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PAGE 01 TOKYO 01667 070932Z
15
ACTION COME-00
INFO OCT-01 EUR-12 EA-10 ISO-00 AID-05 CIAE-00 EB-07
FRB-01 INR-07 NSAE-00 RSC-01 TRSE-00 XMB-04 OPIC-06
SP-02 CIEP-02 LAB-04 SIL-01 OMB-01 STR-04 /068 W
--------------------- 065141
P 070840Z FEB 75
FM AMEMBASSY TOKYO
TO SECSTATE WASHDC PRIORITY 7864
INFO AMEMBASSY MOSCOW
USLO PEKING
AMCONSUL HONG KONG
UNCLAS TOKYO 1667
E.O. 11652: N/A
TAGS: EEWT, EFIN, JA
SUBJECT: BARTER/SWITCH TRADE
REF: STATE A-152
FOR COMMERCE TPD/OEWTA/BEWT ATTN. SUZANNE PORTER
SUMMARY. FOLLOWING INFO, SUBMITTED IN RESPNSE TO REFAIR, BASED
ON EMBASSY'S DISCUSSIONS WITH FONOFF, MITI, JETRO, BANKS AND
TRADING FIRMS. END SUMMARY.
1. SWITCH HOUSES DONOT EXIST IN JAPAN. JAPANESE FIRMS HAVE
IN PAST UTILIZED SERVICES OF SWITCH HOUSES IN EUROPE, ESPECIALLY
FOR RESALE OF GOODS PURCHASED IN EASTERN EUROPE WHICH WERE NOT
MARKETABLE IN JAPAN.
2. SWITCH BUSNESS HAS DECLINED GENRALLY IN RECENT YEARS AND
WITH IT JAPAN'S USE OF SWITCH HOUSES IN EUROPE. SWITCH
TRANSACTIONS STILL OCCUR OCCASIONALLY AND ARE
NOW GENERALLY HANDLED BY JAPANESE TRADING COMPANY
ITSLSELF.
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3. JAPAN DOES NOT HAVE GOVERNMENT-TO-GOVERNMENT CLEARING
AGREEMENTS WITH SOCIALIST COUNTRIES. THERE IS A YEN-YUAN
FINANCIAL AGREEMENT BETWEEN BANK OF CHINA AND CORRES-
PONDING JAPANESE BANKS, BUT THIS IS NOT RPT NOT AN
ARRANGEMENT FOR QTE CLEARING TRADE UNQTE.
4. GOJ DOES NOT APPROVE CONTRACTS CONTAINING EXPLICIT
PROVISIONS FOR BARTER, SWITCH, COUNTER-PURCHASE OR PRODUCT
PAY-BACK, WITH SINGLE EXCEPTION OF A COASTAL TRADE ARRANGE-
MENT WITH USSR WHICH SPECIFIES BARTER TRDE IN LISTED COM-
MODITIES BETWEEN SMALL AND MEDIUM SIZED TRADERS IN JAPAN
AND IN USSR FAR EAST RGION. WITH THIS EXCEPTION, TRANS-
ACTIONS WHICH IN EFFECT INVOLVE "COUNTER-PURCHASE" OR
"PRODUCT PAY-BACK" ARE NEGOTIATED FORMALLY AS SEPARATE SALES
CONTRACTS WITH PAYMENT BY LETTER OF CREDIT OR OTHER STANDARD
METHOD.
5. REFAIR ARRIVED IN TOKYOJAN. 21: IT IS NECESSARY TO
ALLOW MINIMUM OF TEN DAYS TRANSIT TIME FOR AIRGRAMS.
FROM WASHINGTON TO TOKYO. WHEN INFORMATION IS DESIRED
WITHIN SHORT DEADLINE, WASHINGTON AGENCIES MAY, THERE-
FORE, WISH TO TRANSMIT REQUEST BY CABLE.
HODGSON
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