CABINET ORDER RELATING TO DIRECT INWARD INVESTMENTS, ETC. COPYRIGHT RODERICK SEEMAN

Article 5. Notification of the Conclusion of Agreements for Importation of Technology, etc. and Delivery of Recommendations for Revision.

1. Matters to be determined by Cabinet Order, as per the provisions of Article 30, Paragraph 1, of the Law, shall be the conclusion of agreements for importation of technology, etc. falling under any of the items below:

(1) The conclusion of contracts related to conclusion of agreements for the importation of technology, etc. listed in (a) through (d) below (excluding those based on changing one of the parties to the contract related to the conclusion of agreements for the importation of technology, etc.) related to designated technologies (meaning those technologies as set out by ordinance of the Competent Ministry as technologies related to conclusion of agreements for importations of technology, etc. for which there are concerns that there will be harm to national security, prevent the maintenance of public order, or prevent the preservation of public safety. Hereinafter in this Paragraph the same.)

(a) Conclusion of agreements for the importation of technology, etc. where the amount to be paid as countervalue (excluding expenses during stays in Japan and travelling expenses. Hereinafter in this Paragraph called the "countervalue for the technology importation contract.") to the other party to the conclusion of agreements for the importation of technology who is a nonresident (including branches, etc. in Japan of nonresidents. Hereinafter in this Item, the same.) exceeds an amount corresponding to 100 million yen.

(b) Conclusion of agreements for the importation of technology, etc. where the countervalue for the technology importation contract is not clearly ascertained.

(c) Conclusion of agreements for the importation of technology, etc. where a resident, as countervalue for the technology importation contract, transfers industrial property rights and other rights related to technology, establishes rights of usage concerning these, or gives technical guidance concerning business administration.

(d) Conclusion of agreements for the importation of technology, etc. where a nonresident who is a party to the conclusion of agreements for the importation of technology, etc. holds directly 50% or more of the total issued and outstanding shares or the total investment in capital of the company, which is a resident who is the other party to the agreement.

(2) Changes in the provisions of the contracts related to the conclusion of agreements for the importation of technology, etc. listed in items (a)-(d) of the previous Item (limited to those where designated technologies are added as new additions).

(3) Those related to designated technologies, where changes in the provisions of the contract related to conclusion of agreements for the importation of technology, etc. (excluding those listed in (a)-(b) of item (1)), cause the countervalue for the contract for the importation of technology comes to exceed an amount corresponding to 100 million yen.

2. The notification based on the provisions of Article 30, Paragraph 1 of the Law must be made pursuant to the procedures set out by the ordinance of the Competent Ministry within 3 months before the date of the conclusion of agreements for the importation of technology, etc.

3. The matters which are to designated by Cabinet Order as provided for in Article 30, Paragraph 1 of the Law shall be the following matters:

(1) The name, address or residence, nationality and profession of the parties to the conclusion, etc. of technological induction contracts (for corporations, their names, the location of their main offices, the particulars of the business activities which they are conducting, their paid up capital and the names of their representatives);

(2) The type of technology and the countervalue for the technology importation contract

(3) The time of execution of the conclusion, etc. of technological induction contracts;

(4) The reason for the making of the conclusion, etc. of technological induction contracts;

(5) In addition to the matters listed in each of the preceding items, the articles of the contract and other matters as designated by the Ordinance of the Competent Ministry in relation to the conclusion, etc. of technological induction contracts;

4. That which is to be designated by Cabinet Order as provided for in Article 30, Paragraph 3, of the Law be the shall be the Organization of Economic Cooperation and Development Treaty (limited to that portion related to the provisions concerning the liberalization of transactions outside of ordinary trade, as determined based on the provisions of Article 5(a) of the same Treaty)

5. Extension of the term during which the conclusion of agreements for the importation of technology, etc. cannot be made, based on the provisions of Article 30, Paragraph 3 or Paragraph 6 of the Law, shall be made via delivery, by mail or hand delivery, of a document, in which is denoted the term of the said extension, to the address, residence, or place of business of the party who should receive that delivery.

6. The provisions of Article 30, paragraph 7 through Paragraph 10 of the Law shall apply mutatis mutandis concerning the documents in which is denoted the term of the extension as provided for in the preceding paragraph. In that situation, the "preceding paragraph" in Paragraph 7 of the same article and the "Paragraph 6" in Paragraphs 8 through 10 of the same article shall be read "Article 5, Paragraph 5."

7. The recommendations and orders based on the provisions of Article 30, Paragraph 5 of the Law, or the provisions of Article 27, Paragraph 10 of the Law which apply mutatis mutandis in Article 30, Paragraph 7, shall be made via delivery, by mail or hand delivery, of a document, in which is denoted the substance of the said recommendations or orders, to the address, residence, or place of business of the party who should receive that delivery.

8. The provisions of Article 3, Paragraphs 7 through 10 shall apply mutatis mutandis concerning the documents in which is denoted the substance of the recommendation or orders as provided for in the preceding paragraph. In that situation the "preceding paragraph" in Paragraph 7 of the same Article and "Paragraph 6" in Paragraph 8 of the same Article shall be read "Article 5, Paragraph 7"; the "Paragraph 6" in Paragraph 9 of the same Article shall be read "Article 5, Paragraph 7"; the "Article 10, Item 4" shall be read "Article 10, Item 5 or Item 7"; and "Paragraph 6" in Paragraph 10 of the same article shall be read "Article 5, Paragraph 7".

9. The notice based on the provisions of Article 27, Paragraph 7 of the Law, which apply mutatis mutandis to Article 30, Paragraph 7 of the Law, must be made based on the procedures as designated by the Ordinance of the Competent Ministry.