The UK signed a free trade agreement (FTA) with Japan on 23 October 2020. This Comprehensive Economic Partnership Agreement (CEPA) maintains the benefits of the EU-Japan Economic Partnership Agreement (EPA) with enhancements in areas of mutual interest.
This guidance provides information on the key terms of trade for UK businesses trading under the CEPA.
Commitments on tariffs for the vast majority of products traded between the UK and Japan have been transitioned in CEPA without changes.
In some cases, the tariff rates may be lower than the EU-Japan EPA. 21 industrial goods have their duties eliminated in the CEPA tariff schedule. Tariffs on 2 tariff lines covering electrical control units often used in cars are also eliminated.
In Japan’s tariff schedule, 9 tariff lines covering certain leathers and hides will become duty free in 2026. One tariff line covering industrial ethanol has had duties eliminated.
Online tools
You can use online tools to check product-specific and country-specific information on tariffs and regulations:
The quota available to Japanese importers for British products will be the entirety of any unutilised EU quota in that year.
Malt
For malt, the UK will continue to have duty-free access to Japan’s market for malt via the existing Global TRQ.
Before Permit (BP) scheme
The CEPA arrangement uses Japan’s BP scheme.
This scheme temporarily suspends the need to pay tariffs at the border. The importer must provide a guarantee to the customs authority. One way of doing this is via a Banker’s Guarantee. This means that at the point of import, Japanese importers only need to register the import under the BP scheme.
Japanese importers can register an import under the BP scheme through Japan’s digitalised system for customs procedures. Find detailed information on how the new CEPA arrangement operates.
Depending on the type of good you are seeking to export, in order to claim preferential treatment it will need to be either wholly obtained or sufficiently processed.
To be considered sufficiently processed your good will need to meet the relevant product specific rule (PSR). The PSRs for this agreement use the 2017 version of the Harmonised System (HS) nomenclature. You should apply the PSR for your good using the code in which it was classified under this nomenclature.
In a limited number of cases the code for your good may have changed during HS revisions. We are currently updating our online services to reflect these changes. In the interim correlation tables tracing these changes have been made available by the World Customs Organisation and the United Nations
Claiming preferential rates for your exports from the UK
The requirements for claiming preference remain largely unchanged. A claim should be based on a statement of origin by the exporter that the product is originating, or the importer’s knowledge that the product is originating.
Goods do not require a statement of origin if they are:
entering Japan from the UK and below 200,000 yen in value
entering the UK from Japan and below £1,000 in value
Using EU materials and processing in your exports to Japan
For exports of products that currently rely on EU inputs to access preferential tariffs, you can continue to use EU materials or processing in your exports to Japan. The working or processing you do in the UK must go beyond the minimal operations listed in the trade agreement. The other relevant conditions must also be fulfilled. A list of all goods covered by this arrangement can be found in Annex 3-C of the CEPA.
Changes to product-specific rules for exports to Japan
Sending your goods to Japan through the EU and other countries
Goods transited through third countries (including the EU) still benefit from preferential treatment.
For example, you can split a consignment in the EU when exporting goods to Japan. The goods comprising the consignment must not have cleared customs in the EU.
Transit through any other country is possible provided your goods remain under customs surveillance and do not undergo operations other than:
unloading
reloading
any operation designed to preserve them in good condition
Commitments related to standards, regulations and conformity assessment remain largely the same as under the EU-Japan agreement.
The CEPA includes annexes covering a range of sectors:
motor vehicles and parts in annex 2-C
facilitation of shochu export in annex 2-D
facilitation of wine export in annex 2-E
Mutual Recognition Protocol
The CEPA replicates the effect of the EU-Japan Mutual Recognition Agreement (MRA) for Conformity Assessment, through a new Protocol on Mutual Recognition (MRA Protocol).
The MRA Protocol provides measures to simplify the process of demonstrating compliance with safety and other regulatory standards. For example, the MRA Protocol’s good manufacturing practice for medicinal products annex requires the UK and Japan to recognise each other’s inspection and audit systems. It also requires the UK and Japan to waive batch testing of products on import into their territories.
The MRA Protocol covers:
electrical products
good laboratory practice for chemicals
good manufacturing practice for medicinal products (human) telecommunications and radio equipment
Commitments related to sanitary and phytosanitary standards (SPS) and animal welfare remain largely the same as under the EU Japan Agreement. Nothing in the UK-Japan CEPA prevents the UK from continuing to uphold its high environmental, food safety and animal welfare standards.
You can find the provisions on SPS in Chapter 6 of the CEPA. For the provisions on animal welfare, see Chapter 18 Section B of the CEPA.
Trade in services
The CEPA replicates commitments for preferential guaranteed market access and fair treatment for services suppliers and investors from the EU-Japan EPA. UK businesses should consult the relevant CEPA Annexes (8-B-I and 8-B-II) for the level of guaranteed fair treatment and market access for their sector.
If you’re a UK business providing services in Japan, you’ll need to follow Japanese regulations, including on:
getting an authorisation or licence to provide a service
complying with local business regulations
Japanese nationality requirements which could prevent you from providing services in some sectors
Consider appointing an English-speaking lawyer in Japan to help you comply with specific regulations. You can also contact your local chamber of commerce for advice.
The Government of Japan provides advice on setting up a business and investing in Japan.
The CEPA takes all the commitments on business mobility from the EU-Japan EPA and builds on them to provide additional opportunities for the UK and Japanese suppliers in the following areas.
The CEPA provides for the availability of visas for highly skilled professionals to work in Japan. An employee transferring from their UK HQ to the Tokyo office will be able to bring their spouse and dependents and stay for up to five years. The Government of Japan has information on applying for Japanese visas.
The UK definition of investor now focuses on investment in UK industry and jobs, rather than the amount of capital. Japan has expanded the scope of their intra-corporate transferee category.
The UK has also provided certainty that partners and dependent children of intra-corporate transferees can accompany them to the UK. Both the UK and Japan have committed to ensuring that the process for applying for visas will be clear, transparent, and with an aim that they be processed in 90 days.
The CEPA contains measures aimed at supporting e-commerce between the UK and Japan.
The measures within this section are aimed at:
prohibiting the application of customs duties to electronic transmissions and their contents
preventing the forced transfer of source code as a condition of market access
administering measures of general application affecting electronic commerce, such as the collection of information, in a reasonable, objective, and impartial manner
making an effort to avoid requirements (for example: a permit, licence, or approval) that need to be obtained prior to an economic activity being allowed to start where such activity is done via electronic means
protecting the legal effect, validity, and enforceability of an electronic contact
protecting the legal effect or validity of an electronic signature (or the authenticating data resulting from electronic authentication) against discrimination resulting solely from its electronic form
facilitating parties to a particular electronic transaction to mutually determine the appropriate electronic authentication methods or electronic signature for their transaction
facilitating the use of electronic authentication or an electronic signature in electronic transactions in compliance with the applicable legal requirements
encouraging the use of interoperable electronic authentication and electronic signatures
facilitating access to and use of services and applications of a consumer’s choice
connecting the devices of a consumer’s choice to the internet
accessing information on the network management practices of a consumer’s internet access service supplier
protecting consumers online by prohibiting fraudulent and deceptive commercial activities online
protecting online consumers’ personal information
protecting users from unsolicited commercial electronic messages (spam)
encouraging the release of anonymised government datasets where appropriate with a view to enhancing and generating business opportunities, especially small and medium-sized enterprises (SMEs)
cooperation on a broad range of e-commerce areas such as emerging technology (including artificial intelligence and the Internet of Things)
banning unjustified impediments to the free flow of data between the UK and Japan whilst maintaining the highest data protection standards
upholding the UK’s robust data protection laws for individuals’ personal data when data is being transferred across borders
prohibiting unjustified data localisation requirements
preventing unnecessary requirements for encryption service providers to transfer details about their software, or other proprietary information, to state authorities as a condition of entering the commercial market
The CEPA maintains the level of market access granted to financial services suppliers under the EU-Japan EPA.
The CEPA also provides additional enhancements to strengthen commitments on:
cross-border financial data flows to prohibit financial data localisation
the ability to supply new financial services and on regulatory transparency for authorisation processes
The ability to supply financial services in the Japanese market will continue to be governed by Japan’s financial regulatory authorities.
The CEPA also creates an annual dialogue between HerHis Majesty’s Treasury, UK financial regulators, and the Japanese FSA that will explore ways to further reduce regulatory friction.
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The Department for Environment, Food and Rural Affairs (Defra) has contacted GI producers to confirm whether they would like their GI included in the agreement. Find out how additional GIs will be protected under the agreement.
Government procurement
Commitments made on government procurement between the UK and Japan have been transitioned in the CEPA without changes.
This means that the CEPA retains guarantees on non-discriminatory access to the Japanese government procurement market. This includes additional market access beyond Japan’s offer under the WTO Agreement on Government Procurement (GPA).
In the Japanese market, UK businesses now benefit from:
access to regional level procurement opportunities, including procurement by Core Cities
access to contracts across a wide range of services including business services, insurance, telecoms, translation, photography, specialist design, food and beverage serving services
improved standards for the publication of procurement opportunities across all levels of government
Freight forwarding may save you time and money if you’re exporting large volumes of goods or high value items by sea or air freight. Find out more about moving goods and using freight forwarders.
You should consult your legal advisers if you wish to ensure you understand the legal implications of trading for your business.
If you wish to speak to someone directly, we have local trade offices based around the UK. Within each office, you can contact an international trade adviser. Find your local trade office.
Published 23 October 2020
Last updated 129 JanuaryFebruary 20222024
+ show all updates
1 January 2022
Added guidance on finding the correct rule of origin for export.
8 January 2021
Updated 'Small consignments and waivers' information with UK waiver limit.
11 December 2020
Updated statement of origin value threshold after Japan notified the UK of their waiver limit under Article 3.20.2 of the CEPA.
9 December 2020
Added link to UK-Japan CEPA: guidance on importer’s knowledge.
30 November 2020
Updated with details of how trading with Japan will change from 1 January 2021.