The Committee on Foreign Exchange and Other Transactions
Concerning the Amendment of
the Foreign Exchange and Foreign Trade Control Law
January 16, 1997
Foreword
In June 1996, the Committee on Foreign Exchange and Other Transactions (hereinafter, "the Committee") issued a report recommending a fundamental review of the foreign exchange control system. Since September 1996, the Special Subcommittee for Legislative Study has been engaged in deliberations concerning the revision of the Foreign Exchange and Foreign Trade Control Law (hereinafter, "the Foreign Exchange Law"). In November, the Prime Minister issued directives to the Finance and Justice Ministers and instructed the relevant government committees to begin discussions on the structural reform of the Japanese financial market (the _gTokyo Big Bang_h). The Committee conducted further deliberations in light of the government's goal to make the Japanese financial market an international financial center competitive with those of New York and London by the year 2001.
Fundamental revision of the foreign exchange control system is of paramount importance in terms of the overall reform of the financial system. Indeed, it is a necessary front runner to effective overall reform. Its successful implementation will have a positive effect on reforms in other areas to follow in the broader context of financial system reform. With this in mind, the Committee herewith submits a report on the basic principles and steps to be taken for realizing a free foreign exchange control system heading into the 21st century.