(Provisional Translation)

7th Report of Market Access Ombudsman Council (March 18, 2002)

4-(1) Review of the rate structure of Air-NACCS

1. Complainant: American Chamber of Commerce in Japan (ACCJ)

2. Ministry concerned: Ministry of Finance

3. Background:

(1) NACCS (Nippon Automated Customs Clearance System) is a system to carry out import and export customs clearance procedures for cargo and related private businesses (distribution of cargoes, etc.) speedily and reliably through a computer network. There are two kinds of NACCS, Sea-NACCS for sea cargo and Air-NACCS for air cargo and they are operated by the NACCS Operations Organization, a corporation authorized by the Ministry of finance.

(2) NACCS connects the NACCS Operations Organization with customs offices, customs brokers, steamship companies, airlines, banks and others, using dedicated lines and terminals. Its operation expenses are paid with user fees collected from customs houses and private users. To use NACCS, users are required to sign a contract with the NACCS Operations Organization and pay user fees set by the NACCS Operations Organization.

(3) A change to the NACCS system is made every eight years. The latest changes to the Sea-NACCS and Air-NACCS systems were made in October 1999 and October 2001, respectively.

4. Complaint:

The change in the fee structure from a flat-rate system to a specific-rate system in connection with the latest change to the Air-NACCS has resulted in increasing expenses for international parcel delivery service operators that handle a large number of small parcels. The NACCS Operations Organization made the latest change to the fee structure by going through only perfunctory formalities and did not provide full explanation and information to the users. Therefore, the fee structure of the Air-NACCS should be reviewed by establishing a neutral organ to conduct careful examinations of the structure from various angles.
Since NACCS fees are set in a way to cover all expenses with the income from fees, it does not provide any incentives to cut costs. Moreover, since a specific company has been in charge of system development and management for a long time, there is no principle of competition at work. Therefore, efforts should be made to improve the efficiency of the operation in order to slash total costs and lower user fees.
NACCS users have no choice but to use NACCS and pay fees set by the NACCS Operations Organization. The NACCS Operations Organization has the responsibility to explain the fees it charges and should promote information disclosure and improve the transparency of the fee structure in order to subject it to constant monitoring by the users.

5. Results of deliberation:

Since the NACCS Operations Organization exclusively operates and manages NACCS and sets user fees in a way to cover all expenses with the fee income, it is not likely to provide any incentives to cut costs. Moreover, system development and management account for most of the total costs and a specific company has been in charge of system development and management for a long time. Based on the present situation, efforts should be made to make operations efficient and reasonable in order to slash total costs in such ways as providing a level playing field.
According to the ministry concerned, the NACCS Operations Organization revised the Air-NAACS fee on the basis of the opinions it solicited from users and those expressed at study meetings. However, as the complainant points out, NACCS Operations Organization's failure to provide explanation and information in a way satisfactory to the users is one of the reasons why the complaint has been filed. The NACCS Operations Organization says it sets fees in a way to bring its budget into balance after every four years and carries out a comprehensive review of the fee structure in the fifth year in a flexible manner in order to bring the structure into line with economic developments. However, in view of the fact that the Organization has accumulated a huge amount of surpluses and reserves, it cannot necessarily be said that the review is carried out flexibly. Moreover, the Organization is open to the charge of being slow in preparations, in view of the fact that it had to take extreme change-relaxation measures expediently for three years in drastically changing the fee structure this time despite of its avowed policy of setting the fees in a way to bring its budget into balance every four years. Therefore, steps should be taken to establish a new way of revising the fee structure, including the establishment of a neutral study group that will review the fee structure from various aspects, including how to slash total costs and how to ask the users to pay costs. In that case, fees should be set at a reasonable level based on actual costs by making them reflect economies of scale. At the same time, in order to facilitate constant surveillance by the users, disclosure of information concerning user fees should be further promoted and their transparency should be improved.
And from the standpoint of enhancing the convenience for the users, it is important to promote one-stop services with regard to export- and import-related procedures, such as NACCS, by connecting and coordinating the systems of each ministry and agency. This is also important in promoting the electronic government administration, such as "e-Japan" programs.
Based on the above, the ministry concerned should take the following measures with regard to the fee structure of NACCS.

(1) With regard to NACCS, information disclosure should be further promoted and the transparency of user fees should be improved. With regard to thorough implementation of competitive bidding for system development and the outsourcing of some operations, the measures that should be promptly implemented starting in FY2002 should be made specific in order to make business operations more efficient and reasonable and further slash user fees.

(2) With regard to NACCS user fees, steps should be taken to establish a new way of revising the fee structure, including the prompt establishment of a neutral study group composed of well-informed persons that will review the fee structure from various aspects, including how to slash total costs and how to ask the users to pay costs. With regard to the Air-NACCS, the user fee structure should be revised by September 2004 at the latest, when the violent change-relaxation measures expire. In doing so, reasonable fee-setting methods should be studied by taking economies of scale into consideration.

Government decision (March 20, 2002)

4-(1) Review of the rate structure of Air-NACCS

The following measures will be taken regarding the rate structure of Air-NACCS.

A With regard to NACCS, information disclosure will be further promoted and the transparency of user fees will be improved. With regard to thorough implementation of competitive bidding for system development and the outsourcing of some operations, the measures that should be promptly implemented starting in FY2002 will be made specific in order to make business operations more efficient and reasonable and further slash user fees.

B With regard to NACCS user fees, steps will be taken to establish a new way of revising the fee structure, including the prompt establishment of a neutral study group composed of well-informed persons that will review the fee structure from various aspects, including how to slash total costs and how to ask the users to pay costs. With regard to the Air-NACCS, the user fee structure will be revised by September 2004 at the latest, when the violent change-relaxation measures expire. In doing so, reasonable fee-setting methods will be studied by taking economies of scale into consideration.