1 Dec 2007
Trade Regulations of Japan
Japan's Trade Policy Bureau is actively executing integrated domestic and external economic policies aiming at maintaining the established world free trade system and to create a business environment in which Japan's economic growth is sustainable and creating high value added.
Most goods do not require an import licence and can be imported freely. Japanese import licences are required for certain goods, including hazardous materials, animals, plants, perishables, and in some cases articles of high value.
Under the Uruguay Round Japan agreed to convert import quota and bans to tariffs. Inflexible import quotas on certain products (wheat, barley, starches, peanuts, dairy products, footwear and leather goods) were replaced by tariff-rate quotas.
Import Ban and Restrictions
Japan prohibits the import of certain items including narcotics, firearms, explosives, counterfeit currency, pornography, and products that violate intellectual property laws. In addition, Japan imposes restrictions on the sale or use of certain products including those related to health such as medical products, pharmaceuticals, agricultural products, and chemicals.
Some imported goods may have a negative effect on Japan industry, economy, and hygiene, or on public safety and morals. Such goods fall under "import restrictions" as provided by various domestic laws and regulations. Import permit or prior approval for these goods is required for inspection or other requisites.
Restricted items include but not limited to certain agricultural and meat products, endangered species and products such as ivory, animal parts and fur whose international trade is banned by international treaty, and more than two months' supply of medicines and cosmetics for personal use.
For these restricted products, Japanese Customs reviews and evaluates the product for import suitability before shipment to Japan. The use of certain chemicals and other additives in foods and cosmetics is severely regulated and follow a "positive list" approach.
Under the ATA Carnet System, commercial and exhibition samples, professional equipment, musical instruments, and television cameras can be admitted without paying duties in the country.
Customs Tariff and Taxes
Japan tariff is on average one of the lowest in the world, approximately 2%. Most machinery imports are duty free. Japan is a signatory to the WTO Information Technology Agreement which has agreed to eliminate tariffs on information technology products.
Tariff duties are assessed as with most countries in the world on the CIF value at ad valorem or specific rates, and in a few cases a combination of both. Japan is an adherent to the WTO's Customs Valuation Agreement which provides that the customs value of imported goods shall be the transaction value, that is, the price actually paid for the goods.
Import duties on many agricultural items continue to decline, and tariffs in many major sectors e.g. autos and parts, software, computers, and industrial machinery are zero rated, while certain leather goods and footwear, processed foods and some manufactured goods the tariff remains high. Japan's preferential system of tariffs grants lower or duty-free rates to products imported from developing countries.
In addition to customs duties, a 5% consumption tax is levied on a wide range of goods and services. Additional taxes are levied on imported liquors and tobacco products.
Though tariffs are generally low, Japan has barriers that impede imports of alien products in the country, viz. technical standards unique to Japan, requirement of prior experience, regulations favouring local produced products, formal and informal cartels, and cultural and personal relationships, etc.
Customs Requirements and Documents
A number of documents are required for customs clearance. These include an import licence for import quota items usually valid for four months from date of issue; and Import Declaration Form, normal shipping documents such as a commercial invoice, packing list and an original and signed bill of lading or an air waybill if shipped by air, a certificate of origin if the goods are entitled to favourable duty treatment, and any other documents necessary as proof of compliance with relevant Japanese laws and regulations, if applicable.
The commercial invoice should include names of shipper and consignee and detail of each commodity in the shipment. The packing list should include the contents of each container, its gross and net weights in metric measurements.
Labelling and Marking Requirements
The Japanese Measurement Law requires that all imported products and shipping documents show metric weights and measures. Japanese law requires labels for textiles, electrical appliances and apparatus, plastic products and miscellaneous household and consumer goods. For most other products country of origin labelling is not required, except some beverages and foods which do require labelling and marking of true information. False or misleading labels displaying names of countries or flags other than the country of origin, and/or names of manufacturers or designers outside the country of origin are not permissible.
Imported products are subject to product testing and cannot be sold in Japan without certification of compliance with prescribed standards, falling into two categories: technical regulations (or mandatory standards) and non-mandatory voluntary standards. Compliance with regulations and standards is also governed by a certification system in which inspection results determine whether or not approval (certification/quality mark) is granted.
It is important that a Japanese agent or partner be fully aware of the wide variety of legislation that could affect the sale of the exported product in Japan. Major laws stipulating standards that apply to products in Japan include the followings: 1) Electrical Appliance and Material Control Law; 2) Consumer Product Safety Law; 3) Gas Utility Industry Law; 4) Food Sanitation Law; 5) Pharmaceutical Affairs Law; 6) Road Vehicles Law; 7) Building Standards Law.
The Japan Industrial Standards Committee (JISC) plays a central role in standards activities in Japan. The "voluntary" JIS mark, administered by the Ministry of Economy, Trade and Industry (METI), applies to nearly 600 different industrial products and consists of over 8,500 standards.
The Japan Agricultural Standards (JAS) mark is another "voluntary" but widely used product quality and labelling mark. JAS applies 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.
Labelling and Marking
To affix a mandatory quality mark or a voluntary quality mark requires prior product type approval and possibly factory inspections for quality control assessment. Regulated products must bear the appropriate mandatory mark when shipped to Japan in order to clear Japanese Customs. Regulations may apply not only to the product itself, but also to packaging, marking or labelling requirements, testing, transportation and storage, and installation.
Japanese laws requiring product certification and labelling are numerous. Reference for information on these requirements is available in JETRO's Handbook for Industrial Product Import Regulations.
Japan has entered into or been negotiating economic partnership agreements (EPAs) with a number of countries including Singapore, Malaysia, Philippines, Thailand, Brunei, Indonesia, Vietnam and India, Mexico, Chile, Australia and Switzerland, the Gulf Cooperation Council (GCC-Bahrain, Oman, Qatar, Saudi Arabia, United Arab Emirates and Kuwait). Japan is a member of APEC, which has established a goal of APEC-wide free trade and investment for developed economy members.
Hong Kong's Trade with Japan
Most Hong Kong goods such as garments, toys, jewellery, houseware, watches, clocks and major electronic items can be imported freely with import licences, except certain items covered by the import restriction system mentioned above.
Japan is Hong Kong's third largest export market with total exports amounting to HK$ 306 billion in the period of Jan-Oct 2007, comprising telecommunications equipment and parts, toys, games and sporting goods, and other articles of apparel of textile fabrics etc.
Click here for a HKTDC market profile on Japan.