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On November 2, 2020, the Japan Fair Trade Commission ("JFTC") proposed amendments to relevant rules ("Drafts") in accordance with the Government of Japan's "Regulatory Reform Implementation Plan" ("Government's Plan") decided by the Cabinet on July 17, 2020. The JFTC seeks comments from the public, which is due by 6:00 p.m. on Tuesday, December 1, 2020, Japan Time.
The purpose of the Government's Plan is to promote "reform of the regulatory framework necessary for promoting structural reform of the economy and society," including by simplifying procedures through the use of information and communication technology. The Government's Plan recognizes the rapid globalization and digitalization of the economy and recognizes that systems will further accelerate the trend. In order to maintain and strengthen the growth potential of Japan's economy into the future, there must be no delay in responding to globalization and digitalization. Regulatory reform requires not only a review of regulations and systems that impede economic growth, but also changes to regulations and systems that accelerate growth and encourage innovation.
The Government's Plan covers various areas, including (i) growth strategy, such as regulatory frameworks in the digital era, (ii) employment and human resources, (iii) investment, such as Fintech, (iv) medical care, (v) agriculture, forestry and fisheries, and (vi) digital government (e.g., promoting online procedures of the national and local governments from the perspective of reducing administrative costs by 20 percent as well as addressing issues that emerged from COVID-19). As part of this, the relevant government agencies, including the JFTC, need to review and amend procedures where seals are required on paper documents and/or procedures that require face-to-face proceedings.
Affixing seals on paper documents is part of the traditional business culture in Japan and the practice became one of the barriers to remote work in the COVID-19 environment.
On November 2, 2020, the JFTC issued proposed amendments to relevant rules, including the elimination of seals currently required on paper documents. For example, currently, the seal of a notified party or its counsel must be affixed when a pre-notification for a merger filing is submitted to the JFTC, which can be delivered by regular mail or by hand (i.e., the JFTC only accepts a pre-notification in a hard copy format with a seal affixed).
After the relevant rules are amended, such seals will not be required, but instead, a document that supports a pre-notification form that has been authentically prepared as well as the authentically prepared contents thereof shall be attached. It is not clear yet how such authenticity can be proved. The JFTC states that it does not plan to place extra burdens on companies, but it is not clear yet what kind of documents the JFTC would approve and by what authenticity other than affixing the currently required seal. The ultimate purpose of the Government Plan is to promote online procedures, but online procedures will apparently not be ready immediately after these amendments.
Proposed amendments include the following:
1. Proposed amendments to eliminate seals, including revisions to forms for the following rules:
(a) Rules on Notification of Resale Price Maintenance Contracts
(b) Rules on Notification Pursuant to the Provisions of Article 7, Paragraph 3, of the Small- and Medium-Sized Enterprise Cooperatives Act
(c) Rules on Notification of Concerted Actions Pertaining to Determination of the Method of Transferring Consumption Tax and the Method of Labeling Concerning Consumption Tax
(d) Rules on Hearing Opinions by the Fair Trade Commission
2. Proposed amendments to eliminate seals (including revisions to forms), and requiring that documents that support a form have been authentically prepared and have authentic contents:
(a) Rules on Applications for Approval, Reporting, Notification, etc. pursuant to the Provisions of Articles 9 to 16 of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade ("Merger Notification Rules")
(b) Rules on Investigations by the Fair Trade Commission ("Investigation Rules")
(c) Rules on Submission of Facts and Materials for Leniency Procedure
(d) Rules on Commitments Procedure of the JFTC
3. Proposed amendments to eliminate an original copy of the report with respect to leniency procedures.
4. Proposed amendments to the "Ordinance for Enforcement of the Act on Promotion of Administration Utilizing Information and Communications Technology Pertaining to Laws and Regulations under the Jurisdiction of the Fair Trade Commission" to promote online procedures.
The Government plans for the proposed amendments to be effective by the end of December 2020. The Cabinet will review the actions that are expected by the Government's Plan and plans to publish the results by the end of FY2020 (i.e., March 2021).
The comments for the proposed amendments to the relevant rules shall be submitted in Japanese by 6:00 p.m. on Tuesday, December 1, 2020, Japan Time.
1 The JFTC Press Release (November 2, 2020) and proposed amendments are available in Japanese.
2 The Government's Plan is available in Japanese www8.cao.go.jp/kiseikaikaku/kisei/publication/keikaku/200717/keikaku.pdf
3 The JFTC English translation of the Rules on Hearing of Opinions by the Fair Trade Commission.
4 The JFTC English translation of the Investigation Rules.
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