Services Barriers

(1) Insurance

   The report's description concerning insurance is marked by erroneous ascertainment of the facts and unwarranted interpretation. For example, it refers to insurance broker and government corporations as problematic issues in regard to the 1994 Insurance Measures, but provisions of the Measures pertaining to these matters have already been implemented. In reference to the 1996 Supplementary Measures, the report argues that Japan has not fully implemented its obligations with regard to reform of the rating organization and approval of products within the standard processing period and that there exist concerns over erosion of measures to avoid radical change in the third sector and over the lack of transparency in insurance administration. However, all the criteria for the termination of the measures to avoid radical change including the two referred to in the report and the measures pertaining to the third sector have been implemented in good faith. The third sector, therefore, will be completely liberalized in January, 2001. It is confirmed between Japan and the United States that if the two sides could not reach a common view as to whether the criteria have been met, each side's right to act in conformity with its view is preserved.

(2) Accounting and Auditing Services

   The U.S. allegation that a foreign accountant must pass a special examination for foreigners in order to obtain a professional certification is not appropriate. This is because Certified Public Accountant examination is open for any nationalities. In any country, only individuals who are qualified as CPA in the country are allowed to conduct audit activities. In major industrialized counties including the U.S., being allowed to conduct audit activities in a foreign country does not mean to be qualified to conduct the activities within the country in general.

(3) Legal Services

   Regarding the issue raised in paragraph 4, it was reported from Japan Federation of Bar Association ("Nichibenren") that since there were concerns as to whether violations to the existing provisions for preventing misinterpretations of users had been made concerning the restrictions on content of office announcements (releases) and the name of office, Nichibenren decided to conduct an investigation and inquiry to the lawyers to provide guidance and supervise the lawyers properly. Thus, it is an one-sided statement that Nichibenren's investigation and inquiry to the lawyers are harassment. Furthermore, the statement that Nichibenren is administering its regulatory authority inappropriately does not have any grounds and thus inappropriate.

   The revision to the Special Measures Law concerning the Handling of Legal Business by Foreign Lawyers expanded the purpose of joint enterprises between gaikokuho-jimu-bengoshi and bengoshi which practically made the joint associated enterprise system on a par with "partnership", reduced experience required to qualify as gaikokuho-jimu-bengoshi and abolished country regulation on experience, and allowed a gaikokuho-jimu-bengoshi to practice third country law on certain condition. By this revision, access to legal services in Japan has been dramatically improved and thus the statement that Ministry of Justice and Nichibenren have been thwarting development of legal services in Japan to the level acceptable to the international standard, is groundless and inappropriate.

(4) Telecommunications Services

   The claim that Japan's excessive regulation and inadequate safeguards against anti-competitive activities undermine competition is groundless. NTT's interconnection rates are calculated based only on the costs related to interconnection in accordance with MPT ordinances such as "Interconnection Cost Calculation Rules", and therefore are cost-oriented. Consequently, there cannot be unjustifiable cross-subsidization nor anti-competitive rate system. Furthermore, the government of the United States made an arbitrary comparison of interconnection rates in Japan and the United States. It is not appropriate to mention such a groundless view in this report.

   With regard to the leasing of lines by facility-based carriers, Type I telecommunication carriers who are facility-based can either own their lines or use other carriers' lines through interconnection, business consignment and IRU. Thus network flexibility is sufficiently secured. The meaning of the claim made by the government of the United States is not clear nor legitimate.