EBC Meeting Minutes

EOB Meeting Notes - Appendix: EBC Committee and 
 Lobbying  Activities Update


 Casey Sedgman, EBC Policy Director
February 18, 2003

      

Current issues:

1. Investment - EBC response to request for comments from EU Commercial Counsellors group regarding sharp drop in FDI from Europe in first half of FY2002 (provided separately)

2. Investment - Triangular merger

  • Approved by Cabinet as part of bills submitted by METI revising corporate revitalization laws

  • Now must pass the Diet

  • METI keeping quiet on this one though, as there is likely to be quite a bit of opposition from within the ruling party

  • METI couldn't secure tax advantages (i.e. capital gains deferrals currently available to wholly domestic mergers) from MOF (also, the timing of the tax reform season worked against these reforms)

3. Insurance - Policy Holder Protection Corporation (PPC)

  • Will be topped up with 20-25 billion from industry under 3 year plan with support from the Life Insurance Association

  • Most foreign firms voted against this proposal on principle, but can live with this amount
    The EU ambassador sent a letter to the FSA in late January on request from EBC members pointing out that in the long run a pre-funded plan is unworkable

  • But in the meantime this issue is closed

4. Insurance - Reducing guaranteed rates:

  • EBC/ACCJ in informal talks with FSA regarding this matter

  • Current FSA proposal is for "voluntary" rate reductions

  • EBC feels this is unworkable and could cause chaos in the industry. Domestic firms opposed because they feel business will go to foreign firms.

  • Cross the board cut out of the question, though this would be the best solution

  • EBC position remains same as white paper

5. Tax - Factor based tax:

  • Has been approved by the Cabinet and has been submitted to the Diet

  • Reform will basically split the Corporate Enterprise Tax into three separate taxes: an income allocation portion, a value-added portion (salaries, interest and rent paid, etc.), and a capital allocation portion

  • Problems for foreign firms: computing the value-added portion will require that firms establish value-added for their GLOBAL operations; ability to take advantage of foreign tax credits

  • But on the whole, European firms are likely to benefit from this new tax (as long as they are making money!)

  • METI briefed the EBC and ACCJ tax committees on this tax and asked the EBC to distribute a questionnaire to gauge the impact this new tax will have on companies in Japan. This will be sent out shortly.

6. Food - Food additives

  • The MHLW submitted a set of 46 food additives to the Food and Sanitation Council on Dec. 19th for "priority" consideration for addition to Japan's food additive list. For the most part these additives line-up with the EBC priorities. (Though a number of EBC requests were ignored).

  • The EBC Food Committee Chair and Policy Director have been meeting with consumer groups (Shodanren, Co-op) to gauge their support for reforms to Japan's food regulations (and food additives in particular)

  • Goal is to get these food additives through the tests and approved as soon as possible

7. Food - New food safety laws

  • A number of new bills have passed the Diet revising Japan's regulatory structure surrounding food safety (recall that the EBC made a comment to the MHLW on this in December)

  • For example, a food safety commission will be established under the cabinet office and 3rd party testing will be allowed.

  • Looks good on paper but remains to be seen what sort of effect his will have on food producers (especially foreign producers) regarding costs involved with complying with the new regulations.

8. Asset Management

  • Three new position papers as per attached

  • Lobbying activities ongoing for both European and Japanese targets

9. In-vitro diagnostics

  • English translation of OTO ruling provided separately

Other committee news:

10. Banking/Securities

  • First activity as merged committee: Visit to Deputy Commissioner for International Affairs at the FSA (Feb.12)

11. New chairman for the Telecoms committee: Manual Ceva (Equant)

  • Replaces Lisa Suits of C&W who has gone back to London

12. Mr. Yukihiro Yamada (Chanel) has taken over chairmanship of the cosmetics committee

13. Animal health

  • Proposal that foreign animal health firms form a foreign industry association in Japan has been abandoned in favour of closer ties with the domestic Japanese industry association