JPN FTC proposed revisions to the Guidance standards when bills are used as a means of payment for subcontract fees, in consideration of business practices and relations.
Also the Guidance policies when lump-sum payment method and electronically recorded monetary claims are used as a means of payment for subcontract fees.
Follows JPN METI, FTC Feb. 2023 request on appropriate payments, see #164308.
Revisions
Shorten the period from the payment date of subcontract fees until the date on which money equivalent to the amount of receivables for subcontract fees is paid to a financial institution to within 60 days from within 120 days.
Consultation Period
Comments by Mar. 28, 2024 for planned effectiveness from Nov. 1, 2024.
Apr. 2024 Response to Comments
On Apr. 30, 2024, JPN FTC issued consultation feedback after receiving 30 comments.
JPN FTC clarified scope, stated that opinions received will be used for future reference.
Finalized Guidance standardsafter making some additional minor adjustments; changes are effective from Nov. 1, 2024 but also involve some transition measures.
JPN FTC and JPN METI's Small and Medium Enterprise Agency jointly issued requests to related business organizations, FIs, ministries, and agencies on the same day.
For the optimization of payment methods throughout the supply chain, as well as consideration re the financing of businesses working to improve payment methods.
Oct. 2024 JPN METI and JPN FTC Joint Warning
On Oct. 1, 2024, JPN METI as well as JPN FTC, in preparation for the implementation of the new guidelines above, issued compliance warning to around 600 parent firms.
This was issued due to concerns arising re a regular survey under Subcontracting act.
The caution/warning is contained inappendix 2; JPN METI as well as JPN FTC will continue to work to improve trading conditions for small and medium-sized businesses.
The warning raises the prospect of potential measures such as on-site investigations.
