JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
2.7 No-Action Letters The FSA’s “no-action letter” system grew out of a paper entitled “Regarding the Introduction of Prior Confirmation Procedures on the Applica - tion of Laws and Regulations by Administrative Agencies” , pursuant to Cabinet decision on 27 March 2001. It is stated in the paper that, “ With respect to fields that may catalyse new indus - tries and new products and services, including information technology and finance, in order to enhance the ability of private enterprises to antic- ipate whether a certain action would conflict with laws and regulations, administrative agencies will be arranged such that private-sector enterpris- es can inquire in advance as to the relationship between the action concerned and the provi- sions of certain laws and regulations. In addition, in order to ensure the fairness of administration and promote increased transparency, contents of the inquiries concerned and the administra- tive agencies’ responses will be made public”. To this end, the Cabinet established guidelines with regard to the above, stating that “ ...t he responses of administrative agencies with juris - diction to enforce certain laws and regulations in reply to inquiries by private enterprise, etc, to seek advance confirmation on whether proposed actions relating to the enterprise’s business are regulated, will be made public”. Based on this Cabinet decision, the FSA intro - duced a no-action letter system on 16 July 2001. This system is explained below. The laws and regulations that are the subject of the FSA no-action letter procedures are those laws (including subsidiary regulations) over which the FSA has jurisdiction. Inquiries regard - ing those laws and regulations should be made in accordance with the 27 March 2001 Cabinet Decision (entitled “Regarding the Introduction of Prior Confirmation Procedures on the Applica -
tion of Laws and Regulations by Administrative Agencies’’ ), to meet the aim of the Cabinet Deci - sion. The aim of the Cabinet Decision was to create a system under w hich (i) procedures are established to enable private enterprise, etc, to seek advance confirmation with the administra - tive agency having jurisdiction to enforce cer - tain laws and regulations on whether proposed actions in connection with enterprise’s business activities are regulated, (ii) the relevant adminis - trative agency provides a response to the rel - evant enterprise and (iii) such response from the relevant administrative agency is made public. In this connection, inquiries are classified into the following categories: • cases where the provision concerned is used for determining the basis for disposition of an application (as the term “application” is defined in Article 2, Item 3 of the Administra - tive Procedures Law (Law No 88, promul - gated 12 November 1993)) and violations of the provision concerned are subject to penal sanctions; • cases where the provision concerned is used for determining the basis for identifying activi - ties that require notification of certain matters to administrative agencies and violations of the provision concerned is subject to penal sanctions; • cases where the provision concerned is used for determining the basis for unfavourable disposition (as the term “unfavourable dis- position” is defined in Article 2, Item 4 of the Administrative Procedures Law); and • cases where the provision concerned imposes obligations on private companies or restricts their rights directly, with or without unfavourable disposition, where the FSA finds it necessary.
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