4. This Agreement shall also apply to all investments of investors of either Contracting Party made in the Territory of the other Contracting Party in accordance with the laws and regulations of that other Contracting Party prior to the entry into force of this Agreement.
5. In respect of investments made prior to the date of termination of this Agreement, the provisions of this Agreement shall continue to be effective for a period of 10 years from the date of termination of this Agreement.
6. This Agreement shall not apply to disputes arising out of events which occurred prior to its entry into force.
7. The Annexes to this Agreement shall form an integral part of this Agreement.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement.
DONE, in duplicate at Tokyo, on this first day of February, 2017 in the English language.
FOR THE GOVERNMENT OF JAPAN
ON BEHALF OF JAPAN:
Fumio Kishida
FOR THE GOVERNMENT OF THE STATE OF ISRAEL
ON BEHALF OF THE STATE OF ISRAEL:
Kahlon M.
Attachments
Annex I. Existing non-conforming measures referred to in subparagraph 1(a) of article 8
1. The Schedule of a Contracting Party sets out, pursuant to subparagraph 1(a) of Article 8, its existing measures that are not subject to some or all of the obligations imposed by:
(a) Article 2;
(b) Article 3;
(c) Article 6; or
(d) Article 7.
2. Each Schedule entry sets out the following elements:
(a) "Sector" refers to the sector for which the entry is made;
(b) "Sub-Sector", where referenced, refers to the specific sub-sector for which the entry is made;
(c) "Industry Classification", where referenced, and only for transparency purposes, refers to the activity covered by the non-conforming measure, according to domestic or international industry classification codes;
(d) "Obligations Concerned" specifies the obligations referred to in paragraph 1 that, pursuant to subparagraph 1(a) of Article 8, do not apply to the listed measure(s);
(e) "Measures" identifies the laws, regulations or other measures for which the entry is made. A measure cited in the "Measures" element:
(i) Means the measure as amended, continued or renewed as of the date of entry into force of this Agreement, and
(ii) Includes any subordinate measure adopted or maintained under the authority of and consistent with the measure; and (f) "Description" sets out the non-conforming measure or provides a general non-binding description of the measure for which the entry is made.
3. In the interpretation of an entry, all elements of the entry shall be considered. An entry shall be interpreted in the light of the relevant provisions of this Agreement against which the entry is taken, and the "Measures" element shall prevail over all the other elements.
4. For the purposes of this Annex, the term "JSIC" means Japan Standard Industrial Classification set out by the Ministry of Internal Affairs and Communications, and revised on October 30, 2013.
Schedule of the State of Israel
1.
Sector: Veterinary Medicine Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Measures: Veterinarians Law, 1991, Articles 5 and 17 Description: 1. Nationality or permanent residency of the State of Israel (hereinafter referred to in this Schedule as "Israel") is required for licensure as a veterinarian. 2. Foreign veterinarians, who are not nationals or permanent residents of Israel, shall obtain a permit from the Ministry of Agriculture for advising, teaching and research in veterinary medicine.
2.
Sector: Transportation Sub-Sector: Motor Vehicle Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Senior Management and Board of Directors (Article 7) Measures: Supervision Order on Commodities and Services (Imports of Motor Vehicle and Services to Motor Vehicle), 1978, Article 3 Law of Licensing of Services and Professions in the Motor Vehicle Sector, 2016, Articles 2, 20, 41, 42, 44, 68, 97, 98, 136, 143 and 149 Companies Law, 1999, Article 1 Description: 1. License is required in order to commercially import motor vehicles. The director general and at least one interested party as defined in Article 1 of the Companies Law, 1999, of a corporation applying for licensure, shall be nationals or permanent residents of Israel. 2. License is required in order to manufacture and market motor vehicles or to trade in motor vehicles and the license holder must be: (a) a national or permanent resident of Israel who is a sole proprietor; or (b) a registered corporation in Israel whose director general and at least one interested party as defined in Article 1 of the Companies Law, 1999, are nationals or permanent residents of Israel.License is required in order to brokerage in motor vehicle private import and the license holder must be: (a) a national or permanent resident of Israel who is a sole proprietor; or (b) an employee of a registered corporation in Israel whose director general and at least one interested party as defined in Article 1 of the Companies Law, 1999, are nationals or permanent residents of Israel. 4. License is required in order to manufacture traffic products, as defined in Article 2 of the Law of Licensing of Services and Professions in the Motor Vehicle Sector, 2016, and the license holder must be: (a) a sole proprietor; or (b) a registered corporation in Israel the director general and at least one interested party as defined in Article 1 of the Companies Law, 1999, of which are nationals or permanent residents of Israel. 5. Israel may determine that certain traffic products, as defined in Article 97 of the Law of Licensing of Services and Professions in the Motor Vehicle Sector, 2016, are made for marketing in the Israeli market alone. 6. Nationality or permanent residency of Israel is required for licensure as a motor vehicle appraiser. 7. Nationality or permanent residency of Israel is required for licensure as a professional manager of a motor vehicle service center (garage) and at least one licensed professional manager is required to be available on the premises in order to operate a motor vehicle garage. Note 1: "Traffic Product" as defined in Article 2 of the Law of Licensing of Services and Professions in the Motor Vehicle Sector, 2016, is an accessory, a part, system of parts, an appliance with the exception of an appliance that is a work tool used by garages or manufacturers only, a device or substance that is a liquid, solid or gas, that is used or designed to be used for assembly, maintenance or the proper operation of a motor vehicle or for ensuring the safety of a motor vehicle or for ensuring user safety or for his convenience. Note 2: For the purposes of this Schedule, it is understood that director general is an equivalent position to chief executive officer. Note 3: For the purposes of this Schedule, "interested party", as defined in Article 1 of the Companies Law, 1999, is: (a) a substantial shareholder; (b) a person with the power to appoint one or more members of the board of directors or the director general; or (c) a person who serves in the enterprise as a member of the board of directors or as a director general.
3.
Sector: Transportation Sub-Sector: Driving Licenses and Road Transport Services, including Passenger Transportation Services and Motor Vehicle Mechanics Safety Officer Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Measures: Road Transport Regulations, 1961, Articles 175-190, 213-213H, 216, 221, 221A, 247, 251, 531, 567, 567B and 582 Road Transport Ordinance, Article 14 Supervision Order on Commodities and Services (Purchase, Installation and Maintenance of Taxi Meters), 1984 Companies Law, 1999, Article 1 Description: 1. Nationality or permanent residency of Israel is required to obtain certain types of driving licenses, in accordance with Articles 175-185, 189 and 190 of Road Transport Regulations, 1961. 2. Nationality or permanent residency of Israel is required for licensure as a driving instructor. 3. Nationality or permanent residency of Israel is required for licensure as a taxi operator. Nationality or permanent residency of Israel is required for an individual working in installation or maintenance of taxi meters and an enterprise operating in installation or maintenance of taxi meters must have at least one interested party, as defined in Article 1 of the Companies Law, 1999, who is a national or permanent resident of Israel. 5. Nationality or permanent residency of Israel is required for authorization to work as a motor vehicle mechanics safety officer.
4.
Sector: Transportation Sub-Sector: Road Haulage Services Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Measures: Freight Services Regulations, 2001, Articles 2 and 24 Law of Transport Services, 1997 Description: 1. Individuals applying for a haulage license and the operator of the haulage shall be nationals or permanent residents of Israel. 2. The professional manager of haulage shall be a national or permanent resident of Israel.
5.
Sector: Transportation Sub-Sector: Maritime Transport Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Measures: Shipping Law (Sea Vessel), 1960 Ports Ordinance, 1971 Ports Regulations (Safety of Navigation), 1982 Shipping Law (Seafarers), 1973 Maritime Regulations (Seafarers), 2002 Maritime Regulations (Seafarers) (Staffing of Vessels and Tugboats with Israeli Seafarers), 2016 Shipping and Ports Authority Law, 2004 Shipping Law (Foreign Sea Vessel under Israeli Control), 2005 Description: 1. In order to register in the Israeli vessel registry and carry an Israeli flag, a majority ownership of a vessel by a national of Israel or an enterprise incorporated in Israel or by Israel is required ("Israeli Vessel"). 2. A foreign vessel that is controlled by a national or permanent resident of Israel or by an enterprise incorporated in Israel shall be registered in Israel in accordance with Shipping Law (Foreign Sea Vessel under Israeli Control), 2005 ("Foreign Vessel"). 3. Israeli seafarers are required in order to operate an Israeli vessel or a foreign vessel referred to in paragraph 2. 4. Seafarer certificate requires nationality of Israel. Providing a certificate to non-residents is subject to prior approval by the Administrator of Shipping and Ports.
6.
Sector: Transportation Sub-Sector: Air Transport and Air Cabotage Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Measures: Air Navigation Law, 2011 Aviation Services Licensing Law, 1963 Airports Authority Law, 1977 Air Navigation Regulations (Operating of Aircraft and Rules of Flight), 1981 Description: 1. A license to operate an Israeliairline or aircraft is given to: (a) a permanent resident of Israel with no main business operations outside of Israel; (b) a national of Israel with a main business operations in Israel; or (c) an enterprise incorporated in Israel which is directly controlled by a national or permanent resident of Israel orby an enterprise whose control and ownership is in accordance with an international aviation treaty that Israel is a party to. 2. Air cabotage is operated by Israeli aircrafts only.
7.
Sector: Electronic Signature Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Measures: Electronic Signature Law, 2001, Articles 11 and 22 Description: 1. Registration as a "foreign issuer of electronic certificate" may be subject to additional conditions as set out in the Electronic Signature Law, 2001. 2. Registration as an issuer of electronic certificate other than a "foreign issuer of electronic certificate" requires to be a national or permanent resident of Israel or an enterprise incorporated in Israel and having its main operations and center of business in Israel.
8.
Sector: Tourism Sub-Sector: Industry Classification: Obligations Prohibition of Performance Concerned: Requirements (Article 6) Measures: Tourism Services Regulation (Tour Guides), 1967, Article 2 Tourism Services Law, 1976, Article 3 Description: Nationality or permanent residency of Israel is required for licensure as a tour guide.
9.
Sector: Agriculture Sub-Sector: Fishery Industry Classification: Obligations National Treatment (Article 2) Concerned: Measures: Fishery Regulation, 1937, Articles 2-3 Description: Issuance, continuation and amendment of fishery license require authorization by the Ministry of Agriculture. Israel reserves the right not to issue a fishery license for foreign nationals or enterprises under Fishery Regulation, 1937.
10.
Sector: Communications Sub-Sector: Domestic Fixed Line Services, International Communications Services and Radio and Mobile Telephone Services Industry Classification: Obligations National Treatment (Article 2) Concerned: Senior Management and Board of Directors (Article 7) Measures: Communications Regulations (Telecommunications and Broadcasting) (Procedures and Conditions for Obtaining a General License for the Provision of Domestic Fixed-Line Telecommunication Services), 2000, Article 11 Communication Law (Telecommunications and Broadcasting), 1982, Articles 4-4H and 6-7 Communications Regulations (Telecommunications and Broadcasting) (Procedures and Conditions for Obtaining a Unified General License), 2010, Article 10 Description: 1. In an enterprise supplying domestic fixed line services: (a) foreign holding is limited to 80 percent; (b) 75 percent of the members of the board of directors shall be nationals of Israel who are residents of Israel; and (c) the director general shall be a national of Israel who is a resident of Israel. 2. In an enterprise supplying international communications services: (a) foreign holding is limited to 74 percent; (b) majority of the members of the board of directors shall be nationals of Israel who are residents of Israel; (c) the director general shall be a national of Israel who is a resident of Israel; and (d) the enterprise shall be incorporated in Israel and have its main operations and center of business in Israel. 3. In an enterprise supplying radio and mobile telephone services: (a) foreign holding is limited to 80 percent; (b) majority of the members of the board of directors shall be nationals of Israel who are residents of Israel; and (c) the enterprise shall be incorporated in Israel and have its main operations and center of business in Israel.
11.
Sector: Communications Sub-Sector: Broadcasting Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Senior Management and Board of Directors (Article 7) Measures: Broadcasting Authority Law, 1965, Articles 44C-44F Communication Law (Telecommunications and Broadcasting), 1982, Articles 4-4H and 6-7 Communications Regulations (Terms and Conditions for Satellite Broadcasting License), 1998, Articles 13, 20 and 21 Second Authority for Television and Radio Law, 1990, Articles 41 and 59 Public Broadcasting Law, 2014, Article 64 Description: 1. In an enterprise that holds a license for cable broadcasting at least 26 percent of the means of control in the enterprise shall be held by nationals of Israel who are residents of Israel. The license shall not be granted to an enterprise in which a foreign government holds shares, but the Minister of Communications may authorize an indirect holding in the licensee of up to 10 percent by such an enterprise. 2. In an enterprise that holds a license for satellite broadcasting: (a) at least 26 percent of the means of control in the enterprise shall be held by nationals of Israel who are residents of Israel; (b) its main operations and center of business are located in Israel; (c) a majority of its members of the board of directors and any persons in equivalent positions shall be nationals of Israel who are residents of Israel; and (d) its director general or any persons in equivalent management position shall be a national of Israel who is a resident of Israel. 3. At least 51 percent of the means of control in a holder of a concession for operating commercial television broadcasting or regional radio broadcasting must be held by nationals of Israel who are residents of Israel. 4. In television broadcasting, including satellite and cable broadcasting, each broadcasting enterprise operating under license or concession is committed to spend a certain amount of its annual budget for local production, as defined in the legislation listed in the "Measures" element and to broadcast it.
12.
Sector: Legal Services Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Measures: Bar Association Law, 1961, Articles 20, 42 and 98-98M Description: 1. A branch of a foreign law firm may be established in Israel only if it employs either at least one Israeli licensed lawyer or one foreign lawyer, as defined in the Bar Association Law, 1961, and subject to the conditions set forth therein. 2. Nationality, permanent residency or temporary residency of Israel is required for licensure as an Israeli lawyer.
13.
Sector: Investigation Services Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Measures: Private Investigators and Security Services Law, 1972, Articles 4, 9-11 and 13 Description: 1. Nationality or permanent residency of Israel is required for licensure as a private investigator. 2. Ownership of an investigation enterprise may be held only by a licensed private investigator.
14.
Sector: Financial Services Sub-Sector: Tax Consultant, Customs Agent, Insurance, Non-Banking Credit Institutions, Acceptance of Deposits and Other Repayable Funds from the Public, Payment Services Industry Classification: Obligations National Treatment (Article 2) Concerned: Senior Management and Board of Directors (Article 7) Measures: Customs Agents Law, 1964, Article 4 Supervision of Financial Services Law (Consultancy, Marketing and Clearing for Pension), 2005, Articles 5 and 6 Regulation of Representation by Tax Consultants Law, 2005, Article 10 Supervision of Financial Services Law (Regulated Financial Services), 2016 Description: 1. Nationality or permanent residency of Israel is required for licensure as a tax consultant. 2. Nationality or permanent residency of Israel is required for licensure as a customs agent. 3. Nationality or permanent residency of Israel is required for licensure as a pension insurance consultant or agent. 4. Individual suppliers and individual licensees of financial services in the following sub-sectors shall be nationals or permanent residents of Israel and an enterprise which is a licensee of financial services in the following sub-sectors shall appoint at least one position holder who is a national or permanent resident of Israel: (a) non-banking credit services; (b) acceptance of deposits and other repayable funds from the public including keeping and management of financial assets; and (c) payment services including remittance and currency conversion. Note: For the purposes of this Schedule, except for entry No. 16, "position holder" is the director general, chief business officer, deputy director general, vice director general or any persons in equivalent positions, member of the board of directors or other officers who directly report to the director general, as defined in Article 1 of the Companies Law, 1999.
15.
Sector: Financial Services Sub-Sector: Settlement and Clearing Services Industry Classification: Obligations National Treatment (Article 2) Concerned: Measures: Securities Law, 1968 By-Laws of the Tel Aviv Stock Exchange Clearing House Ltd., Part One, Chapter 2, Article 2 Description: 1. Settlement and clearing services for the Tel Aviv Stock Exchange (TASE) must be supplied through an enterprise which is a member of TASE and incorporated in Israel. 2. Foreign TASE membership (remote membership) is possible when meeting relevant regulatory requirements. 3. Remote members of the TASE cannot supply settlement and clearing services for the TASE.
16.
Sector: Postal, Courier and Financial Services Sub-Sector: Industry Classification: Obligations Prohibition of Performance Concerned: Requirements (Article 6) Senior Management and Board of Directors (Article 7) Measures: Post Law, 1986, Articles 1-1H, 5A-5C and 88-88U Israel Postal Company Ltd. General License, 2015, Article 42 and Appendix c Description: Majority of the members of the board of directors and position holders as defined in Appendix c to Israel Postal Company Ltd. General License, 2015, in a licensee operating postal, courier and financial services under the Israel Postal Company Ltd. General License, 2015, shall be nationals of Israel who are residents of Israel and hold a security clearance.
17.
Sector: Land Survey Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Measures: Land Surveyors Regulations, 1982, Article 3 Survey Ordinance, 1929, Article 3 Description: Israeli nationality is required forlicensure as a land surveyor.
18.
Sector: All Sub-Sector: Industry Classification: Obligations Senior Management and Board of Concerned: Directors (Article 7) Measures: Companies Law, 1999, Articles 239 and 240 Description: A public enterprise or an enterprise that has issued debt securities to the public (hereinafter referred to as "debenture enterprise") shall appoint on its board of directors at least two outside directors who are nationals or permanent residents of Israel. However, a public enterprise or a debenture enterprise whose shares or debt, or part of them, were offered to the public outside Israel, or that is registered in a stock exchange outside Israel, may appoint outside directors who are not nationals or permanent residents of Israel.
19.
Sector: All Sub-Sector: Industry Classification: Obligations Prohibition of Performance Concerned: Requirements (Article 6) Measures: Bankruptcy Ordinance, 1980 Companies Law, 1999, Articles 350- 351 Companies Ordinance, 1983 Description: 1. When an investor or an investment is declared bankrupt or insolvent and subject to debt restructuring proceedings, Israel may demand a transfer of technology, a production process or other proprietary knowledge to the extent necessary for the proceedings. 2. When an investor or an investment is party to a license contract, as referred to in subparagraph 1(h) of Article 6 of this Agreement, with an enterprise or individual which is declared bankrupt or insolvent and subject to debt restructuring proceedings, Israel may require the continuation of a duration of the license contract and the cancelation or rejection thereof.
20.
Sector: All Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Measures: Law for Hazardous Substances, 1993 Law for the Prevention of Asbestos Hazards and Damaging Dust, 2011 Law of Environmental Treatment of Electrical and Electronic Equipment and Batteries, 2012 Water Law, 1959 Hazardous Substances Regulations (Import and Export of Hazardous Substances), 1994 Law for the Regulation of the Practice of Pest Control, 2016 Law for the Treatment of Packing Material, 2011 Description: 1. Nationality or permanent residency of Israel is required for hazardous substances handler permit. 2. A refuse disposal enterprise for environmental treatment of electrical and electronic equipment and batteries shall employ only nationals or permanent residents of Israel. 3. Nationality or permanent residency of Israel is required for licensure as a pest exterminator. 4. Nationality or permanent residency of Israel is required to obtain a permit for collection and treatment of asbestos. 5. At least one employee of an asbestos contractor, that performs dismantling and removal of asbestos, shall be a national or permanent resident of Israel. 6. Export of packaging material waste is limited to 20 percent of the recycling objective in accordance with the Law for the Treatment of Packing Material, 2011. 7. Obtainment of permit for export of hazardous substances requires authorization by the Ministry of Environmental Protection
21.
Sector: Employment Contractors Services Sub-Sector: Building Cleaning Services Industry Classification: Obligations Senior Management and Board of Concerned: Directors (Article 7) Measures: Law of Employment of Workers by Private Employment Contractors, 1996 Companies Law, 1999, Article 1 Description: A private employment contractor enterprise for employment of workers in the building cleaning services shall appoint at least one position holder who is a national or permanent resident of Israel.
Schedule of Japan
1.
Sector: Agriculture, Forestry and Fisheries, and Related Services (except Fisheries within the Territorial Sea, Internal Waters, Exclusive Economic Zone and Continental Shelf provided for in the entry No. 8 in the Schedule of Japan in Annex II) Sub-Sector: Industry JSIC 01 Agriculture Classification: JSIC 02 Forestry JSIC 03 Fisheries, except aquaculture JSIC 04 Aquaculture JSIC 6324 Agricultural cooperatives JSIC 6325 Fishery and fishery processing cooperatives JSIC 871 Agriculture, forestry and fisheries cooperative associations, n.e.c. Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3. Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in agriculture, forestry and fisheries, and related services (except fisheries within the territorial sea, internal waters, exclusive economic zone and continental shelf provided for in the entry No. 8 in the Schedule of Japan in Annex II) in Japan.
2.
Sector: Finance Sub-Sector: Banking Industry JSIC 622 Banks, except central Classification: bank JSIC 631 Financial institutions for small-businesses Obligations National Treatment (Article 2) Concerned: Measures: Deposit Insurance Law (Law No. 34 of 1971), Article 2 Description: The deposit insurance system only covers financial institutions which have their head offices within the jurisdiction of Japan. The deposit insurance system does not cover deposits taken by branches of foreign banks.
3.
Sector: Heat Supply Sub-Sector: Industry JSIC 3511 Heat supply Classification: Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in the heat supply industry in Japan.
4.
Sector: Information and Communications Sub-Sector: Telecommunications Industry JSIC 3700 Head offices primarily Classification: engaged in managerial operations JSIC 3711 Regional telecommunications, except wired broadcast telephones JSIC 3731 Services incidental to telecommunications Obligations National Treatment (Article 2) Concerned: Senior Management and Board of Directors (Article 7) Measures: Law concerning Nippon Telegraph and Telephone Corporation, etc. (Law No. 85 of 1984), Articles 6 and 10 Description: 1. Nippon Telegraph and Telephone Corporation may not enter the name and address in its register of shareholders if the aggregate of the ratio of the voting rights directly and/or indirectly held by the persons set forth in subparagraphs (a) through (c) reaches or exceeds one-third: (a) a natural person who does not have Japanese nationality; (b) a foreign government or its representative; and (c) a foreign legal person or a foreign entity. 2. Any natural person who does not have Japanese nationality may not assume the office of member of the board of directors or auditor of Nippon Telegraph and Telephone Corporation, Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West Corporation.
5.
Sector: Information and Communications Sub-Sector: Telecommunications and Internet Based Services Industry JSIC 3711 Regional Classification: telecommunications, except wired broadcast telephones JSIC 3712 Long-distance telecommunications JSIC 3719 Miscellaneous fixed telecommunications JSIC 3721 Mobile telecommunications JSIC 401 Services incidental to Internet Note: The activities covered by this entry under JSIC 3711, 3712, 3719, 3721 or 401 are limited to the activities which are subject to the registration obligation under Article 9 of the Telecommunications Business Law (Law No. 86 of 1984). Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in telecommunications business and internet based services in Japan.
6.
Sector: Manufacturing Sub-Sector: Drugs and Medicines Manufacturing Industry JSIC 1653 Biological preparations Classification: Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in biological preparations manufacturing industry in Japan. For greater certainty, "biological preparations manufacturing industry" deals with economic activities in an establishment which mainly produces vaccine, serum, toxoid, antitoxin or some preparations similar to the aforementioned products, or blood products.
7.
Sector: Manufacturing Sub-Sector: Leather and Leather Products Manufacturing Industry JSIC 1189 Textile apparel and Classification: accessories, n.e.c. JSIC 1694 Gelatine and adhesives JSIC 192 Rubber and plastic footwear and its findings JSIC 2011 Leather tanning and finishing JSIC 2021 Mechanical and industrial leather products, except gloves and mittens JSIC 2031 Cut stock and findings for leather footwear JSIC 2041 Leather footwear JSIC 2051 Leather gloves and mittens JSIC 2061 Baggage JSIC 207 Handbags and small cases JSIC 2081 Fur skins JSIC 2099 Miscellaneous tanning leather products JSIC 3253 Sporting and athletic goods Note 1: The activities covered by this entry under JSIC 1189 or 3253 are limited to the activities related to leather and leather products manufacturing. Note 2: The activities covered by this entry under JSIC 1694 are limited to the activities related to animal glue (nikawa) and gelatine manufacturing. Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in leather and leather products manufacturing industry in Japan.
8.
Sector: Matters Related to the Nationality of a Ship Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Senior Management and Board of Directors (Article 7) Measures: Ship Law (Law No. 46 of 1899), Article 1 Description: The Japanese nationality shall be given to a ship whose owner is a Japanese national, or a company established under Japanese laws and regulations, of which all the representatives and not less than two-thirds of the executives administering the affairs are Japanese nationals.
9.
Sector: Mining Sub-Sector: Industry JSIC 05 Mining and quarrying of Classification: stone and gravel Obligations National Treatment (Article 2) Concerned: Measures: Mining Law (Law No. 289 of 1950), Chapters 2 and 3 Description: Only a Japanese national or a Japanese legal person may have mining rights or mining lease rights.
10.
Sector: Oil Industry Sub-Sector: Industry JSIC 053 Crude petroleum and Classification: natural gas production JSIC 1711 Petroleum refining JSIC 1721 Lubricating oils and greases (not made in petroleum refineries) JSIC 1741 Paving materials JSIC 1799 Miscellaneous petroleum and coal products JSIC 4711 Ordinary warehousing, except refrigerated warehousing JSIC 4721 Refrigerated warehousing JSIC 5331 Petroleum JSIC 6051 Gasoline stations JSIC 6052 Fuel stores, except gasoline stations JSIC 9299 Miscellaneous business services, n.e.c. Note 1: The activities covered by this entry under JSIC 1741, 1799, 4711, 4721 or 6052 are limited to those related to oil industry. Note 2: The activities covered by this entry under JSIC 9299 are limited to those related to liquefied petroleum gas industry. Obligations National Treatment (Article 2) Concerned Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in the oil industry in Japan. All organic chemicals such as ethylene, ethylene glycol and polycarbonates are outside the scope of the oil industry. Therefore, the prior notification under the Foreign Exchange and Foreign Trade Law is not required for the investments in the manufacture of these products.
11.
Sector: Security Guard Services Sub-Sector: Industry JSIC 923 Guard services Classification: Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in security guard services in Japan.
12.
Sector: Transport Sub-Sector: Air Transport Industry JSIC 4600 Head offices primarily Classification: engaged in managerial operations JSIC 4611 Air transport Obligations National Treatment (Article 2) Concerned: Most-Favored-Nation Treatment (Article 3) Senior Management and Board of Directors (Article 7) Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Civil Aeronautics Law (Law No. 231 of 1952), Chapters 7 and 8 Description: 1. The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in air transport business in Japan. 2. Permission of the Minister of Land, Infrastructure, Transport and Tourism for conducting air transport business as a Japanese air carrier is not granted to the following natural persons or entities applying for the permission: (a) a natural person who does not have Japanese nationality; (b) a foreign country, or a foreign public entity or its equivalent; (c) a legal person or other entity constituted under the laws of any foreign country; and (d) a legal person represented by the natural persons or entities referred to in subparagraph (a), (b) or (c); a legal person of which one-third or more of the directors are composed of the natural persons or entities referred to in subparagraph (a), (b) or (c); or a legal person of which one-third or more of the voting rights are held by the natural persons or entities referred to in subparagraph (a), (b) or (c). In the event that an air carrier becomes a natural person or an entity referred to in subparagraphs (a) through (d), the permission will lose its effect. The conditions for the permission also apply to companies such as holding companies, which have substantial control over the air carriers. 3. A Japanese air carrier or a company having substantial control over such air carrier, such as a holding company, may reject the request from a natural person or an entity set forth in subparagraphs 2(a) through 2(c), who owns equity investments in such air carrier or company, to enter its name and address in the register of shareholders, in the event that such air carrier or company becomes a legal person referred to in subparagraph 2(d) by accepting such request. 4. Foreign air carriers are required to obtain permission of the Minister of Land, Infrastructure, Transport and Tourism to conduct international air transport business. 5. Permission of the Minister of Land, Infrastructure, Transport and Tourism is required for the use of foreign aircraft for air transportation of passengers or cargoes to and from Japan for remuneration. 6. A foreign aircraft may not be used for a flight between points within Japan.
13.
Sector: Transport Sub-Sector: Air Transport Industry JSIC 4600 Head offices primarily Classification: engaged in managerial operations JSIC 4621 Aircraft service, except air transport Obligations National Treatment (Article 2) Concerned: Senior Management and Board of Directors (Article 7) Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Civil Aeronautics Law (Law No. 231 of 1952), Chapters 7 and 8 Description: 1. The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in aerial work business in Japan. 2. Permission of the Minister of Land, Infrastructure, Transport and Tourism for conducting aerial work business is not granted to the following natural persons or entities applying for the permission: (a) a natural person who does not have Japanese nationality; (b) a foreign country, or a foreign public entity or its equivalent; (c) a legal person or other entity constituted under the laws of any foreign country; and (d) a legal person represented by the natural persons or entities referred to in subparagraph (a), (b) or (c); a legal person of which one-third or more of the directors are composed of the natural persons or entities referred to in subparagraph (a), (b) or (c); or a legal person of which one-third or more of the voting rights are held by the natural persons or entities referred to in subparagraph (a), (b) or (c). In the event that a person conducting aerial work business becomes a natural person or an entity referred to in subparagraphs (a) through (d), the permission will lose its effect. The conditions for the permission also apply to companies, such as holding companies, which have substantial control over the person conducting aerial work business. 3. A foreign aircraft may not be used for a flight between points within Japan.
14.
Sector: Transport Sub-Sector: Air Transport (Registration of Aircraft in the National Register) Industry Classification: Obligations National Treatment (Article 2) Concerned: Senior Management and Board of Directors (Article 7) Measures: Civil Aeronautics Law (Law No. 231 of 1952), Chapter 2 Description: 1. An aircraft owned by any of the following natural persons or entities may not be registered in the national register: (a) a natural person who does not have Japanese nationality; (b) a foreign country, or a foreign public entity or its equivalent; (c) a legal person or other entity constituted under the laws of any foreign country; and (d) a legal person represented by the natural persons or entities referred to in subparagraph (a), (b) or (c); a legal person of which one-third or more of the directors are composed of the natural persons or entities referred to in subparagraph (a), (b) or (c); or a legal person of which one-third or more of the voting rights are held by the natural persons or entities referred to in subparagraph (a), (b) or (c). 2. A foreign aircraft may not be registered in the national register.
15.
Sector: Transport Sub-Sector: Freight Forwarding Business (excluding Freight Forwarding Business Using Air Transportation) Industry JSIC 4441 Collect-and-deliver Classification: freight transport JSIC 4821 Freight transport, except collect-and- deliver freight transport Obligations National Treatment (Article 2) Concerned: Most-Favored-Nation Treatment (Article 3) Senior Management and Board of Directors (Article 7) Measures: Freight Forwarding Business Law (Law No. 82 of 1989), Chapters 2 through 4 Enforcement Regulation of Freight Forwarding Business Law (Ministerial Ordinance of the Ministry of Transport No. 20 of 1990) Description: The following natural persons or entities are required to be registered with, or to obtain permission or approval of, the Minister of Land, Infrastructure, Transport and Tourism for conducting freight forwarding business using international shipping. Such registration shall be permitted, or such permission or approval shall be granted, on the basis of reciprocity: (a) a natural person who does not have Japanese nationality; (b) a foreign country, or a foreign public entity or its equivalent; (c) a legal person or other entity constituted under the laws of any foreign country; and (d) a legal person represented by the natural persons or entities referred to in subparagraph (a), (b) or (c); a legal person of which one-third or more of the directors are composed of the natural persons or entities referred to in subparagraph (a), (b) or (c); or a legal person of which one-third or more of the voting rights are held by the natural persons or entities referred to in subparagraph (a), (b) or (c).
16.
Sector: Transport Sub-Sector: Freight Forwarding Business (only Freight Forwarding Business Using Air Transportation) Industry JSIC 4441 Collect-and-deliver Classification: freight transport JSIC 4821 Freight transport, except collect-and- deliver freight transport Obligations National Treatment (Article 2) Concerned: Most-Favored-Nation Treatment (Article 3) Senior Management and Board of Directors (Article 7) Measures: Freight Forwarding Business Law (Law No. 82 of 1989), Chapters 2 through 4 Enforcement Regulation of Freight Forwarding Business Law (Ministerial Ordinance of the Ministry of Transport No. 20 of 1990) Description: 1. The following natural persons or entities may not conduct freight forwarding business using air transportation between points within Japan: (a) a natural person who does not have Japanese nationality; (b) a foreign country, or a foreign public entity or its equivalent; (c) a legal person or other entity constituted under the laws of any foreign country; and (d) a legal person represented by the natural persons or entities referred to in subparagraph (a), (b) or (c); a legal person of which one-third or more of the directors are composed of the natural persons or entities referred to in subparagraph (a), (b) or (c); or a legal person of which one-third or more of the voting rights are held by the natural persons or entities referred to in subparagraph (a), (b) or (c). 2. The natural persons or entities referred to in paragraph 1 are required to be registered with, or to obtain permission or approval of, the Minister of Land, Infrastructure, Transport and Tourism for conducting freight forwarding business using international air transportation. Such registration shall be permitted, or such permission or approval will be granted, on the basis of reciprocity.
17.
Sector: Transport Sub-Sector: Railway Transport Industry JSIC 421 Railway transport Classification: JSIC 4851 Railway facilities services Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: 1. The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in railway transport industry in Japan. 2. The manufacture of vehicles or parts and components for the railwaytransport industry is not included in railway transport industry. Therefore, the prior notification under the Foreign Exchange and Foreign Trade Law is not required for the investments in the manufacture of these products.
18.
Sector: Transport Sub-Sector: Road Passenger Transport Industry JSIC 4311 Common omnibus Classification: operators Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: 1. The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in omnibus industry in Japan. 2. The manufacture of vehicles or parts and components for omnibus industry is not included in omnibus industry. Therefore, the prior notification under the Foreign Exchange and Foreign Trade Law is not required for the investments in the manufacture of these products.
19.
Sector: Transport Sub-Sector: Water Transport Industry JSIC 452 Coastwise transport Classification: JSIC 453 Inland water transport JSIC 4542 Coastwise ship leasing Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in the water transport industry in Japan. For greater certainty, "water transport industry" refers to oceangoing/ seagoing transport, coastwise transport (i.e. maritime transport between ports in Japan), inland water transport and ship leasing industry. However, oceangoing/ seagoing transport industry and ship leasing industry excluding coastwise ship leasing industry are exempted from the prior notification requirement.
20.
Sector: Transport Sub-Sector: Water Transport Industry Classification: Obligations National Treatment (Article 2) Concerned: Most-Favored-Nation Treatment (Article 3) Measures: Ship Law (Law No. 46 of 1899), Article 3 Description: Unless otherwise specified in laws and regulations of Japan, or international agreements to which Japan is a party, ships not flying the Japanese flag are prohibited from entering ports in Japan which are not open to foreign commerce and from carrying cargoes or passengers between ports in Japan.
21.
Sector: Water Supply and Waterworks Sub-Sector: Industry JSIC 3611 Water for end users, Classification: except industrial users Obligations National Treatment (Article 2) Concerned: Measures: Foreign Exchange and Foreign Trade Law (Law No. 228 of 1949), Article 27 Cabinet Order on Foreign Direct Investment (Cabinet Order No. 261 of 1980), Article 3 Description: The prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments in water supply and waterworks industry in Japan.
Annex II. Non-conforming measures referred to in paragraph 2 of article 8
1. The Schedule of a Contracting Party sets out, pursuant to paragraph 2 of Article 8, the specific sectors, sub-sectors or activities for which that Contracting Party may maintain existing, or adopt new or more restrictive, measures that do not conform with obligations imposed by:
(a) Article 2;
(b) Article 3;
(c) Article 6; or
(d) Article 7.
2. Each Schedule entry sets out the following elements:
(a) "Sector" refers to the sector for which the entry is made;
(b) "Sub-Sector", where referenced, refers to the specific sub-sector for which the entry is made;
(c) "Industry Classification", where referenced, and only for transparency purposes, refers to the activity covered by the non-conforming measure, according to domestic or international industry classification codes;
(d) "Obligations Concerned" specifies the obligations referred to in paragraph 1 that, pursuant to paragraph 2 of Article 8, do not apply to the sectors, sub-sectors or activities listed in the entry;
(e) "Description" sets out the scope or nature of the sectors, sub-sectors or activities covered by the entry; and (f) "Existing Measures", where specified, identifies, for transparency purposes, a non-exhaustive list of existing measures that apply to the sectors, sub-sectors or activities covered by the entry. 3. In the interpretation of an entry, all elements of the entry shall be considered. The "Description" element shall prevail over all other elements.
4. For the purposes of this Annex:
(a) The term "JSIC" means Japan Standard Industrial Classification set out by the Ministry of Internal Affairs and Communications, and revised on October 30, 2013; and
(b) The term "CPC" means Provisional Central Product Classification (Statistical Papers Series M No. 77, Department of International Economic and Social Affairs, Statistical Office of the United Nations, New York, 1991).
Schedule of the State of Israel
1.
Sector: Land and Real Estate Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Description: The acquisition of rights to land and real estate by foreign nationals or enterprises controlled by foreign nationals is subject to the prior approval by the Israel Land Authority Council. Existing Measures: Israel's Land Law, 1960.
2.
Sector: Transportation Sub-Sector: Airports and Ports Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Senior Management and Board of Directors (Article 7) Description: The State of Israel (hereinafter referred to in this Schedule as "Israel") reserves the right to adopt or maintain any measure with regard to airports and ports, including construction, ground handling services and services supplied or operated in airport and ports and including subjecting ports development and assets companies, port companies and authorized companies, as defined in the Shipping and Ports Authority Law, 2004, to an order of essential state interests, or to any other restrictions. Existing Measures: Shipping and Ports Authority Law, 2004 Ports Ordinance, 1971 Shipping and Ports Order (Announcement on Essential State Interests in Eilat Port Company Ltd.), 2012 Airports Authority Law, 1977
3.
Sector: Transportation Sub-Sector: Light Rail Transit Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Senior Management and Board of Directors (Article 7) Description: Israel reserves the right to adopt or maintain any measure with regard to light rail transit, including manufacturing and services related to light rail transit. Existing Measures: Railroad Track Ordinance, 1972
4.
Sector: Transportation Sub-Sector: Supporting Services for Road Transport and Passenger Transportation Industry CPC 744 Supporting services for Classification: road transport CPC 7121 Other scheduled passenger transportation Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Senior Management and Board of Directors (Article 7) Description: Israel reserves the right to adopt or maintain any measure with regard to supporting services for road transport and passenger transportation. This entry does not include manufacturing of omnibus and components for omnibus. Existing Measures:
5.
Sector: Transportation Sub-Sector: Maritime Cabotage Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Description: Israel reserves the right to adopt or maintain any measure with regard to maritime cabotage involving national treatment or employment of seafarers on vessels performing cabotage. Existing Measures: Law of Cabotage (Permit for a Measures: Foreign Sea Vessel), 2005 Cabotage Ordinance (Permit for a Foreign Sea Vessel) (Request for Permit), 2012
6.
Sector: Human Health, Education, Law Enforcement and Correctional Services and Social Services Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Senior Management and Board of Directors (Article 7) Description: Israel reserves the right to adopt or maintain any measure with regard to human health including health institutions, equipment, services, data exchange and products, education, law enforcement and correctional services and, to the extent they are established or maintained for a public purpose, social services including income security or insurance, social security or insurance, social welfare, public housing and child care. Existing Measures:
7.
Sector: Distribution Services Sub-Sector: Industry CPC 62112 Sales on a fee or Classification: contract basis of food products, beverages and tobacco CPC 62113 Sales on a fee or contract basis of fuels, metals, ores, timber, building materials and industrial and technical chemicals CPC 62117 Sales on a fee or contract basis of pharmaceutical and medical goods and cosmetics CPC 62226 Wholesale trade services of beverages CPC 62228 Wholesale trade services of tobacco products CPC 6225 Wholesale trade services of pharmaceutical and medical goods and cosmetics CPC 6227 Wholesale trade services of intermediate products, other than agricultural; wholesale trade services of waste and scrap and materials for recycling CPC 63107 Retail sales of beverages not consumed on the spot CPC 63108 Retail sales of tobacco products CPC 6321 Retail sales of pharmaceutical and medical goods and cosmetics Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Senior Management and Board of Directors (Article 7) Description: Israel reserves the right to adopt or maintain any measure with regard to distribution services as following: (a) commission agents' services for: (i) alcoholic beverages and tobacco products; (ii) fuels; or (iii) pharmaceutical and medical goods and cosmetics; (b) wholesale trade services for: (i) alcoholic beverages; (ii) tobacco products; (iii) pharmaceutical and medical goods and cosmetics; or (iv) intermediate products other than agricultural; waste and scrap and materials for recycling; (c) food retailing services for: (i) alcoholic beverages; or (ii) tobacco products; and (d) non-food retailing services for pharmaceutical and medical goods and cosmetics. Existing Measures:
8.
Sector: Planning and Construction Sub-Sector: Construction Industry Classification: Obligations Most-Favored-Nation Treatment Concerned: (Article 3) Description: Israel reserves the right to adopt or maintain any measure that accords certain advantages with regard to enterprises in the construction sector. Existing Measures:
9.
Sector: Financial Services Sub-Sector: Industry Classification: Obligations National Treatment (Article 2) Concerned: Prohibition of Performance Requirements (Article 6) Senior Management and Board of Directors (Article 7) Description: Israel reserves the right to adopt or maintain any measure with respect to the following financial services: (a) cooperative financial associations providing credit and accepting deposits (Credit Unions); (b) no interest credit and deposit institutions for mutual assistance; (c) credit card issuers and processors; (d) payment service providers (PSP); (e) platforms for crowd funding; (f) credit information database (credit bureau); or (g) broker-dealers of financial instruments. A broker-dealer is a person or a firm in the business of buying and selling securities, operating as both a broker and a dealer. Note: "A no interest credit and deposit institution" is an institution that is authorized to accept 30 or more depositors and to provide deposit services and loans both with no interest rate. Existing Measures: