Detailed treaty between United States and
Japan on mutual cooperation in the enforcement of their respective competition
laws, regulations and policies has entered into force
The Agreement between
the Government of the United States and the Government of Japan Concerning
Cooperation on Anticompetitive Activities entered into full force and effect in 1999 “Treaty’). Both Japan
and the United States realistically admit that, from time to time, differences
may come up over whether and how to enforce their nation’s respective antitrust
laws. As a result, the parties declare the importance of antitrust enforcement
to their respective economies and affirm their commitment to carefully consider
each other's important interests in applying their competition laws.
For
purposes of this Treaty, Article I defines the "competition
authorities" as including the U.S. Department of Justice and the Federal
Trade Commission and the Japan Fair Trade Commission. On the U.S. side, the
"competition laws" refer to the Sherman and Clayton Acts, the Wilson
Tariff Act and the Federal Trade Commission Act and their implementing regulations.
For Japan, such laws include the Antimonopoly Law of April 1947 and its
corresponding regulations.
There
are a number of conflictual situations that the Treaty deals with. For example,
one party's antitrust enforcement might involve a national or corporation of
the other country. Moreover, it might pertain to anticompetitive activities
(other than mergers or acquisitions) substantially carried out on the other
party's territory.
The
Treaty will also apply if one or more entities taking part in a merger or
acquisition or a company controlling one or more parties to the transaction is
a domestic company of the other party. Another instance is where the relief
sought demands or bars conduct in the other party's territory. Finally, the
Treaty will govern where the other party has required, encouraged or approved
the conduct being investigated.
Since
mutual notification that one of the above situations exist is key, the Treaty
sets time limits for providing notice. The Treaty also requires each party to keep
the other up to date on amendments to its competition statutes, as well as to
the guidelines, regulations or policy statements relating to these statutes.
Under
Article III, each party's competition authority is to help the other party's
international enforcement efforts to the extent feasible and domestically
lawful. This may include supplying information as to each one's enforcement
directed at behavior that might adversely affect competition in the other party
as well as relevant data asked for by the other party.
The
Treaty sets out criteria in Article IV for deciding whether the parties can,
and should, coordinate their antitrust efforts. These elements include
cost-effectiveness, the relative abilities of the parties to obtain the needed
information and the potential benefits of correlating relief. If one party
believes that anticompetitive activity within the other party is adversely
affecting the first party's economy, the former may, in appropriate cases,
request the other under Article V to initiate anticompetitive measures. Under
the Treaty, each requested party agrees to give due consideration to these
petitions and to keep the requesting party informed of any action taken.
The
Treaty suggests a number of factors that each party should take into account
where the enforcement activities of one party are likely to impair the other's
important interests. In addition to assessing the relative impact of the
activities on each other, Article VI mentions the presence or absence of the
accused's intention to have an impact on the markets of the enforcing state,
the degree to which the unlawful activities substantially lessen competition in
each country's markets and the degree of harmony or dissonance between the
enforcing measures and the laws or policies of the other country. Other Article
VI factors include the possibility that both parties will make conflicting
demands on the suspected entities or individuals, the location of relevant
assets and suspects, and the impact of the enforcement activities of one party
on sanctions sought by the other.
In
general, this Treaty is without prejudice to using other bilateral or
multilateral agreements involving Japan and the U.S. and is not intended to
derogate from the requirements of domestic law or international agreements.
Article XI (4) also provides that "Nothing in this Agreement shall be
construed to prejudice the policy or legal position of either Party regarding
any issue related to jurisdiction."
Citation: State Dept. No. 99-137, 1999 WL 1083830 (Treaty).
*** K. Todd Wallace is an attorney at Wallace Meyaski in New Orleans. He has nearly 20 years of experience in the legal and business professions with established excellence in trial advocacy, negotiation, strategic and initiative planning, government relations, mergers and acquisitions, and team building. See http://www.walmey.com/our-attorneys/k-todd-wallace/
