employ, and encourage enterprises within its territory 

to use, risk-based approaches that rely on consensus-based standards and risk management best 

practices to identify and protect against cybersecurity risks and to detect, respond to, and 

recover from cybersecurity events. 

Article 20 

Open Government Data 

1. The Parties recognize that facilitating public access to and use of government 

infonnation fosters economic and social development, competitiveness, and innovation. 

2. To the extent that a Party chooses to make government information available to the 

public, it shall endeavor to ensure that the government information is in a machine-readable 

and open format and can be searched, retrieved, used, reused, and redistributed. 

3. The Parties shall endeavor to cooperate to identify ways in which each Party can expand 

access to and use of government information that the Party has made public, with a view to 

enhancing and generating business opportunities, especially for small and medium-sized 

enterprises. 

16 
Article 21 

Information and Communication Technology Goods 

that Use Cryptography 

1. For the purposes of this Article: 

(a) "cipher" or "cryptographic algorithm" means a mathematical procedure or 

formula for combining a key with plaintext to create a ciphertext; 

(b) "cryptography" means the principles, means, or methods for the transformation 

of data in order to conceal or disguise its content, prevent its undetected 

modification, or prevent its unauthorized use; and is limited to the transformation 

of information using one or more secret parameters, for example, crypto 

variables, or associated key management; 

(c) "encryption" means the conversion of data (plaintext) through the use of a 

cryptographic algorithm into a form that cannot be easily understood without 

subsequent reconversion ( ciphertext) and the appropriate cryptographic key; 

( d) "information and communication technology good (ICT good)" means a product 

whose intended function is information processing and communication by 

electronic means, including transmission and display, or electronic processing 

applied to determine or record physical phenomena, or to control physical 

processes; and 

( e) "key" means a parameter used in conjunction with a cryptographic algorithm 

that determines its operation in such a way that an entity with knowledge of the 

key can reproduce or reverse the operation, but an entity without knowledge of 

the key cannot. 

2. This Article applies to ICT goods that use cryptography. 16 This Article does not .apply 

to: 

(a) a Party's law enforcement authorities reqwnng service suppliers using 

encryption they control to provide unencrypted communications pursuant to that 

Party's legal procedures; 

(b) the regulation of financial instruments; 

( c) a requirement that a Party adopts or maintains relating to access to networks, 

including user devices, that are owned or controlled by the government of that 

Party, including those of central banks; 

16 For greater certainty, for the purposes of this Article, an ICT good does not include a financial instrument. 

17 
(d) a measure taken by a Party pursuant to supervisory, investigatory, or examination 

authority relating to financial institutions or financial markets; or 

(e) the manufacture, sale, distribution, import, or use of the JCT good by or for the 

government of the Party. 

3. With ·respect to an JCT good that uses cryptography and is designed for commercial 

applications, neither Party shall require a manufacturer or supplier of the JCT good, as a 

condition of the manufacture, sale, distribution, import, or use of the JCT good, to: 

(a) transfer or provide access to any proprietary information relating to 

cryptography, including by disclosing a particular technology or production 

process or other information, for example, a private key or other secret 

parameter, algorithm specification, or other design detail, to the Party or a person 

in the territory of the Party; 

(b) partner or otherwise cooperate with a person in the territory of the Party in the 

development, manufacture, sale, distribution, import, or use of the JCT good; or 

( c) use or integrate a particular cryptographic algorithm or cipher. 

Article 22 

Amendment, Entry into Force, and Termination 

1. The Parties may agree, in writing, to amend this Agreement. An amendment shall 

enter into force 30 days after the date on which the Parties have notified each other in writing 

of the approval of the amendment in accordance with their respective applicable legal 

procedures, or on such other date as the Parties may decide. 

2. This Agreement shall enter into force 30 days after the date on which the Parties have 

notified each other in writing of the completion of their respective applicable legal procedures, 

or on such other date as the Parties. may decide. 

3. Either Party may terminate this Agreement by providing written notice of termination 

to the other Party. The termination shall take effect four months after the date on which a 

Party has provided that written notice to the other Party, or on such other date as the Parties 

may decide. 

18 
IN WITNESS WHEREOF the undersigned, being duly authorized thereto by their 

respective Governments, have signed this Agreement. 

DONE in duplicate at Washington, District of Columbia, this seventh day of October, 

2019 in the English and Japanese languages, both texts being equally authentic. 

For Japan: \ !f ~T$tl 

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October 7, 2019 

His Excellency 

Ambassador Robert E. Lighthizer 

United States Trade Representative 

Excellency, 

I am pleased to acknowledge your letter of October 7, 2019, which reads as follows: 

"In connection with the signing of the Agreement between the United States of America 

and Japan concerning Digital Trade (the Agreement), I have the honor to confirm the 

following understanding reached between representatives of the Government of the United 

States of America and the Government of Japan regarding Article 18 (Interactive Computer 

Services) of the Agreement: 

The Parties recognize that there are differences between their respective legal systems 

governing the liability of interactive computer services suppliers. The Parties agree that 

the Act on the Limitation of Liability for Damages of Specified Telecommunications 

Service Providers and the Right to Demand Disclosure of Identification Information of 

the Senders (Law No. 137 of 2001) of Japan is not inconsistent with Article 18 

(Interactive Computer Services). Moreover, based on a review of information on the 

operation of Japan's legal system and discussion between the Parties, the Parties agree 

that Japan need not change its existing legal system, including laws, regulations, and 

judicial decisions, governing the liability of interactive computer services suppliers, to 

comply with Article 18. 

I have the honor to propose that this letter, equally valid in English and Japanese, and your 

letter in reply, equally valid in Japanese and English, shall constitute an agreement between 

our two Governments, which shall enter into force on the date of entry into force of the 

Agreement." 

I have the further honor to confirm that my Government shares this understanding and to agree 

that your letter, equally valid in English and Japanese, and this letter in reply, equally valid in 

Japanese and English, shall constitute an agreement between our two Govern,ments, which shall 

enter into force on the date of entry into force of the Agreement between Japan and the United 

States of America concerning Digital Trade. 

Sincerely, 

SUGIYAMA Shinsuke 

Ambassador of Japan to the United States of America 
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THE UNITED STATES TRADE REPRESENTATIVE 

EXECUTIVE OFFICE OF THE PRESIDENT 

WASHINGTON 

October 7, 2019 

His Excellency 

Mr. SUGIYAMA Shinsuk:e 

Ambassador of Japan to the United States ·of America 

Excellency,. 

In connection with the signj.ng of the Agreement between the United States of America and Japan 

concerning Digital Trade ( the Agreement), I have the honor to confirm · the following 

understanding reached between representatives of the Government of the United States of America 

and the Government of _Japan regarding Article 18 (Interactive Computer Services) of the 

Agreement: 

The Parties recognize that there are differences between their respective legal systems governing 

the liability of interactive computer services suppliers. The Parties agree that the Act on the 

Limitation of Liability for Damages of Specified Telecommunications Service Providers and the 

Right to Demand Disclosure of Identification Information of the Senders (Law No. 137 of2001) 

of Japan is not inconsistent with Article 18 (Interactive Computer Services). Moreover, based 

on a review of information on the operation of Japan's legal system and discussion between the 

Parties, the Parties agree that Japan need not change its existing legal system, including laws, 

regulations, and judicial decisions, governing the liability of interactive computer services 

suppliers, to comply with Article 18. 

I have the honor to propose that this letter, equally valid in English and Japanese, and your letter 

in reply, _equally valid in Japanese and English, shall constitute an agreement between our two 

Governments, which shall enter into force on the date of entry into force of the Agreement. 
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