Terrie's Take 889 - Japanese Pragmatism in Applying Traffic Laws, ebiz news from Japan

Mon Mar 27 10:20:42 JST 2017

* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term 
technology and media entrepreneur living in Japan. 
(http://www.terrielloyd.com)

General Edition Sunday, March 26, 2017, Issue No. 889

- What's New -- Japanese Pragmatism in Applying Traffic Laws
- News -- Recruiting fees rise 20%-100% for engineers
- Upcoming Events
- Corrections/Feedback -- Responses to Inheritance Tax Changes
- Travel Picks -- Archery in Fukuoka, Cosplay in Ehime
- News Credits

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+++ WHAT'S NEW

Traveling to the airport recently on an inner city expressway, it struck 
us how the Japanese have a seemingly ambivalent but actually very 
pragmatic view of following the law. In this instance, it was about 4am 
in the morning and in a stretch of road that had a posted speed limit of 
60km/hour all the traffic was traveling at 80km to 100km per hour. We do 
mean ALL the traffic. Trucks, passenger cars, lite vans... there wasn't 
a single vehicle traveling at 60. And yet, driving was safe and orderly. 
No real speedsters up at that time anyway.

As long-time resident drivers will already know, even the police 
generally accept that few people travel at the posted speed limit on 
main roadways (suburban side streets are a different matter). For 
example, police cars on traffic duty generally don't bother stopping 
speeding cars unless they're doing more than 20km per hour above the 
limit, or are doing something dangerous This means the prevailing speeds 
on the intercity expressways, where the posted speed is 80, is typically 
around 100, with more risk-taking drivers doing up to 120.

In fact pretty much the only time you shouldn't breach the speed limit 
as a driver, is during traffic safety week or when a patrol car decides 
to travel in full view of the rest of the traffic AND travels at exactly 
80km/hr. At those times, everyone speeds until the see the patrol car, 
then settles down to an orderly line behind it, waiting until the 
officers reach the edge of their patrol area and exit. It is often funny 
to see this result in a left lane traffic jam, while speeders coming up 
from behind and not able to see the patrol car will come zooming up the 
fast lane until spot the patrol car. They then hit the brakes and slink 
back into the left lane as best they can - hoping the police up front 
were not watching them in the rear view mirror.

Then there are parking laws, camping vehicle laws, bicycle-use laws, 
skateboard laws, and restrictions on pretty much any type of transport. 
And yet, while the laws are there, few people are apprehended and even 
fewer charged. Drinking alcohol and driving, and actually causing 
accidents being important exceptions.

So is Japan a nation of scofflaw drivers?

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[...Article continues]

Well, yes they are, but this lawbreaking falls in the category of 
pragmatic risk taking and is a perfectly logical outcome of Japan's 
police mindset. There is a very good paper written in 1992 by Daniel H. 
Foote, a professor at Tokyo University, who digs into the concept of 
Benevolent Paternalism and the Japanese legal system. The title of the 
paper is, "The Benevolent Paternalism of Japanese Criminal Justice" 
which, as the name implies, is mostly about criminals already arrested.

However, the paper is valuable to us because it goes into some depth 
about the mindset of the police, the prosecution, the judges, and 
jailers, in terms of how they act with their charges. For them, 
efficiency and reintegrating the offender back into society is more 
important to the greater good than simply punishing the individual for 
the purpose of deterrence.

Foote's paper is here:
http://bit.ly/2n79OYq

Wikipedia identifies paternalism as behavior by an organization (for our 
purposes, the police when controlling traffic) or state that limits a 
person or group's liberty or autonomy for the greater good of society. 
Benevolent paternalism is where the police act from a viewpoint of 
societal benefit, rather than just promoting their own power, and thus 
can have the discretion whether to "influence" offenders to return to 
law-abiding lives or sending those who refuse to submit, to the courts.

Foote talks about how Japan's criminal-justice system depends heavily on 
community cooperation and informal social controls at all levels, from 
crime prevention and detection through to rehabilitation and 
reintegration. He says that for the purposes of criminal justice, the 
relevant communities are not geographic but rather based on family, 
company, and other social groupings.

Foote recognizes that skeptics might argue that the system's 
"benevolence" is largely an illusion and that police discretionary 
powers are excessive, to the point of abuse - quoting Japan's 
unbelievably high conviction rates. However, he argues convincingly that 
in the Japanese system at least, a relatively small number of suspects 
wind up being prosecuted anyway, and instead low-impact cases are dealt 
with directly by the police admonishing the perpetrator. He gives some 
examples of just how much discretion they have, cases which in a western 
context would require prosecution by a court of law.

So how does benevolent paternalism play a role in uniform speeding and 
other acts of mass traffic disobedience? Since at least the beginning of 
the Tokugawa period over 400 years ago, Japan has been a populous 
country and as a practical consideration, rules were made to not only 
control but also facilitate the movement of people and goods. The 
authorities of the day quickly found that by establishing grey zone 
laws, the general populace would in its pursuit of ordinary life 
regularly transgress the rules and thus be easy pickings when those in 
power wanted to make an example of them. This idea of benevolent 
paternalism, the right of the "father figure" state organ to punish but 
generally to forebear for the good of society, has successfully 
continued through to the modern day.

So taking the idea that the police see their role as the safe but 
efficient movement of vehicles, and given that the majority of drivers 
are in themselves a "community" the police are willing to let that 
community (at the police's discretion) to set its own speed limits 
(within some band of reasonableness) rather than try to stick to the 
letter of the law.

To give you some idea of just how powerful this concept of community and 
its influence on the police is, a radical change in the legal view of 
bicycle usage had to be reinterpreted by the police after it was found 
to obviously be not practical. More specifically, in 2008 the National 
Police Agency (NPA) tried to change the traffic laws to ban mothers from 
carrying two kids on their bikes to get them to school. The front/back 
seat "mamachari" are famous world-over as the transportation of choice 
for budget-conscious young mothers.

There was such an uproar as mom groups all over the country complained 
to the local authorities, and anyway basically just ignored the police, 
the NPA got the message. To save face it declared that they would allow 
bicycles that met a new safety standard to continue to still carry two 
kids. Since then, we have never heard of a mom getting charged, 
regardless of whether their bicycle meets safety regulations or not.

So next time you see a vehicle speeding at just on 20km an hour past 
you, you'll know that you're watching a unique feature of Japanese 
culture in action...!

...The information janitors/

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+++ NEWS

- 75 or older? Driving tests are about to get a lot tougher
- Heat of Moritomo school scandal rises for PM
- Son is richest Japanese
- Chinese consumer TV program stimulates slide in shares
- Recruiting fees rise 20%-100% for engineers

=> 75 or older? Driving tests are about to get a lot tougher.

After a series of accidents caused by senile elderly drivers, the 
government has this month passed new legislation requiring stiffer 
driving and mental competency tests for drivers aged 75 and older. The 
accident that was the tipping point was one where an 85-year old man 
drove his light truck into a group of elementary kids, killing one and 
injuring six. The nation's 5.13m drivers older than 75 now need to take 
a tougher dementia test each time (every 3 years) they apply. ***Ed: 
There is already an elderly mental competency test in place, but it has 
only been applied if drivers first broke the law and where dementia was 
an obvious cause. For example, reversing instead of moving forward, or 
driving through a red light. So the new law serves more of a preventive 
function.** (Source: TT commentary from todayonline.com, Mar 25, 2017)

http://bit.ly/2nloB3v

=> Heat of Moritomo school scandal rises for PM

PM Abe and his wife are taking even more heat from former friends, 
following the explosive claims of the principal of the Moritomo Gakuen 
school, Yasunori Kagoike, that Abe's wife handed him an envelope full of 
money as part of Abe's informal support for the school. The latest heat 
comes from Osaka Governor Ichiro Matsui, who was also a member of the 
right-wing organization Nippon Ishin no Kai along with Abe and Kagoike. 
Matsui reckons that Abe is disingenuous in saying that there was no 
implicit understanding between himself and Kagoike over the school's 
questionable land deal. Matsui pointed out that if in fact there was no 
"between the lines" understanding, as Kagoike claims, then why did the 
deal go through so easily. ***Ed: Interesting to see all these right 
wingers stabbing each other in the back as their misdoings become public 
knowledge. Abe may survive this scandal, but the public will certainly 
now be thinking that the LDP is back to its scandal-ridden dealings of 
the past.** (Source: TT commentary from japantimes.co.jp, Mar 25, 2017)

http://bit.ly/2okXlBA

=> Son is richest Japanese

Fortune magazine has just named Softbank CEO Masayoshi Son as the 
wealthiest person in Japan. The magazine says that at 34th place among 
billionaires worldwide, Son is worth US$21.2bn. Son edged out Tadashi 
Yanai of Fast Retailing for the top place. Yanai is currently worth 
around US$15.9bn. (Source: TT commentary from the-japan-news.com, Mar 
21, 2017)

http://bit.ly/2okPLXR

=> Chinese consumer TV program stimulates slide in shares

An annual Chinese state-run CCTV program "3.15 Gala" has hit a number of 
foreign companies with charges of consumer fraud. Included were two 
prominent Japanese firms: Ryohin Keikaku (Muji brand operator in China) 
and Calbee, which saw their respective share prices slide about 4% each 
after the show ran. In the program, both companies were accused of 
exporting products to China that contain materials/ingredients from 
"import-ban areas" (meaning northeastern Fukushima). Both companies deny 
shipping any products to China from the banned areas, but that didn't 
save them a JPY30bn share drubbing on the Tokyo stock market in the 
meantime. (Source: TT commentary from bloomberg.com, Mar 16, 2017)

http://bloom.bg/2nUWKdu

=> Recruiting fees rise 20%-100% for engineers

According to a Nikkei article, a severe shortage of construction and 
software engineers is driving up the commission rates of placements by 
headhunters. The standard placement fee in Japan is currently 30%, but 
the article reports many agents are charging at least 35%, and in some 
cases as much as 100% more than the going rate. The demand for 
construction engineers is of course fueled by the 2020 Olympics, while 
that for software engineers is simply because there are not enough to go 
around. The current SI jobs to applicant ratio is 3.67:1. The overall 
average for jobs to applicants for all industries is 1.82:1. (Source: TT 
commentary from asia.nikkei.com, Mar 25, 2017)

http://s.nikkei.com/2ol25qV

NOTE: Broken links
Some online news sources remove their articles after just a few days of 
posting them, thus breaking our links -- we apologize for the inconvenience.

***------------------------****-------------------------***

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+++ UPCOMING EVENTS

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***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

** In TT-887 we covered some new tax changes that are pertinent to 
foreign permanent residents here, and received a veritable torrent of 
response. Two of the best ones are repeated here:

=> PWC Response:

These tax changes are very significant - good for some and not so good 
for long-term residents. While in most situations there is very little 
one can do from a tax planning perspective, there are ways to avoid or 
minimize inheritance tax exposure if some upfront planning is 
undertaken. If your readers are looking for some advice, please feel 
free to have them contact my colleagues Thomas Lu and Marcus Wong here 
at PWC Japan.

One point to keep it in mind is that at the time when we wrote the below 
Alert the transition rules were not known to us. Subsequently, we have 
learned that any foreigner who leaves before April 1, 2017 (just a 
couple of weeks left) could avoid the 5-year look back assuming there is 
no Japan connection ( family or asset wise).

In summary, there will be three major changes effective April 1, 2017:

The Good:

1. Relief for foreign nationals temporarily in Japan - Exemption from 
gift and inheritance tax on non Japan situs assets for foreign nationals 
residing in Japan for ten years or less out of the last fifteen years 
and who hold a "table 1" visa that generally does not allow them to stay 
indefinitely in Japan, such as a work-related visa.

However, please note the transfer of overseas assets with Japanese 
nationals or other foreign nationals who are subject to gift and 
inheritance tax would not be excluded. Also, the transfer of Japanese 
assets would continue to be subject to Japan gift or inheritance tax 
regardless of how long the foreign national has been in Japan. In 
addition, individuals holding a "table 2" visa such as a spouse of 
Japanese national visa or a permanent resident visa at the time of the 
inheritance or gift will not be exempt from tax on overseas assets.

The Bad:

2. Ten year "tail" for Japanese nationals - Japanese nationals may be 
considered "unlimited taxpayers" even if residing outside of Japan if 
they or the donor/decedent had a jusho in Japan within five years of the 
inheritance or gift.  The proposed tax reforms would increase this time 
period from five years to ten years.

The Ugly:

3. Five year "tail" for foreign nationals - for the first time, the 
receipt or transfer of worldwide assets by longer-term foreigners will 
remain subject to Japan inheritance and gift tax after they depart Japan 
until they have no longer had a jusho in Japan for ten out of the last 
fifteen years. Therefore, receipt or transfer of worldwide assets by 
longer-term foreigners could remain subject to Japan inheritance and 
gift tax for up to five more years after permanent departure from Japan.

To clarify, this means that the transfer of assets involving foreign 
nationals who had a jusho in Japan for ten years or more could be 
subject to Japan gift or inheritance tax as well as potentially transfer 
tax in another country for up to five years after permanently moving out 
of Japan. Even if the foreign national no longer holds a Japanese visa 
or if the assets are located overseas or if the transferor/recipient has 
never resided in Japan before, the transfer of assets involving the 
foreign national would be subject to Japan gift or inheritance tax.

In addition, no transition measures were announced in the proposed tax 
reform. This would mean that individuals who previously moved out of 
Japan prior to April 1, 2017 could be subject to Japan inheritance and 
gift tax. One would need to count back fifteen years from the transfer 
date of the asset to determine if the individual had jusho in Japan for 
ten years during this period. Therefore, if a gift takes place on April 
1, 2017 then theoretically, someone who permanently moved out of Japan 
as far back as April 2, 2012 could be subject to Japan gift tax.

=> Reader Two Response:

As in most countries, the Japanese Government establish tax laws and 
regulations for the subjects living in Japan which happens to be more 
than 90% Japanese of the total population. They do not crack down on 
foreigners but do in fact accommodate foreigners favorably who stay less 
than 5 years, however, for long-term residents like ourselves, why 
should it be different?

You forgot to mention the new "tail" in connection with Inheritance Tax 
taking effect from 1 April 2016 whereby the Japanese State still can 
impose tax up to 10 years after having left Japan. How this will 
practically take place remains to be seen but I am sure tax treaties on 
double taxation will be amended to consider it.

Exit tax only refers to financial securities - not real estate and other 
property. 15% tax is very reasonable in my view. If fund managers have a 
problem with that then never mind, they must be poor people totally 
governed by greed. By the way it is my understanding that there is a 5 
year grace period for the exit tax for foreigners. In other words in 
kicks in from 2020.

It is antisocial not to pay tax and contribute to the state/society no 
matter which country we live in perhaps with the exception of Monaco, 
Dubai and similar states.

***------------------------****-------------------------***

+++ TRAVEL DESTINATIONS PICKS

Japanese Archery Demonstration, Fukuoka
Kyudo: The Way of the Bow

Visiting Kokura Castle any time of year brings you in touch with history 
as well as festivals and seasonal events. Furthermore, the castle makes 
for a great backdrop for other special events, such as this kyudo, or 
the Japanese martial art of archery, demonstration.

This was a fantastic opportunity to see experts in this ancient art from 
all around western Japan and show off their skills and wisdom. A free 
event, it attracted an impromptu gathering of spectators, along with 
some traditionally-dressed participants of another event at the Kokura 
Castle Japanese Garden that day. If you're looking for authenticity in 
cultural events, this had plenty.

http://bit.ly/2nY4qvT

=> Cosplay at Matsuyama Castle, Ehime
Hobby, lifestyle, or escapism?

These days, outside of Harajuku, Japan's cosplayers seem scarcer than 
they once were in the 1990s. It's been suggested that this may be due to 
the rise of "utility" or "normcore" fashion. So these sort of gatherings 
aren't common occurrence these days.

However, this only contributes to a heightened sense of intrigue, 
excitement and novelty surrounding large scale cosplay events, 
especially in a smaller city like Matsuyama. The Japanese friend I was 
with at the castle expressed just as much fascination at the extravagant 
outfits we saw. At the end of the day, he reached the affectionate but 
bewildered conclusion that cosplayers are in a world of their own.

The cosplayers themselves were incredibly welcoming and more than happy 
to pose for photographs. After all, they didn't labor for months over a 
sewing machine or spend hours on fastidious hair and makeup with the aim 
of going unnoticed or unadmired...

http://bit.ly/2ol9YN2

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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