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  5. FY2017 Progress in Enforcement of the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors and Efforts for Fair Subcontracting Practices

FY2017 Progress in Enforcement of the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors and Efforts for Fair Subcontracting Practices

August 27, 2018

The Small and Medium Enterprise Agency

The Small and Medium Enterprise Agency (SMEA) has been strictly enforcing the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors (hereinafter referred to as the “Act”) through on-site inspections of main subcontracting enterprises and other actions, while strictly addressing violations of the Act.

SMEA hereby releases a report of the FY2017 progress in enforcement of the Act, results of services at aid offices for subcontractors and initiatives for improving the business transaction conditions.

1. Results of the enforcement of the Act

SMEA conducted a written survey of approximately 250,000 companies, targeting both main subcontracting enterprises and subcontractors. Based on the survey results, on-site inspections and other actions were performed at 958 main subcontracting enterprises which were suspected of violating the Act, and orders for improvement were issued to 867 of those companies.

2. Results of the services at the aid offices for subcontractors

Aid offices for subcontractors in 48 locations in various prefectures across Japan responded to 6,838 requests for advice from counselors and accepted 601 cases for free consultations with attorneys as well as 14 petitions for conciliation under Alternative Dispute Resolution (ADR).

3. Initiatives for improving the business transaction conditions

In September 2017, Japan established a Liaison Council of Responsible Ministries and Agencies for Improving Vitalization of SMEs and Small Enterprises under the Deputy Chief Cabinet Secretary, aiming to address a variety of challenges surrounding SMEs and small enterprises, such as improvement of business transaction conditions. Since then, the council has been conducting necessary discussions across ministries and agencies.

In addition, SMEA has been dispatching inspectors who monitor subcontracting business. In FY2017, the inspectors visited SME subcontractors across Japan and conducted 2,727 interviews. On the premise of the confidentiality of private information, and if necessary, SMEA will give feedback on or convey details of the interviews to respective companies or industrial associations so as to contribute to improving subcontracting practices and will go on to inspections of companies suspected of violating the Act. Through these efforts, SMEA will urge companies to conduct measures for disseminating appropriate trade practices.

References:

Division in Charge

Fair Trade Division, Business Environment Department, SMEA

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