Policy Goal 5-1: Set appropriate tariff rates and improve the customs system, taking into account domestic and international economic conditions

Transcription

1 Policy Goal 5-1: Set appropriate tariff rates and improve the customs system, taking into account domestic and international economic conditions General outline of the goal When setting tariff rates and improving the tariff system, it is necessary to ensure that policy is tied to the sound development of both the national and global economy, comprehensively considering such matters as the contribution made to international economic and trade development, the actual status of domestic industry, and the impact on consumers, while bearing in mind the function of tariffs in protection of domestic industry, development, the actual situation faced by domestic industry, and the impact on consumers, while bearing in mind the function of tariffs in protecting domestic industry. (Measures for achieving the goal) Policy 5-1-1: Implement appropriate tariff reforms, taking into account the current situation faced by producers, consumers, and users, as well as the results of policy evaluations Policy 5-1-2: Appropriately operate the special tariff measure Results of Evaluation of Policy Goal 5-1 of Policy Goal S: Goal achieved As both measures were rated "s: Goal achieved," s in this area were rated "S: Goal achieved."

2 Measures Policy 5-1-1: Implementation of appropriate tariff reforms, taking into account the current situation faced by producers, consumers, and users, as well as the results of policy evaluations [Key indicator]policy B-1: Implementation of appropriate tariff reforms Goals The MOF will set appropriate tariff rates and improve the customs system, taking into account domestic and international economic conditions. In the FY2017 tariff reform, the MOF implemented appropriate tariff reforms that took into account domestic and international economic conditions. These reforms included the following: Extended the application deadline for the provisional tariff rate, to be applied on March 31, In conjunction with the implementation of a company-initiated childcare project under the Child and Child Care Support Act, the MOF added a nursery facility for the project to tariff reduction measures for skimmed milk for lunch, and exempted paranitro-chlorobenzene and toys from tariffs With regard to the duty free system on aircraft parts, etc. as well as the duty reduction system on products manufactured from goods exported for processing or assembly, both of which were due to expire on March 31, 2017, the application deadlines were extended by 3 years (qualitative ) With regard to the specific duty free store system and selective taxation system due to apply on March 31, 2017, the application deadlines were extended by 3 years and 2 years respectively Expanded the advance reporting system for passenger and air cargo as part of strengthening terrorism countermeasures for the 2020 Tokyo Olympic and Paralympic Games Established evidence collection procedures related to electromagnetic records in criminal investigation proceedings under the Customs Law based on review of the National Tax Crimes Investigation Procedures Revised the standards for target countries of the exemption measures of the preferential tariff system, based on actual results of preferential application and trends in other countries From the viewpoint of reducing the burden on applicants, reviewed the requirements concerning applications for anti-dumping duties From the viewpoint of improving the convenience of passengers entering Japan, set up a duty - free shop (bonded store) for use when arriving at Japanese international airports, and for foreign cargo purchased and imported at a duty - free shop when the passenger arrives time, applied a portable item exemption system Expanded the scope of materials for mixed feed produced at approved plants, from the viewpoint of reducing the price of production materials

3 When setting tariff rates and improving the tariff system, it is necessary to ensure that policy is tied to the sound development of both the national and global economy, comprehensively considering such matters as the contribution made to international economic and trade development, the actual situation faced by domestic industry, and the impact on consumers, while bearing in mind the function of tariffs in protecting domestic industry. Accordingly, the MOF has set the implementation of appropriate tariff reforms as the target. ( the level of rating) As mentioned above, because the appropriate tariff revisions were implemented in the FY2017 tariff revisions, the level of was set to "". of Measures s: Goal achieved (Implement appropriate tariff reforms) When relevant ministries and agencies requested tariff reforms, they were required to detail the policy objectives; the necessity, appropriateness, and effects of the requested measures; and the results of policy evaluation. In addition, when scrutinizing the requests for tariff reforms that they had submitted, the MOF conducted interviews with these ministries and agencies to ascertain the situation in the industries that they oversee and the impact of individual requests on the national economy as a whole. Starting in October 2016, the Council on Customs, Tariff, Foreign Exchange and other Transactions met four times to examine these requests and submitted a report on its findings concerning FY2017 reforms of tariff rates and the tariff system on December 16, The key elements of the draft tariff reforms prepared on the basis of this report were incorporated into the FY2017 Tax Reform Outline. The MOF submitted to the ordinary Diet session on February 7, 2017 a draft bill created based on these to revise part of the Customs Tariff Law. The legislation was established on March 31 of the same year and promulgated on that same day, enforced from April 1 of the same year except for some provisions. As described above, the measurement indicator is, so this measure has been rated as s: Goal achieved. Measures Policy 5-1-2: Appropriate operation of the special tariff system [Key indicator] Policy B-1: Appropriate operation of the special tariff system Goals The MOF will appropriately operate the special tariff system. (qualitative ) In accordance with the WTO Agreements and related domestic laws and regulations, the MOF appropriately operated the special tariff system such as: Imposition of anti-dumping duties on potassium hydroxide from the Republic of Korea and the People's Republic of China (excluding the region of Hong Kong and Macao),and The anti-dumping duty investigation on Polyethylene terephthalate with a high degree of polymerization originating in the People s Republic of

4 China (excluding the region of Hong Kong and Macao). This target has been set because, amid the growing importance of the special tariff system in line with progressive globalization and trade expansion, there is a need to carry out appropriate investigations and decisions in operating the system, while avoiding its abusive or arbitrary operation, in accordance with the WTO Agreements and related domestic laws and regulations. ( the level of rating) As mentioned above, because the MOF has operated the special tariff system appropriately in accordance with the WTO Agreements and related domestic laws and regulations, the level of was rated ". of Measures s: Goal achieved As described above, the measurement indicator is, so this measure has been rated as s: Goal achieved. Departments Customs and Tariff Bureau (Tariff Policy and Legal responsible Division) Timing of policy evaluation June 2017

5 Policy Goal 5-2: Maintain and strengthen the multilateral trading system, and promote economic partnerships and trade facilitation in customs-related fields General outline of the goal Promotion of free trade is a pillar of Japan's outward economic policy and it is necessary for the government to strengthen the free trade system and incorporate vitality of other countries into the growth of Japan in order to realize strong economic growth, being a fundamental position as a whole. Promotion of economic partnership was mentioned as one of the important pillars of the growth strategy in the "Japan Revitalization Strategy" (June 14, 2013 cabinet decision), and is a major measure as well in the subsequent revision, and the Policy Speech by Prime Minister to the 190th Session of the Diet (January 22, 2016) also noted the acceleration of the economic partnership negotiations. In addition, because trade facilitation in the customs sector will support Japanese companies' overseas deployment, the above-mentioned contents are set as policy objectives. The MOF will continue to maintain and strengthen the multilateral trading system with the centrality of the WTO (World Trade Organization), and will also work with relevant ministries and agencies to strategically promote economic partnerships with such regions as the Asia-Pacific region, East Asia, and Europe. Additionally, with the aim of strengthening the growth power of the Japanese economy by enhancing Japanese companies' international competitiveness through the improvement of the trade and business environment, the MOF will proactively promote facilitation of trade of respective countries in collaboration with the World Customs Organization (WCO), Japan International Cooperation Agency (JICA) and Multilateral Development Banks (MDBs), thereby seeking concrete s. Furthermore, the MOF is currently undertaking initiatives within the context of cooperative frameworks with international organizations such as the WCO, as well as regional cooperative frameworks such as APEC (Asia-Pacific Economic Cooperation), and frameworks focused on EPAs (Economic Partnership Agreements) and cooperation with customs authorities in other countries. These include initiatives aimed at promoting international harmonization and streamlining of customs procedures, and initiatives focused on ensuring the security of international trade in customs-related fields. Through these efforts, it is expected that facilitation of international trade will be promoted, eventually improving user convenience in customs procedures and securing the safety and security of our society. In consideration of the importance of these efforts, Japan, acting as a major trading country, will actively promote trade facilitation in the customs sector in international organizations, the framework of regional cooperation, EPA, etc. (Measures for achieving the goal) Policy 5-2-1: Maintain and strengthen the multilateral free trading system and promote economic partnerships Policy 5-2-2: Promote trade facilitation in customs-related fields

6 Results of Evaluation of Policy Goal 5-2 of Policy Goal A: Considerable progress toward accomplishment The MOF actively maintained and strengthened the multilateral free trading system, and promoted economic partnerships and trade facilitation in customs-related fields. The rating for Measure is s: Goal achieved, and the rating for Measure is a: Considerable progress toward accomplishment so the rating for this goal overall, as described above, is A: Considerable progress toward accomplishment. Measures Policy 5-2-1: Maintain and strengthen the multilateral free trading system and promote economic partnerships [Key indicator]policy B-1: Maintain and strengthen the multilateral free trading system and promote economic partnerships Goals In order to secure the national interests of Japan in WTO and EPA negotiations, the MOF will contribute to negotiations through legislation concerning tariffs and other systems that fall within its purview, as well as engaging in negotiations concerning tariffs on items within its jurisdiction. Initiatives were made such as urging acceptance of the Member which had not yet accepted the WTO Trade Facilitation Agreement, and this agreement (qualitative ) entered into force in February The MOF also worked on promoting economic partnership negotiations such as Japan-EU EPA, RCEP and others. The TPP Agreement and its related bills were approved by the Diet in December 2016, and in January 2017, the Government notified New Zealand, which is designated as the Depositary of the Agreement, of the completion of domestic procedures for the TPP. The goal was set for the MOF to contribute to government-wide efforts to maintain and strengthen the multilateral free trading system and promote economic partnership. ( the level of rating) As mentioned above, due to progress in maintaining and strengthening the multilateral free trading system and economic partnership, the level of was rated "". of Measures s: Goal achieved As described above, the measurement indicator is, so this measure has been rated as s: Goal achieved.

7 Measures Policy 5-2-2: Promote trade facilitation in customs-related fields [Key indicator]policy A-1: Number of conclude Customs Mutual Assistance Agreements, etc. (Unit: Countries and Regions) FY FY2012 FY2013 FY2014 FY2015 FY2016 Increase from Increase from Increase from Increase from Target the previous the previous the previous the previous 32 year year year year Based on the concept that increasing the number of concluded Customs Mutual Assistance Agreements could contribute to facilitating more effective enforcement at the border in relation to illicit drugs and other illegal goods, the MOF has set the target number as 32 countries and regions, which include Brazil and Norway, with which Japan is currently under negotiation. (quantitative ) ( the level of rating) In September 2016, the Customs Mutual Assistance Agreement was concluded with Norway and the number of concluded agreements became "31". Although we did not reach the target number of "32", for Brazil and Mexico, after substantial agreement was reached between the governments in 2016, the necessary procedures are being carried out in both countries for concluding the agreements. In April 2017, the MOF signed a memorandum regarding trade facilitation and customs cooperation with the Russian authority, and negotiation with the Belgian authority has been concluded and arrangement for signing is being pursued. In addition, negotiation has started towards concluding an agreement with various countries, including the countries from the regions where there seems to be room for improvement concerning efforts towards concluding an agreement with. Therefore, as there has been tangible progresses made in terms of negotiation and there is relatively a narrow gap to reach the target, the level of is rated " ". Policy B-1: Promote trade facilitation in customs-related fields (qualitative ) Goals The MOF will contribute to the promotion of trade facilitation via technical cooperation in customs-related fields, the initiatives at the WCO and other international organizations, and customs-related cooperation and the conclusion of Customs Mutual Assistance Agreements within the context of EPAs. Regarding customs technical cooperation, in FY2016, 393 officials were accepted from 67 countries and 223 officials from MOF and Japan Customs were dispatched to 28 countries. For Myanmar in particular, the MOF has cooperated for the introduction of a customs clearance system which started operation in November. At APEC, the MOF actively contributed towards the realization of trade

8 facilitation and regional economic integration by implementing capacity building (capability building in developing countries) for facilitation of trade and travel and strengthening border control. At ASEM, the MOF served as the Asian side coordinator of AEO system and Passenger Name Records (PNR), contributing to facilitating trade and travel within the ASEM region. Based on the results of Tripartite (Japan, the People s Republic of China, and the Republic of Korea) Customs Heads Meeting held in October 2015 for the first time in about four years, the practical work level cooperation was promoted in various fields in FY2016 such as customs intelligence, intellectual property, and AEO. Moreover, at the Japan-Korea Customs Head s Meeting in November 2016 and the 8th Japan-EU Customs Cooperation Joint Committee in January 2017, exchange of opinions was held on further strengthening cooperation between customs. In addition, the MOF concluded a customs mutual assistance agreement with Norway to newly contribute to the promotion of trade facilitation. Contributing to technical assistance and these other initiatives by Japan will help to promote trade facilitation in customs-related fields. ( the level of rating) The MOF steadily implemented the various initiatives specified in the targets, with the aim of promoting trade facilitation in customs-related fields. Therefore, the level of was rated "." of Measures a: Considerable progress toward accomplishment Although the measurement index "number of concluded Customs Mutual Assistance Agreements" did not reach its target value, the gap towards the target can be considered as very narrow. Focused on the ASEAN countries, based on the support needs of the partner country, technical cooperation was conducted for modernization of customs administration, which greatly contributed to facilitation of trade in Asia including the start of operation of a customs system in Myanmar. In addition to this, in the framework of international organizations including the WCO, the 8th Japan-EU Customs Cooperation Joint Committee, and the Tripartite (Japan, the People s Republic of China, and the Republic of Korea) Customs Heads Meeting, the MOF contributed to promoting trade facilitation. As described above, the measurement is and, so this measure goal has been rated as a: Considerable progress toward accomplishment. Customs and Tariff Bureau (International Negotiations Departments Division, International Cooperation Division, Office of responsible Economic Partnership) Timing of policy evaluation June 2017

9 Policy Goal 5-3: Ensure proper imposition and collection of customs duties, prevent smuggling of illegal drugs, firearms, and other anti-social contraband, and improve convenience in customs procedures General outline of the goal Amid the rapid progression of economic globalization and given the increasingly networked nature of society, it is vital for the government to take the initiative and respond actively to the demands of changing times as it seeks to maintain order in trade and achieve sound development. Efforts to promote trade facilitation are required in order to tap into rapidly-growing demand in Asia and use this to revitalize the Japanese economy. At the same time, the increased scale and complexity of global logistics is giving rise to more sophisticated smuggling techniques. Accordingly, more stringent enforcement at the border is required in relation to the smuggling (both into and out of Japan) of items that threaten the safety and security of society, including illegal drugs, guns and other items linked to terrorism, and items that infringe intellectual property rights. To address these needs, in its management of customs administration, the MOF will aim to achieve a higher level of compatibility between efforts to promote trade facilitation and enforcement at the border, by such means as improving customs procedures and using more advanced risk management techniques. (Measures for achieving the goal) Policy 5-3-1: Ensure proper imposition and collection of customs duties, etc. Policy 5-3-2: Prevent smuggling of socially undesirable items Policy 5-3-3: Improve the user-friendliness of customs procedures Policy 5-3-4: Enhance the functions of customs procedure systems and improve their user-friendliness Policy 5-3-5: Provide information to facilitate effective customs administration Results of Evaluation of Policy Goal 5-3 of Policy Goal A: Considerable progress toward accomplishment Measure "Policy 5-3-3: Improve the user friendliness of customs procedures" was rated as "b: No major progress", but this is due to the fact that some main measurement indexes were rated " in "user satisfaction in import and export customs clearance". Yet, as stated in the reasons for the evaluation of the measure "Policy 5-3-3", the customs must respond strictly to users in order to control smuggling control of illegal drugs and secure fair and appropriate taxation. From the viewpoint of "user satisfaction" there are aspects that do not always get a good evaluation. Furthermore, all the other main measurement indexes have a level of rated ", and since other highly important policies were rated "s: Goal achieved" or "a: Considerable progress toward ", it was rated as "A: Considerable progress toward accomplishment.

10 Measures Policy 5-3-1: Ensure proper imposition and collection of customs duties, etc. Policy A-1: Operating status of the advance ruling system (proportion of responses provided within a specified period) (Unit: %, days) FY FY2012 FY2013 FY2014 FY2015 FY2016 Written response (%) Average handling time (days) Target Target (quantitative ) Target Verbal response (Note) Each answer ratio is the ratio of when the number of days required for processing from the reception to the answer (processing days) is within a certain period (30 days for replies in writing (except in cases where an answer cannot be given within 30 days due to factors beyond the control of Japan Customs, such as documents necessary for replies getting delayed, etc.), or the same day for verbal responses (except in cases when an answer cannot be given on the same day due to factors beyond the control of Japan Customs, such as the inquirer not answering telephone calls from Japan Customs for an answer or question)), out of the advance rulings related to each category. Average processing days is the average of processing days for reply by writing. There is a system, the advance ruling system, that allows importers, etc. to submit an inquiry to and receive a reply from Japan Customs before importing a cargo, concerning the tariff schedule category etc. applicable to the cargo that they intend to import. With the aim of further promoting the utilization of the advance ruling system by importers, etc. and maintaining a high-level operation by Japan Customs, high targets were set. ( the level of rating) The MOF secured uniform interpretation of difficult cases from each customs office and appropriately implemented progress management to improve efficiency of the operation of the advance ruling system, and also worked to speed up responses. As a result of these efforts, the MOF achieved the target with respect to the percentage of responses that were answered within 30 days in writing, and made quick responses with average processing in just 13.0 days, achieving that target as well, so the

11 level of of these items was rated as "". On the other hand, regarding the percentage of verbal responses given on the same day, there were inquiries requiring careful consideration in the response, falling short of the target value, so the level was set to " ", but the difference from the target value was small. Measures [Key indicator]policy B-1: Ensuring appropriate import (tax payment) declarations [New] Goals The MOF will ensure that import (tax payment) declarations are appropriate, to ensure that the correct customs duties, etc. are imposed and collected. Japan Customs examined and confirmed whether the classification of goods declared as imports (tax payment),taxable value and origin, were appropriate, and inspected and analyzed cargo when there were doubts. As a result, when a mistaken declaration was found, they urged the importer to correct their declaration. As main examples, (1) Because the material of the cargo that is the basis of the classification decision was unknown when examining the documents submitted at the time of import declaration, when the cargo was checked, It was found out that the item classification of goods differed from the appropriate item classification. For that reason, Japan Customs urged them to revise the declaration and also file correction declarations for similar (qualitative ) import declarations in the past ⑵ When cargo was checked and analysis was conducted in the examination of the documents submitted at the time of import declaration, the ingredients described in the documents were different from the actual ingredients. For that reason, Japan Customs urged them to change the item classification to the appropriate item, correct the declaration, and also file correction declarations for similar import declarations in the past. Also, in addition to periodic entry surveys for customs brokers, Japan Customs advised the management of customs brokers to investigate the causes according to the occurrence of declaration errors and consider recurrence prevention measures, and also gave advice on the improvement of the compliance system, as part of efforts to properly instruct and supervise customs brokers. This target has been set because ensuring appropriate import (tax payment) declarations via such activities as checks of the details declared at the time of the declaration and/or after an import permit has been granted, and guidance/supervision of customs brokers and registered customs specialists is vital to ensure that the correct customs duties, etc. are imposed and collected. ( the level of rating)

12 Since it was possible to properly confirm the appropriateness of the declaration contents at the time of declaration and after import permission, and to conduct guidance and supervision appropriately for customs brokers and registered customs specialists, the degree of was evaluated as. of Measures a: Considerable progress toward accomplishment Regarding the measurement index "Operating status of the advance ruling system", although the percentage of answers made within 30 days and the number of days of average processing in the written response achieved the target, the proportion of oral responses responding on the same day was slightly lower than the target. As for securing adequate importation (tax payment) declaration as a main measurement index, the MOF strove to confirm the appropriateness of the declaration contents at the time of declaration and after import permission, as well as conduct guidance and supervision of customs brokers / registered customs specialists. As described above, the measurement indicator is " ", so this measure has been rated as "a: Considerable progress toward accomplishment."

13 Measures Policy 5-3-2: Prevent smuggling of socially undesirable items Policy A-1: Proportion of the total volume of illegal drugs seized at the border (Unit: %) FY FY2012 (FY2008-FY2 012 average) FY203 (FY2009-FY 2013 average) FY2014 (FY201-FY2 014 average) FY2015 (FY2011-FY 2015 average) FY2016 (FY2012-FY 2016 average) Illegal drugs Of which, stimulants Target Increase Increase Increase Increase Increase N.A. Target Increase Increase Increase Increase Increase N.A. (Note 1) Proportion of the total volume of all domestic seizures in which Japan Customs are involved; These are mean values for the last 5 years, including the year in question. (Notes 2 and 3) (Note 2) The proportion of all illegal drugs (stimulants, cannabis, opium, and narcotics (heroin and cocaine)) seized within Japan (based on statistics from the Ministry of Health, Labor and Welfare) within the last five years (quantitative ) (including the year in question) that were seized by Japan Customs (quantity seized as a result of detection by Japan Customs itself or by the police or other agencies with the involvement of Japan Customs). (Note 3) The average for the last five years is used because there are substantial fluctuations due to external factors, such as performance by relevant agencies. It is difficult to set a specific numerical target, but strict enforcement at the border is required on anti-social and other items whose import and export is prohibited for the purpose of maintaining order in international trade. Therefore, the target was set as "increase." ( the level of rating) The s for total seizures within Japan in 2016 are to be published in October or thereabouts, so once these are available, the MOF will calculate the mean value for the period from FY2012 to FY2016 and publish the value in the FY2017 Performance Evaluation Report. Policy A-2: Proportion of inspections based on pre-selection (Unit: %) FY FY2012 FY2013 FY2014 FY2015 FY2016 Target Increase Increase Increase Increase

14 Japan Customs conducts targeted enforcement in the inspection of maritime cargoes arriving Japan, selecting the cargo to be inspected before an import declaration is received (pre-selection). The MOF intends to refine the information used in pre-selection and make more effective use of it, so the target was set as "Increase." ( the level of rating) In FY2016, inspections by preliminary selection have increased significantly from the previous year, but the inspection of offshore cargo increased even further, so the actual value of the percentage of inspection by preliminary selection fell below the target value. However, since the difference from the target value was small, the level of was set to " ". (qualitative ) [Key indicator]policy B-1: Rigorous anti-smuggling activities at the border Target In order to prevent smuggling of anti-social items, the MOF will implement strict border controls. In order to strengthen the border control measures towards the 2020 Tokyo Olympic and Paralympic Games, the MOF is preparing for inspection equipment such as X-ray inspection equipment, as well as illegal drugs and explosives control detection equipment, and actively utilizing it. In order to prevent smuggling of prohibited goods at the border, it is necessary to actively collaborate with relevant agencies in and outside Japan. In 2016, joint training drills with relevant agencies were carried out 324 times, and collaboration with domestic agencies was strengthened in such manners as actively exchanging information and conducting investigations when smuggling cases were detected. Furthermore, efforts have actively been made for gathering information necessary for the proper application of Customs law from overseas, including newly signing a Customs Mutual Assistance Agreement (CMAA) with Norway With regard to aircraft passengers, the MOF is proceeding with electronic acquisition of Passenger Name Records (PNR), acquiring electronic PNR from nearly all airlines, then analyzing and utilizing this information, to promote information collection and utilization, as well as effective and efficient enforcement. As a result of border enforcement through effective use of controls and inspection equipment, the amount all illegal drugs seized in the year ended March 31, 2016 exceeded the previous year. Conducting a strict enforcement through effective utilization of enforcement/inspection devices, collaboration with relevant agencies, and collection and utilization of valid information is the basis of the measures to be taken by Japan Customs that contribute to prevent smuggling of prohibited goods, and it is necessary to comprehensively take into account these activities in evaluating the. Therefore, to carry out rigorous anti-smuggling activities at the border is set as the target.

15 ( the level of rating) As stated above, due to strict enforcement by effective use of control and inspection equipment, collaboration with related organizations, and collection and utilization of effective information, the MOF has rated the level of as "". of Measures a: Considerable progress toward accomplishment Regarding the strict implementation of border enforcement against smuggling offenders, the MOF strives to effectively and efficiently control borders using preliminary information such as control and inspection instruments and PNR, while also actively promoting information exchange through actively seeking cooperation with domestic and overseas affiliated organizations by conducting joint control and joint investigation of criminal cases. In the meantime, the proportion of inspections based on pre-selection has slightly failed to achieve the target. The percentage of control seizure volume of illegal drugs in FY2016 has not yet been confirmed, but the seizure of illegal drugs in FY2016 exceeded the previous year. As described above, the main measurement indicator is for confirmed indexes and other measurement indexes, this measure has been rated as a: Considerable progress toward accomplishment.

16 Measures Policy 5-3-3: Improve the user-friendliness of customs procedures Policy A-1: Usage of the AEO system by business operators (number of new AEO approvals) (Unit: operators) FY FY2012 FY2013 FY2014 FY2015 FY2016 Target The AEO system streamlines and expedites cargo procedures for business operators that have put in place compliance systems including cargo security management. This is an indicator aimed at achieving compatibility between improved security and facilitation throughout international logistics by maintaining and increasing the reliability of the system, while seeking to popularize it, and the target has been set with reference to actual performance in recent years. (quantitative ) ( the level of rating) As a whole, the MOF made efforts to increase the number of AEO operators. In particular, in advance of implementation of the "liberalization of import and export declaration offices", counseling on how to acquire AEO certification from customs brokers increased, and efforts were made to provide guidance and advice according to the actual circumstances of business operators. As a result of this, the number of newly approved AEO business operators, especially AEO customs brokers, increased, and the actual number exceeded the target value, so the level of was rated " ". (Reference) The number of business operators using the AEO system stood at 609 (of which, 240 were exporters (accounting for 57.2% of the total value of trade), 91 were importers (13.4% of the value of trade), 127 were warehouse owners, 144 were customs brokers (accounting for 15.5% of all operators and 52.9% of all import/export declarations), and 7 were transport operators) as of the end of FY2016. [Key indicator]policy A-2: satisfaction of users in the customs clearance of imports and exports (top 3 grades and top 4 grades) (Unit: %) FY FY2012 FY2013 FY2014 FY2015 FY2016 Importers and exporters (top 3 grades) Target Importers and exporters (top 4 grades) Target Maintain Maintain Maintain

17 Customs brokers (top 3 grades) Target Customs brokers (top 4 grades) Target Maintain Maintain Maintain (Note) A questionnaire-based survey was conducted among importers and exporters and customs brokers, in which they were asked to rate import-export and customs clearance procedures, etc. on the basis of a seven-grade evaluation scale of Very good, Good, Quite good, Average, Quite poor, Poor, and Very poor. (Reference) While aiming to improve convenience for users, it is still necessary for Japan Customs to remain strict with users, to ensure that border enforcement is carried out against smuggling and that taxes are collected properly.therefore, to maintain this balance, given that Japan Customs will not necessarily always receive a positive rating for user satisfaction, the MOF has decided to evaluate performance on the basis of the top three and top four grades. The purpose of this indicator is to improve import-export and customs clearance systems in order to make them more convenient for users, as well as ensuring that customs clearance procedures are run properly. In light of the fact that performance in regard to the top four grades has been above 95% in recent years, target values for the of the top three grades were set to exceed s in recent years. ( the level of rating) Although the actual value of the top three grades concerning importers and exporters exceeded the actual value of the previous year, it fell short of the target value, so it was set as " ", but since the actual values at the top four grades exceeded the target values, the level of was set to " ". Although the actual s of the top three grades of the customs brokers exceeded the actual s of the previous year, they were lower than the target value, so the MOF set them to " ". And while the actual values of the top four grades were lower than the target values, the difference from the value (previous year's actual value) was slight, and it was still at a high level of 95% or more, so the MOF set the level of " ". of Measures b: No major progress Regarding the main measurement index "user satisfaction in import and export customs clearance", as stated in the measurement index column "(reference)", for the purpose of securing illegal drug smuggling and fair and appropriate taxation customs must handle users strictly. So, from the viewpoint of "user satisfaction" it is not always possible to obtain good evaluation. In terms of exporters / importers and customs brokers (top three grades), while it fell below the target value, it reached a high level for the exporters / importers (the top four grades). However, because there are that exceeded the previous year's results but did not reach the target value, and the level was " ", the MOF decided to rate it as "b: No major progress.

18 Measures Policy 5-3-4: Enhance the functions of customs procedure systems and improve their user- friendliness [Key indicator]policy A-1: Operational status of the NACCS (system availability) (Unit: %) FY FY2012 FY2013 FY2014 FY2015 FY2016 Target (quantitative ) NACCS is Japan's core system for international logistics, so the operational status of NACCS has a major impact on international logistics involving Japan. As the total length of time for which the system can be out of operation (due to system failure) without impeding smooth international logistics is believed to be around one hour over the course of a year, the target for annual system availability has been set at 99.99%. If a system failure equivalent to 0.01% of the total annual operating time occurs, the system will be down for just under an hour (24 hours (converted into minutes) 365 days 0.01% = minutes). ( the level of rating) In order to ensure prompt recovery in the event of a system failure, the MOF carried out failure response training, checked troubleshooting manuals, and worked to ensure stable operation of the system. As a result, the system utilization rate set as a performance indicator was 99.99%, and the level was set to "", because the actual value reached the target value. of Measures s: Goal achieved As described above, the measurement indicator is, so this measure has been rated as s: Goal achieved.

19 Measures Policy 5-3-5: Enhance the provision of information concerning customs administration Policy5-3-5-A-1: Number of visitors accessing the Japan Customs website (Unit: people) FY FY2011 FY2012 FY2013 FY2014 FY2015 Target 1,450,000 Increase 2,500,000 2,900,000 3,000,000 2,480,760 2,697,892 2,897,470 2,937,334 3,559,752 This indicator has been set because although the MOF actively strives to disseminate information about Japan Customs initiatives in a prompt and user-friendly manner, it is necessary to measure whether citizens are actually aware of this information. The target has been set with the goal of improving on recent performance. ( the level of rating) As the target was exceeded, the level of was rated "." (quantitative ) Policy A-2: satisfaction following lectures and tours of customs facilities (the top three grades) (Unit: %) FY FY2012 FY2013 FY2014 FY2015 FY2016 Target Maintain Maintain Maintain Maintain Maintain (Note) A questionnaire-based survey was conducted among participants in lectures and tours of customs facilities, in which they were asked to rate their experience on the basis of a seven-grade evaluation scale from "Very good" to "Very poor." This indicator has been set because although the MOF actively strives to explain and promote understanding of Japan Customs initiatives in a user-friendly manner via lectures and tours of customs facilities, it is necessary to measure whether the content of this information is actually helpful to citizens. In light of the fact that recent actual values have exceeded 90%, it was decided to maintain actual values from FY2015. ( the level of rating) As the target was exceeded, the level of was rated "."

20 Policy A-3: Awareness of import-export and customs clearance systems (Unit: %) FY FY2012 FY2013 FY2014 FY2015 FY2016 Advance ruling system System for the extension of delivery deadlines Target Target Target Maintain AEO system (quantitative ) Out-of-hour s customs clearance Target Maintain (Note) A questionnaire-based survey was conducted among importers and exporters, to ascertain whether or not they were aware of various customs clearance systems, such as the advance ruling system and the AEO system. This is an index to measure the effect of information provision of various systems from the viewpoint of efforts to improve user convenience and effective implementation of customs administrations. Regarding recognition of the "AEO system" and "outside office hours customs clearance", in light of the fact that the actual value in recent years is close to 90%, the MOF maintained the actual value from FY2015, and for other, the MOF set a target value that exceeds the actual value in recent years. ( the level of rating) All targets were achieved, so the level of was rated ". for all items [Key indicator]policy A-4: Awareness of anti-smuggling activities (Unit: %) FY FY2012 FY2013 FY2014 FY2015 FY2016 Target

21 (Note) A questionnaire-based survey was conducted among importers and exporters and lecture participants, to ascertain whether or not they were aware of anti-smuggling activities such as the use of drug detection dogs and X-ray inspection devices. The MOF actively strives to disseminate information in a prompt and user-friendly manner concerning Japan Customs border enforcement initiatives targeting illegal drugs and items linked to terrorism, etc. and the importance of such endeavors. This indicator has been set because it is necessary to measure whether members of the public are actually aware of this information. The MOF has set the target of improving on recent performance. ( the level of rating) As the target was exceeded, the level of was rated "." Policy A-5: Operation of the Customs Counselor System (level of user satisfaction with advice from Japan Customs)( Top 3 grades and Top 4 grades) (Unit: %) Top 3 grades Top 4 grades FY FY2012 FY2013 FY2014 FY2015 FY2016 Target Target Maintain Maintain Maintain (Note) A questionnaire-based survey was conducted among importers and exporters, customs brokers, and visitors to (quantitative ) inquiry desks, in which they were asked to rate the advice provided by Japan Customs on the basis of a seven-grade evaluation scale ("Very good," "Good," "Quite good," "Average," "Quite poor," "Poor," and "Very poor"). (Reference) While aiming to improve convenience for users, it is still necessary for Japan Customs to remain strict with users, to ensure that border enforcement is carried out against smuggling and that taxes are collected properly. Therefore, to maintain this balance, given that Japan Customs will not necessarily always receive a positive rating for user satisfaction, the MOF has decided to evaluate performance on the basis of the top three and top four grades. The purpose of this indicator is to provide more efficient administrative services by achieving operational improvements in the Customs Counselor System. Regarding for the top four grades, the MOF has set targets to maintain actual s from FY2015, and for the for the top three grades, it has set targets of improving on recent s. ( the level of rating) Regarding for the top three grades, because they fell short of the target values, the level of has been set to. Regarding for the top four grades, because they exceeded

22 the target values, the level of has been set to. Policy A-6:Number of times the Customs Answer (FAQ) facility is used (Unit: times) FY FY2011 FY2012 FY2013 FY2014 FY2015 Target 128, , , , , , , , , ,793 The Japan Customs website has an FAQ page (Customs Answer) providing information about matters such as customs clearance procedures. It is an indicator to make it easier for users to use, such as in reviewing question and answer contents based on system reform in a timely manner, so the MOF set a target value that exceeds the actual value in recent years. ( the level of rating) As the target was not met, the level of was rated "." of Measures a: Considerable progress toward accomplishment In addition to exceeding the target value for the main measurement index "Awareness of smuggling control enforcement activity", the measurement index "the access situation to the customs website", the measurement indexes "satisfaction level with the lecture and customs visit", "awareness of the import and export customs clearance system"," Operation status of the customs consultant system also achieved the target values for the top four grades. On the other hand, for the top three grades of the measurement index "Instances of custom answer usage" and "Operation status of the customs consultant system were lower than the target value. As described above, the non-primary measurement are or, so this measure has been rated as a: Considerable progress toward accomplishment. Customs and Tariff Bureau (Customs Clearance Division, Planning and Administration Division, Enforcement Division, Post Clearance Audit, Investigation and Departments Intelligence Division, International Negotiation Division, responsible Information Management Office, Customs Administration Research Office), Central Customs Laboratory Timing of policy evaluation June 2017