RESTRICTED
WORLD TRADE G/TMB/N/82/Add.1
15February 1996
ORGANIZATION(96-0501)
Original: English Textiles Monitoring Body
AGREEMENT ONTEXTILES AND CLOTHING
Notification under Article 3.1
Japan
Addendum
TheTextiles Monitoring Body hasreceived afurther notification from Japan, pursuant to
paragraph 1ofArticle 3.
TheTMB, inaccordance withparagraph 5ofArticle 3,iscirculating thisnotification to
WTO Members fortheirinformation.G/TMB/N/82/Add.1
Page2
Permanent Mission ofJapan
Geneva, 30November 1995
Dear Mr.Ambassador,
Upon instructions frommyauthorities, Iamforwarding totheTextiles Monitoring Body the
additional information ontheoperation oftheCustom 'sConfirmation and/or PriorConfirmation System
applied onimport ofsilkyarnandsilkfabrics, aswellasontheprogramme ofprogressive phase out
ofthemeasures affecting suchimports, aswasrequested bytheletter dated 31October 1995 with
references A/TMB/403.1 andA/TMB/403.2.1
Yours sincerely,
(signed) Hidetaka Saeki
Counsellor
H.E.Mr.András Szepesi
Chairman
Textiles Monitoring Body
World Trade Organization
Centre William Rappard
RueduLausanne 154
1211 Geneva 21
1Therelevant section ofthisnotification willbeissued under Article 3.2(b) afteritsreview bytheTextiles
Monitoring Body.G/TMB/N/82/Add.1
Page3
Operation ofthePrior Confirmation System (PCS) andtheCustom 'sConfirmation System (CCS)
In1974, Japan made theimport ofrawsilksubject totheStatetrading, pursuant totheCocoon
andRawSilkPrice Stabilization Law. Theintroduction ofthisnewimportation system ledtoasharp
increase ofthepriceofimported rawsilk,andtherefore theJapanese domestic industry ofsilkproducts
significantly lostitsinternational competitiveness. Moreover, asanenormous amount oflessexpensive
silkproducts began tobeimported toJapan mainly fromneighbouring countries suchasthePeople 's
Republic ofChina (China) andtheRepublic ofKorea (Korea), theindustry concerned wasbrought
totheverge ofcollapse.
Under these circumstances, Japan decided, in1976, tostart government-to-government
consultations ontrade levels ofsilkproducts withChina andKorea, andhasannually heldsuch
consultations eversince.
(Japan andChinese Taipei alsoheldconsultations atthenon-governmental levelfortheperiod
between 1980 and1985, buttheyhavebeensuspended since then.)
After thecommencement ofthebilateral consultations, however, imports ofsilkproducts from
certain countries andareas suddenly increased, bearing falseplace-of-origin markings todisguise their
trueorigin suchasChina. Asaresult, theMinistry ofInternational Trade andIndustry (MITI), urged
bynecessity toenure smooth implementation ofthemeasures resulting from bilateral consultations,
decided tointroduce thePCSandtheCCSinaccordance withtheForeign Exchange andForeign Trade
Control LawandtheImport Trade Control Order, withanaimtoprevent suchillegitimate trade and
toaccurately grasp theimport trend.
BoththePCSandtheCCShavebeenimplemented toconfirm thevalidity ofplace-or-origin
declarations, though bydifferent procedures. Under thePCS, which wasintroduced forproducts from
those countries andareas where cases offraudulent declarations oforigin were found orsuchcases
would beprobable, MITI, prior tothecustoms clearance, carefully examines necessary documents
suchascertificates oforigin submitted byimporters. With theabove-mentioned aimofthePCSin
mind, itisessential thatcompetent experts withdetailed knowledge oftextile trade practices should
check relevant information onweavers, processors andsoonprior tothecustoms clearance; thus
thePCSisoperated byMITI officials.
Under theCCS, which wasintroduced forproducts fromthecountries andareas where such
fraudulent casesarerarely expected, customs officers check necessary documents attached totheimport
declaration atthecustoms clearance.
Entry intoJapan oftheproducts withfraudulent origin markings isnotallowed under thePCS
andtheCCS, where thedetermination ofthecountry oforigin ismade exclusively based ontherules
oforigin which Japan hasnotified totheWTO (G/RO/N/1/Add.1).
Because theaimofthePCSandtheCCSistoprevent illegitimate imports inorder tosupplement
effectiveness ofmeasures asaresult oftheabove-mentioned bilateral consultations withregard tothe
trade levels ofsilkproducts, thetwosystems themselves havebynomeans quantitatively restrictive
effects. Nevertheless, Japan referred tothem initsnotification made under paragraph 1ofArticle 3
oftheWTO Agreement onTextiles andClothing (ATC) andincluded theminitsphase-out programme
asprovided forinparagraph 2(b)ofArticle 3ofthesaidAgreement, given thefactthatthetwosystems
areoperated tosupplement theabove-mentioned measures.