짜800 / December / 2008
Death and Taxes Understanding new inheritance laws could save you money and grief.
Exploiting popular culture Bean counting converges opinion leader: Tax reform Business Profile: Funeral director
SPECIAl ADVERTISING SECTIoNS
BUSINESS SUPPoRT AND oUTSoURCING TAX AND PENSIoN SERVICES
Volume 45 / Issue 12 / December 2008
Tony McNicol
Contents
16
26
特集 Features カバーストーリー 死を巡る税金の話
在外米国人に関する新しい財産関連法案について理 解を深めておきたい。 いざというとき、遺族の負担と悲
しみを軽減するために。 ジュリアン・リアル
世界で人気、 日本のポップカルチャー
カリフォルニアでは 「ジャパン・クール」 が大人気だが、 政府はこうした現代文化を利用した商売に当の日本 企業が消極的と指摘する。
Cover Story Death and Taxes 16 Understanding the new and planned estate legislation for U.S. citizens living abroad can save you and your dependents money and grief. By Julian Ryall
World Wants J-Pop 26 The government blames local businesses for “under exploiting” Japan’s modern culture as California takes center stage. By Tony McNicol
トニー・マクニコル
会計標準化の行方
大企業は国際会計基準の導入に対応できるが、 中小 企業や学術界は複雑で時間がかかるとして新規則
に不満。導入に成功したEUでもIASBとの対立がお こっている。
Bean Counting Converges 32 As the world of big business embraces standardized accountancy, SMEs and academia complain of complex, time-consuming new rules — and the EU threatens to split. By Julian Ryall
ジュリアン・リアル
ESTA最新動向
国土安全保障省は、来年1月12日の電子渡航認証
システム （ESTA）義務化に向け、初期トラブルは全て 解決済みと保証。 ジェフ・ボッティング
ESTA Latest 41 The Department of Homeland Security reassures potential visitors to the U.S. that teething troubles are sorted ready for the January 12 launch. By Geoff Botting
December 2008 / ACCJ Journal / 1
Contents
Volume 45 / Issue 12 / December 2008
Departments Note from the Editor 13 President’s Message 15 Media Watch 23 Leisure spend survey. Spotting troubled firms. Magazines crash. Electric cars. Multi-level marketing claims.
On the Spot 30 Charles Dallara, Managing Director, The Institute of International Finance, Inc., is interviewed by Julian Ryall.
Opinion Leader 38 Fujio Mitarai, Chairman of Nippon Keidanren (Japan Business Federation) and Chairman and CEO of Canon Inc., on tax reform.
日本経団連会長・キヤノン会長兼CEOの御手洗冨士夫氏が税制改革について語る。
Classic Journeys 46
Tony McNicol
Lofty Takayama’s cold isolation is reflected in its cuisine and craftsmanship. By Tony McNicol
Science, Technology and Inventions 51 46
Making oil from algae could ease energy and food woes, while reducing greenhouse-gas emissions. By Robert Cameron
FDI Portfolio 53 Asian Art. Mobile information. TUJ growth. German tools. Management buyout. Italian style. By Nicole Fall
Business Profile 56
TokyolIfe: Art and Design by Ian Luna, Rizzoli 2008
John Kamm, the ACCJ’s sole funeral director and embalmer, laments the industry’s lack of regulation. By Martin Foster
Behind the Book 58 Tokyolife: Art and Design is reviewed by Tom Baker.
Advocacy Update 60 ACCJ Viewpoints
In the Final Analysis 62 By Samuel H. Kidder, ACCJ Executive Director
58
4 / ACCJ Journal / December 2008
Morr ison & Foer ster llp R e g i s t e r e d A s s o c i at e d O f f i c e s o f Ito & Mitomi
Expanding our capital markets practice. Morrison & Foerster is pleased to announce that Tony Grundy, for many years the managing partner of Linklaters’ Tokyo office, has joined Morrison & Foerster as a partner. Tony Grundy has over 30 years of experience in capital markets, banking, structured finance and corporate recovery, advising investment, corporate borrowers and issuers, and trustees in Tokyo, Asia and around the world, and has spent more than 15 years as a senior capital markets attorney in Japan. Key Facts Regarding Morrison & Foerster in Tokyo: • Recognized by Chambers Global, as a leading firm in 6 different areas of practice in Japan; M&A, IP, capital markets, real estate, projects/energy and litigation • Largest international firm in Japan, with over 110 attorneys • Joint enterprise partner, Ito & Mitomi, is a closely integrated firm of over 40 experienced Japanese attorneys • Leading capital markets attorneys advising under US, English and Japanese law More than a thousand lawyers in key finance and technology centers internationally. One compelling mission: to deliver success for our clients. For more information regarding our practice, please contact Ken Siegel at +81 3 3214 6522 or visit www.mofo.com. ©2008 MORRISOn & FOERSTER LLP
ACCJ Leaders President Allan D. Smith AIG Companies, Japan and Korea Chairman Charles D. Lake II Aflac Japan Vice Presidents Michael J. Alfant Fusion Systems Japan Co., Ltd. Laurence W. Bates General Electric Japan, Ltd. William R. Bishop, Jr. Bishop & Associates Michael D. Bobrove (Kansai) Nihon Medrad K.K. Kumi Sato Cosmo Public Relations Corporation Mark F. Schwab United Airlines, Inc. Michael D. Weenick (Chubu) PAE Design & Facility Management Treasurer Nasir Majid PricewaterhouseCoopers Brett Jensen (Kansai) Colliers Hallifax Steve Burson (Chubu) H&R Consultants ACCJ Governors Vicki L. Beyer Morgan Stanley Japan Securities Co., Ltd. Charles M. Duncan Continental Airlines Christopher K. Ellis Chrysler Japan Company, Ltd. James Foster Microsoft Japan Harry Hill (Chubu) Oak Lawn Marketing, Inc. Tad Johnson Pratt & Whitney Aftermarket Japan KK John Kakinuki GE Consumer Finance Co., Ltd. Jiri Mestecky Kitahama Partners L.P.C. Sharon Baker Morin State Street Trust and Banking Co., Ltd. Douglas L. Peterson Nikko Citi Holdings Inc. Nicole W. Piasecki Boeing Japan Jay Ponazecki Morrison & Forester LLP Jim Weisser Weisser Consulting Ira Wolf Pharmaceutical Research and Manufacturers of America (PhRMA) ACCJ Executive Staff Samuel H. Kidder Executive Director Aron Kremer Deputy Executive Director
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ACCJ Committees American Auto Industry Randy Krieger Architecture, Construction & Real Estate Kevyn Johnson/Michael P. King Asia Business Philip C. Jones B2B Sales Karl Hahne Banking and Finance Thomas Clark/Ernfred Olsen Capital Markets Douglas Hymas Charity Ball Barbara Hancock Competition Policy Task Force Robert Grondine Corporate Social Responsibility Patricia Bader-Johnston Direct Marketing Joseph Peters Environmental Naoki Arai Financial Services Forum Charles D. Lake II Food and Agriculture Collin Benson Foreign Direct Investment Nicholas Benes Government Relations Andrew Conrad Healthcare Steve Plunkett Human Resource Management Chris Lamatsch/Ken Somers Independent Business Doug Jackson Information, Communications & Technology Darren McKellin Insurance Jonathan Malamud/Grant Tanabe Intellectual Property David Case International Education Patricia O’Keefe Internet Economy Task Force Jim Foster Investment Management David Monroe Legal Services Arshad Karim/Eric Sedlak Corporate Counsel Clair Chino Marketing Programs Dominic Carter Membership Relations Andrew Silberman Privatization Task Force David Hoover Retail Victor Luis Special Events Barry Bergmann Young Professionals Group John Ghanotakis/Daniel Lintz Taxation Jack Bird/Michael Shikuma Toiletries, Cosmetics & Fragrances Yukiko Tsujimoto Transportation and Logistics Jeff Bernier/Mitsuyo Teramura Business Aviation Task Force Gary Konop Travel Industry Kayoko Inoue/Vincent You University Briefing Program Richard May/David Satterwhite Kansai Chapter Business Programs Jiri Mestecky Community Service Kojiro Dan External Affairs Kiran Sethi Living in Kansai Barry Louie Membership Paul Dupuis Women in Business Mari Nogami Chubu Chapter Community Service Steve Burson Independent Business Jeremy Cowx/Jason Morgan Living in Chubu Lowell Sheppard Membership Relations Chris Zarodkiewicz Programs Steve Brown American Chamber of Commerce in Japan Masonic 39 MT Bldg. 10F, 2-4-5 Azabudai Minato-ku, Tokyo, Japan 106-0041 Tel: 03-3433-5381 Fax: 03-3433-8454 www.accj.or.jp / www.ecentral.jp
Publisher Vickie Paradise Green paradise@paradigm.co.jp Editor-in-Chief Simon Farrell simonfarrell@paradigm.co.jp Senior Editor David Umeda Art Director Paddy o’Connor Graphic Designer Akiko Mineshima COLUMNISTS Tom Baker, Robert Cameron, Nicole Fall, Mark Schreiber CONTRIBUTORS Vicki l. Beyer, Alana R. Bonzi, Geoff Botting, Martin Foster, Justin McCurry, Darren McKellin, Tony McNicol, Anthony H. Rowley, Julian Ryall, Catherine Shaw, Richard Smith, Jeffrey Tanenhaus PHOTOGRAPHERS / ILLUSTRATORS Tony McNicol, Jeremy Sutton-Hibbert, Darren Thompson, Mattias Westfalk Published by Paradigm President Vickie Paradise Green Creative Director Richard Grehan Advertising Sales Eileen Chang, Sarit Huys, Helene Jacquet, leai Kubotsuka Kamiyama Ambassador 209 18-6 Kamiyama-cho, Shibuya-ku Tokyo, Japan 150-0047 Tel: 03-5478-7941 Fax: 03-5478-7942 e-mail: inquiries@paradigm.co.jp www.paradigm.co.jp
Published monthly in Tokyo, on the 25th of the month, since 1964. Indexed in the PAIS BUllETIN. All rights reserved. The views and opinions expressed herein (other than editorials from the ACCJ itself) are solely the opinions and views of their authors. The ACCJ is not responsible or liable for any portions thereof. Subscription rates for non-ACCJ members one year ¥9,000; two years ¥15,000; three years ¥22,000. ¥800 per copy. Rates include domestic postage or surface postage for overseas subscribers. Add ¥7,500 per year if overseas airmail is preferred. Please allow eight weeks for changes of address to take effect. Subscription requests should be sent to info@accj.or.jp The ACCJ Journal welcomes story ideas from readers and proposals from writers. letters to the editor may be edited for length and style. The ACCJ Journal is produced entirely on Apple computers
PUBLICITY
Satisfying Customers Is Not Enough It’s much more powerful, and profitable, to emotionally engage them. By John H. Fleming, Ph.D., and Jim Asplund, authors of Human Sigma: Managing the Employee-Customer Encounter
J
ennifer’s mother is more than a satisfied shopper — she is a fully engaged customer. A few years ago, when Jennifer was scheduled to deliver her second child, her mother, Ann, arrived. The day before the delivery, Ann insisted that they go shopping at her favorite upscale clothing store. Jennifer spent several hours wandering the store with her mother and her three-year-old. Ann bought several hundred dollars worth of shoes, then called back later — from the hospital on the day Jennifer’s second child was born — to have them ship a shirt that she decided she wanted after all. We all know someone like Ann — someone who is so passionate, so emotionally connected to a particular brand that it seems as though a large portion of her life revolves around it. Companies spend millions of dollars each year trying to find and court them. But how do customers develop these deeply emotional relationships with companies or brands? And what are the characteristics of a company’s most engaged — and most profitable — customers? The Four Dimensions of Emotional Attachment Gallup’s research reveals that there are four key dimensions to a customer’s emotional attachment to a company. Each dimension represents a specific set of activities that meet customers’ emotional needs. • Confidence is the foundation on which higher levels of emotional attachment are built. Is this company trustworthy? Can its employees be trusted to do what they say they will do, every day? But Confidence alone is not enough to build long-term, sustainable, and emotionally connected customer relationships. • Beyond Confidence lies Integrity, the essential dimension of fair play. Does this company treat me the way I deserve to be treated? If something goes wrong, can I count on this company to fix it quickly? • The next emotional requirement is Pride, a sense of positive identification with the company. Customers who feel Pride are proud to be a customer not because of what their association with a company says to others, but, more importantly, because of what it says to them about themselves.
Customer Engagement (CE11) Hierarchy
Passion
Pride
Integrity
Confidence CE11 is supplemented with select customer engagement drivers specific to your industry/challenge.
• The fourth dimension — and the ultimate expression of emotional attachment — is Passion. A passionate customer describes his or her relationship with the company as irreplaceable and a perfect fit for him or her. Passionate customers are rare, but they represent the epitome of customer connectedness. Like Jennifer’s mother, they are customers for life and are worth their weight in gold. What Are Engaged Customers Worth? Gallup research reveals that across companies of different types, customers who are fully engaged represent an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth than the average customer. In stark contrast, actively disengaged customers represent a 13% discount in terms of share of wallet, profitability, revenue, and relationship growth than the average customer. At a local business unit level — a store, branch, sales team, or other local unit — those whose levels of engagement place them in the top 25% of comparable units within a company tend to outperform all other units on measure of profit contribution, sales, and growth by a factor of 2 to 1. Clearly, engaging customers on an emotional level has a significant financial benefit.
Note from the Editor
American Influence
W
e try to stay upbeat at the Journal; but let’s face it: everyone’s time eventually comes. Based on an ACCJ event, our cover story can help you prepare for the inevitable by protecting in advance your assets and family here and abroad as new inheritance laws for U.S. expatriates emerge. The ACCJ regularly holds such events, and Death and Taxes is a recent example of how those who attend can gain valuable insight and up-to-date information on current issues. Business Profile, meanwhile, features the ACCJ’s sole funeral director and embalmer. John Kamm shares some anecdotes about this freewheeling industry on page 56. What’s remarkable, though, is how a non-Japanese can bypass deeply entrenched questionable practices here and not uncommon 3,000 percent mark-ups to open up his industry by offering fair, upfront deals to the bereaved. on a lighter note, another industry benefiting from recent American influence is Japanese modern culture. As Japan has long embraced the U.S. lifestyle and posed a challenge to a number of its related industries, having the tables turned is intriguing to watch. Japan’s pop culture is exploited most successfully abroad by non-Japanese — prompting the government here to pressure domestic companies to take on these outsiders who successfully have marketed
the lucrative and increasingly mainstream J-Pop phenomena abroad (page 26). Whether you are traveling or staying home this time of year, the Journal wishes you a safe and pleasant rest and a prosperous 2009.
simonfarrell@paradigm.co.jp
letter
Dear Editor, As an ACCJ member and a long-time businessman in consumer goods in Japan who recently returned to the U.S. — where I have my own company, Japan-Asia Strategies, Inc. — I found the cover feature in your September 2008 edition, “Why Foreign Firms Fail,” by Nicole Fall extremely interesting, educational and timely and I plan to distribute copies of the article to clients, potential clients and others interested in business or doing business in Japan. Congratulations on publishing such a fine magazine. Tom Seymour
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By Allan D. Smith / President’s Message
On the Next U.S. Administration
E
ver since the conclusion of the elections in the U.S., Japanese friends and acquaintances have asked me what the effects of a Democratic president and majority in the House of Representatives and Senate will be on U.S.-Japan relations. I am sure that many of the Chamber’s members have received similar queries. The answer is that we really cannot know until the new administration takes over and actually starts to formulate and then implement its policies. However, one thing is clear; good relations between the U.S. and Japan are of fundamental importance to both countries. On this point, I would like to quote Ambassador J. Thomas Schieffer from his Post-Election Press Conference on November 6, 2008 at the Tokyo American Center. Ambassador Schieffer said, “While there will no doubt be differences in approach and style between this administration and the next, I am confident that President Obama will value and nurture the U.S.-Japan alliance and friendship just as President Bush did. He will do so for the same reason that Democratic and Republican administrations since the end of the war have done so — because it is in the vital and strategic interests of America.” In Japan, there is a perception that Republican administrations place more emphasis on security
issues while Democratic administrations place more emphasis on trade issues. This, of course, is a matter of degree and there is always a need in any administration to pay attention to both. Members of the ACCJ have an important role in this regard. We typically are participants in both the U.S. and Japanese communities, and have special insights that come from a more detailed and informed understanding of the issues that face our two countries. We have an obligation to ensure that the discussion of issues is informed. One important point that should be kept in mind is that there really is no need to choose between trade and security. We can have both. The U.S.-Japan security arrangement is in the best interest of both countries. Open U.S. markets for Japanese exports are not a trade-off for U.S. bases in Japan, as some
commentators on both sides of the Pacific sometimes would lead us to believe. In fact, Japan funds a sizeable portion of the cost of the U.S. military presence in Japan. Further, were U.S. forces not in Japan, Japan would have to substantially rearm, which would not be good for relations with its Asian neighbors who are sensitive on Japanese military matters. Also, trade is not a zerosum game. For example, the ACCJ has looked carefully at the benefits of an Economic Integration Agreement between Japan and the U.S., and determined that the economies of both countries would obtain a substantial boost. When asked, we should make note of these factors.
asmith@accj.or.jp Allan D. Smith is ACCJ President.
December 2008 / ACCJ Journal / 15
Death and Taxes
New rules on estate planning for U.S. expats.
I
t is never pleasant to think about death or taxes; but with both being the only things guaranteed in this life, it pays to be prepared for when the grim reaper does come calling. Failure to do so could mean the government gets its hands on more of your estate. And your dependents receive a lot less money than they would have reasonably expected, to cover the costs of education, for example. For a U.S. citizen living in Japan, who is exposed to estate tax considerations for both countries, the complexity is greatly increased. Yet, it is worth noting that having the loose ends of one’s estate resolved before that fateful final day results in one
16 / ACCJ Journal / December 2008
less thing about which surviving relatives will have to worry — at a time when they are inevitably going to be deeply upset as it is. The ACCJ Taxation Committee hosted on September 12 a luncheon event on estate planning, designed to give attendees an overview of the best ways in which to make sure their assets are controlled and disposed of in accordance with their wishes and the needs of their beneficiaries. At the same time, there is consideration given to reducing taxes and other costs to the bare minimum that is legally possible. The key issues in estate planning include decisions as to whom the assets should pass, which assets each beneficiary
should receive, when that should happen and who should have custody over any minors, according to Michael H. Shikuma, international tax and estate planning counsel with the Tokyo office of White & Case LLP and co-chair of the ACCJ Taxation Committee. Anyone making plans for the optimum disposal of their assets also will need to consider legal restrictions on their choices of which relatives receive which assets, the possible implications of taxes or other costs, and the techniques and strategies available. “But, of course, you don’t have to have a plan,” said Shikuma. “In that case, the government has a plan that covers that
By Julian Ryall / Death and Taxes
one of the first factors … is determining which succession law —Japanese or U.S. — is applicable.
SNAPSHOT
situation, and they will dispose of your assets according to that.” His comment stirred a wry laugh from amongst those in attendance. Michael Kato, director of Personal Financial Services at PricewaterhouseCoopers and an expert on taxation issues, also participated. Together, they took a case study of a fairly typical scenario, involving a U.S. citizen married to a Japanese national and they have two children. The fictional Harold has assets in the form of cash, stocks, an IRA (individual retirement account), a 401(k) pension plan, as well as a home in the United States, household goods and personal effects. Harold’s aim is one that both Shikuma and Kato see often: He wants his assets to be passed on to his wife upon his death, and then to his children when she dies. one of the first factors affecting his decisions, Shikuma said, is determining which succession law — Japanese or U.S. — is applicable. “The controlling factors are the location of his real estate property, the location of his
ToNy MCNICol
Generally in Japan, … ■ Property is not jointly owned; property held jointly with the right of survivorship in the U.S. automatically passes to surviving partner ■ Wills are not generally used; the law decides on asset disposal ■ Trusts are rare ■ Heirs become owners of decedent’s assets and debts
At an ACCJ Taxation Committee event in September, Michael Kato, director of Personal Financial Services at PricewaterhouseCoopers, spoke on minimizing taxes.
personal property, and his residency and citizenship, as well as that of his heirs,” said Shikuma. For U.S expatriates with real property, the succession law of the country where the real property is located generally applies. While, for personal property — which includes stocks, financial assets, jewelry, art and so on — the law of the decedent’s country of nationality is applied. However, Japanese law ultimately may apply to expatriates who are residents of Japan. There are some important differences between the U.S. and Japanese succession processes, Shikuma emphasized. Property, for example, generally cannot be jointly owned in Japan, although property held jointly with the right of survivorship in the U.S. automatically will pass to the surviving partner. Similarly, beneficiary-designated property is transferred automatically to
that beneficiary in the U.S., which is a limited option here. Wills generally are not used in Japan and people here simply allow the law to decide how their assets are to be disposed — plus, trusts are rare in Japan. “The U.S. system involves the creation of an ‘estate,’ which takes title to the person’s property, figures out the assets, pays off the debts, identifies the heirs and distributes the remaining assets,” said Shikuma. “The Japanese system, on the other hand, follows the civil law system. There is no ‘estate’ and the heirs become the owners of the decedent’s property immediately upon death — both assets and debts.” Anyone without an estate plan in Japan generally will find that, under the intestacy law, the spouse is entitled to 50% of the assets once debts and taxes have been taken out, and the children
December 2008 / ACCJ Journal / 17
Death and Taxes
“In estate planning, a trust is the most common vehicle for allowing you to keep control of your assets, even after you pass on …”
SNAPSHOT
ToNy MCNICol
Key issues: ■ Who gets assets ■ Which assets each receives ■ When beneficiaries get assets ■ Who gets custody over minors
Michael Shikuma, ACCJ Taxation Committee co-chair and international tax and estate planning counsel at White & Case LLP, advises to make sure you have a tax plan.
share the remaining 50%. Kato then took the microphone to outline the situation regarding taxes — and, most importantly, ways to minimize them. Both the U.S. and Japan impose taxes on gifts and inheritances or estates, with the scope of the tax dependent on the location of the property, and the person’s residency and nationality. Anyone who is a U.S. citizen or domiciled in the U.S., along with anyone with property in the U.S., is subject to tax. For the years up to 2010, both the gift tax and the estate tax are set at 45%; it will rise to 55% in 2011. The good news, Kato pointed out, is that exclusion amounts — including marital deductions and mortgage considerations — can be applied to estates, although special rules apply to non-resident, non-U.S. citizens. He warned that, when the spouse is not a
U.S. citizen, the picture becomes more complicated. In that case, a qualified Domestic Trust (qDoT) might be the best approach. “This is a planning tool,” said Kato. “It is a qualified trust that is especially applicable for a spouse who is not a U.S. citizen and will not receive a benefit from the unlimited marital deduction.” A qDoT permits the deferral of U.S. estate tax on assets transferred to a surviving spouse, permits that spouse to enjoy an income from qDoT assets, and guarantees payment of U.S. estate taxes after the death of that spouse. The drawback, however, is that a qDoT may limit access to funds that have been left to the surviving spouse. Kato went on to examine people who are subject to tax in Japan — which includes anyone with property here, who is a resident, and Japanese nationals who are not resident in Japan.
Inheritance tax rates are slightly higher than in the U.S., being set at between 10% and 50% for amounts over ¥300 million. Tax in Japan also is applied separately to the amount inherited by each successor — which is unlike the system in the U.S. where tax is applied to the entire estate. As a consequence, the more heirs under Japanese law, the lower the overall tax rate. An alternative to a will is a Revocable living Trust (RlT), Shikuma said, which has the benefit of avoiding probate because title ownership is held by the RlT’s trustee, not directly by the decedent. “A trust is an arrangement in which a person transfers property to another person for the benefit of a third person,” said Shikuma. “In estate planning, a trust is the most common vehicle for allowing you to keep control of your assets, even after you pass on. That means it can be allocated to the kids’ education or health care, for example, and means the kids cannot spend it on other things.” Kato pointed out that there are challenges to trusts — whether a no beneficiary trust, a succession trust or general trust — when being used in Japan, particularly when it comes to exposure
December 2008 / ACCJ Journal / 19
Congratulations to the ACCJ on your Kanreki. Johnson & Johnson K. K. Consumer Company 5-2 Nishi-kanda 3-chome, Chiyoda-ku, Tokyo 101-0065
Death and Taxes
Planning for others’ lives after our own death is clearly a complicated matter, and the best advice will come from professionals who know all the issues.
SNAPSHOT
Case Study Harold is a U.S. citizen married to a Japanese national. They have two children and Harold has assets of cash, stocks, an IRA (individual retirement account), a 401(k) pension plan, a home in the United States, household goods and personal effects. Harold wants his assets to be passed on to his wife upon his death, and then to his children when she dies. One of the first factors affecting his decisions is to determine which succession law — Japanese or U.S. — is applicable. Controlling factors are the location of his real estate property and his personal property, his residency and citizenship and that of his heirs. For U.S expatriates with real property, the succession law of the country where the real property is located generally applies. For personal property — which includes stocks, financial assets, jewelry, art and so on—the law of the decedent’s country of nationality is applied. However, Japanese law ultimately may apply to expatriates who are residents of Japan.
© THE NEW yoRKER CollECTIoN 1986 ED FISHER FRoM CARTooNBANK.CoM. All RIGHTS RESERVED.
to taxation. Another issue on which he emphasized caution is the purchasing of insurance to augment an estate; insurance is subject to tax and, therefore, would need to be carefully structured to be tax-free.
The third scenario provided by Kato was the Irrevocable life Insurance Trust (IlIT), which is a way to pass on the proceeds from a life insurance policy without paying U.S. estate tax. By setting up an IlIT, the trust is buying
life insurance in the person’s name and then paying out to the beneficiaries. Contributions to the trust, beyond the $12,000 per beneficiary annual exclusion amount, are subject to U.S. gift tax. The key drawbacks to this type of trust are that it cannot be changed once it has been set up, and that the settler has no control over the arrangement and is unable to receive any benefit from it. Kato concluded the presentation by stating that changes in taxation regulations are ongoing — it was only on June 17 that President George W. Bush signed into law the IRC 877A exit tax, which applies to U.S. citizens and long-term permanent residents who relinquish their citizenship or permanent resident status. The regulations impose a mark-tomarket tax on the deemed sale of worldwide assets and treats deferred compensation items as immediately distributed. Planning for others’ lives after our own death is clearly a complicated matter, and the best advice will come from professionals who know all the issues. Michael H. Shikuma can be contacted at White & Case at mshikuma@whitecase.com; and Michael Kato is at PricewaterhouseCoopers at Michael.Kato@jp.pwc.com
Julian Ryall is The Daily Telegraph’s Tokyo correspondent.
December 2008 / ACCJ Journal / 21
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22 / ACCJ Journal / December 2008
Media Watch
leisure Spend Trends For the past 30 years, the annual Rejaa Hakusho (White Paper on leisure) has been issuing definitive data on the country’s ¥78 trillion leisure market. Currently published by the Japan Productivity Center for Socio-economic Development, the 188-page report is based on information compiled from reports by various associations, plus the results from questionnaire surveys of 3,000 individuals aged 15 and over living in towns and cities with populations above 50,000. The results for 2007 showed outlays for leisure, which had peaked at ¥90.9 trillion in 1996, had dropped by 5.8% to ¥74.53 trillion, a year-on-year decline of ¥4.4 trillion. The drop exceeded the decline in actual disposable income of the average working household, which fell by 0.1% (Source: Ministry of Internal Affairs & Communications). The White Paper data did show a few bright spots in an otherwise gloomy picture. outlays at fitness clubs posted a new high, and demand for sportswear was steady, as were expenditures for digital cameras, flat-screen TVs, electronic game units and software. Among the biggest losers that experienced a major slump were pachinko and other forms of legal gambling. While the greatest negative factor affecting outlays on recreation and leisure is the declining birthrate, even more worrisome for marketers, perhaps, is the ongoing rejaa banare (estrangement from leisure) by people in their twenties and thirties. The age segment to which marketers once had looked as both trendsetter and the largest spender is cutting back on outlays. No doubt reflecting economic concerns, there was an increase in the percentage of people who place higher priority on work/career — following three straight years of decline — which surpassed the percentage of individuals who said they gave higher priority to personal time. In 2007, the nation’s top three leisure activities have remained unchanged from the previous three years: eating out, with a base of 72 million people;
domestic travel, 57 million traveler base; and motoring, 51.3 million driver base. Home computing, with 40.5 million users, declined from 7th place to 8th. But there was little change among the other top 10. As for desired activities in the future, overseas travel ranked 4th, voiced by 40.8% overall and 44.6% of the women. High latent demand still was seen for domestic and overseas travel by both men and women, with increased interest shown in traveling abroad by males in their fifties. The report suggests this trend is indicative of changes in leisure preferences by the post-WWII baby boomers, whose interests likely differ considerably from those of older people born prior to 1947. Activities defined as “new leisure” have doubled in scale over the past five years, and the report suggests the number will continue to grow. The top activities included use of mobile phones for purposes unrelated to work (71.5 million owners, ¥2.517 trillion market value); Internet use (45.6 million users, ¥1.076 trillion); shopping mall visits (41.6 million shoppers, ¥1.306 trillion); deluxe spa bathing (39.9 million bathers, ¥602 billion); and car or motorcycle tinkering (38.8 million owners, ¥1.152 trillion). looking ahead, the White Paper notes that the age when forms of mass leisure were buoyed along with economic expansion and population growth is coming to an end, and will be replaced by what the report calls “selective investment-type leisure.” Future success will hinge on the ability of businesses to identify, and tap into, latent markets. To engage such potential, businesses will have to elevate productivity as service industries — which may be daunting, considering the limited scale in which so many enterprises operate. Besides the catering to an anticipated market growth in leisure activity by recent retirees and seniors, the report notes that the government — concerned over the declining physical strength of school children — may formulate a national strategy. With government backing (and funding), sports facilities may take on a greater role in Japanese society.
December 2008 / ACCJ Journal / 23
Telltale Signs of Trouble These times are difficult enough, but the last thing you need is a vendor or client who might soon vanish. But how to identify and weed out the truly endangered companies with whom you might be dealing? In a series of columns appearing in the tabloid Nikkan Gendai from the end of September, financier Hideto Fujino provides some useful insights into differentiating companies that are on the verge of collapse. The first thing to check, writes Fujino, is whether or not the president’s face appears on the company’s Web site. Just before one company went bust back in June, the president’s aisatsu (message of greeting) on the home page had disappeared, replaced by an unattributed essay of corporate policies. “It’s suspicious if the top man’s face doesn’t appear,” Fujino asserts. “It might even mean he had a previous arrest record.” Another cause for suspicion is a company that has hired one or several unusually attractive receptionists. This personnel addition can be viewed as reflecting the mindset of a boss who tends to put appearances ahead of ability. This indicator also would extend to his choice of private secretary. Should his office be cluttered with ostentatious luxuries — like leather-upholstered sofas, marble tables, stuffed animals, famous works of art or golf tournament trophies — you should be on your guard as well. Nozomu Sahashi, the former president of the
bankrupt NOVA chain of English-language schools is said to have indulged in many of the aforementioned. Here are some other warning signs, according to Fujino: ■ The
wall clock in the meeting room off by five minutes. (“Shows indifference on the part of the users.”) ■ Signs of poor janitorial efforts, e.g., the lavatories do not appear well cleansed; discarded paper has been allowed to pile up around the photocopy machines. ■ Publicity-seeking bosses (like Live Door’s Takafumi Horie) who publish their autobiographies or make regular TV appearances. ■ Companies with too many directors on their boards, particularly advisors and auditors. (The rule of thumb is an average 9.3 people for companies listed on the First Section of the Tokyo Stock Exchange.) The timing of Fujino’s series is interesting because such articles, while not entirely unknown, normally appear later, just around early- or mid-December. By the time you read this, some of the companies Fujino has identified might already be gone.
Random Access No fewer than 16 vernacular magazines planned to suspend or cease publication within 2008. The oldest, women’s magazine Shufu no Tomo (housewife’s companion), was founded in 1917. Another magazine that fell victim to falling circulation numbers was the Japanese-language edition of Hugh Hefner’s Playboy magazine,
24 / ACCJ Journal / December 2008
produced by publisher Shueisha under a licensed agreement with Playboy Enterprises. (Source: Sankei Shimbun) A survey of the incomes spanning the entire careers of professional athletes found that jockeys are likely to earn the most; or, at least, that’s the case for those who ride in events
sanctioned by the Japan Racing Association. In careers covering 20 years or longer, riders can expect earnings to average ¥591 million. That figure considerably eclipses the career earnings of players in Nippon Professional Baseball (¥399 million) and J-League soccer (¥175 million). (Source: Dime magazine)
Media Watch
Charging Ahead Will the day arrive, fairly soon, when automobiles are viewed as household appliances? By 2020, one passenger car out of two on Japan’s roads is expected to be powered by electricity (EV). To realize this usage, incremental moves are under way to set up a new motoring infrastructure. In a tie-up with Tokyo Electric Power Company (TEPCO), parking lot franchise Park24 Co., Ltd. expects to have eight quick-charging stations up and running by January. The Japan Marketing Journal (Oct. 8) also reports the Ministry of Economy, Trade and Industry (METI) is subsidizing procurements of EVs by local governments and companies. From 2009, Kanagawa Prefecture and other local areas will be gearing up for wider use of EVs, supported by a 50% subsidy from METI.
While EVs with lead-acid batteries, such as Toyota Motor Corporation’s COMS, have been on the market since 2000, the attention next year will shift to models from Mitsubishi Motors Corporation (iMiEV) and Fuji Heavy Industries Ltd. (Plug-in Stella, pictured) utilizing lithiumion batteries. Government agencies and businesses that procure EVs will be entitled to rebates amounting to as much as half of the vehicle’s cost. (TEPCO alone, which operates a fleet of 8,000 vehicles, can be expected eventually to order about 3,000 EVs.) The models, priced at roughly ¥3 million — over threefold that of ordinary ultra-compact cars with equivalent passenger capacity — will be available to the general public from 2010.
The year 2009, JMJ notes, marks the third wave of efforts to introduce EVs, the first having happened in the 1970s when vehicle emissions created severe air-pollution problems. The second wave took place in the 1990s, when California put pressure on auto manufacturers worldwide to lower car emissions. This mandate proved impossible to maintain, however, and so the number of EVs on the road began to decline from 2006. The real question on everyone’s mind, therefore, is whether the move toward alternative sources can be sustained if oil prices should recede further.
Multi-level Blues To seek some extra income on the side, more housewives and others are using their personal networks to sell goods via multi-level marketing. But a number of such companies have been hit by claims. Nikkan Gendai (Oct. 29) reports that over the past several years the Ministry of Economy, Trade and Industry (METI) has issued desist orders to several such marketing firms, the most recent being Fukuoka-based Bio C Pulse in May 2008. Another firm on the receiving end of punitive measures in February 2008 was Yokohama-based Endways Japan, which had signed up some 490,000 members and posted sales of ¥60 billion. A METI study in 2006 estimated that multi-level sales companies claimed a total of 21.9 million members, but Nikkan Gendai suggests the actual
figure may be higher. The marketing companies recruit new distributors at seminars that typically promise the potential for huge earnings, but the sad fact is only a tiny fraction make out well — the number of members earning over ¥100,000 a month is estimated at under 1%. Nonetheless, the system has become widespread, and many people find themselves stuck with rooms full of unsold inventories. “With the rapid increase in unemployment, multilevel marketing schemes have been growing,” attorney Masaki Kato tells Nikkan Gendai. “No amount of pleading seems to protect people from entrapment, and the only way to deal with them is to buttress the laws. The current penalties for violations — up to two years imprisonment or fines up to ¥3 million — are too lenient.”
December 2008 / ACCJ Journal / 25
Tony McNicol
World Wants J-Pop
But government wants more marketing.
N
ot so long ago, if you had used the words manga or anime outside Japan, most likely you would have gotten a puzzled look. In 2007, though, 1,468 manga titles were published in the U.S., ringing up total sales of $220 million. Earlier, in 2006, 500 anime titles were released, earning $400 million. Japan pop culture exports have swept the world, and the word otaku (obsessive hobbyist) is now a badge of honor for Japanese pop culture fans anywhere. Through manga and anime’s success — not to mention the country’s toys, video games, fashion, music and food — Japanese pop culture has spread its tentacles across America. Even Hollywood has succumbed to Japanese cool with anime-influenced movies like the Matrix trilogy and Kill Bill. Oscarwinning Japanese animator Hayao Miyazaki has been hailed as a new Walt Disney. A recent anime TV mini-series, “Afro Samurai,” stars Samuel L. Jackson. The Internet is abuzz with news of famous anime “soon to become” live-action movies. But even as Japanese pop culture stomps Godzillalike across American culture, there are worrying signs for marketers. Manga and anime producers can thank the Internet for facilitating international fandom, but illegal downloads of both manga and anime threaten to destroy their business in the U.S. Many in the industry, furthermore, warn that manga and anime in Japan are past their creative
26 / ACCJ Journal / December 2008
peak. There are doubts whether the slow-moving media companies dominating the industry in Japan have the technological prowess to meet the Internet challenge. The business stakes are high in Japan, where otaku are an economic force with which to be reckoned. Back in 2004, Nomura Research Institute, Ltd. estimated the total domestic otaku market at ¥290 billion. They counted 2.85 million otaku in Japan, rather gently referring to them as “enthusiastic customers.” Politicians have even scrambled to capture the otaku vote, most famously LDP rightwing firebrand Taro Aso. As then-foreign minister, Aso oversaw the creation of an International Manga Award, a Nobel Prize equivalent for manga. Evidently the government views pop culture as a potent international PR tool, as well as a lucrative (tax-generating) export. Japanese companies are just as keen to cash in on the pop culture boom. In 2005, publishers Shogakukan Inc. and SHUEISHA Inc. established a San Francisco multi-media company, VIZ Media, LLC. Their business is about 50% manga, a quarter DVD sales (mainly anime) and another quarter licensing. The company’s flagship manga magazine, Shonen Jump, now enjoys a circulation of 300,000. VIZ Media is headed by Merrill Lynch Japan Securities Co., Ltd. former Vice President Hidemi Fukuhara. One of the main jobs when publishing
By Tony McNicol / World Wants J-Pop
Another tricky localization issue is trademarks. Japanese companies tend to be more relaxed about their brands appearing in manga, but VIz Media staff scour their U.S. manga for potential trademark issues. Japanese manga overseas is localization, he says. Principally, that means translation; but it also means censorship. “In the U.S., you can’t show sex or drugs or blood,” Fukuhara says. Even Japanese manga for young children can occasionally contain scenes unacceptable in the U.S. VIz Media uses a voluntary rating system for its books. Another tricky localization issue is trademarks. Japanese companies tend to be more relaxed about their brands appearing in manga, but VIz Media staff scour their U.S. manga for potential trademark issues. “Twenty years ago it was a niche market, so nobody cared about these things,” comments Fukuhara ruefully. The company’s animation business has grown over the last few years, although Fukuhara admits, they started from a low base. The outlook now is as tough for them as for other anime companies. overall, U.S. anime sales dropped from $500 million in 2003 to $400 million in 2006, a slide that is expected to continue, if not accelerate. “[Anime fans] are spending more time on computer games and in Internet chat rooms,” says Fukuhara. Internet piracy looms huge. At present, VIz Media requires six months to translate and prepare anime for release in the U.S. But the same anime can be translated and on U.S. fan sites within 24 hours of being broadcast in Japan. And those amateur fan sites can be vastly more popular than the official sites. “Strictly speaking it is piracy, but they are the same people who support our business,” says Fukuhara. The company is understandably reluctant to go after them.
SNAPSHOT
To reverse the ethnic exodus from Los Angeles’ Little Tokyo, neighborhood leaders are luring trendy young JapaneseAmericans with the $300-million Nikkei Center development’s apartments, offices, shops and gardens following the sale of iconic properties to “outsiders,” reports said in November. With groundbreaking at least 18 months away, analysts say developers want to avoid the “… ostentatious caricature of Japanese culture,” and will advertise in Japan and in the Japanese-language media in the U.S. and Brazil to potential tenants with a cultural interest in Japan, including individuals and businesses.
SNAPSHOT
Hong Kong, Russia, China and France bagged top honors at this year’s International Manga Awards in Tokyo on September 2 hosted by the Ministry of Foreign Affairs. Veteran cartoonist Lau Wan-kit, 42, came first with a youth romance story, about two best friends who fell in love with the same girl, that was published in Chinese, Malay, Thai, Korean, Indonesian and Italian. The screening committee comprised Japanese top manga artists and former editors. ‘‘We should further promote pop culture and strengthen the ties between Japan, which is the origin and home of manga, and manga lovers around the world,’’ a ministry statement said. There were 368 entries from 46 countries and territories, compared to 146 entries from 26 places in 2007, its inaugural year, when three-quarters of the entries came from Asia. This year, almost half the entries were from Europe and the Americas, reflecting the rapidly growing popularity of manga in these regions, organizers said. The winners will visit Japan for 10 days to attend the Kyoto Manga Summit and interact with Japanese manga artists, the ministry said. The International Manga Awards was initiated last year by then-Foreign Affairs Minister Taro Aso, a manga fan, in a bid to boost Japan’s diplomatic profile through pop culture.
The other big name in U.S. manga is ToKyoPoP Inc. Now in its 11th year, the company has around 80 staff in Hamburg, london, los Angeles and Tokyo. Initially, they issued just three or four books annually; last year they released 500 titles in the U.S. and 500 in Europe. When the company started, recalls CEo Stuart levy, no one was translating manga for mainstream bookstores, and the word “manga” wasn’t even known. Despite ToKyoPoP’s success, levy is surprisingly pessimistic about the future of his industry. “Entertainment as a physical package has a very limited lifetime left,” he says. An avid music fan, levy admits that he almost never buys CDs, since almost any track he wants is available online. The same thing is happening to ToKyoPoP’s products, he says. Just like anime, manga fans are taking new releases, scanning them, translating them and offering the “scanlations” online for free. “A lot of kids are not buying the manga, but are going online to the scanlation sites,” says levy. “Why would anyone need to buy my book for $10?” At the same time, he has doubts about the feasibility of charging for manga online, when fans are
December 2008 / ACCJ Journal / 27
“We want to create a truly international market, rather than just an import/export market.”
28 / ACCJ Journal / December 2008
INTERVIEW
Roland Kelts is the author of Japanamerica — How Japanese Pop Culture Has Invaded the U.S. MATTHIAS lEy
accustomed to the free product. Nonetheless, cellphone manga has been touted as one way to make money, but it’s hard to see how that could generate enough revenue to fund new manga, levin says. The “aggregators,” that is the people running the sites, are the only ones making money now. “Is there a profitable model in the future?” he asks. “I hope we are one of the companies who can evolve.” levy also worries that manga books may go the same way as DVDs in as little as 2-3 years. ToKyoPoP’s somewhat radical approach is to bring fans right into the production process. “one philosophy we have is to embrace the fans. It’s a must to consider them part of the solution,” says levy. The company also is looking hard for new artists — and not just from Japan. Some 70-80% of ToKyoPoP’s titles are translated from Japanese; the rest are original titles, a project they started four years ago. “We have put a very serious investment into graphic novel creators,” says levy. “We want to create a truly international market, rather than just an import/export market.” Shinjuku-based GDH K.K. is one of the bestknown anime producers in Japan. Back in the mid-1990s, CEo Shinichiro Ishikawa was looking for a Japanese business with international potential. Foreseeing the growth in broadband, he chose anime as a 21st-century contents business. “Anime was a last-century, old-style business at the time,” he recalls. But while broadband infrastructure is here today, the Internet has yet to generate profits to viably replace DVD sales. “The last three years have been disastrous for DVDs,” says Ishikawa. “We are trying to change the business model for next-generation content. The problem is that people don’t pay money for the digital content.” one strategy has been to license titles to foreign partners, while keeping a tight grip on Internet and broadband rights. Gonzo Rosso K.K., GDH’s group company, has sub-licensed its popular Afro Samurai title for games, DVDs, figures, comics and other merchandising. At the same time, it is
What kind of reaction did you get to the book? It’s been really quite overwhelming. I think the timing was just right because Japan’s popular culture had started streaming into mainstream media and Hollywood. Akira [a wellknown anime from the 1980s] was just picked up by Leonardo Di Caprio, Robotech is being made by Tobey Maguire, and Ghost in the Shell has been bought by Steven Spielberg. It’s kind of a feeding frenzy in Hollywood at the moment. Why Japanamerica? When I was researching the book, I learned that Osamu Tezuka [Japan’s most famous manga artist] went to see Walt Disney’s Bambi more than 80 times. Of course, Tezuka’s own work is compellingly original, but I was really taken by the idea that this kid who survived the firebombing of Osaka was a few years later studying Disney and giving birth to this new art form in Japan. If you follow the course of manga and anime history in Japan, so many influences go back and forth between the two countries. In my book, I use the Mobius strip as a metaphor for such transcultural exchanges. I discovered that the roots of cosplay [fans dressing up as their favorite manga and anime characters] were from “Star Trek” fans. And now, of course, Western kids go to huge conventions dressed as Japanese characters. Did any of the otaku mentality rub off on you? It gave me a real deep appreciation for the craftsmanship in the best work. It is really extraordinary. It is important to remember that the kids who are discovering this anew are pretty frank about the fact that the Japanese manga is just a superior art form. The stories are richer, more sophisticated, more morally nuanced. And the artwork is just astonishing in so many cases. I don’t think I could have written this book if I didn’t feel that way. What next for Japanamerica? Has the Japanese pop culture boom peaked or is there more to come? What seems to be happening now is that international fandom is expanding beyond the media of anime and manga, and into physical manifestations. Cosplay is affecting fashion trends, for example, so that the so-called ‘Gothic-Lolita’ look is now entering mainstream fashion magazines. I think the passion for Japanese pop culture will continue. The real challenge is what’s happening inside Japan. The declining birthrate, antiquated labor practices, and a general lack of creativity within the industry mean that there’s not a lot of inspiring new anime and manga being produced right now. That could spell trouble. We are giving away a copy of Japanamerica — How Japanese Pop Culture Has Invaded the U.S. by Roland Kelts. Simply e-mail editor@paradigm.co.jp by December 16. The winner will be picked at random.
World Wants J-Pop
… Japanese companies have long been uncomfortable with the very notion of intellectual property, preferring to market objects rather than ideas. SNAPSHOT
Japan Cool “under-exploited” Although Japan Cool fashion, anime and manga have been around for 10 years, local businesses were criticized for not exploiting them in foreign markets by a government report released in August that complains Hollywood had gained most from the anime phenomena. The report by the Ministry of Economy, Trade and Industry’s Industrial Structure Council says Japanese fashion, for example, has not really helped the nation’s apparel industry make inroads abroad, citing total exports comprising one-fifth of South Korea’s, and one-150th of China’s. The report recommends creating a distribution trend of Asian consumers to outline preferred lifestyles. A government “trend map” aims to help companies develop and market products. “The map may enable a pan-industry approach, such as selling akamoji-style clothes in combination with accessories and mobile phones of the same style.” Japan Cool, which also includes food and handicrafts, could be valuable in maintaining or strengthening the domestic industry in the face of a declining labor force due to the aging of the population, the report concludes.
experimenting with online games. In 2005, Gonzo acquired an online game company and this year launched two titles for the Japanese market. The games are free, but 10-20% of the players pay for costumes and other items, says Ishikawa. Gonzo sold ¥3 million of digital hair ribbons a day at one point. “The game itself costs a lot of money, but making a digital ribbon is almost free,” he says cheerfully. And rather than treating fan sites as the enemy, GDH is looking to them for new business opportunities. In return for providing anime to one site, the company takes a slice of the advertising revenue, a revolutionary idea for anime producers. Up to now, such companies simply sold their product to TV stations, with no way to tap the advertising revenue, Ishikawa points out. The future of Japanese pop culture exports may well turn on such innovative approaches to intellectual property. But as Roland Kelts notes in his book, Japanamerica (see interview), Japanese companies have long been uncomfortable with the very notion of intellectual property, preferring to market objects rather than ideas. Even anime itself was arguably a Trojan horse for the more lucrative toy sales. Japan’s largest pop culture producers were caught unawares by the overseas boom and ill-prepared for
ToNy MCNICol
Otaku tourists visit Akihabara.
intellectual property issues in America. “I call that ‘Japan’s intellectual property problem’ in the book,” says Kelts. “Partly because the industry had been servicing the domestic market for so long they hadn’t really given much thought to protecting copyrights internationally. Partly because there is a dearth of lawyers in Japan.” The classic industry horror story is Pokemon by Nintendo Co., ltd. The U.S. distributor made, for many years, the bulk of the money in what became a $25 billion worldwide industry. Another fundamental problem for Japanese pop culture — at least on the Japanese side — is technology. Media companies need to understand and utilize the Internet and other paradigm-shifting technologies. But ToKyoPoP’s Stuart levy isn’t optimistic. “I see a huge gap between artistic people in Japan and the technology,” levy says. He describes the piles of bulky manga portfolios in the company’s Tokyo office — many Japanese manga artists don’t even have Web sites. Even more seriously, the stubbornly analog executives of major companies have not even come to grips with the Web. Japan “just doesn’t get the Web,” says levy damningly. “These [sites] are tools you can use to do things that you have never done before.”
Tony McNicol is a freelance writer and photographer based in Tokyo.
December 2008 / ACCJ Journal / 29
On the Spot Charles Dallara
D
allara visited Tokyo in September for discussions with representatives of Japanese companies and the government on the uncertainties in the global financial system. Earlier, in July, the IIF released a report on principles of conduct and best practice recommendations to combat turmoil in the global markets. Where do we stand today as we try to work our way out of this crisis? Clearly, as you have seen from the actions taken in Washington and the continued uncertainties that surround U.S., European and global financial markets, we are still in a period of vast uncertainty and stress. The actions taken — which in our view were necessary, if somewhat overdue — to provide direct support for Fannie Mae and Freddie Mac have injected an important element of stability into this sea of uncertainty. In my view, the government has done a very good job in a very stressful environment of dealing with what was an increasingly unsustainable situation surrounding these [now] governmentsupported enterprises [in the mortgage market].
30 / ACCJ Journal / December 2008
Are you optimistic about the immediate future of the global economy? I think we are able to see a few slivers of light on the financial horizon. The losses from structured products and the trading books of large global financial institutions are beginning to moderate; that’s the good news. The bad news is that it is increasingly difficult for firms to raise capital. And losses through some of the more traditional channels through which banks manage to lose money — credit cards, the mortgage business, commercial real estate, auto loans — will begin to spread even further, into the middlemarket financial institutions of the U.S. This need not necessarily affect Europe as severely, and it need not affect Japan at all. But we are caught in an environment where some of the pure financial elements of the stresses are beginning to ease somewhat, as the stresses on the broader economic elements begin to deepen. How will this be manifested? Whereas one year ago there seemed to be a broad range of financial institutions under considerable stress, today that stress is
FCCJ
Managing Director of The Institute of International Finance Inc.
focused on a narrower group of financial institutions. But we are potentially moving into a period of somewhat extended economic malaise in the U.S., Europe and Japan. Whether “malaise” is the right word, I’m not sure. I doubt the word is “recession” because we don’t see the U.S., Europe or Japan falling into a recession of any depth or duration. But we do see the potential — as a result of both the strains in financial markets and the adverse effects on consumption — for the U.S., Europe and Japan of entering a two- or three-year period of 1% to 2% growth. What is Japan’s specific situation? I realize that you’re in a period of slow growth here in Japan and that is unlikely to change dramatically. As I look at Japan, I find an economy that, in many ways, is more resilient and flexible than the economy that I knew back
By Julian Ryall / On the Spot
… I am a bit concerned to come to Japan and find that the debate is about fiscal stimulus, and that the debate about further structural reform seems to have lost momentum.
BIOGRAPHY
Charles Dallara Name: Charles Dallara Born: 1948, in Spartanberg, South Carolina Education: Bachelor of Science in economics from the University of South Carolina; Master of Arts in law and diplomacy; Doctor of Philosophy from the Fletcher School of Law and Diplomacy at Tufts University Career: Washington, D.C.-based representative of more than 380 key financial institutions from around the world; former U.S. Assistant Secretary of the Treasury, U.S. Executive Director to the International Monetary Fund and Managing Director of then-J.P. Morgan & Co. Married: Since 2003, to Peixin Children: Stephen, Emily and Bryan Other languages: Spanish Hobbies: Sports, Frank Sinatra, New York Yankees
in the late-1980s. That economy was riddled with structural rigidities. Today, I see a more flexible Japanese economy, which is [in a] better position to respond to weakness than it was in the past. And, yet, I am a bit concerned to come to Japan and find that the debate is about fiscal stimulus, and that the debate about further structural reform seems to have lost momentum. Tokyo used to be one of the top-three financial centers in the world; but today it’s rated after Shanghai, Hong Kong and Singapore. How can it recapture its top-three position? If that is going to happen, there will need to be some strong leadership to invigorate Japan’s
capital markets. A lot of liberalization took place in Japan’s banking system over the last 20 years, but this was not met with parallel liberalization and globalization in Japan’s capital market structures. And, today, Japan is seen by corporations and investors as being a relatively userunfriendly capital market. There are a range of measures that could be taken that are not revolutionary, but which could signal to the rest of the world that Japan wants to reassert its potential as one of the leading global financial markets of the world. How do we position ourselves more effectively to anticipate and head off crises in the future? This is a very difficult question. Many experienced voices in global finance say there will always be crises, and there’s not much we can do about them. But the cost — economically, socially and in human terms — can be vast. I think we have to accept [that] these financial crises are the kind of thing we have to do a better job of anticipating. So we are creating a market-monitoring group which will bring together experts from around the world to look at market trends, at areas where fundamentals seem to be deviating — and consider where elements of weakness in one area of the market have the potential to spread to other areas. When do you expect the turbulence in the capital markets and banking sectors to end?
I don’t think anyone can say with any great certainty, although I think it is reasonable to say that we can expect to see moderation over the next year or so in certain aspects of the turbulence. We have called for a major global dialogue to look at the interaction of accounting standards, regulatory policies and financial institutions’ performance — to address some of these issues. Until we can see more clearly a bottom to the [plunge in the] U.S. housing market, it’s going to be difficult for us to see an end to this turbulence. What happens next with the IIF’s report? We are not working with our members on implementation of its recommendations; that is a matter for individual firms to pursue. Even though Japanese financial institutions have largely avoided this storm, when we presented the report to over 200 Japanese bankers and called on senior banking executives and regulatory officials, it is clear that the Japanese banking community is taking very seriously the lessons they can learn from the mistakes of American and European banks. Globally, it will be even more important that banks follow through with these measures, and we are working with our members to move forward [on these]. Julian Ryall is The Daily Telegraph’s Tokyo correspondent.
December 2008 / ACCJ Journal / 31
Bean Counting Converges Despite complexity, standardized accountancy is great for global business.
T
he decision by accounting authorities in the United States to announce a roadmap to adopt International Financial Reporting Standards (IFRS) may mean that it is no longer a question of whether Japan similarly introduces the same system, but rather a matter of when. Yet, there is a vast difference in the pace at which changes in the accounting systems are being adopted on each side of the Pacific. The U.S. Securities and Exchange Commission (SEC), on August 22, voted unanimously to issue a proposed roadmap on the use of IFRS by domestic issuers, thereby allowing certain major U.S. companies to use IFRS in 2009. Japan’s Financial Services Agency (FSA), on the other hand, has agreed to set up a series of panels to consider introducing IFRS, resulting in any adoption not realized until 2011, at the very earliest. “In Japan, we already have our own accounting standards,” says Takashi Inoue, group manager of Tax and Accounting Affairs at the Nippon Keidanren, the Japan Business Federation. “And we were trying
32 / ACCJ Journal / December 2008
to converge those standards at the international level until last year, in the same way as the SEC was in the U.S. “There was, at that point, no firm commitment to adopting IFRS, but we were trying to harmonize with the U.S. generally accepted accounting principles [GAAP] and IFRS,” says Inoue. “But suddenly the U.S. announced last November [2007] that it would apply IFRS to foreign companies there, and went one step further in August [2008] by saying it would also apply to domestic companies. “That was a big change which will affect policy in Japan as well,” he says. Subject to the achievement of certain milestones included in the proposed roadmap issued by the SEC, the decision by the SEC will make IFRS — which has been adopted by more than 100 countries — mandatory for listed firms regarding their financial reports starting in 2014. Yet, why has Japan held out against the change for so long? “Certainly the rapid rate in which globalization has taken place has accelerated the convergence process,”
By Julian Ryall / Bean Counting Converges
“The main reason why Japan has not already fully adopted IRFS is that many market participants considered that accounting standards need to match Japan’s legal structures better, including the Company law.” believes Peter Schlicksup of PricewaterhouseCoopers Aarata. “Shifting global economic influences and the goal of maximizing shareholder value demand a solution whereby accounting and financial reporting can keep pace with the pace in which business and transactions are taking place. “In an increasingly global environment, with the increased frequency of cross-border funding and other transactions, a more global financial reporting solution is required,” says Schlicksup. “Convergence of accounting standards in both Japan and the U.S. with IFRS has been taking place over several years; it is now just taking place at a more accelerated pace and in the form of full adoption, rather than gradual convergence.” Some analysts predict adoption of IFRS probably would be welcomed among Japan’s major companies. Heavyweights listed on overseas exchanges may fear Japan becoming internationally isolated, which could have a negative impact on their business activities. “The accounting standards environment has changed greatly,” according to Koichi Masuda, chairman and president of The Japanese Institute of Certified Public Accountants, speaking on September 1. “If things remain the same, Japan will be frozen out.” yet, others in the industry point to great strides having been made in recent years in Japan to achieve international convergence. There was the accounting Big Bang of 2000, including the implementation of standards similar to IFRS in areas such as financial instruments and post-employment benefits. “At that time, Japanese accounting standards were closer to IFRS than European countries that had not yet adopted the system,” says Takehiro Arai, a member of the Accounting Standards Board of Japan (ASBJ). Since 2005, the ASBJ has held regular discussions of the issue with the International Accounting Standards Board (IASB), and in August 2007 announced the Tokyo Agreement on acceleration of the convergence between Japan’s GAAP and the IFRS. Signed by ASBJ Chairman Ikuo Nishikawa and IASB Chairman Prof. Sir David Tweedie, the agreement reflected the two boards’ pursuance of short-term convergence projects
SNAPSHOT
EU threat to IASB rules The International Accounting Standards Board (IASB) in October agreed to ease its rules on fair-value accounting after pressure from the European Union, but was unlikely to cede to further demands, media reported. Analysts fear that a standoff between the IASB and the EU could prompt opponents of the IASB’s accounting rules to demand European standards instead, a move that would kill off concerted efforts to develop a single set of global accounting rules. French and Italian financiers are said to be key opponents of the IASB rules that apply in over 100 countries, including EU nations. Fair-value accounting means that financial institutions have to mark most of their assets at market prices, which have plunged due to the credit crunch, leaving many banks with losses as capital on their balance sheets devalues. The European Banking Federation wants further changes to the IASB rules. However, according to reports, although sections can be removed, new clauses cannot be added.
by 2008 and their attempt to eliminate completely the differences between their respective systems by the end of June 2011. “The main reason why Japan has not already fully adopted IRFS is that many market participants considered that accounting standards need to match Japan’s legal structures better, including the Company law,” says Arai of ASBJ. “But we do consider that, ultimately, convergence to a single set of high-quality accounting standards would be desirable; and the ASBJ will work to achieve that.” With the support of relevant key regulatory offices in Japan, companies here can at least begin to look forward to the benefits. “Investors, analysts or anyone who uses financial statements will be able to compare figures more easily,” says Inoue of Nippon Keidanren, “while companies that are growing and have operations or affiliates overseas will no longer have to meet different reporting standards.” That improvement, in turn, will make comparisons with other corporations easier — and improve investors’ confidence in those companies. There also is a belief that adopting international standards would
December 2008 / ACCJ Journal / 33
Bean Counting Converges
“If we fully adopt IFRS, we might be compelled to follow the IASB’s decisions, even when we have not been persuaded they are correct.” encourage a new round of mergers and acquisitions, and affect corporate decision-making. “There are many advantages to adopting IFRS,” says Schlicksup of PricewaterhouseCoopers Aarata. “From my perspective, the improved comparability of companies’ business performance across borders and within Peter Schlicksup of PricewaterhouseCoopers Aarata: global industries is a globalization has accelerated significant benefit. convergence process. “In addition, management may take the IFRS adoption process as an opportunity to standardize financial reporting processes and systems throughout the global organization,” he says. “With the move to IFRS globally, including Japan, common accounting principles could be used for day-to-day transactions, with only one annual reconciliation to locally accepted accounting principles for statutory and tax purposes,” says Schlicksup, adding that PricewaterhouseCoopers is supportive of global convergence of accounting standards, and believes the benefits to companies and investors alike outweigh the challenges of the convergence process. Some analysts believe that employees would benefit from the adoption of IFRS because they should find it easier to take paid vacations. The payments that are made when holidays are not taken, but carried over to the next employment year, are counted as “allowance for paid holiday” and thus become part of a company’s liabilities. Staff more than likely would be encouraged to take all their entitled paid holidays since a company inevitably would be looking to minimize liabilities. There are, inevitably, some areas of concern for both regulators and the industry in Japan. “If we fully adopt IFRS, we might be compelled to follow the IASB’s decisions, even when we have not been persuaded they are correct,” says Arai of ASBJ.
SNAPSHOT
A letter to the Financial Times on October 21 from 15 major European investment houses and industry bodies condemned proposed further amendments to the accounting standards relating to the measurement of financial instruments. “Given that the IASB has already amended the application of fair values, we believe that further changes, which go beyond aligning IFRS with U.S. GAAP, risk severely undermining the confidence users have in the accounts produced by European companies … We would oppose any steps by the European Commission to undermine this position and diminish investor confidence in corporate reporting by establishing further carveouts from IAS 39 or adopting its own standards. Now especially, investors need comparability and transparency, not further uncertainty and inconsistency.”
“For example, the IASB was considering abolishing ‘net income’ in income statements, to which we strongly objected. Fortunately, the IASB has recently decided to withdraw that proposal.” Another area that is a cause for worry, says Inoue of Nippon Keidanren, is the issue of manpower — given the acute shortage of accounting experts who are versed in the ways of IFRS, inside companies, at accounting firms and in the FSA. “We need time to educate these people, time to introduce the new accounting system, time to change the way accounting is taught in our universities, and time to completely redesign all the paperwork that the accounting industry uses,” says Inoue. “CEos and CFos will also have to change the way in which they think, and that can also take time.” A change in accounting standards will require consideration of the taxation rules, he says. IFRS has no “last-in, first-out” consideration as an evaluation method for inventory, which would cause huge problems in terms of taxation for companies such as those in the oil industry, says Inoue, which have huge inventories and would, therefore, incur high taxes. The changes will be “complex,” admits Schlicksup of PricewaterhouseCoopers Aarata. “Although IFRS is more principles-based and allows for the use of more professional judgment, the application is still complex,” he warns. “Companies will need to closely evaluate differences between IFRS and their current GAAP, prior to adoption.
December 2008 / ACCJ Journal / 35
Bean Counting Converges
“It may become the standard for international companies to ensure better comparability, but there is no need for such complex accounting standards for our SMEs.”
© The New Yorker Collection 1992 J.B. Handelsman from cartoonbank.com. All Rights Reserved.
“In addition, the adoption of IFRS has broader implications than just financial reporting,” says Schlicksup. “Companies will need to evaluate the impact that IFRS may have on their business processes, operations, contractual obligations, compensation and benefits for employees, and income taxes. “Our experience has been that the adoption of IFRS takes more time and resources than planned,” he adds. “It is important that companies properly plan to address the wide-ranging implications of IFRS.” While the new rules appeal to multinational companies, not all of Nippon Keidanren’s 1,646 member organizations are entirely convinced that the move to new standards is a good one, admits Inoue. “Not all Japanese companies are in favor of IFRS, which was a problem that they also faced in Europe among small and medium-sized enterprises [SMEs],”
he says. “In Japan, we have around 2.5 million companies, around 4,000 listed companies, but only around 30 that are also listed on foreign markets. “There are vast differences between the very largest and the very smallest firms, and we have to make a decision on the extent to which we can apply IFRS,” says Inoue. “It may become the standard for international companies to ensure better comparability, but there is no need for such complex accounting standards for our SMEs,” he says, suggesting the need for different accounting standards for SMEs. In February, a Nippon Keidanren delegation visited some of the leading multinational companies and financial organizations within the European Union, to see how implementation of the rules have proceeded — speaking with their counterparts at the European Commission, Business Europe, the ISM in London, and the UK Accounting Standards Board. “We learned that, for European companies as well, it was very hard for them when they started applying IFRS and that it took them two or three years to prepare,” says Inoue. “But that has now been overcome and you have full implementation. Now it is completely successful; and European executives say it was a very good move, that IFRS has been very good for their competitiveness and for Europe.” The aim is for Japanese businesses to work through the same procedures and, eventually, reach the same conclusions. Failure to do so would leave Japan as the only industrialized country still employing its own accounting standards — potentially causing untold damage to domestic companies as they fall further behind their international rivals. But that will not happen, Inoue says. “Actually, we have no choice, now that the U.S. has decided to apply IFRS,” he adds with a smile. “There may be some issues we have to deal with in the coming years, but I’m sure the benefits will be seen before too long.” Julian Ryall is The Daily Telegraph’s Tokyo correspondent.
December 2008 / ACCJ Journal / 37
W
hy is tax system reform such an important issue for Nippon Keidanren? The first reason is that we need to ensure sustainability of our social security system. The social security system should function as a safety net, to give people a sense of security. However, in Japan, there is distrust toward the pension system. There is also a shortage of doctors, and never-
improving childcare services, among other problems. These social security challenges are becoming a source of anxiety, and are casting a shadow over our society. Social security expenses will continue to increase by ¥1 trillion every year. There needs to be a stable revenue source, therefore, to provide the necessary funding for such a system. Another reason we need to carry out tough fiscal reform is because there is a demand for fiscal consolidation. National and local governments’ combined outstanding long-term debt is ¥778 trillion, which is equivalent to 148% of our GDP. This is the worst level amongst industrialized nations. The national government debt alone is 10-fold the tax revenue. The government set out the goal in its 2006 Basic Policy to post a primary balance surplus by fiscal year 2011, and then reduce its outstanding debt vis-à-vis the GDP. So far, the government has focused on reducing spending. While
this in itself is the correct choice, just like companies that are not able to grow merely by costcutting, so fiscal consolidation cannot be achieved by spending reform alone. The third reason is the need to strengthen our growth potential. Japan is a resource-scarce country, so we must win over global competition and expand through innovation and high-value industries. For this purpose, the corporate tax must be aligned to the international standard, and policies emphasize R&D and the environment. Amid such circumstances—and facing the uncertainty of our economy— domestic demand expansion is of vital importance. Therefore, there is a need to look into the mid-to-low-income families and to provide income-tax cuts for them. Also, we need to examine how we can stimulate personal consumption through such income-tax reduction. Based on what I have explained, we have to seek what could be the main tax revenue source in the future. Particularly, how are we going to handle the immediate issue of securing a stable revenue source for our social security system? This leads to the conclusion that we need to increase the consumption tax. Income and corporate taxes are vulnerable to fluctuations in the economy and, therefore, cannot Views expressed in the Opinion Leader column are those of the author and do not necessarily represent the views or policies of the ACCJ.
38 / ACCJ Journal / December 2008
illustration for the accj journal by darren thompson
Why Tax System Needs Reform
By Fujio Mitarai / Opinion Leader
be defined as a stable source of revenue. The Japanese tax system is overly biased towards direct tax, negatively impacting economic activities. A consumption tax is believed to be more appropriate because there is burden-sharing among the people. Today, the momentum to tax system reform is dampening. This is partly due to the political situation, and also to the economic slowdown. Consumer prices are lower than in the West; and yet prices are rising very sharply, and there is still a lot of waste on the part of the administrative branch. Given these circumstances, it is understandable that the consumption tax hike is a very politically sensitive issue. The past two Cabinets that decided to raise the consumption tax have both come and gone, and I do not blame the politicians for not wanting to make this decision. But, at the same time, if you take a wait-and-see attitude, we believe that the country itself may very well be on the verge of collapsing. There is also talk about “buried money at Kasumigaseki,” but this is an issue that should be resolved in parallel to securing revenues. Even if such hidden treasures do exist and can be used as stopgap money, it is only rational to believe that this be used, instead, to service past debts. Fujio Mitarai is Chairman of Nippon Keidanren (Japan Business Federation) and Chairman and CEO of Canon Inc.
税制改革が必要な理由 日本経団連は、税制改革の問題をなぜこれ
た状況の中、景気の先行き不透明感もあり、
ほど重要視しているのか。第1の理由として、
内需拡大が極めて重要である。中・低所得
社会保障制度の持続可能性を確保する必
世帯向けの施策を見直し、所得税減税を実
要がある。 セーフティーネットたる社会保障
施することも大切だ。 また、 このような所得
制度は、国民に安心感を与えなければなら
税減税を通じて個人消費を刺激する方策に
ない。 ところが日本では年金制度に対する不
ついても検討すべきである。
信感がある。 さらに医師不足や一向に改善
上記を踏まえ、今後、何を主たる税源に
の見られない保育サービスなど、問題は山
できるのか。特に、社会保障制度の安定財
積している。
源確保という喫緊の課題にどう対処すれば
こうした社会保障の問題が不安を引き起
いいのか。そう考えると、消費税増税という
こし、社会全体に影を落としている。社会保
結論に行き着く。所得税や法人税は税収が
障関連費用は年間1兆円ペースで右肩上が
景気変動の影響を受けやすく、安定財源と
りに増加していることから、 このような制度
は考えにくい。そもそも、 日本の税制は直接
を維持する予算を確保するため、安定した
税に過度に偏っていて、経済活動にマイナ
財源が欠かせない。
スの影響がある。その点、国民全体で負担
厳しい財政改革を断行しなければならな
を分け合う消費税のほうが適切だと考えら
い第2の理由として、財政再建の必要性があ
れている。
げられる。国と地方の長期債務残高は合わ
現在、税制改革は勢いを失いつつある。
せて778兆円で、対GDP比148％に相当す
その一因は政治情勢や景気減速にある。消
る。 これは先進国の中でも最悪の水準であ
費者物価指数は欧米諸国ほどではないもの
る。国の債務だけで税収の10倍に達する。
の、物価は急上昇している。行政のムダもま
政府は 「基本方針2006」 で、2011年度まで
だ目立つ。 このような状況の中、消費税の引
にプライマリーバランスを黒字化し、 その後
き上げが政治的に扱いの難しい問題である
債務残高の対GDP比を安定的に引き下げ
ことは理解できる。現に、消費税引き上げを
てゆくという目標を掲げている。 これまで政
決断した内閣が退陣に追い込まれた例は過
府は歳出削減に力を傾注してきた。それ自
去に2度ある。 それだけに、政治家が消費税
体は間違った判断ではないが、企業に置き
引き上げに二の足を踏むのも無理はない。 だ
換えて言えば、 コスト削減だけで成長できな
からと言って、 ただ手をこまねいていては、 こ
いのと同じで、歳出削減だけで財政再建は
の国自体が崩壊のふちに立たされかねない。
実現できない。
「霞が関の埋蔵金」 といった話もあるが、
第3は、成長力を強化する必要である。 日
これは歳入確保と並行して解明すべき問題
本は天然資源に乏しく、技術革新の促進や
である。 そのような埋蔵金が実在し、急場し
高付加価値産業の育成を通じてグローバル
のぎに使えたとしても、過去の債務の返済に
な競争に勝ち抜き、成長を持続しなければ
使うのが筋であろう。
ならない。 そのためには、法人税を国際的な 水準に合わせ、研究開発や環境保全に重点
御手洗冨士夫
を置いた政策づくりが不可欠である。 こうし
日本経団連会長・キヤノン株式会社会長兼CEO
オピニオンリーダーに掲載されている意見はすべて著者個人の意見であり、 ACCJの意見や活動を代表するものではありません。
December 2008 / ACCJ Journal / 39
By Geoff Botting / ESTA Latest
ESTA Latest
U
.S. immigration officials have shifted their PR efforts into high gear as a mandatory authorization system for visitors to the United States goes into force from January. The system is called Electronic System for Travel Authorization (ESTA). From Jan. 12, all citizens of U.S. visa-waiver countries, which include Japan, will be required to go online and fill out a range of questions in order to be eligible to enter the U.S. This must be completed, in principle, at least 72 hours in advance of traveling, although last-minute changes are possible, according to officials of the U.S. Department of Homeland Security (DHS), which introduced ESTA. A big challenge for DHS has been to get the word out in Japan and other affected countries about the new requirement in the lead-up to Jan. 12. The scenario that officials want to avoid is one of large numbers of travelers showing up at airports unaware that they needed to obtain the authorization beforehand. In recent weeks, officials from the U.S. embassy and Washington have been making the rounds throughout Japan, visiting and speaking at the offices of airlines, airports, travel-industry groups, and, of course, the ACCJ. “We’re working with the media and we’re working with the airlines … to let people know that ESTA will be a requirement from January,” says Joanne Ferreira, a public affairs official at DHS in Washington. One of the DHS’s major efforts in Japan was a visit in mid-September by ESTA Director Beverly Good. During the trip, she met with officials of the Japan Association of Travel Agents (JATA), gave news conferences for the Japanese media, and on Sept. 18 had a briefing with ACCJ members working in the airline and tourism industries. “It was apparently an educational meeting for both sides. We told them about the Japanese market and they told us about what they were doing in Washington,” says Vincent You, co-chair of the ACCJ’s Travel Industry Committee. Even so, ESTA has been met with concern and a degree of skepticism from the travel industries and travelers alike. Several Japanese travelers interviewed
for this story said they don’t like the idea of having to convey information about themselves to a U.S. government computer. DHS officials counter that ESTA is a more secure and modernized method of the paper-based procedure it will replace — filling out the I-94 form while en route. “This is a secure database. And you’re answering the same questions on the I-94 in writing. Nobody but the DHS will have access to that information,” Ferreira says. But while travel and transport industry officials, including ACCJ members, welcome the idea of paperless travel, they have had concerns over the progress of ESTA’s implementation in Japan. In short, they fret whether all Japanese travelers will be aware of the requirement and capable of completing the online procedures by the time Jan. 12 rolls around. Such concerns were reflected in a letter the ACCJ sent to the DHS in Washington on Nov. 10. The document gives the chamber’s feedback on the ESTA program and offers recommendations for: ■ the
development of an interface for Japan’s mobile phone users ■ an easier-to-remember URL for the ESTA registration site (the current one is https://esta.cbp.dhs.gov/) ■ a shorter confirmation number that would appear on a printer-friendly format The other major development has been the introduction of ESTA’s Japanese-language site, which went up Oct. 15. As of Nov. 18, over 16,000 people had successfully registered on it voluntarily, according to an embassy official. Those numbers will have to climb drastically for travel and transportation officials to be assured that ESTA’s introduction will be a smooth one.
Geoff Botting is a freelance writer based in Tokyo.
December 2008 / ACCJ Journal / 41
Business Support and Outsourcing | Special Advertising Section by lorem ipsum / lorem ipsum
B
ack in October 2007, the Japan External Trade Organization (JETRO) released a report entitled, “Japan Moves to Improve Efficiency of Service Sector.” JETRO defines the country’s service sector as including healthcare, leisure services, distribution, software services, and “a host of other activities.” The service sector, according to the government-related organization, “now accounts for almost 70% of economic activity whether measured in terms of GDP or employment.” While this greater emphasis in Japan on the service sector made the demand for business support and outsourcing a savvy marketing move, the current global crisis stemming from the U.S. subprime mortgage collapse certainly now makes it a fiscal imperative. Especially in the Japan market, logistics plays a key role in managing cost. The ACCJ Transportation and Logistics Committee works toward the efficient use of air, sea and land transportation in Japan. The committee monitors legislation and regulations that affect equal access and free competition in the logistics service industry. The JETRO report also mentioned the Ministry of Economy, Trade and Industry (METI) forming a study group comprised of leading academics, researchers and industry representatives. Among other matters, the study group suggested that the government set up initiatives to expand the use of IT in the service sector. This would include software sharing, Internet-based accounting, as well as backing for RFID (radio frequency ID) technology. The ACCJ Information, Communications and Technology Committee supports and promotes the expansion and diversification of sales of high-tech goods and services by American companies in Japan. Programs include guest speakers from government, leading technology companies and service providers. In addition, there is an active advocacy component addressing issues such as privacy, telecommunications tariffs and international standards. Back on May 28, 2008, the committee addressed a critical marketing attribute to greater IT activity in Japan in a presentation entitled, “Network Security as a Business Enabler.” Business leaders increasingly question the value of large security budgets with hard-to-measure results. In response, leading enterprise security teams across the globe are learning how to be a business accelerator. By radically reducing the complexity of their operations, they achieve faster time-to-service and fundamental cost transformation.
It’s About Time Business support and outsourcing solutions The JETRO report also addressed the ongoing development of Japanese financial markets, “as both government and business seek to reduce the cost and increase the availability of capital for new business formations, restructurings, and expansions,” bolstering “the demand for legal and financial services.” The ACCJ Legal Services Committee monitors legal and regulatory changes, legislative initiatives and other lawrelated issues that affect the foreign business community in Japan. The committee actively pursues liberalization of the rules restricting the activities of foreign lawyers in Japan and the Japanese lawyers engaged in practice with them. What can help the balance sheets is determining the most cost-efficient location for your corporate offices. Among its objectives, the ACCJ Architecture, Construction and Real Estate Committee aims to expand the knowledge base of members by discussing general industry issues and specific situations at regular programs and closed committee meetings. When all is said and done, business support and outsourcing require leadership that can drive your service business. The ACCJ Human Resources Management Committee explores how members can become better, more effective leaders no matter where they are in their career; and presents practical topics of use to HR professionals and general management. The JETRO report stressed that, “given the rising importance of this sector, Japan will need to take steps to improve service sector productivity to sustain its ongoing economic recovery.” Business support and outsourcing companies are continuing to bring such critical improvements to how companies run their operations here— and market on the global scene. David Umeda Senior Editor ACCJ Journal
December 2008 / ACCJ Journal / 43
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The Gallup Organization Tel: 03-5148-7031 Fax: 03-3544-3966 E-mail: rex_valentine@gallup.com www.gallup.com Gallup has studied human nature and behavior for more than 70 years, employing many of the world’s leading scientists in management, economics, psychology and sociology. Consultants help organizations boost organic growth by increasing customer engagement and maximizing employee productivity through measurement tools, coursework and strategic advisory services. Gallup’s 2,000 professionals deliver services at client organizations, through the Web, at Gallup University campuses and in 40 offices globally. The Gallup Poll has built its reputation on delivering relevant, timely and visionary research on what humans around the world think and feel. Consultants assist leaders to identify and monitor behavioral economic indicators worldwide. Gallup Consulting is global researchbased, specializing in employee and customer management. Consultants draw on a suite of constructs and tools like HumanSigma to drive business performance. Gallup University is a leading provider of degree and non-degree programs in management education and leadership development—a complete curriculum on managing employee and customer assets, and the factors driving individual and organizational performance. Gallup Press educates and informs the people who govern, manage, teach and lead the world’s 6 billion citizens. In addition to books on groundbreaking management, social and political research, the Gallup Management Journal is a monthly online business publication with actionable insights for business leaders and serious management thinkers.
KVH Co., Ltd. Tel: 03-5772-5818 Fax: 03-5772-5685 E-mail: sales@kvh.co.jp KVH Co., Ltd. is a leading integrated communications and IT management service provider established in Tokyo in 1999. Through our facility-based optical-fiber networks and data centers, KVH provides comprehensive IT management solutions—developing and
managing network and IT infrastructure through the entire planning, consulting, design, implementation and operations processes. KVH serves as a single point of contact and ownership for fully managed regional network operations throughout the Asia-Pacific region, including a local presence through affiliates in China and India. In alliance with our global partners, KVH provides a value-added, strategic alternative for both Japanese and multi-national companies, by offering seamless and flexible solutions tailored to their important and specific IT needs. KVH solutions are implemented in an efficient operational structure using the latest technology incorporating global best practices, and are monitored on a 24/7 basis. In addition, KVH’s bilingual Service Desk associates respond to customer needs and inquiries on a 24/7 basis. KVH serves over 1,650 corporate customers in a variety of industry segments, including financial services, manufacturing, pharmaceuticals, media and e-commerce, meeting the operational needs of local and multinational customers in the region.
Kintetsu World Express, Inc. Tel: 03-3201-2580 Fax: 03-3201-2666 www.kwe.com Capitalized at ¥7,216 million and listed on the First Section of the Tokyo Stock Exchange, Kintetsu World Express (KWE) is in the business of cargo logistics, warehousing and distribution on a global scale, backed by our 8,069 highly motivated and quality-minded employees, strategically positioned in our own offices located in major industrial cities around the world, and connected by our advanced information systems. Our overseas international office network covers 188 cities with warehouses in 149 locations. Our clients regard us as their one-stop provider of seamless logistics and supplychain management services. While the world’s economy is rapidly changing, businesses may face difficulties in efficiently storing and taking inventory of their products, or moving them to their international markets around the globe. Logistics solutions hold the key to success in today’s fast-moving business environment. KWE provides total pipeline visibility on the clients’ freight movements through state-ofthe-art technology in cargo tracking, inventory and reporting systems that can help optimize your logistical operations. Contact KWE for further details.
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Larkin & Associates Inc. Tel: 03-3551-4390 Fax: 03-3551-4395 E-mail: sales@jcompliance.com www.jcompliance.com Larkin & Associates provides a variety of Auditing and Compliance services for foreign companies operating in Japan, from Outsourcing of internal audit through to IPO listing support, M&A Due Diligence services and customized project assistance for both US-SOX and J-SOX compliance documentation, testing and remediation. When it comes to outsourcing, our most popular services are provided by our Internal Audit Division. • Outsourcing – In this arrangement we assume responsibility for the internal audit function, providing end-to-end services. For certain clients, we work closely with, and report to, the Director of Internal Audit in the client’s Head Office. • Co-source – We serve as an extension of your internal audit department, working collaboratively with team members of your in-house internal audit function. We can support your internal resources in various roles, including project management, planning, controls identification, documentation, testing, remediation and results analysis. • Special projects – For certain clients, we provide additional resources, supporting the in-house internal audit function on a projectby-project basis in Japan and/or in other Asia-Pacific countries. We also outsource Documentation & Effectiveness testing for US-SOX & J-SOX projects, working in close liaison with our clients to produce a customized solution that is the correct one for them.
Pacific Business Consulting, Inc. Tel: 03-5796-7051 Fax: 03-5796-7059 www.pbc.co.jp With our rich experience in global business, PBC has been endeavoring to provide high value-added business solutions that correspond to customers’ new business strategy and their global business needs. PBC aims at supporting foreign companies in Japan and Japanese global enterprises overseas. PBC has been a leading Japanese provider of Microsoft Dynamics NAV—one of Microsoft’s strategic ERP software that can meet the requirements of global companies resolving the
challenges in their rapidly changing markets. Meanwhile, PBC has installed more than 8,000 Wincor Nixdorf POS systems for use by Japanese retail customers since 1993. The system is wellknown worldwide as the all-in-one designed, flexible system with touchscreen terminal. Based on these experiences, we are also developing our retail solution business with LS Retail from LS Retail ehf., an internationally proven retail management solution based on Microsoft Dynamics NAV. Moreover, recognizing the importance of providing comprehensive IT solutions, PBC also offers IT consulting services for designing and building IT infrastructures in respect to both hardware and software. We always aim at assigning highly skilled resources who understand our customer needs and, most importantly, can achieve system implementation successfully.
PM-Global K.K. Tel: 03-5159-2151 Fax: 03-5159-2152 www.pm-global.com PM-Global provides business performance solutions and services via four professional services groups: • Program Management Optimization • Governance & Compliance • Business Risk & Continuity Management • Business Performance Management Also, we expand your skills inventories through knowledge-transfer workshops and OJT engagements. Our long-term relationships under service-level agreements and fixed-priced fee schedules deliver high-quality, cost-effective and responsive services, while maintaining strict adherence to global management standards, and employing proven process disciplines and performance metrics. Program management has become the core competency for organizations leveraging resources to bring maximum profitability and success across the whole enterprise. Program Managers with enterprise-wide responsibilities must optimize the return from organizational resources: Capital, People, Process and Infrastructure. Reducing risk and creating project success are our consulting services’ focus. We employ proprietary business solutions in operational areas of Business Integration & Improvement, Business Reengineering, Change Management and Business Intelligence. Over five decades of global experience have made us a leading professional services group
helping organizations in Japan, China and the U.S. increase profitability and reduce time-tomarket. Internationally certified project managers and business specialists provide integrated multilingual and multicultural skills to overcome the challenges of our customers’ emerging global business operations. PM-Global’s offices also include Osaka, Shanghai, Dalian, San Francisco and now Seoul.
Robert Half International Tokyo Tel: 03-5219-6633 Fax: 03-5219-6634 E-mail: tokyo@roberthalf.jp Osaka Tel: 06-4560-5522 Fax: 06-4560-5523 E-mail: osaka@roberthalf.jp www.roberthalf.jp Founded in 1948, Robert Half International (NYSE: RHI) is the world’s first and largest specialized recruitment firm and a member of the S&P 500 Index. RHI is a recognized leader in professional consulting and recruitment services, and is the parent company of Protiviti®, a global independent internal audit and business and technology risk consulting firm. With over 400 locations throughout Asia, Oceania, Europe, North America, South America, and the Middle East, our dedication to outstanding service knows no boundaries. Built on a foundation of ethics and a dedication to discretion, we provide expedient solutions to unique and specific recruitment needs. We offer six specialized recruitment resources: • Robert Half Finance & Accounting provides accounting and financial recruitment services at all levels. • Robert Half Financial Services Group is dedicated to the special needs of banking and financial service companies. • Robert Half Management Resources provides financial professionals on an interim project or contract basis. • Robert Half Technology places IT professionals in a wide range of fields, including Web development, systems integration, network security and technical support. • Robert Half Sales & Marketing provides qualified professionals for sales, marketing and advertising positions across all industries. • Robert Half Human Resources provides qualified professionals for human resources roles across all industries. December 2008 / ACCJ Journal / 45
Cold Up Here Takayama’s isolation seen in cuisine, craftsmanship.
T
he usual morning greeting in wintry Takayama isn’t “ohayo gozaimasu” and a bow, it seems, but rather a brisk rub of the hands and a “samui desu-ne?” At least, that was the case at 8 a.m. in the Gifu town’s morning market, where I was chatting with vendors. The owner of a fruit stall informed me that her apples had frozen solid. Winter temperatures in this mountain town routinely drop to a bone chilling -10ºC or lower. Two and a half hours by express train from Nagoya, the town remains a popular summer destination. Yet, it’s just as beautiful in winter. The name “Takayama” literally means “tall mountain.” The remote location meant that, as Japan was distanced from the world during the Edo Period (1603-1868) in self-imposed isolation, so Takayama was cut off from the rest of the nation. When the government demanded taxes from poverty-stricken Takayama, the town sent local woodcarvers to the capital instead. The legacy of
46 / ACCJ Journal / December 2008
these artisans can be seen today in the wooden buildings at Nara and Kyoto, not to mention Takayama’s own well-preserved — and surprisingly sophisticated — Edo architecture. Takayama’s isolation can be seen in the cuisine as well. Geographically far from the sea, the town offers meat dishes rather than fish as local specialties. Hida beef, for example, is renowned; another famous dish is hoba-miso — bean paste with chopped vegetables, grilled on a dried magnolia leaf. Takayama ramen noodles were originally sold outdoors in winter. Adapting to the thinner mountain air, the wrinkly, extra-thin noodles boil quickly, thus economize on fuel and, presumably, stop customers from freezing to death waiting. Looking for refuge from the cold and a spot of breakfast, I pop into a coffee shop near the morning market, only to find it occupied by a small group of Zen monks. They are cheerfully discussing the Internet auction price of ski equipment. One of
By Tony McNicol / Classic Journeys
the monks tells me they are from a Soto zen temple near Takayama. They come into town to beg for alms once a month. “We are having a break right now,” he says with a grin. They all carry little bells and boxes for collecting donations. I inquire into Takayama’s woodcarvers, and a monk tells me about a 17th-century Gifu monk called Enku. The errant religious traveled the whole of Japan, helping others and carving out simple wooden figures of the Buddha for the people he met along the way. Enku is said to have made as many as 120,000 statues during his lifetime. Thousands of his carvings remain, especially in the Hida-Takayama area. Many of the Buddha figures have scratches and dents — children used to swim with them for protection. Takayama’s famous Ichii Ittobori yew woodcarving, however, is credited to a man named Sukenage Matsuda. Toward the end of the Edo Period, Matsuda began to use local wood to carve netsuke (small sculptured toggles to hang from the obi sash of a kimono). The fine-grained beauty of the wood, matched with the ingenuity and craftsmanship of Takayama’s carvers, made Takayama netsuke a much sought after item. Many small woodcarving workshops remain, dotting the town’s landscape. you actually can try your hand at yew woodcarving, close to the Hida Folk Village, a collection of preserved community buildings near Takayama. Although, as teacher Norio yoshino explains, these days they have to use hinoki (Japanese cypress), as slow-growing yew is far too rare and precious. The shop next to the classroom is full of yoshino’s work — birds and animals, small roughly hewn Enku figures, huge elaborately wrought Buddhist deities and cute daruma dolls. “It takes about four or five years to learn to use the chisels properly,” says yoshino. I ask why one daruma doll is yawning. “Perhaps he is bored from sitting there so long” is yoshino’s reply. I wander up the hill to the Hida Folk Village to take photos by night. This is when I get the full
PHoToS ToNy MCNICol
The remote location meant that, as Japan was distanced from the world during the Edo Period (1603-1868) in self-imposed isolation, so Takayama was cut off from the rest of the nation.
Sheltering from the cold and toasting mochi at the Hida Folk Village.
blast of the Takayama winter. As beautifully lit up are the thatched-roof buildings, the weather conditions do not exactly add up to the ideal environment for photography. Camera batteries, I discover, don’t work well at -15ºC — nor do my fingers. I get just a couple minutes of shooting at a time before I have to take the batteries out and warm them against my skin. one of the village staff informs me that they don’t get many tourists during the winter months, apart from evenings. I ask what they spend the winter doing. “Just waiting,” he says. “But actually,” he adds, “it is in snow when the village is most beautiful.” Takayama
Getting There Take the Nozomi bullet train from Tokyo to Nagoya (1hr, 40mins), then the Wide-view Hida Express to Takayama (2hrs, 20mins).
TOKYO
Tony McNicol is a freelance writer and photographer based in Tokyo.
December 2008 / ACCJ Journal / 47
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Informed and Informative Tax and pension services
C
ross-border realities manifest themselves most emphatically when it comes to taxation and retirement
plans — for both corporations and the individual.
The ACCJ Financial Services Forum is an umbrella
committee with four active subcommittees that hold regular meetings, advocate changes in regulations that will improve customer choice and industry soundness, and issue Viewpoints and Public Comment on topics relevant to the financial services industry. The ACCJ Taxation Committee provides information and updates on changes in U.S. and Japanese tax laws,
pages can provide explanations of recent updates in regard
legislative developments and administrative matters.
to filing and particular items on the forms (www.irs.gov/).
The committee develops lobbying positions on U.S. and
Yet, as we know, understanding or securing the valid
Japanese tax and financial issues. It also helps to further
forms doesn’t lead automatically — or easily — to meeting
the dialogue between U.S. and Japanese government
your tax obligations or working out retirement benefits
officials on tax and financial legislative and administrative
while overseas. Nothing replaces the invaluable counsel and
matters. ACCJ advocacy efforts have a proven track record
assistance that professionals based in Japan can provide to
of effectiveness, which includes the introduction of defined contribution pension plans. The Tokyo Metropolitan Government has a handy explanation of the tax (local and national) and pension (national and employee) systems (www.tokyo-icc.jp/ guide_eng/work/index.html). The U.S. Embassy, Tokyo also provides a succinct online coverage of tax on its U.S. Citizen Services pages (http://tokyo.usembassy.gov/e/), including a link that allows you to download appropriate tax forms [e.g., Form 1040 (Individual Income Tax Return), Form
foreign residents living and working here. When it comes to taxes and pensions, you might want to jot down some questions about the future, rather than state facts about the present, in order to arrive at what advice and assistance you may require. Does your oldest living with you now plan on attending university abroad soon? Do you plan on living near your children when you retire? Tax and pension services ease preparation worries, and prepare the company or the individual to meet taxation
2555 EZ (Foreign Earned Income Exclusion), and Form TDF
obligations and the retirement benefits of a company’s most
90.22.1 (Report of Foreign Bank and Financial Accounts)].
valued asset, its employees, and that of individual pensioners.
The Embassy also has a valuable page in regards to what exchange rate to apply on foreign earned income, based on
David Umeda
the “Treasury Reporting Rates of Exchange — Annual Average
Senior Editor
Rates.” Of course, the U.S. Internal Revenue Service Web
ACCJ Journal
48 / ACCJ Journal / December 2008
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AP Outsourcing Tel: 03-5228-1820 Fax: 03-5228-1830 www.APOutsourcing.jp AP Outsourcing (APO) is an independent outsourcing provider of Accounting and Payroll with Big Four experience (Arthur Andersen and KPMG). It was separated from Azsa Audit Corporation (the audit group of KPMG Japan) in April 2004. AP Outsourcing provides bilingual staff with extensive experience and knowledge of financial operations, payroll and tax, helping you compete better and accomplish your goals. Start-up Support: APO provides business start-up support for new foreign corporations and venture companies, including legal registration, tax and social insurance applications. Project Management: Effective and efficient project management support for outsourcing migration. Outsourcing Operations: Well-qualified bilingual accountants, tax/social insurance specialists and system experts accurately and promptly provide outsourcing operations, focusing on the confidentiality of accounting payroll/information. Loan Staff: Accounting/payroll processes are facilitated by the placement of our own specialist staff in the clients’ offices for specific periods. APO also offers other specific services and support on request. For more information on how we can help you to simplify your business processes, call AP Outsourcing at 03-5228-1820.
Nagamine Accounting Office Tel: 03-3581-1975 www.nagamine-mri.com Since 1989, Nagamine Accounting Office has been assisting foreign-affiliated firms (nearly 80% of our clients are foreign-affiliated) expand their business operations into Japan by providing expertise in the areas of tax and accounting. NAO supports the business start-up process in Japan, thus offering payroll and cash management services. Our main areas of service are as follows: Transfer Pricing Consulting: Evaluating taxation risk based on client interviews and the analysis of internal information regarding related-party transactions. We offer the appropriate solutions on transfer pricing risk management. Audit: When foreign-affiliated companies implement voluntary audits in Japan for the purpose of M&As or per request of the parent company, NAO can support with the proper handling of audits and due diligence.
Tax & Accounting: NAO tailors all of services to the needs of our clients, from routine bookkeeping to the preparation and review of financial statements in accordance with the IFRS or US GAAP. Payroll: NAO can provide payroll accounting and social insurance services for our clients. Cash Management: NAO can also act as an expense clerk service; by giving authorization to wire vendors, we can perform the majority of back-office financial functions. For more information, please contact Shinya Nishi at nishi@nagamine-mri.com
Okamoto & Company Tel: 03-5276-0900 Fax: 03-5276-0950 www.okamoto-co.co.jp Okamoto & Company, an independent group of over 50 bilingual accounting professionals, provides professional services to foreign entities in Japan in the following areas: Temporary Accountants—Our accounting professionals can cover for your departing accountant or assist in project work, such as conversions into US GAAP or IFRS. Accounting, Payroll, Cash Management Outsourcing—Compiling financial statements in accordance with US GAAP and IFRS, process payroll, and even make salary and vendor invoice payments on your behalf. Expatriate Payroll and Tax Returns— Experienced professionals will meet with you to make certain you are compliant with the latest Japanese tax regulations. Internal Audits—We have experience assisting dozens of U.S. subsidiaries in documentation, testing related to SOX and internal audits. Taxes—Through our association with Hanato Tax Accountant Office, we can prepare a variety of corporate tax returns. Auditing—We can conduct financial audits, agreed-upon procedures on your behalf. We have many other services available. Call 03-5276-0900, or e-mail: contact@okamoto-co.com
Towers Perrin Japan Tel: 03-3581-6602 www.towersperrin.com Towers Perrin is a global professional services firm that helps organizations improve performance through effective people, risk and financial management. The firm provides innovative solutions in the areas of human capital strategy, program design and management, and in the areas of risk and
capital management, insurance and reinsurance intermediary services, and actuarial consulting. Towers Perrin has offices and alliance partners in major countries across Asia-Pacific, the Americas, and EMEA. More information is available at www.towersperrin.com. Established in Japan 24 years ago, Towers Perrin employs 60 Tokyo-based professional staff providing a full spectrum of HR consulting services. These services range from HR implications of M&A transactions to retirement plans, executive compensation & rewards benchmarking and design to employee research, workforce communication and change implementation strategies. We are a leading consulting firm in Japan advising Western and Japanese corporations on retirement plan issues. We work with local country management and corporate executives to address key issues of plan design, plan funding and investment strategy along with financial reporting compliance and risk management. Our team includes qualified Japanese and English bilingual actuarial and retirement consulting experts. Please contact Steve Allan at 03-35816602 or steve.allan@towersperrin.com with further questions.
US-TaxCPA.com Tel: 03-3353-5626 E-mail: Dan@US-TaxCPA.com www.us-taxcpa.com US-TaxCPA.com provides U.S. Income Tax Preparation and Advisory Services for U.S. citizens, resident and non-resident aliens residing in Japan and around the globe. Whether you are a high net worth individual with complex tax compliance needs, or still early in your career, our tax organizer walks you through the maze of tax reporting requirements within 20-30 minutes. And because we specialize in overseas tax filings, our fees are typically 40%60% less than the competition, so you save both time and money in preparing your tax return, in addition to having your return done right! At US-TaxCPA.com you get over 15 years of expatriate tax experience, FREE fee quotation and initial consultation, fast and reliable service, and your tax return is signed by a licensed U.S. Certified Public Accountant. We strive to achieve the highest level of satisfaction for our clients. For more information, please visit our website or contact us direct. You’ll be glad you did! Dan Schouten CPA MBA CMA CFM
US-TaxCPA.com
December 2008 / ACCJ Journal / 49
By Robert Cameron / Science, Technology and Inventions
Oil from Algae Robert Cameron
H
igh prices for oil are making hitherto exotic alternatives attractive. But even the most viable of these come with their own set of problems. Production of biodiesel and ethanol, made from corn and other crops, has led to a spike in food prices in the last couple of years, for example. Solar power is coming along, but is nowhere near ready to replace oil; and wind and hydro power have serious NIMBY (not-in-my-back-yard) issues. These and other challenges have researchers taking another look at oil-producing algae. Prof. Makoto Watanabe of Tsukuba University has developed a production technology that he thinks could solve Japan’s energy woes, take pressure off food crops, and reduce greenhouse-gas emissions to boot. Algal oil has been tried before, but with limited success. The projects ran up against a variety of barriers, including the fact that algae have natural limits on their growth due to growth medium conditions and self-shading of the colonies as they develop. Prof. Watanabe tested 140 varieties of algae, looking for species that both produce lots of oil and can thrive in a variety of conditions. He settled on two strains of Botryococcus, a freshwater alga common in lakes of Japan. The greatest challenge, and the one that foiled previous attempts, is the phenomenon of light-limitation, or self-shading mentioned earlier. The colony’s individual cells grow in clusters so that, as the colony proliferates, they tend to block each other’s light — and therefore photosynthesis — imposing a natural limit on the colony’s growth. But Prof. Watanabe discovered that he could keep his colonies growing by adding organic matter, like that found in wastewater, to the culture medium. The algae take up carbon from the organic material as they switch from photosynthetic to heterotropic (relying on materials produced by other organisms) growth, which allows the colonies to continue
Prof. Makoto Watanabe — battling energy and food problems.
proliferating even in the absence of sufficient light. “Organic wastewater is usually released into nature, to be degraded by bacteria into methane and carbohydrates,” he notes. “This technique avoids that, so it is an indirect net absorber of carbon.” Currently, Prof. Watanabe’s Botryococcus produces oil at a cost of ¥155 per liter, almost double petroleum’s ¥80. The technology produces 118 tons of oil per hectare per year; but with mass-production and other enhancements, he reckons this could be boosted 10 times, to over 1,000 tons per hectare. If that happens, algal oil quickly will become costcompetitive to crude oil. If petroleum prices rise as expected, that day will arrive even sooner. Technical challenges remain, of course. Prof. Watanabe just moved into a new, larger laboratory on the Tsukuba campus, and is building an outdoor facility to test various methods of scaling up his technology, in collaboration with autoparts-maker Denso Corp. and Sanwa Agriculture Co., which has knowhow in hydroponic daikon sprout growing. Watanabe’s dream is to make Japan self-sufficient in oil, and he believes it could take 10 years to get algae into our gas tanks, given enough funding. But wouldn’t it take a lot of land to produce all that oil? “Yes,” he replies. “We estimate about 300,000ha — almost exactly the amount of disused agricultural land in Japan.” Robert Cameron is Chief News Editor of The Nikkei Weekly.
December 2008 / ACCJ Journal / 51
By Nicole Fall / FDI Portfolio
Art for All Looking for a last-minute holiday gift? While bargain hunters may appreciate what the unfortunate timing of the economic downturn brings to the start of the gift-giving season, Japan is the last place in Asia to find under-valued art — recession or not — according to Bob Tobin of The Asian Collection Contemporary Art Gallery. “Art collectors from China, Taiwan, Korea and Singapore are on the prowl in Japan searching for original artists at galleries and auction houses,” he says. The reason art is priced lower here than in destinations like China is because, firstly, living space is generally smaller in Japan, curtailing purchasing, points out Tobin. Secondly, “Many wealthy Japanese collectors like to buy foreign brand names such as the French masters, same as in fashion buying, so the local artists, with a few exceptions, go unnoticed.” The international community in
Japan often follows suit and sticks with Japanese names that they know, he explains, rather than experimenting with up-and-coming younger artists. “My mission is to bring Japanese paintings to a much wider audience,” says Tobin, whose gallery recently relocated to a convenient location near Roppongi Hills. “At this time, Americans, Koreans and Taiwanese collectors are our best customers.”
Say Cheese California-headquartered Evryx Technologies Inc. has launched full-scale operations this past September to expand its mobile service offering in the Japanese market. Evryx Japan K.K. specializes in mobile visual search services known as ShaLink in Japan and SnapNow overseas. Users’ images from camera phones are linked to Web content, mobile promotions and m-commerce retailers; partners include Amazon.com and NBC. The ShaLink application allows users to take a picture,
submit it to Evryx servers and access information in just three steps—right when consumers are interested. For example, by snapping on magazines that are ShaLink-enabled, readers can be guided directly to related m-commerce Web sites. Hidechika Kawai, president of Evryx Japan, is working on advancing ShaLink so it becomes capable of incorporating GPS data for location-aware services, such as exclusive consumer coupons for retail outlets. ShaLink aims to provide a more efficient and
entertaining service than the two-dimensional barcode available today, says the company. “ShaLink is bringing together both print and digital media, as well as m-commerce vendors with consumers. I am excited to expand the business and to bring ShaLink to a wider range of clients and mobile users,” Kawai stated in a press release. “Our technology is not merely an image-recognition tool, but [also] one that connects people with the information they need—wherever they are, whenever they want it.”
December 2008 / ACCJ Journal / 53
Temple University, Japan Campus (TUJ) predicts it could reach the 1,000-student mark in its undergraduate program by 2010, according to Dean Bruce Stronach. Given TUJ’s double-digit growth over the past several years, he believes the university should hit the 1,000-student enrolment mark by the 2010 fall semester undergraduate program. The current enrolment is at 850, double that of 2001 when TUJ handled 425 enrolments. Student numbers at TUJ have experienced a dramatic increase in recent years because of a February 2005 designation as a (first) foreign university campus in Japan by the Ministry of Education, Culture, Sports, Science and Technology. That status enabled foreign students to apply for student visas. Consequently, North American and European students comprised one-third of TUJ’s student body, a figure that is now closer to nearly 50% in the fall 2008 enrolment. “We continue to be a popular destination for foreign students because our curriculum offers
TUJ
Student Uptick
courses in English that are relevant to contemporary Asia and Japan,” explains Stronach. “We are attractive to Japanese students who want a more challenging American university curriculum that offers diversity and develops critical-thinking skills.” Temple University has experienced a surge in foreign students also because of the world’s heightened interest in contemporary Japanese society and culture. Students choose Tokyo as a learning destination in order to immerse themselves in a hot popular cultural environment based on anime, manga and J-pop, as well as the more traditional subjects such as economics, business and international relations.
German precision-toolmaker Walter AG has launched in September a wholly owned subsidiary, Walter Tooling Japan K.K., in Nagoya. Walter is one of the world’s leading manufacturers of ultrahard tools for industry applications; and the subsidiary, with ¥100 million in initial capital, will focus on importing and marketing proprietary products, which include the Titex and Prototyp brands.
54 / ACCJ Journal / December 2008
Walter AG
Precision Toolkit Walter Tooling Japan aims to have 15 employees by 2009, and is targeting annual sales of ¥1.5 billion. The company also plans to capitalize on its engineering know-how when dealing with manufacturers looking for industry-specific, cutting-edge solutions—serving as their comprehensive supplier of an extensive range in drilling, turning, threading and milling products for the metal processing industry.
FDI Portfolio
As we go to print, the international fashion world is aflutter with the news that Aquascutum Ltd.’s chief executive, Kim Winser, is preparing a management buyout of the British luxury brand. The announcement came after Renown Inc., the Japan parent company, told a Japanese newspaper in October that it may sell the classic fashion label as part of a vast restructuring in early 2009. The management buyout will sustain the revival of this British brand in apparel and accessories. Winser, who became president of Aquascutum in the spring of 2006, is said to be keen on assuming full control of the company. Renown has been struggling under losses and an outmoded operating structure. Aside from selling Aquascutum, it also plans to close 16 loss-generating brands. Renown, which has owned Aquascutum since 1990, brought Winser into its heritage brand after she had transformed Pringle from a dull golfwear brand into a cool, luxury label.
Aquascutum Ltd.
Classic Branding
Industry sources say Aquascutum is halfway through its relaunch, and the timing for Winser is impeccable. A source adds that the deal would not be a leveraged buyout, and is structured in such a way that does not leave Aquascutum management exposed to the credit markets. While Aquascutum is charging ahead, Renown has been losing ground to its competitors. As reported by the fashion press, industry observers say that the parent company is not nimble, and has not been able to respond with sharper, more modern operations, such as at Itochu Corp. and Mitsui & Co., Ltd.
Luxury Italian jeweler Casa Damiani S.p.A. has signed a fiveyear deal with BGioielli Ltd. to distribute its youth-brand Bliss in Japan. The agreement hopes to see the launch here of more than 40 Bliss sales counters, the first group of which have already opened in the Ginza, Ikebukuro and Shinjuku. Also on the cards are two flagship stores slated for Tokyo’s fashionable Omotesando area and Osaka’s Shinsaibashi shopping district. In an interview with leading fashion publication WWD,
Casa Damiani S.p.A.
Ring of Success
Chairman and CEO Guido Damiani says: “Japan represents a very important market for luxury. I am confident about the success that Bliss will be able to achieve.”
The brand is endorsed by Paris Hilton and Italian soccer star Alessandro Del Piero in Japan, and is widely seen as the younger, hipper sister brand to the classic Damiani line. Damiani has five brands covering different price segments, from Bliss up to Calderoni. Founded in 1924, Damiani competes with brands including Fabergé. Contact Nicole Fall at nicole@fivebyfifty.com if you have ideas for this column.
December 2008 / ACCJ Journal / 55
A Dying Business
D
eath in Japan is a way of life for omaha, Nebraskaborn John Kamm. But Kamm, a U.S.-licensed funeral director and embalmer based in Tokyo, wasn’t initially set on joining the family business in Denver, Colorado, where he grew up. Though he used his embalming skills, which brought in up to $300 per contract, to pay for his undergraduate studies at the University of Colorado, Kamm managed a gold mine in Brazil and went off on a series of other career tangents that were selfdesigned to keep him out of the funeral business — before a chance assignment drew him back to familiar territory. Kamm had visited Japan when he was 18, and returned again at age 30 to earn an MBA from Waseda University, the Department of Asia-Pacific Studies, in 2001 — with a view on mining gold in Asia. He conducted a survey on the funeral business in Japan for a systems management report. It took just a few interviews with funeral directors to see specific patterns emerge — and realize there was a business opportunity.
56 / ACCJ Journal / December 2008
Unlike many of the other industries in Japan, the funeral sector is unregulated. Furthermore, business by referral also raises ethical issues, while bad planning has many companies now hitting a demographic brick wall. Funeral practitioners in the U.S., on the other hand, have been regulated by the Federal Trade Commission since 1984, and must provide price estimates over the phone, as well as an official price list to anyone who asks. Funeral companies stateside also are required to maintain reasonable rates. Many Japanese funeral practitioners, nonetheless, resist calls for similar regulation. Such resistance is perceived by some to be motivated by wanting to make huge profits by subtly pressuring bereaved families to buy expensive caskets or take services and frills they do not need. “In Japan, essentially anyone with a black suit can start a funeral company,” Kamm says. Nobody in Japan likes to be seen skimping, and funerals are, possibly, the most visible public measure of the esteem in which the deceased is held. A Buddhist ritual often entails sitting with the
All NATIoNS SoCIETy, INC.
Unregulated funeral industry raises ethical issues.
BIOGRAPHY
John Kamm ■ President, All Nations Society, Inc. ■ Born: June 25, 1971, Omaha, NE ■ BS, Geology/Paleontology; Minor in Math, University of Colorado, Denver, 1995 ■ Certified Embalming Technician/ Funeral Director ■ MBA, Waseda University, 2003 ■ Other languages: Japanese ■ AMS group of funeral companies from 1990 ■ Keihan do Brasil, managing geologist from 1997 ■ Hobbies: Camping, fossil hunting
body through the night preceding cremation, then a memorial service by a monk, the cremation, followed by a reception. All these observances — and especially the casket and flowers, and food served at the reception — are a source of profits to funeral companies. Similar to many other businesses in Japan,
By Martin Foster / Business Profile
In some cases, bereaved families do not even know where their deceased loved ones have been taken—and, more importantly, by whom.
SNAPSHOT
All Nations Society, Inc. ■ Mission: Relieve burden of those suffering loss ■ Established: 2003 ■ Employees: 5 fulltime, 40 outsourced funeral directors ■ Location: Ginza, Tokyo ■ Main business: Funeral preplanning for Japanese and foreign citizens in the Buddhist and Christian traditions; remains repatriation in the case of overseas deaths ■ Areas covered: Tokyo, Kanagawa, Chiba, Saitama, Nagoya, Sapporo ■ www.all-nations.jp ■ www.ans-shouji.com ■ Email: info@all-nations.jp ■ Tel: 03-3567-6377
they tend to charge a flat rate for an all-inclusive service package, rather than provide an itemized menu from which to determine the bereaved family’s preferences. “Many funeral operators are sizing you up while they are talking to you,” says Kamm, “and will deliver a handwritten invoice based on their view of your ability to pay.” There are approximately 6,000 funeral companies in Japan, but persons looking to plan ahead are hard-pressed to find even a single advertisement for a funeral business. “So the question is: How do they get customers?” Kamm rhetorically asks. By greasing palms, he suggests. “Some hospital administrators let it be known that they require a payment of ¥3 million from a funeral company to ‘get in,’” says Kamm. “The hospital will call the funeral company when a patient
is either dying or deceased, so the body can be whisked away.” In some cases, bereaved families do not even know where their deceased loved ones have been taken — and, more importantly, by whom. Kamm established the All Nations Society in 2003 in order to provide a preplanned funeral service with fixed costs that remove much of the anxiety connected with planning a funeral. “Preplanning or pre-need funerals help freeze costs,” Kamm says. “They also ensure that the final wishes of either the person, themselves, or of their family members are honored.” Kamm provides traditional Japanese funerals, and also will undertake the required procedures to be able to ship home expats who died in Japan. Preplanned funeral arrangements by Kamm start from around ¥400,000 (about $3,782) and average approximately ¥900,000. (By some accounts, ¥2.5 million can be the average charged by Japanese funeral companies, where some contend the prices are inflated by the significant markups on equipment and facilities.) The demographics of Japan are changing, according to Kamm, and the overwhelming trend over the last five years has been to scale down the funeral ceremony. Japanese funeral companies that had invested significant sums on lavish halls designed for large-scale funerals are now struggling to realize a return
on such investments. Kamm has sidestepped this issue by relying on rental halls, even for the more prominent funerals for which he has been responsible. Kamm’s clients have included two-time Palme D’or-winning film director Shohei Imamura; Kamm was contracted in December 2005 for his services after being seen talking about the funeral business on TV. Everything was in place when Imamura died in May 2006, and Kamm remains on good terms with the filmmaker’s son. Kamm also positioned his office near one of the main Ginza shopping avenues after determining that women tend to make the arrangements for family funerals. Prospective clients often will visit during a shopping trip to discuss matters over a cup of tea or coffee in his small, but tastefully appointed white-colored office. The business of death is not confined to office hours, though; and Kamm works as the job dictates. Nevertheless, he will, on occasion, pick up his wife Ruby (whom he met at Waseda) from her job in the accounts department at a U.S. law firm in Tokyo, and head out of town for a few days. “I take the boat out to somewhere like the ogasawara islands, which takes 26 hours, alone,” says Kamm. “I find peace and quiet in places like Chichijima, which is a place many people don’t seem to know about.” Martin Foster is a freelance writer based in Tokyo.
December 2008 / ACCJ Journal / 57
Tokyolife: Art and Design By Ian Luna, Lauren A. Gould, Tom Mes, Jasper Sharp, David G. Imber, Mika Yoshida, Toshiko Mori, Yuniya Kawamura and Fumihiro Hayashi. Rizzoli, 496 pp, $75
T
courtesy Rizzoli, TokyolIfe: Art and Design by Ian Luna, Rizzoli 2008
urning a page in Tokyolife is like turning a corner in Tokyo itself. You’re bound to encounter something startling, colorful, whimsical, sleek, cluttered or puzzling — or all of the above. The massive, full-color book showcases the art, fashion and design that flavor urban life. The book, like the capital, can seem impenetrable at first. It begins with a long, jargon-filled essay on contemporary architecture that discusses many buildings, only some of which we later can view. For example, the book has this to say about architect Keiichi Irie’s O House in Meguro:
58 / ACCJ Journal / December 2008
“The combination of generous apertures and intersecting volumes allow for permeation and outward spatial expansion, liberating the thickset concrete of some of its weight as it creates a relational whole in a sea of accumulated and discontinuous fragments.” I understood some of the sentence found on page 22, but it wasn’t until I encountered photos of the O House on pages 60 and 61 that I understood a little better. Other than that, most of this multi-authored book is clearly written, especially the essays on cinema and anime. Also, the brief introductions to 53 individual
and collective creators give a good idea of what they do, with relevant images immediately adjacent. The lineup ranges from well-exposed celebs such as fashionista Nigo and artist Takashi Murakami, to rising stars such as photographer Naoki Honjo, whose specialty is making actual landscapes look like tiny scale models of themselves. The featured architects make intriguing use of small and irregular spaces. In one house by Kazuyo Sejima, a bathroom occupies a tapering sliver of space that runs the entire length of the building.
Reviewed by Tom Baker / Behind the Book
The featured architects make intriguing use of small and irregular spaces. While space limitations are obvious considerations in building design, there also seems to be little room for extra frills in most of the other fields examined. Some of the most aesthetically pleasing items are clearly rooted in practicality, such as product designer Naoto Fukasawa’s spacesaving, wall-mounted CD player, which, by the way, became an early hit for the popular Mujirushi Ryohin brand. Robot designer Tatsuya Matsui goes out of his way to cultivate common sense: “In 2001 he started Flower Robotics, a studio where each day one member cooks for all the others, because Matsui believes that, as busy designers defect from the travails of everyday life, their capacity to design for human needs is diminished.” In a spirit of avoiding too narrow a focus, some of the
featured creators fruitfully have colored outside the lines of their primary fields. Architectural duo Klein Dytham, for instance, found a niche setting up temporary walls around construction sites. Their creations, though functional, also provide a look more like balloons, gardens or video games than mere barricades. In a city where buildings go up and down as often as hemlines, there seemingly is always room for one more construction site enclosure. Whether one despairs at Tokyo’s ephemeral nature or rejoices in the city’s inexhaustible vibrancy, Tokyolife well illustrates a comment in its pages by architect Toshiko Mori: “Tokyo demonstrates that ‘city’ is a verb and not a noun.” Tom Baker is a staff writer at The Daily Yomiuri.
We are giving away a copy of Tokyolife. Simply e-mail editor@paradigm.co.jp by December 17. The winner will be picked at random. Winners of Gusher of lies: Randy Krieger, Ford Japan limited; Eric Sedlak, Jones Day; laurence Smith, GE Money Asia.
December 2008 / ACCJ Journal / 59
Advocacy Update ACCJ Viewpoints are the core products of ACCJ Advocacy. An ACCJ Viewpoint is a brief paper, generated by a committee, that expresses the Chamber’s official position on a specific issue. Viewpoints are primarily used to express opinions on current policies, policies under consideration by the Japanese and/ or U.S. governments, and policies under discussion in bilateral or multilateral forums. They are also used to raise new concerns about issues not currently on the Japanese government agenda. Develop New Corporate Law and Taxation Procedures for the Conversion of the Japanese Branch of a ForeignIncorporated Company to a Stock Company
Revise Portfolio and Business Transfer Provisions Under Japan’s Insurance Business Law
Reform Corporate Governance by Requiring Listed Companies to Have Independent Outside Directors
Insurance Committee
Foreign Direct Investment Committee
Valid Through September 2009
Financial Services Forum
Valid Through March 2009
Valid Through September 2009
Recommendation
Recommendation
Recommendation
The American Chamber of Commerce in Japan (ACCJ) recommends that the Government of Japan, through the Ministry of Justice, the Ministry of Finance and other Ministries concerned, revise the Corporation Law, the Corporation Tax Act and other relevant laws and regulations to establish a new simplified procedure to convert the branch office of a foreign-incorporated company registered in Japan (Japanese branch) into a Japan-incorporated stock company (stock company) (kabushiki-kaisha under the laws of Japan). The present situation greatly disadvantages Japanese branches in terms of legal and taxation procedures when they incorporate as kabushikikaisha, compared with domestic companies doing the same. While foreign-incorporated companies recognize their ability to continue to operate as a Japanese branch, the option to convert the Japanese branch to a stock company on terms equivalent to those accorded to domestic companies will greatly improve the flexibility of their corporate organization. To remedy the current situation, the ACCJ recommends the following: (1) Establish a new “quasi company split” procedure to allow a Japanese branch to convert to a stock company. The new procedure should allow the Japanese branch to incorporate into a stock company or issue new shares by transferring its business to such stock company without having to obtain consent of the creditors for the transferred business by implementing procedures comparable to the creditor protection procedures and other procedures for a company split. (2) Not require inspection by a courtappointed inspector for a quasi company split, similar to the procedures for a company split. (3) Allow the quasi company split to be tax deferred as a tax-qualified reorganization and establish measures to exempt consumption tax and reduce real estate acquisition, registration, and license taxes.
The American Chamber of Commerce in Japan (ACCJ) calls on the Government of Japan to revise the Insurance Business Law (IBL) in order to facilitate the efficient domestication of a foreignincorporated insurance company (“foreign insurance company”). Under the IBL, corporate transactions by domestic insurers are treated differently from foreign companies. Japanincorporated insurers have procedures such as mergers (shinsetsu gappei), spin-offs (kaisha bunkatsu), policy portfolio transfers (houkatsu iten), and non-portfolio transfers of the company’s business (jigyou no jouto) available to them. However, the procedures available to foreign insurance companies are limited to only policy portfolio transfers and nonportfolio transfers of the company’s business. These procedures are also more complicated and costly compared to procedures available to Japan-incorporated insurers. Having a more comprehensive menu of options for corporate reorganization procedures for foreign insurers would increase management options and could result in greater corporate transactions and increased investment in Japan. This is consistent with the Government of Japan’s recent commitments for better regulation and a doubling of foreign direct investment (FDI) by 2010. The ACCJ recommends that the Government of Japan establish new measures to allow for the transfer and domestication of a foreign insurer’s business on more reasonable terms. As part of the new branch domestication measures, the FSA should establish an “overnight” reorganization procedure which does not require a sales black out or individual notice to creditors, and that assumes the license of the branch to the local transferee entity.
The American Chamber of Commerce in Japan (ACCJ) calls on the Government of Japan to formalize a policy requiring that Japanese stock exchanges: a) adopt listing rules requiring that at least one-third of the members of corporate boards be independent outside directors; b) promulgate standards consistent with global best practices that clearly define “independence;” and c) require detailed disclosure of all facts in the background of nominated director candidates that may affect independence of judgment or create potential conflicts of interest.
Released ACCJ Viewpoints can be read in full in the Advocacy section of www.accj.or.jp 60 / ACCJ Journal / December 2008
ACCJの 「意見書」 は、特定の問題に対してのACCJの公式見解を表明する委員会が作成した簡潔な提言書であ り、提言活動の中核を成しています。現行の政策や、 日本又は米国政府で検討中の政策、二国間もしくは多国間 で協議中の政策についてだけでなく、新たな関心を高めるために現在日本政府の課題となっていない問題につ いても意見を述べています。
外国会社の日本支店を株式会
日本の保険業法に基づく包括移
上場会社へ独立社外取締役の選
社化するための会社法制および
転規定および事業譲渡規定の改
任を義務付ける企業統治の改革
税制の整備を
正を
対日直接投資委員会
金融サービスフォーラム
保険委員会
2009年9月まで有効 英語正文
2009年9月まで有効 英語正文
2009年3月まで有効 英語正文
提言
提言
提言
在日米国商工会議所（ACCJ）は、外国会社の日本
在日米国商工会議所（ACCJ） は日本政府に対し、効
在日米国商工会議所（ACCJ）は、日本の証券取引
支店を株式会社化するための手続きについて、現在
率的な外国保険会社の日本法人化を促進するため
所が a) 取締役会役員の少なくとも三分の一を独立
日本の会社と比べ、外国会社の日本支店は法律上お
の保険業法の改正を求める。
社外取締役とすることを義務付ける上場規則を採用
よび税務上において不利な取扱いを受けていること
保険業法上、 日本の保険会社による組織改編と外
し、b)「独立」を明確に定義するために国際的なベ
から、簡素な手続きを新設するべく、法務省・財務省
国保険会社による同様の取引の取扱いは異なり、 日
スト・プラクティスに沿った基準を公表し、c)推薦さ
その他関係する省庁に対し、会社法、法人税法その
本で設立された保険会社は、新設合併、会社分割、
れた取締役候補者の経歴に関し、判断の独立性に
他関連法の改正を要請する。外国会社の日本支店
包括移転、事業の譲渡等の手続きを行うことができ
対して影響がある又は潜在的な利益相反を生じさ
が支店形態で引続きビジネスを行うことができるこ
る。 しかし、外国保険会社が行うことのできる手続き
せるような事実を全て詳細に公表すること、を義務
とを認識する一方で、 日本の会社が支店を株式会社
は、包括移転と事業の譲渡に限定されており、 これら
付ける政策を、日本政府が正式に採択することを提
化する際と同様の条件のもとで、外国会社が日本支
の手続きは日本の保険会社が行うことのできる手続
言する。
社を株式会社化する選択肢を持つことは外国会社
きに比べて複雑かつ費用負担が大きい。
組織の柔軟性を大きく改善することになるであろう。
外国保険会社の利用できる組織改編に、 より総合
現状を改善するためACCJは以下の提言を行う。
的な選択肢を用意することは、経営の幅を広げ、取
(1) 外国会社の日本における事業所として登記した
引の増加、 引いては対日投資の増加につながる。 これ
支店 （以下 「日本支店」 ） を株式会社にするための
は、 日本政府の近年のコミットメントである、 ベター・
手続きとして 「準会社分割」 を新設し、 日本支店
レギュレーションおよび2010年までの対日直接投
が、債権者保護手続、その他会社分割と同等の
資を倍増するという計画と合致するものである。
手続きを実施することにより、承継事業に係る会
ACCJは、 日本政府に対し、外国保険会社のビジ
社債権者の同意を要することなく、株式会社に
ネスをより合理的な条件で移転および日本法人化す
事業を承継させ、株式会社の設立または新株の
ることができるよう手続きを整備することを提言す
発行を行うことができるものとすべきである。
る。新しい支店の日本法人化手続の一貫として、金
(2) 準会社分割については、会社分割と同様、裁判
融庁は、販売停止期間や債権者への個別通知が不
所の選任する検査役の検査を要しないものとす
要で、支店の保険業法免許を譲受人である日本法人
べきである。
に承継させる 「即日」組織再編手続を整備すべきで
(3) 準会社分割については、会社分割と同様、税制
ある。
適格組織再編による課税繰延を認め、 また、 消費 税の非課税、不動産取得税・登録免許税の軽減 措置を設けるべきである。
ACCJが公表した意見書の全文は、www.accj.or.jp のアドボカシーセクションでご覧頂けます。 December 2008 / ACCJ Journal / 61
By Samuel H. Kidder / In the Final Analysis
Meeting the Challenges of Changing Times
A
t our annual Ordinary General Meeting at the end of October, I reported that when 2008 began we were confident that the growth in membership and in activity level of 2007 would continue. Well beyond this year’s first half these positive trends continued. And as a result, we are finishing the year in strong financial condition. But more recently, external developments have made us more cautious as we look to the future. I am confident that the value we return to members and the strength of our brand will continue to serve us well. But from a management perspective our watchword as we end this year will have to be flexibility. This has also been our first year operating under the new Constitution and I can report that the transition has gone smoothly and that the hard work of the Constitutional Champions last year has paid off in clearer and more efficient governance. During this 60th year of the Chamber I’ve spent more time than I otherwise likely would have looking over the organization’s past history. What I’ve read and seen make me very optimistic about our future. The ACCJ has always had, and currently certainly has, strong volunteer leadership. We have also adapted successfully to changes in the business environment over time. In the immediate post-war years we built a strong rapport with the U.S. government, particularly the Embassy. That relationship continues to serve us well today. In the 1970s we opened up more and more to Japanese members and that process is continuing. For decades now we have been established as the premier foreign-related advocacy organization in Japan. As requests come from Japanese government agencies, political party leaders and other organizations, this role will continue to expand. The content of our advocacy and programs will change to reflect changing times, but the influence of the ACCJ will only increase in the years ahead.
Samuel H. Kidder is ACCJ Executive Director.
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