Over the years, the EBC has been involved in a number of activities that have resulted in noticeable improvements to the Japanese business environment. Some of these achievements are outlined below.
The EBC Airlines Committee successfully lobbied the Government of Japan to change its pricing restrictions on international airfares. A number of changes in practices announced and enacted in the 2006-2008 period resulted in European Airlines becoming free to file and market fares set at their own discretion, whereas previously, they were only allowed to file rates that were approved by their Japanese competitors based on IATA fares, or in the case of group travel, at lower rates set by the Ministry of Land Infrastructure and Transportation.
The EBC Banking Committee has been instrumental in promoting reforms of the firewall restrictions that artificially separate financial service functions, such as banking and securities. These firewalls have been particularly detrimental to European financial services firms, which in sharp contrast, operate in Europe within a universal banking environment. The revision of the Financial Instrument Exchange law which passed the diet in 2008 was a direct result of the EBC's lobbying activities. "Double-hatting" of certain back-office functions between affiliates of financial groups has been secured thanks to EBC efforts.
The EBC successfully lobbied to have the House of Councillors add a resolution to the company law, clarifying that an article (Article 821) potentially severely limiting the legal status of so-called pseudo-companies should not apply to companies which have had long-standing business in Japan. This resolution, though not an ideal solution, saved a large number of members from loosing their legal status in Japan, many of whom had been operating for decades in the form of a duly registered foreign company branch, operating under licenses and approvals that complied with requirements stipulated by the relevant government agencies. Finally, the EBC was instrumental in having the Cabinet Office issue detailed explanatory notifications on interpretation of the article to the relevant government authorities.
The EBC lobbying efforts have been instrumental in the abolishment of the re-entry permit requirement for valid residential visa holders.
The EBC Legal Services Committee, in cooperation with other foreign business organisations and government representatives, successfully lobbied for changes to regulations restricting the freedom of association between Japanese and foreign lawyers in Japan. Full partnerships between Japanese and foreign lawyers are now allowed, making it easier for the legal services community in Japan to provide comprehensive trans-national legal services in the wake of globalisation.
The EBC Liquor Committee played a key role in securing a reduction in the tax rate differential between shochu and non-shochu liquor in 1998, following a World Trade Organisation ruling issued in 1996 confirming discrimination in the Japanese tax regime against imported spirits such as whisky and gin. The EBC also celebrated a major break through in 2006 when the minimum requirement for distances between stores with liquor retail licenses were eliminated.
The Office of the Trade Ombudsman (OTO) started proceedings on the regulation of medical devices as a result of the publication of the EBC's annual White Paper: "Issues for the Millennium: the EBC Report on the Japanese Business Environment 2000". Following the publication of this report, the EBC Medical Diagnostics Committee was asked by the OTO to submit a formal complaint calling for improvements to the approval process for in-vitro diagnostic products in Japan. The OTO's ruling on this issue prompted the MHLW to review its approval processes, which has led to a marked shortening of the time needed to gain approval for low-risk products. Moreover, the EBC's recommendations for shortened approval times were taken up as top priority of the Japan Investment Council and, subsequently, also by the Ministry of Health, Labour and Welfare.
Merger and Acquisitions
The EBC proposal to allow foreign shares to be used as consideration in mergers and acquisitions of Japanese companies by foreign companies was implemented through a triangular merger scheme in the new company law in May 2007. Although the final version of the scheme that was approved did not meet EBC's expectations, it can still be very helpful for European firms wanting to enter in a bidding race for a Japanese company without being delayed by having to raise cash.
The EBC Phytosanitary Committee successfully lobbied the Japan Fair Trade Commission (JFTC) to investigate the business practices of fumigation service providers at Narita airport. In August 2001 the JFTC concluded that the incumbent service providers were colluding to set prices and share orders in violation of the Anti-Monopoly Act. One of the two companies involved was subsequently fined, and both were ordered to stop colluding to set prices and share orders for work. The EBC also managed to convince the Japanese government to add a number of insects to the non-quarantine list, making the import to Japan of cut flowers substantially easier.
New regulations on large-scale retailing were constrained through EBC’s efforts so as not to affect the cities with more than 1 million inhabitants
EBC lobbying contributed to the introduction of a triangular merger scheme allowing foreign shares to be used as consideration in mergers and acquisitions of Japanese companies by foreign companies
EBC lobbying was instrumental in achieving expansion of the period of validity for importation of tableware
New regulations on large-scale retailing were constrained through EBC's efforts to ensure that unduly strict retailing restrictions would not apply to cities with more than 1 million inhabitants
- Updated on: 2009-07-28