The Japan-Switzerland Free Trade and Economic Partnership Agreement. An Introduction for Japanese Companies invest-in-switzerland.jp Table of contents. Greetings. 2 A warm welcome. 3 1. A brief history of Japanese-Swiss economic relations. 4 2. The road to the JSFTEPA. 13 3. Major elements of the agreement. 16 4. Trade in goods. 20 5. Technical regulations, standards and conformity assessment procedures. 26 6. Trade in services. 27 7. Movement of natural persons for business purposes. 29 8. Electronic commerce. 32 9. Investment. 34 10. Intellectual property. 38 11. Government procurement. 40 12. New institutional relationships. 45 13. Appendix 1: Personnel. 46 14. Appendix 2: Young Professionals Program. 54 15. Swiss Business Hub Japan services. 58 16. Addresses. 60 JSFTEPA | 1 Greetings. The Japan-Switzerland Free Trade and Economic Partnership Agreement (JSFTEPA) took effect in September 2009. Japan and Switzerland have maintained good economic ties since entering into a treaty of friendship and commerce in 1864. Our two countries have a long history of developing together, based on the complementary and cooperative relationship we share on the international trade and economics stage as trade- and technology-oriented nations. And this new agreement makes the cooperative relationship even more robust and firm. The Japanese government has been working to conclude free trade agreements (FTAs) and economic partnership agreements (EPAs) with nations worldwide as part of its efforts to strengthen and facilitate Japan’s trade and investment relationships. The provisions of the JSFTEPA—Japan’s first EPA with a developed nation—signal a dramatic advance over our previous EPAs. In addition to eliminating customs duties on 99% of Japan-Swiss trade (by value) within 10 years, the agreement extends to other areas, such as service and investment rules and liberalisation, e-commerce, business environment development and the introduction of a country-of-origin self-certification program for approved exporters. The JSFTEPA is likely to serve as a model for such all-encompassing trade agreements. While our two countries will no doubt achieve closer economic ties thanks to this agreement, a true two-way economic partnership cannot be achieved through governmental agreements alone. Rather, active utilisation of the JSFTEPA by businesses of both countries is required: the agreement opens the door wider for Japanese and Swiss businesses, but it’s up to the companies themselves to seize the opportunity. For our part, we are working with relevant organisations and agencies on the Swiss side to support Japanese and Swiss businesses. And I am confident that this brochure will help broaden understanding of the JSFTEPA and increase its utilisation, thereby paving the way for deeper business and investment ties between our two nations. Yasuo Hayashi Chairman & CEO, Japan External Trade Organization (JETRO) 2 | JSFTEPA A warm welcome. When the Japanese Minister for Foreign Affairs Hirofumi Nakasone received Swiss Federal Councillor Doris Leuthard on February 19, 2009 in Tokyo for the signing of the Japan-Switzerland Free Trade and Economic Partnership (JSFTEPA) between Japan and the Swiss Confederation, it not only concluded a two-year period of intense amicable negotiations with a flourish. It also opened up a new era of bilateral economic opportunities, and signalled a new era in the 150 years of friendship and economic partnership between our two countries. Switzerland was among the first European countries to enter into a contractual relationship with Japan, and it is with great satisfaction that Switzerland is now the first European country to conclude a modern FTEPA with Japan. I invite you, the entrepreneurs and companies of Japan, to seize this historical moment and leverage this new level of access to the Swiss, and thus European, markets. Switzerland offers a stable and investor-friendly business environment, an excellent infrastructure in the heart of Europe and a highly skilled and productive labour force. You will also find suitable partner companies among the plethora of Swiss small and medium-sized enterprises for your expansion into the Swiss market. The common traits that the Japanese and Swiss people share will help bring this JSFTEPA to life. Precision, diligence and ingenuity have made both countries leaders in research and development as well as in specialised production. This provides a solid basis for creating mutual growth and benefits, that will overcome any cultural and language differences. What Swiss consumers may not have in numbers they make up in affluence and curiosity for innovative products. This makes Switzerland your ideal test market for Europe. FTEPAs are complex legal documents that are not easily accessible for small and medium-sized firms, and often a challenge to the entrepreneurial spirit. For this reason, we created this brochure to help you to discover the opportunities to stimulate trade, increase industrial cooperation, foster investment around the globe, and to provide you with a practical knowledge of the provisions of the JSFTEPA. In addition, it will point you to the people and organisations who can help you to establish a presence in Switzerland. In this spirit I call upon you to seize this chance. Let us start right now! Jean-Daniel Gerber State Secretary, Director of the State Secretariat for Economic Affairs (SECO) JSFTEPA | 3 1. A brief history of Japanese-Swiss economic relations. 1.1 The first signs of mutual awareness. There is little doubt that the stories of the travels of Venetian merchant Marco Polo in the 13th Century, which mention the gold rich Japan or “Cipangu” as he called it, reached Switzerland. However, it was only in the 16th century that we find historical evidence to confirm awareness in each country of the other’s existence. In 1586, the town chancellor of Lucerne in Switzerland, Renward Cysat, published a book which included a map of Japan (see reproduction below). However, as Cysat never visited Japan, both the text and map were based on third party reports. Reproduction used with kind permission by Zentral- und Hochschulbibliothek Lucerne Source: (ZHB Luzern) 4 | JSFTEPA 1.2 The growth of formal relations. 1.2.1 The ending of Japanese isolation The forced opening of a number of Japanese ports in 1854, initially by American vessels and quickly followed by other sea powers, broke the Dutch monopoly on trade with Japan. Rather than seeing the lull in exports under the auspices of the Dutch that resulted as a setback, the textile manufacturers of eastern Switzerland and the watch industry of Neuchatel (which was headed by Aimé Humbert, a member of the Council of States) saw it as an opportunity to open a new market. They sent an official delegation from Switzerland to Japan in 1859, but were unable to open negotiations with the Japanese authorities. Nevertheless, the watch manufacturers opened a branch office in Yokohama, employing Dutch and French nationals protected by their respective national treaties. 1.2.2 Treaty of Amity and Commerce 1864 It was only with a second Swiss mission funded by the Swiss Confederation and personally led to Japan by Aimé Humbert, that negotiations were entered into with the Tokugawa shogunate in Edo (present-day Tokyo) in 1862, shortly before the mission’s two year mandate expired. The guard at the Swiss mission in ‘Yedo’ As a result, Switzerland and Japan concluded their first bilateral treaty on 6 February The Swiss delegation of 1864 enjoys 1864, created with very similar terms to those concluded with the great powers. the hospitality of the Dutch Mission The “Treaty of Amity and Commerce between the Swiss Federal Council and His Majesty in ‘Yedo’ (Tokyo). the Taïkun of Japan” deals mainly with conditions governing the activities of Swiss Source: Humbert, Aimé, 1867, citizens in Japan, such as the freedom of trade, the right to set up within the newly Le Japon illustré, Paris, Vol.1, p. 305. opened ports, and extraterritoriality, without offering reciprocal rights to Japanese citizens in Switzerland. (The Taïkun is nowadays commonly referred to as the Shogun, the de-facto ruler of Japan, as opposed to the Mikado, the Emperor or Tenno who until 1868 remained largely powerless) JSFTEPA | 5 Insight. 1.2.3 Treaty of Amity, Establishment and Commerce 1896 After a new government came to power with the Meiji restoration in 1868, one of its main goals was to renegotiate these “unequal treaties.” To achieve this, Switzerland was During his time in Japan, Aimé Humbert among the participants in a number of international conferences that were held in Tokyo concluded that the Japanese had a in 1882 and 1886-87. The Japanese government declared its willingness to open the natural ability for all things technical, whole country to foreigners as long as their extraterritorial right (trials by their respective as well as for navigation, and saw that consulates) were abolished. Japan’s destiny was to become the manufacturing base and trading hub in the Pacific region. It took until the 1890s before the Japanese government was successful in these negotiations. Switzerland again followed the example of the great powers and renegotiated a new “Treaty of Amity, Establishment and Commerce” in 1896, “on the basis of equity and mutual profits.” 1.2.4 Treaty of Establishment and Commerce 1911 This treaty remained in force until 1911 when new negotiations were held in Berne with the Japanese envoy to Vienna. The main new agreement in the 1911 “Treaty of Establishment and Commerce” was the right to purchase property. Its validity was fixed until 1923, with indefinite extensions until one party had cause to cancel the agreement. This treaty has formed the basis of Japanese-Swiss bilateral economic relations well into the 21st century. 1.3 The development of bilateral trade. 1.3.1 Beginning with silk At the time of the opening of Japan, the range of goods available for export was extremely limited. In 1892, silk was still the predominant commodity in Japan’s trade with both Europe and America, accounting for nearly 59% of exports. The remainder of exports consisted mainly of Japanese tea, porcelain, coal, lacquerware and copper. The silk export trade was focused on Yokohama, with six Swiss companies accounting for 45% of all trade. In 1893, 47.75% of Japanese silk was machine manufactured, mostly for export, while the remaining 52% was hand-spun, using traditional techniques that varied from region to region. Switzerland in turn exported fabrics and watches in significant quantities, followed in time by chemicals and condensed milk. With the rapid modernisation of Japan that began with the Meiji restoration, Swiss machinery manufacturers quickly expanded their business to supply railway engineering, electrical power plants and spinning mills. 6 | JSFTEPA 1.3.2 The growth of trade Trade statistics were first collated in 1898. They show rapid growth in two-way trade, especially during and after WWI, when a jump in Japanese exports to Switzerland led to a record trade balance surplus for Japan in 1918. However, Swiss exports to Japan grew substantially in the 1920s. Figure 1 Japanese-Swiss trade 1898-1954. Japan exports to Switzerland Million ¥ Japan imports from Switzerland Trade balance 1000 800 600 400 200 0 -200 -400 1954 1952 1950 1948 1946 1944 1942 1940 1938 1936 1934 1932 1930 1928 1926 1924 1922 1920 1918 1916 1914 1912 1910 1908 1906 1904 1902 1900 1898 -600 Sources: Swiss Statistical Yearbook, Vols. 1892-1931. External trade statistics of the Federal Customs Administration (FCA), annual reports 1931-1954 (including the Japanese colony Korea until 1948). Note: Yen figures are provided as an approximate indication for comparison purposes only. The exchange rate was calculated at CHF 1 = ¥ 90. During the 1920s and 1930s, Japan was an important market for Swiss machinery and watches. However, bilateral trade slumped in the 1930s, collapsed completely towards the end of WWII, and remained very low during the American occupation following the war, with Japanese exports to Switzerland growing as economic recovery took hold. The trade balance turned in favour of the Swiss in 1953 and remained so until the beginning of the 1970s. JSFTEPA | 7 Resource. 1.4 Current economic relations. As Japan and Switzerland are members of both the OECD and WTO, bilateral Double Taxation Agreement, 1971 economic relations between the two countries are regulated to a high degree by these SR 0.672.946.31 organisations. Nevertheless, additional bilateral treaties including a double taxation www.admin.ch agreement (1971, currently under revision) and an agreement on scientific and Agreement on Scientific and Technological Cooperation, 2007 SR 0.420.463.1 technological cooperation (2007) have been reached. The conclusion of this Japan-Switzerland Free Trade and Economic Partnership Agreement (JSFTEPA) allows friendly relations between the two states to reach a new level. www.admin.ch Figure 2 Japanese-Swiss trade 1955-2008. Japan exports to Switzerland Japan imports from Switzerland Billion ¥ Trade balance 800 700 600 500 400 300 200 100 0 -90 Source: FCA, External trade statistics 1955-2008. 8 | JSFTEPA 2007 2005 2003 2007 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 1973 1971 1996 1967 1965 1963 1961 1959 1957 1955 -200 1.4.1 Review of Japanese-Swiss Trade Trade figures (see graphic) over the last 50 years show a marked decrease in Japanese exports to Switzerland since the end of the 1980s. This is not only a reflection of the contraction of the Japanese economy with the burst of the real estate and stock market bubble, but also the impact of globalisation, as many Japanese companies transferred production to low-cost countries in Asia or Eastern Europe. As a result, cars, computers and other goods made by Japanese manufacturers are now exported to Switzerland directly from these countries, so they do not appear in Japanese trade figures. In recent years, direct Japanese exports to Switzerland have again risen significantly. Figure 3 Japan external trade with Switzerland 2000–2008. Billion ¥ Year Exports to CH Change % Imports to Japan 2000 353.3 14.2 519.0 18.8 165.8 872.3 – 2001 305.1 –13.6 484.4 –6.7 179.3 789.7 –9.5 2002 235.7 –22.8 466.1 –3.8 230.4 701.8 –11.1 2003 245.1 4.2 486.5 4.4 240.9 732.1 4.3 2004 263.7 7.4 514.6 5.8 250.8 778.4 6.3 2005 263.5 –0.4 530.2 3.0 267.7 792.9 1.9 2006 279.4 6.4 605.3 14.2 325.9 884.8 11.6 2007 315.2 12.8 605.7 0.0 290.4 921.0 4.1 2008 375.3 19.0 635.2 4.9 259.9 1,109.5 9.7 Change % Trade balance Volume Change % Source: FCA, External trade statistics 2000-2008. From 2002 including electrical current, returned goods and outwards processing traffic. JSFTEPA | 9 Figure 4 Japanese imports and exports to Switzerland by groups of goods (net worth). Japan exports to Switzerland 2008 in Billion ¥ Gems, precious metals, jewellery Vehicles, aeroplanes Machinery (electrical) Basic chemical goods Pharmaceuticals Machinery (non electrical) Optical and medical instruments Clocks and watches Non-precious metals and their goods Plastics, rubber Agricultural products Cloths and clothes Fertilisers, colourants, pigments Furs, leathers, leather goods 0 30 60 90 120 150 90 120 150 Japan imports from Switzerland 2008 in Billion ¥ Pharmaceuticals Basic chemical goods Clocks and watches Gems, precious metals, jewellery Machinery (non electrical) Machinery (electrical) Agricultural products Non-precious metals and their goods Plastics, rubber Optical and medical instruments Cloths and clothes Furs, leathers, leather goods Fertilisers, colourants, pigments Vehicles, aeroplanes 0 30 60 Source: FCA, External trade statistics 2008. 10 | JSFTEPA In 2008, exports of Japanese goods to Switzerland grew by 19.0 % to ¥ 375 bn. (2.1% of all Swiss imports). The main Japanese exports to Switzerland are vehicles, precious metals and jewellery, machinery and chemicals. These figures do not take into account exports to Switzerland by Japanese companies from other countries. In 2008, Japanese imports from Switzerland grew by 4.9 % to ¥ 633 bn. (3.3% of all Swiss exports). The main Swiss exports are chemical and pharmaceutical goods, watches and machines. Japan remains the most important export destination in Asia for Switzerland, and the second most important source of imports into Switzerland from Asia, after China. Figure 5 Ranking of main groups of traded goods 2007/08 (net worth). Billion ¥ 2008 Net worth Share % 2007 Net worth Share % +/- % 2007/08 137.7 36.7 79.4 25.2 73.5 Vehicles, aeroplanes 88.9 22.6 85.1 27.0 –0.3 Machinery (electrical) 29.6 7.9 28.4 9.0 4.0 Basic chemical goods 25.7 6.9 25.5 8.1 1.2 Pharmaceuticals 24.5 6.5 22.3 7.1 10.1 Machinery (non electrical) 23.2 6.2 27.1 8.6 –14.6 Clocks and watches 11.2 3.0 90.2 2.9 23.8 Japan exports to Switzerland Gems, precious metals, jewellery Japan imports from Switzerland Net worth Share % Net worth Share % +/- % 2007/08 Pharmaceuticals 130.8 20.6 114.7 18.9 14.0 Basic chemical goods 120.7 19.0 114.2 18.9 5.7 Clocks and watches 103.9 16.4 108.7 17.9 –4.4 Gems, precious metals, jewellery 93.7 21.3 77.3 12.8 21.3 Machinery (non electrical) 54.1 8.5 59.6 9.8 –9.2 Optical and medical instruments 42.9 6.8 41.4 6.8 3.6 Machinery (electrical) 16.4 2.6 18.3 3.0 –10.2 Source: FCA, External trade statistics 2007/08 (excluding gold trade). JSFTEPA | 11 1.4.2 Review of Japanese-Swiss investment Resource. Japanese investment in Switzerland statistics. www.jetro.go.jp/switzerland/relations Switzerland is an important investor in Japan. Statistics from the Swiss National Bank (SNB) show that Swiss direct investment in capital stock in Japan totalled ¥1.332 trillion by the end of 2008, accounting for 1.8% of Switzerland’s total overseas investments. This also represents 2.9% of total foreign direct investment in Japan, which ranks Switzerland 7th among all nations in Japan. The SNB calculates Swiss direct investment flows into Japan in 2008 were a record-high ¥117 bn., with Swiss companies employing over 64,000 people in Japan. From the Japanese side, direct investment in Switzerland has been declining since 1994, amounting to less than ¥56.5 bn., and accounting for just 0.1% of all foreign investment. Analysing foreign investment according to their real country of origin, however, leads to a different picture. Including indirect investment, Japanese investment totalled ¥ 630 bn. in 2005. Case Study. 1.5 Recent Japanese activity in Switzerland. In recent years, Switzerland has become the country of choice for multinational compa- For case studies of Japanese nies looking to set up European, International and even World headquarters. In the last companies setting up in Switzerland, 10 years, more than 180 regional headquarters of large foreign companies have relocated please contact the Swiss Business Hub to the country. These companies have been attracted by the benefits that Switzerland Japan for your copy of the brochure: has to offer, including a stable and investor-friendly business environment, an excellent “Success Stories. Japanese and Multinational Companies in Switzerland.” infrastructure in the heart of Europe, a highly skilled and productive labour force, high quality of life, and competitive taxes. Among the Japanese companies that have taken advantage of these benefits are: •Japan Tobacco International, which located its International headquarters in the Canton of Geneva in 1999. •Nissan International, which moved its European headquarters to the Canton of Vaud in 2006. •Kanebo Cosmetics (Europe) Ltd., which has had its European headquarters in the Canton of Zurich since 1980. •Eizai Pharma AG which established its sales operations, local medical and regulatory affairs, and sales operations in the Canton of Zurich in 2005. •Elpida Memory (Europe) Sarl which established its European Sales and ‘Systems Technology Lab’ in Grand-Lancy in the Canton of Geneva in 2008. •Hitachi Medical Corporation, which established its European headquarters in the Canton of Zug in 2007. •Sekisui Alveo, which has had its European headquarters and Applications Services laboratory in the Canton of Lucerne since 1973. •Mycom Intertec AG Europe (part of Mayekawa Manufacturing), which established its European headquarters in the Canton of Zug in 2004. Currently, there are over 150 Japanese companies with operations in Switzerland. 12 | JSFTEPA 2. The road to the JSFTEPA. 2.1 A commitment to FTAs. Since the beginning of the 1990s, Switzerland has been building a network of free trade agreements with numerous countries outside the European Union. The constant improvement of access to foreign markets represents a core objective of Swiss foreign economic policy. By entering into FTAs, Switzerland aims to provide its companies with a level of access to international markets that is at least equivalent to the market access conditions enjoyed by its most important foreign competitors. Free trade agreements are therefore an important instrument in maintaining and strengthening Switzerland’s competitiveness as a business location. Regular bilateral economic consultations between Switzerland and Japan began in 1995. When Japan introduced bilateral preferential trade agreements known as Economic Partnership Agreements (EPAs) as a trade policy instrument, Switzerland responded with a proposal to explore the possibility of negotiating a bilateral preferential trade agreement between the two countries. 2.2 The search for common ground. Explanation. This proposal was in keeping with Swiss trade policy which since the early 1990s has actively implemented the negotiating and concluding of Free Trade Agreements (FTAs), The European Free Trade Association mainly within the framework of the European Free Trade Association (EFTA). By the late (EFTA) is an intergovernmental 1990s EFTA countries began expanding the scope of their FTAs beyond the initial organisation set up for the promotion agreements on trade in goods and intellectual property rights, to include areas such as the trade in services, investment and public procurement. Today, the scope of these comprehensive EFTA/FTAs is similar to that of the Japanese EPAs. The initial exploration of a common ground for a bilateral preferential trade agreement of free trade and economic integration to the benefit of its four Member States: Iceland, Liechtenstein, Norway and Switzerland. www.efta.int revealed that due to different trade structures between Japan and the other EFTA States, an approach within the EFTA framework was not possible. This left a bilateral agreement as the only realistic approach of concluding an agreement between the two countries in the short and medium term. In 2003-2004, separate feasibility studies on a bilateral FTA/ EPA conducted in Switzerland by the State Secretariat for Economic Affairs (SECO) and in Japan by the Japanese External Trade Organization (JETRO), showed that a JapaneseSwiss FTEPA would stimulate bilateral economic relations and be mutually beneficial. JSFTEPA | 13 Moving forward, in October 2004 on the occasion of his visit to the Japanese Prime Minister Junichiro Koizumi in Tokyo, the President of the Swiss Confederation Joseph Deiss suggested the two countries actively take further steps on the path to creating a possible FTA/EPA. In Tokyo in April 2005, Prime Minister Koizumi and Swiss President Samuel Schmid agreed to launch a joint feasibility study group at the level of the competent authorities from both countries. 2.3 Formation of a Joint Governmental Study Group. This led to the formation of a Joint Governmental Study Group, which met five times between October 2005 and December 2006. The Study Group focused its attention on all sectors normally covered by a comprehensive FTEPA and compared the respective approaches of Japan and Switzerland in each negotiating area. In addition, to create a comprehensive picture of economic relations between Japan and Switzerland, other areas of possible cooperation between the two countries such as science and technology, tourism, social security, as well as the fight against money laundering and legal assistance in criminal matters, were also discussed within the framework of the Study Group. The Study Group’s main report, Joint Governmental Study Group for Strengthening Economic Relations between Japan and Switzerland, concluded a bilateral FTEPA between Switzerland and Japan would considerably enhance the existing economic relations, especially in the fields of goods, services and investment, and strengthen the competitiveness of both countries. The report recommended a rapid start to negotiations to form an agreement. This recommendation was publicly supported by major private sector organisations in both countries, such as economiesuisse in Switzerland and Nippon Keidanren in Japan. 2.4 The launch of negotiations. On 19 January 2007, an official phone conversation between the President of the Swiss Confederation Micheline Calmy-Rey and the Japanese Prime Minister Shinzo Abe noted the results of the Study Group, and jointly announced the launch of the bilateral negotiations. It was agreed that the negotiation rounds should be held alternately in Switzerland and Japan, starting with a first round in Tokyo in May 2007. 14 | JSFTEPA All eight negotiation rounds were held under the joint chairmanship of Jun Yokota, the Japanese Ambassador for International Commercial and Economic Affairs in the Ministry of Foreign Affairs, and Ambassador Luzius Wasescha, the Permanent Representative for Switzerland to the International Economic Organisations in Geneva and Delegate of the Federal Council for Trade Agreements. 2.5 The way to the signing of the JSFTEPA. Resource. On 19 February 2009 in Tokyo, the Head of the Swiss Federal Department of Economic Affairs Doris Leuthard and the Japanese Foreign Minister Hirofumi Nakasone signed the The official texts of the JSFTEPA are Japan-Switzerland Free Trade and Economic Partnership (JSFTEPA). On 1 September available online at: 2009, the JSFTEPA formally entered into force. Japan Ministry of Economy, Trade and Figure 6 Industry (METI) The way to the signing of the JSFTEPA. www.meti.go.jp Switzerland 2007 January President of the Swiss Confederation Calmy-Rey and Prime Minister Abe decide officially to launch negotiations 2008 March Preparatory meeting in Tokyo May 1st round of negotiations in Tokyo July 2nd round of negotiations in Savognin/CH October 3rd round of negotiations in Yokohama November 4th round of negotiations in Thun/CH February 5th round of negotiations in Tokyo May 6th round of negotiations in Lugano-Cadro/CH June 7th round of negotiations in Tokyo September 8th round of negotiations in Bern, agreement in principle; initialling of the agreement early morning on 25 September State Secretariat for Economic Affairs (SECO) www.seco.admin.ch by the respective chief negotiators 20082009 October - January Finalisation of the last issues, legal revision of the texts February Signature by Federal Councillor Leuthard and Foreign Minister Nakasone at the Ministry of Foreign Affairs in Tokyo Summer Completion of the ratification processes in Switzerland and Japan September 1 Entry into force of the JSFTEPA JSFTEPA | 15 3. Major elements of the agreement. 3.1 Overview of the agreement. The JSFTEPA established a comprehensive economic partnership between Switzerland and Japan. It contains substantive provisions on trade in goods (liberalisation of trade in industrial goods as well as selected processed and basic agricultural goods, rules of origin, custom procedures, trade facilitations and provisions relating to non-tariff barriers), trade in services, the movement of natural persons for business purposes, the establishment and protection of investments, the protection of intellectual property, the promotion and facilitation of electronic commerce, provisions in the field of competition, and the promotion of a closer economic relationship. 16 | JSFTEPA Unlike most of Switzerland’s FTAs with third countries outside of the EC, which are normally concluded together with the other Member States of the European Free Trade Association (EFTA), Iceland, Liechtenstein and Norway, the JSFTEPA is a bilateral agreement between Switzerland and Japan. Due to the specific trade structure between Japan on the one hand and Iceland and Norway on the other hand, it has not been possible to include the other EFTA States into the negotiations. On the basis of the Customs Union Treaty of 1923 between Switzerland and the Principality of Liechtenstein, the provisions on trade in goods of the JSFTEPA also applies to the territory of Liechtenstein. 3.2 Substantive provisions in the JSFTEPA. In particular, the JSFTEPA contains substantive provisions in the following areas: 3.2.1 Trade in goods Establishment of a free trade area for industrial goods and selected agricultural goods. With the entry into force of the JSFTEPA, almost all tariffs on industrial goods have been dismantled. Most industrial goods benefited immediately from the dismantling of tariffs at that time. For a small number of industrial goods, the Japanese tariffs will be dismantled after a transitional period. Regarding agricultural goods, Switzerland and Japan have granted each other tariff concessions on a selected range of basic and processed agricultural goods. Japan granted Switzerland preferential market access in particular for Swiss cheese specialities, dried meat, chocolate, wine and cigarettes. Switzerland granted Japan preferential market access inter alia for ornamental plants “Bonsai”, high quality gift fruits, sake (rice wine) and cigarettes The provisions on trade in goods also contain rules of origin, provisions on customs procedures and trade facilitation, as well as provisions relating to technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS). (for more details, see chapter 4) 3.2.2 Trade in services Provisions in this area are built on the WTO services agreement (GATS) and include a number of “GATS-plus” elements in certain areas. Annexes on financial services, telecommunication services, disciplines on domestic regulation in services, and the recognition of qualifications of service suppliers contain additional sector-specific provisions that go beyond the GATS level. Exceptions to the principles of market access, national treatment and most-favoured nation (MFN) treatment are inscribed following a so-called “negative list” approach. (for more details, see chapter 6) JSFTEPA | 17 3.2.3 Movement of natural persons Moreover, the JSFTEPA contains provisions on the entry and temporary stay of natural persons for business purposes. This chapter in JSFTEPA contains specific provisions on transparency and procedures regarding the entry and temporary stay of natural persons. The Parties have contracted specific commitments on the entry and temporary stay of certain categories of natural persons of the other Party; the level of commitments taken by Switzerland is comparable to that contained in previous Swiss FTAs. The provisions in this area conform to the Swiss legislation on foreigners and cannot be compared to the agreement of the Free Movement of Persons in force between Switzerland and the EU, as, similarly to the GATS, they mainly relate to service providers. (for more details, see chapter 7) 3.2.4 Provisions to promote and facilitate electronic commerce The JSFTEPA is Switzerland’s first FTA to include specific provisions on trade in electronic goods and services, digital signatures and the protection of online consumers. The chapter in JSFTEPA, also includes obligations regarding digital goods, electronic certificates and electronic signatures. (for more details, see chapter 8) 3.2.5 Provisions concerning the establishment and protection of investments The JSFTEPA facilitates the establishment of Japanese and Swiss investments based on the principles of national treatment and MFN. In addition, this chapter in JSFTEPA contains provisions on the protection of established investments. (for more details, see chapter 9) 3.2.6 Provisions on strengthening the protection of intellectual property The JSFTEPA contains, inter alia provisions improving the protection of copyrights, trademarks, designs, patents, new plant varieties, geographical indications, confidential test data, as well as in respect of unfair competition. In addition, the JSFTEPA contains provisions on the enforcement of intellectual property rights. (for more details, see chapter 10) 3.2.7 Provisions on government procurement As Japan and Switzerland are both parties to the plurilateral WTO Agreement on Government Procurement (GPA), the provisions on government procurement are limited to a reference to the GPA as well as evolutionary and negotiation clauses. (for more details, see chapter 11) 18 | JSFTEPA 3.2.8 Promotion of a closer economic relationship A Joint Committee overseeing the implementation and further development of the Agreement is being established. In addition to the Joint Committee, several technical sub-committees will be created. For the first time in a Swiss FTA, the JSFTEPA will contain provisions on the promotion of closer economic relations involving the private sectors of both countries. This creates an instrument by which specific concerns and problems faced by industries can be directly addressed in the bilateral context. (for more details, see chapter 11) 3.2.9 Dispute settlement The JSFTEPA contains provisions designed to prevent anti-competitive behaviours from frustrating the benefits derived from the Agreement. Furthermore, detailed provisions on cooperation between competition authorities of both countries are foreseen. 3.3 Statements on environmental protection, labour standards and human rights. The JSFTEPA includes in its preamble a statement concerning environmental protection and sustainable development. Besides, the WTO exception clauses, which also apply to the JSFTEPA, allow the adoption of measures deviating from the Agreement for the purposes of environmental protection. In addition, the JSFTEPA contains an article on the promotion of environmental goods and environmental-related services. Furthermore, the Investment chapter in JSFTEPA includes a provision stipulating that is it inappropriate to encourage investment activities by relaxing domestic health, safety or environmental measures or lowering labour standards. Regarding human rights, both countries reaffirm in the preamble of the Agreement their commitment to human rights and fundamental freedoms in accordance to the principles of the Universal Declaration of Human Rights. JSFTEPA | 19 4. Trade in goods. Resource. 4.1 Industrial goods. With the entry into force of the agreement on 1st September 2009, Switzerland abolished Details on Chapters 35 and 38, all customs duties on imports on industrial goods with the very limited exception of a product specific rules: small number of goods of Chapters 35 (casein, albumins, dextrins) and 38 (miscellaneous JSFTEPA, Annex II, Appendix I chemical goods) for animal feed, which are considered to be agricultural goods. Product Specific Rules www.seco.admin.ch/themen 4.2 Agricultural goods. 4.2.1 Basic agricultural goods and agricultural goods of particular interest for Japanese exporters Under the agreement, Switzerland granted Japan preferential market access for a wide range of basic agricultural goods, together with preferential market access specially for the following designated agricultural goods which are said to be of particular interest for Japanese exporters. Zero duty applies to: • Certain live animals and goods thereof. • Fish and fisheries goods. • Certain vegetables and fruits, mainly during the winter season. • Spices, vegetable saps and extracts, certain other vegetal goods (except for animal feed). • Animal or vegetable fats and oils and their cleavage goods, prepared edible fats, animal or vegetable waxes, for technical purposes. • Cocoa in primary forms. • Grapes, peaches and nectarines, put up as “gift fruits” (within an annual preferential tariff quota of 50 tons in total). • Giving plants of the ‘bonsai’-type for ornamental purposes. • Provisionally preserved salted yam. • Dried single garlic and tomatoes. • Ginger and shallots prepared or preserved by vinegar or acetic acid. • Sake. 20 | JSFTEPA The export of animals or animal (by-) products from Japan to Switzerland. The export of animals or animal (by-) products from Japan to Switzerland is governed by the Agriculture Agreement of 1999 between the European Union (EU) and Switzerland. This agreement principally facilitates trade in agricultural products Resource. For more information on exports of animal or animal (by-) products between Switzerland and the EU by harmonising regulations on animal-health and Federal Veterinary Office (FVO) zootechnical measures applicable to the trade of live animals and animal products. www.bvet.admin.ch It ensures that the legal requirements of the EU and Switzerland in this sector are equivalent, and animals or goods of animal origin which have been approved for For more information on EU approval export into the EU can automatically be exported to Switzerland as well. procedures for exporting animal or In accordance with the Agreement, Switzerland has completely adopted EU third-country import conditions for animals and animal (by-) products, including respective import certificates. Consignments of animals or animal (by-) products for export from Japan to Switzerland must be approved for import into the EU for the animal (by-) products animal or animal (by-) products to Switzerland Japan Ministry of Agriculture, Forestry and Fisheries www.maff.go.jp group of goods concerned, and must be accompanied by the corresponding EUthird country certificates. Switzerland cannot accept other import certificates. Japan must also have an EU-approved residue-testing program in place for the group of goods intended for export (annual approval by the EU), and the establishment of the exporter or producer must appear on the EU list of approved establishments in Japan. The EU approval procedure for Japan, the residue testing program, and approval of interested establishments must be initiated by the Japanese Agricultural Ministry by application to the EU. JSFTEPA | 21 Reduced duty rates apply to: • Certain meat goods. • Certain living plants and goods thereof. • Certain vegetables and fruits, mainly during the winter season. • Oilseeds. • Dried radish of the genus Raphanus sativus (¥ 126 per 100kg gross). • Mixtures of nuts or dried fruits containing tropical fruits. (for animal feeding: ¥ 72 per 100kg gross; other: ¥ 9 per 100kg gross). • Sparkling fruit wine (¥ 2520 per 100kg gross). Note: ¥ figures are provided as an approximate indication for comparison purposes only. The exchange rate was calculated at CHF 1 = ¥ 90. 4.2.2 Processed agricultural goods Furthermore, Switzerland granted to Japan preferential market access for a certain number of processed agricultural goods: Zero duty applies to: • Communion wafers. • Empty cachets of a kind containing more than 10% but not more than 20% by weight of meat, offal, blood, sausage or any combination thereof. • Tomato pulp, purée and concentrates, in airtight containers, of a dry extract content of 25% or more by weight, composed of tomatoes and water, whether or not salted or otherwise seasoned. • Mushrooms and truffles, prepared or preserved otherwise than by vinegar or acetic acid; preparations of tropical fruits and nuts; jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, not containing added sugar; orange and grapefruit juices, not containing added sugar or other sweetening matter; pineapple juices and juices of tropical fruit as well as mixtures of juices with a basis of juices of tropical fruits or tropical nuts. • Extracts, essences and concentrates, of coffee, tea or maté, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee, tea or maté, not containing milk fat or milk protein, sugar or starch; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof. • Inactive yeasts (except for animal feeding); prepared baking powders; soy sauce; tomato ketchup and other tomato sauces; mustard flour and meal, unmixed (except for animal feeding); other sauces and preparations therefore or mixed condiments and mixed seasonings (except liquid mango chutney); soups and broths and preparations therefore; other food preparations of tariff heading 2106.90 not containing sugar (except of tariff heading 2106.9040). 22 | JSFTEPA • Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured, ice and snow. • Beer made from malt; vermouth and other wine of fresh grapes flavoured with plants or aromatic substances; undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol or higher; ethyl alcohol and other spirits, denatured, of any strength; undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol; spirits, liqueurs and other spirituous beverages (except concentrated grape juice containing added alcohol) and vinegar and substitutes for vinegar obtained from acetic acid. Reduced duty rates (in form of a rebate on the most favoured nation duty rate) apply to: • Sugar confectionery. • Chocolate. • Swelled or roasted cereals or cereal goods (“Muesli”); waffles and wafers. • Rusks, toasted bread and similar toasted goods; bread and other ordinary bakers’ wares (except goods for animal feeding); potatoes in the form of flour, meal or flakes. • Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, containing added sugar; peanut butter; extracts, essences and concentrates, of coffee, tea or maté, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee, tea or maté, containing milk fat or milk protein, sugar or starch. • Homogenised composite food preparations. • Protein concentrates and textured protein substances, containing milk fat, other fat or sugar; chewing-gum and sweets, tablets, pastilles and the like, not containing sugar and other food preparations of tariff heading 2106.90, containing sugar. 4.3 Working or processing which confers origin. 4.3.1 Introduction In order to obtain the status of originating goods which allows a preferential treatment in the importing country, the rules of origin according to the annex on rules of origin (“Annex II”) have to be fulfilled. This annex contains among other provisions the working or processing which has to be undertaken in order to achieve originating status. JSFTEPA | 23 Goods incorporating non-origin input materials are considered as originating, if: Resource. JSFTEPA Annex II • The value of the non-originating materials used in the production of the goods does not exceed 60% of the ex-works price of those goods; or • All non-originating materials used in the production of the goods have undergone a www.seco.admin.ch change in tariff classification at 4-digit level of the Harmonized System. Harmonized System Exceptions from this general rule are listed in a separate list (product specific rules). Short name for the Harmonized This list covers inter alia products from the agricultural sector, leather and leather Commodity Description and Coding goods, products from the textile sector, raw precious metal goods and watches. Input System (HS), an internationally material originating from the partner country (e.g. material originating from Switzerland standardised system of names and numbers for classifying traded products developed and maintained by the World Customs Organization (WCO) www.wcoomd.org used in Japan) may be used accumulatively. Consequently this input material does not have to fulfil the above-mentioned criteria. Furthermore, depending on the goods in question, a certain percentage does not have to fulfil the requested rule. For the agricultural sector this percentage is 7%; for the industrial sector 10% (in relation to the ex-works price); and for the textile sector 7% (in relation to the weight) respectively. 4.3.2 Direct transport rule (consignment criteria) The direct transport rule allows the splitting-up of consignments by a third party, under the condition that the consignment in question is stored under customs surveillance by the third party. For example: A larger Japanese company operates a warehouse in Rotterdam (Netherlands, EU) in order to supply the European market with its goods. The goods are stored there in a customs warehouse. It shall be understood that this Japanese company wants to supply customers in Switzerland with their goods, and in addition would like to profit from the preferential treatment foreseen in the JSFTEPA. The rule for splitting-up allows this procedure. In order to apply for a preferential treatment for the importation, the Japanese company in Japan has to issue a proof of origin retrospectively for the goods which were delivered to Switzerland. 4.3.3 Proof of origin Resource. Certificate of origin EUR.1 EUR. 1 is a declaration for products To obtain preferential treatment in Switzerland when importing goods from Japan requires the presentation of a valid proof of origin issued in Japan. A ‘Proof of Origin’ may be issued for goods originating in Japan or Switzerland. There are two types of ‘Proofs of Origin’: with preferential origin status required for shipments to those countries 1. Certificate of origin EUR. 1 with which the EEC has special 2. An origin declaration issued by an “approved exporter” (see 4.3.4). agreements. In the context of JSFTEPA, it only applies to Swiss exporters. http://ec.europa.eu 24 | JSFTEPA The validity of a ‘Proof of Origin’ is limited to one year. In cases in which exporters are not authorised to issue an origin declaration, a certificate of origin EUR.1 is required. 4.3.4 Approved exporter The status of an approved exporter allows the holder to issue an origin declaration as proof of origin. The approved exporter is authorised to mention an origin declaration, as such is a prescribed text, on any commercial document as long this document describes the goods concerned in sufficient detail. Consequently there is no additional form to be filled in and no form to be checked by the responsible authorities. Resource. Approved exporter status in Japan Under JSFTEPA, METI was designated as the competent authority for issuing a self-declared C/O (Certificate of Origin), This experience-based system accelerates customs procedures at the time of the the first time this system has been imple- export. In addition, the importer has the possibility to present a copy of an origin mented in Japan. However, METI delegates declaration to the customs authorities of the importing country. The origin declaration the issuance of C/Os as such to the may be issued at the time of export, as well as retrospectively after the exportation. The competent governmental authorities for granting the status as an “approved exporter” is the Ministry of Economy, Trade and Industry (METI) for Japan, and the Federal Customs Administration for Switzerland. Chambers of Commerce. www.meti.go.jp/policy www.mof.go.jp Legal text for the rules of origin and appendices JSFTEPA Annex II www.seco.admin.ch/themen Business in Switzerland in the context of the Switzerland-EU Free Trade Agreement. Switzerland maintains Free Trade Agreements (FTA) with Japan as well as with the EU (technically within the European communities). However, there is no linkage Document for use by approved exporters www.customs.go.jp/kyotsu between these FTAs. In the context of the Switzerland-EU FTA Japanese goods EC-Switzerland agreement on have to be regarded as non-originating materials. This implies that goods originating products originating from Japan may not profit from preferential treatment in the scope of 2005 amendments to the Switzerland-EU the Switzerland-EU FTA when re-exported to the EU. However if sufficient working Agreement concerning the definition of or processing on Japanese input material takes place in Switzerland according to the concept of “originating products” and the Switzerland-EU rules of origin, this new product may be considered as an originating product from Switzerland, in the scope of the Switzerland-EU FTA. methods of administrative cooperation in the Official Journal of the European Union http://eurlex.europa.eu Therefore it may be interesting for a Japanese company to import Japanese input material duty free into Switzerland based on the JSFTEPA, undertake sufficient value added work in Switzerland, and export the new product to European markets based on the preferential regime of the Switzerland-EU FTA. Contact Details. Japan Approved exporter status in Japan For inquiries to METI, there is an on-line inquiry form at: www.meti.go.jp Switzerland Approved exporter status in Switzerland Swiss Federal Customs Administration www.ezv.admin.ch JSFTEPA | 25 5. Technical regulations, standards and conformity assessment procedures. Resource. 5.1 Technical barriers to trade. The chapter in JSFTEPA covering technical regulations, standards and conformity Legal text of the WTO agreement: assessment procedures, is applied as defined in the Agreement on Technical Barriers Annex 1A Multilateral Agreements on to Trade in Annex 1A to the WTO Agreement unless otherwise provided for in this Trade in Goods Chapter. It applies to any goods irrespective of origin. It does not apply to purchasing www.wto.org specifications prepared by governmental bodies for production or consumption requirements of governmental bodies and sanitary and phytosanitary measures as defined in the SPS Agreement. Contact Details. For further information on technical Each Party has designated an enquiry point to answer all reasonable enquiries from the other Party regarding technical regulations, standards and conformity assessment regulations, standards and conformity procedures and, if appropriate, provide the other Party with other relevant information procedures, and to contact the which it considers the other Party should be made aware of. Sub-Committee on Technical Regulations, Standards and Conformity Assessment Procedures Federal Department of Economic Affairs (DEA) State Secretariat for Economic Affairs (SECO) www.seco.ch 26 | JSFTEPA 6. Trade in services. 6.1 Introduction. The JSFTEPA aims to provide business with a more open, stable and predictable environment. For Japanese business, it brings legal certainty and security to a wide range of issues and needs in accordance with the laws and regulations of Switzerland, and represents an opportunity for businesses to create added value in Switzerland. The provisions for trade in services in JSFTEPA cover two broad areas. The first relates to the services, including their regulation, recognition of qualifications and service suppliers, and market access. The second is the movement of natural persons for business purposes. 6.2 Provision of services. 6.2.1 Introduction The provisions of the JSFTEPA build on the WTO General Agreement on Trade in Services (GATS). In some service sectors a number of “GATS-plus” commitments were added, with annexes on financial and telecommunication services and the bilateral recognition of qualifications of service providers and requirements. Exceptions to the principles of market access, national treatment and most-favoured nation (MFN) treatment are inscribed following a “negative list” approach. The establishment of the Joint Committee offers the possibility to address at the bilateral level any barriers to trade in services which fall within the scope of the JSFTEPA. 6.2.2 Scope of coverage The Trade in Services Chapter in JSFTEPA covers all government measures at the federal, cantonal and communal level in Switzerland. In general all services are covered, including the liberal professions (lawyers, doctors, auditors, architects, engineers, etc.), consulting (in reference to executive and management, advertising, computer science, etc.), renting, research, couriers, telecommunications, construction, trading and commission business, wholesale, retail and trade, financial services (banking, insurance, asset management), training, environmental care, leisure, tourism and transport. Not covered by the Agreement, however, are services which are supplied in the exercise of sovereign authority. JSFTEPA | 27 The definition of trade in services includes four forms of service delivery: • Cross-border trade in services in the form of goods being moved across the border, e.g. the dispatch of an architectural plan via the Internet or telephone call from Japan to Switzerland. • The use of a service by a foreign consumer who moves from Japan to Switzerland in order to consume a service. A typical example for this is a tourist who travels to Switzerland. • The provision of a service by a place of business abroad. Trade in services is associated in this case with a direct investment. Examples of this are branches, subsidiaries or joint ventures of logistics companies, banks, insurance companies and other service companies. • The provision of services by a provider who personally enters Switzerland for this purpose, such as by a consultant or an Executive Service employee of a Japanese company. (See chapter 7 for more details) 6.2.3 Administration of domestic regulations Under the Agreement, the Parties commit to adhere to bilateral regulations, general rules and principles. In terms of domestic regulations, each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner. 6.2.4 Recognition of qualifications and service suppliers In terms of qualification requirements and procedures, technical standards and licensing requirements, the necessary procedures should be simple, appropriate and clear. Where authorisation is required for the supply of a service, the competent authorities will inform the applicant of the decision concerning the application within a reasonable period of time after the submission of an application is considered complete. At the request of the applicant, the competent authorities will provide, without undue delay, information concerning the status of the application. Each Party has committed to providing adequate procedures to verify the competence of professionals of the other Party. Switzerland is prepared to encourage its competent authorities and professional associations to recognise the qualifications of service suppliers from Japan. In addition, Switzerland provides procedures for the recognition of training and work experience acquired in Japan. 28 | JSFTEPA 7. Movement of natural persons for business purposes. 7.1 Movement of natural persons supplying services. Under the JSFTEPA, conditions pertaining to working in Switzerland include: • Legal certainty for the entry and the temporary stay of specific categories of persons is improved. • Transparent criteria and procedures to make sure that the movement of natural persons is facilitated. • While permanent access to the Swiss labour market is not contemplated by this agreement, nationals of Japan are admitted temporarily to supply a service in Switzerland if they are trained and qualified for specific job positions. • No numerical ceilings will be applied in the issuance of short-term and annual residence permits in respect of highly qualified specialists from Japan covered by the agreement. • Limitations and conditions for the entry and temporary stay in Switzerland are: - Local working conditions as provided by law and/or collective agreements; - Measures limiting professional and geographical mobility within Switzerland; - Regulations related to statutory systems of social security and public retirement plans; - Requirement that the enterprise employing natural persons cooperate, upon request, with the authorities in charge of the enforcement of measures relating to the entry and temporary stay; - Eligibility of subsidies, tax incentives and tax credits may be limited to natural persons domiciled in a particular geographical subdivision of Switzerland and all other legislation relating to immigration, entry, stay and work. 7.2 Categories of natural persons 7.2.1 Categories of natural persons in service sectors for which Switzerland has made commitments In the Agreement Switzerland undertook commitments related to the entry and temporary stay of the following categories of natural persons: JSFTEPA | 29 Intra-corporate transferees (ICT) These are essentially persons (executives, senior managers and specialists), who have been employed by a specific business or company of Japan (which supplies services in Switzerland through a branch, subsidiary or affiliate established in Switzerland) for at least one year prior to the temporary transfer to a branch (or subsidiary) established in Switzerland. • Entry and temporary stay are subject to an authorisation (work and residency permit). • The maximum permitted stay as an ICT is 5 years. Other essential persons moving to Switzerland: (a) Service salespersons These are employed or mandated by a Japanese enterprise to conclude a contract for the sale of a service on behalf of the enterprise. They do not engage in making direct sales of services to the general public or supply services themselves. (b) Business visitors Entering Switzerland for a short-term with the responsibility of setting up a commercial presence of the Japanese enterprise in Switzerland. • They have been employees of that Japanese enterprise not having a commercial presence in Switzerland for at least a year prior to the transfer. • They are in a general supervisory position, and do not engage in direct sale of services to the general public nor supply of services through themselves. c) Contractual service suppliers supplying a service in Switzerland Resource. For details on specific service sectors covered under the agreement relating to contractual service suppliers supplying These are professionals in specific services sector (see resources box for link to more details) who have been employed for at least one year prior to the transfer by a Japanese enterprise located outside Switzerland not having a commercial presence in Switzerland, whose enterprise has concluded a services contract with a business in Switzerland. (Individual service suppliers not employed by the enterprise located outside Switzerland a service in Switzerland, please see: are considered as natural persons seeking access to the Swiss employment market.) JSFTEPA Annex VIII, Appendix 2, Specific • They must have five years of related experience. Commitments by Switzerland for the • The entry and temporary stay is subject to authorisation; it is granted for a single Movement of Natural Persons period of three months and is limited to the number of persons necessary to supply www.seco.admin.ch 30 | JSFTEPA the contract. d) Installers and Maintainers These are qualified specialists supplying installation or maintenance services for Resource. machinery or industrial equipment. The supply of that service has to occur on a fee or contractual basis, pursuant to an installation or maintenance contract between the Applications for work and residence builder of the machinery or industrial equipment and the owner of the machinery, both of permits should be made to the respective whom are enterprises, excluding any supply of services in connection with enterprises cantonal immigration and labour market supplying job placement services. authorities: www.bfm.admin.ch/bfm The maximum permitted stay as a natural person in (a) to (d) is 90 days within one year. 7.2.2 Non-services sector The following categories of natural Japanese persons in the non-service sectors may enter and stay temporarily in Switzerland in accordance with and subject to the relevant legislation of Switzerland: Intra-corporate transferees (ICT) These are essentially persons (executives, senior managers and specialists) employed by a specific business or company of Japan for at least one year and are temporarily transferred to Switzerland (The enterprise supplies services in Switzerland through a branch, a subsidiary or affiliate established in Switzerland). • The entry and temporary stay are subject to an authorisation (Work and Residence permit). • The maximum permitted stay as an ICT is 5 years. Other essential persons moving to Switzerland (a) Salespersons Are employed or mandated by a Japanese enterprise to conclude a contract for the sale of goods on behalf of the enterprise. • They may not directly sell goods to the general public. (b) Business visitors Entering Switzerland for a short term with the responsibility of setting up of a commercial presence of a Japanese enterprise in Switzerland. • They have been employees for not less than one year of the Japanese enterprise that does not have a commercial presence in Switzerland. The maximum permitted stay as for (a) and (b) is 90 days within one year. If an authorisation for such a period of stay is renewed for the following year, the applicant must stay abroad at least two months between the two consecutive periods of stay in Switzerland. JSFTEPA | 31 8. Electronic Commerce. 8.1 Introduction. Today, electronic commerce is an important component of commercial activity. Companies increasingly use it as a more efficient means of conducting acquisition and sales transactions, and private individuals are inclined to order more goods and services online. The availability of digital goods and services delivered electronically is constantly growing and geographical borders tend to disappear. Regulation of electronic commerce, however, is not yet very advanced on the level of international trading. In this context, Switzerland and Japan have established a legal framework on electronic commerce in their bilateral Agreement, which aims at facilitating commercial exchanges in general terms between the two countries, and at improving commercial conditions not only for electronic commerce, but also for trade in goods and services. 8.2 Confirmation of current practice and commitments in electronic commerce. In the Chapter in JSFTEPA on Electronic Commerce, Switzerland and Japan confirm their current practice, which is not to impose customs duties on electronic transmissions. They commit: • Not discriminate each other’s digital goods. • Not to introduce barriers to electronic commerce – in an excessive manner. • Not to adopt or maintain measures that would accord a less favourable treatment to digital goods of either Japan or Switzerland, than they would accord to like digital goods of any other country. Nevertheless, these commitments are subject to exceptions which are enumerated in the lists of reservations for services and investments, and which apply by analogy to electronic commerce. In addition, Switzerland and Japan pledge not to discriminate services supplied by electronic means against services supplied by any other means. 32 | JSFTEPA 8.3 Recognition, promotion and cooperation. Resource. Switzerland and Japan recognise the importance of protecting online consumers and personal data, and to have regulatory frameworks that support industry-led develop- JSFTEPA, Chapter 9 Electronic ment of electronic commerce. They encourage paperless trade administration for trade Commerce, is available at: in goods and services and the movement of natural persons and they also promote Switzerland: State Secretariat for electronic signatures. In this regard, they have established the basis for facilitated recognition procedures for suppliers of electronic certification services. The implementation presupposes the guarantee of the equivalence of both the Japanese and Swiss legislations, the latter being currently more demanding. Economic Affairs (SECO) www.seco.admin.ch Lists of reservations for services and investments (which also applies to Electronic Commerce) JSFTEPA Annex IX, Appendix 2 www.seco.admin.ch Finally, given the ubiquitous character of electronic commerce, Switzerland and Japan plan to cooperate within international organisations, in particular the WTO, to develop a legally binding multilateral framework for electronic commerce. JSFTEPA | 33 9. Investment. Resource. 9.1 Facilitating and protecting investment. Japan and Switzerland are both members of the OECD and have international OECD Codes of Liberalisation of Capital commitments to liberalise cross-border capital movements in accordance with the OECD Movements and of Codes. However, prior to the conclusion of the EPA there was no bilateral investment Current Invisible Operations protection treaty between Japan and Switzerland. The investment chapter in JSFTEPA www.oecd.org/daf/investment/codes increases legal security for Japanese investors in Switzerland in two ways: 1. It extends the liberalisation commitments of the OECD Codes. 2. It includes standards for the treatment and protection of investments. As a result, Japanese investors in Switzerland have a stronger legal position than investors from other countries that have not concluded an EPA (with liberalisation commitments for investments) or a bilateral investment protection treaty with Switzerland. 9.2 Scope of concept of investment. The investment chapter in JSFTEPA is built on a broad asset-based concept of “investment”, which apart from controlling participation in existing companies also includes portfolio investments and any other asset that has an economic value. The investment chapter is applicable to investments owned or controlled by natural citizens (Japanese or Swiss nationals) or by enterprises constituted according to the law of one of the two EPA partner countries. In order to ensure that the method of structuring an investment (e.g. through a company in a third country) does not limit investment protection, enterprises constituted or organised according to the law of a third country are also recognised as “investors” if and to the extent that they are owned or controlled by nationals or enterprises of the two EPA partners. The investment chapter in JSFTEPA covers: 1. The pre-establishment phase (market access). 2. The post-establishment phase (protection against discriminatory and arbitrary treatment by State authorities) of an investment. 34 | JSFTEPA The core discipline for both phases of the life cycle is non-discrimination, which guarantees Japanese investors the same treatment as the one provided to Swiss investors (national treatment) or investors of third countries (most favoured nation treatment) in similar situations, whichever of the two is more favourable to the investor. Exceptions from the obligation of most favoured nation treatment are permitted for liberalisation commitments assumed by the EPA partners in other free trade agreements, customs unions or similar agreements. 9.3 Pre-establishment phase (market access for investments in Switzerland). Resource. The commitments made by the EPA partners under the OECD Codes of Liberalisation JSFTEPA Annex IX, Appendix 2 of Capital Movements and of Current Invisible Operations are the point of departure for the investment chapter in JSFTEPA. It adds, however, a mechanism of legal enforceability not available under said OECD instruments. The liberalisation commitments made by Switzerland in the EPA mean that national treatment applies as a basic principle and discriminatory market access conditions for foreign investors, including Japanese www.seco.admin.ch Federal Office of Justice Guidelines for Acquisition of Real Estate by Persons Abroad. www.bj.admin.ch investors, may only be maintained in the exceptional cases explicitly listed in Annex IX of the JSFTEPA. Investments in services sectors are covered by the chapter in JSFTEPA on trade in services (see chapter 6), which prevails in the event of any inconsistency. These exceptions are largely related to the energy sector (nuclear energy, gas pipelines, hydroelectric power, oil prospecting and exploitation). There is also the requirement for a Japanese investor regarding their Swiss subsidiary that at least one member of the subsidiary’s board of directors has to have its domicile in Switzerland. This requirement may lead to the necessity of a temporary board member with a work and residence permit (or a Swiss national) in case the work and residence permit for the future board members were not issued yet. Japanese investors shall discuss this point with Switzerland. Trade & Investment Promotion. and the cantonal authorities. No authorisation is required for the acquisition of premises for professional use and business activities (so called “permanent establishment”). The concept of business activity is very broad. Investments in services sectors are covered by the chapter in JSFTEPA on trade in services (see chapter 6), which prevails in the event of any inconsistency. However, purchase of non-commercial real estate property by Japanese investors who are resident outside Switzerland or do not have permanent residence status in Switzerland, and by enterprises with headquarters abroad or which are local headquartered but foreign-controlled, are subject to authorisation in Switzerland. JSFTEPA | 35 Enforcement of the legislation on the acquisition of real estate by foreigners is primarily the responsibility of the canton in which the real estate is located. The authority designated by the canton decides whether or not a transaction requires a permit and whether or not a permit should be granted. The related guidelines of the Federal Office of Justice include a list of competent authorities and their contact details in its annex. 9.4 Post-establishment phase (investment protection). The section of the investment chapter in JSFTEPA relating to protection deals with providing legal security to investors. Investments, in particular direct investments, are normally made with a long-term perspective. Therefore, its exposure to changes of the legal environment, such as regulatory changes or other acts of State authorities that affect the value of the investment in a way that goes against the investor’s good faith is particularly high. Several disciplines of the investment chapter protect the Japanese investor from arbitrary, unreasonable or discriminatory treatment by Swiss authorities (and vice versa) on all levels of government. The principle of non-discrimination (national treatment, most favoured nation treatment) is also applicable to taxation matters. Exceptions thereof are only allowed to the extent that it is necessary for the equitable and effective imposition of direct taxes. However, the investment chapter does not apply to taxation measures to the extent that these are covered by the bilateral agreement on double taxation. The investment chapter includes specific provisions on expropriation, general treatment and free transfer of payments and capital in relation with an investment. Direct and indirect expropriations are only acceptable on a non-discriminatory basis, for a public purpose and against full, prompt and effective compensation. The so-called umbrella clause protects specific commitments entered into with respect to a Japanese investment in Switzerland that were conducive for the investor’s decision to invest. Therefore, in case of a breach of such a commitment the Japanese investor can submit the dispute (together with alleged breaches of other provisions of the chapter) to the dispute settlement mechanisms of the investment chapter in JSFTEPA (see chapter 9.5). The enhanced protection of the investors and investments is also found in the ban of performance requirements (e.g. the prohibition to require investors to purchase or use goods of domestic origin). 36 | JSFTEPA 9.5 Investor-State dispute settlement mechanism. The investment chapter provides for an Investor-State dispute settlement mechanism (besides the general State-State dispute settlement mechanism of the EPA). The possibility to bring a claim for compensation to an independent international Resource. Resolution of disputes over investments in Switzerland The point of contact for consultations to reach an amicable settlement arbitral body and to get a comparatively easily enforceable award within a foreseeable (see Art. 94 para. 2 EPA), is the time frame is a cornerstone of the protection provided to Japanese investments and International Investments and Multi- investors in Switzerland. national Enterprises Unit at SECO. [email protected] If no amicable agreement is found between the Investor and the State during the six months consultation period, the investment dispute can be submitted inter alia to international arbitration. For initiating arbitration, the Japanese investor doesn’t need a specific consent by the Swiss authorities to do so, because such consent has already been included by the EPA partners in the investment chapter in JSFTEPA. However, no When no amicable settlement can be reached and the investor intends to bring his case to international arbitration, the chosen rules of arbitration determine the point of contact for the investor. such consent is given for disputes relating exclusively to market access questions (pre-establishment phase). JSFTEPA | 37 10. Intellectual Property. 10.1 Introduction. The role of intellectual property is of special importance for highly developed trade partners such as Japan and Switzerland, whose competitive edge in the global economy lies particularly in the area of innovative and high-tech industries. Accordingly, the JSFTEPA provides for a comprehensive chapter on the protection of intellectual property rights (IPRs). 10.2 Scope of intellectual property provisions. In addition to adopting the key principles of national treatment and most-favoured nation, Chapter 11 in the JSFTEPA on Intellectual Property contains detailed provisions on the protection in all fields of IPRs (copyright and related rights, patents, trademarks, designs, geographical indications for goods and services, topographies of integrated circuits, plant varieties and test data submitted in marketing authorisation procedures for pharmaceutical and agro-chemical products.) 10.3 Industrial property rights. In the area of industrial property rights, the JSFTEPA provides for the explicit patentability of biotechnological inventions and grants up to five years of compensation in case of significant market-entry delay due to lengthy authorisation procedures for innovative pharmaceutical and plant protection products. The JSFTEPA provides stronger legal security than provided for in the WTO-TRIPS Agreement when it comes to the protection of confidential test data that have to be submitted to government agencies to get marketing approval (a period of 6 years for pharmaceutical and at least 10 years for agro-chemical products). Furthermore, Japanese investors can count on at least 20 years of design protection in Switzerland. 38 | JSFTEPA 10.4 Protection and enforcement of rights. Contact Details. The IPR provisions in the JSFTEPA provide both Japanese and Swiss companies with the high standards of protection and the legal certainty needed to conduct bilateral trade Federal Institute of Intellectual Property and investments in IPR-intensive innovative economic sectors. [email protected] www.ige.ch Besides the regulation on substantive law, the IPR chapter also contains important standards regarding the enforcement of civil, criminal or administrative law. The JSFTEPA stipulates that the assistance of the customs authorities must be made available not only with regard to imported goods, as is the prevailing WTO-TRIPS standard, but also be extended to goods destined for export or in transit. Besides this, the enforcement procedures at the border extend not only to trademark and copyright-protected products, but also include all types of IPRs. The JSFTEPA further provides for the possibility of an analysis of samples or models of goods that are withheld by customs due to suspicion of counterfeiting and piracy. Eventually counterfeited products may be destroyed according to a simplified procedure. JSFTEPA | 39 11. Government procurement. 11.1 Introduction. Government procurement in Switzerland totalled ¥ 3.06 trillion in 2005, with approximately 20% of contracts concluded at the federal level and 80% at the sub-federal level. The Federal government and the 26 Cantons cooperate closely to apply procurement laws homogeneously and in a coherent manner, with their joint efforts focusing on the development of a common electronic platform for all government procurement notification. The JSFTEPA confirms the commitments of Japan and Switzerland under the Government procurement agreement of the WTO of April 15, 1994 (GPA), which entered into force on January 1, 1996. The JSFTEPA does not provide an additional extension of the scope of coverage achieved by both Parties under the GPA. The main value added of the JSFTEPA is to offer to both Parties a window of opportunity to negotiate further liberalisation, in the case that one or the other Party agrees to give to a Third Party a level of market access exceeding the scope of coverage offered under the obligations of the GPA. In this context, the ongoing revision of the GPA will also provide further impetus. In Switzerland, major efforts for enhancing access to information, the harmonisation of procedures and facilitating electronic communication were recently brought to a successful conclusion. The cooperation between the Federal government and the Cantons is fruitful and constructive. As a result, Swiss purchasing entities and bidders from Japan and other GPA or FTA-Partners will be able to benefit significantly in the coming years from a lean organisation and an efficient implementation of new technologies, leading to enhanced transparency and increased competition for national and international bidders. 11.2 Legislative framework. 11.2.1 General principles The Swiss legislation on government procurement is based on the following basic principles: • Transparency of the tendering procedure. • Strengthening of competition between tenderers. • Rational use of public funds. • Equal treatment between tenderers. 40 | JSFTEPA • Respect of the provisions referring to workers’ protection (i.e. safety in the construction sector), and working conditions (i.e. social insurance, vacations.) for procurement in Switzerland. • Wide access to tender notices through paper and electronic means. • Efficient remedy system at the federal and cantonal levels. • Opening-up of the Swiss market to foreign bidders on a reciprocal basis. 11.2.2 Legislation currently in force International level The GPA represents the cornerstone for assuring market access for suppliers from Japan in Switzerland. With this Agreement, Switzerland opened up its markets for goods, services and construction purchased by procuring entities at the federal and the subfederal levels, as well as for several utilities (drinking water, local transportation, electricity, Resource. Federal Act on Public Procurement of 16.12.1994 www.admin.ch airports and ports) above specific thresholds. The value of the thresholds is expressed in Special Drawing Rights (SDR) of the International Monetary Fund (IMF). In Japanese yen Federal Council Ordinance on Public these thresholds approximately represent the following values: Procurement of 11.12.1995 • Federal level: goods and services (¥ 22.5 mn.); www.admin.ch/ construction (¥ 865 mn.) • Cantonal level: goods and services (¥ 34.5 mn.); construction (¥ 865 mn.) Cantonal legislation www.bbl.admin.ch • Utilities: goods and services (¥ 70.0 mn.); construction (¥ 865 mn.) Federal level At the national level, the following legislation is relevant for market access for suppliers from Japan: Federal legislation • Federal law on government procurement, 16.12.1994. This law, passed by Parliament, sets all the basic rules for procurement above GPA thresholds. • Ordinance on government procurement, 11.12.1995. This Ordinance of the federal Council sets detailed rules for procurement under and above GPA thresholds. Cantonal legislation The cantons operate under an Intercantonal Agreement on government procurement of 25.11.1994 revised in March 2001 and its Executive Directives. All the cantons have joined this Agreement and translated it in their legislation. JSFTEPA | 41 Resource. 11.3 Institutional framework. Various bodies hold policy responsibilities regarding government procurement at the Coordination of Federal Construction federal and cantonal government levels. and Real Estate Services (BKB) www.beschaffung.admin.ch Federal Finance Control and Government Procurement (KBOB) www.kbob.ch/de/index.htm Swiss Conference of Cantonal Directors Federal level At the federal level, attention is drawn to the following federal bodies: • The Purchasing Commission of the Federal Government. • The Coordination of the Federal Construction and Real Estate Services (BKB). • The Federal Finance Control and the Government Procurement (KBOB). • The Commission: Federal State-Cantons (KBBK). for Public Works, Land Management and Environmental Protection The KBBK was established with the entry into force of the GPA and aims at a faithful www.bpuk.ch implementation by Switzerland of its international obligations in the area of government procurement. Its membership is composed of representatives of the cantons and the Federal government involved in government procurement. Its major tasks refer to: • The elaboration of the Swiss position in international fora. • The promotion of exchanges of views between the Federal government and the cantons. • The elaboration of recommendations on the transposition of international obligations in Swiss law. • The conclusion of agreements with foreign surveillance entities. • The granting of advice and acting as mediator in dispute cases. • The filing of complaints for violation of international obligations with the federal or cantonal competent authorities under specific circumstances. (A tenderer has complained without filing any remedy procedure; or, at the request of a foreign authority in the absence of any action by the purchasing entities.) Cantonal level The Swiss Conference of the cantonal directors for public works, land management and environmental protection (BUPK) is the inter-cantonal authority in charge of government procurement. The BUPK elaborated executive directives and non-binding recommendations. The BUPK is also an information and advisory organ for the cantons. At the level of each canton, no uniform structure has been established to administratively control government procurement. In general terms, the department or the unit in charge of government procurement follows and coordinates the implementation of the legislation. 42 | JSFTEPA 11.4 Forms of advertising. Resource. 11.4.1 Swiss Official Gazette At the federal level, tender and award notices as well as pre-information notices and Swiss Official Gazette qualification lists are published daily in the Swiss Official Gazette. They are also available www.shab.ch. on its website. 11.4.2 simap.ch electronic public procurement platform More recently, the successful implementation of “Project simap.ch” created an Electronic platform for public procurement www.simap.ch electronic platform shared by the federal government, cantons and communes for public procurement purposes. The project became fully operational in 2009, and can be accessed online. This single point of access has been operational since May 1, 2009. Simap aims at reinforcing competition and transparency, quickly providing in a centralised manner the tender information from all purchasing entities, standardising tender and award notices, simplifying and rationalising administrative tasks, and reinforcing communication through increased cooperation and exchange of views between tenderers and competence centres. “Simap.ch” offers among others the following services: • Tender notices and their listing. • Award notices and their listing. • Applications for tenders. • Downloading of tender documents. • Questions from tenderers and answers. In addition, the following information is made available: • Lists of qualified suppliers. • Legislation and regulations. • Discussion forum. • Jurisprudence including Federal Court Decisions. • Training programs. • Statistics. • Practical guides. • Documents for electronic signature. JSFTEPA | 43 11.5 Procedures for awarding contracts. Above the GPA threshold values, the Federal government applies three tender procedures, namely: 1.Open procedure (any bidder may submit an offer). 2.Restrictive procedure (any potential bidder may submit a request to participate); on the basis of qualification criteria, the purchasing authority selects the firms invited to present a bid. 3.Discretionary procedure (direct award to a bidder without publication of tender notice) under specific circumstances. The Swiss cantons also apply these three procedures, albeit with lower thresholds. Negotiations are foreseen at the federal level provided the tender notice or documentation mentioned it, or no bid appeared to be the economically most advantageous based on criteria such as delivery date, quality, price, rentability, after-sale service, ecological characteristics or technical value. At the cantonal level, legislation does not include the possibility to negotiate. 44 | JSFTEPA 12. New institutional relationships. 12.1 The Joint Committee. Contact Details. The Joint Committee monitors the proper implementation of the provisions of the Agreement by the parties, examines the further development, extension and deepening Japan of the Agreement, and where necessary makes appropriate recommendations to the Ministry of Foreign Affairs (MOFA) parties. In addition, the Joint Committee will endeavour to settle any possible disputes Central and South Eastern Europe Division, concerning the proper interpretation or implementation of the Agreement, by means of European Affairs Bureau consultation. The Joint Committee of the JSFTEPA will meet at the senior officials level, www.mofa.go.jp normally every two years, or when necessary upon the request of one of the parties. Switzerland The Joint Committee will be assisted in these tasks by specific sub-committees. State Secretariat for Economic Affairs The JSFTEPA anticipates the formation of sub-committees in the areas of: (SECO) • Customs matters and rules of origin. Free Trade Agreements Division • Technical barriers to trade. • Intellectual property rights. [email protected] www.seco.admin.ch • Promotion of a closer economic relationship. The Joint Committee may also establish other sub-committees and ad hoc working groups to provide assistance in its work as necessary. 12.2 The Sub-Committee on the Promotion of a Closer Economic Relationship. To involve the business communities and address specific company problems in bilateral trade and investment, the JSFTEPA foresees direct channels of communication between government agencies and business sector representatives. The JSFTEPA provides for a “Sub-Committee on the Promotion of a Closer Economic Relationship” which serves as a platform for direct discussions between business representatives and the relevant government authorities from both sides. This Sub-Committee will address issues concerning the dismantling of trade and investment barriers, as well as possible forms of cooperation to promote trade and investment between the two countries. To this end, the new Sub-Committee is entitled to propose recommendations and measures to the Joint Committee. JSFTEPA | 45 13. Appendix 1: Personnel. 13.1 Introduction. Though the JSFTEPA has a specific chapter relating to the movement of natural persons for business (see chapter 7), this section relating to Switzerland’s general regulations regarding entry and stay, is included here as a convenient resource. Admittance requirements for Japanese nationals planning to start a business in Switzerland are described in chapter 13.3. 13.2 Entry, stay and employment conditions for Japanese nationals in Switzerland. 13.2.1 Entry In order to enter Switzerland, a valid identity document is required that is recognised by Switzerland (valid passport). No additional official document is required for Japanese nationals willing to stay less than 3 months in Switzerland for tourism, business meetings (see chapter 13.3) and transit purposes. This also applies to the following activities: • Theoretical education such as technical courses supplied by Swiss companies to buyers of technical equipment. • Medical treatment. • Participation in scientific, economic, cultural and sporting events. • A driver for the transportation of persons or goods through Switzerland for a company outside Switzerland. • Temporary reporting for foreign media. • Cross-border Japanese providers or Japanese nationals employed by a foreign employer executing a special mandate in Switzerland without taking up employment and not exceeding 8 days a year. Exceptions occur in specific economic sectors: e.g. building, hotel and catering, security services, cleaning. 13.2.2 Gainful employment – authorisation policy In accordance with Swiss legislation on foreigners, access to the labour market is subject to authorisation. A work and residence permit is granted to qualified Japanese workers if the following requirements are satisfied: • Priority and economic needs test: They are trained and qualified for specific job positions which cannot be filled by Swiss labour or EC/EFTA nationals. Exceptions include family reunion, education and humanitarian grounds. 46 | JSFTEPA • Personal qualifications: There are special reasons for employing a particular person: e.g. for IT projects, transfer of know how, specialist qualifications. Resource. • Salary and terms of employment are subject to control (a permit is only granted if local wage levels and working conditions are respected). For details on entry, stay and • In case of gainful employment lasting more than four months, permits can only employment conditions for Japanese be issued within the scope of the numerical ceilings. nationals in Switzerland. www.bfm.admin.ch Exceptions to these market access requirements (e.g. priority) may be made for various professions and groups of individuals: • Temporary duties as part of large projects for companies with headquarters in Switzerland. • Service and guarantee work for products from the country of origin. • Execution of a special mandate. • Investors and entrepreneurs creating employment opportunities in Switzerland. • Highly qualified scientists with a degree obtained in Switzerland in areas or sectors in which there is a lack of labour. See Chapter 7 for categories of natural persons where Switzerland has undertaken specific commitments related to entry and temporary stay. 13.2.3 No gainful employment – longer stays Stays of more than three months also require a permit for persons who are not gainfully employed (retirees, students, and others). Permits are issued by the cantonal migration offices. A distinction is made between short stays (less than one year), temporary stays (of limited duration) and permanent stays (of unlimited duration). Japanese nationals must submit the application for a residence permit to the relevant cantonal migration authorities before entering Switzerland. Depending on the purpose of the stay (schooling, retirement, medical purposes, etc.), different documents will be required. If the conditions for a permit are fulfilled, then a short-stay permit (L permit) for a stay of less than one year will be issued, or a residence permit (B permit) valid for one year will be issued if the applicant is to stay longer than one year. After entering the country, the permit holder must register with the relevant municipality. 13.2.4 Special case: students The procedure described in 13.2.3 also applies to students. The following conditions also apply: Foreign pupils and students wishing to study in Switzerland are required to submit a personal study plan and also to state their precise goal (diploma, matriculation examination, degree, doctorate, etc.). The directorate of the school has to confirm that prospective students have the necessary language skills to follow tuition. JSFTEPA | 47 Applications for a residence permit as a student must be sent to the cantonal migration authorities, together with the following documents: • Letter of acceptance from an approved establishment for the purpose of following a vocational training course as a principal activity. • Proof of payment of tuition fees. • Proof of sufficient financial funding for living expenses for the duration of the course of study, not to have to apply for social assistance benefits for the duration of the stay. • Curriculum vitae, diplomas/school certificates. • Written agreement to leave Switzerland after completion of studies. • Additional sheet documenting language proficiency, coverage of all risks related to sickness and accident insurance cover. If these requirements are met, the student will receive a residence permit for the duration of their studies or for the period of one year if their studies last longer than one year. The permit will be extended until the student has received a regular degree, if the requirements for the permit continue to be met. 13.2.5 Authorisation categories A work and residence permit is issued if an employment contract has been submitted. As a rule, the validity of this permit is determined by the duration of the employment contract and duration of the stay. (a) Short-term work residence permit (L Permit): This permit may be granted to Japanese nationals to stay and work in Switzerland on a temporary basis. Its term of validity is set to harmonise with the employment contract or provision of services contract or up to one year if the activity lasts for more than one year. This permit may be extended up to a total maximum duration of 24 months, provided the employer remains the same — a change of employer is only considered for special circumstances. Also considered as short-term stays are basic and continuing education and training in Switzerland that come under the bilateral agreement on Young Professionals (see Chapter 14 for more details). The L permit applies to: • Key positions. (founding a company, training new qualified staff, self-employed workers, etc.) • Specialists and technicians working on specific projects. • Intra-corporate transfers. • Indispensable managers and qualified personnel who cannot be recruited from Switzerland or EC countries. • Young professionals. • Family reunions. 48 | JSFTEPA (b) Annual work and residence permit (B Permit): This permit authorising a person to take up employment is renewed from one year to the next, provided there are no conflicting grounds for eligibility (e.g. infringements, dependency on social welfare). It enables professional and geographic mobility, and the legal ability to change domicile to a different canton, and is available to employees and the self-employed. The B permit applies to: • Managers and qualified personnel transferred within a company group to work on specific projects, for the duration of the project. • Indispensable managers and qualified personnel who cannot be recruited from Switzerland or EC countries. • Family reunions. (c) Permanent residence permit (C Permit): This settlement permit is granted to Japanese nationals after a regular and uninterrupted period of 10 years of residence in Switzerland or after 5 years at certain conditions (good integration level, especially with regard to national language). It is not subject to restrictions with regard to the economic needs test, and its holders are in all practicality placed on the same level as Swiss nationals (holders can invoke the freedom of trade and industry), with the exception of the right to vote and elect. (d) Family reunions Family reunions pertain to the immediate family of holders of L and B Permits. The scope of the immediate family and the conditions pertaining to applying for these permits include: • Spouse or registered same sex partner. • Unmarried children under the age of 18. • Appropriate living quarters. • Sufficient financial means. Family members holding a long-term residence permit (B Permit or C Permit) can be gainfully employed or self-employed nationwide without any additional application procedure. Full professional and geographic mobility is granted. For family members holding a short-term residence permit (L Permit) additional application procedures are required. JSFTEPA | 49 Resource. Overview of the personal and technical requirements for setting up a company 13.3 Japanese nationals planning to start a business in Switzerland. Japanese nationals wishing to start a business in Switzerland can apply for a short-term and important information on business or a long-term stay directly to the respective cantonal authorities where they intend to location Switzerland. reside. The migration authorities of the Canton of residence will provide further details on www.kmu.admin.ch the procedure to follow in their respective Canton. Switzerland’s official web portal with Short-term stay: Japanese entrepreneurs entering Switzerland temporarily for negotiating information on self-employment in contracts, business meetings, exploration talks for the setting up of a company etc., can Switzerland www.ch.ch/private Links to chambers of commerce and enter and stay for three months without requiring any work and residence permit, as long as they do not supply services as such or exercise a gainful activity in Switzerland. Under this rule, two three-months stays are possible within a civil year but they must not exceed other organisations in Switzerland, a total of three months within a period of six months. Conditions of staying in Switzerland with a focus on SMEs under this status are that the person has sufficient financial means for the duration of the www.kmu.admin.ch/adressen stay and can describe to the border police the purpose of the stay. (German, French, Italian only) Long-term stay: Japanese entrepreneurs willing to set up an enterprise in Switzerland Information on investing in Switzerland www.osec.ch and reside in Switzerland in the long run. As a rule, applications for a work and residence permit have to be made from abroad (Japanese territory) by the entrepreneur himself directly to cantonal migration authorities in Switzerland. In some cases, it might be possible to apply for a work and residence permit from within Switzerland. Solicitors or sponsors such as a chamber of commerce, or cantonal economic promotion organisation can assist with this. The permit delivered will be initially granted for a 2-year period and can be extended. The cantonal authorities determine what documents must be presented. As a general rule these include the following: • Business plan, market study. • Potential employment creation. • Proof of capital for starting the business. • Proof of specific preparations for launching the business like rental agreements for real estate. • A foundation charter and/or a registration with the register of commerce, etc. 50 | JSFTEPA Key steps for establishing a new company in Switzerland. The main work relating to setting up a new business is Switzerland is focused on the practical matters of setting up any business that all companies must meet, such as ensuring financial and legal matters and approvals from the relevant authorities are in order. Key steps include: • Clarify whether there are any authorisations, permits or licenses required for your business activity (e.g., for companies active in the health care sector or the catering and hotel industry). • Check whether there is any obligatory factory insurance (e.g. for the construction industry). • Select the legal structure of organisation. • Clarify any opportunities for tax optimisation. • Decide on the location of the company headquarters. • Decide on a name for the company and checking its availability. • Pay the initial capital in to a blocked account at a bank. The cantonal and regional economic promotion agencies have extensive information on-line, and can also answer your inquiry. A list of the cantonal economic promotion agencies can be found on page 62. JSFTEPA | 51 Resource. Links to information about working in Switzerland 13.4 Where to ask for more information and submit an application. Work and residence permit application forms are handled at the regional level www.bfm.admin.ch (cantonal authorities) in Switzerland. There are no formalities required at the Swiss Cantonal immigration and approved by the Federal Office for Migration. The following general information is valid labour market authorities for all Cantons: www.bfm.admin.ch • Applications for Japanese nationals wishing to take up employment must be Embassy in Japan. Valid permits are then issued by the cantonal authorities after being submitted by the employer to the labour market authorities in the Canton where the person intends to work. • Investors willing to launch an independent business shall apply directly in the Canton where they intend to reside. The migration authorities of the Canton of residence will provide further details on the procedure to follow in their respective Canton. For detailed information on the application procedure including where to apply, which form to fill in, how long it takes etc., please follow the links in the Resource box to the relevant cantonal authorities. Resource. For more in-depth information on the documents required www.bfm.admin.ch 13.5 Documents required for the work permit application process. The following documents are required when applying for a work permit in Switzerland, • Employee’s details: - CV, diploma, qualifications etc. • Employer and specific tasks: - reasons for the application. - Description of the employee’s task and probable duration of stay. - Signed employment contract. - In specific cases, proof that the vacancy cannot be filled by a Swiss or an EC/EFTA national. In the case of assignments, a letter of assignment issued by the foreign employer indicating salary and benefits, the date the employee joined the company, and confirmation the employee will return to the company when the assignment ends. 52 | JSFTEPA Figure 8 Application procedure for work and residence permits for Japanese prospective employees 1 Employer established in 2 Permit Cantonal application Employment Authority Switzerland 8 if approved 3 Hand over of Federal Office certificate guaranteeing for Migration (FOM) the residence permit 9 if approved 4 Prospective employee Work permission 5 Cantonal Employment Authority 6 Cantonal Migration Authority 7 Certificate guaranteeing the residence permit (necessary to pass the border and to be handed over by the employee to the municipal authority when registering) JSFTEPA | 53 14.Appendix 2: Young Professionals Program. 14.1 Introduction. The Young Professionals Program was established by the Government of Japan and the Swiss Federal Council to facilitate the bi-directional exchange of young professionals between the two countries. It supports young professionals who want to go to the reciprocal country for a limited period of time to take up employment within the field of their previously acquired professional technology or knowledge, in the hope of familiarising themselves with business, professional and technical practices in the country and improving their linguistic knowledge. 14.2 Swiss requirements to be a Japanese Young Professional. Professionals of Japanese nationality, over the age of 18 and under the age of 35 will be granted a permit for a temporary stay in Switzerland up to a maximum of 18 months. The trainee agreements are valid for any occupations that foreign nationals are not prohibited from exercising in Switzerland. For professions which require a government approval, the corresponding permit must be obtained. During their stay, trainees are required to work in the occupation that they have learned or in their study major. Part-time work or working as a self-employed person is not permitted. Japanese applicants wishing to join the Young Professionals Programme in Switzerland must meet the following requirements: • Japanese nationality. • Aged over 18 and under 35. • Have completed tertiary education. • Working knowledge of a Swiss national language. • Motivation to continue learning. 54 | JSFTEPA 14.3 The process for joining the Young Professional programme. The process for joining the Young Professional programme has three steps: 1.Find a position. 2.Obtain a written employment contract with the Swiss employer and apply for a work permit. 3.When a work permit is granted, begin employment in Switzerland. 1. Find a position The Young Professional applicant should find a position of employment in Switzerland on their own in their field of study or expertise. 2. Apply for a work permit When the Young Professional finds a job that forms the basis for the application, the employer in Switzerland gives the Young Professional an employment contract. Standard contract forms are available on-line, at the Federal Office for Migration (FOM - www.swissemigration.ch) in Berne, and the Embassy of Switzerland in Tokyo (see Resource box for details). The Swiss employer should also send the Young Professional two official application forms, which are available at the above addresses. The Young Professional must submit his/her application, completed and signed, together with the contract of employment, CV, and copies of their passport and University Diploma to the Embassy of Switzerland in Tokyo who will forward the application to the FOM. 3. Receive permission and enter Switzerland If all requirements have been fulfilled, the FOM informs the applicant that a “permit for a temporary stay” is granted either via the employer or the Embassy of Switzerland in Tokyo. The Young Professional can subsequently pursue his/her employment and enter Switzerland. JSFTEPA | 55 Resource. Federal Office for Migration: Occupational Training in Switzerland www.swissemigration.ch/themen 14.4 If a Young Professional applicant cannot find employment. If a Young Professional is not successful in finding employment, the Federal Office for Migration (FOM) offers assistance in finding a position. The candidate should complete 2 copies of the official application form (see Resource box), and leave the box Where to apply in Japan for “employment” empty. In addition, the candidate should submit a full CV, with a www.swissemigration.ch/themen photograph and copies of certificates providing proof of education and professional Standard employment agreement for trainees www.swissemigration.ch/themen Official application form for trainees www.swissemigration.ch/themen 56 | JSFTEPA experience in one of the three official languages — German, French, or Italian. The Young Professional must submit their job application, completed and signed, to the Embassy of Switzerland in Tokyo who will forward it to the FOM. FOM will then publish this job application in due course. Once a job has been found in this way, the job application will directly be treated as application as specified under 14.3. 14.5 Permit extension and change of employment. If a Young Professional wants to extend her/his permit to work in Switzerland, they can apply to FOM, which decides whether the Young Professional permit can be extended up to a maximum of 18 months in total. Contact Details. For further information on the Young Professional program: Japan Embassy of Switzerland to Japan If a Young Professional wants to change their employment during their stay in [email protected] Switzerland, they can apply to FOM which decides whether to allow the change. www.eda.admin.ch/tokyo Switzerland Federal Office for Migration [email protected] www.bfm.admin.ch JSFTEPA | 57 15. Swiss Business Hub Japan services. Interested in locating your business in Switzerland? We’re here to help! The process of basing an overseas business in Switzerland involves a large number of strategic decisions and administrative tasks. At the Swiss Business Hub Japan (SBHJ) we are here to support your company by providing the preliminary information you need. SBHJ informs potential investors, entrepreneurs, managers, consultants and interested parties about Switzerland as a business location. We work together with our headquarters in Zurich (OSEC), the cantonal business promotion representatives in selected markets and industry clusters, to actively pursue the marketing of Switzerland as a business location. ‘Step-by-Step Location Services’. As part of the activities to promote Switzerland as a business location abroad, SBHJ not only ensures potential investors, managers and consultants receive all the necessary information about Switzerland and the benefits our locations offer, but also about the difficulties which have to be overcome. With our “Step-by-Step Location Services” we offer comprehensive services based on three progressive steps: • Initial Information • Basic Consulting • Detailed Consulting 58 | JSFTEPA Initial Information. The aim of initial Information is to provide current and relevant information about locations in Switzerland. This is provided in the form of extensive documentation via the Internet, an investor hotline, media tours, official information events and investor seminars. Basic Consulting. In the basic consultation, Swiss Business Hub Japan helps Japanese investors to answer very specific, individual questions. In doing so, SBHJ works closely with various partners from private business and the network of the cantonal economic development offices. SBHJ makes available the following services within the basic consultation. • Engage in a First Consultation tailored to your business • Create a Customer Requirement Profile • Make an Offer • Organise a Fact Finding Mission Detailed Consulting. With the detailed consultation, Swiss Business Hub Japan uses competent analysis and verified contacts to bring you on the successful path to the location in Switzerland. The services of the detailed consultation are offered by private experts for a fee. • Strategy Services • Legal Services, Tax Services, Financial Services • Implementation Services • Relocation Services, Real Estate Services, Staff Services JSFTEPA | 59 16. Addresses. In Switzerland Trade Government Procurement Osec Headquarters State Secretariat for Economic Affairs Federal Construction and Real Stampfenbachstrasse 85 (SECO) Estate Services P.O. Box 2407 Effingerstrasse 31 Fellerstrasse 15 CH-8021 Zurich CH-3003 Berne CH-3003 Berne Phone: +41 (0)44 365 51 51 Phone: + 41 (0)31 324 08 53 Phone: +41 (0)31 325 50 50 Fax: +41 (0)44 365 52 21 Fax: + 41 (0)31 324 10 00 Fax: +41 (0)31 325 23 32 [email protected] [email protected] [email protected] www.osec.ch www.seco.admin.ch www.beschaffung.admin.ch www.invest-in-switzerland.com (German, French and Italian only) Swiss Federal Customs Administration Swiss Government Information Online Monbijoustrasse 40 Federal Finance Control and The official Swiss portal ch.ch, is a joint CH-3003 Berne Government Procurement (KBOB) project of the federal government, the Phone: +41 (0)31 322 65 11 Holzikofenweg 36 cantons and the communes, and carries Fax: extensive information on Swiss [email protected] Phone: +41 (0)31 325 50 63 government. www.ezv.admin.ch Fax: +41 (0)31 322 78 72 www.ch.ch/private CH-3003 Berne +41 (0)31 325 50 09 [email protected] Directorate General of Customs www.kbob.ch JETRO Switzerland Federal Customs Administration FCA Rue de Lausanne 80 Federal Department of Finance FDF Swiss Conference of Cantonal Directors CH-1202 Geneva Monbijoustrasse 40 for Public Works, Land Management Phone: +41 (0)22 732 13 04 CH-3003 Berne and Environmental Protection Fax: Phone: + 41 (0)31 322 65 13 Postfach 422 +41 (0)22 732 07 22 www.jetro.go.jp/switzerland Embassy of Japan to Switzerland Fax: + 41 (0)31 322 42 94 CH-8834 Zurich [email protected] Phone: + 41 844 342 23 66 www.efd.admin.ch Fax: + 41 844 342 23 81 Engestrasse 53 www.bpuk.ch CH-3012 Berne (German and French only) Phone: +41 (0)31 300 22 22 Fax: +41 (0)31 300 22 55 Swiss Official Gazette of Commerce [email protected] Postbox 8164 www.ch.emb-japan.go.jp CH-3001 Berne Federal Veterinary Office (FVO) Fax: Schwarzenburgstrasse 155 [email protected] CH-3003 Berne www.shab.ch Phone: +41 (0)31 324 09 92 +41 (0)31 324 09 61 Phone: +41 (0)31 323 30 33 Fax: +41 (0)31 323 85 70 Electronic platform for public [email protected] procurement www.bvet.admin.ch www.simap.ch 60 | JSFTEPA Investment In Japan Investment Dispute Resolution Ministry of Economy, Trade State Secretariat for Economic Affairs and Industry (METI) SECO 1-3-1 Kasumigaseki, Chiyoda-ku International Investments and Tokyo 100-8901 Multinational Enterprises Unit Phone: +81 (0)3 3501 1511 Effingerstrasse 1 Fax: CH-3003 Berne www.meti.go.jp +81 (0)3 3501 6942 Phone: +41 (0)31 323 12 75 Fax: +41 (0)31 325 73 76 Japan External Trade Organization [email protected] (JETRO) www.seco.admin.ch Ark Mori Building, 6F 1-12-32 Akasaka, Minato-ku Federal Office of Justice Tokyo 107-6006 Bundesrain 20 Phone: +81 (0)3 3582 5511 CH-3003 Berne www.jetro.go.jp Phone: +41 (0)31 322 43 11 [email protected] Japan Customs www.bj.admin.ch Customs and Tariff Bureau Swiss Business Hub Japan Embassy of Switzerland to Japan 5-9-12 Minami-Azabu, Minato-ku Tokyo 106-8589 Phone: +81 (0)3 5449 8400 Fax: +81 (0)3 3473 6090 Hotline: 0120 844 313 (freedial within Japan) [email protected] www.invest-in-switzerland.jp Embassy of Switzerland to Japan 5-9-12 Minami-Azabu, Minato-ku Tokyo 106-8589 Phone: +81 (0)3 5449 8400 Fax: +81 (0)3 3473 6090 [email protected] www.eda.admin.ch/tokyo 3-1-1 Kasumigaseki, Chiyoda-ku Protection of Intellectual Property Tokyo 100-8940 www.customs.go.jp Swiss Federal Institute of Intellectual Property Ministry of Agriculture, Forestry Stauffacherstrasse 65 and Fisheries (MAFF) CH-3003 Berne 1-2-1 Kasumigaseki, Chiyoda-ku Phone: +41 (0)31 377 77 77 Tokyo 100-8950 Fax: +41 (0)31 377 77 78 Phone: +81 (0)3 3502 8111 [email protected] Fax: www.ige.ch/en www.maff.go.jp Personnel Federal Office for Migration Quellenweg 6 CH-3003 Berne Phone: +41 (0)31 325 11 11 Fax: +81 (0)3 3502 7407 Ministry of Foreign Affairs (MOFA) 2-2-1 Kasumigaseki, Chiyoda-ku Tokyo 100-8919 Phone: +81 (0)3 3580 3311 www.mofa.go.jp +41 (0)31 325 93 79 [email protected] www.bfm.admin.ch JSFTEPA | 61 Cantonal and Regional Economic Development Offices. Appenzell Inner Rhodes Nidwalden www.ai.ch www.nwcontact.ch Appenzell Outer Rhodes Obwalden www.wifoear.ch www.iow.ch BaselArea Economic Promotion St. Gallen www.baselarea.ch www.location.sg.ch Basel-Country Thurgau Basel-Town Jura: www.jura.ch/eco Business Development Lucerne Ticino www.lucerne-business.ch www.copernico.ch Greater Geneva-Berne Area Uri Berne: www.berneinvest.com www.ur.ch/wfu Fribourg: www.promfr.ch Geneva: www.whygeneva.ch Neuchâtel: www.e-den.ch Valais : www.business-valais.ch Vaud : www.dev.ch Greater Zurich Area www.greaterzuricharea.ch Aargau: www.aargauservices.ch Glarus: www.glarusnet.ch The Grisons: www.awt.gr.ch Schaffhausen: www.economy.sh 62 | JSFTEPA www.wiftg.ch Schwyz: www.schwyz-economy.ch Solothurn: www.locationsolothurn.ch Zug: www.zug.ch/economy Zurich: www.awa.zh.ch Important notice The information and data contained in this publication are drawn from a variety of sources and have been researched with the greatest possible care. Persons wishing to use information from this publication do so at their own risk. Switzerland. Trade & Investment Promotion. and the Swiss Business Hub Japan cannot be held liable for the accuracy and completeness of the information contained in this publication. Note The links supplied in this brochure are abbreviated, and only indicate the website for the linked information. Exact locations with complete website addresses are in the links in the PDF version of this brochure, which is available on–line at: www.invest-in-switzerland.com JSFTEPA | 63 Impressum Publisher: Switzerland. Trade & Investment Promotion. Project Management: Swiss Business Hub Japan Editor, Translation, Layout: Embermedia Japan Cover: The cover picture shows the new Monte Rosa Hut high above Zermatt in the shadow of the Matterhorn, in the Canton of Valais, Switzerland. Developed as a joint project between the Swiss Federal Institute of Technology Zurich (ETH Zurich) and the Swiss Alpine Club (SAC) and with the support of numerous donors and sponsors, it combines innovative architecture with sustainable design. It is 90% self-sufficient in energy and has innovative systems for water collection and treating waste water. For more information see: www.neuemonterosahuette.ch Visualization by: ETH Zurich, D-ARCH, Studio Monte Rosa, Prof. Andrea Deplazes 64 | JSFTEPA Switzerland. Trade & Investment Promotion. c/o Swiss Business Hub Japan Embassy of Switzerland 5-9-12 Minami-Azabu, Minato-ku, Tokyo 106-8589 Japan Phone: 0120 844 313 (Domestic calls) Phone: +81 3 5449 8400 (International calls) Fax: +81 3 3473 6090 [email protected] Copyright© Swiss Business Hub Japan 2010. All rights reserved. Our hotline: 0120 844 313 www.invest-in-switzerland.jp
© Copyright 2024