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European companies in Japan suffer from travel bans

European companies in Japan suffer from travel bans

Tokyo (SCCIJ) – European business in Japan is heavily affected by the entry ban on non-Japanese citizens and the re-entry ban on foreign residents in Japan. This is the conclusion from a survey carried out by the European Business Council in Japan (EBC).

So far, the Japanese government will only partially roll back entry restrictions as part of its coronavirus countermeasures on foreign nationals, allowing only students and business workers with valid legal status to be gradually readmitted to the country. According to local press reports, the government said its efforts to further ease the re-entry restrictions and open the border depend on the capacity of conducting PCR tests at airports.

European companies in Japan suffer from travel bans

Harsh effects

Between June 30 and July 12, 2020, the EBC surveyed members of European National Chambers of Commerce, using a questionnaire created by the German Chamber of Commerce and Industry in Japan. 376 European companies, with headquarters based in 16 European countries and Japan, responded.

According to the answers, 85% of European companies are negatively affected by the ban, mainly in their ability to successfully carry out new or existing projects due to management and/or specialists not being able to (re-)enter Japan. 44% of respondents expect a loss in revenue solely due to the (re-)entry ban. 23% of the companies expect appropriate actions from the Government of Japan, such as compensation and tax relief.

Furthermore, the management of European subsidiaries in Japan cannot travel to the headquarters in Europe causing disruptions to the governance of the companies. Moreover, according to the survey, companies are suffering as leadership and expert positions cannot be filled as non-Japanese personnel cannot enter Japan despite having the proper visas.

Also, 65% of companies that use Japan as a regional headquarter express problems with management not being able to visit subsidiaries in other countries, among them South Korea, Taiwan, and the Philippines. The current situation is in direct opposition to Japan’s wish for more foreign companies to use Japan as their regional hub, the EBC said in its statement.

Unfair intervention

Michael Mroczek, the EBC President, said at a press conference in Tokyo on July 22: “Despite the good start of the EU-Japan Economic Partnership Agreement, we are now at risk of losing the momentum due to the (re-)entry ban.” Furthermore, the EBC has been approached by various European companies arguing that the current travel restrictions are unfairly interfering in the proper management of European investments in Japan.

This is of concern as under various treaties, such as the Free Trade Agreement between Japan and Switzerland and the Energy Charter Treaty, claims may be filed directly against the Government of Japan when fair and equitable treatment is denied to foreign investors.

Besides, the (re-)entry ban of permanent and long-term residents may be a breach of Article 12 of the International Covenant on Civil and Political Rights, which clearly states that “no one shall be arbitrarily deprived of the right to enter his own country.”

In its statement, the European Business Council reiterates its requests for Japan to extend the same treatment to non-Japanese residents as it is offered to Japanese nationals. This means that European residents, together with other nationals, shall be able to leave and come back to Japan. This is possible in all other G7 countries, except for Japan.

Background information

Since April, a (re-)entry ban into Japan has been imposed by the Japanese government on non-Japanese nationals (including permanent and long-term residents) to contain the COVID- 19 pandemic. Facing a serious increase in coronavirus infections, the government declared a state of emergency on April 7th and lifted it at the end of May without any change regarding the entry ban for foreign nationals.

The European Economic Area (EEA) region and Switzerland also had restrictions on entering the area. However, these restrictions focused on persons who did not have a working or residency visa for the said region. Consequently, Japanese nationals living in Europe were able to exit and enter the region in the same way as EEA and Switzerland nationals.

In July, the European Council officially recommended lifting travel restrictions on 15 countries including Japan. Currently, only Germany has decided not to open their borders to Japanese nationals that are not residents unless reciprocity for its resident citizens in Japan is offered.

Text: SCCIJ based on an EBC statement

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