JAPAN decided not to impose anti-dumping duty on Indonesian origin cut sheet paper

On June 26, 2013, the Ministry of Economy, Trade and Industry (“METI”) and the Ministry of Finance (“MOF”) jointly announced they determined not to impose anti-dumping duty on cut sheet paper originating in Indonesia.  The cut sheet paper is uncoated printing paper cut to A4 size or other sizes, and is mainly used for plain paper copies and for commercial printing.  Specifically, the questioned cut sheet paper is the ones classified under HS code of 4802.56 and 4802.62.

On May 10, 2012, Japanese paper manufacturing companies (total 8 manufactures) filed an application for the imposition of an anti-dumping duty on cut sheet paper originating in Indonesia to METI and MOF.  Both ministries have conducted joint anti-dumping investigation since June 29, 2012, by providing opportunities for interested parties to present evidence and views, and also collected objective evidence through investigations into Indonesian suppliers and other interested parties.  After the investigation by both ministries, they found no significant fact of dumping, and decided not to impose anti-dumping duty on the product subject to the investigation on June 26, 2013.

Japan Customs Published Results of Annual Post-Entry Audit; Still Showing High Non-Compliant Rate in Customs Valuation

In an effort to ensure compliance with Customs laws, particularly with regard to making correct import declarations and paying the correct taxes and duties, Japan Customs under the Ministry of Finance (“MOF”) conducts post-entry audit every year. The post-audit is conducted to review the import declarations made by importer so that correct duties and taxes have been paid. On November 2, 2012, the MOF published on their website the results of the post audit conducted between the period from July 2011 to June 2012. During this period, the Customs officials conducted post-audits on a total of 6,098 importers. The post audit team’s findings are summarized as below:

Amount of short & additional tax on incorrect import declarations is the highest based on historical records

The total non-declared and short-declared related value of all investigated companies was approximately JPY 247 billion (approximately US$ 3.1 billion). The amount of customs duty and tax shortage (additional payment) was JPY 15.5 billions (approx. US$ 195 million), an increase of 15% compared with previous year’s post audit results. This amount of shortage and additional duty/tax is the highest and the worst in the history of customs valuation relating to import declarations.

Still high rate of Non-Compliance Companies

The post-entry audit team investigated a total of 6,098 companies. Of these, 4,290 or 70.4% of companies investigated were found to have failed to make correct import declarations, the tendency is to keep about 70% of failure rate in recent years.

The top five product categories and its short duty & tax declarations amount are as follows. These top five categories make up 54.4% of short duty/tax amount.

1. Optical & precision (Chapter 90) JPY 1.95 billions

2. Medical equipment (Chapter 30) JPY 1.86 billions

3. Machine and Mechanical appliances (Chapter 84) JPY 1.66 billions

4. Electronics (Chapter 85) JPY 1.64 billions

5. Chemical (Chapter 29) JPY 1.01 billions


Typical short-declaration case examples are as follows;

- The cost of material which was provided free of charge basis to an exporter of finished goods was not included in the import declaration value.

- The transaction price was variable depending on the sales result in Japan and it was retroactively adjusted. The variance amount was paid to an exporter, and the adjusted amount was not included in customs declaration.

- The transaction price was not included license fee relating to patent of the imported products.


Japanese Customs conduct this post audit in customs valuation every year by randomly picking up the target companies. For recent years, the non-compliance rate continue to be higher in level of approx. 70%. Non-compliance with customs laws may result in imposition of penalties and loss of credibility, it is encouraged for importers to conduct customs health check in order to find hidden issue and manage the penalty risk.

(Reference:  http://www.mof.go.jp/customs_tariff/trade/collection/ka20121102a.htm )

Japan start anti-dumping investigation to cutsheet of Indonesia origin

According to the press release of METI on June 29, 2012, METI will start investigation of anti-dumping of Indonesia origin cutsheet, which is typically used for A4 size copy paper.  This investigation will be conducted by joint task of MOF and METI based on the Customs Tariff Act.  The period is expected as within one year.  Once the report verify the anti-dumping result, Japan will impose anti-dumping import duty to Indonesia origin cutsheet.

The anti-dumping investigation is requested by Japanese paper industry consisted by eight major companies.  According to them, the cutsheet is exported to Japanese market about 15% lower price than Indonesia market price by two Indonesian companies. 

It is not so often anti-dumping investigation is done in Japan, and first time for paper industry in Japan.


Reference: http://www.meti.go.jp/press/2012/06/20120629001/20120629001-1.pdf
More details are referred in: http://www.customs.go.jp/kaisei/kokuji/H24kokuji/H24kokuji0226.pdf

Japanese origin food import restriction in China after March 2011 disaster

While I was in Shanghai last week, my colleague kindly investigated the captioned issue quickly.
The findings are below and this is still effective as of June 2012.


Right after the earthquake disaster, China Inspection and Quarantine ("CIQ")announced that:


They will prohibit food imports from 12 Japanese regions including Fukushima, Gunma, Tochigi, Ibaraki, Miyagi, Yamagata, Niigata, Nagano, Yamanashi, Saitama, Tokyo, and Chiba.  （福島県、群馬県、栃木県、茨城県、宮城県、山形県、新潟県、長野県、山梨県、埼玉県、東京都、千葉県）
Food imports from other regions require radiation test certificates.

On June 23, 2011, there was a loosing of the policy. It is stipulated that:
"Food imports from Yamagata （山形県） and Yamanashi （山梨県） are no longer prohibited."

Food imports (not inclusive of the HS codes listed in the annex of the policy update which still need radiation test certificates ) from other regions no longer require radiation test certificates but would need country of origin certificates.


********************************************

The above mentioned HS code is as follows:



一、蔬菜及制品

HS编码07章的0701100000至0714909099；

HS编码20章的2001100000至2005999990、2006009010、2006009090。

二、水产品及水生动物

HS编码02章的0210930000、0208400000、0208500000、0210920000；

HS编码03章的0301100010至0307999090；

HS编码05章的0511919010、0511919090；

HS编码12章的1212201010至1212209090；

HS编码15章的1504100000、1504200000、1504300090、1506000010；

HS编码16章的1603000010至1605909090；

HS编码20章的2008993100至2008993900；

HS编码21章的2103909000。

三、茶叶及制品

HS编码09章的0902101000至0903000000；

HS编码21章的2101200000。

四、乳及乳制品

HS编码04章的0401100000至0406900000；

HS编码19章的1901100010至1901900000。

五、水果及制品

HS编码08章的0801110000、0802110000、0802120000、0802901090、0802902000、0803000000、0804100000、0804200000、0804300090、0804400000、0804501090、0804502090、0804503000、0805100000、0805201000、0805202000、0805209000、0805400090、0805500000、0805900000、0808100000、0808201200、0808201300、0808201900、0813100000、0813200000、0813300000、0813401000、0813402000、0813403000、0813404000；

HS编码20章的2006001000、2006002000、2006009090、2007100000、2007910000、2007991000、2007999000、2008192000、2008201000、2008209000、2008301000、2008309000、2008401000、2008409000、2008500000、2008601000、2008609000、2008701000、2008709000、2008800000、2008910000、2008920000、2008991000、2008992000、2008993900、2008999000。

六、药用植物产品

HS编码12章的1211201000至1211209900、1211901100至1211903600、1211903930至1211903999。

Annual update of Japan Customs regulation

Japanese customs regulations, including change of tariff rate, Generalized System of Preferences (GSP) scheme update, introducing customs facilitation system etc, are in most cases implemented annually in April.
I reviewed FY2012 customs regulation proposed changes, which are awaiting the review by Diet at this point of time, and find this year's most useful topic for trader would be "(hard copy) invoice is no longer required in customs declaration".

Currently, Customs Law Article 68 stipulate like as follows, "invoice (called "Shiiresho" in Japanese, imply hard copy) should be submitted in export and import customs declaration unless customs advise otherwise." 
Off course, Japan customs have state of the art e-customs declaration system, called as NACCS.
But still, exporter/importer have to submit invoice (hard copy) to customs authority for all declarations based on the Customs Law Article 68.
By amending Article 68, invoice submission is basically no longer required unless customs request, e.g. in more precise review or cargo inspecting case.  Trader's obligation is to keep the invoice either electrically or in documents, and if customs request to submit, just do so.  Therefore, in normal operation, traders will not be required to submit hard copy invoice in each time of customs declaration.

As for implementation timeline, it is expected from July 2012.  As NACCS system's program change is necessary, due to its system work, it cannot be started from April 2012.

AEO mutual recognition between Japan - Korea effective on Nov. 1, 2011

As announced in May 2011, Japan and Korea signed the mutual recognition of AEO in both countries.
http://japantradecompliance.blogspot.com/2011/05/aeo-mutual-recognition-between-japan.html

Japan Customs announced the implementation of mutual recognition with Korea will be in place on Nov. 01, 2011.  The procedures how the AEO operations will make use of the benefits in customs declaration can be found in following Customs web site.

http://www.customs.go.jp/zeikan/seido/aeo/leaflet_23-10.pdf

AEO benefits implementation starts in Japan-Singapore

With mutual AEO recognition with Singapore, Japan start its implementation of benefits of AEO from August 1, 2011.  The customs guidance how to make it in declaration transaction is announced in Customs web site.

http://www.customs.go.jp/zeikan/seido/aeo/leaflet_23-07.pdf

AEO mutual recognition between Japan - Korea

According to Nikkei Newspaper on May 19, 2011, government of Japan and Korea is likely to announce mutual recognition of AEO shortly.  At this point of time, I find no official announcement on Japan Customs web site, but perhaps will be available soon.

As for AEO operators, 370 companies are registered in Japan such as Toyota or Nippon Express, while Korea has 141 companies.  Ministry of Finance expect the trade between Japan and Korea increase in area of steel industry or semiconductor industry.
Japan have had AEO mutual recognition with New Zealand, US.  Signed with EU and Canada.  On progress with Singapore, China and Malaysia.

(Additional Update)
This news was officially annoucned on May 20 by MOF press release.
http://www.mof.go.jp/customs_tariff/trade/facilitation/ka230520.htm

Japan-EU AEO mutual recongnition implement on May 24, 2011

On June 24, 2010, Ministry of Finance ("MOF") in Japan announced that Japan and EU signed the Decision establishing mutual recognition of AEO between the EU and Japan.  This mutual recognition offers enhanced trade facilitation opportunities provided by customs to certified AEO traders in both sides who have invested in securing their supply chains.

Now, Japanese MOF and Customs jointly announced that Japan-EU AEO mutual recognition will be implemented on May 24, 2011. 
AEO trader in Japan will be treated as good compliance trader in EU by informing JPN-EU mutual recognition code to their trade counter part in EU.  The benefits would be their goods will go through a so called "green lane" in customs clearance.
Likewise, in order to have mutual recognition benefits in Japan in trade with EU porters, Japanese trader request their JPN-EU mutual recognition code to EU partners, and input the code into NACCS system in customs declaration, will be treated accordingly.  The code is 12 digits number like A1B34567NL00.

(Reference:  http://www.customs.go.jp/zeikan/seido/aeo/leaflet_23-05.pdf )

Violation case study - import prohibition sanction

On April 01, 2011, Ministry of Economy, Trade and Industry ("METI") announced the trade sanction to a Japanese national individual who violated the import control of Foreign Exchange and Foreign Trade Law ("FEFTL"). The sanction is the prohibition of any kind of import (including the import transaction through third party) for 1 month from April 08, 2011 to May 07, 2011 based on Article 53 (2) of FEFTL.

The law prescribe the sanction is for a period of not more than one year, therefore the 1 month sanction is not so severe one. The violation of this individual was to import bird's feather from United States which is restricted under CITES without import approval. (Violation of Article 52 of FEFTL). The bird's feather is in CITES Appendix I, that are threatened with extinction and the trade in wild-caught specimens of these species is illegal (permitted only in exceptional licenced circumstances).

So, why this guy imported the feather into Japan? What purpose? If you search this guy's name in google, you can easily find his profile and web site. He sold the bird's feather as fishing imitation bait through online sales! I'm not so familiar with fishing technique, but the CITES Appendix I bird's feather is worth while violating FEFTL?

(Source: http://www.meti.go.jp/press/2011/04/20110401012/20110401012.html )

Japan eliminate certain GSP tariff targetting China

According to NHK news on January 8, 2011, Japanese government is considering to eliminate certain GSP preferential tariff (about 460 items) from April 2011.

Ministry of Finance (“MOF”) in Japan review the rule to what items are applicable to Generalized System of Preferences (“GSP”) tariff, and consequently 462 items of Chinese origin items will be not eligible to GSP tariff. GSP is a system to impose lower import duty to encourage import from developing countries and aim to help their economic development. The new policy by MOF is basically to terminate the GSP tariff to certain items which import amount occupy more than 50% from specific one country or region in consecutive three years. With applying this new policy, many Chinese origin items such as vegetables and variety of consumer items will be in target of the new rule, because import of such items are mostly occupied by China. The import duty rate for such items will increase 2.4% ~ 5.2% by applying MFN rate instead of GSP, and the increased trade cost will affect importers, or will be reflected into retail price in Japan.

MOF plan to amend the Temporary Tariff Measures Law and to implement the new tariff rule from April 2011. As Chinese commodities are gaining competitiveness internationally, it aims to terminate preferential measure to China to help other developing countries. The examples are vegetables from China such as Burdock (HS 0706.90), Matsutake mushroom (HS 0709.59), or consumer items such as Fireworks (HS 3604), Pearls (HS 7116), Fishing rods (HS 9507), or Thermos bottle (HS 9617) etc. All of them have been 0% import duty under GSP, but MFP rate ranges from 2.5% to 5.2%. Other examples are prepared fish such as Mackerel (HS 1604.11) and Eel (HS 1604.19), the GSP duty of them are 7.2%, while MFN rate is 9.6%.

In fiscal year 2009, the 86% of import amount under GSP was occupied by Chinese origin items. The background of this decision is that Chinese products are almost competitive internationally and treated well too much under GSP. system On the other hand, after 462 items are excluded from GSP treatment, still 3090 items are eligible to GSP and most of them are actually imported from China.
The list of HS code of Chinese origin items which will be excluded from GSP on April 2011 is already available in Customs web site. Traders who have business with China and made use of GSP should investigate whether your items are included in the list for assessing the trade cost impact to business in fiscal year 2011.

(Source and list of items: 平成23年度税制改正大綱 内閣府ホームページ)

Japanese Customs Published Results of Annual Post-Entry Audit

In an effort to ensure compliance with Customs laws, particularly with regard to making correct import declarations and paying the correct taxes and duties, Japan Customs under the Ministry of Finance (“MOF”) conducts post-entry audit every year. The post-entry audit is conducted to review the import declarations of importing companies and determine if correct duties and taxes have been paid. On October 19, 2010, the MOF published on their website the results of the post-entry audit conducted between the period from July 2009 to June 2010. During this period, the Customs team conducted post-audits on a total of 6,204 companies. The post-entry audit team’s findings are summarized as below:

Amount of penalty collected on incorrect import declarations is the highest based on historical records
The total non-declared and short-declared related value of all investigated companies was approximately JPY198 billion (approximately US$2.4 billion). The amount of penalty including shortage of duty & tax was approximately JPY14.5 billion (approx. US$179 million), an increase of 12% compared with previous year’s post audit results. This amount of duty & tax shortage and its penalty are the highest and worst in the history of customs valuation relating to import declarations.

Increased Number of Non-Compliance Companies
The post-entry audit team investigated a total of 6,204 companies. Of these, 4,356 or 70.2% of companies investigated were found to have failed to make correct import declarations, the numbers of non-compliant companies increased 1.3% compared with previous year. The average penalty amount per company was JPY3.3 millions (approx. US$41,100).

The top 5 product categories and its short duty & tax declarations amount are as follows. These top 5 categories make up 52.2% of short duty/tax amount.
1. Electrical Machinery (Chapter 85) JPY2.63 billions
2. Processed Food (Chapter 21) JPY1.67 billions
3. Machine and Mechanical appliances (Chapter 84) JPY1.26 billions
4. Apparel and clothing knitted or crocheted (Chapter 61) JPY0.75 billions
5. Apparel and clothing not kitted or crocheted (Chapter 62) JPY0.73 billions

Typical short-declaration case examples are as follows;
- The cost of material which was provided free of charge basis to an exporter of finished goods was not included in the import declaration value.
- The transaction price was variable depending on the sales result in Japan and it was retroactively adjusted. The variance amount was paid to an exporter, and the adjusted amount was not included in customs declaration.
- False application of preferential tariff. Although an importer don’t have appropriate certificate of preferential tariff for importing goods from China, declared as eligible goods of preferential tariff.

Japanese Customs conduct this post audit in customs valuation every year by randomly picking up the target companies. For recent years, the non-compliance rate continue to be higher in level of approx. 70%, the penalty amount is slightly increasing year by year, and no sign of decreasing. Non-compliance with customs laws may result in imposition of huge penalties and loss of credibility, it is encouraged for importers to conduct customs health check in order to find potential problem and manage the penalty risk.

Singapore's AEO Mutual Recognition

Singapore Customs periodically issue well written e-newsletter, I like it very much.
According to the latest news letter "inSYNC" 9th edition issued on August 18, 2010, Singapore have mutual recognition agreement of AEO (*) with Canada and Korea.
http://www.customs.gov.sg/insync/Issue09/index.html

(*) Singapore call it as "Secure Trade Partnership - STP", and Canada call as "Partners in Protection - PIP", while Korea call as AEO.

Actually this is not so new information, as it was announced on June 25, 2010. It is same timing I drafted the Japan- EU, and Japan - Canada AEO mutual recognition. Perhaps, I heard Singapore's mutual recognition at that time, but it completely slipped out of my mind.

This article of AEO mutual recognition is neat and concise, I love it. We can know the essence of Singapore AEO system at a glance.

Singapore Customs is currently engaged in discussion of mutual recognition with China, Japan, New Zealand and the United States.
Among them, China would be the most challenging one. China have their own AEO systems (ranking the operators in AA, A, B, C, and D) but as long as I hear from reliable source, the actual implementation is still in doubt and the practice is different by port by port.

EU Import Cargo - 24 Hour Rule Programming

Like U.S, EU will implement 24 hours rule in Dec 2010.

See reference material:

EC Customs Information Portal
http://ec.europa.eu/ecip/security_amendment/index_en.htm

JMC (in Japanese)
http://www.jmcti.org/C-TPAT/vol.1/2010/C-TPAT_CSI_1-125.htm

Japan extend countermeasure against Byrd Amendment

On August 6, 2010, Ministry of Economy, Trade and Industry ("METI") announed on its Press Release that Japan will extend countermeasure against Byrd Amendment in U.S., which impose additional customs duty to certain steel items (Ball or roller bearings) of U.S. origin.

Japan have extended this countermeasure one year each since September 2005. Current measure is valid until August 31, 2010. This will be extended again one year until August 31, 2011 with following rate which is re-calculated as recent distribution result in U.S.

1. 8482.10 Ball bearings
   Current rate: 9.6% (until Auguslt 31, 2010)
   --> 4.1% (from September 01, 2010 until August 31, 2011)
   


2. 8482.20 Tapered roller bearings
   Current rate: 9.6% (until August 31, 2010)
   --> 4.1% (from September 01, 2010 until August 31, 2011)

Background of Halt of Distribution under the Byrd Amendment (quoted from METI web site)
Japan took countermeasures against the U.S. in September 2005. The U.S. repealed the Byrd Amendment in February 2006. However, since the distribution of duties will be continued under the transitional clause, Japan urged the U.S. to halt the distribution and extended the validity of the countermeasures. As the U.S. had still not yet suspended the distribution, Japan further extended the validity of the countermeasures by one year in September 2008, following its alternation of commodity items and duty rates. Moreover, since the distribution under the transitional clause still continued in 2008, Japan further extended the validity of countermeasures by one year in September 2009, following its alternation of duty rates.

Update:
Cabinet decision was made on August 10 and it made this countermeasure official, according to MOF Press Release http://www.mof.go.jp//jouhou/kanzei/ka220810.htm )

(Source: http://www.meti.go.jp/press/20100806008/20100806008.html )

(Details of Background of Halt of Distribution under the Byrd Amendment: page 17 - 18 of http://www.meti.go.jp/english/report/downloadfiles/2010WTO/2010priority.pdf )

Japan reduce ceiling amount of GSP preferential tariff to limit China origin items

According to The Nikkei news paper on July 26, 2010, the Ministry of Finance (“MOF”) is considering to reduce the ceiling amount of GSP preferential tariff of one country. The ceiling for each product group is open for utilization by all preference-receiving countries equally, however there is maximum ceiling percentage per one country as 20% of total ceiling amount per year in order to avoid inequality among GSP countries. MOF try to reduce this ceiling percentage per one country to 10 – 15%. In these years, Chinese origin items fulfill this ceiling percentage for most of items, therefore MOF aim to equalize the GSP preferential opportunity to many other developing countries.

In Japan, GSP preferential tariff is applicable to approx. 3,500 items which are originated in 154 developing countries or regions. Among GSP eligible items, approx. 1,180 items can be allowed until they exceed the ceilings of either limited amount or quantity.
For example, Chapter 76 (Aluminum and articles thereof) have GSP preferential tariff as 0%, while MFN tariff for Chapter 76 is from 2% - 7.6% depending on items. The annual ceiling amount of Aluminum item is JPY11.7 billions for fiscal year April 01, 2010 to March 31, 2011. As for GSP utilization of Aluminum item from China, it reached the maximum amount per country or 20% of total ceiling amount in May 2010, therefore MOF suspended the GSP preferential for Aluminum item originated in China on May 18, 2010. After this suspension date until the end of the fiscal year, Chinese origin Aluminum items are to be imposed in MFN rate. Other same examples of suspension of GSP privilege to Chinese origin items are; Fireworks (HS 36.04) on May 18, Article of leather (HS 43.02 - 43.03) on May 18, and certain carpets and other textile floor coverings (HS 57.02) on June 16, and garments and clothing accessories of cotton (HS 62.09) on May 18 etc. Most of GSP ceiling amount of textile items in apparel industry are used up by Chinese origin items in early stage of fiscal year.

The background of this amendment plan is rapid increase of the import from China. The import amount from China to Japan exceed JPY10 trillions, this makes China as top trade partner country for Japan. Chinese origin products are generally accepted as competitive in international market, questions come arise why Chinese origin products occupy the most of GSP preferential treatment which is a trade measure for contributing to developing countries.

MOF plan to implement this GSP ceiling limitation amendment starting from next fiscal year, April 2011. This will correct the disproportion among GSP eligible countries, and the developing countries other than China will be able to enjoy more GSP preferential opportunity, but the cost of import from China is expected to increase due to less GSP utilization allowance to China. Especially for small medium companies who import apparel items and daily necessities will be negatively affected because most of such items are imported from Chinese manufacturing sites and supply source is not diversified enough to other countries or regions.

Traders who import from China and utilize GSP preferential tariff are encouraged to carefully plan the sourcing strategy for next fiscal year.

Japan - Canada agreed AEO Mutual Recognition

On June 25, 2010, Ministry of Finance ("MOF") in Japan announced that Japan and Canada signed the Decision establishing mutual recognition of AEO between the Canada and Japan.

This mutual recognition offers enhanced trade facilitation opportunities provided by customs to certified AEO traders in both sides who have invested in securing their supply chains.

Following the mutual recognition with EU announced on June 24, Canada is 4th country Japan signed AEO mutual recognition, New Zealand, US, and EU.

The contents of the agreement is almost similar to mutual recognition with EU.

In Canada, AEO system is called as Partners in Protection ("PIP")

(Resource: http://www.mof.go.jp/jouhou/kanzei/ka220625.htm )

Japan - EU agreed AEO Mutual Recognition

On June 24, 2010, Ministry of Finance ("MOF") in Japan announced that Japan and EU signed the Decision establishing mutual recognition of AEO between the EU and Japan.
This mutual recognition offers enhanced trade facilitation opportunities provided by customs to certified AEO traders in both sides who have invested in securing their supply chains.

This mutual recognition with EU is 3rd one for Japan, following with New Zealand (signed on May 2008) and with U.S. (signed on June 2009). EU have had mutual recognition with Switzerland and Norway only. Japan is their first AEO mutual recognition country other than Europe area.

The main contents of this agreement is as follows.

1. Both Japan and EU customs authority will reflect the risk analysis of the status of AEO traders in customs examination or inspection when the goods are exported or imported by AEO traders in other side.
2. Both parties will respect the status of AEO traders in other side in application of variety of security operation.
3. Both parties will make effort to develop common system how priorities cargoes are handled in emergency.
4. Both parties will continue discussion of further benefit of mutual recognition.

(Resource Japan : http://www.mof.go.jp/jouhou/kanzei/ka220624.htm )

(Resource EU : http://ec.europa.eu/taxation_customs/resources/documents/common/legislation/proposals/customs/com(2010)055fin_en.pdf )

In addition, according to Nikkei Newspaper on June 25, AEO mutual recognition with Canada is also in progress. The good news with Canada is expected to be announced within this month.

Enhancement of Customs Penalty in Japan

On February 9, 2010, Ministry of Finance ("MOF") announced on Customs web site that they will increase penalty amount of customs compliance violation by amending Customs Law.
The draft of the amendment law have been through Cabinet Decision and submitted to the National Diet. The amendment of the law will be on April 01, 2010. (*)
Followings are the quick outline of the penalty enhancement.

• Penalty of Customs Duty evasion
  Amendment of: Customs Law Article 110.
  Current: Imprisonment with work for not more than five years or a fine of not more than five million yen, or both
  Amendment: imprisonment with work for not more than ten years or a fine of not more than ten million yen, or both
  Reason: With the growing complexity of global trade, and with more vicious and skillful duty evasion method, MOF decided to increase the penalty amount. Also, considered being in line with the penalty amount of other economic crime or domestic tax evasion penalty.
  

• Penalty of violation of prohibited export/import items (for Narcotic, marijuana etc.)
  Amendment of: Customs Law Article 108-4, and 109.
  Current: imprisonment with work for not more than seven years or a fine of not more than thirty million yen, or both
  Amendment: imprisonment with work for not more than ten years or a fine of not more than thirty million yen, or both
  Reason: Increase of illegal import of Narcotic. To have reasonable balance with other relevant crime related laws, and with the Customs Duty evasion.
  
  
• Penalty of violation of prohibited export/import items (for Intellectual Property Infringement items etc.)
  Amendment of: Customs Law Article 108-4, and 109.
  Current: imprisonment with work for not more than seven years or a fine of not more than seven million yen, or both
  Amendment: imprisonment with work for not more than ten years or a fine of not more than ten million yen, or both

(Source: http://www.customs.go.jp/kaisei/horitsu.htm#kz220209 )

(*) According to MOF officer, the implementation of the penalty provision is likely to be in June 2010, as it is required to have certain period to make known to the public.

MOF Japan extend temporary duty rate of Tobacco and Alcohol

According to the Ministry of Finance ("MOF") web site on Nov. 06, 2009, MOF drafted the plan to extend temporary customs zero duty rate of Tobacco and Alcohol products in next fiscal year.

Cigarettes (2402.20) and many of Alcohols (2208) products such as whisky, brandy, vodka, and liquors have general tariff with ad-valorem or non-ad valorem duties, but currently the MNF tariff rate is Free. For example, for cigarettes (2402.20), the general tariff is 8.5% plus 290.7 yen / 1,000 pcs., and the WTO bound rate is also same rate. However, the temporary duty rate is zero percent and the duty free rate is applied as MFN based on Act on Temporary Measures concerning Customs.
This Act is basically "temporary", therefore re-newed every year. Current one is from April 01, 2009 to March 31, 2010. It may be sound strange, however, this temporary rate for tobacco has been extended every year till now from 1987 due to Japan-US Tobacco Agreement.
For temporary tariff for Alcohol is also extended annually same manner from 1998 due to WTO recommendation.

Normal procedure would be that MOF will submit amendment of the Act in February next year, and then the Diet will approve it by end of March. The new tariff (if approved, the rate as Free) will be applied from April 01, 2010.

In September this year, Japanese government political power changed from LDP (Liberal Democratic Party of Japan) to DPJ (Democratic Party of Japan) and currently actively discussed the increase of tobacco tax for compensating budget deficit, such points may make the "annual established custom"somewhat cloudy. But this temporary zero percent tariff for tobacco and Alcohol is decided not by domestic reason but by foreign external pressure, I bet free "temporary" tariff rate will be applied next year again as usual.

(Source: http://www.mof.go.jp/jouhou/kanzei/h22kaisei/zaimu/h22zaimu.htm )