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  5. METI to Request Main Subcontracting Companies to Further Take Appropriate Care in Trading with their Subcontractors Affected by Novel Coronavirus Disease

METI to Request Main Subcontracting Companies to Further Take Appropriate Care in Trading with their Subcontractors Affected by Novel Coronavirus Disease

March 10, 2020

As the novel coronavirus disease is spreading across the world, impacts caused by the disease on supply chains and other business activities have already been emerging in Japan as well as in other countries. In light of this, the Ministry of Economy, Trade and Industry (METI) will request, through 1,142 related industrial associations, that main subcontracting companies should take appropriate care in trading with SME subcontractors, which are highly likely to be adversely affected by such impacts, e.g., dealing with subcontractors’ delay in delivery behind schedule and completing quick and flexible payment to subcontractors.

1. Overview

As the novel coronavirus disease is spreading across the world, impacts caused by the disease on supply chains and other business activities have already been seen in Japan as well as in other countries.

METI has received inquiries from some subcontractors stating that their main subcontracting companies, without providing satisfactory consultation, have unilaterally suspended trading due to the subcontractors’ delay in delivery behind schedule or have demanded quick delivery of orders without paying appropriate costs involving the delivery.

Considering the fact that many businesses are facing the end of the fiscal year, and aiming to minimize the negative impacts on SME subcontractors, whose business bases are particularly vulnerable to such adverse conditions, METI, under the name of the METI Minister, will request, through 800 related industrial associations, that main subcontracting companies should further take appropriate care in trading with their SME subcontractors that have been affected by the disease, e.g., not only providing satisfactory consultation occasions with their subcontractors but also taking flexible actions for delivery deadlines and payment (see the Appendix).

From March 10, 2020, METI will also start, in sequence, requesting the same of representatives of 342 industrial associations under the jurisdiction of other ministries and agencies in joint name with other relevant ministers.

2. Details of the request

Division in Charge

Fair Trade Division, Business Environment Department, Small and Medium Enterprise Agency