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General product obligations
What are the basic laws governing the safety requirements that products must meet?
The Consumer Products Safety Act (Act No. 31 of 1973, as amended) (CPSA) generally applies to all kinds of products sold in Japan and accidents caused by products within Japan. Further to the CPSA, some specific products are also regulated in part by the following laws:
- electrical appliances by the Electrical Appliances and Materials Safety Act (Act No. 234 of 1961, as amended);
- gas appliances by the Gas Business Act (Act No. 51 of 1954, as amended); and
- combustion appliances (eg, gas stoves) by the Act on the Security and Transaction of Liquefied Petroleum Gas (Act No. 149 of 1967, as amended).
Other products, however, are regulated exclusively by the following laws instead of the CPSA. Some examples are:
- automobiles by the Road Tracking Vehicle Act (Act No. 185 of 1951, as amended) (RTVA);
- medicines, cosmetics and medical appliances by the Act on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (formerly known as the Pharmaceutical Affairs Act) (Act No. 145 of 1960, as amended) (ASSCC); and
- food, additives and the like by the Food Sanitation Act (Act No. 233 of 1947, as amended) (FSA).
An outline of the CPSA in English is available on the website of the Ministry of Economy, Trade and Industry (METI) (www.meti.go.jp/policy/consumer/seian/shouan/contents/shouanhougaiyo-e.pdf).
What requirements exist for the traceability of products to facilitate recalls?
The Household Goods Quality Labelling Act requires that information, including the name of the product’s manufacturer, importer and so on, be labelled on certain consumer products. This requirement helps consumers to properly identify the product and the parties responsible therefor, and facilitates the lodging of reports and the making of claims by consumers where appropriate.
In relation to consumer products, the safety level of which may deteriorate after a period of use, the CPSA requires the manufacturers and importers (hereinafter, manufacturers) of such products to prepare a list of the product holders based on the information provided by such holders (CPSA, article 32-11(1)).
Under the ASSCC, authorised holders of products composed of biological products should keep the records of their assignees (ASSCC, article 68-7(1)).
The FSA requires that food business operators endeavour to keep records of all necessary information, such as the identities of buyers (FSA, article 3(2)). Although the laws do not link such lists and records with the product recall programme, product traceability supported by such systems is seen to be helpful in the actual recall process.
What penalties may be imposed for non-compliance with these laws?
All these laws have penalty provisions for non-compliance. Under the FSA, a person producing food or additives that do not conform to the requisite standards risks imprisonment with (or without) work for not more than two years or a fine of not more than ¥2 million, or both (FSA, article 72). In addition, a prefectural governor may rescind the business approval, prohibit the business from operating in whole or in part, or suspend the business for a specified period (FSA, article 55).
Under the CPSA, a person selling designated products (see question 19) that do not meet the requirements stipulated by law risks imprisonment with (or without) work for not more than one year or a fine of not more than ¥1 million, or both (CPSA, article 58(1)). In addition, the competent minister may prohibit such a person from affixing labels pursuant to CPSA, article 13 on specified products for a period of no more than one year as designated by him or her (CPSA, article 15). In such cases, given that the affixation of labels is required under the CPSA, the effect of this prohibition is such that the person must not sell or display the same products for sales purposes.
Furthermore, publication of a product recall is in itself a type of penalty, as the publication usually includes the name of the manufacturer of the product and this can damage the manufacturer’s reputation.
Reporting requirements for defective products
What requirements are there to notify government authorities (or other bodies) of defects discovered in products, or known incidents of personal injury or property damage?
If a manufacturer is made aware of any serious accident caused by a product, it is required by the CPSA, article 35(1) to report it to the relevant authority. It is assumed, however, that retailers will report such knowledge to the manufacturers or importers of the product. Recently, the METI has established an online version of the reporting system on its website (www.meti.go.jp/product_safety/form/index.html) (Japanese only). If the accident caused by a product is not serious or it is clear that the accident is caused by something other than a product, it should be reported to the National Institute of Technology and Evaluation (the NITE, one of the independent administrative agencies in Japan).
Furthermore, under article 63-3(1) of the RTVA, automobile manufacturers must notify the Ministry of Land, Infrastructure and Transportation (MLIT) of any defects discovered in the design or manufacturing process. This notification must be made before any necessary remedial measures are taken.
The ASSCC requires manufacturers of medicines, cosmetics and medical devices to notify the Minister of Health, Labour and Welfare (MHLW) if they initiate a product recall or are made aware of any adverse effects caused by such medical products or devices (ASSCC, articles 68-10(1)).
The FSA requests food business operators to endeavour to prevent public health hazards by taking any necessary measures appropriately and immediately, such as providing central or local government with the records of retailers they have supplied (FSA, article 3(3)).
Notification criteria and time limits
What criteria apply for determining when a matter requires notification and what are the time limits for notification?
Under the CPSA, a matter requires notification where it constitutes a ‘serious product accident’, namely, an incident that satisfies the criteria provided for under the Ordinance for the Enforcement of the CPSA (Act No. 48 of 1974, as amended). These criteria relate to the danger posed by, and the type of, the accident, and, in so doing, target accidents involving serious actual or potential danger (CPSA article 2(6)).
Under the Ordinance for the Enforcement of the CPSA (Cabinet Office Ordinance of the reporting of a serious accident caused by a product required by the CPSA, No. 47 of 2009 (the CPSA Cabinet Office Ordinance)), the reporting of a serious accident caused by a product required by the CPSA article 35 should be submitted to the relevant authority, within 10 days of the date the reporter came to know of the accident, in the prescribed form described in question 7 (CPSA Cabinet Office Ordinance article 3).
The Ordinance for Enforcement of the ASSCC (Ordinance of the Ministry of Welfare (the MOW, predecessor of the MHLW), No. 1 of 1961 (the ASSCC Ordinance)) requires a manufacturer to report to the MHLW as soon as it initiates a product recall programme (ASSCC Ordinance article 228-22(1)).
To which authority should notification be sent? Does this vary according to the product in question?
The relevant authority to which the notification should be sent depends on the product as follows:
- consumer products, electric appliances, gas appliances and combustion appliances to the Consumer Affairs Agency (CAA);
- medical products, cosmetics and medical devices to the MHLW;
- automobiles to the MLIT; and
- food, additives and the like to the CAA.
In addition to notifying the relevant authority, as required by law, it is highly recommended that other relevant authorities and local governments are notified as well.
What product information and other data should be provided in the notification to the competent authority?
Article 3 of the CPSA Cabinet Office Ordinance, which refers to the CPSA article 35(1), requests that the notification be made in the prescribed form (Form I) and contain the following information:
- name of the product, brand, number of models and the country of production;
- details of the human injury or injuries;
- situation of the accident (ie, facts, causes, measures taken to prevent future accidents, contact person or organisation that conducted the investigation and the holder of the products);
- date that the supplier reported the accident, and the background to such reporting;
- place of the accident;
- period and total volume of production, imports and distribution;
- company name and address of the product manufacturer or importer; and
- relevant industry association.
RTVA article 63-3(1) and ASSCC Ordinance article 228-22(1) also set forth information to be provided to the relevant authority.
Obligations to provide updates
What obligations are there to provide authorities with updated information about risks, or respond to their enquiries?
Under article 51-2 of the Ordinance for Enforcement of the RTVA (Ordinance of the Ministry of Transport, No. 74 of 1951 (the RTVA Ordinance)), manufacturers must update information about risks every three months until remedial measures are completed.
The CPSA does not impose an obligation on manufacturers to update information, but manufacturers are expected to keep the relevant authorities updated regarding the status of the product recall programme.
What are the penalties for failure to comply with reporting obligations?
Manufacturers that fail to report or who submit false reports in violation of the CPSA article 35(1) may be ordered by the relevant authority to establish systems to collect information on serious product accidents, if this is regarded as necessary by the relevant authority (CPSA article 37). Violation of these orders risks imprisonment with (or without) work for not more than one year or a penalty of ¥1 million, or both (CPSA article 58(v)).
Manufacturers that fail to report or that submit false reports in violation of the RTVA article 63-4(1) risk imprisonment with (or without) work for not more than one year, a fine of not more than ¥3 million, or both (RTVA article 106-4(3)).
A person producing food or additives who fails to report or who submits false reports in violation of the FSA article 28(1) risks a fine of not more than ¥500,000 (FSA article 75(2)).
Is commercially sensitive information that has been notified to the authorities protected from public disclosure?
In cases where the competent minister receives a report in accordance with CPSA article 35(1), or otherwise comes to know of the occurrence of a serious product accident, if he or she finds it necessary to prevent serious danger to general consumers, he or she will, in principle, make a public announcement of information such as the name and type of the relevant consumer product, the details of the accident, and so on, so as to minimise the dangers associated with the use of said product. However, commercially sensitive information will not necessarily be disclosed in such announcements (see question 20).
As a general rule, administrative organisations should disclose administrative documents upon request (Act on Access to Information Possessed by Administrative Organs, Act No. 42 of 1999, as amended (AAI)). Administrative documents are defined in the AAI; however, the AAI excludes several kinds of information from disclosure (AAI article 5). Such information includes confidential business information which if disclosed could have a harmful effect on the competitive position of a certain business entity. Commercially sensitive information is assumed to be generally covered by this category; however, the AAI also sets out a category for absolute disclosure if disclosure is necessary for the protection of life, health, livelihood and property (AAI article 5(ii)). In the context of product recall, most of the information provided by manufacturers is likely to fall within the scope of absolute disclosure. It is uncertain whether such commercially sensitive information can be kept undisclosed.
Use of information in prosecution
May information notified to the authorities be used in a criminal prosecution?
As a general rule, information that is acquired through an administrative procedure may not be used in a criminal investigation. The CPSA expressly sets out the rule that on-site inspections conducted by the relevant authority may not be regarded as criminal investigations (CPSA article 41(12)).
Product recall requirements
What criteria apply for determining when a matter requires a product recall or other corrective actions?
Any person engaged in the manufacture or import of consumer products must, in cases where there is an accident affecting the consumer products that he or she manufactured or imported, investigate the cause thereof; and, if he or she finds it necessary to prevent the occurrence and increase of danger already posed, endeavour to recall said consumer products or otherwise take measures to prevent the occurrence of danger or an increase in a danger already posed (CPSA article 38(1)). Retailers of such products are required to cooperate with the manufacturers’ hazard-preventing measures (CPSA article 38(2)).
Under the RTVA, the applicable criteria are the ‘security standards’ stipulated in articles 40 to 46. The security standards vary in accordance with the type of automobile. Detailed criteria are also provided in the ‘Security Standards for the Road Tracking Vehicle’ (Ordinance of the Ministry of Transport, No. 67 of 1951). Product recall is expected if automobiles are found to violate the security standards; manufacturers and importers are required to report to the MLIT once such product recall programme is put into force (RTVA, article 63-3(1)).
As explained above, most of the criteria are quite abstract and manufacturers and importers are not specifically instructed to initiate a product recall programme. However, a product recall programme is generally accepted as one of the most typical ‘hazard-preventing measures’, and manufacturers and importers are therefore expected to implement such a programme.
What are the legal requirements to publish warnings or other information to product users or to suppliers regarding product defects and associated hazards, or to recall defective products from the market?
Most of the laws and regulations order manufacturers to take necessary measures to collect information on accidents caused by their products, to provide such information properly to general consumers and to prevent a hazardous situation being caused by a product (eg, CPSA, articles 34(1) and 38(1)). Such necessary measures are assumed to include the publication of information as well as the conduct of a product recall programme. In addition, under the ASSCC, manufacturers and sellers are required to dispose, recall, stop selling, inform about defective products and take any other necessary measures (ASSCC, article 68-9).
Are there requirements or guidelines for the content of recall notices?
There are requirements for the content of recall notices in several laws and regulations. The Request for Providing Information Regarding the Accident, Caused by Consumer Products, etc (Notification by Director General for Commerce and Distribution Policy, No. 1 of 2015) applies to products regulated by the CPSA. The ASSCC is also supplemented by the Medicine Recall Notice (Notification by the Pharmaceutical and Food Safety Bureau, Notification No. 1121-10 of 2014).
What media must be used to publish or otherwise communicate warnings or recalls to users or suppliers?
The laws and regulations do not stipulate any obligatory media or communication measures that must be taken to announce a recall programme. In practice, since manufacturers must report accident information and the initiation of a product recall programme to the relevant authorities, such information is forwarded to and uploaded on the websites of non-profit consumer information centres, which are affiliates of the authorities. The relevant authorities may also announce the accident at a press conference, if regarded as necessary.
Do laws, regulation or guidelines specify targets or a period after which a recall is deemed to be satisfactory?
There are no specified targets or any particular period after which a recall will be deemed satisfactory.
Repair and replacement
Must a producer or other supplier repair or replace recalled products, or offer other compensation?
As previously explained, the laws and regulations do not provide for any mandatory repair programme. Manufacturers generally choose measures that will best prevent hazardous situations or product deterioration. In addition, government authorities are likely to provide guidance or instructions. Apart from administrative responsibility, a producer or supplier will also be subject to civil liability for any defective products provided to consumers. See question 24.
What are the penalties for failure to undertake a recall or other corrective actions?
When a person violates an order of article 39(1) of the CPSA (as mentioned in question 19), that person will be punished by imprisonment with (or without) work for no more than one year or a fine of not more than ¥1 million, or both (CPSA, article 58(iv)).
Under the RTVA, manufacturers who find that their automobiles do not meet the legally requested requirements must report to the MLIT (RTVA, article 63-4(1)). If the manufacturer makes a false report, they will be charged and punished with imprisonment with (or without) work for no more than one year or a fine of up to ¥3 million, or both (RTVA, article 106-4(iii)). In 1999, a major truck and bus manufacturer was found to have failed to report a product defect and conduct a product recall. Accordingly, several employees in charge of product security were penalised with one and a half years’ imprisonment (with probation for three years) (Yokohama District Court, judgment on 13 December 2007; affirmed by Tokyo High Court, judgment on 2 February 2009).
In addition, the representative directors each received a penalty of ¥200,000 due to violation of the RTVA, article 63-4(1) (Tokyo High Court, judgment of 15 July 2008, affirmed by the Supreme Court, judgment on 9 March 2010).
What powers do the authorities have to compel manufacturers or others in the supply chain to undertake a recall or to take other corrective actions?
The manufacturers or importers of consumer products may be ordered by the relevant authority (a hazard prevention order under CPSA, article 39(1)), and to the extent necessary, to recall products where:
- serious accidents have occurred;
- the lives or wellbeing of general consumers have been placed in serious danger or the occurrence of such danger is considered to be imminent; or
- the relevant authority finds it necessary to prevent the occurrence or increase of any type of danger.
If a recall is carried out in an unsatisfactory way, a hazard prevention order or an on-site inspection order (as described below) will be executed.
The METI can produce a list of designated products that are deemed highly likely to cause danger to general consumers as a result of their structure, material or usage, etc (CPSA, article 2(2)). The METI may order the manufacturer to take all necessary measures to improve methods of manufacture, import or inspection of the specified products where it finds that such manufacturers fail to conform to the requirements outlined in the CPSA Cabinet Office Ordinance (the Order for Improvement).
The relevant authority may, when necessary, enforce the CPSA by:
- ordering a person engaging in the manufacture, import or sale of the products or a business operator transacting specified maintenance products, to report on the status of its business (CPSA, article 40(1)); or
- sending officials (or the NITE on behalf of officials) to enter the offices, factories, workplaces, stores or warehouses of a person engaging in the manufacture, import or sale of the products, or a business operator transacting specified maintenance products and to conduct an inspection of products, books, documents and other items (CPSA, article 41(1)).
If the relevant authority has asked its officials to conduct an on-site inspection but some products are found to be extremely difficult for them to inspect on site, the authority may order the owner or possessor to submit them for inspection to the relevant authority within a designated period (CPSA, article 42(1)).
Can the government authorities publish warnings or other information to users or suppliers?
When relevant, the authority can publicly announce its orders and information to users and suppliers (CPSA, articles 36(1) and 39(2), RTVA, article 63-2(4), etc). Public announcements are made through press releases on the website of the CAA (www.caa.go.jp), which does not provide a facility for members of the public to post remarks or reports of incidents. Under the CPSA, information that should be included in such a public announcement comprises:
the name and type of the consumer products pertaining to said serious product accidents, the details of the accidents and any other matters that contribute to avoiding the dangers associated with the use of said consumer products (CPSA, article 36(1)).
However, other information, including but not limited to details about the relevant manufacturer, current status of the accidents, periodical reports from the relevant manufacturer, among others, is also included in the public announcement.
Can the government authorities organise a product recall where a producer or other responsible party has not already done so?
Under the ASSCC, article 70(2), the MHLW and prefectural governors, after ordering necessary measures to be taken by the responsible parties under the ASSCC, article 70(1), may dispose of or recall or take other necessary measures if it is immediately necessary or if such responsible parties fail to observe the orders imposed upon them.
However, there is no provision that allows government authorities to conduct a complete product recall programme.
Are any costs incurred by the government authorities in relation to product safety issues or product recalls recoverable from the producer or other responsible party?
There is no such provision.
How may decisions of the authorities be challenged?
Any administrative disposition imposing an obligation on parties can be challenged under the Administrative Case Litigation Act (Act No. 139 of 1962, as amended). This is provided, however, that the same has not been previously challenged in court.
Implications for product liability claims
Implications for product liability claims
Is the publication of a safety warning or a product recall likely to be viewed by the civil courts as an admission of liability for defective products?
Safety warnings do not have any legal standing as admissions of liability. However, in practice, such warnings are likely to be seen by the civil court as strong evidence in establishing the liability of defective products.
Can communications, internal reports, investigations into defects or planned corrective actions be disclosed through court discovery processes to claimants in product liability actions?
Even though the Code of Civil Procedure (Act No. 109 of 1996, as amended (the CCP)) does not provide for full discovery, the court may order that documentary evidence be provided to a party upon the other party’s request (CCP, article 220). Although the document-holding party may refuse to provide such documents on the grounds that they are irrelevant to the facts of the case, many of the documents are assumed to be relevant to product liability in actual product liability actions.
Notwithstanding the above, the document-holding party may still refuse to submit a document prepared exclusively for use by the holder thereof (CCP, article 220(iv)(d)).
Updates and trends
Updates and trends
Updates and trends
On 13 June 2018, a law to amend the Food Sanitation Act (FSA) was promulgated. Among the several amendments that were made, set out below are the two important amendments in relation to product recall:
Collection of information regarding health hazard caused by food containing specific substances (article 8 of the amended FSA)
For the purpose of preventing health hazards, business operators who deal with food products containing specific substances requiring special precautions are obligated to report it to the prefectural authorities when any health problem is, or likely to be, caused by such a product. This amendment was made in response to the recent increase in health hazards caused by health foods. For example, in the last three years, there was a rapid increase in the number of cases where the health of women was severely affected due to the intake of supplements containing Pueraria mirifica, which was advertised as effective in enhancing beauty. The substances subject to this regulation is not specified yet. It will be specified by the MHLW after discussions at relevant commissions and implementation of the public comment process. According to the MHLW, such substances will include alkaloid and hormone-like substances.
Reporting system for food recall (article 58 of the amended FSA)
When a business operator voluntary recalls its food product which violates the FSA, it is required to report such recall to a prefectural governor. According to recently received information, the number of food recalls was about 1,000 a year even though there has been no obligation to report food recalls so far. As a result, information of recall was not centralised. After the enforcement of this amendment, the reported recall information will be consolidated on the MHLW’s website through prefectural governors.
The first amendment above will be enforced by a date specified by a Cabinet Order within a period not exceeding two years from the day of promulgation (ie, 13 June 2018), whereas the second amendment is likely to come in to force in three years from that day.