Marker system of jftc’s Leniency Program Setting up or reforming a leniency programme - What makes a leniency policy successful – Takujiro Kono Senior Officer for Leniency Program, Investigation Bureau Japan Fair Trade Commission Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October

Leniency Program of Japan Fair Trade Commission Setting up or reforming a leniency programme - What makes a leniency policy successful – Takujiro Kono Senior Officer for Leniency Program, Investigation Bureau Japan Fair Trade Commission Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October

Key Elements of an effective leniency programme Substantial payoff for priority Clarity, transparency, and certainty Application accepted even after investigation starts Severe penalties for non-applicant(s) Confidentiality of application information ・ Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 3

Overview of Jftc’s Leniency program 1st Applicant the initiation of the JFTC investigation Before After 100% immunity 2nd Applicant Up to 3 Applicants 50% reduction 3rd to 5th Applicant 30% reduction 30% reduction 30% reduction Criminal accusation NOT filed by JFTC (Applicant firm and its individuals) Up to 5 applicants 4 Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 4 4

Qualification requirements <JFTC’s Leniency Program> For immunity The first firm to comes forward before the first day of the investigation Not commit further acts on or after the first day of the investigation For reduction 2nd to 5th firm to self-report Not commit further acts on and after the first day of the investigation Submit reports and documents unknown to JFTC (for 4th and 5th application, for application after the investigation begun) Self-report is due the twentieth day from the first day of the investigation Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 5

Disqualification requirements <JFTC’s Leniency Program> Both for immunity and reduction Reports and documents submitted not contain false information Not submit false reports or false materials responding to JFTC's additional requests Not coerce others to commit the infringement or blocked others from ceasing Not disclose the fact of application to third parties without justifiable reasons Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 6

Additional requirements for Application after investigation starts <JFTC’s Leniency Program> Application Deadline  Due the twentieth day from the inception of the investigation Maximum Number of Applications  Three  The number of applications including before and after the investigation are not more than 5 Value of Reporting  Must includes the facts other than already ascertained by JFTC Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 7

JFTC’s Experience (1) Number of Applications after the introduction of the leniency program（Since Jan. 2006） Number of Cases  Leniency applications are important information sources of price-fixing cartels, etc. FY 2005 2006 2007 2008 2009 2010 Total Applications ２６ ７９ ７４ ８５ １３１ ４８０ ※The period of FY2005 is between Jan. 4 .2006 and Mar. 31. ※In 2010, the program was revised to introduce joint application and to expand the number of applicants. FY 05 06 07 08 09 10 Total The number of price-fixing cartels and bid-riggings etc １７ ９ ２０ １１ ２２ １０ ８９ Leniency applied cases (published) ０ ６ １６ ８ ２１ ７ ５８ Leniency applied companies (published) ３７ ５０ １３４ Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 8

JFTC’s Experience (2) After the introduction of the leniency program （ Since Jan. 2006 ）　→ The size of price-fixing cartel cases enlarges. Strict measures against price-fixing cartels in the large market fields Main fields Market size （for one year） FY Hot-dip galvanized steel sheets 2109 million US＄ 2009 Electric wire 2159 million US＄ 2010 Vinyl chloride pipes 1531 million US＄ 2008 Optical fiber cable 　574 million US＄ ※Exchange rate(Trade Statistics of Japan) 　 FY2010 82.35\/$ FY2009 90.09\/$ FY2008 96.38\/$ Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 9

JFTC’s Experience (3) Multi-agency coordination and cooperation  Previous Cases (such as Marin Hose Case) Pay full attention to matters of Confidentiality  Identity of Leniency Applicant , Information from Leniency Applicant  Legal obligation The chairman, the commissioners and the staff members of the JFTC shall not divulge or make surreptitious use of trade secrets of entrepreneurs which came to their knowledge in the course of their duties. (Article 39 of the Antimonopoly Act). Information Exchange in the area of, among other things:  General matters of the violation (relevant market, duration, etc.)  Schedule of the dawn raids, investigation methods, etc.  Results of the dawn raids, Progress of investigation Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 10

Thank you for your attention ! Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October 11

Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October

Overview of JFTC’s Marker system JFTC’s Rules on Reporting and Submission of Materials Regarding Immunity from or Reduction of Surcharges Form No.1 Reporting Name and address of the applicant Products concerned Basic information of the conduct (such as geographical area, parties, duration) No need to describe in detail, nor to attach documents JFTC notifies the applicant of, the order of submission the deadline by which (1) reporting the facts regarding the violative act by using Form No.2 and (2) submission of materials should be completed Marker Period Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October

Form No. 1: Written report ○ Summary of the Violative Act to be Reported 1. Goods or Services Targeted by the Said Act   2. Description of the Said Act (1) (2) 3. The Time of the First Implementation (The Time of Termination) ______ (Year) ______ (Month) ______ (Day) (until ______ [Year] ______ [Month] ______ [Day]) * The written report shall be prepared in Japanese. Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October

Form No. 2: Written report (1) 1. Summary of the Violative Act to be Reported (1) Goods or Services Targeted by the Said Act   (2) Description of the Said Act a. b. (3) Name or Title and Address or Location of Other Entrepreneur(s) Participating in the Said Act (4) The Time of the First Implementation (The time of Termination) ______ (Year) ______ (Month) ______ (Day) (until ______ [Year] ______ [Month] ______ [Day]) * Yellow cells: Substitution of an oral report for a written report could be possible. Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October

Form No. 2: Written report (2) 2. Position Titles and Names of Executives or Employees Who Have Involved in the Said Act at the Reporting Entrepreneur  Current Position Title and Division’s Name  Position Title and Division’s Name at Time of Involvement (The Time of the Position) Name   3. Names and Others of Executives or Employees Who Have Involved in the Said Act at Other Entrepreneur(s) Participating in the Said Act Name of Entrepreneur  Current Position Title and Division’s Name Position Title and Division’s Name at Time of Involvement (The Time of the Position) Name   4. Other Matters for Consideration 5. Submission of Materials No.  Title of Material Description of Material’s Content (Summary) Notes   Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October

features of JFTC’s Marker system JFTC has No discretion about whether or not to grant marker Virtually All applicant is notified by JFTC of the deadline to perfect the marker (according to JFTC’s Rule) Not only to the 1st applicant As long as applying prior to the investigation starting date Even the 2nd , 3rd and subsequent applicants are granted marker(s) The Order of reporting and submission is decided according to the time when JFTC receives the Form No. 1 Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October

Thank you for your attention ! Setting up or reforming a leniency programme - What makes a leniency policy successful – Mini Plenary Session 4b ICN Cartel Workshop 2011 Wednesday, 12 October