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The Global Legal Monitor is an online publication from the Law Library of Congress covering legal news and developments worldwide. It is updated frequently and draws on information from official national legal publications and reliable press sources. You can find previous news by searching the Global Legal Monitor.

Japan: Reporting Requirements for Adviser/Consultant Positions for Retired CEOs

(Oct. 17, 2017) In August 2017 the Tokyo Stock Exchange revised its instructions for the Report on Corporate Governance that it requires listed companies to prepare. The revised instructions have a section on the status of former chief executive officers (CEOs).  If some of them retain positions in the company, such as advisor or consultant, the report must explain their role, work conditions, terms of services rendered, method of decision-making on their appointment, the total amount of their remuneration, etc.  (Instructions for the Report on Corporate Governance (revised Aug. 2017), Japan Exchange Group website, at 11 (in Japanese).)  The instructions will be applied after January 1, 2018.  (Report on Corporate Governance, Japan Exchange Group website (Aug. 2, 2017) (in Japanese).)

Shiseido, ranked number 1,457 on the Forbes list of the world’s biggest public companies, announced on October 4, 2017, that it would not renew the terms of or appoint new advisors and consultants from now on. (Shiseido Abolishes Advisors and Consultants, ASAHI NEWSPAPER (Oct. 6, 2017) (in Japanese); The World’s Biggest’s Companies: #1,457 Shiseido, FORBES (May 2017) (click on “continue to site”.)  One news article predicts that the numbers of such advisors and consultants will decrease because of the disclosure requirement.  (What Are They Doing? Seats of “Advisor” and “Consultant” Are Shaken by Obligatory “Disclosure,” DAILY SHINCHO (Aug. 31, 2017) (in Japanese).)

Unique to Japan

Because retired CEOs who remain as company advisors and consultants are not executives regulated under the Corporation Act, companies did not have to disclose the conditions of their retention. Furthermore, their compensation is often classified as sales promotion expenses, not as personnel expenses.  (Id.)  It is therefore hard for outsiders to determine the amounts paid to them.  The public image of these advisors is that they come to the company when they feel like it and they have big offices and attractive secretaries; it is not clear what the advisors actually do.  On the other hand, some appear to continue to overly influence management of the company.  (Id.)

Background

The issuance of the revised instructions was one of the most recent efforts to improve Japan’s corporate governance system.  In order to revitalize the Japanese economy, the government established the Japan Economy Revitalization Headquarters in 2012.  (Regarding Establishment of the Japan Economy Revitalization Headquarters, Cabinet Decision (Dec. 26, 2012), Kantei (Prime Minister of Japan and His Cabinet) website (in Japanese).)  The Headquarters held an Industrial Competitiveness Conference in 2013.  (Regarding the Industrial Competitiveness Conference, Japan Economy Revitalization Headquarters Decision (Jan. 8, 2013) (in Japanese).)  The Japan Revitalization Strategy was discussed at the Conference and adopted by the government that same year.  (Cabinet Decision (June 14, 2013), Kantei website; Action Plan on Enhancement of Industrial Competitiveness (2017), at 1, Kantei website (in Japanese).)

In 2014, the Cabinet adopted a revised Japan Revitalization Strategy that set supporting the Tokyo Stock Exchange in establishing a “corporate governance code” as the program’s next task. (Minutes of the First Meeting of the Council of Experts Concerning the Corporate Governance Code (Aug. 7, 2014), Financial Services Agency website (in Japanese).)  The Council of Experts on the Corporate Governance Code was established by the Financial Services Agency and the Tokyo Stock Exchange.  The Council issued the draft Corporate Governance Code on March 5, 2015; the Tokyo Stock Exchange adopted the Code and incorporated it as an exhibit in its Securities Listing Regulations.  The Code and the associated rules entered into force on June 1, 2015.  (Enhancing Corporate Governance, Japan Exchange Group website (Sept. 5, 2017); Corporate Governance Code, Japan Exchange Group website (last visited Oct. 11, 2017) (in Japanese).)

In 2016, the Ministry of Economy, Trade and Industry (METI) established a CGS (Corporate Governance System) Study Group to discuss corporate governance issues with a view to fortifying companies’ earnings.  The group compiled the discussion results into a report in March 2017.  (The CGS (Corporate Governance System) Study Group Compiled a Report, METI (Mar. 10, 2017).)   The report refers to the importance of disclosure of information concerning advisers and consultants who were former CEOs.  (CGS Study Group, CGS Report, § 5.1 (Mar. 10, 2017), METI website (in Japanese).)  In May 2017, the METI started to discuss with the FSA and the Tokyo Stock Exchange the formulation of new disclosure rules concerning such individuals.  (To Clarify Roles of Advisors & Consultants, METI Starts to Make Rules to Secure Transparency, NIKKEI (May 22, 2017) (in Japanese).)

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Israel: Protection of Children in Criminal Investigations and Trials

(Oct. 16, 2017) On July 24, 2017, the Knesset (Israel’s parliament) passed the Evidence (Protection of Children) (Amendment No. 17) Law, 5777-2017 (Amendment Law) (SEFER HAHUKIM [BOOK OF LAWS, official gazette, SH] 5777 No. 2656 p. 1106, available at KNESSET NATIONAL LEGISLATION DATABASE (in Hebrew).)  The Law amends the Evidence (Protection of Children) Law, 5715-1955.  (SH 5715 No. 184 p. 96, as amended; references below to the “Law” are to the current text of the Law, incorporating the Amendment Law.)  The Amendment Law sets a special procedure for interrogating and obtaining testimony from a child under 14 years of age in cases of sex offenses and offenses involving domestic violence.  It requires the presence and the permission of a child investigator to obtain testimony from a child.  (Law, §§ 1-2(a).)  It authorizes the court to stop a child’s testimony upon the court’s own initiative or per a request by a child investigator, upon finding that continuation of the testimony may cause the child emotional harm.  (Id. § 2(c).)

Conditions of Testifying

The child investigator may make permission for the child to testify dependent on the condition that the defendant will not be present in the courtroom; the testimony will be given in the presence of the defense attorney via closed-circuit television or other means. (Id. § 2(d)(1).)  The court may order that the questions asked be adjusted to the level of the child’s comprehension and may similarly issue special instructions on the duration of the child’s cross examination.  To the extent possible, the child’s testimony will not be interrupted and will be limited to the day on which it commences.  The court may, however, stop or delay the hearing of a child’s testimony if it believes that its continuation causes hardship to the child.  (Id. §§ 2(e) & 10(a).)

The Law further now requires the provision of a room or other space suitable to their needs where minors can wait before testifying in court.  (Id. § 2F.)

Presence of Child Investigators and Others

In accordance with the now amended Law, unless otherwise determined by the court for special reasons, which must be registered, a person selected by the child to be present during the child’s testimony in court must be allowed in, even if the hearing is conducted behind closed doors. (Id. § 2B(a).)  Moreover, except if impossible or for special, registered reasons, a child investigator who has investigated a child must be present during the child’s testimony in court.  (Id. § 2B(b).)  When the child investigator has authorized the testimony of a child, the child’s cross examination can only be done by the defense attorney or an attorney appointed for the defendant by the court, not by the defendant.  (Id. § 2C.)

Appointment of Child Investigators

For the purpose of implementing the Law, child investigators are to be appointed by the Minister of Justice according to recommendations of a committee composed of the following members:

  1. President of the Juvenile Courts or a Juvenile Court judge appointed by the President, who will serve as a chairperson of the committee;
  2. Head of the Child and Special Investigations Unit in the Ministry of Labor Welfare and Social Services or a senior child investigator on his/her behalf;
  3. a senior police officer appointed by the Minister for Internal Security;
  4. a Ministry of Education employee who is an educator appointed by the Minister of Education;
  5. a Ministry of Health employee who is a psychiatrist or a psychologist who specializes in children and youth, appointed by the Minister of Health. (Id. § 3.)

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Vietnam: New Rules on Media for Children

(Oct. 13, 2017) On October 1, 2017, a new Ministry of Information and Communications circular, issued by Minister Truong Minh Tuan on June 23, 2017, came into force in Vietnam. It has provisions on media designed for children and requires warnings for viewer or reader discretion related to material not suitable for them.  The rules of Circular 09/2017/TT-BTTIT apply to all media, whether published or broadcast, including items in the online press.  (Ministry Tightens Control over Publication of Children-Related Content, VIETNAM LAW AND LEGAL FORUM (updated Oct. 4, 2017); Circular 09/2017/TT-BTTIT, on Content Ratio, Broadcasting Time and Broadcasting Period Intended for Children and Warning of Contents Not Suitable for Children in Broadcasting Newspapers, Printed Newspapers, Online Newspapers and Publications (Circular) (June 23, 2017), VAN BAN PHAP LUAT.CO.)

The Circular was issued in part to fulfill aspects of the April 2016 Law on Children and defines content for children as material “to be produced, published, broadcasted, or released for readers or audiences” who are children and content not suitable for children as material “not suitable for the age, maturity level, needs, and capacity” of children or that risks “adverse impact on cognitive and psychological development of children.”  (Circular, art. 3.)  The 2016 Law on Children had raised the age for the end of childhood to 18 years from the previous 16.  (Revised Child Law: Pioneering Child Rights, VIETNAM NEWS (Apr. 2, 2016); Luật Trẻ em số 102/2016/QH13 [Law on Children No. 102/2016/QH13], VN DOC.COM (Apr. 10, 2017).)

Material for Children

Material for children to be given priority in production, broadcast, publication, and release includes that on

  • laws and policies on children rights;
  • discovery, learning, exchange of knowledge, recreation, and entertainment intended for children;
  • prevention and awareness of factors and acts likely to harm, abuse, hurt, or exploit children;
  • guidelines for life skills, self-protection skills, and safety skills for children; and
  • sex education, health, and nutrition.  (Circular, art. 4 ¶ 1.)

The Circular also states that coverage on children should be given special preference during the annual month devoted to children’s rights (id. art. 4 ¶ 2), which began on May 27 this year. (Vietnam Launches Action Month for Children 2017, VOV5.VN (May 27, 2017).)  In addition, the Circular requires that set amounts of time of various types of broadcasts be devoted to children’s topics.  For example, radio and television stations that state in their operating licenses that they provide broadcast journalism must cover news about children for a minimum of 60 seconds per broadcast.  (Circular art. 5 ¶ 1(a).)

Similar requirements are established for print media.  Newspapers that are issued daily or every few days must have at least 5% of their articles each week devoted to material for or about children, and monthly publications must have that type of content comprising 1% of their issues.  (Id. art. 8.)

Publishers of books and other materials for children must label them to indicate the age range for which they are suitable; those published in Vietnam in foreign languages must have this information in Vietnamese.  (Id.)

Publications for children written by Vietnamese authors must meet certain standards related to accuracy in what they state about the country’s history, sovereignty, and territory; must promote patriotism; must “nourish the soul, beautiful dignity, and healthy body” of children, and must conform to both the customs of the country and the level of maturity and the needs of children.  (Id. art. 13.)  Publications for children by foreign writers that are translated into Vietnamese and published or distributed in the country must meet similar standards on suitability for “habits, customs, maturity levels, needs and abilities of children and the political, cultural and social conditions of Vietnam.”  (Id. art. 14.)

Materials that Portray Children

The Circular also has provisions on material that concerns actual children.  It requires that in reports on a case involving a child victim, the child’s face be obscured and confidential information on the child be protected.  When images of children under the age of seven are used as characters or illustrations in programs on illegal activities, parental or guardian consent is required; for older children the child’s consent is also required.  (Id. art. 15.)

Materials Not Suitable for Children

Content not considered suitable for children, whether the material appears in print, on the air via radio or television, or online, must have warning notices that can be in the form of sounds, images, writing, or symbols.  The Circular contains specific standards for when and how these warnings appear and requires that they be short, clear, and easy to recognize and remember.  Furthermore, the language should distinguish material not suitable for those under six years of age, not suitable for those from six to eleven, and not suitable for those under 16.  (Id. art. 16.)

The Circular also outlines the responsibilities of press agencies, publishers, and importers of publications, of agencies that manage the press and publishers, of the provincial Departments of Information and Communications, and of offices attached to the national Ministry of Information and Communications.  (Id. arts. 17-20.)

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ASEAN/Hong Kong: Negotiations Concluded on Free Trade and Investment Agreements

(Oct. 13, 2017) On September 9, 2017, Hong Kong and the Association of Southeast Asian Nations (ASEAN) announced that they had concluded negotiations on a Free Trade Agreement (FTA) and a related Investment Agreement. (Press Release, Hong Kong and ASEAN Conclude Free Trade Agreement Negotiations, Trade and Industry Department of the Government of the Hong Kong Special Administrative Region website (Sept. 9, 2017).) The two parties will sign the agreements in November. (Id.) ASEAN’s ten Member States include Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar (also known as Burma), the Philippines, Singapore, Thailand, and Vietnam. (ASEAN Member States, ASEAN website (last visited Oct. 10, 2017).)

According to Edward Yau, Hong Kong’s Secretary for Commerce and Economic Development, who co-chaired the meeting at which the announcement was made, “[t]he Agreements are comprehensive in scope and the commitments therein … [encompass] trade in goods, trade in service, investment, economic and technical co-operation and [a] dispute settlement mechanism. The FTA will become effective after completion of the necessary procedures.” (Hong Kong and ASEAN Conclude Free Trade Agreement Negotiations, supra.) Yau noted that in 2016 ASEAN was Hong Kong’s second largest trading partner in merchandise trade and in 2015 its fourth largest trading partner in services trade. (Id.) He added that the two new agreements would bring to Hong Kong “more and better access to the ASEAN markets, create new business opportunities and further enhance trade and investment flows.” (Id.)

The negotiations on the FTA began in July 2014 and concluded in July of this year. (Id.) In 2016 Hong Kong and ASEAN conducted merchandise trade amounting to HK$833 billion (about US$107 billion), and in 2015 the total trade in services trade between the two sides was HK$121 billion (about US$16 billion). (Id.) In regard to investment, at the end of 2015 “ASEAN ranked sixth among Hong Kong’s destinations of outward direct investment, with a stock of HK$218 billion, and … sixth among Hong Kong’s sources of inward direct investment, with a stock of HK$555 billion” (about US$28 billion and US$71 billion, respectively). (Id.)

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Thailand: Revised Excise Tax Law

(Oct. 12, 2017) On September 16, 2017, a revised excise tax came into force in Thailand that increases taxes on seven products, including alcoholic beverages, playing cards, sugary drinks, and tobacco. Speculation in advance was that prices would go up substantially. For that reason, the commerce and finance ministries moved to limit hoarding of the affected items in advance of the effective date of the change. Penalties for hoarders include seven years of imprisonment and/or a fine of up to 140,000 baht (about US$4,222). (Phusadee Arunmas, Crackdown on Alcohol, Cigarette Hoarders, BANGKOK POST (Sept. 14, 2017).)

Under the new provisions, excise rates will be calculated in a different manner, based on retail prices and volume, rather than according to the present system that relies on factory prices. (Id.) These rules were enacted in the Excise Tax Act B.E. 2560 (2017), published in the Royal Thai Government Gazette on March 20, 2017, in advance of the September effective date. The Act consolidates seven separate excise duty regulations and applies international standards for excise taxes.  (Angela Koo, Excise Tax Act B.E. 2560 Gazetted, IBFD TAX RESEARCH PLATFORM (IBFD) online subscription database (Mar. 28, 2017) (requires log on, then search by country).

Thailand imposes excise taxes regardless of whether the product was made domestically or imported. (Thailand: Country Survey, ¶ 9.5 Excise Duty, IBFD (last visited Sept. 14, 2017).) There is an additional customs duty imposed on imported cigarettes, with a rate of 5% for products from countries in the Association of Southeast Asian Nations Free Trade Area Agreement, to which Thailand is a party, and 60% in other cases. (Thailand: Tobacco Taxation, World Health Organization website (last visited Sept. 14, 2017).)

The excise taxes, often called sin taxes, are used to fund government programs with social benefits. (Arunmas, supra.) For example, annually 2% of the alcohol and cigarette taxes, without a monetary limit, is sent to the state-operated public television; 1.5%, up to 2 billion baht (about US$60.3 million), is given to the Thai Health Promotion Foundation; and 2%, also up to 2 billion baht, benefits the National Sports Development Fund. In addition, the Cabinet has announced it will establish an Elderly Fund, which will receive 2% of the sales, up to 4 billion baht a year. (Id.)

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