Trade policy review report by the secretariat

4.2  Measures Directly Affecting Exports

4.2.1  Export procedures and requirements

1.1.  According to the World Bank's Doing Business report, in 2014, Japan ranked 20^th out of 189 countries and territories for ease of trading across borders at a total time of 11 days and a cost of US$915 for exporting a container (compared to 11 days and US$880 in 2013), of which US$145 and five days is for documents' preparation and two days and US$75 for customs' clearance and technical control.⁸³

1.2.  There have been no major changes to the procedures and requirements for exports since the last review of Japan and most requirements are based on international agreements and/or security as well as gathering statistics. The documents required include the export declaration form (Customs form C-5010), invoices, and other papers as required by specific laws and regulations.⁸⁴

1.3.  The principal legislation affecting exports are set out in Table 3.7. In addition, there are several laws applicable to specific groups of products such as the Narcotics and Psychotropics Control Act, the Cannabis Control Act, and the Stimulant Drug Control Act.

Table 3.14 Principal legislation affecting exports

Legislation	First passed	Last amended	Purpose
Customs Act	1954	2013	Is the principal legislation covering customs procedures and documentation.
Foreign Exchange and Foreign Trade Control Act	1949	2009	Sets out the legal basis for registration of exporters and the application of export controls in specified circumstances.
Act on Conservation of Endangered Species of Wild Fauna and Flora	1992	2005	Provides legal basis for the Minister of the Environment to draft guidelines on conservation of endangered species, the requirement to have approval for international trade, and other measures for their protection.
Act on Controls on the Illicit Export and Import and Other Matters of Cultural Property	2002		Legal basis for measures in connection with the import, export, and recovery of stolen cultural property in order to ensure proper implementation of the Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property.
Export Trade Control Order	1949	2013	Sets out the products to which export controls apply.
Foreign Exchange Order			Sets out the technologies (including software) to which export controls apply.

Source: Japanese authorities.

1.4.  Under the 2011 amendments to the Customs Act, goods manufactured by an AEO can be exported through another business entity without the goods being placed in a customs area. In the two-year period up to April 2014, the number of AEOs increased by 54 to 523 but there are no data on the value or type of goods exported by AEOs.

4.2.2  Export taxes, charges, and levies

1.1.  There are no export taxes, charges, or levies applied by the government or other public authorities in Japan.

4.2.3  Export prohibitions, restrictions, and licensing

1.1.  Under the Customs Act, export prohibitions apply to a limited range of products: narcotics and certain other drugs; child pornography; articles which infringe intellectual property rights; and certain articles that constitute unfair competition under the Unfair Competition Prevention Act (essentially related to intellectual property rights as well).

1.2.  In addition, the Foreign Exchange and Foreign Trade Control Act provides the legal basis for applying export controls while product lists and detailed operational guidelines are found in secondary legislation, including Cabinet orders, Ministerial orders, etc. The main Orders under the Act are the Export Trade Control Order of 1949 (last amended in 2014) which sets out the goods and their destinations where the permission or approval of METI is required for export, and the Foreign Exchange Order of 1980 (last amended in 2013) which sets out the technologies and destinations where permission from METI is required for transfer outside Japan. These lists of goods and technologies are updated regularly, as are destinations and end-user lists.⁸⁵

1.3.  Japan maintains export controls for security, conservation, and humanitarian reasons, including international commitments such as CITES and Chemical Weapons Convention (CWC) as well as Japan's participation in non-binding arrangements such as; the Wassenaar Arrangement on transfers of conventional arms and dual-use goods and technologies; the Missile Technology Control Regime; the Treaty on the Non-Proliferation of Nuclear Weapons; the Nuclear Suppliers Group; and the Australia Group. For example, METI permission is required for the export of goods and technologies regulated under the International Export Control Conference with the objective of preventing the proliferation of weapons of mass destruction.

1.4.  The Trade and Economic Cooperation Bureau in METI is responsible for export control policy and legislation and participation in international export control discussions and negotiations. It is also responsible for issuing export licences and enforcement.

1.5.  Most of the products in the lists of goods appended to the Export Trade Control Order and the lists of technologies appended to the Foreign Exchange Order are related to Japan's international commitments or its participation in non-binding arrangements and include a "catch-all" category for products or technologies that could be used in weapons of mass destruction.⁸⁶ The Export Trade Control Order also includes exports of several agricultural, fishing, and forestry-related products to all regions where METI approval is required.⁸⁷ In these cases, METI is obliged to obtain the consent of the MAFF before granting a licence.

1.6.  To obtain an export licence, the exporter must apply to METI with an application form and supporting documents, including an end-use certificate from the end-user. In practice, licences are refused for military weapons and certain materials which can be used in developing weapons of mass destruction. In December 2011, the government announced that it would permit arms exports to partner countries for joint development provided the government of the country-of-destination obtained consent from Japan before any item exported from Japan was transferred to a third country. For dual-use items, licence approval depends on METI's assessment of the risk which is based on the destination and the end-user although, for the "catch-all" category of products a licence is not required for exports to 27 countries.⁸⁸

1.7.  For technologies, including software, a licence is required for the transfer of a listed technology from Japan to another country, or for transfer within Japan to a non-resident.

1.8.  Normally, each consignment of goods for export under the Export Trade Control Order or technology for transfer abroad under the Foreign Exchange Order requires an individual export licence but there are five different kinds of bulk export licences: for regular exports of less sensitive goods to some locations; for established trading relationships; for re-exports of certain goods for repair or replacement to some locations; and for repeated exports to an overseas subsidiary.⁸⁹

4.2.4  Export support and promotion

1.1.  Japan notified the Committee on Agriculture that it had not provided any export subsidies for FY1995-2013.⁹⁰

1.2.  The Japan Bank for International Cooperation (JBIC) and the Nippon Export and Investment Insurance (NEXI) are the official export credits agencies of Japan.⁹¹ According to the authorities, provision of these credits is based on the terms and conditions of the OECD Arrangement on Officially Supported Export Credits.⁹²

1.3.  NEXI was established in 2001 and took over the export insurance programmes then run by METI. It was established as an incorporated administrative agency under the Act on General Rules for Incorporated Administrative Agencies, and the Trade and Investment Insurance Act. In conducting its business, NEXI provides trade and investment insurance with the objective of breaking-even financially. It offers several insurance products covering different aspects of trade risks as well as investment insurance for Japanese companies. However, export credit insurance represents over 80% of the total underwritten amount which has been relatively stable for the past few years at ¥8.2 to ¥8.6 trillion (Table 3.8).

Table 3.15 NEXI insurance activity, FY2009-13

(¥ million)

	2009	2010	2011	2012	2013
Premium income	40,203	39,757	33,378	38,797	31,994
of which
Export credit insurance
One year or less	3,866	5,754	5,462	5,025	5,612
More than one year	9,730	9,403	8,611	6,918	7,703
Overseas investment insurance	2,956	2,595	3,177	3,718	4,471
Overseas untied loan insurance	21,425	13,477	10,065	17,924	6,078
Reinsurance	597	1,064	1,528	3,207	3,771
Claims paid	10,441	8,574	8,359	4,416	12,234
of which
Export credit insurance	9,591	7,346	7,157	3,079	9,675
One year or less	..	..	..	..	..
More than one year	..	..	..	..	..
Overseas investment insurance	0	0	0	0	0
Overseas untied loan insurance	0	0	0	0	0
Reinsurance	137	0	0	0	436
Underwritten amount	8,199,062	8,582,951	8,537,772	8,300,064	8,517,171
of which
Export credit insurance
One year or less	2,747,597	3,498,241	3,321,146	3,451,195	3,855,361
More than one year	3,483,858	3,810,662	3,789,341	2,700,699	2,993,984
Overseas investment insurance	213,193	219,229	440,367	530,106	611,679
Overseas untied loan insurance	1,606,754	741,082	549,068	1,369,370	706,030
Reinsurance	25,885	39,998	51,834	83,311	108,365

.. Not available.

Source: NEXI Annual Report 2013.

1.4.  In its current form, JBIC was established in April 2012 under the Japan Bank for International Cooperation Act of 2011. It had previously been part of the Japan Finance Corporation although its origins go back to the Export-Import Bank of Japan created in 1950.

1.5.  Most of JBIC's lending activities are for overseas investment loans – which represented about three-quarters of the total operations of ¥2,206.1 billion in FY2013. These investments include projects that will deliver raw materials to Japan, projects involving Japanese companies, as well as projects abroad using exports from Japan. JBIC also continues to provide direct loans for exports (Table 3.9).⁹³

Table 3.16 JBIC lending and investments, FY2009-13

(¥ billion)

	2009	2010	2011	2012	2013
Export loans	97.8	151.2	207.9	126.6	126.2
Import loans	8.2	69.5	172.6	304.3	56.2
Investments	2,193.7	710.3	962.0	3,138.5	1,671.0
Untied loans	344.3	75.8	23.2	293.7	46.0
Equity participation	13.0	19.8	1.5	74.3	97.4
Guarantees	707.9	638.1	228.5	303.2	209.1
Total	3,365.1	1,765.9	1,595.9	4,240.91	2,206.1

Source: JBIC Report on FY2013 JBIC Operations (http://www.jbic.go.jp/en/information/press/press-2014/0515-21176 [September 2014]).

1.6.  JBIC's funding comes from different sources, but are mostly from government accounts or with government guarantees including Government-Guaranteed Foreign Bonds, borrowing from the Fiscal Investment and Loan Program (FILP) and the Foreign Exchange Fund Special Account (FEFSA) (Table 3.10).⁹⁴

Table 3.17 JBIC funding sources, FY2009-12

(¥ billion)

	2009	2010	2011	2012
Capital contribution from FILP industrial investment	20.0	35.5	200.0	69.0
Borrowing from FILP fiscal loan	906.6	690.9	201.0	400.0
Borrowing from FEFSA	987.4	323.5	230.4	1,744.9
Government-guaranteed foreign bonds	626.3	463.3	423.2	205.3
FILP agency bonds	70.0	50.0	50.0	0.0
Other (including repayments)	16.7	(244.4)	(6.9)	180.6

Source: JBIC Report on FY2013 JBIC Operations (http://www.jbic.go.jp/en/information/press/press-2014/0515-21176 [September 2014]).

1.7.  JETRO is the official agency responsible for promoting exports through information, research, support for, and participation in, international trade fairs, and other activities to promote exports from, and investment in, Japan. JETRO was originally established in 1958 but now operates as an incorporated administrative agency under the Japan External Trade Organization Incorporated Administrative Agency Act of 2002. JETRO currently has 74 offices around the world.