JAPAN Law and Practice Contributed by: Taro Omoto, Yusuke Nakajima and Makoto Sakai, Mori Hamada & Matsumoto
1.2.3 Enforceability Against Domestic Parties A bill of sale is not required to be translated, certi - fied, notarised or legalised to be enforceable against a Japanese party. However, in the case of a fresh reg - istration of the imported aircraft in the aircraft registry, a notarised bill of sale must be submitted to the JCAB. 1.2.4 Registration, Filing and/or Consent From Government Entities In order to register an aircraft with the JCAB, the bill of sale must be submitted as one of the supporting documents with the application for registration. The outline of the registration process for a newly imported aircraft is as follows. • Applicant: owner. • Standard processing period: one week from receipt of the application. • Major supporting documents (an example for a simple case): (a) application form; (b) power of attorney (only in the case of an ap - plication by an agent); (c) certificate of airworthiness; (d) notarised bill of sale; (g) document evidencing empty weight; (h) receipt of registration tax (original); (i) certificates of residence of more than two thirds of officers (if the applicant does not have any other aircraft registered in Japan); (j) list of shareholders or annual securities report; (k) certificates of residence of shareholders hold - ing more than two thirds of voting rights; and (l) other documents required by the JCAB. No government applications or consents are required as a prerequisite to the execution and delivery of a bill of sale in relation to an aircraft or engine registered in Japan. (e) certificate of non-registration; (f) certificate of registered seal; Please see 2.1.6 Licensing/Qualification of Lessors regarding the requirements for the owner of an aircraft registered in Japan.
1.2.5 Taxes/Duties Payable Upon Execution of a Bill of Sale Registration tax is payable upon registration of the transfer of an aircraft, while it does not apply to the sale of an engine or an ownership interest in an enti - ty that owns an aircraft or engine. Please see 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement regarding stamp duty.
2. Aircraft and Engine Leasing 2.1 Overview 2.1.1 Non-Permissible Leases
In general, operating/wet/finance leases or leases concerning only engines or parts are permissible and recognised. Depending on the nature of parts, the independent legal title will be lost if the parts are attached to the aircraft and consist of the structure thereof, in which case the lessor will lose the owner - ship interests and thus the lease agreement will lose its base. See also 2.2.4 Risk of Title Annexation . 2.1.2 Application of Foreign Laws The Japanese conflict of laws rules allow parties to choose the governing law of the agreement as a mat - ter of general principle. The parties to a lease may choose the governing law for a lease involving a domestic party or an asset situated in Japan. How - ever, as an exception, under the Japanese conflict of laws rules, those provisions of the foreign law will not apply if the application thereof is against public policy. 2.1.3 Restrictions Concerning Payments in US Dollars No material restrictions are imposed on domestic les - sees making rent payments to foreign lessors in US dollars, but certain payments are restricted under the Foreign Exchange and Trade Act; see 2.1.4 Exchange Controls . 2.1.4 Exchange Controls In exceptional cases (eg, payment to a person residing in an area subject to international sanctions), cross- border payments are subject to governmental approv - al pursuant to exchange controls under the Foreign Exchange and Trade Act but, as a general rule, they are only subject to post facto reporting requirements.
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