How Japan took to Covid 19?
The Japan government strategically handled the pandemic situation in the country, announcing its 1st COVID-19 emergency response package with key measures to include home return support for Japanese travellers in abroad, strengthening their immigration control, and loan support for SMEs, etc. The government also unveiled the 2nd COVID-19 emergency response package. Key measures include expanded number of hospital beds for infected patients, additional loan support, for companies and strengthening employment support measures, etc.
The government also announced another economic package to stimulate the nation’s economy. While the total scale of the package is 117 trillion yen (1.1 trillion USD), which is equivalent to 22 percent of the country’s GDP, about three-fourths of the budget was allocated to employment and business support, and the remainder was allocated to the healthcare system, consumption promotion campaign, and public investment, etc.
The government, in its mandate, has requested its people and companies for promotion of telework to prevent the spread of infection. The Ministry of Health, Labour and Welfare (MHLW) introduced policies for expansion of employment adjustment program and to ease its eligibility criteria. The policy aims to support employers who are suffering from the business downturn while they maintain employment by paying leave allowance and letting employees take partly paid leave, while retaining them.
The MHLW subsidized a maximum 100% of leave allowance for SMEs and maximum 80% leave allowance for large enterprises, capped at JPY 15,000 a day per employee on leave.
The Japanese Government aimed at doubling the target for net purchases of exchange-traded funds to JPY 12 trillion ($112 billion), while agreeing to coordinated foreign swap lines, to lower the cost of borrowing dollars internationally, with the US Federal Reserve, and establishing a new one-year facility that would offer loans against corporate debt as collateral at a 0% interest rate
Key business support measures:
Ministry of Finance (MOF) of the Government of Japan took to use loans for crisis response. Low-interest-rate loans provided by the Development Bank of Japan (DBJ). Reports confirmed that until the end of October, total lending outstanding was 2,012.1 billion (190 cases) and most of the loans granted were for automotive and transportation industries.
MOF decided to use safety-net loans (loan limit: JPY720 million) and loan for crisis response (loan limit: JPY300 million) to support SMEs. Low-interest-rate loans were provided by government-financial institutions (JFC, Shoko Chukin Bank, etc.). MOF established special loan program for novel coronavirus. Low-interest-rate loans were provided by Japan Finance Corporation (JFC) and Okinawa development Finance Corporation. Loan limit is JPY300milion.
Ministry of Economy, Trade and Industry (METI) decided to use a safety-net guarantee program (guarantee limit: JPY280 million) and crisis-related guarantee (guarantee limit: JPY280 million) to support SMEs. The government established private financial institution’s no-interest unsecured loan provided by utilizing prefectural directed credit programs. The loan limit is JPY30 million.
METI established subsidy program for sustaining businesses. This program targets companies facing severe conditions in particular and provides them with subsidies for a wide variety of purposes that in general are considered effective in supporting them in sustaining or reviving their businesses. Eligible companies can obtain JPY 2 million.
The Japanese government also kept in mind the difficulties faced during custom clearance procedures during the times of COVID, with flexible responses regarding declaration at a convenient customs office, handling of seal. (i.e., for items that require the importer/exporter’s or customs broker’s seal, such seal is not required.), handling of items for which the original must be submitted or presented in writing (i.e., documents may be extended or submitted electronically), telework of Customs Brokers among various others.
If it is found to be difficult to submit a certificate of origin, the submission will be postponed. Please note that this treatment requires the submission of a certificate of origin of the export country itself. Therefore, if importer is unable to submit the certificate of origin of the export country, importer will not be able to apply the preferential tariff rate, and importer will need to file an amended return if there is a shortfall in the amount of duty and other tax.