From: OVERSEAS BUSINESS REPORTS (JAPAN 2)
University of Missouri-St. Louis
National Trade Data Bank
ITEM ID : IT MARKET 111091832
DATE : Oct 28, 1996
AGENCY : USDOC, International Trade Administration
PROGRAM : Market Research Reports
TITLE : JAPAN - DESTINATION JAPAN (2) - OBR9405
Program key : IT MARKET
Update sched. : Monthly
End year : 1995
Date of record : 19950321
JAPAN - DESTINATION JAPAN (2) - OBR9405
This article is derived from a report dated May 1994, prepared at the U.S.
Department of Commerce - Washington, DC. The article consists of 61 pages
and includes the second part of a discussion of the economic and commercial
climate in Japan, with emphasis on information useful for potential U.S.
sellers and investors. It includes the following sections:
JAPANESE REGULATIONS, STANDARDS, QUALITY MARKS,
AND CERTIFICATION SYSTEMS
INTELLECTUAL PROPERTY PROTECTION
GETTING YOUR PRODUCT THROUGH JAPANESE CUSTOMS
METHODS OF PAYMENT
TAXATION IN JAPAN
INVESTMENT IN JAPAN
BEST U.S. EXPORT PROSPECTS
REGIONAL OUTLOOK OUTSIDE THE TOKYO AREA
THE JAPANESE GOVERNMENT
JAPANESE IMPORT PROMOTION MEASURES
U.S. DEPARTMENT OF COMMERCE JAPAN EXPORT
PROMOTION PROGRAM (JEPP)
U.S. DEPARTMENT OF COMMERCE SPECIAL INFORMATION PRODUCTS
AND BUSINESS FACILITATION SERVICES FOR JAPAN
JAPANESE TRADE BARRIERS
WHERE TO RECEIVE EXPORT COUNSELING
WHERE TO RECEIVE MARKET INFORMATION AND TRADE LEADS
GUIDANCE FOR BUSINESS TRAVELERS
LIST OF SELECTED JAPANESE BUSINESS TERMS
ARE YOU READY TO EXPORT?
INTERNATIONAL TRADE ADMINISTRATION/US&FCS DISTRICT OFFICES
JAPANESE REGULATIONS, STANDARDS, QUALITY MARKS, AND CERTIFICATION SYSTEMS:
An important area of concern for your company is meeting the requirements
for Japanese regulations and standards, if these exist for your product.
Product requirements in Japan fall into two categories: regulations (or
mandatory standards) and nonmandatory voluntary standards. Compliance with
regulations and standards is also governed by a certification system, in
which inspection results determine approval (certification/quality mark)
when all requirements have been met.
In Japan, compliance with mandatory regulations, if applicable to your
product, is required before your firm can sell your product or even display
it in a trade event -- this is true for all foreign and Japanese domestic
firms. In some instances, a product may be controlled by more than one law,
or different laws apply to products of the same group, since each law has
its legislative objective. You should also be aware that technical
regulations are concerned not only with technical specifications of a
product itself, but also with packaging, marking or labeling requirements,
testing, transportation and storage, installation, etc. While "voluntary"
standards and "voluntary" quality marks are not mandatory in Japan, it is
strongly recommended that your firm try to comply with these requirements
and receive appropriate approval. Meeting Japanese standards or receiving a
Japanese quality mark is important for winning Japanese consumer
acceptance. Many Japanese consumers or end-users will only look for
products meeting these requirements.
Some common Japanese regulations include the Consumer Product Safety Law,
Electrical Appliance and Material Control Law, Measurement Law, High
Pressure Gas Control Law, Gas Utility Industry Law, Law Concerning the
Examination and Control of Manufacture of Chemical Substances, Fertilizer
Control Law, Road Transportation Law, Telecommunications Enterprise Law,
Radio Law, Plant Protection Law, Pharmaceutical Affairs Law, Food Sanitation
Law, and Industrial Safety and Health Law. Voluntary standards include
Japanese Industrial Standards (JIS), Japanese Agricultural Standards (JAS),
Electronic Devices Industry Association of Japan (EIAJ) standards, Japan
Electric Machinery Manufacturers Association (JEM) standards, Japan
Automobile Technology Association (JASO) standards, Japan Iron and Steel
Federation (JISF) standards, and Japan Electronic Parts Dependability
Association (RCJS) standards.
Your firm must determine if your product will be affected by Japanese
regulations and standards. Unfortunately, obtaining information in these
areas from outside of Japan can be difficult. In addition, Japanese
approval procedures are often slow and cumbersome and can be discouraging to
those unwilling to make a major commitment of their time, money, and
energy. However, significant progress has been made in specific product
areas in the last few years, and steps to simplify the system continue.
It is absolutely essential that your company work closely with your Japanese
partner to ensure your product meets applicable regulations, standards, and
quality marks. Even though some of this information is available here in
the United States and is in English, much information on Japanese
regulations and standards is only available through the appropriate Japanese
governmental ministry and/or only exists in written form in the Japanese
language. Therefore, it is often up to your partner in Japan to supply your
firm with information on regulations, standards, and quality marks. Your
partner will likely serve as your adviser on these matters and answer any
questions you may have. Moreover, you should consider designating your
partner as the point person in your company's dealings with the various
Japanese Government agencies and ministries. It will be virtually
impossible for your company to accomplish this work without someone
knowledgeable about regulations, standards, and quality marks in Japan.
Your company will most likely have to provide detailed information on your
product in Japanese and your firm or Japanese partner will have to know the
appropriate contacts in the relevant Japanese Government ministry or
ministries responsible for granting relevant product approvals.
The following organizations have services available to assist U.S. exporters
in identifying and obtaining information on Japanese regulations, standards,
quality marks, and certification:
NATIONAL CENTER FOR STANDARDS AND CERTIFICATION INFORMATION (NCSCI): NCSCI
is a part of the U.S. Department of Commerce's National Institute of
Standards and Technology and serves as a referral service and focal point in
the United States for information about standards and standards-related
activities. It provides information on U.S., foreign, and international
voluntary standards; government regulations; and conformity assessment
procedures for nonagricultural products. NCSCI also serves as the U.S.
inquiry point under the Agreement on Technical Barriers to Trade (Standards
Code) of the General Agreement on Tariffs and Trade (GATT) and the U.S.
member body to the International Organization for Standardization
Information Network (ISONET). NCSCI works closely with other national
inquiry points and ISONET members to obtain foreign trade-related technical
standards, regulations, and conformity assessment procedures.
As the GATT inquiry point, NCSCI receives summary notifications, in English,
of proposed foreign technical regulations that may affect trade. Copies of
Japanese proposed technical regulations notified through the GATT
Secretariat are available from NCSCI. Many of these proposed regulations
are in English. NCSCI provides a translation service for foreign standards
(for which there is a charge).
NCSCI staff respond to requests for information by identifying relevant
standards and/or regulations for your product. Searches are made with the
aid of various indexes/catalogs, by contacting professional and
standards-developing organizations, and through communication directly with
foreign standards bodies. The requester is referred to the appropriate
standards-developing organization or private sector organization for
additional technical information and/or copies of the document. NCSCI does
not provide copies of the standards. For more information, contact:
U.S. Department of Commerce
National Center for Standards and Certification Information
National Institute of Standards and Technology
TRF Building, Room A163
Gaithersburg, MD 20899
Phone: (301) 975-4040
Fax: (301) 975-2128
GATT Hotline (notifications of proposed technical regulations):
The following two organizations have been designated as the GATT Standards
Code national inquiry points in Japan for standards information:
Standards Information Service
First International Organizations Division
Economic Affairs Bureau
Ministry of Foreign Affairs (MOFA)
2-2-1 Kasumigaseki, Chiyoda-ku
Tokyo 100 JAPAN
Standards Information Service
Information Service Department
Japan External Trade Organization
2-2-5 Toranomon, Minato-ku
Tokyo 107 JAPAN
METRIFICATION OF PRODUCTS: Your product may not only need to meet Japanese
metric import regulations, but metrification of your product and product
literature is vital in winning Japanese consumer or end-user support. To
assist your efforts to metrify your products, the U.S. Department of
Commerce has created the Office of Metric Programs within the National
Institute of Standards and Technology. This office provides assistance on
foreign metric import regulations and on matters relating to the U.S.
transition to the metric system. The office also serves as a referral point
for metric coordinators in other federal agencies, metric-related
organizations, and local state metric contacts. The office also provides
information on metric standards. For more information, contact:
U.S. Department of Commerce
Office of Metric Programs
National Institute of Standards and Technology
Building 411, Room A146
Gaithersburg, MD 20899
Phone: (301) 975-3690
Fax: (301) 975-3839
JAPANESE INDUSTRIAL STANDARDS (JIS): The JIS mark is widely used in Japan,
and many diverse products are designated as eligible to bear this mark. The
JIS are technical specifications which are applied to over 1,000 different
products. These standards are comprised of three main elements: (1)
product standards relating to the function, configuration, and construction
of the product; (2) production method standards which include the testing,
analysis, performance criteria, and inspection of the product; and (3) basic
standards which relate to the terminology, units, series, and markings. The
JIS marking system is designed to promote quality standardization for
individual product categories. There are about 8,600 JIS standards for all
products covered under the JIS system. Presently, over 90 percent of these
standards are available in English.
Although the JIS mark is voluntary, compliance with these standards
significantly enhances a product's image among Japanese consumers and is
often essential for a product to sell in Japan. The Japanese consumer
considers the JIS mark as a guarantee of a product's quality. The JIS mark
also ensures that a product is designed and produced in compliance with
consumer safety concerns.
Adherence to JIS is also an important determinant for companies competing on
bids in the Japanese Government procurement process. Products that comply
with these standards will be given preferential treatment in procurement
decisions, as Japanese Government entities, in compliance with Article 26 of
the Industrial Standardization Law, must give priority to products bearing
the JIS mark when selecting winning procurement bids.
JIS cover all industrial products except for those products regulated by
specific national laws or for which other standard systems apply (i.e.,
Pharmaceutical Affairs Law and Japan Agricultural Standards). The American
National Standards Institute (ANSI) can identify the particular JIS for
specific products and provide a copy of these to companies for a fee.
To obtain a Japanese Industrial Standard that has not been translated into
English, contact the sales department of the Japanese Standards Association
(JSA). JSA is a nonprofit organization promoting industrial standardization
in Japan and is affiliated with of the Ministry of International Trade and
Industry (MITI). JSA has been delegated the authority to publish JIS by the
Japan Industrial Standards Committee, the organization that represents Japan
in the International Standards Organization. JSA will translate JIS into
English -- the fees being based on the number of pages of the original
Japanese version. JSA also maintains the International Standardization
Cooperation Center (ISCC) for responding to inquiries by foreigners
regarding Japanese standards. If an inquiry is too specific for JSA to
answer, it will refer the inquiry to the appropriate Japanese industry
organization for a response. The ISCC will translate the response into
English and transmit the response.
MITI administers the JIS marking system. It has designated certain Japanese
and foreign testing organizations to test and approve products to bear the
JIS mark. For further discussion of this topic and contact information, see
the section titled "U.S. Testing Laboratories."
Contacts: American National Standards Institute
11 West 42nd Street, 13th Floor
New York, NY 10036
Phone: (212) 642-4900
Fax: (212) 302-1286
Japanese Standards Association
4-1-24 Akasaka, Minato-ku
Tokyo 107 JAPAN
International Standardization Cooperation Center
Japan Standards Association
Olumu Building, 3rd Floor
4-6-11 Akasaka, Minato-ku
Tokyo 107 JAPAN
JAPANESE AGRICULTURAL STANDARDS (JAS): The JAS mark is a voluntary but
widely used mark to ensure that applicable products meet specific product
quality standards and are labeled in a prescribed manner. JAS apply to
beverages; processed foods; forest products; agricultural commodities;
livestock products; oils and fats; products of the fishing industry; and
processed goods made from agricultural, forestry, and fishing industry raw
materials. There are approximately 390 JAS. JAS specify the applicability
of the law, product definitions for items covered by JAS, product quality
standards for relevant products, methods of measurement, and determination
of quality. The JAS marking system is administered by Japan's Ministry of
Agriculture, Forestry and Fisheries (MAFF).
Japanese law requires that products specified by MAFF must comply with
mandatory quality labeling requirements, regardless of whether or not an
applicable product bears the JAS mark. These products include beverages and
all packaged and processed food items. The mandatory standards for quality
labeling of processed foods and beverages are, however, administered by
Japan's Ministry of Health and Welfare. There are also additional mandatory
regulations affecting food items and beverages sold in Japan. For further
information on JAS, contact the Trade Assistance and Promotion Office of the
U.S. Department of Agriculture.
The JAS mark is an important quality assurance for forest products.
Specific JAS marks exist for various types of plywood, paneling, flooring
boards, lumber, and timber. The U.S. Western Wood Products Association
reports that there are currently over 80 government authorized testing and
inspection facilities for lumber in Japan, and that there have been few
problems with getting JAS marks for lumber imported into Japan. The
American Plywood Association (APA) in 1989 became a JAS authorized foreign
testing organization. Many U.S. plywood exporters have applied to APA to
have their applicable products approved to bear the JAS mark. English
translations of JAS can be obtained through any of the seven offices of the
Japan External Trade Organization (JETRO) in the United States (see the
section titled "The Japanese Government" for contact information). Contacts:
U.S. Department of Agriculture
U.S. Trade Assistance and Promotion Office
Phone: (202) 720-6343
Fax: (202) 690-4374
U.S. Western Wood Products Association
American Plywood Association
U.S. exporters of building materials who have questions regarding Japanese
construction standards should contact the Building Center of Japan, a
Japanese quasi-government, nonprofit organization that answers inquiries
concerning the Building Standards Law of Japan. The Building Center was
established in 1965 with the support of the Ministry of Construction and
construction industries to study and appraise new technologies related to
construction, and to collect and propagate related information. It is the
only organization in Japan responsible for appraising technical matters to
be reviewed and approved under the provisions of the Building Standards
Law. It provides foreign customers with consulting services on how to meet
the relevant legal regulations, market research, arrangement of meetings,
seminars, and factory visits. Contact:
The Building Center of Japan
3-2-2 Toranomon, Minato-ku
Tokyo 105 JAPAN
Phone: 011-81-3-3434-7155 (International Section)
JAPANESE QUALITY MARKS: In Japan various quality marks are affixed to
products that are tested and approved. Some quality marks are mandatory,
with the product approval process and application for the quality mark
governed by specific national laws. Other quality marks are voluntary, but
are often important for a product to be widely accepted by Japanese
consumers. Mandatory quality marks and voluntary quality marks require both
product type approval and factory inspections (these inspections are for
quality control assessment) before a product can be affixed with the
relevant quality mark. In instances where mandatory quality marks are
applicable, it is important that the regulated products bear the appropriate
mark when shipped to Japan. Japanese customs authorities will not allow
into Japan imported goods that do not bear the appropriate mandatory quality
mark. Following are descriptions of some of the mandatory and voluntary
quality marks. This is not a comprehensive listing, but a summary of those
quality marks that are widely used in Japan and, in the case of the
voluntary quality marks, well recognized by Japanese consumers.
"T" MARK: The "T" mark is a mandatory quality mark that regulates the sale
of electrical appliances and components in Japan. The application of the
"T" mark is governed by Japan's Electrical Appliance and Material Control
Law. This law groups electrical apparatuses into categories A and B.
With category A products, compliance with this law requires that the
products be tested and approved, and that the manufacturing
facilities be inspected for quality control by MITI-designated testing
laboratories. If the testing authority determines that the manufacturer has
the capability to supply a product that meets the safety standards of the
Electrical Appliance and Material Control Law, then the manufacturer will be
granted "Type Approval" (a license) for the tested product. The appropriate
"T" mark is then applied by the testing authority, signaling to Japanese
customs authorities and potential Japanese buyers that the product has been
approved for sale in Japan. Category A products are designated as those
electrical appliances, components, and materials which are "liable to cause
danger or radio noise."
Category B products are defined as those electrical appliances, components,
or materials for which "there is warranted concern for potential danger and
occurrence of damage." These products must also comply with the safety
standards of the Electrical Appliance and Material Control Law but are not
required to be tested and approved by a MITI-designated testing laboratory.
U.S. manufacturers exporting category B products can test their products for
compliance with the appropriate safety standards and affix the "T" mark for
category B products that comply with the relevant standards.
To obtain an English-language version of the Electrical Appliance and
Material Control Law, contact the National Center for Standards and
Certification Information (NCSCI) of the National Institute for Standards
and Technology. JETRO offices in the United States can also provide an
outline of the law and an explanation of the type approval system of this
If you have technical inquiries about the type approval process or if you
want to have applicable electrical appliances, components, or materials
tested and approved for export to Japan, you should contact Underwriters
Laboratories Inc. or the United States Testing Company Inc. Both companies,
located in the United States, are MITI-designated testing laboratories that
can test and grant type approval for many electrical appliances, components,
and materials regulated by the Electrical Appliance and Material Control
Law. A description of these companies and their services can be found in
the "U.S. Testing Laboratories" section.
"S" MARK: The "S" mark is a mandatory quality mark that regulates the sale
or display of a limited number of consumer products in Japan. The
application of the "S" mark is regulated under Japan's Consumer Product
Safety Law. The specific items covered under this law that must bear the
"S" mark include protective helmets for vehicle users, protective helmets
for baseball players, beds or cribs for infants, rollerskates, mountain
climbing ropes and equipment, household pressure cookers and pressure pots
(designated as First Class Specific Products); and bottled carbonated
beverages and glass bottles for carbonated beverages (designated as Second
Class Specific Products).
First Class Designated Products must be tested and granted type approval,
and the manufacturing facilities must be inspected and approved for quality
control by a MITI-designated testing laboratory before the applicable
product can be affixed with the "S" mark. Both Underwriters Labs and the
United States Testing Company are designated by MITI to grant type approval
and perform factory inspections for First Class Designated Products.
Second Class Designated Products can be labeled with the "S" mark after the
U.S. manufacturer has verified that its product is in compliance with the
safety standards of the Consumer Product Safety Law. The manufacturer must
give notification to MITI of its intent to do so. Your Japanese importer
can make this notification on your behalf.
The National Center for Standards and Certification Information can provide
an English translation of the Consumer Product Safety Law to potential U.S.
exporters. Technical questions regarding type approval and factory
inspections should be addressed to MITI-designated testing laboratories or
to Japan's Consumer Product Safety Association:
Consumer Product Safety Association
Stork Higashi Ikebukuro
2-6-6 Higashi Ikebukuro, Toshima-ku
Tokyo 170 JAPAN
"SG" MARK: The "SG" mark is a voluntary quality mark that is affixed to
products that meet the technical safety and quality standards established by
Japan's Consumer Product Safety Association (JCPSA). The JCPSA has
established standards for a variety of consumer goods such as furniture,
sporting goods, household goods, and items for infants and children
(excluding toys, as these items are covered by a different set of safety
standards). Although the "SG" mark is not required for a U.S. manufacturer
to sell applicable consumer products in Japan, it is a widely recognized
safety mark that will enhance the image of the products with Japanese
Manufacturers of products that bear the "SG" mark are also provided with a
type of product liability insurance by JCPSA. In the event of an accident
attributed to a defect in a product bearing the "SG" mark, the JCPSA will
provide financial compensation to the consumer for the manufacturer.
Both Underwriters Laboratories and the United States Testing Company, Inc.
are designated by MITI to conduct product testing, lot inspection, and
factory evaluations -- all of which are required before the testing
organizations can apply the "SG" mark to applicable products.
"ST" MARK: The "ST" or Safety Toy mark is a voluntary quality mark that can
be applied to toys that meet the safety standards set by the Japanese toy
industry through the Toy Safety Control Administration, a self-regulatory
commission composed of toy manufacturers, consumers, and health
professionals. The Japan Toy Association established the "ST" mark and
engages in information campaigns aimed at educating Japanese consumers about
the merits of buying toys affixed with the "ST" mark. Their efforts have
apparently had a substantial impact as over 95 percent of toys sold in
Japan, whether domestic or imported, carry the "ST" mark. Japanese
retailers are strongly committed to carrying toys that bear the "ST" mark.
Toys that meet or exceed the safety standards established by the Japanese
toy industry can be affixed with the "ST" mark. At the time of publication,
there were no organizations in the United States designated by Japanese
authorities to test and approve products to bear the "ST" mark. The Japan
Toy Association has published an English language manual that describes the
application and approval process of the "ST" marking system. Contact:
Japan Toy Association
4-22-4 Higashi-Komagata, Sumida-ku
Tokyo 130 JAPAN
"ECO" MARK: The "ECO" mark is a voluntary mark that is used to recommend
"environmentally friendly" products to Japanese consumers. Use of the "ECO"
mark on applicable products is recommended, as market surveys have indicated
that Japanese consumers will choose to purchase products bearing the "ECO"
mark label, even if prices are a little higher than similar products without
the mark. Some of the product categories covered by the "ECO" mark system
include solar-powered products, non-CFC aerosols, biodegradable oil for
two-cycle engines, soap made from cooking oil, recycled paper products, home
composters, recycled plastic products, and recycled wood fertilizers.
The major criteria for approving products to bear the "ECO" mark label are:
(1) product causes little or no pollution in use; (2) product causes little
or no pollution when discarded; (3) product otherwise contributes to the
conservation of the environment; and (4) use of the product improves the
environment. For more information on the "ECO" mark program and to obtain
application information, contact the Japan Environment Association, the
organization which administers the "ECO" mark program:
Japan Environment Association
Office Toranomon No. 1 Building
1-5-8 Toranomon, Minato-ku
Tokyo 105 JAPAN
U.S. TESTING LABORATORIES: In the United States, there are a limited number
of testing laboratories that have been designated by Japanese Government
agencies to test and approve U.S. products for compliance with Japanese
mandatory certification systems and laws. The following list identifies
some of those entities. The list may not be comprehensive, as some testing
labs failed to respond to our inquiries regarding their services. After the
contact information, we have included a description of the testing services
offered by these labs. Some labs are designated to test and approve a
variety of products falling under the purview of several Japanese
certification systems and laws. There are, however, Japanese mandatory
certification systems and laws for which there are no testing labs in the
United States designated to test and approve applicable products for sale in
Japan. In these instances, a U.S. company will have to work closely with
their Japanese importer to have their products tested and approved by
Japanese testing labs before these products can be sold in Japan.
Technical Information Center
1285 Walt Whitman Road
Melville, NY 11747
Phone: (516) 271-6200 ext. 631 or 614
Underwriters Laboratories is designated by MITI to test and approve those
U.S. products for sale in Japan that fall under the purview and are in
compliance with the following import regulations and quality mark systems:
(1) The "T" Mark: Mandatory under Japan's Electrical Appliance and Material
(2) The "S" Mark: Mandatory under Japan's Consumer Product Safety Law.
(3) The "SG" Mark: Voluntary quality mark administered by Japan's Consumer
Product Safety Association.
(4) The "JIS" Mark: Voluntary quality mark administered by MITI (UL is the
only MITI authorized testing lab in the United States that can perform
"JIS" factory inspections).
(5) UL test data on U.S. medical equipment, tested to the appropriate
Japanese standards, are accepted by the Japan Machinery and Metal
Inspection Institute, designated by Japan's Ministry of Health and
Welfare to conduct product investigations on medical products pending
approval under Japan's Pharmaceutical Affairs Law.
United States Testing Company (USTC), Inc.
1341 North 108th East Avenue
Tulsa, OK 74116
Phone: (918) 437-8333
United States Testing Company, Inc. is designated by MITI to test and
approve those U.S. products for sale in Japan that fall under the purview
and are in compliance with the following import regulations and quality mark
(1) The "T" mark
(2) The "S" mark
(3) The "SG" mark
(4) The "JIS" mark: The U.S. Testing Company is designated by MITI as an
authorized inspection laboratory in the United States to perform "JIS"
Heraeus DSET Laboratories, Inc.
45601 North 47th Avenue
Phoenix, AZ 85027
Phone: (602) 465-7356, 1-800-255-3738
Heraeus DSET Laboratories, Inc., according to its Japanese agent, Kasho
Company, Ltd., has pending approvals with MITI for the acceptance of product
testing using Heraeus DSET's Emmaqua Test Method. This test method applies
to many diverse products, including building materials, glass, plastics,
paints, sealants, adhesives, automotive body panels, etc. Contact:
Hazleton Washington Inc.
9200 Leesburg Pike
Vienna, VA. 22182
Phone: (703) 893-5400
Hazleton Washington Inc. can test the following U.S. products for compliance
with Japanese regulations and standards:
(1) Pharmaceuticals and biomedical products. Mandatory testing and
approvals are needed for these products. They are regulated under
Japan's Pharmaceutical Affairs Law. Progress has been made in the
acceptance of foreign-generated test data for health care products.
Japan now accepts the results of all pre-clinical tests conducted
outside of Japan if those tests are conducted according to Japanese test
protocols. However, the Ministry of Health and Welfare (MHW) is still
reluctant to approve products based on clinical tests performed outside
of Japan, even if these tests are conducted on Japanese people. Test
data developed in Japan are required for medical implantable or invasive
products or devices and pharmaceuticals.
(2) Pesticides and industrial chemicals. Mandatory testing and approvals
are needed for these products. Pesticides are regulated under Japan's
Agricultural Chemical Regulation Law (administered by Japan's Ministry
of Agriculture, Forestry and Fisheries -- MAFF) and the Poisonous and
Deleterious Substance Control Law (administered by the Safety Division
of MHW). Both Japanese and foreign producers of pesticides and other
agrochemicals must register these products with MAFF. All chemical
substances, including agrochemicals, have to be registered in accordance
with Japan's Law Concerning the Examination and Regulation of
Manufacturer etc., of Chemicals Substances (administered by MHW and
MITI), with certain chemical substances regulated by the Poisonous and
Deleterious Substance Control Law.
ETL Testing Laboratories, Inc.
U.S. Route 11, Industrial Park, P.O. Box 2040
Cortland, N.Y. 13045-0950
Phone: (607) 753-6711
ETL Testing Laboratories, Inc. is a MITI-designated foreign inspection
testing organization for manufacturers of electrical appliances and other
electrical components that are regulated under Japan's Electrical Appliance
and Material Control Law. ETL can inspect and certify U.S. manufacturing
facilities for compliance with the quality control provisions of the
Electrical Appliance and Material Control Law. They can test electrical
products to the specifications of this law; however, they are not designated
by MITI to approve products that fall under the law's purview.
Problems that foreign companies have experienced with Japanese standards and
certification systems generally have fallen into one of three categories:
LACK OF TRANSPARENCY: Some of the committees that draft Japanese standards
have shown reluctance to allow foreign participation. As a result, foreign
firms whose products could be affected by new standards have had no
meaningful input into the development of those standards. Furthermore, in
many cases foreign firms do not learn the details of the new standards until
after Japanese firms, represented on the committees, have. As a result, the
foreign firms lose critical lead time retooling to comply with the new
standards. This situation is beginning to improve as more drafting
standards committees are opened to participation by qualified foreigners.
LACK OF ACCEPTANCE OF FOREIGN TEST DATA: In the past, Japanese authorities
refused to accept the results of tests conducted by manufacturers or
independent U.S. test laboratories. Companies seeking certification had no
choice but to submit to testing and inspection by Japanese authorities,
exposing certain proprietary information. This situation is also beginning
to improve as the Japanese Government allows more foreign firms to conduct
testing for Japanese regulations and standards.
LACK OF HARMONIZATION WITH INTERNATIONAL STANDARDS: Japanese standards
often differ from international standards or from standards prevalent
elsewhere. While some changes have been implemented, Japanese regulations
and standards continue to deviate from international standards in many
In January 1992, the Japanese Government resolved or promised to resolve 49
nonautomotive standards, certification, and testing procedures that had
impeded market access for U.S. exporters of processed food, cosmetics,
industrial equipment, pharmaceuticals, and other products. The U.S.
Government continues to press for resolution of the issues that remain
INTELLECTUAL PROPERTY PROTECTION:
If you are seeking to develop trade or to license your technology in Japan,
you should take the steps necessary to obtain and protect your intellectual
property through patents, trademarks, copyrights, and other intellectual
property rights in Japan. Failure to do so can limit your potential for
Japan and the United States are signatories of the Paris Convention for the
Protection of Industrial Property and other treaties governing the
protection of industrial property rights. These treaties, however, do not
automatically protect patents or trademarks your business has acquired in
the United States. You will have to file applications for patents or for
trademark registrations in Japan, but your U.S. rights can provide certain
advantages if applications are filed promptly in Japan. A U.S. patent or
trademark attorney, as appropriate, can provide advice, but you will also
need to hire a Japanese attorney, preferably one with which your U.S.
attorney has an established relationship, to prosecute the application for a
patent or for registration of a trademark.
Japan and the United States are signatories to the Berne Convention for the
Protection of Literary and Artistic Works and to the Universal Copyright
Convention. These conventions provide automatic protection for copyrighted
works, including computer programs, originating in either country or
produced by authors of either country. The owner of a U.S. copyright that
is infringed upon in Japan is able to sue the infringer in Japanese courts.
Registration in Japan for copyrighted works is not required. Japan does
provide for voluntary registration of computer programs and musical works,
which simplifies the evidence that must be produced in court.
Sound recordings of foreign origin, including U.S. origin, are protected in
Japan under the Convention for the Protection of Phonograms Against
Unauthorized Duplication of Their Phonograms (Geneva Phonograms Convention).
U.S.-produced semiconductor chips are protected in Japan under the Japanese
Law Concerning the Circuit Layout of a Semiconductor Integrated Circuit.
Under this law, in order to obtain protection, foreign chip layout-designs
must be registered with the Industrial Property Cooperation Center.
Obtaining and protecting patent and trademark rights in Japan can be
time-consuming and costly. While the process to safeguard such rights might
seem prohibitive, lack of protection would permit competitors both in and
outside of Japan to copy your product or production process. Even when
intellectual property rights have been acquired, pirating of technology and
designs can occur in Japan, as it could in almost any country. Each company
in a trading or licensing agreement should understand clearly what its
rights and obligations are with respect to the intellectual property rights
owned or acquired by the other. Such a clear understanding helps to create
a good rapport based on mutual trust, thereby ensuring the success of the
trading or licensing agreement.
From 1989 through 1993, Japan was included on the "Watch List" under the
so-called Special 301 provisions of the U.S. Omnibus Trade and
Competitiveness Act of 1988, because of deficiencies in its intellectual
property laws and problems of a practical nature involving protection of
patents, copyrights, and trademarks.
PATENTS: Japan's patent law differs from U.S. patent law in several
important ways. The greatest contrast is that patents are granted to the
first to file an application for a particular invention, rather than to the
first to invent, as is done in the United States. Under the Paris
Convention, the date on which a U.S. applicant filed a U.S. application will
become the Japanese filing date so long as the corresponding application, in
Japanese, is filed in Japan within one year of the U.S. filing date. Prompt
filing in Japan is also important because printed publication of a
description of the invention anywhere in the world, or knowledge or use of
the invention in Japan, prior to the filing date of the Japanese application
would preclude the granting of a patent on the application. Second, unlike
the United States, where examination of patent applications is automatic, an
applicant must request examination of his patent application in Japan but
has seven years in which to do so. As is true in most countries of the
world, but not in the United States, all patent applications are published
prior to approval 18 months after filing. If, during the examination, the
Japanese Patent Office (JPO) finds no impediment to the grant of a patent
for a particular invention, it publishes the patent application a second
time, including any changes that have been made during the examination.
Following this second publication of the application, any party may oppose
the grant of a patent by demonstrating that the standards for patentability
are not met by the invention.
Japan and the United States are signatories to the Patent Cooperation Treaty
(PCT), which is administered by the World Intellectual Property
Organization. Under the PCT, an applicant can file a single "international
application" designating the PCT member countries in which a patent is
sought. The international application has the same effect as filing
individual national applications in each of those countries. U.S. nationals
can file an international patent application with the U.S. Patent and
Trademark Office of the U.S. Department of Commerce and designate Japan as
one of the countries in which a patent is sought. The international patent
application under this program does not obviate the need to file a separate
patent in Japan. However, it does provide the applicant with certain
advantages regarding time limits and translations.
It takes a long time to obtain a patent in Japan. Like patent offices in
other countries, the JPO does not begin examination until 18 months after a
patent application is filed, even if examination is requested at the time of
filing. A shortage of patent examiners to review the flood of patent
applications filed by Japanese companies causes a significant backlog of
applications awaiting examination. An applicant can request accelerated
examination under certain circumstances, but not in ordinary cases. The JPO
has added some examiners to its staff and has begun to hire subcontractors
to perform initial searches of patent applications. In December 1990, the
JPO inaugurated the world's first electronic filing system for patent
applications. These measures, however, have yet to result in a substantial
reduction in the time required to examine an application or grant the patent.
It must be emphasized that accurate translation into Japanese is required
for a patent application. The JPO will reject applications with translation
mistakes or typos. Companies should ensure that translations of their
applications are perfect.
During the examination period, no effective legal protection exists. The
Japanese Patent Office reports that the average time required to examine a
patent application in Japan is 32 months. That is in addition to the 18
months prior to initial publication and the 2 months following publication
for opposition. Overall, it takes a minimum of 5 years, and an average of
6-7 years, to obtain a Japanese patent. By comparison, the average period
required for the U.S. Patent and Trademark Office to process a patent
application is 18 months. In the U.S.-Japan Structural Impediments
Initiative (SII), the Government of Japan has agreed to reduce the period
required for examination to 24 months by 1995.
If the application is uncontested in Japan and all requirements are met, the
patent is granted and valid for 15 years from the date the application is
published (but not more than 20 years from the date the application was
TRADEMARKS: To provide for protection for the brand names of products,
Japan enacted the Trademark Law of 1959. Under the law, the first to file
an application for a particular trademark is entitled to the registration of
the mark in connection with that particular class of goods. Japan enacted a
new law providing for the registration of service marks which came into
effect in April 1992. The trademark law permits the owner of a well-known
foreign trademark or service mark to oppose the registration of a mark if it
can demonstrate that the mark is confusingly similar to its own. One common
mistake to avoid is registering your mark just for your product. You should
also obtain protection for the packaging and/or promotional materials that
go along with your product. A trademark registration is valid for ten years
from the date of registration and can be renewed indefinitely for ten-year
periods so long as the trademark continues to be used. If a mark has not
been used for a period of three years, it can be canceled.
On February 20, 1990, Japan agreed to the Nice Agreement Concerning the
International Classification of Goods and Services for the Purposes of the
Registration of Marks. As is the case with patent applications, a resident
agent (usually a lawyer or patent agent) must prosecute the trademark
application. As with the processing of patent applications, Japan's
trademark registration process is very slow. It takes an average of 4 years
to process a trademark registration in Japan, compared with an average of 13
months in the United States. The only protection available for a trademark
in Japan prior to registration is under the Japanese Unfair Competition
Law. Under this law, the owner of the mark must demonstrate that the mark
is well-known in Japan and that consumers will be confused by the use of an
identical or similar mark by the unauthorized user.
COPYRIGHTS: Japan's copyright law is administered by the Copyright Office
of the Cultural Affairs Agency, Ministry of Education. Under the Berne
Convention for the Protection of Literary and Artistic Works and the
Universal Copyright Convention, Japan provides protection for copyrighted
works, including computer programs, for nationals of member states of those
conventions and/or works first published in member countries. The
protection lasts for the life of the author plus 50 years, or 50 years from
publication in the case of juridical entities. Registration is not required.
Japan amended its copyright law in April 1991 to extend protection for sound
recordings from 30 to 50 years, to provide a rental right for foreign
phonogram producers, and to provide criminal penalties for copying
previously unprotected U.S. and certain other foreign-produced sound
recordings released from 1968 to 1978. The one-year prohibition against
rental starts to run from the date of first sale anywhere in the world, not
from the date of first sale in Japan; there is no protection for foreign
sound recordings produced before 1968.
In 1988, Japan enacted legislation to facilitate the prosecution of
suspected video pirates, although loopholes remain. The law must be
enforced more rigorously if it is to be effective in curbing abuses, which
cost U.S. owners of rights in video recordings an estimated $200 to $250
million each year.
SEMICONDUCTOR CHIP LAYOUT AND DESIGN: The layout-designs of U.S.-produced
semiconductor chips are protected in Japan under the Japanese Law Concerning
the Circuit Layout of a Semiconductor Integrated Circuit. This law is
administered by an independent registration agency, the Industrial Property
Cooperation Center (IPCC). Under the Japanese law, foreign chip
layout-designs must be registered within two years of the first commercial
exploitation in the registry maintained by the IPCC. The duration and the
level of the protection is essentially the same as under the U.S.
Semiconductor Chip Protection Act. Japanese layout-designs are eligible for
protection in the United States under orders issued by the Assistant
Secretary and Commissioner of Patents and Trademarks.
UTILITY MODEL AND DESIGN PROTECTION: The Japanese utility model system
parallels the patent system. It serves as an incentive to individuals and
small and medium-sized businesses (which lack large budgets for research and
development) to invent. While novelty remains an important requirement, the
degree of inventiveness for a utility model is less than that required for a
Japan also protects registered designs under a system modeled on the British
system. To be registered, a design must be industrially useful, novel, and
creative. The design right lasts 15 years from the date of registration.
The application for registration is similar to that for patent applications.
TRADE SECRETS: Japan enacted amendments to the Unfair Competition Law in
1990 that provide some measure of protection from theft of trade secrets
such as know-how, customer lists, sales manuals, and experimental data. The
law, which was amended in 1993, provides for injunctions against wrongful
use, acquisition, or disclosure of a trade secret by any person who knew or
should have known that the information in question was misappropriated. A
problem with judicial procedure remains and makes enforcement of rights
without loss of the trade secret difficult.
If you are interested in protecting your product in Japan, you will need a
Japanese lawyer (bengoshi) or patent agent (benrishi). Consult with your
attorney here in the United States, the Martindale-Hubbell Law Directory, or
the Business Support Organizations in Japan guide which is available on the
National Trade Data Bank (NTDB). Other reports on intellectual property
IMI: Japan -- Trademark Registration Costs. US&FCS/Japan, March 1994.
Available on the NTDB.
Intellectual Property Rights: U.S. Companies' Patent Experiences in Japan.
Government Accounting Office, July 1993. Order number: GGD-93-126.
Contact: (202) 512-6000.
Japanese Patent Information. Japan Technology Program, U.S. Department of
Commerce, 1993. Contact: Japan Technology Program at (202) 482-1288.
Protecting Intellectual Property Abroad: An Introductory Guide for U.S.
Businesses. U.S. Patent and Trademark Office, U.S. Department of Commerce,
June 1993. Contact: (703) 305-9300.
Basic Facts About the Patent Cooperation Treaty (PCT). World Intellectual
Property Organization, June 1993. Contact: U.S. Patent and Trademark
Office, PCT Section, at (703) 305-3365.
International Copyright Relations of the United States. U.S. Copyright
Office, June 1991. Contact: (202) 707-3000.
"Patent Protection or Piracy - A CEO Views Japan," Harvard Business Review.
September/October 1990, pp. 58-67. Reprint Product Information and Orders:
GETTING YOUR PRODUCT THROUGH JAPANESE CUSTOMS:
Getting your product through Japanese customs tends to be somewhat obscure,
although it is critical in satisfying your customers. Guaranteeing that
your product arrives on time and in good condition is essential in keeping
your Japanese importer content. This generally requires using proper
packing materials and a reputable freight forwarder. However, it is in your
interest to learn as much as possible about the procedure of clearing your
goods through Japanese Customs in order to avoid expensive delays or
Since the Japanese tend to shy away from formal rules and procedures, the
Japanese Customs Law is not written as a set of concise regulations but
rather very general guidelines. Therefore, Japanese customs clearance tends
to be more of an art than a science -- a considerable amount of discretion
is left to each Japanese customs official. Problems tend to occur when
shipments are improperly packaged and/or damaged en route or the shipping
documents do not have succinct or complete descriptions. Delays also often
result when one shipment contains many different types of products or when
one product is manufactured from several diverse components. If you are
unfamiliar with the fundamentals of shipping your products overseas or U.S.
Government requirements and general export documentation (Shipper's Export
Declaration Form, etc.) consult the U.S. Department of Commerce's A Basic
Guide to Exporting (see advertisement at the end of this guide). There are
also a number of software programs available to help companies prepare
shipping documentation. The best advice we can offer to you is use a
freight forwarder that is familiar with the specific regulations of your
country of destination.
OUTLINE OF JAPANESE CUSTOMS CLEARANCE: Shipments cleared through Japanese
Customs are passed through a two-part structure. The Japanese Government
has licensed approximately 20 major customs brokers to approve import
shipments into Japan. A shared computer database allows both Japanese
Customs and the import broker to track a shipment through the customs
clearance process. Japanese Customs will verify that the customs broker has
computed the duty and tax accurately and if necessary will carry out an
on-the-spot inspection of any suspect shipment. A concise product
description and accurate valuation that can be easily entered into this
system will likely avert any confusion or delays. If your company will be
routinely shipping to a given port, it would be in your interest to meet
with the customs broker that will handle your shipments' customs clearance.
As relationships are always critical in Japan, the more familiar your
customs broker is with your company and products, the more likely you will
avoid excessive delays and handling charges. Still, it is not unusual for
each container to be opened and the contents carefully checked against the
invoice and packing list. It is extremely important that all of the
documents match and that the documents perfectly describe the contents of
the shipment -- "almost" does not count with Japanese Customs.
CUSTOMS DOCUMENTATION: While customs procedures have been simplified in
recent years, a number of documents are still required for clearance. These
include: (1) for import quota items, an import license, usually valid for
four months from date of issuance; (2) an Import Declaration Form (Customs
Form C 5030); (3) shipping documents such as a commercial invoice, packing
list, and an original and signed bill of lading, or, if shipped by air, an
air waybill; (4) a certificate of origin if the goods are entitled to
favorable duty treatment (preferential or General Agreement on Tariffs and
Trade rates; in practice, shipments from the United States are routinely
assessed using the General Agreement on Tariffs and Trade or "temporary"
rates without a certificate or origin); and (5) any additional documents
necessary as proof of compliance with relevant Japanese laws and standards
regulations, if applicable. To be certain that all required documentation
is provided at the time your shipment arrives in Japan, consult with your
Commercial Invoice: All shipments regardless of value require at least two
copies of the commercial invoice. The invoice must be on shipper's
letterhead and signed by the shipper or an approved representative. This
document is used to determine the value of goods being imported and should
include the complete name and address of the shipper, full description of
goods and tariff classification, number of units shipped, unit price and
total price in U.S. dollars, and country of origin of goods.
Packing List: A packing list in the shipment is recommended and should
provide the following information: exact description of all items in the
shipment, the gross and net weight of each package, the exterior
measurements of each package, the total number of shipping containers, and
gross weight and gross measurement. Units of measure must be in metric on
both documents and goods. It is helpful to ship like products together to
avoid confusion or unnecessary inspections.
Bill of Lading: Three signed original bills of lading should be sent
through banking channels, and at least two unsigned copies should be
forwarded to the consignee. For goods sent by air, a standard set of ten
(one original and nine copies) should be made available.
Certificate of Origin: A certificate of origin is required only when the
goods are to be granted duty concessions under GATT or the Generalized
System of Preferences. Such documents are often authenticated by a local
chamber of commerce or by a Japanese consular or diplomatic official.
Import License: Most goods now qualify as "freely importable" and do not
require an import license. The only exception is for those commodities
falling under import quotas in which case the Japanese importer would apply
for license approval (see section on quotas).
PACKING, MARKING, AND LABELING: Straw packing materials are prohibited.
The Japanese Measurement Law requires that all imported products and
shipping documents show metric weights and measures. There is no law
requiring display of the identity of the place of origin. However, if
labels indicating origin are determined to be false or misleading, the
labels must be removed or corrected. Otherwise the goods will be returned
to country of origin. False or misleading labels which display the names of
countries, regions, or flags other than the country of origin, and/or names
of manufacturers or designers outside the country of origin are not
Items required by Japanese law to bear labels cover four product
categories: textiles, electrical appliances and apparatuses, plastic
products, and miscellaneous household/consumer goods. The Household Goods
Quality Labeling Law requires mandatory labeling for many household products
(i.e., plastic containers, plastic dishes and wash basins, textile and
apparel products, toothbrushes, and laundry/kitchen detergents). Textile
and apparel products also fall under the Labeling Requirements for Textile
Goods. Labels on electrical appliances and apparatuses are under the
purview of the Electrical Appliance and Material Control Law and the Quality
Control Law for Home Appliances. Because all these regulations apply
specifically to individual products, it is important to work with a
prospective agent/importer to ensure your product meets requirements, if
applicable. For more information, see the section titled "Japanese
Regulations, Standards, Quality Marks, and Certification Systems."
In general, most labeling laws are not required at the customs clearance
stage, but at the point of sale. Consequently, it is most common for
Japanese importers to affix a label before or after clearing customs.
HEALTH AND SANITARY REQUIREMENTS -- INSPECTION CERTIFICATES: Japanese
health and sanitary regulations are strictly enforced. All imported plants
and soils, animals, meat, and viscera of animals must be accompanied by a
phytosanitary or zoosanitary inspection certificate issued by the government
of the exporting country attesting that such shipments are free from
infectious materials or diseases. Additional information is available from
the Animal and Plant Health Inspection Service, U.S. Department of
Agriculture, Hyattsville, MD 20782, (301) 436-8383 (for export of live
animals), (301) 436-7885 (for meat and meat byproducts), and (301) 436-8537
Japan's Food Sanitation Law requires that an Import Notification Form must
be submitted for all food products at the time of import to ensure all
standards governing foodstuffs and products which come in contact with food
(such as dishes, containers, and water purifiers) have been met. The use of
chemicals and other additives in foods is severely restricted in Japan. The
additive regulations follow a "positive list" approach which indicates only
those additives permitted, their maximum tolerable amount, and the foods in
which the additives may be used. Cosmetics are governed by similar
restrictions covering permissible ingredients. Additional information on
specific regulations is available through the U.S. Department of
Agriculture, Office of Food Safety and Technical Services at (202) 720-9408.
IMPORT QUOTAS: Japan has in effect two quota systems: a quantity allocated
quota and a tariff quota. The quantity allocated quota is applied to
imports of some dairy products, fish, grain staples, and coal. Import of
these items requires an Import Quota Certificate issued by the Ministry of
International Trade and Industry (MITI) through an import notice system
granting allocation twice a year. The quota certificate is valid for four
months. Once the certificate is obtained, an application for approval is
then made to an authorized foreign exchange bank which issues the import
A tariff quota is in effect for cheese, maize, oats, malt, preparations of
cocoa without sugar, some tomato products, pineapples, some alcohol
materials used as base of alcoholic beverages, leather, and leather
footwear. For items subject to an import tariff quota, a lower primary duty
rate is applied until the quantity exceeds the quota threshold at which time
a higher duty is assessed. To apply for the primary duty rate, an importer
must obtain a quota allocation in advance from MITI. Current quota volumes
and duty rates are listed in the annual publication of the Customs Tariff
Schedules of Japan, which is available from OCS America, Inc., phone: (703)
TARIFFS: According to the Japan Tariff Association, the average applied
tariff is now one of the world's lowest at 2.9 percent. However, import
duties on some agricultural items and certain manufactured goods remain
relatively high. As part of their import incentive program, the Japanese
expanded the list of duty-free manufactured products in April 1990 by 1,000
items and reduced the tariff on four more. Consequently, almost all
machinery imports are now tariff free.
Tariffs are administered by the Customs Bureau of the Ministry of Finance.
Japan is a member of the Harmonized System Convention and therefore shares
the same trade classification system as the United States up to six digits.
Duties are assessed on the c.i.f. (cost, insurance, and freight) value at ad
valorem or specific rates, and, in a few instances, are charged a
combination of both.
Japan's tariff schedule has four columns of applicable rates: general,
General Agreement on Tariffs and Trade (GATT), preferential, and temporary.
Goods from the United States are charged GATT rates unless a lesser
"temporary" rate exists. Japan's preferential system of tariffs grants
lower or duty-free rates to products imported from developing countries.
In addition to the customs duty, a 3 percent Consumption Tax (general excise
tax) is levied on all goods sold in Japan (except for autos, in which case
the tax is 4.5 percent), and payment is required at the time of import
declaration. The Consumption Tax is assessed on the c.i.f. value of the
product plus the import duty. Refer to the section on taxation for more
Duties and consumption tax are payable when making an import declaration at
the time of customs clearance by the importer. The Import Declaration Form
(Customs Form C 5030) is filled out by the importing company and is used as
an import declaration as well as a tax payment declaration form. Unattended
packages containing items with a value of 10,000 yen or less are exempt from
duty and the Consumption Tax. For travelers, the tax-free value is 200,000
yen or less for attended baggage.
SAMPLES AND ADVERTISING MATERIALS: Japan is a member of the International
Convention to Facilitate the Importation of Commercial Samples and
Advertising Materials under the ATA Carnet System. Use of a carnet allows
goods such as commercial and exhibition samples, professional equipment,
musical instruments, and television cameras to be carried or sent
temporarily into a foreign country without paying duties or posting bonds.
A carnet should be arranged for in advance by contacting a local office of
the United States Council for International Business or its New York office
at (212) 354-4480. Fees are based on the value of goods to be shipped.
Processing time takes generally five business days.
Advertising materials, including brochures, films, and photographs, may
enter Japan duty free. A commercial invoice for brochures and literature
for free distribution must have either the actual or estimated value of the
cost of production. Do not use the term "no charge."
Articles intended for display but not for sale at trade fairs and similar
events are also permitted to enter duty free in Japan only when the
fair/event is held at a bonded exhibition site. These bonded articles are
required to be reexported after the event, or stored at a bonded facility.
All shipments to bonded exhibition areas must also comply with any relevant
standards, regulations, or quota requirements. A commercial invoice for
these goods should be marked "no commercial value, customs purposes only"
and "these goods are for exhibition and are to be returned after conclusion
of the exhibition." It is also important to identify the name of the trade
show or exhibition site, including exhibition booth number (if known), on
FREE TRADE ZONES AND BONDED AREAS: Japan has one free trade zone at Naha on
Okinawa. In addition, there are five kinds of bonded areas:
(A) Designated Bonded Areas: These are public areas located near ports of
entry authorized by the Ministry of Finance. In them, foreign cargo
(shipments to be exported, to be imported and in transit) can be
unloaded, transported, and stored up to one month. The areas are used
for customs declaration and handling, and can be used by anybody for a
(B) Bonded Sheds: These facilities are authorized by the Director General
of Customs Houses, and they are used the same way as designated bonded
(C) Bonded Warehouses: Foreign cargo can be stored at bonded warehouses for
up to two years (and longer with special permission). As long as cargo
is stored in a bonded warehouse, custom duty is not applied. Bonded
warehouses are most often used for cargo to be exported.
(D) Bonded Factories: Bonded factories allow manufacturers to produce goods
with foreign materials without paying customs duties for those foreign
materials. Although there appears to be no prohibition against using
such factories to produce goods to import into Japan, most bonded
factories in Japan produce items for export only.
(E) Bonded Exhibition Sites: These are authorized by the Director General
of Customs House for an international event. They are designed to make
administration of worldwide expositions and exhibitions by foreign
governments easier. Foreign cargo can be exhibited or used with simple
declaration. Equipment and materials to be displayed at a bonded
exhibition site should be identified as such and arrangements must be
made with the freight forwarder prior to shipment. If goods are to be
removed from the bonded site during the exhibition, either for sale or
display at another location, they must be cleared through Japanese
Customs before they are removed.
U.S. companies interested in utilizing bonded space should contact a freight
forwarder with background and experience of doing business in Japan.
FOREIGN ACCESS ZONES: The Japanese Government approved the establishment of
Foreign Access Zones (FAZ) in 1992. To facilitate imports, the FAZs are
designed to provide low-cost warehousing and distribution facilities in a
central location. Initially, seven FAZs concentrated around airports and
seaports with significant import trade will be established. They will be
supported through a combination of budget allocations and special financing
and taxation policies. Five additional zones are under consideration. The
FAZs will be managed by "third sector" companies (a combination of public
and private sector investment) with the approval of the prefectural
governments. Another key objective of the FAZs is to simplify bonding
procedures. Completion of the following seven FAZ sites is anticipated
between 1993 and 1996: Asia-Pacific Trade Center in the Osaka Port area,
Kansai International Airport area, Kobe Port area, Nagasaki Airport area,
Matsuyama Port area, Kitakyusyu Port area, and New Chitose Airport area.
SIMPLE TAX SYSTEM FOR LOW-VALUE IMPORTED FREIGHT: This system was created
to establish a simple tax rate on imported freight worth less than 100,000
yen and makes customs procedures for small packages simpler and quicker by
using uniform tariff rates, eliminating the extra time necessary to
determine the type of product and accurate value, and minimizing customs
brokers' handling charges. There are seven tariffs for alcohol (ranging
from 6 - 220 yen per liter), and five tariffs for manufactured goods
(ranging from 3 - 20 percent). The simplified tariffs are based on an
average of general tariff rates applied to all products in a group, so some
items may be assigned a higher tariff under the simplified system than under
regularly applied rates. Importers can choose either the normal rate or the
simple tax rate. However, certain items cannot be brought in under the
METHODS OF PAYMENT:
There are a number of methods used to settle payment for sales transactions
in Japan: cash in advance, letter of credit used in conjunction with a
documentary draft (time or sight), promissory note, documentary collection
or draft, open account, and consignment sales. As with domestic sales, a
major factor that determines the method of payment is the amount of trust in
the buyer's ability and willingness to pay. Because of the protection it
offers to the U.S. exporter and the Japanese importer, an irrevocable letter
of credit is a popular form of settlement. Another frequently employed
payment option is the use of documentary collection or open account with
international credit insurance, which, unlike the letter of credit, allows
the importer's line of credit to remain open. At the same time, this option
protects the exporter if the buyer goes bankrupt or cannot pay.
International credit insurance can be obtained from the Export-Import Bank
of the United States or private insurers. For more information on payment
methods, consult the U.S. Department of Commerce's A Basic Guide to
A payment method used in Japan and often unfamiliar to U.S. companies is the
promissory note. Promissory notes (yakusoku-tegata or yakute) act as
I.O.U.s with a promise to pay at a later date, typically 90 to 120 days.
However, there are some notes that can be as long as 210 days (typhoon
notes). Because Japanese banks will provide short-term financing through
discounting and rollover of notes, most Japanese firms that accept
promissory notes need a solid relationship with their banks or they will
experience cash flow problems. The use of promissory notes has been
practical because of the cultural tendency to establish long-term business
relationships based on loyalty and trust.
Japanese banks are often shareholders in medium-sized and large
corporations. As Japanese companies are highly leveraged in comparison with
their U.S. counterparts, banks take an active interest in the operations of
the Japanese firm. This unique relationship between a company and bank is a
long-standing one -- a Japanese company rarely changes banks and would
probably not shop for better credit arrangements. Even in times when
financing is relatively easy, companies will borrow in excess of need in
order to maintain good relations with their bank and to ensure that funds
will be available in leaner years. Banks are often shareholders in public
corporations, have close relationships with both local governments and
national regulatory agencies, and often have a coordinating function with
its clients. In large business deals, the bank's role is not just one of
lender, but key contributor.
A Japanese firm's ability to borrow is often based more on the company's
personal contacts and rapport with bank officials than on the conventional
U.S. standard of creditworthiness. While some large U.S. companies in Japan
have strong relationships with Japanese banks, most small and medium-sized
U.S. firms complain that it is almost impossible to secure the kind of trade
financing and factoring services needed for importing and distribution. For
U.S. companies with operations in Japan, teaming up with Japanese partners
in a joint venture has been an advantage in receiving more preferential
treatment from Japanese banks.
Large Japanese banks ("city banks") are a prime potential financial source
for small and medium-sized foreign companies in Japan. In contrast, U.S.
banks operating in Japan mainly focus on lending to subsidiaries of large
U.S. companies, and smaller Japanese banks generally have limited ability to
help foreign companies due to limited staff who can analyze the
creditworthiness of foreign-owned companies whose representatives
communicate in foreign languages. When a Japanese bank extends credit to a
foreign-owned company in Japan, it evaluates the financial status of the
borrower and its parent company, in order to avoid significant risk.
Therefore, even if the Japanese subsidiary is financially strong, the parent
company must usually guarantee the obligation.
Pre-export financing (or working capital) is available from banks and other
private sector entities, federal and state government-sponsored programs,
and trading companies. Export transaction financing (letters of credit,
documentary collection, forfaiting, and factoring) is available from banks
and other private sector entities.
EXPORT-IMPORT BANK OF THE UNITED STATES (EXIMBANK): Eximbank is an
independent U.S. Government agency that helps finance exports of U.S. goods
and services. Eximbank can help in the following ways:
(1) It facilitates export financing of U.S. goods and services by matching
the effect of export credit subsidies from other governments and by
absorbing reasonable credit risks that are beyond the current reach of
the private sector.
(2) It helps U.S. exporters obtain pre-export financing by guaranteeing
their repayment of export-related working capital loans from commercial
(3) It helps exporters extend credit to their foreign customers by covering
the political and commercial risks of nonpayment.
(4) It encourages commercial financing of U.S. exports by guaranteeing
repayment of loans made to foreign buyers of U.S. exports.
(5) It encourages foreign buyers to purchase U.S. exports by offering
competitive, fixed-rate loans.
Eximbank can support the sale of U.S. goods and services to a creditworthy
foreign buyer when competitive private financing is unavailable. To qualify
for Eximbank support, the product or service must have at least 50 percent
U.S. content and cannot be military related. Transactions must have a
reasonable assurance of repayment and must not adversely impact the U.S.
economy. To receive additional information on specific programs, contact
the Eximbank Export Financing Hotline at 1-800-424-5201.
In May 1991, Eximbank reached an agreement for cooperation with the
financial institutions of the Government of Japan (Export-Import Bank of
Japan, Japan Development Bank, and the Ministry of International Trade and
Industry) to advance mutual objectives in: (1) expanding the role of
exports in the growth of global trade, (2) facilitating the flow of trade
and investment capital to developing countries, (3) assisting cooperation
between suppliers and banks of Japan and the United States, and (4)
increasing the volume of exports from the United States and other countries
to Japan. It is expected that the cooperative application of financing
support by the respective agencies will enable projects to be financed that
otherwise could not proceed for lack of complete capital resources. In
particular, it is expected that U.S. exports will benefit from more
effective access to financing supported by the Japanese agencies. For more
information on the joint Eximbank-Government of Japan effort, contact:
Mr. Raymond J. Albright
Vice President, Asia Division
Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, DC 20571
Phone: (202) 566-8885
Fax: (202) 566-7524
THE U.S. SMALL BUSINESS ADMINISTRATION (SBA): SBA assists businesses in
obtaining the capital needed to explore, establish, or expand international
markets. SBA provides assistance to U.S. companies through the following
SMALL BUSINESS INVESTMENT COMPANIES: Licensed by SBA, firms whose
investment strategies include export activities may receive equity capital
or term working capital in excess of SBA's $750,000 statutory limit.
Contact the Investment Division at (202) 205-6512.
EXPORT REVOLVING LINE OF CREDIT PROGRAM: This program guarantees loans up
to $750,000, for export-related purposes, including: (1) pre-export
financing of labor and materials used in the manufacture of goods for
export, or to purchase goods or services for export, (2) specific expenses
related to the penetration and development of foreign markets, and (3)
insured accounts receivable generated from sales of goods and services for
export. The maximum maturity is generally 12 months but may be renewed
twice for a total of 36 months. Contact the Office of International Trade
at (202) 205-6720.
INTERNATIONAL TRADE LOAN GUARANTEE PROGRAM: This program offers loan
guarantees of up to $1 million for facilities and equipment and up to
$250,000 for working capital to (1) small businesses that can significantly
expand existing export markets or develop new export markets or (2) those
adversely affected by import competition. Maturities of loans may extend up
to 25 years. Contact the Office of International Trade at (202) 205-6720.
BUSINESS LOAN GUARANTEE PROGRAM: Financing for fixed-asset acquisition or
general working capital purposes may be obtained. The program encourages
private lenders to make loans of up to $750,000 to borrowers who could not
borrow on reasonable terms (i.e., long-term maturities) without government
help. Contact the Office of Financial Assistance at (202) 205-7511.
THE EXPORT-IMPORT BANK OF JAPAN (JEXIM): JEXIM is a Japanese governmental
financial institution. While most of its programs are designed to support
Japanese exports, JEXIM does provide financial support to encourage exports
from the United States to Japan. JEXIM provides Japanese firms with
overseas direct loans to finance the import of U.S. manufactured products.
In addition, JEXIM provides loans through financial intermediaries, usually
foreign banks, for U.S. exporters or manufacturers. Such loans are made for
the benefit of businesses intending to export their manufactured goods to
As part of a joint effort with U.S. Eximbank to increase U.S. exports to
Japan, JEXIM will make available medium- and long-term financing for imports
from the United States to Japan. Financing is available to Japanese
importers buying from the United States, to U.S. exporters for direct sales
to Japan, to U.S. manufacturers for production of products to be sold in
Japan, and to U.S. manufacturers for investment in the expansion of
production facilities used to conduct long-term supply contracts to Japan.
For more information on JEXIM programs, contact:
Export-Import Bank of Japan Export-Import Bank of Japan
375 Park Avenue 2000 Pennsylvania Avenue, N.W.
Suite 3601 Suite 3350
New York, NY 10152 Washington, DC 20006
Phone: (212) 888-9500 Phone: (202) 331-8547
Fax: (212) 888-9503 Fax: (202) 775-1990
THE EXPORT-IMPORT INSURANCE DIVISION OF THE MINISTRY OF INTERNATIONAL TRADE
AND INDUSTRY (EID/MITI): EID/MITI insures repayment of export credits.
EID/MITI insurance enables commercial banks, which normally would be
unwilling to assume the risk of certain types of financing, to fund overseas
projects. EID/MITI has a wide range of short-, medium-, and long-term
insurance programs for Japanese and non-Japanese exporters, importers, and
The United States and Japan have recently embarked on a new joint effort
that makes it possible for U.S. companies to benefit from Japanese
Government insurance programs. U.S. Eximbank and EID/MITI are cooperating
on this venture. There are three general programs currently being offered
by the EID/MITI-U.S. Eximbank venture: the Prepayment Import Insurance
Program, co-financing by EID/MITI and U.S. Eximbank, and the General Purpose
Credit Facilities Program.
For more information, contact:
EID/MITI Mr. Raymond J. Albright
1221 Avenue of the Americas Vice President, Asia Division
New York, NY 10020 U.S. Eximbank
Phone: (212) 819-7770 811 Vermont Avenue, N.W.
Fax: (212) 819-7796 Washington, DC 20571
Phone: (202) 566-8885
Fax: (202) 566-7524
CENTRAL COOPERATIVE BANK FOR COMMERCE AND INDUSTRY (SCB): SCB, established
in 1936 and supervised by MITI and the Ministry of Finance, is financed by
SCB's supporting member organizations, which consist of trade cooperatives,
beneficial societies, and credit unions in Japan. SCB provides long- and
short-term financing to small and medium-sized businesses. SCB extends
three types of loans: (1) capital investment loans, (2) long-term working
capital loans, and (3) short-term working capital loans. For more
Central Cooperative Bank for Commerce and Industry
2-10-17 Yaesu, Chuo-ku
Tokyo 104 JAPAN
CREDIT GUARANTEE SYSTEM IN JAPAN (CGC): CGC was established in 1937 to
promote the stable progress of small and medium-sized enterprises through
reinforcing their fund raising capabilities such as providing for credit
guarantees and insurance. For more information, contact:
Credit Guarantee System in Japan (CGC)
3-1-3 Kyobashi, Chuo-ku
Tokyo 104 JAPAN
For more information on these Japanese programs, refer to two reports
written by US&FCS/Japan: Government of Japan New Import and Inward
Investment Support Organizations and Expanded Loan Programs and Financing
for Small and Medium-Sized American Companies in Japan. Both reports are
available on the National Trade Data Bank.
TAXATION IN JAPAN:
CONSUMPTION TAX: The 3 percent Consumption Tax (4.5 percent on automobiles)
is essentially a value-added sales tax and is levied at the time of each
resale, starting with customs clearance into Japan (at which time it is
levied on the c.i.f. value, plus import tariff). Retail sales are also
subject to the 3 percent Consumption Tax.
WITHHOLDING TAX: Royalty payments from Japan to the United States are
subject to a 20 percent withholding tax, which can be reduced to 10 percent
under the 1971 U.S.-Japan Double Taxation Treaty (the paperwork required in
Japan is usually handled by the Japanese agent/distributor). Through this
application of the law, in most instances, your company will receive 90
percent of the royalties, with your Japanese agent/distributor or end-users
of the product paying the 10 percent withholding tax on behalf of your
company. The 10 percent withholding tax may be credited against your U.S.
tax liability (you should make sure that you receive a copy of the tax
payment receipt from your Japanese business partner).
Royalties are defined as payments of any kind made as consideration for the
use of, or the right to use (1) copyrights of literary works, artistic
works, scientific works, motion picture films, films or tapes used for radio
or television broadcasting; (2) patents; (3) designs or models; (4) plans;
(5) secret processes or formulas; (6) trademarks; (7) other like property or
rights or know-how; or (8) ships or aircraft.
Royalties are also defined as any gains derived from the sale, exchange, or
other disposition of any property or rights mentioned in the previous
paragraph to the extent that the amounts realized on such sale, exchange, or
other disposition for consideration are contingent on the productivity, use,
or disposition of such property or rights.
Such imports as computer software, publications, or artwork are subject to
the withholding tax in cases where gross licensing (or copyright) royalty
payments are provided.
TAX TREATMENT OF FOREIGN-OWNED FIRMS: Local branches of foreign firms are
generally taxed only on income derived from within Japan, whereas domestic
Japanese corporations are taxed on their worldwide income. Calculation of
taxable income and allowable deductions, and payments of the Consumption Tax
are otherwise the same as those for domestic companies, with national
treatment for foreign firms. The Corporation Tax Act classifies
corporations as either foreign or domestic depending on the location of the
head office, without regard to the place of incorporation. The U.S.-Japan
Tax Treaty provides for the avoidance of double taxation.
INCOME TAX: The United States and Japan signed an Income Tax Treaty on July
9, 1972. This agreement was designed to prevent double taxation from
occurring with respect to income taxes.
TAX BENEFITS FOR EXPORTERS: Many exporters are unaware of the U.S. tax
benefits to exporters available under the Foreign Sales Corporation (FSC) or
the Interest-Charged Domestic International Sales Corporation (IC-DISC)
provisions of the Internal Revenue Code. For more information on these
programs, contact the Office of Service Industries and Finance,
International Trade Administration, U.S. Department of Commerce at (202)
You should contact an accounting firm in Japan for specific guidance on tax
issues. Most, if not all, of these companies provide publications on the
specifics of taxation in Japan. A list of accounting firms with offices in
Japan is provided in the publication Business Support Organizations in
Japan, 1992, which is available on the National Trade Data Bank.
INVESTMENT IN JAPAN:
Despite the recent rapid rise of the yen against the dollar, the lower land,
commercial rent, and share prices in Japan today (compared with the 1985-90
"bubble economy" period), as well as the financial crunch affecting many
Japanese companies, provide U.S. companies with an excellent opportunity to
set up, expand, or buy businesses in Japan.
The Japanese Government does not employ local equity requirements, export
performance requirements, or local content requirements. In addition, the
Japanese Government has not forced foreign individuals or companies to
divest themselves of investments. Japanese law allows limited foreign
landholding, and foreign investors may repatriate capital and profits
Although many legal restrictions on foreign direct investment in Japan have
been eliminated, foreign direct investment remains low in Japan compared
with all other advanced industrialized countries. One barrier for U.S.
investors in Japan is the difficulty in acquiring a majority interest in
Japanese companies -- an approach that is often preferred by U.S. companies
as the most expedient way for an "outsider" to gain ground in an "insider's"
market. While merger and acquisition specialists report greater activity
advising foreign companies about making major direct investments in Japanese
companies, acquisition of a Japanese company, particularly by a non-Japanese
company, is still generally viewed with disfavor in Japan (the colloquial
Japanese term for acquisition is "hijacking").
Most industrial and commercial investment and inward technology transfer is
now legally possible and rarely interfered with. However, some significant
legal investment restrictions remain. The Foreign Exchange and Foreign
Trade Control Law and the implementing Cabinet Order Concerning Domestic
Direct Investment, Etc. (Cabinet Order No. 261, Oct. 11, 1980) do not
require official permission for direct foreign investment. However, ex post
facto notification for investment in unrestricted sectors is required by the
Japanese Government. Moreover, the Japanese Government still imposes a
prior notification for restricted sectors. In addition, there are Japanese
Fair Trade Commission (JFTC) approval requirements on investments and
technology transfers by foreign companies to their own subsidiaries or to
Japanese companies, although the scope and timing of these requirements have
Japan provides foreign investors with national treatment after entry with
limited exceptions as notified to the Organization of Economic Cooperation
and Development (OECD). In accordance with the provisions of the OECD Code
of Liberalization of Capital Movements, to protect the national security and
public interest, Japan retains restrictions in the following business
categories: (1) arms, gun powder, atomic energy, aircraft, and space
development (for national security); (2) narcotic manufacturing, vaccine
manufacturing, and security guard services (for maintenance of public order
and protection of safety of the general public); and (3) agriculture,
forestry, and fisheries; petroleum refining and marketing; leather and
leather product manufacturing; and mining (for protection of domestic
In addition, Article VII of the U.S.-Japan Treaty of Friendship, Commerce,
and Navigation exempts the following sectors from the requirement for
national treatment of investments: broadcasting, telecommunications,
electric power generation and other public utilities, domestic rail and air
transportation, banking, shipbuilding, and industries involved in the
exploitation of land or other natural resources. While foreign investment
in these sectors is restricted, it has taken place in some of them.
However, the criteria for defining and controlling these sectors remain
unclear. The fact that guidelines are not made public potentially inhibits
further investment. Foreign investment in the banking and securities
industries is subject to a reciprocity requirement.
The Japanese Government also restricts industrial siting in certain areas to
prevent further overconcentration in the environs of Tokyo, Osaka, and
Nagoya. These restrictions are applied on a nondiscriminatory basis to both
foreign and domestic companies. Many local prefectural governments outside
these three areas actively seek foreign direct investment in their
Based on the U.S.-Japan Structural Impediments Initiative, the Japanese
Government amended the Large Retail Store Law in May 1991 (effective January
31, 1992) making it easier for foreign retailers to invest in Japan.
Retailers, however, continue to face major challenges breaking into the
domestic distribution network.
Your company should carefully examine the Ministry of International Trade
and Industry's (MITI) new programs for promoting investment in Japan,
including loan programs through the Japan Development Bank (JDB). The
following is a selected list of public and private-sector programs that your
firm may benefit from. For more information on many of these programs,
refer to the following reports written by US&FCS/Japan: Government of Japan
New Import and Inward Investment Support Organizations and Expanded Loan
Programs and Financing for Small and Medium-Sized American Companies in
Japan. Both reports are available on the National Trade Data Bank.
JAPAN DEVELOPMENT BANK (JDB): JDB is a wholly owned Japanese Government
entity established to promote Japan's industrial development and
socio-economic growth by offering long-term and low-interest loans for
various projects originating in the private sector.
JDB will provide long-term financing to:
(1) Japanese, U.S., or joint entities in Japan for facilities designed to
expand the importation of products into Japan.
(2) U.S. and joint entities in Japan to promote investment in production
facilities which may import goods and services from the United States.
(3) Promotion of international joint R&D projects.
For more information, contact:
The Japan Development Bank The Japan Development Bank
Center for Promotion of Direct Center for Promotion of Direct
Investment in Japan Investment in Japan
1101 17th Street, N.W. 601 South Figueroa Street
Suite 1001 Suite 4450
Washington, DC 20036 Los Angeles, CA 90017-5748
Phone: (202) 331-8696 Phone: (213) 362-2980
Fax: (202) 293-3932 Fax: (213) 362-2982
The Japan Development Bank
Center for Promotion of Direct
Investment in Japan
575 Fifth Avenue, 28th Floor
New York, NY 10017
Phone: (212) 949-7550
Fax: (212) 949-7558
FOREIGN INVESTMENT IN JAPAN DEVELOPMENT, INC. (FIND): FIND, which was
established with the support of MITI, provides support to U.S. companies
entering the Japanese market through comprehensive services geared to the
needs of each individual company. FIND maintains close ties with Japanese
governmental organizations such as the Japan External Trade Organization and
the Japan Development Bank as well as Japanese private sector corporations
that support the organization. FIND provides services on consulting,
employment support, training and seminars, business support, and contract
research. For more information or information on how to become a member,
Foreign Investment in Japan Development, Inc.
2nd Floor, Akasaka Twin Tower
2-17-22, Akasaka, Minato-ku
Tokyo 107 JAPAN
JAPAN SMALL BUSINESS CORPORATION (JSBC): JSBC is a Japanese
quasi-government institution connected with the Small Business Agency of
MITI. JSBC provides (1) loans for small and medium-sized enterprises; (2)
training and educational programs at eight JSBC training institutions; (3)
consulting and information support for small business; (4) a mutual relief
system for the prevention of bankruptcies; and (5) assistance for overseas
investment by small and medium-sized enterprises.
In April 1993, JSBC initiated a program to promote foreign investment in
Japanese small and medium-sized enterprises as part of MITI's Inward
Investment Promotion Program. JSBC will now assist foreign companies
looking to find potential business partners and joint venture partners, will
provide consultations on regulatory approvals from government agencies, and
provide information on the investment environment in 46 prefectures in Japan
using JSBC's resources and information on Japanese small and medium-sized
enterprises. For more information on JSBC's investment promotion, contact:
Mr. Shigeki Nagamine
International Business Affairs Division
International Affairs and Research Department
Japan Small Business Corporation
Toranomon No. 37 Mori Building
3-5-1 Toranomon, Minato-ku
Tokyo 105 JAPAN
JAPAN FINANCE CORPORATION FOR SMALL BUSINESS (JFS): JFS was established to
promote the development of small to medium-sized businesses by providing a
stable supply of long-term, low-interest capital. To this end, JFS extends
loans for plant and equipment and for use as long-term operating funds. For
more information, contact:
Japan Finance Corporation for Small Business
9-3, Otemachi 1-chome, Chiyoda-ku
Tokyo 100 JAPAN
PEOPLE'S FINANCE CORPORATION OF JAPAN (PFC): PFC was established in 1949 as
a Japanese governmental institution providing long-term, low-interest loans
to people and small businesses that, due to their unfavorable financial
positions, are not in a position to obtain credit from a private financial
institution. Because of its conservative nature and government connection,
PFC cannot grant loans to enterprises engaged in banking and insurance,
speculative operations, nonprofit/social welfare businesses, and types of
businesses that "could offend public morals." While the PFC primarily
provides loans to Japanese companies, it has given loans in the past to
American-affiliated businesses in Japan. For more information, contact:
People's Finance Corporation
9-3, Otemachi 1-chome, Chiyoda-ku
Tokyo 100 JAPAN
INDUSTRIAL STRUCTURE IMPROVEMENT FUND (ISIF): ISIF was established in 1986
under the Private Participation Promotion Law and is jointly regulated by
MITI and the Ministry of Finance. ISIF provides loan guarantees to
enterprises engaged in foreign direct investment in Japan by guaranteeing
the credit made available to a company by a commercial bank or other
financial institution. For more information, contact:
Industrial Structure Improvement Fund
JDB Building, 7th Floor
1-9-1 Otemachi, Chiyoda-ku
Tokyo 100 JAPAN
JAPAN KEY TECHNOLOGY CENTER: The center was established in 1985 to promote
private-sector research and development (R&D) in key technologies. It
provides loans to companies for R&D activities and invests in joint R&D
companies set up by private concerns. For more information, contact:
Japan Key Technology Center
16th Floor, Ark Mori Building
1-12-32 Akasaka, Minato-ku
Tokyo 107 JAPAN
JAPANESE PREFECTURAL GOVERNMENTS: Most of the 47 prefectures in Japan offer
incentives to businesses that locate in their region. These incentives
consist of subsidies, tax incentives, and loans. Subsidies from the
prefectures are designed to attract businesses to particular locations that
are underdeveloped, are underpopulated, or are seeking the introduction of
specific products. Tax incentives are usually designed for the development
of a targeted area as specified by prefecture and municipal tax legislation
based on the national and regional development laws. For the most part,
these incentives are in the form of exemption from prefecture taxes for a
period of three years. The prefectures and other local entities also offer
special loan schemes for investment projects to assist their respective
region's development. To acquire more information, contact the prefectures'
investment promotion offices (these offices are listed in a joint U.S. Small
Business Administration-Japan Development Bank publication titled Inside
Washington & Tokyo: A Business Guide to U.S. and Japanese Government
Assistance available from either organization. Information is also provided
on some local government programs through International Market Insight
reports which are available on the National Trade Data Bank.
U.S.-JAPAN DIRECT INVESTMENT STATISTICAL SUMMARY: U.S. direct investment in
Japan reached a cumulative value of $26.2 billion in 1992. Major investment
sectors include manufacturing ($11.9 billion), wholesale trade ($5.4
billion), petroleum ($4.8 billion), and finance ($2.7 billion). On the
other hand, Japanese direct investment in the United States reached a
cumulative value of $96.7 billion in 1992. Major investment sectors include
wholesale trade ($30.8 billion), manufacturing ($19.1 billion), real estate
($15.4 billion), services ($11.8 billion), finance ($9.8 billion), banking
($7.9 billion), and retail trade ($0.9 billion).
For more statistical information on U.S.-Japan investment, contact:
U.S. Department of Commerce - Bureau of Economic Analysis
U.S. Foreign Direct Investment Abroad (202) 606-5566
Foreign Direct Investment in the U.S. (202) 606-9893
An annual overview of Japan's investment climate is provided in the Japan
Country Commercial Guide (CCG) which is available on the National Trade Data
Bank. For a list of publications that provide information on direct
investment in Japan, see the "Market Entry Alternatives - Establishing an
Office in Japan" section of this publication.
BEST U.S. EXPORT PROSPECTS:
Many product sectors in the Japanese market offer substantial opportunities
for U.S. exporters. The competition is intense, but when an American firm
correctly identifies a competitive window in a Japanese product sector and
has the capability to effectively export a quality product to Japan, it will
likely find an opportunity for successful sales.
The following 32 product areas are considered by US&FCS/Japan to offer
significant export opportunities to American firms. These products were
chosen because they offer (1) near-term growth potential or (2) a large
market receptive to additional U.S. suppliers. The list highlights product
areas where Japanese demand is strong, and American suppliers are
competitive and have the greatest likelihood of expanding exports to Japan.
More detailed statistical information as well as a brief write-up on each
sector are provided in the Japan Country Marketing Plan (which will be
replaced by the Japan Country Commercial Guide in fiscal year 1995). In
addition, for many of these sectors, an Industry Sub-Sector Analysis (ISA)
has been written. All of these documents are/will be made available on the
National Trade Data Bank.
The name of each product sector is followed in parentheses by: (1)
estimated market size in 1993, (2) estimated market growth rate from 1993 to
1995, (3) estimated U.S. imports in 1993, and (4) estimated average growth
rate of U.S. imports from 1993 to 1995.
(1) Electronic Components
($74.5 billion, 8 percent, $5.9 billion, 11 percent)
(2) Electrical Power Systems
($29.0 billion, 6 percent, $1.0 billion, 50 percent)
(3) Industrial Chemicals
($170.0 billion, 1 percent, $7.4 billion, 5 percent)
(4) Building Products
($16.5 billion, 12 percent, $3.1 billion, 11 percent)
($95.6 billion, 10 percent, $2.4 billion, 10 percent)
(6) Automotive Parts and Service Equipment
($132.6 billion, 2 percent, $0.9 billion, 30 percent)
(7) Computers and Peripherals
($45.0 billion, 2 percent, $3.2 billion, 5 percent)
(8) Telecommunications Equipment
($16.7 billion, 3 percent, $1.1 billion, 15 percent)
(9) Medical Equipment
($11.0 billion, 5 percent, $1.7 billion, 10 percent)
(10) Aircraft and Parts
($9.0 billion, 2 percent, $4.6 billion, 3 percent)
(11) Direct Marketing Services
($58.0 billion, 7 percent, $1.5 billion, 5 percent)
(12) Veterinary Equipment and Supplies
($4.5 billion, 20 percent, $0.3 billion, 25 percent)
(13) Marine Fish Products (Seafood)
($31.3 billion, 0 percent, $2.6 billion, 3 percent)
(14) Drugs and Pharmaceuticals
($82.4 billion, 3 percent, $1.0 billion, 8 percent)
($69.4 billion, 3 percent, $0.6 billion, 11 percent)
(16) Automobiles and Light Trucks/Vans
($96.0 billion, 0 percent, $0.6 billion, 10 percent)
(17) Laboratory Scientific Instruments
($5.0 billion, 4 percent, $0.4 billion, 10 percent)
(18) Sporting Goods and Recreational Equipment
($15.4 billion, 13 percent, $0.4 billion, 13 percent)
(19) Plastic Materials and Resins
($51.0 billion, 1 percent, $1.0 billion, 5 percent)
(20) Architect/Engineering/Construction Services
($523.0 billion, 3 percent, N/A, N/A)
(21) Computer Software
($38.0 billion, -3 percent, $0.4 billion, 10 percent)
(22) Paper and Paperboard
($64.1 billion, 1 percent, $0.7 billion, 3 percent)
(23) Textile Products -- Made-up
($10.2 billion, 13 percent, $0.2 billion, 12 percent)
(24) Machine Tools and Metalworking Equipment
($8.1 billion, 4 percent, $0.1 billion, 10 percent)
($89.7 billion, 2 percent, $0.2 billion, 5 percent)
($25.0 billion, 2 percent, $0.3 billion, 2 percent)
(27) Films, Videos, and Other Recordings
($3.0 billion, 2 percent, $0.4 billion, 3 percent)
(28) Printing and Graphic Arts Equipment
($2.1 billion, 4 percent, $0.05 billion, 10 percent)
(29) Security and Safety Equipment
($2.0 billion, 9 percent, $0.01 billion, 12 percent)
($0.9 billion, 15 percent, $0.01 billion, 12 percent)
(31) Pollution Control Equipment
($8.0 billion, 10 percent, $0.01 billion, 10 percent)
($18.0 billion, -1 percent, $0.5 billion, -1 percent+
REGIONAL OUTLOOK OUTSIDE THE TOKYO AREA:
THE CITY OF OSAKA AND THE KANSAI, CHUGOKU, AND SHIKOKU REGIONS: The Kansai
region is the six-prefecture area of west central Japan centering around the
cities of Osaka, Kobe, and Kyoto, with a combined population of some 22
million people. This area, the traditional merchant center of Japan, is an
economic giant with a gross regional product (GRP) larger than the GDP of
Korea, Taiwan, Hong Kong, and Thailand combined, and accounts for over 3
percent of the entire world's GNP. The Osaka stock exchange is the world's
fifth largest in value.
The Kansai region has development plans that would make even the most
aggressive planners gasp: as of last year, there were 920 major projects
(projects in excess of one billion yen, or $8.7 million) in planning or in
progress, totaling some $345 billion. The centerpiece is the $10.6 billion
Kansai International Airport now being built on a man-made island in Osaka
Bay. Other massive projects include the Kansai Science City, a
research/industrial park being constructed on a large tract of land near
Kyoto, Osaka, and Nara; Technoport Osaka, a city to be built on three
man-made islands south of Osaka, and within the city the building of the
Asia and Pacific Trade Center and the World Trade Center; and "Rinku Town,"
the link town to be built on the shore facing the new airport to provide
support services, hotels, and office space.
The Kansai region offers many advantages to American companies planning to
enter the Japanese market: labor and housing costs much lower than in Tokyo;
some of the best transportation, communication, and other infrastructure
support in Japan; office rental prices approximately 50 percent of Tokyo's,
on average; and a business orientation, as the home of thousands of
companies, and the center of Japan's textile and apparel, chemicals,
pharmaceuticals, and sporting goods industries.
The U.S. and Foreign Commercial Service in Osaka (US&FCS/Osaka) works
closely with local business organizations to promote American exports to the
Kansai region. Together with the Kansai Chapter of the American Chamber of
Commerce in Japan (ACCJ), US&FCS/Osaka recently established the Kansai
Made-in-the-USA Committee, to identify and organize Kansai-area companies
importing U.S. products into Japan. This committee should be very useful in
helping new-to-market U.S. exporters penetrate the Japanese market.
US&FCS/Osaka also covers the Chugoku region, centering on the growing
industrial cities of Hiroshima and Okayama, and Shikoku region, which is
seeing renewed growth due to three bridge construction projects linking
Shikoku island to Japan's main island of Honshu.
THE CITY OF NAGOYA AND THE CHUBU REGION: Nagoya, hub of the
eight-prefecture Chubu region (with a population of 13 million), is Japan's
third largest metropolitan area after Tokyo (225 miles to the east) and
Osaka (125 miles to the west). Aichi Prefecture, in which Nagoya is
located, boasts the highest per capita income in Japan and alone has a $200
billion GRP, larger than the GDP of South Korea. Chubu's GRP is equal to
that of the GDP of Canada. A manufacturing and export powerhouse, it
accounts for close to half of Japan's trade surplus with the United States.
The Chubu region is home to top Japanese manufacturers in autos and auto
parts, aerospace, machine tools, and ceramics. The region is constructing
major projects worth billions of dollars, including Aichi Health Park,
Nagoya Sports Dome, International Design Center, and the New Chubu
International Airport, the largest of the projects; the airport will be
Japan's second 24-hour airport and is slated for a 2005 opening, the year
Aichi also hopes to host the World's Fair.
Top U.S. aerospace companies are active with significant technical tie-ups
in the region. Several U.S. auto parts and other high technology firms have
set up local offices for sales, service, and even R&D. US&FCS/Nagoya is
working actively with the 70-member American Business Community of Nagoya
(ABCN) and its Made-in-the USA Committee to help American business capture a
bigger share of the lucrative Chubu industrial, consumer, and major projects
THE CITY OF FUKUOKA AND THE KYUSHU-YAMAGUCHI REGION: The Kyushu-Yamaguchi
region, lying 700 miles west of Tokyo, is one of the most rapidly developing
areas of Japan and is quickly turning into a third economic center,
following Tokyo and Osaka. It has a population of some 15 million, a land
area the size of Switzerland or the Netherlands, and an economy 1.6 times
that of Korea and 2.6 times that of Taiwan, with a GRP of approximately $410
billion. Kyushu, known as Japan's "Silicon Island," because it accounts for
42 percent of Japan's total semiconductor chip output, will also account for
an estimated 10 percent of Japan's car production by 1995.
Particularly good business prospects in the Kyushu-Yamaguchi region may be
found in the areas of electronics and computers, architecture, architectural
design and construction, and medical equipment and technology. In addition
to construction of a new international terminal at Fukuoka airport, plans
are being made to obtain funding from the Japanese Government to start
construction of a major new international airport within the next ten years
to serve as a hub for western Japan and nearby Asian countries.
US&FCS/Fukuoka works closely with the Fukuoka American Business Club, an
organization of 27 companies which promotes the interests of U.S. firms in
THE CITY OF SAPPORO AND THE HOKKAIDO AND TOHOKU REGIONS: Northern Japan,
consisting of six prefectures in the Tohoku region centering on Sendai, 250
miles north of Tokyo, and the island of Hokkaido, whose largest city is
Sapporo, 700 miles from Tokyo, has a GRP of $350 billion. Northern Japan's
direct imports from the United States totaled about $2.2 billion in 1992,
but indirect imports via Tokyo and the Kansai double that figure, to over $4
billion. Sapporo, Hokkaido's capital of 1.8 million people, and Sendai,
with a population of almost 1 million, are responsible for more than
one-third of total sales in the region.
The construction, building products, and tourism industries are particularly
attractive markets in northern Japan. Architectural and construction
services are much in demand as the region's focus has shifted in recent
years. Hokkaido's New Chitose Airport, with its $8 billion Aeropolis
concept, has the potential to become a new Asian passenger and air cargo hub
and relieve some of the air traffic and congestion of the Tokyo and Kansai
In Tohoku, a dynamic high technology sector increasingly takes center stage,
with growth rates well above the national average.
THE JAPANESE GOVERNMENT:
The government-business relationship in Japan is much more intimate than in
the United States. The Japanese Government routinely consults with the
private sector through advisory committees, groups, and other formal and
informal mechanisms which often serve as fora for building consensus on
policy actions that impact on the private sector. The private sector in
Japan will also seek the guidance of bureaucrats in Japan's ministries for
the interpretation of laws and statutes and to advise on how to conduct
business that is significantly influenced by national or prefectural laws
and certification systems.
The trade agencies of the Japanese Government (the Ministry of International
Trade and Industry -- MITI, the Japan External Trade Organization -- JETRO,
and the Manufactured Imports Promotion Organization -- MIPRO) are under
pressure from foreign countries to implement further market opening
measures. These agencies are cooperating with the U.S. Department of
Commerce (USDOC) under the USDOC-MITI Joint Trade Promotion Cooperation
Program to increase American exports to Japan. This program concentrates on
five major categories for cooperation: data and information exchange,
market research, trade events, specific trade expansion initiatives, and
trade facilitation services. For more information on this program, see the
June 14, 1993 edition of Business America (past Business America issues are
now made available on the National Trade Data Bank).
MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI): MITI formulates and
implements the Japanese Government's trade and industrial policy. Along
with the ministries of Finance (MOF); Construction (MOC); Transportation
(MOT); Agriculture, Forestry and Fisheries (MAFF); as well as the Economic
Planning Agency (EPA); MITI occupies a central position in what the Japanese
call the economic bureaucracy. MITI is regarded as one of the three most
powerful and prestigious ministries of the central government (together with
the MOF and the Ministry of Foreign Affairs). MITI has overall
responsibility for trade matters, and it funds most of the government's
export promotion programs. However, day-to-day management and operation of
these programs is the responsibility of JETRO. MITI functions include both
policy-making and program operations. On export-related matters, MITI
supervises the export financing programs of Japan's Export-Import Bank,
operates several types of export insurance programs, supports research
organizations, and facilitates various types of overseas technical and
cooperation training programs.
JAPAN EXTERNAL TRADE ORGANIZATION (JETRO): Although legally placed under
MITI's aegis, JETRO administers the export programs of the Japanese
Government with virtual independence. MITI subsidizes much of JETRO's total
annual expenditures and, technically, has final decision-making authority
over JETRO management and programs -- remaining JETRO funding originates
from voluntary contributions from corporate Japan. Originally established
to help Japanese firms export, JETRO now assists American companies seeking
to export to Japan.
JETRO offers a number of products and services which you may find helpful in
your efforts to export to Japan. See the sections titled "Market Research
-- Japan External Trade Organization," "Choosing Your Method of Market Entry
-- Japanese Government Programs," and "Japanese Import Promotion Measures"
in this guide. JETRO also publishes market research reports and other
publications/pamphlets useful to U.S. exporters.
Exporters who believe they have encountered nontariff barriers or other
institutional problems related to trade should contact the U.S. Department
of Commerce, Office of Japan Trade Policy, at (202) 482-1820. In addition,
complaints may be brought to the attention of JETRO. When JETRO deems it
appropriate, trade complaints will be forwarded to the Office of Trade and
Investment Ombudsman (OTO), which was established by the Japanese Government
for the purpose of settling trade grievances. Complete information about
the OTO is available at all JETRO offices.
JETRO offices in the United States:
JETRO, New York JETRO, Chicago
44th Floor, McGraw-Hill Building 401 North Michigan Avenue
1221 Avenue of the Americas Suite 660
New York, NY 10020-1060 Chicago, IL 60611
Phone: (212) 997-0400 Phone: (312) 527-9000
Fax: (212) 302-1581 Fax: (312) 670-4223
JETRO, Houston JETRO, Denver
1221 McKinney 1200 17th Street
One Houston Center, Suite 2360 Suite 1110
Houston, TX 77010 Denver, CO 80202
Phone: (713) 759-9595 Phone: (303) 629-0404
Fax: (713) 759-9210 Fax: (303) 893-9522
JETRO, Los Angeles JETRO, San Francisco
725 Figueroa Street 235 Pine Street
Suite 1890 Suite 1700
Los Angeles, CA 90017 San Francisco, CA 94104
Phone: (213) 624-8855 Phone: (415) 392-1333
Fax: (213) 629-8127 Fax: (415) 786-6927
JETRO, Atlanta JETRO, Dallas
245 Peachtree Center Avenue World Trade Center
Suite 2208 2050 Stemmous Freeway
Marquis One Tower Suite 152-1
Atlanta, GA 30303 Dallas, TX 75258
Phone: (404) 681-0600 Phone: (214) 651-0839
Fax: (404) 681-0713 Fax: (214) 651-1831
MANUFACTURED IMPORTS PROMOTION ORGANIZATION (MIPRO): MIPRO is a nonprofit
organization established in 1978 by the joint efforts of the Japanese
Government and the private sector to promote the imports of foreign
manufactured products by hosting various trade exhibitions and providing a
wide range of market information. MIPRO's activities are broadly classified
into the following three categories: (1) holding imported product trade
exhibitions for buyers and the general public, (2) disseminating information
regarding imported products and the Japanese market, and (3) promoting sales
of foreign products to Japanese consumers to enhance the appreciation of the
quality of imported goods. MIPRO operates under the aegis of JETRO.
2000 L Street, N.W., Suite 616
Washington, DC 20036
Phone: (202) 659-3729
JAPANESE IMPORT PROMOTION MEASURES:
Japan's Import Promotion Measures were initiated in April 1990 to stimulate
imports into Japan. By instituting these measures, the Japanese Government
displayed its commitment to addressing some of the concerns voiced by the
U.S. Government and Japan's other trading partners, regarding the tremendous
merchandise trade and current account surpluses that Japan holds with the
United States and other countries.
Japanese Government efforts to increase imports into Japan also derive from
the need for the Japanese Government to redress Japan's current economic
difficulties. The rapid appreciation of the yen over the last few years,
resulting from the persistent surpluses in Japan's current account (of which
the merchandise trade balance is a major part), has had a strong negative
impact on Japanese industry, adversely effecting Japan's economic recovery.
In October 1993, the Japanese Government publicly expressed that Japan must
work towards a highly significant reduction in its current account surplus.
Significantly increasing imports into Japan will strongly diminish the
upward market pressures on the value of the yen and substantially reduce
Japan's current account surplus. The Japanese Government has stated that
import expansion will be a priority policy issue for Japan.
The Japanese Government Import Promotion Measures provide many types of
assistance to potential U.S. and other foreign exporters seeking to do
business with Japan. These measures were expanded in April 1993 to include
new programs and expansions of existing ones. Many of these programs are
operated and administered by JETRO. The scope of these programs covers
import tax incentives, export financing, assistance in finding Japanese
business partners, market research, export study programs, the provision of
free office space in Tokyo, among other initiatives. The following is a
listing of the major Japanese import promotion programs and activities in
operation as of April 1994.
TAX INCENTIVES FOR MANUFACTURED IMPORTS: The Tax Incentives for
Manufactured Imports initiative was introduced in April 1990 and expanded in
April 1993. Under the present system, manufacturers and the subsidiaries of
foreign corporations that are operated by manufacturers (50 percent or more
of the stock must be foreign owned) can receive corporate income tax credits
or additional depreciation on imported equipment when they annually increase
the value of their manufactured imports by 2 percent or more. The tax
credit rate is tied to a company's rate of increase in eligible imports --
the greater the percentage increase of eligible imports, the greater the tax
credit rate (up to a 5 percent maximum rate). The additional depreciation
rate on imported equipment is 10 or 20 percent. Imported equipment eligible
for the additional depreciation must be imported within the taxable year or
within the two years prior to the taxable year, and still be in the
company's possession at the end of the taxable year. Eligible manufactured
imports under the tax incentive program include those products in sections 5
through 8 of the SITC product classification code.
The Tax Incentives for Manufactured Imports also provide tax benefits to
wholesalers and retailers under the provisions of the Import Marketing
Reserve Fund. Under this program, companies can create a reserve fund of up
to 20 percent of the value of the increased eligible imports, for the
purpose of market development for imported manufactured goods. The reserved
funds can be deducted from the company's taxable income. For further
information on import tax incentive programs, contact:
Import Division, International Trade Administration Bureau
Ministry of International Trade and Industry
Phone: 011-81-3-3501-1511 ext 2701-9
BUSINESS INITIATIVES FOR GLOBAL PARTNERSHIP (BIGP): On November 13, 1991,
MITI introduced the BIGP program. The program was designed to: (1) expand
Japanese imports, (2) increase local procurement by Japanese-affiliated
companies operating abroad, and (3) promote international corporate
cooperation between Japanese and U.S. companies. As part of this
initiative, the U.S. Department of Commerce has encouraged Japanese
companies that support the BIGP initiative to provide their detailed
procurement plans to the Department so potential U.S. suppliers will know
what these companies are looking to import and who are the appropriate
contacts. The procurement plans that the Department has received from
Japanese companies have been placed on the National Trade Data Bank to
ensure widespread dissemination of this information. More recently,
Keidanren (Federation of Economic Organizations -- the principal Japanese
business organization), published a guide titled Access to Japan: List of
Contact Points for Procurement (July 1993). To receive a copy of this
Industry and Telecommunications Department
9-4, Otemachi 1-chome, Chiyoda-ku
Tokyo 100 JAPAN
Phone: 011-81-3-3279-1411 (extension 3517)
JETRO PRE-FABRICATED HOUSING IMPORT PROMOTION: Given the need for more
inexpensive housing in Japan, JETRO will be opening four showrooms dedicated
to presenting foreign-produced pre-fabricated housing. By September 1994,
there will be showrooms in Osaka, Yokohama, Sapporo, and Fukuoka.
AUTO AND AUTO PARTS IMPORT PROMOTION: The Japanese Government has initiated
a program to promote auto and auto parts imports into Japan. JETRO, which
is the implementing authority for these activities, established the Imported
Automobile Project Office in its Import Promotion Division in July 1992.
JETRO activities include: (1) assistance to foreign auto parts missions,
(2) assistance in providing training on the in-house design process for auto
parts in Japan, and (3) imported auto shows in five Japanese cities. For
more information, contact the JETRO office nearest you.
JETRO SENIOR TRADE ADVISORS: JETRO has dispatched 31 senior trade advisors
to North America, Europe, and the Asia-Pacific region with 21 senior trade
advisors stationed in various regions of the United States. These
individuals work with state governments to help expand U.S. exports from the
states or regions where they are posted. The senior trade advisors
dispatched to the state governments are individuals with various industry
expertise, recruited from Japanese trading companies, manufacturers, and
distributors. They help identify products with sales potential in the
Japanese market, provide commercial consulting services to local businesses
exploring export opportunities in Japan, and offer general market and
consumer information to potential exporters developing products for the
Japanese market. For the name and location of the JETRO senior trade
advisor in your state or region, contact the JETRO office nearest you.
JETRO ASSISTANCE TO FOREIGN TRADE MISSIONS: In cooperation with other
national governments and trade associations, JETRO seeks to help foreign
trade missions to Japan. JETRO's support includes: (1) consultation on
mission schedules, (2) coordination of trade fairs and store and factory
visits, (3) arrangement of introductions and business meetings, (4) language
assistance, (5) preparation of meeting space, and (6) briefing seminars.
For more information, contact the JETRO office nearest you.
JETRO BUYERS' MISSIONS: JETRO organizes and recruits Japanese importers and
regional business associations to participate in buying missions dispatched
from Japan to the United States and other countries. These buying missions
visit selected trade fairs and potential suppliers in the United States.
The mission groups are accompanied by JETRO industry specialists who provide
advice on product selection and import methods, and act as guides for the
missions. JETRO offices in the United States will coordinate seminars,
business negotiation meetings, factory visits, and other business
arrangements for the buyers' missions. Contact the JETRO office nearest you
for specific information on future buying missions to the United States.
JETRO IMPORT PRODUCT SPECIALISTS AND NEW IMPORT SHOWCASES: This program
provides an opportunity for smaller Japanese wholesalers and retailers to
visit the United States and other foreign countries to search for products
with clear import potential. Successful Japanese applicants are sent by
JETRO on one-to-three month assignments to a particular foreign country.
These import product specialists work closely with JETRO offices abroad,
purchasing product samples which are shipped back to Japan for display in
one of JETRO's New Import Showcases. JETRO will also begin participating
more actively in domestic trade fairs in Japan by displaying and promoting
those product samples purchased by the product specialists. For more
information, contact the JETRO office nearest you.
MIPRO INTERNATIONAL EXHIBITION HALLS: The International Exhibition Halls of
the Manufactured Imports Promotion Organization (MIPRO) are located in the
Culture Center Building and World Import Mart Building in the Sunshine City
Complex located in the Ikebukuro section of Tokyo. These exhibition halls
are made available for trade fairs, exhibitions, business negotiations, and
other activities designed to promote the import of manufactured goods into
Japan. They are available at minimal charges to help cover administrative
costs. There is also exhibition space available for permanent exhibitions
of goods from the United States. The U.S. Department of Commerce utilizes
the space allocated to the U.S. Government for holding trade fair
exhibitions organized and recruited by the Department. For more information
on the exhibition halls or to apply for use of them, contact:
Trade Fair Division
Import Promotion Department
Manufactured Imports Promotion Organization
6th floor, World Import Mart Building
1-3, Higashi Ikebukuro 3-chome, Toshima-ku
Tokyo 170 JAPAN
MIPRO PRODUCT AND CONSUMER SURVEY REPORTS: Every year, MIPRO produces a
limited number of consumer survey and product trend reports. Unlike the
JETRO "Your Market in Japan" market research reports, these reports are not
comprehensive market research reports, but are intended to specifically
convey detailed information on Japanese consumer product preferences and
purchasing trends. For more information on obtaining these reports, contact
MIPRO's Washington, DC office.
OTHER IMPORT PROMOTION MEASURES: The following are other Import Promotion
Measures being implemented by the Japanese Government:
(1)JETRO market research and trade facilitation information (see the section
titled "Market Research").
(2)JETRO Japanese importer-U.S. exporter matchmaking services (see the
section titled "Choosing Your Method of Market Entry").
(3)Foreign Access Zone construction and expansion (see the section titled
"Getting Your Product Through Japanese Customs").
(4)Japan Export-Import Bank and MITI export financing activities (see the
section titled "Export Financing").
(5)Japan Development Bank and MITI investment financing activities (see the
section titled "Investment in Japan").
U.S. DEPARTMENT OF COMMERCE JAPAN EXPORT PROMOTION PROGRAM (JEPP):
To help you take full advantage of export opportunities in Japan, the U.S.
Department of Commerce initiated the Japan Export Promotion Program (JEPP)
in February 1990. The program was designed specifically to assist U.S.
firms in entering the Japanese market. JEPP has three major elements:
(1) JAPANESE MAJOR PROJECTS ARRANGEMENTS AND OFFICIAL DEVELOPMENT
ASSISTANCE PROGRAM (ODA): The Department identifies and counsels American
firms on commercial opportunities presented by Japanese domestic
infrastructure projects (major projects or public works) and Official
Development Assistance projects in developing countries (ODA or Japanese
foreign aid program). For appropriate contact information, see section
titled "Where to Receive Business Counseling."
(2) JAPAN CORPORATE PROGRAM (JCP): On November 29, 1990, the Department
announced the 20 companies selected to participate in the JCP. As part of a
five-year commitment to the program, the companies will arrange four visits
a year to Japan, including two by their chief executives; publish their
product literature in Japanese; participate in at least one trade promotion
event in Japan each year; and modify products as needed to enhance sales in
Japan. The Department will work closely with these firms over the five-year
period, providing them with market information, arranging introductory
meetings with prospective Japanese buyers, and recommending market
development strategies. For more information on the JCP, contact the Office
of Export Promotion Coordination within the Department's International Trade
Administration at (202) 482-2087.
(3) GENERAL TRADE FACILITATION: The Department has committed to improve
and expand its ongoing trade facilitation programs. Products and services
that have been tailored more specifically to the Japanese market include the
Agent/Distributor Service, the Gold Key Service, the Customized Sales
Survey, trade events, and market research and information. Commerce has
expanded its US&FCS staff in Japan from 45 persons in fiscal year 1990 to 62
persons in fiscal year 1993 (17 Americans and 45 Japanese) with a presence
in Tokyo, Osaka, Nagoya, Sapporo, and Fukuoka. These individuals report on
commercial developments, identify trade barriers, prepare market research,
counsel U.S. exporters on business practices and opportunities, coordinate
U.S. participation in and organize trade events, and introduce exporters to
Japanese buyers. Under JEPP, the Department also created the Japan Export
Information Center (JEIC). The JEIC is the primary contact point in the
Department for U.S. exporters seeking business counseling and commercial
information. JEIC staff work closely with US&FCS/Japan and the 68 US&FCS
district offices in the United States to assist U.S. companies interested in
exporting to Japan.
U.S. DEPARTMENT OF COMMERCE SPECIAL INFORMATION PRODUCTS AND BUSINESS
FACILITATION SERVICES FOR JAPAN:
The following are US&FCS/Japan special information products and business
facilitation services that are designed to help your firm export to Japan.
JAPAN COUNTRY MARKETING PLAN (CMP): The annual Japan CMP provides
information on country specific economic and trade statistics, best export
prospects, the general commercial and economic environment, financing
environment, trade and investment issues/barriers, schedule of market
research to be prepared by US&FCS/Japan, trade events to involve
US&FCS/Japan participation, and the US&FCS/Japan work plan for the coming
fiscal year. In fiscal year 1995, the CMP will be replaced by the new
annual Country Commercial Guide. The Japan CMP is available on the National
Trade Data Bank.
JAPAN MARKET INFORMATION REPORTS (JMIR's): The JMIR's are US&FCS/Japan
reports aimed at firms and individuals that are new to Japan and need
general background information on the business climate and services
available from the private sector in Japan. The JMIR's are available on the
National Trade Data Bank.
BUSINESS SUPPORT ORGANIZATIONS IN JAPAN (JMIR 1) (1992): This JMIR contains
a list of market research and business consulting firms, Japanese Government
agencies, Japanese and U.S. trade associations, libraries and information
centers, U.S. state representative offices, convention and exhibition
centers, advertising and public relations firms, credit reporting agencies,
executive office support firms, executive search firms, temporary staff
services, interpreters/translators, mailing label services, accounting
firms, patent attorneys, shipping/freight services, customs brokers, and
ENGLISH-LANGUAGE BUSINESS PUBLICATIONS IN JAPAN (JMIR 2) (1992):
Publications are broken down by product sector: apparel and textiles,
automotive, aviation, biotechnology, building and construction materials,
chemicals and metals, computer software/hardware, consumer goods, cosmetics,
electronics, energy and environment, food and food services, furniture and
wood products, industrial materials, instrumentation, machinery, media and
publications, medical care, paper and pulp, pharmaceuticals, services,
sports and recreation, telecommunications, and miscellaneous.
COST OF DOING BUSINESS IN JAPAN (JMIR 3) (1993): This report gives basic
cost information for rents and standard products and services needed by a
U.S. company to set up an office in Tokyo or other cities in Japan. Topics
include office rent, equipment, staff, communications, transportation,
forming a company and obtaining professional assistance, marketing, housing
and accommodations, meals and hospitality, contact lists, and bibliography.
ADVERTISING IN JAPAN (JMIR 4) (1993): This report includes (1) an overview
of the Japanese advertising industry; (2) a description of advertising media
by type (newspapers, magazines, broadcasting, and transit advertising) and
typical costs; (3) U.S. Consulate/Osaka comments; and (4) list of
JAPANESE DATABASES ACCESSIBLE FROM THE UNITED STATES (JMIR 5) (1993): This
reports lists (1) Japanese on-line databases in English accessible from the
United States; (2) Japanese on-line databases in Japanese accessible from
the United States; (3) Japanese on-line database distributors; (4) Japanese
databases planned for overseas expansion; and (5) problems encountered by
database services in globalization.
US&FCS JAPAN SERVICES GUIDE (1993): A complete listing of products and
services offered by US&FCS in Japan. This report has been placed on the
National Trade Data Bank.
BUSINESS FACILITATION: The US&FCS/Japan offers individualized consultation
services designed to help your firm enter the Japanese market. Appointments
should be made by cable through your local U.S. Department of Commerce
district office (see appendix).
US&FCS/Japan contact information:
U.S. Embassy, Tokyo U.S. Consulate, Fukuoka
1-10-5 Akasaka, Minato-ku 2-5-26 Ohori, Chuo-ku
Tokyo 107 JAPAN Fukuoka 810 JAPAN
Phone: 011-81-3-3224-5060 Phone: 011-81-92-751-9331
Fax: 011-81-3-3589-4235 Fax: 011-81-92-713-9222
APO Address: APO Address:
Unit 45004, Box 204 Unit 45004, Box 242
APO AP 96337-5004 APO AP 96337-5004
U.S. Consulate, Osaka-Kobe U.S. Consulate, Sapporo
2-11-5 Nishitenma, Kita-ku Nishi 28, Kita 1, Chuo-ku
Osaka 530 JAPAN Sapporo 064 JAPAN
Phone: 011-81-6-315-5957 Phone: 011-81-11-641-1115
Fax: 011-81-6-361-5978 Fax: 011-81-11-643-1283
APO Address: APO Address:
Unit 45004, Box 239 Unit 45004, Box 276
APO AP 96337-5004 APO AP 96337-5004
US&FCS/Nagoya Naha Consulate (non-US&FCS)
U.S. Consulate, Nagoya U.S. Consulate, Naha
3-10-33 Nishiki, Naka-ku No. 2564 Nishihara
Nagoya 460 JAPAN Urasoe City, Okinawa 901-21
Phone: 011-81-52-203-4277 Phone: 011-81-98-876-4211
Fax: 011-81-52-201-4612 Fax: 011-81-98-876-4243
APO Address: FPO Address:
US&FCS/Nagoya Naha Consulate
c/o U.S. Embassy, Tokyo PSC 556, Box 840
Unit 45004, Box 276 FPO AP 96372-0840
APO AP 96337-5004
OBTAINING LEGAL ASSISTANCE IN JAPAN: A list of patent attorneys in Japan is
available in the Business Support Organizations in Japan, 1992. Lists of
Japanese lawyers (bengoshi) who speak English and U.S. law firms in Tokyo
(gaikokuho-jimu-bengoshi offices) prepared by the U.S. Embassy consular
section are available from either US&FCS/Tokyo or the consular section.
Similar lists of lawyers in the other consulate districts are available from
US&FCS/Osaka and the Osaka consulate, and the consulates in Fukuoka,
Sapporo, and Naha. Please contact the appropriate US&FCS/Japan office or
consulate in Japan to request a copy (see contact information in this
JAPANESE TRADE BARRIERS:
Over the past few years, the Japanese Government has removed most formal
barriers to the import of goods and services. Import licenses, which are
still technically required for all goods, are granted on a pro forma basis
with limited exceptions (fish, leather goods, and some agricultural
products). Japan's average tariff rate is one of the world's lowest.
Current obstacles to selling to the Japanese market do not fit into
conventional trade barrier categories. Instead of tariffs and official
discrimination against imports, American exporters face a number of factors
that raise costs and inhibit access. These include the tangle of government
red tape, lack of transparency in import certification and approval
procedures, the high cost of land, an outdated and fragmented distribution
system, close ties among Japanese competitors, and skeptical attitudes
toward foreign suppliers by some government and private business
executives. Two annual publications which focus on trade barriers are:
National Trade Estimate Report on Foreign Trade Barriers. Office of the
U.S. Trade Representative. (Annual). Contact the Government Printing
Office at (202) 783-3238.
United States-Japan Trade White Paper. American Chamber of Commerce in
Japan. (Annual). Contact the U.S. Chamber of Commerce at (202) 463-5460.
WHERE TO RECEIVE EXPORT COUNSELING:
TRADE INFORMATION CENTER (TIC): The U.S. Government interagency Trade
Promotion Coordinating Committee has established a comprehensive, one-stop
information center for U.S. companies seeking information on Federal
programs and activities that support U.S. exports, including information on
overseas markets and industry trends. The TIC provides detailed information
on the resources available through the publication Export Programs: A
Business Directory of U.S. Government Resources. Also provided is a
computerized calendar of U.S. Government-sponsored domestic and overseas
trade events. For more information, contact the TIC at 1-800-USA-TRADE.
U.S. DEPARTMENT OF COMMERCE/INTERNATIONAL TRADE ADMINISTRATION (ITA): ITA
offers assistance and information to help U.S. exporters of manufactured
goods (agricultural and other food products are handled by the U.S.
Department of Agriculture). ITA units include country (International
Economic Policy -- IEP) and industry (Trade Development -- TD) experts and
domestic and overseas commercial offices (U.S. and Foreign Commercial
Service -- US&FCS), each promoting products and offering services and
programs for the U.S. exporting community.
The Japan Export Information Center (JEIC): The Office of Japan is ITA's
country-specific (IEP) expert on Japan. The Office of Japan performs two
separate and distinct functions: trade policy and trade promotion. The
former function is performed by the Office of Japan Trade Policy (OJTP) and
involves the development and implementation of bilateral and multilateral
trade policy and commercial strategies. The latter function is performed by
the Office of Japan Commercial Program's (OJCP) JEIC. The JEIC offers
business counseling and provides current and accurate information on
exporting to Japan. The JEIC provides information on doing business in
Japan, including market entry alternatives, market information and research,
product standards and testing requirements, tariffs, and nontariff
barriers. The staff also maintains a commercial library and is available to
participate in private-sector and government-sponsored seminars on various
aspects of doing business in Japan. Contact the JEIC at (202) 482-2425.
Trade Development (TD): TD industry specialists work with manufacturing and
service industry representatives and associations to identify trade
opportunities and obstacles by product or service, industry sector, and
market. To assist U.S. business in its export effort, industry experts
conduct executive trade missions, trade fairs, marketing seminars, and
business counseling. Industry specialists are organized into four major
sectors: (1) technology and aerospace industries; (2) basic industries; (3)
textiles, apparel, and consumer goods industries; and (4) service industries
and finance. For further information on services provided by industry trade
specialists, call (202) 482-1461.
U.S. and Foreign Commercial Service (US&FCS): Established to help U.S.
firms compete more effectively in the global marketplace, the US&FCS has a
network of trade specialists in 68 U.S. cities (district offices) and 66
countries worldwide. US&FCS offices provide information on foreign markets;
agent/distributor location services; trade leads; financing aid; and
counseling on business opportunities, trade barriers, and prospects abroad.
District office trade specialists can provide the business community with
local export counseling and a variety of export programs and services,
including the Export Qualifier Program. In this program, specialists help
firms determine their readiness to export. Specific recommendations are
proposed to help strengthen and enhance a company's exporting ability. For
the telephone number of your local district office, see the section titled
"International Trade Administration/US&FCS District Offices."
IMPORTANT TD CONTACTS:
Office of Export Trading Company Affairs: This office (1) promotes the
formation and use of export trading companies and export management
companies, (2) offers information and counseling to businesses and trade
associations regarding the U.S. export intermediary industry, and (3)
administers the Export Trade Certificate of Review program, which provides
limited antitrust protection to U.S. firms for joint export activities. The
office also manages The Export Yellow Pages, a directory of U.S. suppliers,
banks, service organizations, and export trading companies. To register
your company in this free directory, contact your local ITA district
office. To contact the office, call (202) 482-5131.
Major Projects Branch (MPB): MPB (1) coordinates government assistance and
helps U.S. firms to compete for major infrastructure and industrial projects
overseas, (2) identifies upcoming projects and prepares specific information
about them, (3) monitors developments in specific industrial sectors, (4)
provides one-on-one business counseling, and (5) offers guidance on
appropriate foreign market business contacts, contract bidding procedures,
and strategies. MPB's Major Projects Reference Room, Room 2014-B at the
U.S. Department of Commerce, is a one-stop shopping center for project
information from around the world. U.S. firms can review US&FCS project
reports, appraisal reports produced by multilateral development banks (MDB),
literature on MDB project cycles, sample bidding documents, and country
development plans. To contact MPB, call (202) 482-5226.
Japan Official Development Assistance (ODA) Program: This program provides
information and counseling to U.S. suppliers and consultants interested in
pursuing infrastructure projects in developing countries, using funds from
Japan's foreign aid program. The volume of Japan's ODA, which includes
grant aid, soft loans, and technical cooperation, is estimated at $11
billion in 1992 and is expected to grow over the next five years. A
substantial portion of these funds is untied, meaning non-Japanese firms may
bid on them. U.S. firms' participation in yen-loan projects is estimated at
7-8 percent of total Japanese ODA in FY 1992. For additional information,
contact Robert Lurensky, Office of Energy, Environment and Infrastructure
(Trade Development) at (202) 482-4002 or Elizabeth Johns, Office of Japan
Trade Policy (International Economic Policy) at (202) 482-1820.
OTHER U.S. DEPARTMENT OF COMMERCE CONTACTS:
Bureau of Export Administration (BXA): BXA is responsible for control of
exports for reasons of national security, foreign policy, and short supply.
Licenses on controlled exports are issued and seminars on U.S. export
regulations are held domestically and overseas. Contact the Office of
Export Licensing at (202) 482-8536 or the automated telephone line at (202)
National Oceanic and Atmospheric Administration/National Marine Fisheries
Service (NMFS): NMFS specialists work with fishing industry representatives
and organizations to facilitate access to foreign markets. In cooperation
with US&FCS, NMFS assists exporters seeking new opportunities for export of
fish and fish products, especially to the Japanese and European markets. It
also provides inspection services for fishery exports and issues U.S.
Government certification. Contact the Office of Trade and Industry
Services, Fisheries Promotion and Trade Matters at (301) 713-2379 and Export
Inspection Services at (301) 713-2355.
U.S. DEPARTMENT OF AGRICULTURE CONTACTS:
Foreign Agricultural Service (FAS): The FAS maintains 15 overseas
agricultural trade offices to help exporters of U.S. agricultural and forest
products in key overseas markets, including Japan. For additional
information, call the AgExport Services Division at (202) 720-6343.
U.S. Trade Assistance and Promotion Office (TAPO): TAPO is a single contact
point within the Foreign Agricultural Service for agricultural exporters
seeking foreign market information. The office also counsels firms that
believe they have been injured by unfair trade practices. Contact TAPO at
Agriculture Research Service: The service provides exporters with
information, research, and consultations on a wide array of topics,
including shipping, storage, insect control, pesticide residues, and market
disorders. Contact International Activities at (301) 504-5605.
SMALL BUSINESS ADMINISTRATION CONTACTS:
Export Legal Assistance Network (ELAN): ELAN is a nationwide group of
attorneys with experience in international trade who provide free initial
consultations to small businesses on export-related matters. Contact ELAN
at (202) 778-3080.
Small Business Institutes (SBI): SBI's provide international trade
counseling and management assistance to eligible small businesses. Some
SBI's provide international trade counseling, depending on local needs and
program strengths. Contact a business development officer at your local
Small Business Administration (SBA) district office. For the address and
phone number of your local SBA district office, call 1-800-U-ASK-SBA.
EXPORT-IMPORT BANK OF THE UNITED STATES CONTACTS:
Services for Small Businesses: The Export-Import Bank of the United States
(Eximbank) offers briefing programs that are available to the small business
community, including regular and group briefings held both within the bank
and around the country. To encourage small businesses to sell overseas,
Eximbank offers a special toll-free hotline to provide information on the
availability and use of export credit insurance, guarantees, and loans
extended to finance the sale of U.S. goods and services abroad. Contact the
Eximbank Hotline at 1-800-424-5201.
City-State Program: Eximbank works with state and local government agencies
to offer export counseling and financial assistance to the businesses in
their jurisdictions. Cooperative programs currently operate in more than 20
states and regions. For additional information, call (202) 566-4490.
WHERE TO GET MARKET INFORMATION AND TRADE LEADS:
U.S. DEPARTMENT OF COMMERCE CONTACTS:
Business America: Business America is the principal Commerce Department
publication for presenting domestic and international business news. Each
monthly issue includes a "how to" article for new exporters; a discussion of
U.S. trade policy; news of government actions that may affect trade; and a
calendar of upcoming trade shows, exhibitions, fairs, and seminars. An
annual subscription costs $61. For information about Business America,
contact the International Trade Administration's Office of Public Affairs at
(202) 482-3251, or for ordering a subscription, contact the U.S. Government
Printing Office at (202) 783-3238.
Bureau of the Census/Export and Import Trade Database: The Export and
Import Trade Database provides worldwide U.S. export and import statistics
tracked by mode of transportation and port of entry or exit. Various levels
of classification, including the Harmonized System of Commodity
Classification, Standard International Trade Classification, Standard
Industrial Classification Based Codes, and End-Use Classification are
available. Customized tabulations and reports can be prepared to user
specifications. Prices begin at $25 and vary depending upon user
requirements and job size. Contact Trade Data Services Branch at (301)
Bureau of the Census/Center for International Research (CIR): CIR compiles
and maintains up-to-date global demographic and social information for all
countries in its International Data Base (IDB), which is accessible to U.S.
companies seeking to identify potential markets overseas. A computer tape
of information on the IDB can be purchased for $175. Printed tables on
selected subjects for selected countries can be purchased for a minimum
charge of $75. Contact the Systems Analysis and Programming staff at (301)
Technology Administration/Japan Technology Program (JTP): JTP publishes
several reports on important high technology developments in Japan,
including such areas as advanced ceramics, manufacturing, electronics,
biotechnology, and technology transfer issues. JTP serves as a coordinator
of Federal Government efforts related to the acquisition and dissemination
of Japanese technical information, and sponsors conferences and workshops on
accessing Japanese information for government and private sector
participants. JTP also sponsors the Manufacturing Technology Program, which
is designed to allow U.S. engineers to work in Japan. JTP implements the
U.S.-Japan Science and Technology Agreement for the U.S. Department of
Commerce, including negotiating various joint R&D arrangements. JTP
publishes the Directory of Japanese Technical Resources in the United
States. Contact the JTP staff at (202) 482-1288.
U.S. DEPARTMENT OF AGRICULTURE CONTACTS:
Economic Research Service (ERS): The ERS staff provides economic data,
models, and research information about agricultural economies, agricultural
policies of foreign countries, and bilateral agricultural trade and
development relations. The ERS maintains files on (1) the production and
marketing of major commodities; (2) pricing data; (3) use, development, and
conservation of natural resources; and (4) overseas performance of the U.S.
agricultural industry. It also publishes regional agricultural and trade
reports, commodity outlook circulars, and a variety of research publications
on country specific issues. Contact the Agriculture and Trade Analysis
Division at (202) 219-0700.
Agriculture Trade and Marketing Information Centers: These centers, part of
the National Agriculture Library, help locate relevant material from their
large collection on trade and marketing, and provide copies of research and
data from their AGRICOLA database. For additional information, call (301)
Country Market Profiles: These profiles are country-specific 2-4 page
descriptions of 40 overseas markets for high-value agricultural products.
They provide market overviews; market trends; and information on U.S. market
positions, competition, and general labeling and licensing requirements.
Contact the FAS Information Division at (202) 720-7937.
AgExport Connections: The AgExport Action Kit provides information that can
help put U.S. exporters in touch quickly and directly with foreign importers
of food and agricultural products. AgExport Connections' services include
trade leads, buyer alerts, foreign buyer lists, and U.S. supplier lists. To
receive a free copy of the Action Kit, fax your request to (202) 690-4374.
For more information, contact the AgExport Connection at (202) 690-3424.
Computerized Information Delivery Service (CIDS): CIDS provides instant
access to U.S. Department of Agriculture reports and news releases, making
time-sensitive agricultural information available to any location within
seconds of release. For a fee, CIDS provides information on trade leads,
market reports, economic outlooks, and certain statistics. Contact CIDS at
U.S. DEPARTMENT OF LABOR/FOREIGN LABOR TRENDS: These are a series of
reports, issued annually, that describe and analyze labor trends in more
than 70 foreign countries. The reports, which are prepared by the U.S.
Embassy in each country, cover labor-management relations, trade unions,
employment and unemployment, wages and working conditions, labor and
government, international labor activities, and other significant
developments. A list of key labor indicators is also included. Contact the
Office of Foreign Relations at (202) 219-6257.
U.S. DEPARTMENT OF ENERGY/COAL AND TECHNOLOGY EXPORT PROGRAM: This program
promotes the export of U.S. clean coal products and services by acting as an
information source on coal and coal technologies. Contact the Office of
Fossil Energy at (202) 586-7297.
SMALL BUSINESS ADMINISTRATION/EXPORT INFORMATION SYSTEM (EIS): EIS data
reports provide specific product information on the top 25 world markets and
market growth trends for the past five years. Contact the Office of
International Trade at (202) 205-6720.
GUIDANCE FOR BUSINESS TRAVELERS:
DOCUMENTS REQUIRED: A valid U.S. passport is necessary to enter and travel
in Japan, and by law foreigners are required to carry their passports at all
times. A visa is not needed for visits up to 90 days (with a round-trip air
ticket) unless you plan to establish a business or work for a Japanese firm,
in which case visa applications are available at the Japanese consulate
nearest your U.S. residence. Immunization and health certificates are not
required upon entrance. If you will be staying longer than 90 days, you
must obtain an Alien Registration Card, available free of charge from the
municipal office of the city or ward where you are temporarily residing in
ARRIVAL PROCEDURES: Upon arriving in Japan, your passage through both
immigration and customs is usually automatic as long as your passport (and
air ticket if arriving without a visa) is in order. An oral declaration of
personal effects is all that is required unless you arrive by ship, have
unaccompanied baggage, or bring articles exceeding the duty-free allowance.
If you expect unaccompanied luggage to arrive after you, in order to be
exempt from paying duty later, a declaration form should be filled out when
you clear customs. You are allowed to carry up to 400 cigarettes, 2 ounces
of perfume, and three 750 ml bottles of hard liquor into the country. Any
other goods can be brought in duty free if valued under 200,000 yen
(approximately $1,800 at 110 yen/dollar exchange rate). Japan has very
stringent regulations on admitting animals, plants, vegetables, and other
agricultural produce into the country. Since customs restrictions vary
depending on country of origin, it is advisable to check before your
departure with the Japanese Embassy or Japanese consulate nearest you. You
should exchange U.S. dollars for yen before leaving the airport, especially
if you are arriving at night or on a Sunday. There is a currency exchange
counter inside the customs area of Narita Airport (Tokyo).
HOLIDAYS: The following is a list of holidays which are observed annually
in Japan. If a national holiday falls on a Sunday, the following Monday is
a compensatory day off. May 4 is also a national holiday, although it has
no specific title. Please be aware that the December 27 - January 8 New
Year's holidays, the April 24 - May 8 "Golden Week" holidays, and the August
8 - 20 "o-bon" holiday period should be avoided when traveling to Japan on
January 1 New Year's Day
January 15 Adult's Day
February 11 National Foundation Day
March 21 Vernal Equinox Day
April 29 Greenery Day
May 3 Constitution Memorial Day
May 4 (Declared Official Holiday)
May 5 Children's Day
September 15 Respect-for-the-Aged
September 23 Autumnal Equinox Day
October 10 Health-Sports Day
November 3 Culture Day
November 23 Labor Thanksgiving Day
December 23 Emperor's Birthday
For additional information on traveling to Japan, you may want to contact
the Japan National Tourist Organization (JNTO) and obtain the free brochure
Your Traveling Companion: Japan. Contact JNTO at (212) 757-5640.
There are many English-language publications on Japan and Japanese business
practices. The following is a bibliography of publications and databases
which we find particularly useful and which are available through the
AMERICAN CHAMBER OF COMMERCE IN JAPAN (ACCJ): Selected publications
available through the American Chamber of Commerce in Japan are listed
below. ACCJ publications are sold in the United States through the U.S.
Chamber of Commerce. Phone: (202) 463-5460.
ACCJ Directory. ACCJ, 1993 (annual). A complete listing of more than 700
U.S. corporations and 2,100 individual members, with address, phone, and fax
numbers, and business description of the firm.
ACCJ Journal. A monthly magazine which contains timely articles about doing
business in Japan. Concentrates on U.S. business activities and marketing
principles that have been successful in Japan.
1993 U.S.-Japan Trade White Paper. ACCJ, 1993 (annual). Documents the
current business environment for U.S. companies in Japan, identifies
lingering obstacles in 34 sectors, and offers recommendations to help expand
Trade and Investment in Japan: The Current Environment. ACCJ, 1991.
Provides information on what it takes for foreign firms to succeed in one of
the world's most competitive markets. Also includes statistics and in-depth
analysis plus 31 sector reports.
Setting Up an Office in Japan. ACCJ, 1993. Tells how to set up shop in
Japan, with detailed sections on real estate in Tokyo, contract
negotiations, legal services, taxes, banking, patents, staffing, and dozens
of business issues based on information from ACCJ members and other local
sources. Osaka, Nagoya, and other cities and industrial sites included.
Employment Practices of American Companies in Japan. ACCJ, 1991. A
thorough analysis of how American companies in Japan treat their employees,
based on a survey of the employment practices of 204 ACCJ member firms.
Covers employee relations, development and training, recruitment, personnel
policies, and local trends.
Exporting to Japan. ACCJ, 1989. An excellent publication that discusses
"rookie" mistakes in exporting to Japan that cost time and money. Gives the
new exporter an immediate opportunity to benefit from the experience of
others, while the veteran gets some helpful new tips as well.
Finding a Home in Tokyo. ACCJ, 1991. A practical guide through the
bewildering world of Tokyo real estate to assist the newcomer.
Living in Japan. ACCJ, 1993. A helpful guide for families anticipating a
move to Japan. Topics include moving and what to bring, getting settled,
culture, schools, health care, business and finance, working spouses,
typhoons and earthquakes, legal affairs, and includes a special section on
the Kansai area.
AMERICAN ELECTRONICS ASSOCIATION (AEA): Selected publications available
through the American Electronics Association are listed below. Contact
AEA's Publications Department at (408) 987-4200.
1992 Directory of American Electronics Companies in Japan. American
Electronics Association, 1991. A bilingual listing of AEA members operating
Softlanding in Japan: A Market Entry Handbook for U.S. Software Companies,
second edition. American Electronics Association, 1992. An excellent
how-to source book for establishing a presence in the Japanese software
Software Partners: The Directory of Japanese Software Distributors.
American Electronics Association, 1993. A listing of Japanese software
distributors with appropriate contact information.
JAPAN TECHNOLOGY PROGRAM REPORTS: The Japan Technology Program (JTP) of the
U.S. Department of Commerce makes information on Japanese science and
technology more accessible to U.S. industry and helps ensure an equitable
and beneficial exchange of information and technology. Some recent JTP
reports are listed below. To identify additional reports, contact JTP staff
at (202) 482-1288. To order, contact NTIS at (703) 487-4650.
Intelligent Buildings in Japan (order PB91-187757/CAU).
High Magnetic Field Facilities in Japan Related to Superconductivity
Research (order PB91-240762/CAU).
Automated Storage Retrieval and Transport Systems in Japan (order
The Role of Corporate Linkage in U.S.-Japan Technology Transfer (order
How to Acquire Japanese Scientific and Technical Information (order
Research in Optoelectronics Computing Systems and Devices in Japan (order
Basic Biotechnology Essential for the Japanese Chemical Industry in the '90s
and Beyond (order PB92-182625/CAU).
U.S. Industry Access to Japanese Science and Technology (order
Japanese Affiliated Electronics Companies: Implications for U.S. Technology
Development (order PB92-145788/CAU).
OCS AMERICA, INC. PUBLICATIONS: OCS America is a worldwide publications
distributor for Japanese governmental and private-sector publications in
English. We strongly recommend that you send for a copy of OCS's List of
Publications: Governmental & Similars to see what publications OCS offers.
OCS America, Inc.
2000 North 15th Street, Suite G3-2
Arlington, VA 22201
Phone: (703) 528-4500
MISCELLANEOUS: The following sources are also useful references:
Japan Company Handbook. Toyo Keizai, Inc. (quarterly). Provides a look at
publicly traded and major privately held Japanese companies. Company
description, industry outlook, key financial and corporate data, and stock
performance are given. Organized alphabetically by industry for fast
reference. Published in two sections quarterly. Available through Toyo
Keizai America Inc. Phone: (212) 949-6737; Fax: (212) 949-6648
Japan Digest. An executive summary of political, business, trade,
technology, and social news from Japan and Washington, DC, delivered daily
by fax. A weekly edition available by mail. Edited by professional
journalists, based on a careful reading of Japanese newspapers and
magazines, and the Kyodo reports (Kyodo is Japan's premier news agency).
Phone: 1-800-669-7570; Fax: (703) 528-8123
JEI Reports. Japan Economic Institute (weekly). Cover various trade and
economic issues and focus on one topic in-depth each week. Phone: (202)
Standard Trade Index of Japan. The Japan Chamber of Commerce and Industry
(annual). Index listing of over 23,000 Japanese companies. Identifies what
types of products the companies handle and indicates whether the company is
a manufacturer, importer, and/or exporter, where appropriate. Phone:
011-81-3-3435-4785; Fax: 011-81-3-3578-6622.
Focus Japan II: A Resource Guide to Japan-Oriented Organizations. Gateway
Japan, the National Planning Association, 1993. Contains detailed
descriptions of over 180 institutions and organizations that, in whole or in
part, deal with information about Japan and U.S.-Japan relations, including
academic institutions, nonprofit organizations, database resources,
libraries, research institutes, think-tanks, and grant-making institutions
and foundations. Phone: (202) 265-7685.
Gateway Japan: Using Gateway Japan's full-text search and retrieval
capability, business users can check a vast number of U.S.-Japan business
translations; identify over 3,000 experts to be consulted or interviewed on
specialized subjects; retrieve reports and analyses on business, economics,
investment, and a wide range of other subjects from the Congressional
Research Service, Japan Economic Institute, U.S. and Japanese governments,
and other organizations; and search articles from over 30 U.S. newspapers
for the latest news about Japan. Phone: (202) 265-7685.
Export to Win, U.S. Department of Commerce. Computer software providing
detailed information on export marketing and the export process. Designed
as a computer-based training system for potential exporters, export
counselors, students, and small to medium-sized firms. Four levels of
tutorial interaction orient the user to the multiple areas and tasks
involved in exporting. Includes an overview of specialized terms and
regulations, descriptions of various forms used in international
transactions, and referrals to others sources of information. Covers a wide
range of related topics, such as trade shows, pricing, financing, licensing,
shipping, insurance, marketing, distribution networks, currency exchange,
product development, and global strategies. 5 1/4-inch, 360K diskette for
IBM-PC compatible computers. $60. Order from NTIS (order number
PB89-780035/CAU). Phone: (703) 487-4650.
LIST OF SELECTED JAPANESE BUSINESS TERMS:
AMAKUDARI: "Descent from heaven" -- retired government officials who take
up prestigious posts in industry or in industry associations. Retiring
bureaucrats seeking a suitable position often receive several offers of
employment from interested or obliging companies or trade associations.
Amakudari results in close connections among bureaucrats and industry.
DANGO: Collusive bidding groups. A common practice in the Japanese
construction industry has been to form a group to choose which construction
company would submit the lowest bid on which construction project.
Elimination of such bid-rigging has been a U.S. goal in the U.S.-Japan
GAIATSU: Outside pressure. Pressure by the U.S. Government on the Japanese
Government, which is sometimes solicited by Japanese companies or the
Japanese Government itself, aimed at changing insular Japanese Government
regulations or business practices.
GYOSEI SHIDO: Administrative guidance. Japanese industrial policy is
transmitted by extra-legal and informal, but very persuasive instructions
from the Japanese Ministry of International Trade and Industry and other
Japanese Government agencies to industry. Since guidance is not judicially
enforceable, Japanese Government agencies have used their powers to grant,
delay, or refuse licenses and approvals to ensure compliance.
HONNE & TATEMAE: The real story and the official story -- sometimes the
real story can be learned while going out socializing after hours.
JINMYAKU: Personal connections or networks. The right connections can
provide key introductions and favorable consideration of business proposals.
KEIRETSU: Affiliated-company relationships. There are two kinds of
keiretsu: horizontal keiretsu conglomerates headed by a major Japanese bank
and vertical keiretsu industrial groupings connecting manufacturers and part
suppliers, or manufacturers, wholesalers, and retailers.
KISEI KANWA: Deregulation. There are 10,942 kyoninka kisei (gyosei shido,
tsutatsu, etc. -- approvals, licenses, certificates, registrations, permits,
notifications, reports, tests, examinations, etc.) in Japan as of March
1992. Deregulation will encourage domestic business activities and promote
imports from overseas.
NEMAWASHI: "Digging around the root" (laying the groundwork) is a typical
Japanese decision-making mechanism. It is necessary to build support for a
course of action or to secure an informal consensus before a formal decision
is made. In Japan, group decision-making is very important for which
nemawashi is indispensable.
RIKEN-KOZO: Exclusive business relationships (groups) to protect the
interests of beneficiaries. The purpose is to ensure a peaceful and orderly
market, as opposed to free competition.
RINGISHO: Buckslip. After nemawashi is completed, a confirmed or final
draft is made, and based upon this draft, consensus and approval will be
obtained by passing a ringisho or actual draft for everyone's HANKO (seal or
chop). Sometimes, it requires one hundred seals to materialize proposed
SHITEI GYOSHA: Designated suppliers. Parties/companies/organizations
entitled to supply goods or services, and/or participate in bids,
exclusively. Other suppliers who wish to participate in business
transactions with particular companies/organizations/agencies must work
through a designated supplier.
SHONIN/KYOKA: In the medical industry, there are two interrelated Japanese
governmental approvals necessary: a shonin for a product based on its
efficacy and safety, and a kyoka for the business of manufacturing or
importing, which requires a minimum level of personnel and facilities.
TATENE: Selling products based on the list prices but later adjusting those
prices through rebates and other means. These price adjustments or rebates
are made between the manufacturer and wholesaler or wholesaler and retailer.
TSUTATSU: Written administrative guidance given by government officials to
The following export charter was developed by the member companies of the
U.S.-Japan Business Council. These are not binding commitments, but optimal
managerial and operational guidelines proposed by major U.S. companies with
years of experience in the Japanese market. It is our belief that companies
following the charter will enhance their chances for successful business in
(1) Senior executives and management must make a long-term corporate
commitment to developing the Japanese market. This long-term commitment
must include the acceptance of a substantially different time frame for
achieving a return on investment, and a relatively high cost to sales ratio.
(2) Companies should be prepared to assign expatriate staff charged with
its Japan operations for a longer period than in other foreign markets.
Rotations of less than three years are not recommended.
(3) Regular visits -- at least biannually, ideally quarterly -- to Japan
should be made by senior management to support the company's activities in
the Japanese market. These visits should be coordinated and arranged by the
senior country manager.
(4) Adequate investment in U.S. and Japan-based plant and equipment and
other facilities (e.g., engineering and design, after-sales service, etc.)
must be made to ensure the total quality of products or services sold in the
(5) A senior manager should be assigned the specific responsibility of
directing the company's operations in the Japanese market, including
marketing and sales, investment, customer relations, and strategic
planning. The senior manager should be delegated reasonable authority for
Japan operations and should be fully involved in decision-making.
(6) Companies new to the Japanese market will benefit by maintaining a
close working relationship with the US&FCS staff at the U.S. Embassy in
Tokyo and the American Chamber of Commerce in Japan.
REPRESENTATION IN JAPAN:
(7) Selection criteria of U.S. staff for assignment in Japan should
include not only the technical abilities as required for the specific
business, but also cultural awareness and, to the extent possible, language
capability. Cultural awareness, at least, should also pertain to spouses
and children. Preassignment cultural and language training is preferable.
(8) As a prerequisite to developing business in Japan, the company should
develop adequate local representation. Selection of local staff should
emphasize technical strengths required for the business first, and the
ability to speak English secondarily. It should also be recognized that
recruiting efforts take more time and are more costly than recruitment in
the United States.
(9) Personnel representing U.S. companies in Japan should receive
appropriate and sufficient training to ensure that they are fully
knowledgeable about the company, its products and/or services, and policies.
(10) Personnel representing U.S. companies in Japan must be able to conduct
business in Japanese or should be adequately supported by Japanese speaking
staff or interpreters.
TOTAL QUALITY MANAGEMENT:
(11) Given the Japanese emphasis on quality, and Japanese consumers'
perception of quality differences between Japanese and U.S.-made products,
U.S. companies must ensure that the quality of their products and services
exceeds or is no less than that of competing Japanese products.
(12) The company must commit to a continuous improvement philosophy,
setting an objective of zero defect achievement in all business activities.
Customer comments should be sought and used toward this end.
(13) The process by which total quality will be achieved should be fully
documentable and communicated to all personnel. At the company's
discretion, such process information may be shared with customers on request.
(14) Where quality defects are identified by Japanese customers, companies
should undertake immediate action to correct the root cause and prevent
DESIGN AND MANUFACTURING:
(15) Products/services exported to or sold in the Japanese market must be
designed to meet the specific requirements of Japanese customers. Existing
products or services intended for sale in Japan should be modified to meet
these requirements. Positive results are likely to be achieved faster by
introducing products, services, and technologies unique to the Japanese
(16) U.S. companies must be cognizant of unique Japanese standards for
specific products/services and how they may differ from U.S. or
(17) U.S. companies should implement flexible, adaptive processes to allow
new products or services to be brought to market in the most timely manner
(18) Appropriate manufacturing capacity should be committed to meet the
demands of the Japanese market and to satisfy the reasonable needs of
Japanese customers where they may differ from U.S. or other world market
(19) Recognizing the extensive use of just-in-time delivery systems in
Japan, U.S. companies should commit the resources required to meet delivery
schedules required by Japanese customers.
(20) In a highly competitive market, manufacturing processes should be
designed, or adapted, to minimize total manufacturing costs.
(21) Companies should strive to ensure that all technical services provided
to Japanese companies meet the standards required by the customer and should
not be inferior to similar services provided to U.S. customers.
(22) Where appropriate, specific technical services should be developed to
meet specific needs of Japanese customers within a reasonable time frame.
(23) Reflecting long-term commitments to the Japanese market, U.S.
companies should develop local capability to provide technical services.
(24) Technical literature and design/product information must be made
available in Japanese, according to Japanese practices for the specific
product or service involved.
(25) Commercial services should be designed or adjusted to meet Japanese
standards. Where desired, translation of commercial documentation should be
ARE YOU READY TO EXPORT TO JAPAN?
Before your first sale, you should be prepared for all facets of your export
business. How would you answer the following questions?
(1) Have you selected a team of qualified export advisors (accountant, tax
and customs advisor, attorney, freight forwarder, banker)?
(2) Have you developed a master international marketing plan?
(3) Do you have long-term commitment by top management to overcome the
initial difficulties and financial requirements of exporting?
(4) Have you carefully selected your Japanese business partner?
(5) Are you knowledgeable about Japanese distribution channels for your
(6) Have you researched the markets in one or two geographic areas in
which to concentrate your initial export efforts?
(7) Have you considered the international market potential for each of
(8) Do you intend to treat your Japanese distributors on an equal basis
with your domestic counterparts?
(9) Have you considered the Japanese market separately in designing your
(10) Are you willing to modify products to meet Japanese regulations and/or
(11) Will you print service, sale, and warranty messages in the Japanese
(12) Are you prepared to provide readily available sales service for the
(13) Do you understand Japanese culture and business practices?
(14) Are you prepared to file your patent and trademark applications in
If you answered "yes" to each of these questions, you should avoid the most
common mistakes of potential exporters.
INTERNATIONAL TRADE ADMINISTRATION/US&FCS DISTRICT OFFICES:
Birmingham (205) 731-1331
Anchorage (907) 271-6237
Phoenix (602) 640-2513
Little Rock (501) 324-5794
Los Angeles (310) 575-7104
Long Beach (310) 980-4550
Newport Beach (714) 660-1688
San Diego (619) 557-5395
San Francisco (415) 705-2300
Santa Clara (408) 970-4610
Denver (303) 844-6622
Hartford (203) 240-3530
Served by Philadelphia District Office
DISTRICT OF COLUMBIA:
Served by Gaithersburg District Office
Miami (305) 526-7425
Clearwater (813) 461-0011
Orlando (407) 648-6235
Tallahassee (904) 488-6469
Atlanta (404) 452-9101
Savannah (912) 652-4204
Honolulu (808) 541-1782
Boise (208) 334-3857
Chicago (312) 353-8040
Wheaton (312) 353-4332
Rockford (815) 987-4347
Indianapolis (317) 582-2300
Des Moines (515) 284-4222
Wichita (316) 269-6160
Louisville (502) 582-5066
New Orleans (504) 589-6546
Augusta (207) 622-8249
Baltimore (410) 962-4539
Gaithersburg (301) 975-3904
Boston (617) 565-8563
Detroit (313) 226-3650
Grand Rapids (616) 456-2411
Minneapolis (612) 348-1638
Jackson (601) 965-4388
St. Louis (314) 425-3302
Kansas City (816) 426-3141
Served by Boise District Office
Omaha (402) 221-3664
Reno (702) 784-5203
Portsmouth (603) 334-6074
Trenton (609) 989-2100
Santa Fe (505) 827-0350
Buffalo (716) 846-4191
Rochester (716) 263-6480
New York (212) 264-0634
Greensboro (910) 333-5345
Served by Minneapolis District Office
Cincinnati (513) 684-2944
Cleveland (216) 522-4750
Oklahoma City (405) 231-5302
Tulsa (918) 581-7650
Portland (503) 326-3001
Philadelphia (215) 962-4980
Pittsburgh (412) 644-2850
San Juan (809) 766-5555
Providence (401) 528-5104
Columbia (803) 765-5345
Charleston (803) 727-4051
Served by Omaha District Office
Nashville (615) 736-5161
Knoxville (615) 545-4637
Memphis (901) 544-4137
Dallas (214) 767-0542
Austin (512) 482-5939
Houston (713) 229-2578
Salt Lake City (801) 524-5116
Montpelier (802) 828-4508
Richmond (804) 771-2246
Seattle (206) 553-5615
Tri-Cities (509) 735-2751
Charleston (304) 347-5123
Milwaukee (414) 297-3473
Served by Denver District Office
This file extracted from Dept. of Commerce National Trade Data Bank (NTDB)
CD-ROM SuDoc No. C 1.88:996/11. Processed 03/12/1997 by software developed
by RCM (UM-St. Louis Libraries) / OBR_0027