Joint Statement on Japan Postal Reform Preliminary Draft

News provided by

American Council of Life Insurers

Feb 26, 2010, 05:03 ET

American Chamber of Commerce in Japan

American Council of Life Insurers

Americas Health Insurance Plans

American Insurance Association

Association of Bermuda Insurers and Reinsurers

Canadian Life and Health Insurance Association

Coalition of Service Industries

Comité Européen des Assurances (Association of European Insurers and Reinsurers)

European Business Council in Japan

Foreign Non Life Insurance Association of Japan

Property Casualty Insurance Association of America

U.S. Chamber of Commerce

U.S. - Japan Business Council

WASHINGTON, Feb. 26 /PRNewswire-USNewswire/ -- On February 8, the Government of Japan released a "Postal Reform Preliminary Draft" ("Preliminary Draft") that lays out the government's framework for Japan Post restructuring. According to the government, the contents of the Preliminary Draft constitute the basis for deliberations on a final government legislative draft to be submitted to the Diet in March 2010.

The Preliminary Draft contemplates a number of measures that, if implemented, would be inconsistent with Japan's international obligations and best practices to provide a level playing field between the Japan Post entities and private banks, insurers, and delivery companies and to refrain from special favors that would give Japan Post an unfair competitive advantage. For example, it contemplates:

Implementing special measures such as exemptions from consumption taxes, stamp taxes, etc., to compensate the Japan Post Group for the costs it incurs as a result of universal service obligations imposed by the government.
Raising or eliminating the per-person deposit and coverage limits currently imposed on Japan Post Bank and Japan Post Insurance's businesses.
Permitting the Japan Post entities to enter new business areas, including those where foreign companies are strong.
Providing Japan Post Bank, Japan Post Insurance, and Japan Post Services special legal and regulatory exemptions, including from provisions of the Banking Law, Insurance Business Law, and Road Traffic Law.
Allowing Japan Post to compete on an un-level playing field with foreign express delivery companies.

For years, industry groups have engaged Japan regarding Japan Post reform, repeatedly emphasizing the need to establish a level playing field with the private sector across the broad spectrum of Japan Post's competitive services, including banking, insurance, express delivery, and other services. Industry groups have long expressed the view that there should be no new or modified products or services introduced by Japan Post until a level playing field is established between Japan Post and private companies in accordance with Japan's international obligations.

The organizations listed above – representing a broad and global group of stakeholders – have a large stake in any restructuring of Japan Post. The organizations strongly urge the Government of Japan to use the time remaining before the new postal legislation is finalized as an opportunity to ensure a level playing field. In this effort, we urge the governments involved to commit to a process with Japan that facilitates the adoption of such measures and would bring Japan into full compliance with its national treatment obligations under the General Agreement on Trade in Services (GATS), a cornerstone of multilateral efforts to liberalize international trade in services, as well as adoption of international best practices of open competition to benefit consumers – before existing restrictions on Japan Post are removed or it is allowed to expand its existing operations or enter new lines of business.

SOURCE American Council of Life Insurers