Regulations related to Exporting Used Cars

An owner of a registered motor vehicle who intends to export the motor vehicle is required to apply for temporary registration of export erasure and to obtain a certificate of temporary registration of export erasure (Article 15-2 of the Road Vehicles Act).

In addition, the owner of (i) a vehicle that has been registered for temporary termination of registration, and (ii) a light motor vehicle subject to inspection or a small motor vehicle on two wheels (excluding those “specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism“) is required to submit a notification of planned export and obtain a certificate of planned export (Article 16, Paragraph 4, and Article 69-2, Paragraph 3) when intending to export.


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Regulations related to Exporting Cultural Properties

Important Cultural Properties, Important Tangible Folk Cultural Properties, Natural Monuments, and Important Art Objects may not be exported without an export permit.

In the case of exporting antique artworks (swords, old-style firearms, paintings, Buddhist statues, etc.), it is necessary to obtain an export audit certificate for antique artworks because they may contain important cultural properties.

 

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Trade Insurance for Overseas Transactions

Trade insurance is insurance for overseas transactions (exports, investments, loans) conducted by Japanese companies. The trade insurance system covers the risks of war, expropriation, restrictions on foreign exchange transactions, and long-term, large-value transactions that private insurance usually cannot cover, and has a strong character as a public service.

In Japan, however, the business has been transferred to Nippon Export and Investment Insurance (NEXI) since 2001, based on the Trade Insurance Law. In Japan, however, the business has been transferred to Nippon Export and Investment Insurance (NEXI) since 2001, based on the Trade Insurance Law. NEXI was initially an independent administrative institution, but is now a joint stock company wholly owned by the Japanese government (see Chapter 2 of the Trade Insurance Law), and is positioned as a special company under the Trade Insurance Law.

There are two main types of accidents covered by trade insurance: those caused by force majeure, such as bans on foreign currency exchange, restrictions on foreign currency remittance, restrictions or bans on imports, or war, and those caused by the responsibility of the contracting party, such as bankruptcy or default of the contracting party.

Different underwriting policies and standards are established for the types of transactions and indemnities to be covered, depending on the country risk and financial condition of the counterparty.


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Regulations on Exporting Pharmaceuticals

Section 1: Pharmaceuticals for Export and Application of the Pharmaceutical Affairs Law

The Pharmaceutical Affairs Law applies to manufacture, sale, production, and marketing of pharmaceuticals in Japan.

In the case of exporting pharmaceutical products, certain exemptions are allowed (Article 74 of the Regulations). This is because some obligations such as descriptions on containers being in Japanese (Article 50) are unreasonable).

In this way, although it provides certain exemptions (Article 74, Paragraph 2), the Pharmaceutical Affairs Law applies to most cases.

For example, even if a Japanese pharmaceutical manufacturer only manufactures pharmaceutical products for export, it is not exempted from licensing as a manufacturer and seller.

In addition, where a pharmaceutical product is purchased from a domestic pharmaceutical manufacturer, distributed wholesale to a trading company, and the trading company exports the pharmaceutical product, it is understood that the business operator in question is required to obtain a wholesale distributor’s license, even if it only handles pharmaceutical products for export.

Section 2: Terminology (Difference between “Manufacture” and “Sale and Manufacture”)

To explain the terminology, “manufacture and sale” means something like placing a product on the Japanese market, and the term refers to both cases where a manufacturer (maker) places a product on the Japanese market and cases where an importer places a product on the Japanese market by importing it from a foreign country. For this reason, importers of pharmaceuticals, etc., need to pay attention to the regulations pertaining to manufacturing and sales under the Pharmaceutical Affairs Law.

On the other hand, when the term “manufacture” is used simply, it is assumed to refer to the actual physical production of the product.

Since the two concepts are distinct, if a pharmaceutical manufacturer (with a manufacturing and sales license) outsources the entire actual manufacturing process to a manufacturer (with a manufacturing license), it will be able to manufacture and sell the product even if it does not have a manufacturing license.

Section 3: Manufacture and Import of Pharmaceuticals for Export

Any person who intends to manufacture (including having a contractor manufacture) or import (including having a contractor manufacture) pharmaceutical products, quasi-drugs, cosmetics, medical devices, or regenerative medicine products for the purpose of export shall notify the Minister of Health, Labor and Welfare (Articles 74, 74-2, and 74-3 of the Pharmaceutical Affairs Law). For export medicines, special exceptions such as exemption from the obligation to label in Japanese are allowed, so notification is required, and the system is designed to enable supervision.

For example, when changes or translations of package designs, instruction manuals, etc. are made in Japan for export, the business operator who performs such work is required to submit a notification as a manufacturer of pharmaceutical products for export (Article 14-9, 14-10, 23-2-12 of the Act, Article 74, 74-2, 74-3 of the Enforcement Order, Article 265 of the Regulations, etc.).

Section 4: Certification of Manufacturers in Japan

A manufacturer of a pharmaceutical product, quasi-drug, medical device, or regenerative medicine product for export shall be certified by the Minister of Health, Labor and Welfare at the time of commencement of production and every five years if the manufacturer is required by a foreign government or international organization to certify that the manufacturing or quality control methods at the manufacturing site of the pharmaceutical product conform to the “Ministerial Ordinance on Standards for Manufacturing and Quality Control of Pharmaceuticals and Quasi-drugs” (GMP Ministerial Ordinance). (Article 80, paragraphs 1 to 3 of the Law, Article 70-2, Article 71, and Articles 73-2 to 73-5 of the Regulations).

The procedures for issuing certificates are handled by the Pharmaceuticals and Medical Devices Agency (PMDA) for pharmaceuticals and quasi-drugs, the Japan Cosmetic Industry Association (JCiA) for cosmetics, and the Overseas Medical Equipment Technical Assistance Association (OMETA) for medical devices, in vitro diagnostic products, and regenerative medical products.

Section 5: Recall

 (1) When a manufacturer of a drug, quasi-drug, cosmetic, medical device, or medical device for regenerative medicine, etc. for export recalls a drug, quasi-drug, cosmetic, medical device, or medical device for regenerative medicine, etc. that it has manufactured, sold, produced, or has obtained approval for, the manufacturer shall report to the Minister of Health, Labor and Welfare that it has initiated the recall and the status of the recall (Article 68-11).

 

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Tax Laws Related to Export Transactions

Section 1: General Remarks

A number of tax-related laws and regulations are relevant to export transactions, including the Consumption Tax Act, the Corporation Tax Act, customs-related laws and regulations of the exporting country, and tax treaties. 

Section 2: Consumption Tax

1 Tax Exemptions on Exporting goods

Under the Consumption Tax Act, consumption tax is levied on the sale of goods and services, etc. However, export transactions are exempt from tax and no consumption tax is levied.

However, in order to qualify for export tax exemption, documents proving the export (contracts, export licenses, and other related documents) must be kept for 7 years.

2 Refund of Consumption Tax paid at time of purchase of parts, etc. for making export products

Refunds are often available for the amount equivalent to consumption tax, etc., paid when entering a contract to purchase parts, etc., from other companies to make finished products.

In other words, the cost of goods, etc. purchased for export usually includes consumption tax, which means that the company has paid too much consumption tax. By filing a tax return, an exporting company can receive a refund of the amount of consumption tax it actually paid at the time of purchase.

Companies that receive refunds are likely to be more vulnerable to tax audits and inspections than those that do not, so careful preparation of taxation measures is advised.

3 Exemption from consumption tax when providing paid services to a foreign country

Exporting companies often receive orders for construction work in a foreign country to install exported equipment, online training, etc., or technology licensing contracts for the head office of a foreign company, etc. Such service contracts for construction work, licensing, etc. to foreign companies are also often exempt from export tax. (On the other hand, it may be subject to consumption tax and value-added tax in other countries where the installation work is performed.)

Section 3: Customs Laws and Regulations of the Destination Country

1 General Remarks

Although tariffs may be imposed in the destination country, there may be cases where reduction or exemption of tariffs is available through EPAs, etc., and it is useful to consider such cases.

2 Withholding Tax

When an exporting company enters into a contract with a foreign business partner (purchaser of goods) for technical licensing, provision of technology, training, etc. in connection with the export of goods, the payment of such contract may be subject to withholding tax in the country of the business partner.

With regard to withholding tax, if there is a tax treaty between Japan and the other country, there may be cases where a reduction or exemption of withholding tax can be obtained. However, in most cases, the notification must be made prior to tax payment, and even if the taxpayer notices the tax after the payment, the taxpayer will not be able to obtain a reduction or exemption. Therefore, in cases in which our firm is involved, we often make allowances in advance in the contracts.

3 Tariffs, Consumption Taxes, etc.

When an exporting company exports to a foreign business partner (purchaser of goods), it should be aware that the other country may impose customs duties, consumption taxes, liquor taxes, and other taxes.

 

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Regulations related to Exporting Drugs

Japanese laws prohibit exporting drugs and drug-related products in most cases. The following table details regulations and the drugs they ban.

Cannabis Control Law (1948)

Marijuana (marijuana grass and marijuana grass products. In English, it is called marijuana.

Cannabis researchers are not allowed to export unless they are licensed to do so (Article 4).

Stimulant Drug Control Law (1951)

Methamphetamine (e.g., amphetamine, methamphetamine)

Export is prohibited (Article 13).

Methamphetamine raw materials (e.g. ephedrine)

General Remarks

Permission is required for export (Article 30-6, Paragraph 3)

For individuals

Permission may be granted to carry and export “methamphetamine materials that are medicinal products” (e.g., sleeping pills and sedatives) for the purpose of treating one’s own illness. A “Portable Export Permit” or a copy thereof is required.

Exports by designated exporters of methamphetamine materials

Designated exporters of methamphetamine materials may obtain a permit to export methamphetamine. An export permit or a copy of the permit is required.

Narcotics and Psychotropics Control Law

Narcotics

(e.g., heroin, cocaine, morphine, MDSA)

General Remarks

Permission is required for export (Articles 17 and 18).

For individuals

A permit may be granted to a person who has been instructed by a physician to take a “narcotic drug” (morphine, fentanyl, etc.) for the purpose of treating his or her own illness and to export it as hand luggage. Customs requires a “Portable Export Permit” or a copy thereof.

Licensed drug exporters

Customs requires an export license or a copy thereof (Article 18, Paragraph 5 of the Law).

Psychotropic drug

General Remarks

Exporting basically requires an export license (Article 50-11 and 50-12).

For individuals

A permit may be granted to carry and export “psychotropic drugs that are medicines” (diazepam, triazolam, etc.) for the purpose of treating one’s own illness. Customs requires a Portable Export Permit or a copy thereof.

Licensed psychotropic drug exporters

〇Among (i) exports of Class 1 psychotropic substances and (ii) exports of Class 2 and Class 3 psychotropic substances, which are specified psychotropic substances30 and are destined for specified regions, exports cannot be made without an export license (Article 50-12 and 50-13). Customs will require an export license or a copy thereof.

〇 For the export of Class II psychotropic substances other than those listed in (ii) above, notification is required in accordance with the Law. Customs will require a duplicate of the export notification (Article 50-14, paragraph 2) and a copy of the export business license.

〇In the case of exports of Class 3 psychotropic substances other than those listed in (ii) above, neither permission nor notification is required. Customs will require a copy of the export license.

Export by Establishers of Psychotropic Drug Testing and Research Facilities, etc.

No export is allowed without an export license (Article 50-12, Paragraph 2). Customs requires an export license or a copy thereof.

Raw materials for narcotic psychotropic drugs

(e.g., acetone, toluene, acetic anhydride)

General Remarks

When exporting narcotic psychotropic raw materials, an export license based on the Narcotics Control Law is not required, but an export approval based on the Foreign Exchange and Foreign Trade Law is basically necessary.

If a business

(= In the case of repeated and continuous export)

Both a notification of commencement of business at the time of commencement of business and a notification for each export are required (Article 72, Article 50-30).

If not a business

〇Notification of commencement of business is not required.

〇Notification is required when exporting narcotic psychotropic materials in excess of the amount specified for each narcotic psychotropic material (Article 50-32).

Opium Law (1954)

Opium 32

Export is prohibited except to those who have been entrusted by the government (Article 6, Paragraph 1).

Poppy seed or“keshi-gara”

Export is prohibited in principle. A license is required for export (Article 6, Paragraph 2).

 

Further information in English on exporting drugs may be found on the Narcotics Control Department’s website.

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Regulations related to Exporting Plants

Section 1: General Remarks

Plants may be required to undergo quarantine in accordance with the Plant Protection Law. In addition, the government may not approve the export of certain seeds and seedlings in accordance with the Forestry Seeds and Seedlings Act (Article 25, Paragraph 2). In addition, there are cases where CITES-related plants cannot be exported without approval based on the Foreign Exchange and Foreign Trade Law, and there are plants that cannot be basically exported based on the Seeds Conservation Law (see below), so care must be taken.

Section 2: Plant Protection Law

The Plant Protection Law requires quarantine for the export of certain plants, injurious plants and injurious animals.

The plants subject to quarantine are those belonging to flowering plants, pteridophytes, and helophytes. The term “injurious plants” refers to fungi, mucus, bacteria, parasitic plants, viruses, etc. that are harmful to useful plants. The term “pest animals” refers to mites and other organisms that harm useful plants.

In the event that an importing country intends to export “plants and their containers and packages” that require inspection certification by the exporting country for importation, it is necessary to apply for an export inspection review of such “plants and their containers and packages” and then pass an inspection by a plant protection officer to ensure that they conform to the requirements of the importing country (Article 10).  Electronic application for export inspection is also possible.

Customs requires a “Seal of Acceptance”, a “Certificate of Acceptance for Plant Inspection”, or a copy thereof. 

Section 3: Forestry Seeds and Seedlings Act

In the case of exporting cedar, hinoki, red pine, black pine, Japanese larch, Japanese white pine, Japanese ezo pine, Japanese white pine, and Japanese yellow pine, the government may restrict the export in order to secure good quality seeds and seedlings (Article 25(2) of the Act, Article 1 of the Order).

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Regulations related to Exporting Rare Wild Animal and Plant Species

Law for the Conservation of Species

The Law for the Conservation of Species (officially called the “Law for the Conservation of Endangered Species of Wild Fauna and Flora”) stipulates measures for exporting rare wild animal and plant species. Briefly, it stipulates the prohibition in principle of the capture, transfer, delivery, display for sale, advertisement, import and export, etc. of “rare wild animal and plant species”. For the list of rare wild animal and plant species, please refer to the website of the Ministry of the Environment.

The following table focuses on transfer and export:

Type

Transfer, etc.

Export

Rare Domestic Animal or Plant Species

Specific type 

〇 Permission is not required for individual transfers (i.e., free in principle).

〇Prior notification of the business to be transferred is required.

No exports are envisioned.

Specific type Ⅱ

〇 Prior permission is required for each individual transfer (i.e., prohibition in principle).

〇 However, prior permission and prior notification are sufficient for transfers for purposes other than sales and distribution.

A certificate from the Minister of the Environment is required.

Others

〇Prior permission is required for each individual transfer (i.e., prohibition in principle)。

Same as above.

International Rare Species of Wild Fauna and Flora

Same as above.

Export approval based on Article 48(3) of the Foreign Exchange and Foreign Trade Act is required.

Emergency species

Same as above.

Same as above.

 

Animals, their organs or their processed products are subject to regulation. Therefore, for example, not only the elephant itself but also processed products such as ivory are subject of regulation.

 

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Regulations related to Exporting Animals

Section 1: General Information

There are many cases where quarantine is required for exporting animals out of Japan.

In addition, there are cases where CITES-related animals cannot be exported without approval based on the Foreign Exchange and Foreign Trade Law, and there are cases where export is basically prohibited based on the Species Survival Law.

It is also important to note that birds cannot be exported without a certificate of lawful capture.

Section 2: Rabies Prevention Law

The Rabies Prevention Law stipulates that before exporting dogs, cats, raccoons, foxes, and skunks, it is necessary to apply for an export inspection (Article 3 of the Rules for Import and Export Quarantine of Dogs, etc.) and undergo quarantine (Article 7). Applications for export inspection can be submitted electronically.

Customs requires the submission of an export quarantine certificate or a copy thereof.

For more information, you may check the Animal Quarantine Guide by the Ministry of Agriculture, Forestry and Fisheries which is available in English.

Section 3: Livestock Infectious Disease Control Law

The Livestock Infectious Disease Control Law requires, in principle, quarantine for the export of livestock, as shown in the following table.

Animals and other objects for which the importing country requires proof of inspection by the exporting country

 

 

 

 

 

・In order to export, it is necessary to apply for an export inspection, have an inspection by a livestock quarantine officer, and receive an export quarantine certificate (Article 45, Paragraph 1). Electronic application for export inspection is also possible.

・Customs requires the export quarantine certificate or a copy thereof, or a copy of the animal quarantine inspection acceptance notice.

Items designated by the Minister of Agriculture, Forestry and Fisheries as requiring quarantine (“designated quarantine items”). Specifically, it refers to the following items (1) through (6).

 

(1) The following animals or their carcasses

Even-toed ungulates (cattle, deer, giraffes, etc.), horses, domestic animals, dogs, rabbits, bees

(2) Eggs of domestic animals

(3) Parts of the animals in (1) (bones, meat, fat, blood, skin, hair, horns, hooves, tendons and organs)

(4) Dairy products of the animals in (1) (raw milk, skimmed milk, etc., cream, butter, cheese, brine, powdered milk, etc.), semen, fertilized eggs, unfertilized eggs, and feces and urine.

(5) Bone meal of the animals in (1), meat meal, meat and bone meal, blood meal, skin meal, feather meal, hoof horn meal and organ meal.

(6) Sausage, ham and bacon made from (3) above.

Section 4: Wildlife Protection Law

The Law for the Protection of Birds and Wildlife stipulates that birds and animals (including processed products thereof specified by the Ordinance of the Ministry of the Environment) or eggs of birds may not be exported without a certificate of lawful capture (Article 25, Paragraph 1).


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Regulations related to Exporting Food

Section 1: Export Food Safety Certificate
(Food Sanitation Law)

When exporting food products from Japan to other countries, a certificate regarding the safety of the food products to be exported may be required by the destination country in accordance with the laws and regulations of the country.

In such a case, the exporter need to apply for a food safety certificate, and if the Minister of Health, Labor and Welfare approves the safety of the food, the certificate will be issued (Article 65-4 of the Food Sanitation Law).

 

Section 2: Export Certificates (Act on Facilitating the Export of Agricultural, Forestry, and Fishery Products and Food)

In cases where the governmental agency of the exporting country requires the issuance of an export certificate for food and agricultural, forestry, and marine products for which import conditions are specified, and upon application by the exporter, the Minister of Health, Labor and Welfare (/prefectural governor, etc.) may issue an export certificate after confirming that the import conditions concerned are fulfilled (Article 15 of the same law).

Specific examples include export certificates for food, etc. pertaining to radioactive material regulations in each country or region, and free sale certificates for food, feed, pet food, etc.

 

Section 3: Rice

Those who intend to export rice grains (i.e. rice fir, brown rice, milled rice, and crushed rice) are basically required to notify the Minister of Agriculture, Forestry and Fisheries in advance (Food Law, Article 36).


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