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Japan Foreign Lawyers Agreement (1987)

Agreement on Foreign Lawyers

Feb. 27, 1987

EMBASSY OF JAPAN

WASHINGTON, D.C.

February 27, 1987

Dear Ambassador Yeutter:

I would like to refer to the foreign lawyer issue and state the following upon instruction from my home Government:

The Governments of Japan and the United States have conducted a series of consultations, including those between Justice Vice-Minister Kakei and Ambassador Smith, regarding the implementation of the system of accepting foreign attorneys. Based on the results of these consultations, the Government of Japan intends to implement the system in line with the attached guidelines.

We appreciate your continued assistance and understanding as we work to implement a foreign lawyers system that is appropriate both domestically and internationally.

Sincerely yours,

[signature]

Nobuo Matsunaga

Ambassador of Japan

The Honorable

Clayton Yeutter

U.S. Trade Representative

Washington, D. C. 20506

Attachment One to the

GOJ Letter to the USG dated

February 27, 1987

1. Date of enforcement of the Law

The Government of Japan is making all possible efforts so that the Law will come into force as from April 1, 1987.

2. Scope of practice

A gaikokuho jimu-bengoshi qualified under a specific U.S. jurisdiction (all states, territories, and the District of Columbia) as the country of primary qualification is required to follow the necessary procedures stipulated in Articles 16 and 17 of the Law in order to practice laws of other U.S. jurisdictions. In view of the realities in the United States, however, as regards documents to verify that he falls under Item 2, Paragraph 1 of Article 16 of the Law, written statements prepared by himself and by the law firm to which he belongs (or its equivalent) containing the points listed below will suffice. Therefore, he need not prove his practicing experience concerning laws of each other jurisdiction, unlike in the case of the application for designation of laws of other third countries. This is based on the assumption that the U.S. Government will issue a formal written statement to the Japanese Government which (a) endorses that in view of the legal education, bar examination, legal system and legal practice in the United States a lawyer of a U.S. jurisdiction is generally possessed with basic capabilities and has been sufficiently trained to deal with legal matters concerning any other U.S. jurisdictions, (b) states that strict professional ethics is established in each jurisdiction that a lawyer should not handle legal matters when he is not confident of his expertise and knowledge, and (c) requests that the application for designation for other U.S. jurisdictions should be treated based on these realities in the United States.

(1) Contents of a written statement by the applicant

- statement that he has competence to handle matters concerning laws of other U.S. jurisdictions by outlining his past practicing experience as well as the scale and contents of business of the law firm to which he belongs.

- statement that he has so far observed such professional ethics of his jurisdiction of primary qualification as corresponds to that described in the above formal statement of the U.S. Government and a pledge that he will observe such ethics ln dealing with matters concerning laws of other designated U.S. jurisdictions in Japan as a gaikokuho jimu-bengoshi, namely that when he is not confident of his expertise and knowledge about laws of other jurisdictions he will refrain from handling such matters or deal with them with the advice of others with expert knowledge.

(2) Contents of a written statement by the law firm (or its equivalent)

- statement that to the best of its knowledge and belief the contents of the written statement by the applicant are accurate and he has so far observed the professional ethics of his jurisdiction of primary qualification such as mentioned above and will observe it in dealing with matters regarding laws of other designated U.S. jurisdictions in Japan as a gaikokuho jimu-bengoshi.

So long as these requirements are fulfilled, the Minister of Justice will grant the applicant the designation of laws of other U.S. jurisdictions based on the application unless there exists any compelling reason.**

3. Five-year experience requirement

(1) Experience as an attorney in federal, state or local government shall be deemed as "experience of having engaged in practice as a foreign lawyer" as provided for in Article 10 (1);

(2) A lawyer from an open state can count his experience from other open states toward the five-year experience requirement in the home jurisdiction;

(3) As long as the reality exists that an open state lawyer's experience outside open states or the United States can be deemed as experience in his home jurisdiction, that experience will count toward the five-year experience requirement;

(4) The legal experience of an attorney from an open state obtained while working for the U.S. Federal Government will be counted toward the five-year experience requirement in his home jurisdiction, regardless of the location of such experience.

4. Entry into Japan of a foreign law trainee without a qualification as a foreign lawyer

Entry into Japan of a foreign law trainee without a qualification as a foreign lawyer whom a gaikokuho jimu-bengoshi employs will be subject to normal immigration control. There will be, however, no restriction limiting the number of such trainees to any specific number per gaikokuho jimu-bengoshi, and the number of such foreign law trainees admitted into Japan will be evaluated solely in terms of the necessity and non-replaceability of their services.

5. Qualification and registration procedures

The qualification by the Minister of Justice and the registration with Nichibenren will be completed together within three months unless there exists any compelling reason

Notwithstanding the residence requirement stipulated in Item 3, Paragraph 1 of Article 10 of the Law, an applicant will, if he so wishes, be permitted to make an application for approval (an informal registration review by Nichibenren may be initiated in parallel with this) even without the fulfillment of this requirement at the time of the application, on condition that the formal approval will be granted him upon its fulfillment. This will shorten the period between the establishment of residence and the registration, thereby reducing the burden on the applicant.

Details of the procedures will be explained to the parties concerned including U.S. Embassy in Tokyo when the specifics of application forms and other documents are finalized. Informal screening shall be started from as early in March as possible, and its specific date shall be informed to the U.S. Government through the diplomatic channel.

6. Others

(1) With respect to biennial reports, such documents will suffice as demonstrate that the business operations or financial conditions of a gaikokuho jimu-bengoshihave not so deteriorated as to cause damages to his clients (see Item 3, paragraph 2 of Article 14 of the Law). Information such as the number of cases which he has handled or his revenue and expenditure shall not be required in the reports.

(2) A designation fee stipulated in Paragraph 3 of Article 17 of the Law is to be charged according to the number of specific foreign countries. Fee for designation of laws of any number of U.S. jurisdiction shall be, however, equal to the fee for designation of laws of single specific foreign country so long as the application is made in one package.

(3) The Government of Japan has no intention to require an applicant to accumulate in advance one year's operating expenses (see the ABA letter addressed to Ambassador Yeutter). Misunderstanding on this point, if any, should be dispelled.

**ln case the Minister of Justice requests, for compelling reasons, that an applicant demonstrate his learning and experience concerning laws of a U.S. jurisdiction other than those whose legal systems utilize common law principles, the Minister of Justice will give due consideration to the reality of the position of such jurisdiction in the legal system of the United States.

In case the Minister of Justice requests, for compelling reasons, that an applicant from a jurisdiction whose legal system does not utilize common law principles (in the event that such jurisdiction becomes open) demonstrate his learning and experience concerning the laws of other U.S. jurisdictions, the Minister of Justice will give due consideration to the reality of the position of such jurisdiction in the legal system of the United States.

Attachment Two to the

GOJ Letter to the USG dated

February 27, 1987

The following are the views of the Government of Japan regarding the handling of the experience of a lawyer of an open state as mentioned in paragraph 3 (3) of Attachment 1.

Item 1, Paragraph 1 of Article 10 of Special Measures Law Concerning the Handling of Legal Business by Foreign Lawyers provides as a qualification requirement that "the applicant is qualified to become a foreign lawyer and has the experience of having engaged in practice as a foreign lawyer in the foreign country where he acquired such qualification for five years or more after acquiring it." In evaluating the fulfillment of this qualification requirement, we can by no means go beyond what the Law stipulates, but intend to apply the provisions of the Law as flexibly as possible within its framework, giving due consideration to the reality of legal practice in the United States.

From this standpoint, we are of the position, as mentioned in the above

Attachment, that as long as the reality exists that experience of a lawyer of an open state (a lawyer whose home jurisdiction has adopted rules licensing foreign attorneys) outside open states or the United States can be deemed to be experience in his home jurisdiction, the experience will be counted toward the five-year experience requirement. It is not conceivable to make evaluation on all possible cases and judgement has to be made on a case-by-case basis in applying the said principle. The following, however, can be pointed out as illustrative cases:

1. When a lawyer of an open state whose headquarters or base office is situated in an open state engages in practice at another office of the same firm located in a closed state (a jurisdiction which has no rules licensing foreign attorneys) or a third country, his experience obtained while working at such other office will be counted toward the five-year experience requirement.

2. When a lawyer from an open state engages in practice at an office of a law firm located in a closed state or third country, the Minister of Justice will determine whether his experience should be counted for purposes of the five-year requirement by taking into account, inter alia, the following factors: (1) the lawyer's personal contacts with the open state; (2) the nature of the actual legal work performed by the lawyer; (3) exchange of legal information; and (4) work with an attorney of the home jurisdiction.

3. With respect to a lawyer from an open state who is employed in the legal counsel's office of a corporation, the Minister of Justice will render him the same treatment as that accorded to a lawyer belonging to a law firm, unless there are compelling reasons involving the corporate lawyer's work, status, responsibility as a lawyer, and method of supervision.

4. Experience in Japan of the so-called "trainees" and "clerks" or U.S.-licensed attorneys working for corporations or organizations in Japan cannot be counted toward the five-year experience requirement. Legal experience periodically obtained in their home jurisdictions while stationed in Japan, however, can be counted toward the experience requirement.

Paragraph 2 of Supplementary Provisions of the Law permits experience of a "trainee" or a "clerk" employed by a bengoshi in Japan to be counted toward the five-year experience requirement up to two years in total. When there exists the reality that a U.S. licensed attorney working for a corporation or an organization in Japan is employed** by a bengoshi, his remedial provision shall be applied mutatis mutandis.

**When a corporate lawyer is directly supervised by and reports to a bengoshi in Japan, the Minister of Justice will consider such situation to constitute the reality of employment by a bengoshi.

THE UNITED STATES TRADE REPRESENTATIVE

WASHINGTON

20506

February 27, 1987

Ambassador Nobuo Matsunaga

Embassy of Japan

2520 Massachusetts Avenue, N.W.

Washington, D.C. 20008

Dear Nobuo:

This is to acknowledge your letter and attachments of February 27 regarding the foreign attorneys issue.

First, let me take this opportunity to thank you and your Government for your efforts over the past five years to resolve this long-standing issue between our two countries. The efforts of the Ministry of Justice and Ministry of Foreign Affairs were especially crucial during the past year and a half of intensive consultations following your Government's announcement in the July 1985 Action Program to address this issue.

My government regards this understanding on foreign attorneys as a significant step forward in the liberalization of the Japanese legal services market. At the same time, however, the law contains several restrictive provisions that are troubling. Foremost among these are (a) the prohibition a formation of partnerships between foreign attorneys and (b) the prohibition on the employment of bengoshi by foreign attorneys, and (c) the exclusion of legal trainee experience in Japan as credit toward the five-year experience requirement.

My Government finds these and other restrictions in the Japanese law to be regrettable. Because of these reservations, I want to make clear that my Government does not view this arrangement - particularly with regard to the reciprocity provision - as setting a precedent for future discussions on the liberalization of trade in services.

We expect that in the near future, after the new system is put into place, we can revisit these issues. In the meantime, we look forward to your Government's flexible implementation of the law taking full account of both the reality of U.S. legal practice and the concerns expressed to your side by the U.S. Government over the past year and a half.

As indicated by the Japanese delegation, problems may emerge after the new system goes into operation. In this regard, we welcome your Government's pledge to consult with us to ensure smooth implementation of the law. I suggest that we use the occasion of the next U.S.-Japan Trade Committee meeting scheduled for early September for the first formal review of the system. Of course, if there are serious difficulties that arise in the interim, we reserve the right to bring them to the attention of your Government and expect their expeditious resolution.

Thank you again, Nobuo, for your cooperation in bringing this issue to a successful resolution. As in the past, I know we can count on you to ensure that the law is implemented in a manner consistent with the market-opening spirit of the Government of Japan's Action Program.

Sincerely,

Clayton Yeutter

OFFICE OF THE UNITED STATES

TRADE REPRESENTATIVE

EXECUTIVE OFFICE OF THE PRESIDENT

WASHINGTON

20506

March 31, 1987

Mr. Atsushi Shimizu

Director General

Judicial System and Research Department

Ministry of Justice

1-1-1 Kasumigaseki

Chiyoda-ku, Tokyo 100

Japan

Dear Mr. Shimizu:

I am writing in response to your Government's request for a statement on the reality of legal practice in the United States for the purposes of determining the appropriate scope of practice that the Government of Japan will permit American attorneys qualified as foreign law attorneys ("gaikokuho jimu-bengoshi") under the Special Measures Law concerning the Handling of Legal Business by Foreign Lawyers.

We are of the view that -- especially with regard to American attorneys who will establish offices in Japan -- the reality of legal practice is such that, as stated in the attached letter from the Chairman of the Section of International Law and Practice of the American Bar Association, it is "nearly impossible for American lawyers to discharge their duties to clients without advising with respect to the laws or other States."

An attorney admitted to the bar or any U.S. jurisdiction is, as a general rule, capable of dealing with legal issues concerning other U.S. jurisdictions. This can be demonstrated, inter alia, by the following:

(1 ) The basic educational policy of law schools in the United States is to train students to practice as an attorney of any U.S. jurisdiction. A graduate of an accredited law school is, therefore, generally able to deal with legal issues concerning other U.S. jurisdictions by referring to relevant laws, regulations, and judicial precedents.

(2) Admission requirements do not vary substantially among U.S. jurisdictions. Bar examinations in the United States, especially those of common law jurisdictions, are of similar scope and subject matter. An example is the widespread use of the Multistate Bar Examination (MBE) and Multistate Professional Responsibility Examination (MPRE) by the vast majority of U.S. jurisdictions. In addition, most states have rules in effect that allow a lawyer licensed in another jurisdiction to waive in upon demonstrating requisite years as an admitted attorney.

(3) Many legal and business transactions in the United States are conducted in a manner that involves the laws of more than one jurisdiction. Moreover, there is a large and growing body of law derived from the U.S. Constitution, federal law, and applicable judicial decisions that is common to all U.S. jurisdictions. In addition. a growing number of state laws are based on uniform or model codes adopted in a number of jurisdictions. Finally, almost all U.S. jurisdictions base their legal systems on common law principles of interpretation and adjudication.

(4) It is common practice in the United States for an attorney to render legal advice on laws of other jurisdictions and, in appropriate cases, to appear before courts of other jurisdictions for argument.

In dealing with the laws of other jurisdictions, American attorneys must meet established standards of competence and diligence in advising on legal matters as to which they hold themselves out as competent. These standards are found in the laws of each State concerning practice in that State, the canons of professional ethics as adopted by the judicial authorities of that State, and common law standards governing the professional responsibility of lawyers. The ABA letter states that "[t]he standards are generally uniform throughout the United States and follow the Model Code of Professional Responsibility adopted by the ABA. With regard to the permissible scope of practice, these standards do not vary materially from State to State."

We expect that the Government of Japan will apply the provisions in the Special Measures Law for designation of the laws of other States in a matter that fully meets these realities of legal practice in the United States.

Sincerely,

[signature]

Joseph A. Massey

Assistant United States Trade

Representative for Japan and China


TANC offers these agreements electronically as a public service for general reference. Every effort has been made to ensure that the text presented is complete and accurate. However, copies needed for legal purposes should be obtained from official archives maintained by the appropriate agency.