Identifier
Created
Classification
Origin
09TOKYO447
2009-02-27 01:00:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

DAILY SUMMARY OF JAPANESE PRESS 02/27/09

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
pdf how-to read a cable
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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #0447/01 0580100
ZNR UUUUU ZZH
P 270100Z FEB 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 1095
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 4999
RUEHFK/AMCONSUL FUKUOKA 2654
RUEHOK/AMCONSUL OSAKA KOBE 6444
RUEHNAG/AMCONSUL NAGOYA 0463
RUEHKSO/AMCONSUL SAPPORO 3205
RUEHBJ/AMEMBASSY BEIJING 7955
RUEHUL/AMEMBASSY SEOUL 3981
RUCNDT/USMISSION USUN NEW YORK 3920
UNCLAS SECTION 01 OF 09 TOKYO 000447 

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 02/27/09

INDEX:

Alliance issues:
UNCLAS SECTION 01 OF 09 TOKYO 000447

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 02/27/09

INDEX:

Alliance issues:
1) Prime Minister Aso in Diet reply says that disputed Senkaku
Islands are subject to the U.S.-Japan security arrangements
(Sankei)
2) China, which also claims the Senkakus, protests Aso statement on
the islands being subject to security arrangements with the U.S. in
a contingency (Nikkei)
3) U.S. government, when asked by Japan, vague about defending
Senkaku Islands during contingency (Yomiuri)
4) Defense Ministry considering intercept of North Korea missile if
it heads towards Japan (Sankei)
5) North Korea strengthening ties with Iran on missile technology,
focusing on Taepodong-2 (Sankei)

Ozawa the strategist:
6) Statement by Democratic Party of Japan (DPJ) President Ozawa
about presence of most U.S. troops in Japan not needed is still
causing an uproar (Tokyo Shimbun)
7) Prime Minister Aso on Ozawa's statement: He has no knowledge of
defense affairs (Tokyo Shimbun)

8) Japan to provide Gaza area with 19.5 billion yen in
reconstruction assistance (Mainichi)

Political agenda;
9) Fiscal 2009 budget bill to pass the Lower House today (Tokyo
Shimbun)
10) Aso orders delay in requesting extra stimulus package in order
to avoid clash with ongoing budget deliberations (Nikkei)
11) LDP bigwig Hidenao Nakagawa absents himself from meetings of his
faction for three weeks (Nikkei)

12) U.S. expecting Japan to purchase Treasury bonds that will back
President Obama's stimulus package (Tokyo Shimbun)

13) Japan Fair Trade Commission readying amendment to the
Anti-Monopoly Act that would toughen system of penalties (Mainichi)


Articles:

1) Aso: Japan-U.S. security treaty covers Senkaku Islands

SANKEI (Page 5) (Excerpts)

February 27, 2009

Prime Minister Taro Aso said in a House of Representatives Budget
Committee meeting yesterday: "Since the Senkaku Islands are Japan's
inherent territory, the Japan-U.S. security treaty covers them." He
made this remark in response to a request by Democratic Party of
Japan Deputy President Seiji Maehara that the government should ask
the U.S. about whether the islands are covered by the treaty.

Aso also said, keeping in mind his conversation with U.S. President
Barack Obama when they met on the 24th: "The Japan-U.S. alliance is
a living entity. We must continue efforts to prevent the alliance
from becoming useless during a contingency."

2) China refutes Aso's remark defining Senkaku Islands as covered by
Japan-U.S. security treaty

TOKYO 00000447 002 OF 009



NIKKEI (Page 2) (Full)
February 27, 2009

Ken Sato, Beijing

In reaction to Prime Minister Taro Aso's statement that "the
Japan-U.S. security treaty will cover the Senkaku Islands (the
Diaoyutai Islands)" when they are invaded by an enemy, the Chinese
Foreign Ministry spokesman issued this statement:

"We express our strong dissatisfaction. The Diaoyutai Islands are
China's inherent territory. From the broad standpoint of stable
bilateral relations, Japan should be careful about what it does and
says."

3) U.S. avoids specifying "defend Senkaku Islands," in response to
Japan's call for confirmation after Chinese ship's intrusion into
Japanese waters

YOMIURI (Page 2) (Full)
February 27, 2009

Satoru Ogawa, Washington

The U.S. government has avoided confirming its conventional view
that "the Japan-U.S. security treaty is applicable to the Senkaku
Islands," according to informed sources yesterday. Japan asked the
U.S. to confirm it after a Chinese oceanographic ship intruded into
Japanese territorial waters in the southeast of the islands in early
December of last year. The Japanese government analyzes that the
U.S. side has made a minimal level of reply because the government
is now in the transitional period. Considering that the U.S. might
be taking such a stance because responsible officials have yet to be
appointed, the government intends to ask the U.S. side to confirm it
as soon as official appointments are made for the posts of assistant
secretary at the State Department and the Defense Department.

Some speculate U.S. consideration to China

Washington has taken the position of maintaining neutrality without
intervening in the issue of sovereignty over the Senkaku Islands.
However, in 1996, then Deputy Assistant Secretary of Defense Kurt
Campbell under the Democratic Clinton administration indicated --
the first time for a high-ranking U.S. official to do so -- that the
security treaty covers the Senkaku Islands and that the U.S. is
obligated to defend Japan during a contingency.

When Chinese activists landed on the islands in March 2004, during
the first-term Republic Bush administration as well, the deputy
spokesman of the State Department said in a press conference: "The
U.S.-Japan security treaty is applicable to areas under the
administration of Japan, so the treaty covers the Senkaku Islands."

The State Department, however, in response to Japan's request for
confirming this conventional view, replied last December:
"Territorial issues should be settled between the parties concerned
in a peaceful manner." In replying to written requests by the
Yomiuri Shimbun, the department would only state: "The U.S. abides
by international agreements. The U.S. policy stance remains
consistent."


TOKYO 00000447 003 OF 009


A senior Foreign Ministry official commented: "The U.S. government,
in a move to strengthen relations with China, might be giving
priority to diplomatic consideration to that nation." In meeting
with Prime Minister Aso on Feb. 24, however, President Barack Obama
reaffirmed his administration's commitment to defending Japan.
Keeping this in mind, the Japanese government intends to cope with
the matter in a cool-headed manner.

Aso said in a House of Representatives Budget Committee meeting
yesterday: "Since the Senkaku islands are an inherent part of Japan,
the Japan-U.S. security treaty covers them." He then emphasized he
would ask the U.S. to confirm this once again.

4) Defense Ministry mulls shooting down N. Korean missile

SANKEI (Top play) (Abridged)
February 27, 2009

The Defense Ministry has now begun studying plans to mobilize the
Self-Defense Forces' missile defense (MD) system and intercept an
advanced model of the Taepodong 2, a North Korean long-range
ballistic missile, should North Korea launch the missile at Japan,
sources said yesterday. Intercepting it would be the Standard
Missile 3 (SM-3),a sea-based intercept missile mounted on
Aegis-equipped destroyers, and the Patriot Advanced Capability 3
(PAC-3),a land-based ground-to-air guided missile. The MD system
would be actually used for the first time since its introduction.
However, intercepting requires a grave political decision. The
Defense Ministry will therefore coordinate carefully with the prime
minister's office.

The government decided in 2003 to introduce the U.S.-developed MD
system. MD counteraction is a double-decker system. First and
foremost, a Maritime Self-Defense Force Aegis ship launches an SM-3
missile to shoot down a ballistic missile in outer space. In case
the SM-3 fails to hit the missile, the Air Self-Defense Force will
back up to intercept the missed target with its ground-based PAC-3
missile.

The MSDF currently stages two SM-3 capable Aegis destroyers. One is
the Kongo, which was deployed in 2007, and the other one is the
Chokai, which came on in 2008. The ASDF also introduced the PAC-3 to
its Iruma base in Saitama Prefecture in March 2007. Beginning with
this introduction, the ASDF has now completed PAC-3 deployment to
four bases in the metropolitan area. In addition, the ASDF also
deployed the PAC-3 to its Gifu base yesterday.

The Kongo test-launched an SM-3 missile in waters off Hawaii in
December 2007, and the test was successful. However, the Chokai
failed in an even more difficult test that was conducted in November
last year. The ASDF test-launched a PAC-3 missile in the U.S.
mainland state of New Mexico in September last year for the first
time and successfully hit a mock-up projectile.

In July 2006, North Korea launched seven ballistic missiles,
including a Taepodong-2 missile. At that time, the SDF had no
intercept system. The Kongo and the Chokai were also in the Sea of
Japan and on the Pacific side, but they were only tasked with
detecting and tracking ballistic missiles.

To intercept the enhanced Taepodong-2 missile, the government will
for the first time invoke an action, newly stipulated in the SDF law

TOKYO 00000447 004 OF 009


with the MD system being introduced, to destroy ballistic missiles
and other projectiles.

The action for missile destruction is to be taken in two cases: 1)
if there are such pre-launch signs as fuel injection, the defense
minister, with the prime minister's approval, will order the SDF to
intercept; and 2) when it is necessary to watch out for missile
testing or other eventualities even though there are no definite
signs, the defense minister will have Aegis vessels and other SDF
systems prepositioned to intercept in conformity with a prepared
outline of countermeasures for emergencies.

5) N. Korea strengthens missile ties with Iran

SANKEI (Page 5) (Abridged)
February 27, 2009

North Korea is now preparing to launch an "artificial satellite"
believed to be an advanced model of the Taepodong 2, a long-range
ballistic missile. In connection with this project, North Korea has
sent missile development researchers to Iran several times in order
to deepen mutual exchanges with Iran on missile technology since
Japan invoked sanction measures against North Korea in July 2006,
the Sankei Shimbun learned yesterday from sources familiar with
military affairs between Japan and the United States. Observers say
North Korea sent those researchers to Iran for such purposes as
acquiring that country's technical know-how for satellite delivery
vehicles and missiles in order for North Korea to develop
longer-range missiles. As another likely reason, it has become even
more difficult than before to secure machinery parts and military
potential materials.

Meanwhile, the new Taepodong-2 missile has yet to be set on a launch
pad at Musudanri in North Korea's northeastern province of North
Hamkyong. However, the projectile was placed beside the launch pad
yesterday, according to a source familiar with military affairs
between Japan and the United States. "The missile can be raised and
fueled in a single day," the source said. North Korea is now about
to complete its readiness to launch the missile.

Iran and North Korea have been cooperating with each other as
Iranian nuclear development researchers have visited North Korea and
North Korea has sold missile-related parts to Iran. Iran has denied
the existence of any military relations with North Korea. However,
the two countries' technical cooperation has been continuing behind
the scenes. Their nuclear-related technologies might have improved
markedly.

6) Government and ruling parties explode over Ozawa's remark about
only needing U.S. 7th Fleet to defend Japan

TOKYO SHIMBUN (Page 2) (Full)
February 27, 2009

The Aso administration went on the attack yesterday against
Democratic Party of Japan (DPJ) President Ichiro Ozawa for his
statement that in stationing U.S. forces in Japan, "the presence of
the 7th Fleet would be enough." The aim was to raise doubts about
the capability of the DPJ to administer the country if it is to
destabilize the Japan-U.S. alliance, as well as to unsettle the
united front of the opposition parties.


TOKYO 00000447 005 OF 009


Chief Cabinet Secretary Takeo Kawamura told the press corps, "His
thinking about limiting the presence of the U.S. forces to the 7th
Fleet is unrealistic."

In meetings yesterday, every faction of the Liberal Democratic Party
(LDP) showered Ozawa with a rain of criticism, with former LDP Vice
President Taku Yamasaki of the Yamasaki faction saying, "If an
Ozawa-led DPJ administration were to become a reality, Japan's
national security would be shaken to its very foundation. The
Japan-U.S. alliance would start to fall apart."

Former Chief Cabinet Secretary Nobutaka Machimura of the Machimura
faction, in addition to advocating that the Ozawa statement be made
a campaign issue in the next Lower House election, said, "I would
like many in the local areas to say what kind of irresponsible
foreign and national security policy this is."

The Ozawa statement premised a massive reduction of the U.S. forces
stationed in Japan and in turn, Japan shouldering some of that role.
If the gap created by the departing U.S. forces is to be filled,
Japan would have to increase its defense power. This point, too,
received criticism, with Machimura stating, "There would be momentum
building to increase the defense budget three to five times, but
such would be reckless debate."

Former Finance Minister Fumiaki Ibuki said, "I wonder if the Social
Democratic Party (SDP) will go along with this concept and cover the
increase in Japan's defense power." He sought to arouse the SDP,
which will be cooperating with the DPJ in the next Lower House
election.

7) Prime Minister Aso: Ozawa lacks knowledge of defense

TOKYO SHIMBUN (Page 2) (Full)
February 27, 2009

Prime Minister Aso last evening criticized Democratic Party of Japan
(DPJ) President Ichiro Ozawa for his remark about the 7th Fleet of
the U.S. Navy being enough (to defend Japan). In a reply to a
question from the press corps, he said, "A person with knowledge of
defense would never make such a remark." The Prime Minister pointed
out: "Japan has neighboring it a country that tests nuclear weapons,
that is ready to launch (nuclear-tipped) missiles called the Nodong.
If one thinks about Japan's security, the air power (of the U.S.
armed forces) is a vital element."

8) Japan to provide 19.5 billion yen in assistance for
reconstruction efforts in Gaza Strip

MAINICHI (Page 2) (Full)
February 27, 2009

Mainichi Shimbun learned on February 26 through a government source
that the Japanese government is now coordinating an announcement
that it will provide roughly 200 million dollars or about 19.5
billion yen. The aid will be announced at a conference on assistance
for the reconstruction of the Gaza Strip to be held in Egypt on
March 2. Japan has already extended emergency financial assistance
worth 10 million dollars or roughly 980 million yen to the Gaza
Strip.

The conference will be joined by about 70 countries, including the

TOKYO 00000447 006 OF 009


U.S. and European and Middle Eastern countries. Participants will
confer on how to share the cost of reconstructing public facilities
destroyed in attacks by the Israeli military -- 2.8 billion dollars
or about 273 billion yen. Senior Vice Foreign Minister Shintaro Ito
will likely attend the meeting from Japan. Secretary of State
Clinton will attend from the U.S. She is expected to announce that
the U.S. will disburse 900 million dollars or about 88 billion yen.

9) Fiscal 2009 budget to clear Lower House today

TOKYO SHIMBUN (Page 2) (Full)
February 27, 2009

The fiscal 2009 budget and related bills will clear the House of
Representatives today after they are adopted in a Lower House
plenary session this afternoon. Before they are sent to the plenary
session, they will be approved the Lower House Budget Committee,
Financial Affairs Committee and Internal Affairs Committee. Based on
a constitutional rule, the budget and related bills will be enacted
before the March 31 end of current fiscal year.

In a meeting yesterday of the House of Councillors Diet affairs
chiefs, the ruling Liberal Democratic Party (LDP) and main
opposition Democratic Party of Japan (DPJ) agreed to take a vote on
bills related to the second supplementary budget for fiscal 2008,
designed to secure funds for the cash-hand out program, on March 3
in Financial Affairs Committee session and Upper House plenary
session on March 4. The bills will be voted down by a majority of
lawmakers from the opposition parties. The ruling coalition is
expected to hold a Lower House plenary session as early as March 4
to readopt them with a tow-thirds override vote.

The Upper House Budget Committee agreed in a meeting of its
directors to carry out a question-and-answer session on March 5 and
6 at the attendance of Prime Minister Taro Aso. In order to enact
the fiscal 2009 budget and related bills before the end of current
fiscal year, the ruling parties will ask the opposition camp to take
a vote as early as possible.

10) Prime Minister Aso delays order to look into additional economic
package to avoid impact on budget deliberations

NIKKEI (Page 2) (Full)
February 27, 2009

Although the government is actually working on drafting up
additional economic stimulus measures, Prime Minister Taro Aso will
likely put off to next week or later ordering senior ruling
coalition members to consider such a package. The Prime Minister
originally planned to give that order immediately after the fiscal
2009 budget and related bills are passed in the House of
Representatives. However, the House of Councillors is still
deliberating bills related to the second supplementary budget for
fiscal 2008. Aso will forgo giving the order until after the related
bills are readopted with a two-thirds lower chamber majority
override vote.

Aso had intended to order to senior ruling camp officials the
planning of the additional economic stimulus package soon after the
fiscal 2009 budget cleared the Lower House on Feb. 27. Chief Cabinet
Secretary Takeo Kawamura took a cautious stance toward Aso's plan at
a press conference yesterday. He stated: "We must hurry the passage

TOKYO 00000447 007 OF 009


of the fiscal 2008 second extra budget and related bills. We will
concentrate on that."

In managing Diet affairs, there is a risk in compiling an additional
economic package now. The reason is because compiling another
economic package means that the government and ruling parties admit
that the fiscal 2009 budget is insufficient. This, as a result,
would give the opposition camp a good cause to demand corrections
and re-submission. In order to avoid such a situation, Aso has to
continue saying that he has yet to give an order.

Aso is playing it safe. He has decided to wait until the fiscal 2009
budget is adopted by the Lower House, which means the budget is
certain to be enacted. He will then give the order to compile the
additional economic package, directing it to senior ruling coalition
members instead of his cabinet ministers.

The miscalculation was the bills related to the fiscal 2008 second
extra budget including fiscal resources for the cash-handout
program. Although the second supplementary budget itself cleared the
Diet in late January, passage of the related bills has been delayed
due to confrontation between the ruling and opposition camps.
Following former Prime Minister Junichiro Koizumi, who revealed his
intention to absent himself from voting in the Lower House, other
Liberal Democratic Party (LDP) lawmakers might defy the party.

Judging that barriers against the fiscal 2008 second budget related
bills are high, Aso decided to give the order after the related
bills were readopted in the Lower House. The present situation of
the Aso administration, which needs to give consideration not only
to the opposition camp but also to the ruling parties, has put off
efforts to come up with an additional economic package.

11) Hidenao Nakagawa absents himself from attending Machimura
faction meetings

NIKKEI (Page 2) (Full)
February 27, 2009

The Machimura faction, the largest in the ruling Liberal Democratic
Party (LDP),is now pushing ahead with a review of its management
system. Former Prime Minister Yoshiro Mori, who had announced his
intention to leave the faction, attended a meeting on Feb. 5 for the
first time in three weeks. Former Secretary General Hidenao
Nakagawa, however, has failed to attend the faction's meeting for
three weeks. With a move to exclude Nakagawa from the mainstream,
some faction members are growing dissatisfied with the leadership.

Nobutaka Machimura, chair of the faction, introduced Mori with a
smile in a meeting yesterday, saying: "It is not that he left our
faction but he was unable to show up on account of some business."
Mori is expected to attend faction's meetings from now on, changing
his present title as supreme advisor to the faction.

Mori proposed in a meeting on Feb. 5 that Machimura head the faction
and Nakagawa be demoted. Faced fierce opposition from faction
members close to Nakagawa, Mori revealed his intent to leave the
faction in order to put the turmoil behind him.

Meanwhile, Nakagawa has not attended meetings since the Feb. 5
meeting. Machimura told reporters yesterday: "I have often asked Mr.
Nakagawa to attend, but he appears to be busy." Mori's return to the

TOKYO 00000447 008 OF 009


faction appears to have given strong backing to Machimura. One
lawmaker close to Nakagawa said: "Mr. Mori's influence will not
continue forever. Didn't he promise to leave the faction?" Some
faction members criticize the Mori-Machimura management setup.

12) U.S. President Obama submits budget message to Congress:
Economic stimulus measures to rely on borrowing for time being;
Purchases of Treasury bonds by Japan unavoidable

TOKYO SHIMBUN (Page 8) (Full)
February 27, 2008

Masakazu Furukawa, Washington

U.S. President Obama included a long-term fiscal reconstruction
policy in the framework of the Budget Message for fiscal 2010
(October 2009 - September 2010),which he submitted to Congress on
February 16. In reality, however, the U.S. has to rely on the
issuance of Treasury bonds to finance its economic stimulus package
for the time being. Japan will likely be asked to purchase a massive
amount of U.S. Treasury bonds.

Even though President Obama has so far recognized the need for
fiscal reconstruction, he noted that it was necessary to increase
public spending for economic recovery for the time being. Based on
that stance, he has been seeking understanding of a temporary
expansion of the fiscal deficit.

However, an expanded fiscal deficit will trigger a drop in the value
of the dollar, rocking confidence in the greenback as the
international key currency. If a weak dollar trend continues, prices
of such commodities as crude oil and grains, for which payments are
made in dollars, could soar, giving rise to global inflation. A fall
in the value of the U.S. Treasury bonds, which the governments of
many countries and major central banks have purchased as secure
assets, would be a serious blow.

It is imperative for Japan to help the U.S. reconstruct its economy.
That is because the sluggish U.S. economy as well as a weak dollar
and a fall of the U.S. Treasury bonds will deal a blow to the
Japanese economy, as well. Prime Minister Taro Aso during a press
conference after the bilateral summit in Washington on the 24th
denied any request from the President to purchase U.S. Treasury
bonds. However, in order to reconstruct the Japanese economy, too,
Japan now has no other choice but to purchase U.S. government
bonds.

13) Administrative surcharge system to be toughened: FTC releases
draft amendment to Anti-Monopoly Law

MAINICHI (Page 2) (Full)
February 27, 2009

The Fair Trade Commission (FTC) on February 26 released a draft
amendment to the Anti-Monopoly Law. The amendment features an
expanded scope of the application of administrative surcharges
imposed on irregularities, as well as toughened penalties, such as
increasing administrative surcharges imposed on companies that
played a leading role in bid-rigging activities (dango) to 50
PERCENT . The Commission plans to submit it to the Diet after
securing approval at a cabinet meeting on the 27th and put it into
force starting next spring at the earliest.

TOKYO 00000447 009 OF 009



This is the first amendment to the law since 2005. The key element
of the draft is a review of the administrative surcharge system.
Under the amended law, dumping, the abuse of dominant bargaining
position against subcontractors and exclusive private
monopolization, which refers to exclusion of competitors from the
market, using unlawful means, will be subject to surcharges.

Since there is no end to cartels and bid-rigging activities, the FTC
will reinforce the administrative surcharge system, by increasing
surcharges on companies that played a leading role in those
activities and exempting or reducing surcharges on companies that
voluntarily submitted information on their illegal trade practices
before coming under scrutiny. Such surcharges on major manufacturers
will be increased from the current 10 PERCENT to 15 PERCENT . A
prison term sentenced to individuals will be raised from "three
years or less" to "five years or less."

An additional rule stipulating that the judgment system, under which
the FTC decides the propriety of administrative punishments it
imposed, should be reviewed within fiscal 2009 has also been set up.
The FTC submitted in March last year an amendment bill that included
an additional rule stipulating that the system should be reviewed
within fiscal 2008. However, the bill was scrapped, faced with
opposition from the Democratic Party of Japan, which insists on the
total abolition of the system.

ZUMWALT