Fisheries Sector Legal Update – the Marine Products Proper Distribution Act

Introduction

In the field of fisheries, it is commonly understood that (i) illegal catches adversely affect the sustainable utilization of fishery resources and put pressure on fishery operators, necessary measures to prevent the distribution of illegally caught fish, including their exportation, and to ensure proper domestic distribution, and that (ii) international cooperation is necessary for the elimination of Illegal, Unreported and Unregulated (“IUU”) fishery operations, especially with concern to highly vulnerable species. Accordingly, Japan must take measures to prevent the inflow of IUU catches from within its waters and abroad.

Against this background, the Act on Ensuring the Proper Domestic Distribution and Importation of Specified Aquatic Animals and Plants, etc., (hereinafter referred to as the “Proper Distribution Act”) was promulgated on December 11, 2020, to regulate specified aquatic animals and plants caught in or imported to Japan, including (a) notification by fishermen, etc., (b) communication of the catch number, etc., for each catch, (c) preparation and preservation of transaction records, and (d) certification of legality upon export and import.

The Proper Distribution Act came into force from December 1, 2022.

1. Regulated aquatic animals and plants

With respect to fish, seaweed, and other aquatic animals and plants (collectively, “Resources”), the Fishery Act and the Proper Distribution Act stipulate three groups: “Specified” Resources, “Class I” Resources, and “Class II” Resources . Specified Resources are broadly stipulated under the revised Fishery Act and the Basic Policy on Resource Control thereunder and managed through a new Total Allowable Catch (“TAC”) system.

TABLE 1: Aquatic Animal and Plants Designations and Regulation Methods

Currently, Specified and Class I Resources include the same types (save for that the grace periods for young eels are different). However, the Fishery Act regulates the “act of gathering, catching and distributing” target fish species and the Proper Distribution Act regulates the “operator” that gathers and distributes the target fish species, especially in domestic fisheries. In addition to Japanese regulations, it is also important to pay attention to conservation and control measures for aquatic animals and plants, such as the regulations of the countries where they are exported and imported, and the Western and Central Pacific Fisheries Commission (WCPFC).

2. Domestic distribution related measures

(1) Business Operator Notification Requirements for Class I Aquatic Animals and Plants

A person who (a) gathers or catches Class I Resources and (b) carries out the business of transferring (i) those Resources or (ii) processes products based thereon (or the organization to which such person belongs if such organization carries out the business of transferring), shall be obliged to notify in advance the governmental authority of the information, etc., concerning such person’s authority to gather or catch such Class I Resources.

In addition, a business operator handling Class I Resources (meaning a person, entity or organization that is engaged in the business of selling, exporting, processing, manufacturing or providing any of the Class I Resources) shall also be obliged to notify MAFF within two weeks of the commencement of such business. Provided that, in the case of the provision of Article 8, para. 1 of the Proper Distribution Act, the obligation to notify shall be exempted.

(2) Obligation to Transmit Information by Notifying Catcher or Gatherer and Business Operator Handling Class I Aquatic Animals and Plants

In the event of the transfer of Class I Resources from a notifying catcher or gatherer to a business operator handling Class I Resources and in the event of the transfer or delivery between business operators handling Class I Resources, they shall communicate the fish catch number, the the name of the business operator, the weight and quantity, and the date of the transfer or delivery by means of its packaging, container, indication on an invoice, electronic data processing (recording in an electronic file, a CD Rom, etc.).

(3) Obligation of Business Operator Handling Class I Aquatic Animals and Plants, etc., to Prepare and Preserve Transaction Records

In the event of transfer, acceptance, delivery, and acceptance, destruction, or loss of Class I Resources between business operators handling Class I Resources, such business operators shall be obliged to prepare and maintain records of the names, weight, quantity, date, counterparty, catch number, etc., in writing or by electromagnetic records for a period of three years. 9 However, exemptions are granted in the event of a small amount of waste or loss, or in the event of leftovers from sales or provision to generalconsumers.

(4) Attachment of Legal Harvest Certificate pertaining to Export of Class I Aquatic Animals and Plants, etc.

Business operators handling Class I Resources shall apply to the governmental authority for a legal harvest certificate (certifying (a) that their harvests have not been gathered or caught in violation of the laws and regulations related to the Fishery Act or (b) that Resources constituting such harvests are not imported or farmed aquatic animals and plants, etc.) and attach the same when it exports Class I Resources. In addition, the legal harvest certificate under the Proper Distribution Act is approved only for Class I Resources. If proof of proper fishing is required under the import regulations of the country to which other aquatic animals and plants, etc., are exported, it is necessary to pay attention to the measures in accordance with the applicable laws of such a country.

(5) Questions and Answers concerning the “Act on Ensuring the Proper Domestic Distribution and Importation of Specified Aquatic Animals and Plants, etc.” (hereinafter referred to as “Domestic Distribution Q&A”)

  1. A retailer who sells Class I Resources solely to consumers is not required to submit a notification. Furthermore, when a retailer sells Class I Resources to a consumer, the obligation to communicate information and the obligation to prepare and preserve transaction records are exempted. However, in the event that a retailer receives Class I Resources from another business operator handling Class I Resources, it is necessary to prepare and preserve transaction records.
  2. Restaurants and accommodations fall under the category of business operators handling Class I Resources, but the obligation to notify and the obligation to communicate information are exempted. Similar to retailers, the obligation to communicate information and the obligation to prepare and preserve transaction records will be exempted in the event of the sale of Class I Resources, but in the event of the transfer of such resources from another business operator handling Class I Resources , it is necessary to prepare and preserve transaction records.

How to make the regulations known to small businesses and downstream businesses in the value chain, and how to make them prepare the compliance system therefor, is likely to be an issue for the future.

3. Import-related measures

(1) Regulations Concerning Class II Aquatic Animals and Plants, etc.

When importing Class II Resources (meaning Class II Aquatic Animals and Plants and manufactured or processed products using such resources as raw materials that are specified by MAFF Public Notice), the attachment of a certificate of legal gathering or catch by a foreign government agency or other documents provided by the Enforcement Order of the Proper Distribution Act (for example, in the case of farmed fish, a document certifying such fact) is required.

This regulation applies to importers, and even in the event of subsequent sales or provision, there is no obligation to present legal supplementary certificates or to prepare and store records.

(2) Country, Region and Organization to Issue a Certificate of Legal Gathering or Catch, etc.

For countries where a certificate of legal gathering and catch can be obtained, etc., they are updated from time to time on the website of the Fisheries Agency (https://www.jfa.maff.go.jp/j/kakou/ tekiseika. html).

4. Sanctions against Violations

(1) Effort Obligation to Report

A business operator handling Class I Resources shall make an effort to promptly notify MAFF of any suspected illegal gathering or catch of such resources from another business operator handling the same. However, there is a special feature of this requirement in that the obligation is “to make efforts” and that the report is limited to the cases of Class I Resources transferred to the reporting business operator handling the same (in the event that there is a suspicion of illegal gathering or catching of Class I Resources that have been traded between other business operators handling the same, the obligation to make efforts for reporting shall not apply, but it will be construed that voluntary reporting shall not be prevented.

(2) Recommendations and Orders Concerning Class I Aquatic Animals and Plants, etc.

The Director General of the Regional Agricultural Administration Office may (a) recommend that necessary measures should be taken in cases where a notifying catcher or gatherer does not comply with the obligation to transmit information or where a business operator handling Class I Resources does not comply with the obligation to transmit information or to prepare and preserve transaction records, and (b) in cases where the business operator fails to take measures pertaining to the recommendation without justifiable grounds, order such measures to be taken.

(3) On-site Inspections

The Director General of the Regional Agricultural Administration Office is authorized in the following to the extent necessary for the enforcement of the Proper Distribution Act:

  1. Requesting importers of Class I Resources and Class II Resources and other related business operators to submit necessary reports, books, documents and other materials; and
  2. Entering the factories, stores, offices, places of business, ships, vehicles, warehouses, etc., of the business operator as mentioned in (a) above and inspecting the status of the business operations, aquatic animals and plants, etc., books , documents and other materials, and inquiring the employees and other persons concerned.

(4) Penal Provisions

Penal provisions for violation of the obligation to notify, violation of the order to take measures, violation of export restrictions, refusal or obstruction etc., of on-site inspections will apply to a notifying catcher or gatherer and a business operator handling Class I Resources .

Importers of Class II Resources are also subject to penal provisions with respect to violation of the obligation to attach a certificate of legal gathering and catch, etc., refusal or obstruction, etc., of on-site inspections. In both cases, dual criminal penalty provisions will apply.

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