JAPAN'S INDIVIDUAL ACTION PLAN SUMMARY

OCTOBER, 1998

SPECIFIC AREAS CURRENT POSITION SHORT TERM MEDIUM TERM LONG TERM
1. TARIFFS
Implement fully the Uruguay Round agreements, thereby bringing tariff rates down to the following levels (simple average for agricultural products and trade-weighted average for other products)

Industrial products (6,700items*): 1.5%Fisheries products (290items*): 4.1%Forestry products (170items*): 1.0%Agricultural products (1500items*): 9.3%(*approximate figures)
As Japan expressed in the WTO Ministerial Conference in May 1998, it will support the launch from 2000 of comprehensive multilateral trade negotiations including those on industrial goods and rule-making of investment. Japan will take the initiative on the modalities of the coming negotiations with close consultations with other WTO members.

Progressively reduce tariffs in accordance with General Principles of the OAA and the UR agreement.
2. NON-TARIFF MEASURES Not apply any non-tariff measures that are not justified under international agreements. Continue to ensure the transparency of the non-tariff measures.
3. SERVICES - Business Services Professional ServicesLegal servicesBy the revised Special Measures Law Concerning the Handling of Legal Business by Foreign Lawyers which came into force in August 1998, Japan has adopted the following measures.




(1) Relaxation of restrictions on the objectives of joint enterprise between a gaikokuho-jimu-bengoshi (a foreign lawyer qualified by Japanese law) and a bengoshi (a lawyer qualified by Japanese law)

(2) Lifting a ban on performing the legal business concerning so-called third country law by a gaikokuho-jimu-bengoshi.

(3) Relaxation of experience requirement for qualification as gaikokuho-jimu-bengoshi.



- Communications Services Japan has been steadfastly implementing measures that would prepare for the early realization of the reform titled "The Second Info-communications Reform" which aims at promoting the triad of deregulation, promotion of network interconnection policies and reorganization of NTT, in order to bring about fair and effective competition, further promotion of service diversification and price-cutting, and galvanization of the information and telecommunications industry. NTT will be reorganized following the enactment of the Bill for the revision of the NTT Laws (planned for 1999).

As for interconnection rates, the Government of Japan intends to submit a Bill necessary to amend the Telecommunications Business Law to the ordinary session of the Diet in the spring of 2000 in order to implement Long-run Incremental Cost Methodology (LRIC) as early as possible. Provided that all due procedures are completed expeditiously, LRIC will be implemented in 2000.


- Financial Services Please see the attached paper.
- Transport Services
The revision of the Road Vehicles Act enables accession to the revised UN-ECE 1958 Agreement and introduction of the mutual recognition system for component type designation certification with foreign government. These measures will be implemented by November 1998

- Energy Services The Japanese Government abolished the certification system of gasoline supplier in January 1998, under which certificate had been required for registration of new service stations prior to this abolishment. In view of further promoting competitions in the power generating business, the Government will introduce a new tender system, which is to be implemented from the year 1999 unless special circumstances arise. This system includes post award investigations by a third-party to ensure a fair competition among all participants in a tendering for new thermal power sources, except for the authorized or permitted power sources (planned to be in operation from 2007). It also contains the introduction of accounting separation on newly-bid thermal power sources.
4. INVESTMENT Improving the environment for foreign investmentSince the last version of IAP was released, a number of concrete measures have been undertaken to further improve the environment for foreign investment. In telecommunications sector, the KDD Law was abolished in April 1998 while the Telecommunications Business Law and the Radio Law were revised in June 1997, thereby abolishing the limitations on foreign capital participation in all Type 1 telecommunications carriers (except for NTT), including the ones for radio licenses. As recent expanding, in FY 1997, the requirement of the foreign capital ratio in the foreign-affiliated firms eligible for loans was relaxed, from 50% or over to over one-third, and the loan program for facilitating international cooperation between enterprises in case of business transfer was added to the program. Thereafter, since January 1998, special low-interest has been applied for all sectors which make the first full-scale investment in Japan. The Japan Development Bank (JDB) will continue to promote foreign direct investment in Japan by these measures.

To promote the creation of an M&A market in Japan, the Foreign Investment in Japan Development Corporation (FIND) issued the report for the specific measures regarding environmental arrangement for promotion of M&A activities, such as the measures to provide information activities, arrangements of administrative and legal procedures and so on in March 1998. Based on this report and others, the government will initiate to explore further measures for M&A promotion in Japan.


5. STANDARDS AND CONFORMANCE
Ensuring TransparencyIn order to ensure transparency in the health care policy, Japan will give opportunities for foreign manufactures of pharmaceuticals and medical devices to state their opinion in the relevant councils on an equal basis with Japanese manufacturers.

Alignment with International Standards
(1) Alignment of JIS StandardsWork was undertaken to align the Japan Industrial Standards (JIS) more closely with international standards (ISO and IEC standards) in cases where JIS did not yet conform. As for the closer alignment of Japanese Industrial Standards(JIS) with international standards(ISO and IEC standards), progress was made to align some 1000 JIS with international standards by the end of FY 1997, based on the alignment guidelines and a 1995 survey on the status of the alignment of JIS.

(2)Electrical GoodsTechnical studies were made for further alignment of the technical requirements of Electrical Appliance and Material Control Law with international standards such as IEC, and Japan adopted 237 international standards in FY 1997 instead of 120.

(3)Alignment of JAS Standards(a) Concerning JAS standards for fruit drinks, Japan revised them in July 1998, taking into account the situation of fruit import.(b)Japan revised JAS standards for concrete form plywood by relaxing restrictions for forms and reviewing standards for flexural rigidity in August 1997.

(4)Screw Engine of Fishing BoatsAs for engine of fishing boats, Japan adopted the calculation method on basis of total displacement in taking account of consistency with international standards in August 1997.
Alignment with International Standards
(1)Japan Industrial Standards(JIS)Efforts will be made to contribute to international standardization by proposing JIS as international standards, in cases where relevant international standards do not exist or existing international standards seem to be inappropriate, and where JIS seem to be acceptable as international standards, in addition to proposing, as necessary, to withdraw inappropriate international standards.

(2)Japan Agricultural Standards(JAS)Japan will review JAS for structural plywood, emphasizing performance based standards, including board strength, during 1998. As for JAS for machine stress rated structural lumber for wood frame construction, Japan will consider revision of JAS based on data provided by relevant economies.

(3)VICHJapan will progress harmonization of its relevant standards in accordance with a series of guidelines for harmonization of technical requirements for registration of veterinary medical products (these guidelines are under drafting in the VICH (International Cooperation on Harmonization of Technical Requirements for Registration of Veterinary Medicinal Products.))


Promotion Mutual Recognition Arrangement
(1)Clinical Test Data The range of acceptable foreign clinical test data for pharmaceuticals was expanded through the adoption of the International Conference on Harmonization Guidelines in August 1998. Process for the acceptance was more transparent, while inappropriate delays will be avoided.

(2)Telecommunications EquipmentThe Bill for the revision of the Telecommunications Business Law and the Radio Law was enacted to introduce the following measures (April 1998).(a)Establishing systems which enable the acceptance of certifications and /or testing results conducted by the organizations in other economies.(b)Establishing certification systems based on the type of telecommunications equipment.

(3)Japan Agricultural Standards (JAS)Japan designated twelve organizations to FTOs three related to food, nine related to wood products.
Promotion Mutual Recognition Arrangement
(1)Automotive EquipmentThe Road Vehicles Act was revised and promulgated in May 1998. The revision enables accession to the revised UN-ECE 1958 Agreement and introduction of the mutual recognition system for component type designation certification with foreign government. These measures will be implemented within six months of promulgation, i.e. by November 1998.

(2)Japan will accept health certificates for meat and meat products which are issued and electrically transmitted by authorities for exporting countries to the Japanese Government, Since March 1998 a network for electrical transmission of health certificate between Australia and Japan has been installed. The United States of America and New Zealand will join to the network.


6. CUSTOMS PROCEDURES Introduction of the principles in the WCO Guide lines on Express Consignment ClearanceJapan has implemented the principle of the WCO Guidelines in its overall customs clearance procedures.




Computerization of Customs Procedures
(1)Japan will enable certain containerized sea cargoes to obtain import permission immediately after Customs confirms the cargoes are brought into a (Hozei) area, through the up-graded computerized customs clearance systems or NACCS (Nippon Automated Cargo Clearance System) together with the pre-arrival cargo examination system in FY 1999.

(2) The current Sea-NACCS shall be improved, and institutionalization of EDI (Electronic Data Interchange) filing for customs procedures between the each business' system and Sea-NACCS shall be enhanced during FY 1999.


7. INTELLECTUAL PROPERTY RIGHTS Ensuring of Expeditious Grant of Intellectual Property Rights
(1)Japan has revised the Design Law in order to strengthen the protection of creative designs corresponding to the globalized economy.

(2)Measures for expedite grant of patent applications have been implemented, such as extension of accelerated examination system and prompt prosecution of applications requested within 12 months from the filing date to be examined. Accelerated examination system for design applications was improved in 1997. It has been also introduced into trademark examination procedure since 1997.

(3)Japan has revised the Seeds and Seedlings Law in order to strengthen the plant breeders' right, thereby bringing this law in line with the 1991 UPOV Convention. (4) To further promote electronic filing, in addition to the current system with specialized terminals, the new on-line patent application system which enables on-line filing with personal computers started operation in April 1998.
Ensuring of Expeditious Grant of Intellectual Property Rights
(1)Preparation is under way toward participating in the Madrid Protocol, and strengthening of international protection of well known trademarks is to be sought.Amendments to the Patent Law is to be considered so as to reduce the period of request for examination from the current 7 years from the filing date.

(2)With a view to shortening the prosecution time of appeals for invalidation to 12 months as to patent and to 6 months as to trademark and design, the paperless system will also be developed for the purpose of handling appeals procedures expeditiously and appropriately.

(3)The Japan Copyright Office continues its efforts toward the ratification of the new WIPO treaties by discussing the necessary amendments of the Copyright Law
Ensuring of Expeditious Grant of Intellectual Property Rights

(1) The JPO aims at realizing by 2005, "Real-time Operation" i.e. each application of patent, trademark and design is prosecuted without delay.

(2)The Japan Copyright Office continues to improve copyright system in Japan and to contribute to the development of the international harmonization of copyright protection.

Adequate and Effective Civil and Administrative Procedures and Remedies Available Against Infringement of Intellectual Property Rights
Japan amended the industrial property laws in order to lessen the burden of proving damages caused by infringement and to strengthen penalties.
Adequate and Effective Civil and Administrative Procedures and Remedies Available Against Infringement of Intellectual Property Rights

(1)For the purpose of prevention and early settlement of disputes, Hantei system (advisory opinion on infringement by the Japanese Patent Office) will be refined,

(2)Further discussion is to be held for amendment of cooperation in patent appeals.the Copyright Law to increase the amount of fine for infringement of copyright by a body corporate.

(3) Provisions related to damages awards against industrial property rights infringement are to be further reviewed.
Adequate and Effective Civil and Administrative Procedures and Remedies Available Against Infringement of Intellectual Property Rights
Continuous efforts will be made to incorporate and develop the enforcement systems in the field of copyright.

Promotion of Bilateral Technical Cooperation for the Implementation of the TRIPS Agreement and the Acceleration Thereof
(1)Human resources development(a)Cooperation through WIPO: The Japanese Patent Office made voluntary contribution: Funds-in-trust/Japan to enable WIPO to conduct cooperation activities, such as Regional Forums, symposiums, expert dispatch and receiving trainees.(b)Cooperation through JICA:A two-month long group training course on industrial property is held annually for administrative officials and examiners of APEC economies' industrial property offices.Long-term experts from the Japanese Patent Office are stationed in Indonesia, the Philippines, Thailand, and Vietnam.

(2)The Patent Abstract of Japan, along with information on legal status of applications, has been provided via the Internet. The Japanese Patent Office compiled CD-ROMs which contains IP related laws of Australia, Canada, China, Indonesia, Korea, New Zealand, Malaysia, Philippines, Thailand and the US, and provided them, free of charge, mainly for APEC economies. In Indonesia, Japan is cooperating in the development of patent information retrieval system.
Promotion of Bilateral Technical Cooperation for the Implementation of the TRIPS Agreement and the Acceleration Thereof
(1)Copyright-A two-month long group training course in administration of copyright will be launched in 1999.-Continued support and cooperation for Asia-Pacific economies in implementing the TRIPS Agreement in the field of copyright.-Expanded cooperation in the field of copyright by increasing the number of participating countries and participants in symposia/seminars, training programs, etc.

(2)The JPO will expand cooperation in patent appeals.
8. COMPETITION POLICY Transparency
(1)Regarding copy-righted works for which resale price maintenance (RPM) system under Section 24-2, Article 4 of the Antimonopoly Act, the scope thereof has been limited as books, magazines, newspapers, records, music tapes, music CDs (since March 1998).

(2)Personnel training projects relating to competition policy have been implemented as Partners for Progress (PFP) projects (the second one was held in Bangkok and Pattaya in February 1998).

(3)Regarding the regulation of holding companies, the entire prohibition on the establishment of and transformation into a holding company has been lifted and revised to prohibition on the establishment of and transformation into a holding company which constitutes and excessive concentration of economic power.

(4)The system for notification of mergers, and acquisition of businesses, etc., the system for reporting of stock holdings, and the system for notification of interlocking directorates have been reviewed from such viewpoints as the fundamental reasoning and purpose of the systems, easing the burden of requirements on companies (The Bill was passed by the Diet in May 1998, and is expected to be enforced from January 1999.).
Transparency
(1)Regarding the exemption cartels under the Antimonopoly Act, depression cartels and rationalization cartels will be repealed. Regarding the exemption systems under the Exemption Act, the exemption concerning cooperatives will be allowed under Section 24 of the Antimonopoly Act and other exemptions will be in principle abolished. The Exemption Act itself will also be abolished, A bill for this purpose will be submitted to the next ordinary session of the Diet.

(2)Regarding the resale price maintenance (RPM) system for copy-righted works( books, magazines, newspapers, records, music tapes, music CDs), based on the principle that reasonable and particular reasons are necessary to keep the system which is in principle prohibited by the AMA, necessary measures will be taken. In the interest of consumer protection, for the time being, prompt and appropriate actions will be taken in order to correct the bad effect in distribution and business transaction existing under the current RPM system,.

(3)A conclusion will be reached after conducting a study on appropriate private remedy system which facilitates the victims of conducts impeding the formation of fair and open market to seek relief on their own initiative.

(4)Necessary measures will be taken to enforce the Convention on Combating Bribery of Foreign Public Officials in International Business Transaction (the amendment of the Unfair Competition Prevention Law has been passed by the Diet session.).

(5)Regarding the kind of holding companies prohibited and the restrictions on the total value of stockholdings by a large-scale non-financial company, necessary review will be implemented.


9. GOVERNMENT PROCUREMENT In order to explain government procurement information in greater detail, the Ministry of Foreign Affairs or each procurement agency sponsors government procurement seminars at the beginning of (or as early as possible in) a fiscal year. Japan will contribute to advancing the work to develop a set of APEC non-binding principles on government procurement by 1999 in cooperation with other APEC member economies.


Japan will implement the following measures included in the Three-Year Deregulation Program decided by the Cabinet on March 31, 1998.--The post-award publication of the scheduled ceiling tender prices for construction services procurement will be practiced in FY 1998.

--The results of the business evaluation on qualification for participating in competitive tendering will be published after the review of the business evaluation in 1998.--The effective measurement to (reverse subcontracting( and (bulk-subcontracting( will be implemented.

Japan will address to promote digitization of procedures, including publication of procurement information, based on the "Basic Plan for Promoting Administrative Informatization " adopted on 25 December 1994 and revised on 20 December 1997 by the Cabinet.
10. DEREGULATION "The Three-Year Deregulation Program (decided by the Cabinet on March 31, 1998)-Coverage: 624 items in 15 fields, including 327 newly added item-A briefing was held for foreign governments and other organizations to outline the program on April 1, 1998. "The Three-Year Deregulation Program" (decided by the Cabinet on March 31, 1998)-Revision of the program: The Government will revise the program, taking into consideration requests and opinions from the public(including foreign people) as well as the results of the monitoring by the Deregulation Committee under the Administrative Reform Headquarters(mandated to monitor implementation of the program and address new deregulation challenges). The revision process is supposed to be finished about the end of FY 1998.-Ensuring transparency of the revision process: When a conclusion of the revision process goes against a request or opinion from the public for deregulation, the Government will clarify and explain the necessity and the reason to sustain the regulation concerned.



Enhance the transparency of the regulatory systemThe Deregulation Committee under the Administrative Reform Headquarters will monitor implementation of deregulation measures decided by the Three-Year Deregulation Program and address new deregulation challenges.



Eliminate trade and investment distortions arising from domestic regulations that are more restricting than necessary to fulfill a legitimate objective
(1)Japan will implement the 624 items incorporated in the Three-Year Deregulation Program of March 1998.

(2)The U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy will continue to be conducted in order to strengthen the dialogue between and reinforce the efforts of their governments under the U.S.-Japan Framework for a New Economic Partnership.


11. RULES OF ORIGIN



12. DISPUTE MEDIATION In July 1998, Japan requested consultations with Canada under the Dispute Settlement Understanding (DSU) of the WTO Agreement regarding certain Canadian measures affecting the automotive industry.


13. MOBILITY OF BUSINESS PEOPLE (1)As a result of reviewing the requirements for the issuance of multiple-entry visa for APEC members, Japan has started to issue business people from the APEC region 90-day multiple-entry visas valid for 5 years (as of January 1, 1998).

(2)The Government abolished in January 1998 the restriction on the maximum period of stay for status of residence of (Intra-company Transferee), a decision based on the analyses of the five-year survey on enforcement practices after the coming into force of the revisions to the Immigration Control and Refugee Recognition Act in June 1990.



14. IMPLEMENTATION OF UR OUTCOMES (1)Japan is steadily implementing the Information Technology Agreement(ITA) and actively participating in the discussions on ITA II.

(2)Japan engaged positively in the WTO negotiations on Basic Telecommunications and the WTO financial services negotiations and contributed to the successful conclusions.




SUMMARY OF JAPAN'S FINANCIAL SERVICES


ATTACHMENT
SPECIFIC AREAS CURRENT POSITION SHORT TERM MEDIUM TERM LONG TERM
-Financial Services Japan participated in WTO financial services negotiations that were held from April 1997. In December 1997, a permanent agreement on a full MFN basis was reached with seventy countries submitting new offers after three rounds of negotiations following the Uruguay Round. Japan has been taking initiatives throughout the negotiations towards successful end, by incorporating the measures of Japan-U.S. bilateral consultations as well as substantially improving our commitments from the 1995 level - reflecting the developments such as the amendment of the Foreign Exchange and Foreign Trade Control Law The Bill for reform of financial system, involving amendments to 24 laws altogether, has passed the Diet and most of which will be implemented from December, 1998. The main pillars for the Reform Bill are as follows.

(1)Expansion in Means of Asset Through amendments to Securities Investment Trust Law, Securities and Exchange Law, Banking Law, etc., the changes will make ways for:

(i)Enhancements to investment trusts by way of:(a)launching new investment trust products (b)Liberalizing product design(c)Introducing over-the-counter sales of investment trust by banks and other institutions.

(ii)Full liberalization of the securities derivatives

(iii)Expansion of the definition of securitiesThese will cater for broader range of products available to the investors, such as securities derivatives, but also for over-the-counter sales of investment trust by banks and other institutions.

(2)Provision of Attractive Services through Active Intermediations.It is designed to liberalize securities company services and fees, encourage new entries, and provide for reforms designed to make it easier for market participants to receive higher-quality services from financial institutions through:

(i)Liberalization of services in terms of:(a)diversification of securities company services(b)diversification of asset investment businesses

(ii)Price liberalization in the forms of:(a)full liberalization of brokerage commissions (brokerage commission that applies to transaction value in excess of 50 million yen was liberalized in April 1998, and full liberalization will be completed by the end of 1999)(b)reform of the rating organization system (eliminating the obligation for member insurers of the rating organization to use premium rates calculated by the rating organization for fire, automobile, and other insurance products.)

(iii)Promotion of new entry to the market by way of:(a) Shifting from licensing to registration system for securities companies(b) Promotion of cross-sectoral entry.(c) Revision of the provision consequent upon the ratification of the WTO Protocol on Financial Services.

(3)Create Diverse and Distinctive Market Systems(i)We will provide investors and fund-raisers with a variety of markets and fund-raising channels rather than only the traditional exchange markets through:(ii)Abolishment of requirement of consolidation of order-flow for listed securities(iii)Reviewing the operations of exchange markets(iv)Reinforcement of registered over-the-counter market functions(v)Introduction of proprietary trading systems (PTSs)

(4)Build a Framework that Enables Users to Make Transactions with Confidence While adhering to the principle of self-responsibility, we will also enhance disclosure requirements and formulate fair trading rules so as to ensure that markets are fair and reliable. In addition, under the transparent rule-based framework, we will ensure the soundness of financial intermediaries, and will also prepare for frameworks for protecting investors and policy-holders in the event of failure. These will be achieved through:

(i)Enhancing disclosure requirements and frameworks for fair trading by:(a)providing for consolidated disclosure covering both parent and subsidiary companies.(b)Formulating and enhancing fair trading rules to prevent unfair trading activities

(ii)Ensuring the soundness and fairness of intermediaries and enhance investor protection through:(a)enhancing rules governing actions taken by securities companies etc. and(b)reviewing the disclosure systems on financial institutions (c)preparing for subsidiary rules(d)reviewing capital adequacy rations for securities companies (e)creating new securities investor protection fund.(f)creation of Policy-Holders Protection Corporation
We Will complete the financial System Reform by year 2001.

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