Construction Business Act

Link to law: http://www.japaneselawtranslation.go.jp/law/detail_download/?ff=08&id=2133
Published: 2008

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Construction Business Act

Table of Contents

Chapter I General Provisions (Article 1, Article 2)

Chapter II Construction Business License

Section 1 General Provisions (Article 3 - Article 4)

Section 2 Ordinary Construction Business License (Article 5 - Article 14)

Section 3 Special Construction Business License (Article 15 - Article 17)

Chapter III Contracts for Construction Work

Section 1 General Provisions (Article 18 - Article 24)

Section 2 Duties of Main Contractor (Article 24-2 - Article 24-7)

Chapter III-2 Dispute Resolution Procedures for Contracts for Construction Work (Article 25 - Article 25-26)

Chapter IV Securing of Construction Technology (Article 25-27 - Article 27-22)

Chapter IV-2 Evaluation, Etc., of Management of Construction Business Operators (Article 27-23 - Article 27-36)

Chapter IV-3 Construction Trade Associations (Article 27-37, Article 27-38)

Chapter V Supervision (Article 28 - Article 32)

Chapter VI Central Council for Construction Business, Etc. (Article 33 - Article 39-3)

Chapter VII Miscellaneous Provisions (Article 39-4 - Article 44-5)

Chapter VIII Penal Provisions (Article 45 - Article 55)

Chapter I General Provisions

(Purpose)

Article 1 The purpose of this Act is to ensure the proper execution of construction work and the protection of owners as well as to promote sound development of the construction industry and contribute to the furtherance of the public welfare by bettering the integrity of persons operating construction businesses and rationalizing construction work contracting.

(Definitions)

Article 2 (1) The term "construction work" as used in this Act shall mean the civil engineering and construction work listed in the upper column of Attached Table 1.

(2) The term "construction business" as used in this Act shall mean a business to contract to complete construction work, regardless of whether it is a main contractor, a subcontractor, or falls under any other designation.

(3) The term "construction business operator" as used in this Act shall mean a person who operates a construction business under the license specified in paragraph (1) of Article 3

(4) The term "subcontract" as used in this Act shall mean a contract concluded between a person operating a construction business that has contracted for construction work from another party and another person operating another construction business for all or a part of said construction work.

(5) The term "owner" as used in this Act shall mean a person who orders construction work (excluding a person who contracts for work from another party), "main contractor" as used in this Act shall mean a person who is the operator of a construction business and the orderer under subcontracts, and "subcontractor" as used in this Act shall mean the contractor under subcontracts.

Chapter II Construction Business License

Section 1 General Provisions

(Construction Business License)

Article 3 (1) In accordance with the provisions of this Chapter, any person who intends to operate a construction business shall obtain a license from the Minister of Land, Infrastructure, Transport and Tourism when the person establishes offices (head office, branch offices or equivalent based on the provisions of Cabinet Order, the same shall apply hereinafter) in two or more prefectures, or from the Prefectural Governor having jurisdiction over the area where the office is located when the person establishes an office(s) in one prefecture only. This provision shall not apply to operators who only contract for simple construction work that are provided for under the Cabinet Order.

(i) A person who intends to operate a construction business other than those specified in the following item.

(ii) A person intending to operate a construction business that intends to perform the work in the course of construction business by concluding subcontracts for all or part of construction work directly contracted for from an owner when the amount of the subcontract payment (total amount of subcontract payments when there are two or more subcontracts related to the work) exceeds the amount stipulated under Cabinet Order.

(2) The license set forth in the preceding paragraph shall be granted for each of the construction businesses listed in the lower columns of Attached Table 1 for each of the construction work classifications listed in the upper columns of the same table.

(3) The license in paragraph (1) shall cease to be effectived if not renewed every five years.

(4) When the application for renewal provided for in the preceding paragraph has been made and the disposition in response to that application has not been made by the date of expiry of the period in the same paragraph (hereinafter referred to as "valid period of license"), the previous license shall be valid after the expiry of the valid period of license until disposition is made.

(5) In the case referred to in the preceding paragraph when a license has been renewed, its valid period of license shall be calculated from the day following the date of expiry of the valid period of the previous license.

(6) When a person who received a license for the persons specified in item (i) of paragraph (1) (including the renewal of license provided for in paragraph (3); hereinafter referred to as "ordinary construction business license") receives a license for the persons specified in item (ii) of paragraph (1) regarding construction business concerning the said ordinary construction business license (including the renewal of license provided for in paragraph (3); hereinafter referred to as "special construction business license") the ordinary construction business license relating to said construction business of that person shall cease to be valid.

(License Conditions)

Article 3-2 (1) The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may make the license provided for in paragraph (1) of the preceding Article subject to conditions and may amend such conditions.

(2) The conditions in the preceding paragraph shall be limited to the minimum necessary to ensure the proper execution of construction work and the protection of owners and shall not impose unreasonable obligations on the operator receiving the license.

(Appurtenant Work)

Article 4 When contracting for construction work concerning the licensed construction business, the construction business operator may contract for construction work in another construction business appurtenant to said construction work.

Section 2 Ordinary Construction Business License

(Application for License)

Article 5 Based on the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, a person wishing to receive an ordinary construction business license (hereinafter referred to as "license" with the exception of item (ii) and item (iii) of Article 8) shall submit the license application form, having filled in the items listed below, to the Minister of Land, Infrastructure, Transport and Tourism when the person intends to establish offices in two or more prefectures and to the Prefectural Governor having jurisdiction over the location of office(s) when the operator intends to establish an office(s) in one prefecture only.

(i) Trade name or name

(ii) Name of office and address

(iii) When the applicant is a juridical person, the amount of stated capital (including total capital, hereinafter the same) and the names of officers

(iv) When the applicant is an individual, the name of the person and the name of the manager when applicable

(v) The construction business for which a license is sought

(vi) When another business is operated, the category of the business.

(Documents to be Attached to License Application Form)

Article 6 (1) Based on the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, the applicant shall attach the documents listed below to the license application form provided for in the preceding Article.

(i) Record of construction work

(ii) Documents recording the amount of construction work executed in each of the previous three business years

(iii) Documents recording the number of employees

(iv) Documents certifying that the applicant (when the applicant is a juridical person, said juridical person, its officers and employees provided for by Cabinet Order and when the applicant is an individual, that person and employees provided for by Cabinet Order) and the statutory agent are not disqualified under the provisions of each item of Article 8

(v) Documents certifying compliance with the requirements listed in item (i) and item (ii) of the following Article

(vi) Other documents as provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism in addition to those listed in each of the preceding items.

(2) Notwithstanding the provisions of the preceding paragraph, an applicant for renewal of a license shall not be required to attach the documents listed in item (i) through item (iii) of said paragraph.

(License Requirements)

Article 7 The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor shall not grant a license unless the applicant is found to conform to the following requirements.

(i) When the applicant is a juridical person, one full-time officer (here and below refers to an employee who executes company business, a board director, an executive director or equivalent person; the same shall apply below) and when the applicant is an individual, that person or one of the managers shall be one of the persons specified below:

(a) A person who possesses five years or more experience of being responsible for managing construction operations in the classification of construction work for which the applicant wishes to be licensed.

(b) A person certified by the Minister of Land, Infrastructure, Transport and Tourism to possess abilities equivalent or higher than those in sub-item (a).

(ii) The applicant shall post a full-time engineer who complies with one of the items below in each office:

(a) A person who has business experience in the licensed classification for not less than five years following graduation from a senior high school or a secondary school under the School Education Law (Act No. 26 of 1947) (includes vocational schools under the former Secondary School Ordinance, Imperial Ordinance No. 316 of 1943; the same shall apply below) or a person who has business experience in the licensed classification for not less than three years after graduation from a university (includes universities under the former University Ordinance, Imperial Ordinance No. 388 of 1918; the same shall apply below) or a college (includes colleges under the former College Ordinance, Imperial Ordinance No. 61 of 1903; the same shall apply below) with credit in the subjects specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(b) A person who has business experience in the licensed classification for not less than ten years.

(c) A person who has been certified by the Minister of Land, Infrastructure, Transport and Tourism to possess experience or qualifications equivalent to or higher than those in sub-item (a) or (b).

(iii) When the applicant is a juridical person, the corporation, its officers and the representatives of its branches or offices, or when the applicant is an individual, the individual or his/her managers, shall not be considered likely to commit an unfair or dishonest act with regard to any contract.

(iv) The applicant shall not lack sufficient financial standing or financial credibility to execute contracts (excluding simple construction work as provided for under Cabinet Order in the proviso of paragraph (1) of Article 3).

Article 8 The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor shall not grant a license when the applicant falls under the definitions of any of the following items (any of item (i) or item (vii) through item (xi) when applying for a renewal of license), when there are false entries concerning important items on the application form or the attached documents, or when essential information has not been provided.

(i) An adult ward, a derelict or an undischarged bankrupt

(ii) An applicant who has had an ordinary construction business license or a special construction business license canceled under the provisions of item (v) or item (vi) of paragraph (1) of Article 29, when less than five years have elapsed since the date of rescission

(iii) An applicant who, from the date of notice under the provisions of Article 15 of the Administrative Procedures Law (Act No. 88 of 1993) with relation to rescission proceedings for a ordinary construction business license or a special construction business license corresponding to item (v) or item (vi) of paragraph (1) of Article 29, until the date of said proceedings or the date of the decision not to take proceedings, has issued a notification under the provisions of the same Article corresponding to item (v) of Article 12, when less than five years have elapsed since the date of said notification.

(iv) When there has been a notification under the provisions of the same Article corresponding to item (v) of Article 12 within the period provided for in the preceding item and the applicant was an officer or an employee under the provisions of Cabinet Order of the juridical person to which said notification relates or an employee under the provisions of Cabinet Order of the individual to whom said notification relates within 60 days prior to the notification in the preceding paragraph and when less than five years have elapsed since the date of said notification

(v) An applicant who has been ordered to suspend operations under the provisions of paragraph (3) or paragraph (5) of Article 28, when the term of the suspension has not been completed

(vi) An applicant who has been prohibited from operating in the licensed classification under the provisions of Article 29-4, when the term of the prohibition has not been completed

(vii) An applicant who has been sentenced to a term of imprisonment and has finished serving that sentence, when less than five years have elapsed since the date when said sentence finished

(viii) An applicant who has been fined under the provisions of this Act or under the provisions of Cabinet Order based on laws and regulations concerning the execution of construction work and the employment of laborers in construction work or under the provisions of the Act on Prevention of Unjust Acts by Organized Crime Group Members (Act No. 77 of 1991) (excluding the provisions of paragraph (7) of Article 32-2 of the same Act) or who has committed a crime under Article 204, Article 206, Article 208, Article 208-3, Article 222 or Article 247 of the Penal Code (Act No. 45 of 1907) of under the Act on Punishment of Physical Violence and Others (Act No. 60 of 1926) and has served said sentence, when less than five years have elapsed since the sentence was served

(ix) An applicant who is a minor who does not have the same capabilities with regards to business as an adult and whose statutory agent is covered by any one of the preceding items

(x) An applicant that is a juridical person when any of its officers or employees under the provisions of Cabinet Order are covered by item (i) through item (iv) or item (vi) through item (viii) (excluding those persons covered by item (ii), item (iii) and item (iv), and item (vi) who were employees of said juridical person under the provisions of Cabinet Order prior to the rescission of a license under the provisions of Article 29, the notification in item (v) of Article 12 corresponding to the provisions of the same Article and prior to the prohibition of operations under the provisions of Article 29-4, respectively)

(xi) An applicant who is a private individual when any employees under the provisions of Cabinet Order are covered by item (i) through item (iv) or item (vi) through item (viii) (excluding those persons covered by item (ii), item (iii) and item (iv), and item (vi) who were employees of said private individual under the provisions of Cabinet Order prior to the rescission of a license under the provisions of Article 29, the notification in item (v) of Article 12 corresponding to the provisions of the same Article and prior to the prohibition of operations under the provisions of Article 29-4, respectively).

(Validity of Former License in Case of License Transfer)

Article 9 (1) When a licensed operator who intends to operate a further licensed construction business corresponding to any of those listed in the following items receives a license from the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor under the provisions of paragraph (1) of Article 3, the former license issued by the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor with regard to said operator shall cease to be valid.

(i) When an operator who has received a license from the Minister of Land, Infrastructure, Transport and Tourism has office(s) in one prefecture only.

(ii) When an operator who has received a license from the Prefectural Governor closes the office in the prefecture concerned and establishes an office in another single prefecture.

(iii) When an operator who has received a license from the Prefectural Governor operates offices in two or more prefectures.

(2) Under the provisions of paragraph (4) of Article 3, when there has been an application under the provisions of Article 5 by an operator who intends to operate a further licensed construction business corresponding to any of the classifications listed in each of the preceding items, the provision of paragraph (2) of Article 6 shall apply mutatis mutandis to said applicant.

(Registration and License Tax and License Fee)

Article 10 An applicant who wishes to receive a license from the Minister of Land, Infrastructure, Transport and Tourism shall pay the registration and license tax provided for in the Registration and License Tax Act (Act No. 35 of 1967) or the licensing fee provided for by Cabinet Order based on the classifications below.

(i) An applicant wishing to receive a license who is not covered by the following item shall pay registration and license tax.

(ii) An applicant wishing to receive a renewal of license under paragraph (3) of Article 3, and an applicant who has already received a license from the Minister of Land, Infrastructure, Transport and Tourism with regard to another construction business shall pay the license fee.

(Notification of Change, Etc.)

Article 11 (1) When there have been any changes to the items listed in item (i) through item (iv) of Article 5, the licensed operator shall submit notification of change to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor within thirty days as provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(2) At the end of each business year, a licensed operator shall submit documents listed in item (i) and item (ii) of paragraph (1) of Article 6, and other documents as provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor within four months of the end of each business year.

(3) When there have been any changes to items entered on documents listed in item (iii) of paragraph (1) of Article 6 or other documents as provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, the licensed operator shall submit documents recording those changes to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor within four months of the end of each business year.

(4) When the person, an officer in the case of a juridical person and the manager in the case of a private individual, who was certified as conforming to sub-item (a) or (b) of item (i) of Article 7 leaves or ceases to conform to sub-item (b) of the same item, or when a person assigned to the office who was recognized as conforming to sub-item (a), (b) or (c) of item (ii) of the same Article ceases to be assigned to the office or ceases to conform to sub-item (c) of the same item and there is a replacement, the licensed construction business operator shall submit the documents listed in item (v) of paragraph (1) of Article 6 concerning that person to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor within two weeks based on the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(5) When the criteria listed in item (i) or item (ii) of Article 7 are no longer met or when any of the items listed in item (i) and item (vii) through item (xi) of Article 8 apply, the licensed construction business operator shall submit documents to that effect to the Minister of Land, Infrastructure, Transport and Tourism or to the Prefectural Governor within two weeks based on the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Notification of Cessation of Business, Etc.)

Article 12 When the licensed construction business operator corresponds to one of the following items, the person listed in each item shall submit documents to that effect to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor within thirty days.

(i) When the licensed operator dies, his/her heir.

(ii) When a juridical person has ceased to exist due to merger, a person who was an officer.

(iii) When a juridical person is dissolved due to a decision to commence bankruptcy proceedings, the administrator in bankruptcy.

(iv) When a juridical person is dissolved for a reason other than merger or a decision to commence bankruptcy proceedings, the liquidator.

(v) When the licensed construction business has been discontinued, the individual who was the said licensee or an officer of the juridical person which was the said licensee.

(Public Inspection of Submitted Documents)

Article 13 The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor shall, in accordance with the provisions of Cabinet Order, establish a reading room for public inspection of documents provided for in Article 5, paragraph (1) of Article 6, and paragraph (1) through paragraph (4) of Article 11, or copies of said documents.

(Delegation to the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism)

Article 14 Necessary matters concerning applications for licenses shall be determined by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, other than those matters provided for in this Section.

Section 3 Special Construction Business License

(Licensing Standards)

Article 15 The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor shall not grant a license unless the applicant for a special construction business license is found to conform to the following standards.

(i) The applicant complies with item (i) and item (iii) of Article 7.

(ii) The applicant assigns a full-time worker who complies with any one of the following items in each office. However, in view of the comprehensive nature of construction technology (hereinafter refers to the necessary specialist knowledge needed to correctly implement construction work in accordance with a design blueprint and the ability to apply such knowledge), the status of dissemination of construction technology and other circumstances, for a person wishing to receive a license for a construction business specified by Cabinet Order (called "specified construction business" below), the full time worker assigned to each office shall conform to sub-item (a) or under the provisions of sub-item (c) be deemed by the Minister of Land, Infrastructure, Transport and Tourism to have equivalent or higher ability than the persons listed in sub-item (a).

(a) A person who has passed the technical certification under the provisions of paragraph (1) of Article 27 or examination based on the provisions of other laws and ordinances provided for by the Minister of Land, Infrastructure, Transport and Tourism in accordance with the classification of the construction business license applied for, or a person who has received certification under the provisions of other laws and ordinances in line with the classification of construction business license applied for and based on the provisions of the Ordinance of the Minister of Land, Infrastructure, Transport and Tourism.

(b) A person who conforms to sub-item (a), (b) or (c) in Article 7 who has two or more years business experience in contracting directly from owners when the amount of the contract fee is above that amount provided for by Cabinet Order in the field of construction work related to the construction business in which application has been made for a license.

(c) A person who has been certified by the Minister of Land, Infrastructure, Transport and Tourism as possessing equivalent abilities to those listed in sub-item (a) or (b).

(iii) The applicant shall have a sufficient financial basis to execute contracts with owners when the contract fee is above that provided for by Cabinet Order.

(Restrictions on the Conclusion of Subcontracts)

Article 16 Only the holder of a special construction business license shall conclude the subcontracts that correspond to those in each of the items below in order to execute construction work directly contracted from an owner.

(i) Subcontracts when the amount of the subcontract fee related to the subcontract is more than the amount prescribed by the Cabinet Order referred to in item (ii) of paragraph (1) of Article 3 for one contract.

(ii) Subcontracts when the total amount of the subcontracting fees for all other subcontracts in order to execute said construction work would exceed the amount provided for under the Cabinet Order for item (ii) of paragraph (1) of Article 3 with the conclusion of said subcontract.

(Mutatis Mutandis Application)

Article 17 The provisions of Article 5, Article 6 and Article 8 through Article 14 shall apply mutatis mutandis to a special construction business license and the recipient of a special construction business license (hereinafter referred to as "special construction business operator"). In such case, "item (i) and item (ii) in the following Article" in item (v) of paragraph (1) of Article 6 shall be read "item (i) of Article 7 and item (ii) of Article 15"; "sub-item (a), (b) or (c) of the same Article" and "the sub-item (c) of the same item" in paragraph (4) of Article 11 shall be read "sub-item (a), (b) or (c) of item (ii) of Article 15" and "the sub-item (a), (b) or (c) of the same item," respectively; and "item (i) or item (ii) of Article 7" in paragraph (5) of the same Article shall be read "item (i) of Article 7 or item (ii) of Article 15."

Chapter III Contracts for Construction Work

Section 1 General Provisions

(General Rules for Contracts for Construction Work)

Article 18 The parties to a contract for construction work shall conclude the contract fairly based on agreement made on terms of equality and shall fulfill the contract honestly and in good faith.

(Content of Contracts for Construction Work)

Article 19 (1) The parties to a contract for construction work shall record the following items in writing, sign or affix a registered seal and exchange documents when making a contract based on the principles of the preceding Article.

(i) The content of the construction work.

(ii) The amount of the contract fee.

(iii) The date for the commencement of the construction work and the date for the completion of the construction work.

(iv) When agreements are made concerning the pre-payment of all or part of the contract fee or payments based on completion, the date and the method of the payment.

(v) Provisions regarding changes to the period of construction, changes to the amount of the contract fee and payment of damages and the method of calculation for the amount in the event of an offer from one of the parties for design changes, delay to the commencement of construction or suspension of all or part of the construction work.

(vi) Provisions regarding changes to the period of construction due to natural disasters and other Acts of God and the payment of damages and the method for calculating the amount.

(vii) Changes in the amount of the contract fee or the content of the construction work based on fluctuations or changes in prices, etc., (refers to prices, etc., provided for in Article 2 of the Price Control Ordinance (Imperial Ordinance No. 118 of 1946).

(viii) Provisions regarding the payment of compensation in the event of losses or damage to a third party caused by the execution of the construction work.

(ix) Provisions regarding the details and system used when the orderer supplies materials used in the construction work or leases construction and other machinery.

(x) The date and method for the orderer to conduct an inspection in order to confirm total or partial completion of the construction work and the date of transfer.

(xi) The date and method for payment of the contract fee following completion of the construction work.

(xii) When a guarantee and insurance agreement is concluded or other measures are stipulated regarding liability for faults in the object of the construction work and the fulfillment of said liability, the content of the agreement or measures.

(xiii) Interest for arrears, damages for breach of contract and other damages in the event of delays in fulfillment by either party or non-fulfillment of other obligations.

(xiv) Method of resolution for disputes concerning the contract.

(2) When there are changes to the content of the contract which concern the items listed in the preceding paragraph, the parties to the contract shall record the changes in writing, sign or affix a registered seal and exchange documents.

(3) As specified by Cabinet Order, a party to a contract for construction work may obtain the agreement of the other party to said contract and employ methods using electronic data processing equipment and telecommunications technology stipulated as conforming to the measures taken for in each of the relevant paragraphs by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism in place of the measures taken for in the preceding two paragraphs. In this case, a person who employs measures specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism shall be deemed as having employed the measures taken for in each of the relevant paragraphs.

(Notice Concerning Appointment of On-Site Representative)

Article 19-2 (1) When assigning an on-site representative to a construction site in relation to fulfillment of the contract, the contractor shall notify the orderer in writing of matters regarding the limit of authority of said on-site representative and the method for reporting the opinions of the orderer concerning the acts of said on-site representative to the contractor (called "matters concerning the on-site representative" in paragraph (3)).

(2) When assigning a supervisor to a construction site in relation to fulfillment of the contract, the orderer shall notify the contractor in writing of matters regarding the limit of authority of said supervisor and the method for reporting the opinions of the contractor concerning the acts of said supervisor to the orderer (called "matters concerning the supervisor" in paragraph (4)).

(3) As specified by Cabinet Order, in place of the written notice provided for in paragraph (1), the contractor may obtain the agreement of the orderer specified in the same paragraph and give notice of matters concerning the on-site representative employing methods using electronic data processing equipment and telecommunications technology stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism. In this case, said contractor shall be deemed as having given said written notice.

(4) As specified by Cabinet Order, in place of the written notice provided for in paragraph (2), the orderer may obtain the agreement of the contractor in the same paragraph and give notice of matters concerning the supervisor, employing methods using electronic data processing equipment and telecommunications technology stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism. In this case, said orderer shall be deemed as having given said written notice

(Prohibition of Unreasonably Low Contract Fees)

Article 19-3 The orderer shall not take unfair advantage of the orderer's position in a transaction to make a contract for a contract fee that does not cover the generally required costs needed to complete the ordered construction work.

(Prohibition of Unreasonable Compulsory Purchase of Materials, Etc.)

Article 19-4 After making a contract, an orderer shall not take unfair advantage of the orderer's position in the transaction to specify purchase outlets for material or machinery to be used in the ordered construction work and direct the contractor to purchase them to the disadvantage of the contractor.

(Recommendations to Owners)

Article 19-5 When an owner who has made a contract with a construction business operator (except for business operators provided in paragraph (1) of Article 2 of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of 1947)) has violated the provisions of the preceding two Articles, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who licensed said construction business operator may make the necessary recommendations to said owner when found particularly necessary.

(Estimates for Construction Work, Etc.)

Article 20 (1) When making a contract for construction work, a construction business operator shall provide a clear breakdown of material expenses, labor expenses and other expenses for each type of construction based on the content of the work and shall endeavor to carry out an estimate for the construction work.

(2) When requested by an orderer of construction work, a construction business operator shall submit a written estimate for construction work before the contract is concluded.

(3) The orderer of construction work shall, prior to the conclusion of the contract when the contract method is by discretionary contract and prior to the submission of bids when the contract method is competitive tendering, indicate as clearly as possible the details with regard to the matters listed in item (i) and item (iii) through item (xiv) of paragraph (1) of Article 19 and allow the specified period provided for by Cabinet Order needed for the construction business operator to make an estimate for said construction work between said indication of details and conclusion of said contract or tendering.

(Contract Guaranty)

Article 21 (1) When a contract for construction work includes provision for pre-payment of all or a part of the contract fee, the orderer may request the construction business operator to establish a guarantor before the pre-payment is made. This provision shall not apply to construction work covered by the guaranty of surety companies provided for under paragraph (4) of Article 2 of the Act On Guaranty Service Related to Advance Payment of Public Works (Act No. 184 of 1952) or simple construction work as stipulated by Cabinet Order.

(2) A construction business operator who has received the request provided for set forth in the preceding paragraph shall establish a guarantor as specified in one of the items below.

(i) A guarantor for payment of arrears interest in the event of default by the construction business operator, damages for breach of contract and any other damages.

(ii) Another construction business operator who will guarantee the completion of the construction work in place of the said construction business operator.

(3) If the construction business operator does not establish a guarantor despite being requested to do so under the provisions of paragraph (1), the orderer may decline to make the pre-payment regardless of the provisions of the contract.

(Prohibition of Blanket Subcontracting)

Article 22 (1) A construction business operator shall not blanket subcontract construction work contracted for to another operator whatever method is used.

(2) A person who operates a construction business shall not undertake a blanket subcontract for construction work from a construction business operator which has been contracted for by said construction business operator.

(3) When the construction work in the preceding two paragraphs is construction work other than a facility utilized by a large number of people or important construction work related to building provided for by Cabinet Order, the provisions shall not apply when the main contractor for the said construction project has obtained the written consent of the owner in advance.

(4) As specified by Cabinet Order, in place of the written consent provided for in the preceding paragraph, the owner may obtain the agreement of the main contractor specified in the same paragraph and give notice of the consent specified in the same paragraph employing methods using electronic data processing equipment and telecommunications technology stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism. In this case, said owner shall be deemed as having given said written consent.

(Request for Replacement of Subcontractor)

Article 23 (1) When the orderer deems that a subcontractor is unsuitable for the execution of the construction work, the orderer may request the contractor to replace said subcontractor. This shall not apply to subcontractors selected with the advance written consent of the orderer.

(2) As specified by Cabinet Order, in place of the written consent provided for in the proviso of the preceding paragraph, the orderer may obtain the agreement of the person selecting the subcontractor specified in the proviso of the same paragraph and give notice of the consent specified in the proviso of the same paragraph employing methods using electronic data processing equipment and telecommunications technology stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism. In this case, said orderer shall be deemed as having given said written consent.

(Reporting of Construction Supervision)

Article 23-2 A contractor who is required to execute a contracted construction project in line with a design drawing from an architect under the provision of paragraph (3) of Article 18 of the Act on Architects and Building Engineers (Act No. 202 of 1950) must immediately report the reason to the orderer using the method provided for in paragraph (2) of Article 19-2 when there is a reason not to follow the design drawing.

(Cases Regarded as Contracts)

Article 24 A contract concluded for the purpose of completing construction work for remuneration regardless of whatever name is given to it shall be deemed as a contract for construction work, and the provisions of this Act shall apply.

Section 2 Duties of Main Contractor

(Hearing the Opinion of Subcontractors)

Article 24-2 The main contractor shall take into account the opinions of subcontractors when deciding matters necessary for the execution of the contracted construction work, such as the details of the work process and the method of work.

(Payment of Subcontracting Fees)

Article 24-3 (1) After receiving payment for work completed or payment after completion of all work, the main contractor shall pay a subcontracting fee to the subcontractor that executed the construction work for which said payment has been made at an equivalent rate of the amount paid to the main contractor and equivalent to the amount of work completed by the subcontractor within one month or as short a period as possible after receiving the payment.

(2) After receiving a pre-payment, the main contractor shall give adequate consideration to making an advance payment to the subcontractor for expenses necessary to commence the construction work, including the purchase of materials and the recruitment of workers.

(Inspection and Transfer)

Article 24-4 (1) After receiving notice from the subcontractor that the contracted construction work has been completed, the main contractor shall make an inspection in order to confirm the completion of the work within twenty days or within as short a period as possible from the date when said notice was received.

(2) After confirming the completion of the construction work based on the inspection provided for in the preceding paragraph, the main contractor shall accept transfer of said construction work immediately on the request of the subcontractor. This provision shall not apply when the subcontract contains the provision that the transfer shall be made on a specified date before the twentieth day after the completion of the work.

(Date of Payment for Subcontracting Fees by Special Construction Business Operator)

Article 24-5 (1) The date of payment for subcontracting fees for subcontracts (excludes cases in which the contractor in a subcontract is a special construction business operator or a juridical person with capital exceeding the amount stipulated by Cabinet Order, hereinafter in this Article the same) when a special construction business operator is the orderer shall be fixed to within fifty days of the date of the offer specified in paragraph (2) of the preceding Article (the specified date in the case of the proviso of the same paragraph, hereinafter in this Article the same) or within as short a period as possible.

(2) For subcontracts in which a special construction business operator is the orderer, the date of the offer specified in paragraph (2) of the preceding Article when the date of payment for the subcontracting fee is not fixed or the fiftieth day from the date of the offer specified in paragraph (2) of the preceding Article when the date of payment is fixed in violation of the preceding paragraph shall be deemed the fixed date of payment for the subcontracting fees.

(3) When a special construction business operator makes a payment for subcontracting fees related to a subcontract in which said special construction business operator is the orderer, the special construction business operator shall not deliver negotiable instruments deemed unlikely to receive a discount from an ordinary financial institution (refers to an organization which receives deposits or savings and engages in financing) before the payment date for said subcontracting fees.

(4) The special construction business operator shall pay subcontracting fees concerning subcontracts in which the said special construction business operator is the orderer by the payment date specified under the provisions of paragraph (1) or the payment date provided for in paragraph (2). When the said special construction business operator does not make such payment, the special construction business operator shall pay to the subcontractor an amount equivalent to the unpaid amount multiplied by the rate specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism for the period from the fiftieth day after the offer specified in paragraph (2) of the preceding Article until the date of actual payment of the subcontracting fees concerned as arrears interest.

(Guidance, Etc., from Special Construction Business Operator for Subcontractors)

Article 24-6 (1) A special construction business operator who contracts for construction work directly from an owner shall make efforts to guide the subcontractors so that they observe the provisions of this Act and the provisions of Cabinet Orders based on laws and regulations concerning the execution of construction work and the employment of workers who execute construction work with regard to the construction work of the subcontract concerned.

(2) When the special construction business operator provided for in the preceding paragraph deems that the subcontractor for the contracted construction work has violated the provisions specified in the same paragraph, he/she shall indicate said violation to the operator of said construction business and make efforts to request rectification.

(3) When the special construction business operator in paragraph (1) has requested rectification under the provisions of the preceding paragraph and the operator of said construction business has not rectified said violation, said special construction business operator shall promptry inform the same to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who granted the license, in a case in which the person operating the construction business concerned is a construction business operator, or the Prefectural Governor who has jurisdiction over the site of the construction work concerned in a case in which the person operating the construction business concerned is other than a construction business operator.

(Preparation of Work Ledger and Work Plan)

Article 24-7 (1) When directly contracting for construction work from an owner and when the amount of the subcontracting fee in the subcontract concluded in order to execute said construction work is above the amount stipulated by Cabinet Order (the total amount of the contract fees when there are two or more subcontracts), the special construction business operator shall prepare a work ledger for the said construction work in accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, recording the trade name or the name of the subcontractor, the content of the construction work with regard to said subcontractor, the period of the work and other matters stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, in order to ensure the proper execution of the construction work, and place it in each construction site.

(2) In accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, the subcontractor for construction work in the preceding paragraph shall, when subcontracting the contracted construction work to another person operating a construction business, notify the special construction business operator in the same paragraph of the business number or name of said other person operating a construction business, the content of the contracted construction work, the period of construction and other matters as stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(3) The special construction business operator in paragraph (1) shall when requested by the owner in the same paragraph submit the work ledger provided for under the provisions of the same paragraph for the inspection of said owner.

(4) The special construction business operator in paragraph (1) shall prepare a work plan showing the distribution of work among each subcontractor for said construction work and indication it in an easily visible location at said construction site in accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

Chapter III-2 Dispute Resolution Procedures for Contracts for Construction Work

(Establishment of a Committee for Adjustment of Construction Work Disputes)

Article 25 (1) The Committee for Adjustment of Construction Work Disputes shall be established in order to resolve disputes concerning contracts for construction work.

(2) The Committee for Adjustment of Construction Work Disputes (hereinafter referred to as "Committee") shall have the authority to conduct mediation, conciliation and arbitration (hereinafter referred to as "dispute resolution procedures") in disputes concerning contracts for construction work (hereinafter referred to as "disputes") based on the provisions of this Act.

(3) There shall be a Central Committee for Adjustment of Construction Work Disputes (hereinafter referred to as "Central Committee") and Prefectural Committees for Adjustment of Construction Work Disputes (hereinafter referred to as "Prefectural Committees"). The Central Committee shall be located in the Ministry of Land, Infrastructure, Transport and Tourism and the Prefectural Committees shall be located in the prefectures.

(Organization of the Committee)

Article 25-2 (1) The Committee shall consist of up to fifteen members.

(2) The committee members shall be appointed by the Minister of Land, Infrastructure, Transport and Tourism for the Central Committee and by the Prefectural Governor for the Prefectural Committee from among people of good character and sound knowledge.

(3) The Central Committee and the Prefectural Committees shall each have a chairman co-opted from among the members.

(4) The chairman shall be in charge of the affairs of the Committee.

(5) If the chairman meets with an accident, he/she shall be represented in his/her duties by a person selected in advance from among the committee members.

(Term of Appointment of Committee Members, Etc.)

Article 25-3 (1) The term of appointment for committee members shall be two years. However, the term of appointment for alternate committee members shall be for the remaining term of the appointment of the previous member.

(2) Committee members may be re-appointed.

(3) Committee members shall carry out their duties until re-appointed committee members are appointed.

(4) Committee members shall be part-time.

(Disqualification of Committee Members)

Article 25-4 A person who corresponds to any of the following items may not be a committee member.

(i) Undischarged bankrupts.

(ii) A person who has been sentenced to a term of imprisonment or a heavier punishment and when less than five years have elapsed since the completion of the sentence.

(Dismissal of Committee Members)

Article 25-5 (1) The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor shall dismiss any committee member found to correspond to any of the items of the preceding Article.

(2) The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may dismiss any committee member who corresponds to any of the following items.

(i) When a member is deemed unable to execute duties due to mental or physical impairment.

(ii) When a committee member is deemed to have violated the responsibilities of the position or engaged in other misconduct inappropriate to the position.

(Meetings and Resolutions)

Article 25-6 (1) The chairman shall convene committee meetings.

(2) The Committee may not hold any meetings or pass any resolutions unless a majority of committee members are in attendance in addition to the chairman or the chairman's representative under the provisions of paragraph (5) of Article 25-2.

(3) The business of the Committee shall be decided by a majority of those in attendance. When those in attendance are equally divided, the chairman shall decide.

(Special Committee Members)

Article 25-7 (1) Special committee members may be appointed to the Committee in order to participate in dispute resolution procedures.

(2) The term of appointment for special committee members shall be two years.

(3) The provisions of paragraph (2) of Article 25-2, paragraphs (2) and (4) of Article 25-3, Article 25-4, and Article 25-5 shall apply to special committee members.

(4) Important matters relating to special committee members shall be determined by Cabinet Order except for those matters specified in this Act.

(Prefectural Committee Members Viewed as Local Civil Servants in Regular Government Service)

Article 25-8 Committee members and special committee members of the Prefectural Committee shall be viewed as local civil servants in regular government service under the provisions of paragraph (2) of Article 3 of the Local Public Service Act (Act No. 261 of 1950) for the application of the provisions of Article 34, item (ii) of Article 60, and Article 62.

(Jurisdiction)

Article 25-9 (1) The Central Committee shall have jurisdiction regarding dispute resolution procedures in the cases listed in each of the following items.

(i) When both parties are construction business operators licensed by the Minister of Land, Infrastructure, Transport and Tourism.

(ii) When both parties are construction business operators and the licenser differs.

(iii) When only one party is a construction business operator licensed by the Minister of Land, Infrastructure, Transport and Tourism.

(2) A Prefectural Committee shall have jurisdiction over dispute resolution procedures in the cases listed in each of the following items.

(i) When both parties are construction business operators licensed by the governor of the prefecture concerned.

(ii) When only one party is a construction business operator licensed by the governor of the prefecture concerned.

(iii) When both parties are operating a construction business without a license, and the construction work site relating to the dispute lies within the prefecture concerned.

(iv) In addition to the cases listed in item (iii) of the preceding paragraph and item (ii) when one of the parties only is operating a construction business without a license, and the construction work site related to the dispute is within the prefecture concerned.

(3) Regardless of the provisions of the preceding two paragraphs, the parties may determine the Committee with jurisdiction based on a mutual agreement.

(Application for Dispute Resolution Procedures)

Article 25-10 An application for dispute resolution procedures shall be made in writing according to the provisions of Cabinet Order to the Minister of Land, Infrastructure, Transport and Tourism for the Central Committee and to the governor of the prefecture concerned for a Prefectural Committee.

(Commencement of Mediation and Conciliation)

Article 25-11 When a dispute has arisen, the Committee shall conduct mediation or conciliation in cases that correspond to one of the following items.

(i) When both or one of the parties has requested the Committee to conduct mediation or conciliation.

(ii) In a dispute concerning a public facility or structure provided for under Cabinet Order when the need for mediation or conciliation based on the authority of the Committee has been determined.

(Mediation)

Article 25-12 (1) Mediation by the Committee shall be conducted by mediation committee members.

(2) Mediation committee members shall be appointed by the committee chairman for each case from among committee members and special committee members.

(3) Mediation committee members shall conciliate between the parties, clarify the main points of the claims of both parties and make efforts to resolve the case.

(Conciliation)

Article 25-13 (1) Conciliation by the Committee shall be conducted by three conciliation committee members.

(2) Conciliation committee members shall be appointed by the committee chairman for each case from among committee members and the special committee members.

(3) The Committee may, when it finds it necessary for conciliation, request the appearance of the parties and hear their opinions.

(4) The Committee may prepare an conciliation plan and recommend that the parties accept such plan.

(5) The plan set forth in the preceding paragraph shall be prepared based on the opinion of a majority of the conciliation committee members.

(Cases in which Mediation and Conciliation Shall not Be Conducted)

Article 25-14 When the Committee determines that the dispute is not suited for mediation or conciliation due to its nature or that the parties have requested mediation or conciliation without good cause for improper purposes, it shall not conduct mediation or conciliation.

(Closing of Mediation and Conciliation)

Article 25-15 (1) When the Committee determines that there is no prospect that the dispute to which mediation or conciliation relates will be resolved through mediation and conciliation, it may close the mediation or conciliation.

(2) The Committee shall notify the parties when it has closed the mediation or conciliation under the provision of the preceding paragraph.

(Interruption of Prescription)

Article 25-16 When mediation or conciliation has been closed under the provision of paragraph (1) of the preceding Article, and the party that requested said mediation or conciliation lodges a lawsuit related to the request that was the purpose of the mediation or conciliation within one month of the date of receiving the notice in paragraph (2) of the preceding Article, the lawsuit shall be deemed to have been lodged at the time of the request for mediation or conciliation with regard to the interruption of prescription.

(Suspension of Legal Proceedings)

Article 25-17 (1) When litigation between the parties regarding the dispute is pending, the court of the suit may decide to specify a period of four months within which to suspend legal proceedings for any of the reasons listed in the following items or if there is a joint petition from the parties.

(i) Mediation or conciliation related to the said dispute is being conducted between the parties by the Committee.

(ii) Other than case provided for in the preceding item, there is an agreement between the parties to resolve the said dispute through mediation or conciliation by the Committee.

(2) The court of the suit may nullify the decision set forth in the preceding paragraph at any time.

(3) No objection may be raised to a decision to dismiss the petition in paragraph (1) or a decision to nullify the decision in paragraph (1) under the provision of the preceding paragraph.

(Commencement of Mediation)

Article 25-18 When a dispute has arisen, the Committee shall conduct mediation when any of the following items are applicable.

(i) There has been a request to the Committee for arbitration from both parties.

(ii) When there has been a request for arbitration to the Committee from one of the parties based on an agreement on the arbitration specified in this Act.

(Arbitration)

Article 25-19 (1) Arbitration by the Committee shall be carried out by three arbitration committee members.

(2) The arbitration committee members shall be appointed by the chairman of the Committee based on the agreement of the parties from among the committee members and special committee members. When there is no selection based on the agreement of the parties, the chairman of the Committee shall appoint the arbitration committee members from among the committee members and the special committee members.

(3) At least one of the arbitration committee members shall be qualified as an attorney under the provisions of Chapter II of the Attorney Act (Act No. 205 of 1949).

(4) With regard to Arbitration conducted by the Committee, the provisions of the Arbitration Law (Act No.138 of 2003) shall, except as otherwise provided for by this Act, apply by deeming the arbitration committee members to be the arbitrators.

(Submission of Documents and Articles)

Article 25-20 (1) When conducting arbitration the Committee may, when it finds it necessary, on the application of the party concerned, order the other party to submit documents and articles pertaining to said contract.

(2) When the other party fails to submit the documents and articles under the provisions of the preceding paragraph without reasonable cause, the Committee may find in favor of the claims of the complainant with regard to said documents and articles.

(On-the-spot Inspection)

Article 25-21 (1) When conducting arbitration the Committee may, when it finds it necessary based on the application of the party concerned, enter construction sites and other areas related to the case owned by the other party and conduct an inspection of factors involved in the dispute.

(2) When conducting the inspection provided for under the preceding paragraph, the Committee may have one of the arbitration committee members conduct said inspection.

(3) When the opposite party refuses the inspection provided for in paragraph (1) without reasonable cause, the Committee may find in favor of the claim of the complainant with regard to said facts.

(Non-disclosure of Conciliation and Arbitration Proceedings)

Article 25-22 Conciliation and arbitration proceedings conducted by the Committee shall not be open to the public. However, the Committee may permit the attendance of persons it finds appropriate.

(Required Expenses for Dispute Resolution Proceedings)

Article 25-23 (1) The expenses required for dispute resolution proceedings shall be paid by each of the parties unless otherwise specified.

(2) The Committee shall order the pre-payment of expenses for acts related to the allegations of the parties.

(3) When the Committee orders pre-payment of expenses based on the provision of the preceding paragraph and the party concerned fails to pre-pay said expenses, the Committee may not conduct the acts in the preceding paragraph.

(Application Fee)

Article 25-24 An applicant to the Central Committee for Adjustment of Construction Work Disputes for dispute resolution shall pay the application fee stipulated by Cabinet Order.

(Report on Status of Dispute Resolution)

Article 25-25 Based on the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, the Central Committee for Adjustment of Construction Work Disputes shall report on the status of dispute resolution to the Minister of Land, Infrastructure, Transport and Tourism, and a Prefectural Committee for Adjustment of Construction Work Disputes shall report to the governor of the prefecture concerned.

(Delegation to Cabinet Order)

Article 25-26 Other than matters provided for in this Chapter, the necessary matters related to dispute resolution proceedings and the expenses for them shall be determined by Cabinet Order.

Chapter IV Securing of Construction Technology

(Securing of Construction Technology)

Article 25-27 (1) Construction business operators shall make efforts to secure construction technology.

(2) The Minister of Land, Infrastructure, Transport and Tourism shall implement training, provide materials and take other measures as needed to contribute to the securing of the construction technology set forth in the preceding paragraph.

(Assignment of Chief Engineer and Managing Engineer, Etc.)

Article 26 (1) When executing construction work that has been contracted for, construction business operators shall assign a person who conforms to sub-item (a), (b) or (c) of item (ii) of Article 7 with regard to said construction work to take charge of the management of construction technology at said construction site (called "Chief Engineer" below).

(2) Notwithstanding the provisions of the preceding paragraph, when a specified construction business operator has contracted for construction work directly from an owner and the amount of the subcontract fee in the subcontract concluded in order to execute said construction work is more than the amount provided for by Cabinet Order based on item (ii) of paragraph (1) of Article 3 (the total contract fee when there are two or more subcontracts), the special construction business operator shall assign a person who conforms to sub-item (a), (b) or (c) of item (ii) of Article 15 (when said construction business is a designated construction business, a person covered by sub-item (a) or under the provisions of sub-item (c) a person certified by the Minister of Land, Infrastructure, Transport and Tourism as having abilities equivalent to or higher than a person listed under sub-item (a)) with relation to said construction work to take charge of the management of construction technology for the construction work on said construction site (called "Managing Engineer" below).

(3) For important construction work related to public facilities or structures, or facilities or structures utilized by a large number of people, specified by Cabinet Order, the chief engineer or managing engineer to be assigned under the provisions of the preceding two paragraphs shall be a full-time employee for each construction site.

(4) The managing engineer who shall be a full-time employee under the provisions of the preceding paragraph shall be a person who has received managing engineer certification under the provisions of paragraph (1) of Article 27-18 and who has undergone the training registered by the Minister of Land, Infrastructure, Transport and Tourism specified in Article 26-4 through Article 26-6.

(5) A managing engineer appointed pursuant to the provision of the preceding paragraph shall present his/her managing engineer certification when requested to do so by the owner.

Article 26-2 (1) When the operator of a civil engineering business or a construction business executes general civil engineering work or general building work and also executes construction work other than general civil engineering or general building work (except for the simple construction work provided for under Cabinet Order in the proviso of paragraph (1) of Article 3), he/she shall have said construction work executed by a construction business operator who has received a license for the construction business to which said construction work relates, except for cases in which the operator executes the work itself with a person who complies with sub-item (a), (b) or (c) in Article 7 in relation to said construction work assigned to be in charge of the management of the construction technology for said construction work at said construction site.

(2) When executing other construction work related to the construction work for which the construction business is licensed (except for small construction work under the provisions of Cabinet Order based on the proviso of paragraph (1) of Article 3), the construction business operator shall have said construction work executed by a construction business operator who has received a license in the construction business related to said construction work, except when the operator executes the work itself with a person who complies with sub-item (a), (b) or (c) in item (ii) of Article 7 in relation to said construction work assigned to be in charge of management construction technology for said construction work at said construction site.

(Duties of Chief Engineer and Managing Engineer, Etc.)

Article 26-3 (1) The chief engineer and the managing engineer shall, in good faith, prepare construction plans for said construction work, manage the work process and quality control and other technical matters as well as provide technical advice and supervision of workers employed in said construction work in order to properly implement the construction work at the construction site.

(2) Workers employed in the execution of construction work at the construction site shall follow the directions given by the chief engineer and the managing engineer as part of their duties.

(Registration)

Article 26-4 The registration in paragraph (4) of Article 26 shall be granted based on the application of a person who intends to provide the training in the same paragraph.

(Disqualification)

Article 26-5 Training provided by a person who corresponds to any of the following items may not receive the registration in paragraph (4) of Article 26.

(i) A person who has violated this Act or orders based on this Act and has been fined or received a heavier punishment, when less than two years have passed since the date of completion or discharge of the sentence.

(ii) A person who has had the registration of the training in paragraph (4) of Article 26 rescinded under the provision of Article 26-15, when less than two years have passed since the date of rescission.

(iii) When one of the officers of a juridical person that conducts training corresponds to either of the preceding items.

(Requirements for Registration)

Article 26-6 (1) When an application for the training specified in Article 26-4 conforms to all the requirements listed below, the Minister of Land, Infrastructure, Transport and Tourism must grant registration. In this case, the procedure necessary for registration shall be specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(i) The subjects listed below are provided.

(a) The legal system related to construction work.

(b) The design of execution plans for construction work, process management, quality control and other technical management.

(c) The latest materials, equipment and techniques related to construction work.

(ii) For the subjects listed under sub-items (b) and (c) of the preceding item, a person who corresponds to one of the following is engaged in the training work as an instructor.

(a) A person with experience as a managing engineer.

(b) A person who has experience as a teacher of the subjects listed in Attached Table 2 at a senior high school, secondary school, university, a college or a vocational school under the School Education Law.

(c) A person with equivalent or higher proficiency than those persons listed in sub-item (a) or (b).

(iii) None of the following shall apply to an entity controlled by a construction business operator.

(a) When the applicant for the registration under the provision of Article 26-4 (hereinafter called "Applicant for Registration") is a joint stock company, its parent company (refers to parent company as provided for in paragraph (1) of Article 879 of the Company Law (Act No. 86 of 2005). The same applies in item (i) of paragraph (2) of Article 27-31) is a construction business operator.

(b) Officers or employees of a construction business operator (includes those who have been officers or employees of said construction business operator within the past two years) account for more than one half of the officers (employees with the right to execute business in the case of a membership company (refers to membership company as provided for in paragraph (1) of Article 575 of the Companies Act. The same applies in item (ii) of paragraph (2) of Article 27-31)) of the applicant for registration.

(c) The applicant for registration (the officer with the right of representation in the case of a juridical person) is an officer or employee of a construction business operator (includes a person who has been an officer or employee of the said construction business operator within the past two years).

(2) Registration shall record the matters listed below in the training registration ledger.

(i) The date of registration and the registration number.

(ii) The name or designation and the address of the entity that conducts the training which has received the registration in paragraph (4) of Article 26 (hereinafter referred to simply as "Registered Training Institution"), and the name of its representative in the case of a juridical person.

(iii) The location of the office where the registered training institution provides training.

(Renewal of Registration)

Article 26-7 (1) Unless it is renewed for each term established by Cabinet Order and to be not less than three years, the registration in paragraph (4) of Article 26 shall lose validity following the expiry of the term.

(2) The provisions of the preceding three Articles shall apply mutatis mutandis to the registration set forth in the preceding paragraph.

(Obligations relating to the Provision of Training)

Article 26-8 The registered training institution must provide training impartially and in compliance with the requirements listed in item (i) and item (ii) of paragraph (1) of Article 26-6 and the standards established by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Notification of Changes to Registration Matters)

Article 26-9 When the registered training institution wishes to change the matters listed in item (ii) or item (iii) of paragraph (2) of Article 26-6, it must provide notification to this effect at least two weeks before the date of the intended changes to the Minister of Land, Infrastructure, Transport and Tourism.

(Training Regulations)

Article 26-10 (1) The registered training institution must establish regulations concerning training (hereinafter referred to as "Training Regulations") and provide notification to the Minister of Land, Infrastructure, Transport and Tourism before the commencement of training. The same shall apply when it changes the training regulations.

(2) The training regulations must establish the method of providing training, the charges relating to training and other matters established by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Suspension and Abolition of Training)

Article 26-11 When the registered training institution wishes to suspend or discontinue all or some training, it shall provide notification to that effect in advance to the Minister of Land, Infrastructure, Transport and Tourism as specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Provision and Viewing of Financial Statements)

Article 26-12 (1) Within three months of the end of each business year, the registered training institution must prepare an inventory of assets, balance sheet, profit and loss statement, statement of cash flow, and a business report for that business year and keep them at its office for five years (when electro-magnetic records (refers to records prepared using electronic, magnetic and other means that are imperceptible to human senses and provided for information processing by computer; hereinafter in this Article the same) are prepared instead, includes said electro-magnetic records called "financial statements, etc.," in the following paragraph and in Article 54).

(2) Construction business operators and other concerned parties may make the requests listed below at any time during the business hours of the registered training institution. Notwithstanding that the charge established by the registered training institution must be paid for the requests in item (ii) or item (iv).

(i) When financial statements, etc., have been prepared as documents, a request for viewing or copies of said documents.

(ii) A request for copies or excerpts of the documents in the preceding item.

(iii) When financial statements, etc., have been prepared as electro-magnetic records, a request for viewing or copies of a format that shows the matters recorded in said electro-magnetic records using the method specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(iv) A request for the provision of the matters recorded in the electro-magnetic record in the preceding item using the electro-magnetic method specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism or a request for the grant of documents that record said matters.

(Compliance Order)

Article 26-13 The Minister of Land, Infrastructure, Transport and Tourism may, when finding that training no longer conforms with the provision of paragraph (1) of Article 26-6, order that the registered training institution take the necessary measures be taken to conform with the provision of the same paragraph.

(Order for improvement)

Article 26-14 The Minister of Land, Infrastructure, Transport and Tourism may, when finding that the registered training institution has infringed the provision of Article 26-8, order the registered training institution to take the necessary measures to conduct training in accordance with the provision of the same Article or to improve the method of its training and other operations.

(Rescission of Registration)

Article 26-15 The Minister of Land, Infrastructure, Transport and Tourism may rescind the registration of the training that the registered training institution provides or order the cessation of some or all training for a set period when any of the following items applies to the registered training institution.

(i) Once item (i) or item (iii) of Article 26-5 apply.

(ii) When it has infringed the provisions of Article 26-9 through Article 26-11, paragraph (1) of Article 26-12 or the following Article.

(iii) When it refuses a request under the provisions in each of the items in paragraph (2) of Article 26-12 without just cause.

(iv) When it has infringed an order under the provisions of the preceding two Articles.

(v) When it received registration in paragraph (4) of Article 26 by unlawful means.

(Recording in the Book)

Article 26-16 As provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, the registered training institution must prepare a book, record the matters specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism in it and maintain it.

(Provision of Training by the Minister of Land, Infrastructure, Transport and Tourism)

Article 26-17 (1) When there is no entity to provide training, when there has been notification of suspension or abolition of some or all training under the provision of Article 26-11, when registration in paragraph (4) of Article 26 is rescinded under the provision of Article 26-15, or the registered training institution has been ordered to cease some or all training, when it is impossible for the registered training institution to provide some or all training due to natural disaster or other cause and when otherwise found necessary, the Minister of Land, Infrastructure, Transport and Tourism may provide some or all training directly.

(2) When the Minister of Land, Infrastructure, Transport and Tourism provides some or all training directly under the provision of the preceding paragraph, the handover of training and other necessary matters shall be specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Fees)

Article 26-18 A person who wishes to undergo the training provided by the Minister of Land, Infrastructure, Transport and Tourism under the provision of paragraph (1) of the preceding Article must pay the fees determined by Cabinet Order in consideration of the actual cost to the government.

(Collection of Reports)

Article 26-19 The Minister of Land, Infrastructure, Transport and Tourism may, to the extent necessary for the enforcement of this Act, have the registered training institution report on the status of its operations and accountings.

(On-the-spot Inspections)

Article 26-20 (1) The Minister of Land, Infrastructure, Transport and Tourism may, to the extent necessary for the enforcement of this Act, have his/her employees enter the business premises of the booked training institution and inspect the status of its operations, books, documents and other items.

(2) When employees conduct an on-the-spot inspection under the provision of paragraph (1), they must carry identity documents and display them to concerned parties.

(3) The authority to conduct an on-the-spot investigation under the provision of paragraph (1) shall not be construed as having been granted for the purposes of a criminal investigation.

(Publication)

Article 26-21 The Minister of Land, Infrastructure, Transport and Tourism must publish the cases listed below in Kanpo, the Official Gazette.

(i) When the registration in paragraph (4) of Article 26 is granted.

(ii) When notification under the provision of Article 26-9 has been received.

(iii) When notification under the provision of Article 26-11 has been received.

(iv) When the registration in paragraph (4) has been rescinded under the provision of Article 26-15 or when a suspension of training has been ordered.

(v) When it is decided to provide some or all training directly under the provision or Article 26-17 or when it is decided not to provide some or all of the training that had been provided directly.

(Technical Qualifications)

Article 27 (1) In order to improve construction technology, the Minister of Land, Infrastructure, Transport and Tourism may conduct technical examination of persons who work or intend to work in the execution of construction work by construction business operators based on the provisions of Cabinet Order.

(2) The examination provided for set forth in the preceding paragraph shall consist of an academic examination and a practical examination.

(3) The Minister of Land, Infrastructure, Transport and Tourism shall issue a certificate to a person who has passed the examination provided for in paragraph (1).

(4) A person who has been issued with a certificate may apply for re-issue of the certificate when the certificate has been lost or damaged.

(5) Those who have passed the examination provided for in paragraph (1) may assume the title provided for by Cabinet Order.

(Designation of Designated Examining Body)

Article 27-2 (1) The Minister of Land, Infrastructure, Transport and Tourism may delegate all or a part of the work relating to the implementation of the academic examination and the practical examination (hereinafter referred to as "examination affairs") to a designated person (hereinafter referred to as "designated examining body").

(2) The designation provided for set forth in the preceding paragraph shall be made based on the application of the person who intends to conduct examination affairs.

(3) When delegating examination affairs to a designated examining body, the Minister of Land, Infrastructure, Transport and Tourism shall not conduct said examination affairs.

(Standards for Designation)

Article 27-3 (1) The Minister of Land, Infrastructure, Transport and Tourism shall not award the designation under the provisions of paragraph (1) of the preceding Article unless the application under the provisions of paragraph (2) of the same Article conforms to each of the following items.

(i) The employee's, facilities, method of conducting work and plans concerning implementation of examination affairs regarding other matters are appropriate for the proper and correct implementation of examination affairs.

(ii) The applicant possesses the adequate financial and technological basis needed for the proper and correct implementation of plans relating to the conduct of examination affairs in the preceding item.

(iii) When business other than examination affairs is conducted, there is no danger that the conduct of said business shall prejudice examination affairs.

(2) When the person making an application provided for in paragraph (2) of the preceding Article conforms to any one of the following items, the Minister of Land, Infrastructure, Transport and Tourism shall not grant the designation under the provisions of paragraph (1) of the same Article.

(i) An applicant other than an incorporated association or an incorporated foundation.

(ii) An applicant who has received a penal sentence for a violation of the provisions of this Act when less than two years have elapsed since completion of said sentence.

(iii) An applicant who has had designation canceled under the provisions of paragraph (1) or paragraph (2) of Article 27-14 when less than two years have elapsed since the date of that rescission.

(iv) Any of the officers fall under one of the items below.

(a) A person who conforms to item (ii).

(b) A person who has been dismissed under an order based on the provisions of paragraph (2) of Article 27-5, when less than two years have elapsed since the date of the dismissal.

(Publication of Designation)

Article 27-4 (1) When granting a designation under the provisions of paragraph (1) of Article 27-2, the Minister of Land, Infrastructure, Transport and Tourism shall publish the name of the person who has received said designation, the location of the principal place of business and the date on which the designation was made.

(2) When the designated examining body plans to change its name or the location of its principal place of business, it shall notify the Minister of Land, Infrastructure, Transport and Tourism no later than two weeks before the date when the change is to be made.

(3) When receiving the notification provided for set forth in the preceding paragraph, the Minister of Land, Infrastructure, Transport and Tourism shall publish it.

(Appointment and Dismissal of Officers)

Article 27-5 (1) The appointment and dismissal of the officers of the examining body shall not be valid without the approval of the Minister of Land, Infrastructure, Transport and Tourism.

(2) When an officer of a designated examining body has committed an act in violation of this Act (including orders and disciplinary measures based on this Act) or the examination affairs regulations in paragraph (1) of Article 27-8 or has committed an action which is grossly improper concerning examination affairs, the Minister of Land, Infrastructure, Transport and Tourism may order the designated examining body to dismiss the officer.

(Examination Committee Members)

Article 27-6 (1) The designated examining body shall appoint testing committee members from among people who satisfy the requirements provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism and shall have them prepare examination questions and mark examination papers.

(2) The designated examining body shall notify the Minister of Land, Infrastructure, Transport and Tourism without delay when appointing or dismissing the examination committee members provided for the preceding paragraph.

(3) The provisions of paragraph (2) of the preceding Article shall apply mutatis mutandis to the dismissal of testing committee members in paragraph (1).

(Duty of Secrecy, Etc.)

Article 27-7 (1) The officers and employees (includes the examination committee members in paragraph (1) of the preceding Article, hereinafter in this Article the same) of the designated examining body shall not divulge confidential information concerning examination affairs.

(2) Officers and employees of the designated examining body engaged in examination affairs shall be deemed as employees working in the public service under the laws and regulations for the application of the Penal Code and other penal provisions.

(Regulations for Examination affairs)

Article 27-8 (1) The designated examining body shall establish examination affairs regulations with regard to matters relating to the implementation of examination affairs provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism and shall receive approval from the Minister of Land, Infrastructure, Transport and Tourism. It shall do the same when planning to change the regulations.

(2) When the Minister of Land, Infrastructure, Transport and Tourism determines that examination affairs regulations approved pursuant to the provision of the preceding paragraph are inappropriate for the proper and correct implementation of examination affairs, he/she may order the designated examining body to change the regulations.

(Business Plan, Etc.)

Article 27-9 (1) The designated examining body shall prepare a business plan and a budget each business year and receive the approval of the Minister of Land, Infrastructure, Transport and Tourism before the beginning of the business year concerned (for the business year in which the designation under the provisions of paragraph (1) of Article 27-2 was received, without delay after receiving the designation). It shall do the same when it plans to change the business plan and budget.

(2) The designated examining body shall prepare a business report and a settlement of accounts each business year and submit it to the Minister of Land, Infrastructure, Transport and Tourism within three months of the end of the business year concerned.

(Preparation of Records, Etc.)

Article 27-10 The designated examining body shall prepare records that cover matters related to examination affairs provided for under the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism and shall store such records.

(Supervision Order)

Article 27-11 The Minister of Land, Infrastructure, Transport and Tourism may issue a supervision order against the designated examining body with regard to examination affairs when he/she finds it necessary to ensure the proper implementation of examination affairs.

(Reporting and Inspection)

Article 27-12 (1) The Minister of Land, Infrastructure, Transport and Tourism may, when he/she finds it necessary to ensure the proper implementation of examination affairs, request the necessary reports concerning the status of examination affairs from the designated examining body and have ministerial officials enter the offices of the designated examining body to inspect the status of examination affairs and facilities, records and documents and other articles.

(2) Ministerial officials who conduct an on-the-spot inspection pursuant to the provision of the preceding paragraph shall carry identification cards and produce said documents when requested to do so by the person concerned.

(3) The authority to conduct on-the-spot inspections based on the provisions of paragraph (1) shall not be interpreted as criminal investigation.

(Suspension and Cessation of Examination affairs)

Article 27-13 (1) The designated examining body may not suspend or cease all or part of its examination affairs unless it receives permission from the Minister of Land, Infrastructure, Transport and Tourism.

(2) The Minister of Land, Infrastructure, Transport and Tourism shall not grant the permission provided for set forth in the preceding paragraph unless he/she finds that there is no risk of to the fair and proper implementation of examination affairs due to the complete or partial suspension or cessation of the examination affairs of the designated examining body.

(3) When granting the permission under the provisions of paragraph (1), the Minister of Land, Infrastructure, Transport and Tourism shall give public notice of that fact.

(Rescission of Designation, Etc.)

Article 27-14 (1) The Minister of Land, Infrastructure, Transport and Tourism shall rescind the designation of a designated examining body when it corresponds to one of the items in paragraph (2) of Article 27-3 (excluding item (iii)).

(2) When the designated examining body corresponds to one of the following items, the Minister of Land, Infrastructure, Transport and Tourism may rescind the designation of said designated examining body or order the suspension of all or part of the examination affairs for a defined period.

(i) When the designated examining body is deemed to no longer conform to one of the items of paragraph (1) of Article 27-3.

(ii) When the designated examining body has violated the provisions of paragraph (2) of Article 27-4, paragraph (1) or paragraph (2) of Article 27-6, Article 27-9, Article 27-10, or paragraph (1) of the preceding Article.

(iii) When the designated examining body has violated an order based on the provisions of paragraph (2) of Article 27-5 (including the cases where applied mutatis mutandis pursuant to paragraph (3) of Article 27-6 apply), paragraph (2) of Article 27-8, or Article 27-11.

(iv) When the designated examining body has conducted examination affairs which is not based on the examination affairses regulations that have been approved under the provisions of paragraph (1) of Article 27-8.

(v) When the designated examining body received designation under the provisions of paragraph (1) of Article 27-2 on the basis of wrongful means.

(3) When rescinding a designation based on the provisions of the preceding two paragraphs or when ordering the suspension of all or some examination affairs based on the provisions of the preceding paragraph, the Minister of Land, Infrastructure, Transport and Tourism shall give public notice of that fact.

(Implementation of Examination Affairs by the Minister of Land, Infrastructure, Transport and Tourism)

Article 27-15 (1) The Minister of Land, Infrastructure, Transport and Tourism shall conduct all or part of the examination affairs regardless of the provisions in paragraph (3) of Article 27-2 in cases in which the designated examining body has suspended all or some examination affairs based on the provisions of paragraph (1) of Article 27-13 when the designated examining body has been ordered to suspend all or some examination affairs based on the provisions of paragraph (2) of the preceding Article or when the designated examining body is unable to implement all or some examination affairs as a result of a natural disaster or some other cause, and when found necessary.

(2) The Minister of Land, Infrastructure, Transport and Tourism shall issue advance public notice when deciding to conduct examination affairs under the provisions of the preceding paragraph or when deciding not to conduct examination affairs that had been conducted under the provisions of the same paragraph.

(3) The transfer of examination affairs and other important matters when the Minister of Land, Infrastructure, Transport and Tourism has decided to conduct examination affairs under the provisions of paragraph (1), approved the cessation of examination affairs under the provisions of paragraph (1) of Article 27-13 or canceled designation under the provisions of paragraph (1) or paragraph (2) of the preceding Article shall be stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Fees)

Article 27-16 (1) A person who plans to take the academic examination or the practical examination or a person who plans to receive certification or re-issue of certification shall pay the fees stipulated by Cabinet Order in consideration of the actual costs to the government (a person planning to take an examination conducted by a designated examining body shall pay the fees to the designated examining body).

(2) Fees paid to the designated examining body pursuant to the provision of the preceding paragraph shall comprise the income of the designated examining body.

(Request for Investigation Concerning Dispositions Taken by the Designated Examining Body)

Article 27-17 Requests for investigation based on the Complaints against Administrative Acts Inquiries Law (Act No. 160 of 1962) with regard to dispositions or inactions concerning examination affairs carried out by a designated examining body may be made to the Minister of Land, Infrastructure, Transport and Tourism.

(Issue of Managing Engineer Certification)

Article 27-18 (1) Based on the application of a person with a managing engineer qualification (refers to having passed the examination stipulated by the Minister of Land, Infrastructure, Transport and Tourism in the provisions of sub-item (a) of item (ii) of Article 15, or having received the license stipulated by the Minister of Land, Infrastructure, Transport and Tourism in the same sub-item (a); possessing the business experience or having completed the subjects provided for under sub-item (a) or (b) of item (ii) of Article 7, or having the certification of the Minister of Land, Infrastructure, Transport and Tourism provided for sub-item (c) of the same item, and possessing the business experience provided for under sub-item (b) of item (ii) of Article 15; or being certified by the Minister of Land, Infrastructure, Transport and Tourism as having abilities equivalent to or higher than the persons listed in sub-item (a) or (b) of the same item under the provisions of sub-item (c) of the same item in the construction business classification, hereinafter the same), the Minister of Land, Infrastructure, Transport and Tourism shall issue a managing engineer certification (hereinafter referred to as "qualification certificate") to the applicant.

(2) The qualification certificate shall record the name of the person receiving the certificate, the date of receipt, the managing engineer qualification held by the person receiving the certification, the classification of construction business and other matters as stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(3) In the case of paragraph (1) when the applicant has two or more managing engineer qualifications, a qualification certificate that records all managing engineer qualifications shall be issued.

(4) The valid period for the qualification certificate shall be five years.

(5) The valid period for the qualification certificate shall be renewed based on application.

(6) The provisions of paragraph (4) shall apply to the valid period of a qualification certificate after renewal.

(Designated Certificate Issuing Organization)

Article 27-19 (1) The Minister of Land, Infrastructure, Transport and Tourism may delegate the issue of qualification certificates and the renewal of the valid period of qualification certificates (hereinafter referred to as "certification work") to a designated person (hereinafter referred to as "designated certificate issuing organization").

(2) Designation under the provisions of the preceding paragraph shall be based on application from the person who intends to conduct certification work.

(3) The Minister of Land, Infrastructure, Transport and Tourism shall not grant the designation under the provisions of paragraph (1) when an applicant under the provisions of the preceding paragraph falls under any of the following items.

(i) A person other than an incorporated association or an incorporated foundation.

(ii) A person who has had a designation canceled under the provisions of paragraph (1) or paragraph (2) of Article 27-14 when the provisions of paragraph (5) apply and when less than two years have elapsed since the date of the rescission.

(4) The Minister of Land, Infrastructure, Transport and Tourism shall not conduct certification work when delegating certification work to a designated certificate issuing organization.

(5) The provisions of Article 27-4, Article 27-8, Article 27-12, Article 27-13, Article 27-14 (except for item (i) of paragraph (2) of the same Article), Article 27-15, and Article 27-17 shall apply mutatis mutandis to a designated certificate issuing organization. In such cases, "paragraph (1) of Article 27-2" in paragraph (1) of Article 27-4 and item (v) of paragraph (2) of Article 27-14 shall be read "paragraph (1) of Article 27-19." "Examination affairs regulations" in Article 27-8 and item (iv) of paragraph (2) of Article 27-14 shall be read "certification work regulations." "Examination affairs" in paragraph (1) of Article 27-12, paragraph (1) and paragraph (2) in Article 27-13, paragraph (2) and paragraph (3) in Article 27-14, Article 27-15 and Article 27-17 shall be read "certification work." "Each of the items of paragraph (2) of Article 27-3 (except for item (iii))" in paragraph (1) of Article 27-14 shall be read "item (i) of paragraph (3) of Article 27-19." "paragraph (1) or paragraph (2) of Article 27-6, Article 27-9, Article 27-10 or paragraph (1) of the preceding Article" in item (ii) of paragraph (2) of the same Article shall be read "paragraph (1) of the preceding Article or Article 27-20." "paragraph (2) of Article 27-5 (including the cases where applied mutatis mutandis pursuant to paragraph (3) of Article 27-6 apply), paragraph (2) of Article 27-8, or Article 27-11" in item (iii) of the same paragraph shall be read "paragraph (2) of Article 27-8" and "paragraph (3) of Article 27-2" in paragraph (1) of Article 27-15 shall be read "paragraph (4) of Article 27-19."

(Business Plan, Etc.)

Article 27-20 (1) The designated certificate issuing organization shall prepare a business plan and budget each business year and submit them to the Minister of Land, Infrastructure, Transport and Tourism based on the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism. It shall do the same when it intends to change the business plan and the budget.

(2) The designated certificate issuing organization shall prepare a business report and settlement of accounts each business year and submit them to the Minister of Land, Infrastructure, Transport and Tourism based on the provision of the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Fees)

Article 27-21 (1) A person who wishes to be issued a qualification certificate or a renewal of the valid period for a qualification certificate shall pay the fees stipulated by Cabinet Order in consideration of the actual cost to the government (a person who wishes to receive a qualification certificate or a renewal of the period of validity of a qualification certificate from a designated certificate issuing organization shall pay the designated certificate issuing organization).

(2) The fees paid to the designated qualification issuing organization pursuant to the provision of the preceding paragraph shall form the income of the designated certificate issuing organization.

(Delegation to the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism)

Article 27-22 The necessary matters relating to the registration in paragraph (4) of Article 26, the receipt of training and the qualification certificates in paragraph (1) of Article 27-18 except those provided for in this Chapter shall be provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

Chapter IV-2 Evaluation, Etc., of Management of Construction Business Operators

(Business Evaluation)

Article 27-23 (1) A construction business operator who directly contracts construction work related to public facilities and structures provided for under Cabinet Order from an owner shall undergo an evaluation of objective matters related to the business by the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who granted the license as provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(2) The evaluation in the preceding paragraph (hereinafter referred to as "business evaluation") shall be conducted through a numerical evaluation of the matters listed below.

(i) Business conditions.

(ii) The size of the business, its technical capabilities and objective matters other than those listed in the preceding item.

(3) In addition to the matters provided for in the preceding paragraph, the categories and standards for the business evaluation shall be determined by the Minister of Land, Infrastructure, Transport and Tourism based on the opinion of the Central Council on Construction Industry.

(Business Analysis)

Article 27-24 (1) The analysis of the matters listed in item (i) of paragraph (2) of the preceding Article (hereinafter referred to as "business analysis") shall be conducted by a person who has received registration from the Minister of Land, Infrastructure, Transport and Tourism provided for in Article 26-5 with mutatis mutandis application in Article 27-31 and Article 27-32 (hereinafter referred to as "registered business analysis organization").

(2) An application for business analysis shall be submitted to the registered business analysis organization, with the application form recording matters specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(3) The documents specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism as supporting documents for facts needed in the business analysis must be attached to the application form set forth in the preceding paragraph.

(4) The registered business analysis organization may, when found necessary for an analysis, request the construction business operator who applied for said analysis to submit reports and data.

(Notice of Results of Business Analysis)

Article 27-25 The registered business analysis organization must notify the construction business operator who applied for the analysis of the numerical results of said analysis without delay after conducting the analysis as specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Evaluation of Business Size, Etc.)

Article 27-26 (1) Evaluation of the matters listed in item (ii) of paragraph (2) of Article 27-23 (hereinafter referred to as "Evaluation of Business Size, etc.") shall be conducted by the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor.

(2) An application for an evaluation of business size, etc., shall be submitted to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who licensed the construction business, with an application form recording matters specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(3) Documents specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism as supporting documents for facts needed in the evaluation of business size, etc., must be attached to the application form set forth in the preceding paragraph.

(4) The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may, when found necessary for an evaluation of business size, etc., request the construction business operator who applied for the evaluation of business size, etc., to submit reports and data.

(Notice of the Results of the Evaluation of Business Size, Etc.)

Article 27-27 The Ministry of Land, Infrastructure, Transport and Tourism or the Prefectural Governor must notify the construction business operator who applied for the evaluation of business size, etc., of the numerical results of said evaluation of business size, etc., without delay after conducting the evaluation of business size, etc., as specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Request for Re-evaluation)

Article 27-28 A construction business operator who has a complaint concerning the results of an evaluation of business size, etc., may make a request for a re-evaluation to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who conducted said evaluation of business size, etc.

(Notice of Comprehensive Numerical Evaluation)

Article 27-29 (1) After a request from the construction business operator who applied for the evaluation of business size, etc., the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor must notify said construction business operator of the comprehensive numerical evaluation (refers to the numerical results of evaluation using the figures related to the results of the business analysis and the figures related to the results of the evaluation of business size., etc.; the same applies below) as specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism without delay.

(2) The request in the preceding paragraph shall be submitted to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who licensed the construction business of said construction business operator, with the figures related to the results of the business analysis received from the registered business analysis organization under the provision of Article 27-25.

(3) After a request from an owner of the construction work in paragraph (1) of Article 27-23, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor must notify said owner of the comprehensive numerical evaluation relating to the construction business operator in the same paragraph (when there has been a request from said owner for the figures related to the results of the business analysis and the figures related to the results of the evaluation of business size, etc., of the construction business operator in the same paragraph, includes these figures) in accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism. Notwithstanding that notification of the figures relating to the results of the evaluation of business size, etc., shall suffice when the request is from an owner in respect of a construction business operator who has not made a request under the provision of paragraph (1).

(Fees)

Article 27-30 A person who wishes to make the application in paragraph (2) of Article 27-26 or the request in paragraph (1) of the preceding Article to the Minister of Land, Infrastructure, Transport and Tourism must pay the fee stipulated by Cabinet Order in consideration of the actual cost to the government in accordance with the provisions of the Cabinet Order.

(Registration)

Article 27-31 (1) The registration in paragraph (1) of Article 27-24 shall be granted on the basis of an application from the person who wishes to conduct business analyses.

(2) The Minister of Land, Infrastructure, Transport and Tourism must grant registration when the person who applied for registration under the provision of the preceding paragraph (hereinafter in this paragraph called "Applicant for Registration") possesses the computers (includes input-output equipment) and programs required for the business analysis (refers to those that give directives to a computer and are packaged to allow a single result to be obtained) and when none of the following apply to an entity controlled by the construction business operator required to undergo the business evaluation under the provision of paragraph (1) of Article 27-23. In this case, procedures necessary for registration shall be specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(i) When the applicant for registration is a stock company, and its parent company is a construction business operator.

(ii) Officers or employees of the construction business operator (includes those who have been officers or employees of said construction business operator within the past two years) account for more than one half of the officers (employees with the right to execute business in the case of a membership company) of the applicant for registration.

(iii) The applicant for registration (the officer with the right of representation in the case of a juridical person) is an officer or employee of the construction business operator (includes a person who has been an officer or employee of the said construction business operator within the past two years).

(3) Registration shall record the matters listed below in the ledger of registried business analysis organizations.

(i) The date of registration and the registration number.

(ii) The name or designation and the address of the registered to business analysis organization, and the name of its representative in the case of a juridical person.

(iii) The location of the office where the registered business analysis organization conducts analyses.

(Mutatis Mutandis Application)

Article 27-32 The provisions of Article 26-5, Article 26-7 through Article 26-16 and Article 26-19 through Article 26-21 shall apply mutatis mutandis to the registered business analysis organization. In this case, the wording of the provisions listed in the upper column of the following table listed in the middle column of the same table shall be read as the wording listed in the lower column of the same table respectively.

|Article 26-5|Training provided by a person who corresponds to|A person who corresponds to|

|Article 26-5; paragraph (1) of Article 26-7; item (v) of Article 26-15; and item (i) and item (iv) of Article 26-21|Paragraph (4) of Article 26|Paragraph (1) of Article 27-24|

|Item (ii) of Article 26-5 and item (iv) of Article 26-21|Article 26-15|Article 26-15 with mutatis mutandis application in Article 27-32|

|Item (ii) of Article 26-5|Training in paragraph (4) of Article 26|Paragraph (1) of Article 27-24|

|Item (iii) of Article 26-5|Training in paragraph (4) of Article 26|Operations of the business analysis organization|

|Paragraph (2) of Article 26-7|The preceding three Articles|Article 26-5 with mutatis mutandis application in Article 27-31 and Article 27-32|

|Heading of Article 26-8|Relating to the provision of training|Of the business analysis organization|

|Article 26-8|Requirements listed in item (i) and item (ii) of paragraph (1) of Article 26-6, and the standards established by Ministry of Land, Infrastructure, Transport and Tourism Ordinance|The standards established by Ministry of Land, Infrastructure, Transport and Tourism Ordinance|

|Article 26-8 and Article 26-16|Training|Business analysis|

|Article 26-9|Item (ii) or item (iii) of paragraph (2) of Article 26-6|Item (ii) or item (iii) of paragraph (3) of Article 27-31|

|Article 26-10 (includes heading)|Training Regulations|Business Analysis Regulations|

|Paragraph (1) of Article 26-10|Concerning training|Concerning business analysis operations|

||Training|Business analysis operations|

|Paragraph (2) of Article 26-10 and Article 26-14|Providing training/method of its training|Providing business analysis/method of its business analysis|

|Paragraph (2) of Article 26-10|Relating to training|Relating to business analysis|

|Article 26-11 and item (iv) and item (v) of Article 26-21|Training|Business analysis operations|

|Paragraph (2) of Article 26-12|Construction business operator|Construction business operator provided for in paragraph (2) of Article 27-31|

|Article 26-13|Training|Registered business analysis organization|

||Paragraph (1) of Article 26-6|Paragraph (2) of Article 27-31|

|Article 26-14|The registered training institution ...Article 26-8|The registered business analysis organization ...Article 26-8 or Article 27-33 with mutatis mutandis application to Article 27-32|

||Training in accordance with the provision of the same Article|Business analysis operations in accordance with these provisions|

|Article 26-15|The registration of the training that the registered training institution provides|The registration|

||All training|All business analysis operations|

|Item (i) of Article 26-15|Item (i) or item (iii) of Article 26-5|Item (i) or item (iii) of Article 26-5 with mutatis mutandis application in Article 27-32|

|Item (ii) of Article 26-15 and item (ii) of Article 26-21|Article 26-9|Article 26-9 with mutatis mutandis application in Article 27-32|

|Item (iii) of Article 26-15|Each of the items in paragraph (2) of Article 26-12|Each of the items in paragraph (2) of Article 26-12 with mutatis mutandis application in Article 27-32|

|Item (iv) of Article 26-15|The preceding two Articles|Article 26-13 or the preceding Article with mutatis mutandis application to Article 27-32|

|Item (iii) of Article 26-21|Article 26-11|Article 26-11 with mutatis mutandis application in Article 27-32|

|Item (v) of Article 26-21|Article 26-17|Article 27-35|

(Duty to Conduct a Business Analysis)

Article 27-33 When requested to conduct a business analysis, the registered business analysis organization must conduct a business analysis without delay except when there is justifiable grounds.

(Duty of Secrecy)

Article 27-34 The officers and employees, and former officers and employees, of the registered business analysis organization must not divulge the confidential information they have obtained from conducting an analysis.

(Implementation of Business Analysis by the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor)

Article 27-35 (1) When there is no person with the registration in paragraph (1) of Article 27-24, when there has been notification of a total or partial suspension or abolition of business analysis under the provision of Article 26-11 with mutatis mutandis application in Article 27-32, when registration in paragraph (1) of Article 27-24 is rescinded under the provision of Article 26-15 with mutatis mutandis application in Article 27-32, or the registered business analysis organization has been ordered to cease some or all of the analysis, when it is impossible for the registered business analysis organization to conduct some or all business analysis due to natural disaster or other cause and when the Minister of Land, Infrastructure, Transport and Tourism otherwise finds it necessary, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may conduct some or all business analysis directly.

(2) When it is decided that the Prefectural Governor will conduct a business analysis under the provision of the preceding paragraph or when the reason for deciding that the Prefectural Governor will conduct said analysis under the provision of the preceding paragraph no longer exists, the Minister of Land, Infrastructure, Transport and Tourism must promptly give notification to that effect to the said Prefectural Governor.

(3) When the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor conducts some or all business analyses directly under the provision of paragraph (1), the handover of business analysis and other necessary matters shall be specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(4) The provision of Article 27-30 shall apply to a person who wishes to undergo a business analysis conducted by the Minister of Land, Infrastructure, Transport and Tourism under the provision of paragraph (1).

(5) When deciding to conduct some or all operations for business analysis directly under the provision of paragraph (1), or when deciding not to conduct some or all of said analysis operations which had been conducted directly, the Prefectural Governor must make publication to this effect in the official gazette of the said prefecture.

(Delegation to the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism)

Article 27-36 Important matters relating to the business evaluation and the re-evaluation under Article 27-28 shall be determined by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, except for the provisions made in this Chapter.

Chapter IV-3 Construction Trade Associations

(Notification)

Article 27-37 Associations and foundations provided for under the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism with the objective of ensuring the proper execution of construction work through surveys, research and training relating to the construction business and seeking the sound development of the construction business (hereinafter referred to as "construction trade associations") shall notify the matters stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism to the Minister of Land, Infrastructure, Transport and Tourism of the Prefectural Governor in accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Reports, Etc.)

Article 27-38 The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may request the construction trade association making the notification in the preceding Article to report on the matters necessary to ensure the proper execution and sound development of the construction business.

Chapter V Supervision

(Instructions and Suspension of Business)

Article 28 (1) Where a licensed construction business operator is covered by any one of the following items or has violated the provisions of this Act (except for Article 19-3, Article 19-4 and Article 24-3 through Article 24-5, including paragraph (4) of Article 24-7 with mutatis mutandis application under the provision of paragraph (3) of Article 13 of the Act for Promoting Proper Tendering and Contracting for Public Works (Act No. 127 of 2000, called "Act for Promoting Proper Tendering and Contracting" below; the same applies in paragraph (4)) or paragraph (1) or paragraph (2) of Article 13 of the Act for Promoting Proper Tendering and Contracting, or paragraph (6) of Article 3, paragraph (1) of Article 4, paragraph (2) of Article 7, paragraph (1) or paragraph (2) of Article 8, or Article 10 of the Act on Assuring the Fulfillment of Liability for Faults in Specified Housing (Act No. 66 of 2007, called "Fulfillment Assurance Act" below in this Article), the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may issue the necessary instructions to said construction business operator. Where a special construction business operator does not follow the recommendations under the provisions of paragraph (2) or paragraph (3) of Article 41 and where found necessary, the same shall apply.

(i) Where there is a danger to the public because the construction business operator did not execute the construction work properly, or where there is a grave risk of danger.

(ii) Where the construction business operator has committed a dishonest act with regard to a contract.

(iii) Where the construction business operator (where the construction business operator is a juridical person, said juridical person and its officers) or its employees as stipulated under Cabinet Order have infringed other laws and regulations concerning the business (excluding the Act for Promoting Proper Tendering and Contracting, the Fulfillment Assurance Act and orders based on them) and are deemed unsuitable as construction business operators.

(iv) Where the construction business operator has violated the provisions of Article 22.

(v) Where the chief engineer or the managing engineer provided for under paragraph (1) or paragraph (2) of Article 26 is grossly unsuited to the management of the construction work, and it is deemed to be in the public interest to replace him/her.

(vi) Where a construction business operator has violated the provisions of paragraph (1) of Article 3 by concluding a subcontract with a person operating a construction business that has not received a license under the same paragraph.

(vii) Where a construction business operator has concluded a subcontract where the amount of the subcontract fee is more than that provided for under Cabinet Order for item (ii) of paragraph (1) of Article 3 with a person operating a construction business other than a special construction business operator.

(viii) Where a construction business operator has knowingly concluded a subcontract with a person who has been ordered to suspend business under the provisions of paragraph (3) or a person who has been prohibited from business under the provisions of paragraph (1) of Article 29-4 within the scope of the suspended or prohibited business.

(ix) Where a construction business operator has infringed the provisions of paragraph (1) of Article 3, Article 5, or paragraph (1) of Article 7 of the Fulfillment Assurance Law.

(2) The Prefectural Governor may issue the necessary instructions where a person operating a construction business who has not received a license under the provisions of paragraph (1) of Article 3 and is executing construction work within the area of his/her jurisdiction falls under any of the items below.

(i) Where there is a danger to the public because the person operating the construction business did not execute the construction work properly or where there is a grave risk of danger.

(ii) Where the person operating the construction business has committed a dishonest act with regard to a contract.

(3) Where a licensed construction business operator falls under any of the items of paragraph (1) or does not follow the instructions based on the provisions of the same paragraph or the following paragraph or a person operating a construction business falls under any of the items of the preceding paragraph or does not follow the instructions under the provisions of the same paragraph, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may order that person to suspend all or part of their business for a period of no more than one year.

(4) A Prefectural Governor may issue the necessary instructions to a construction business operator who has received a license from the Minister of Land, Infrastructure, Transport and Tourism or from another Prefectural Governor and is operating a business within said prefecture when said construction business operator is covered by any one of the items in paragraph (1) in relation to business in said prefecture or has violated the provisions of this Act or the provisions of paragraph (1) or paragraph (2) of Article 13 of the Act for Promoting Proper Tendering and Contracting, or the provisions of paragraph (6) of Article 3, paragraph (1) of Article 4, paragraph (2) of Article 7, paragraph (1) or paragraph (2) of Article 8, or Article 10 of the Fulfillment Assurance Act.

(5) A Prefectural Governor may order a construction business operator who has received a license from the Minister of Land, Infrastructure, Transport and Tourism or from another Prefectural Governor and is operating a business within said prefecture to suspend all or part of said business for a period of no more than one year when said construction business operator falls under any of the items of paragraph (1) with relation to business in said prefecture or does not follow the instructions under the provisions of the same paragraph or the preceding paragraph.

(6) When imposing the penalties in the preceding two paragraphs, the Prefectural Governor shall immediately notify the Minister of Land, Infrastructure, Transport and Tourism where said construction business operator received a license from the Minister of Land, Infrastructure, Transport and Tourism and the other Prefectural Governor where said construction business operator received a license from another Prefectural Governor.

(7) The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may, when issuing instructions to a construction business operator who comes under item (i) or item (iii) of paragraph (1) or a person operating a construction business without the license in paragraph (1) of Article 3 who comes under item (i) of paragraph (2), make recommendations to orderers concerning the appropriate measures to be taken where found particularly necessary.

(Rescission of License)

Article 29 (1) When a licensed construction business operator is covered by any of the following items, the Minister of Land, Infrastructure, Transport and Tourism shall rescind the license of said construction business operator.

(i) Where a construction business operator with a general construction business license no longer meets the requirements listed in item (i) or item (ii) of Article 7 and where a special construction business operator no longer meets the requirements listed in item (i) of the same Article or item (ii) of Article 15.

(ii) Where a construction business operator falls under any of the provisions in item (i) or item (vii) through item (xi) of Article 8 (including cases where Article 17 applies).

(ii)-2 Where a person operating a construction business falls under any of the items of paragraph (1) of Article 9 (including cases where Article 17 applies) and has not received a general construction business license or a special construction business license.

(iii) Where a construction business operator has not commenced business within one year of receiving a license or where business has been continuously suspended for one year or more.

(iv) Where a construction business operator falls under any of the items of Article 12 (including cases where Article 17 applies).

(v) Where a construction business operator received the license in paragraph (1) of Article 3 through improper means (including the renewal of license in paragraph (3) of the same Article).

(vi) Where a construction business operator falls under any of the items of paragraph (1) of the preceding Article and the circumstances are particularly severe, or where the construction business operator has violated the business suspension penalties under the provisions of paragraph (3) or paragraph (5) of the same Article.

(2) Where a licensed construction business operator has violated conditions attached under the provisions of paragraph (1) of Article 3-2, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may rescind the license of said construction business operator.

Article 29-2 (1) When the location of the office of a construction business operator cannot be confirmed or when the location of the construction business operator cannot be confirmed (refers to the location of the officers in the case of a juridical person and includes the location of the manager in the case of a private individual), and there is no response from said construction business operator within thirty days of a public notice in Kanpo, the Official Gazette, or the gazette of the relevant prefecture, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may rescind the license of said construction business operator.

(2) The provisions of Chapter III of the Administrative Procedures Law shall not apply to penalties under the provisions set forth in the preceding paragraph.

(Measures for Construction Work in the Event of License Rescission)

Article 29-3 (1) Where a construction business license has lost its validity under the provisions of paragraph (3) of Article 3, the person who was the construction business operator to whom said license related or his/her general successor where business suspension has been ordered based on the provisions of paragraph (3) or paragraph (5) of Article 28 or where the construction business license has been rescinded under the provisions of the preceding two Articles, the person who received said penalties or his/her general successor may execute construction work contracted for prior to the loss of validity of the license or prior to said penalties. In such cases, these persons shall notify the orderer of said construction work within two weeks of the license losing its validity or of receiving said penalties.

(2) Where a person who was a special construction business operator or his/her general successor or the general successor of a special construction business operator executes construction work based on the provisions of the preceding paragraph, the provisions of Article 16 shall not apply.

(3) Notwithstanding the provisions of paragraph (1), the Minister of Land, Infrastructure, Transport and Tourism of the Prefectural Governor may prohibit the execution of said construction work where found necessary in the public interest.

(4) A person executing construction work under the provisions of paragraph (1) who was a construction business operator or his/her general successor shall be deemed as a construction business operator for the purposes of the completion of said construction work.

(5) The orderer of construction work may cancel a contract for construction work within thirty days of the date of receiving the notice based on the provisions of paragraph (1) or from the date when he/she became aware that the license had lost its validity or that penalties had been imposed under the provisions of the same paragraph.

(Prohibition of Business)

Article 29-4 (1) When ordering a construction business operator or another person operating a construction business to suspend operations under the provisions of paragraph (3) or paragraph (5) of Article 28, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor shall prohibit the officers and the employees stipulated by Cabinet Order as having liability for the cause of said penalties (including persons who were officers or employees stipulated under Cabinet Order within 60 days of the said penalty, the same shall apply in the following paragraph) where the operator is a juridical person, and the private individual and his/her employees stipulated under Cabinet Order as having liability for the cause of said penalties where the operator is a private individual, from commencing a new business in the area where said suspension has been ordered for the same period as the period of the suspension (includes becoming the officer of a juridical person that conducts business in the area where the said suspension was ordered).

(2) When rescinding the license of a construction business operator as a result of the application of item (v) or item (vi) of paragraph (1) of Article 29, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor shall prohibit the officers stipulated under Cabinet Order to have liability for the cause of said penalty where said construction business operator is a corporate identity, and the employees stipulated under Cabinet Order to have liability for the cause of said penalties where the construction business operator is a private individual, from commencing a new business in the construction business to which said rescission relates for five years (excludes contracting for simple construction work only as provided for by Cabinet Order in the proviso of paragraph (1) of Article 3).

(Publication of Supervisory Penalties, Etc.)

Article 29-5 (1) When imposing penalties under the provisions of paragraph (3) or paragraph (5) of Article 28, Article 29 or paragraph (1) of Article 29-2, the Minister of Land, Infrastructure, Transport and Tourism and the Prefectural Governor shall make public such penalties in accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(2) A construction business operator supervisory penalty record shall be maintained in the Ministry of Land, Infrastructure, Transport and Tourism and the prefecture.

(3) When a licensed construction business operator receives instruction under paragraph (1) or paragraph (4) of Article 28 or is ordered to suspend business under the provisions of paragraph (3) or paragraph (5) of the same Article, the Minister of Land, Infrastructure, Transport and Tourism or the Provisional Governor who granted the license shall record the date of said penalty, the details and other matters provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism in the construction business operator supervisory penalty record.

(4) The construction business operator supervisory penalty record shall be submitted to public inspection in the reading room provided for under the provisions of Article 13 (including cases where Article 17 applies).

(Reporting of Illegal Acts)

Article 30 (1) When a construction business operator commits any of the acts covered in each of the items of paragraph (1) of Article 28, the person affected may report such acts to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who granted the license to said construction business operator or the Prefectural Governor having jurisdiction over the area where the construction work is being conducted and request that the appropriate measures be taken.

(2) Where a person operating a construction business that has not received a license under the provisions of paragraph (1) of Article 3 comes under any of the items of paragraph (2) of Article 28, the person affected may report such fact to the Prefectural Governor having jurisdiction over the area where the person operating said construction business is executing said construction work and request that the appropriate measures be taken.

(Reporting and Inspections)

Article 31 (1) Where found particularly necessary the Minister of Land, Infrastructure, Transport and Tourism for all persons operating a construction business and the Prefectural Governor for persons operating a construction business within the relevant prefecture may collect the necessary reports concerning business, assets and the status of construction work or have their ministerial or prefectural employees enter offices and other locations related to the business to examine records and documents and other articles.

(2) When conducting an on the spot inspection under the provisions of the preceding paragraph, said ministerial or prefectural employees shall carry identification papers and produce them when requested to do so by the person concerned.

(3) Important matters relating to the qualifications of said ministerial or prefectural employees shall be as stipulated by Cabinet Order.

(Hearing of Witnesses)

Article 32 (1) The chairman of the hearing concerning the rescission of a license under the provisions of Article 29 shall hear the opinion of witnesses where he/she finds it necessary.

(2) The provisions of the preceding paragraph shall apply where the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor grant an opportunity for defense concerning penalties under the provisions of paragraph (1) through paragraph (5) of Article 28 and paragraph (1) or paragraph (2) of Article 29-4.

Chapter VI Central Council for Construction Business, Etc.

Article 33 Deletion

(Establishment of the Central Council for Construction Business, Etc.)

Article 34 (1) The Central Council for Construction Business shall be established in the Ministry of Land, Infrastructure, Transport and Tourism in order to preside over matters relating to the authority under this Act and the Act concerning the Prepayment Surety Business for Public Works) and the Act for Promoting Proper Tendering and Contracting.

(2) The Central Council for Construction Business shall prepare standard contract forms for construction work, requirements concerning the qualifications for participants in bidding and requirements concerning miscellaneous expenses other than material expenses and labor expenses that make up forecast prices and may recommend implementation of them.

(Organization of the Central Council for Construction Business)

Article 35 (1) The Central Council for Construction Business shall consist of no more than twenty members.

(2) The members of the Central Council for Construction Business shall be appointed by the Minister of Land, Infrastructure, Transport and Tourism from among people with academic experience, orderers of construction work and construction business operators.

(3) There shall be an equal number of members appointed from among orderers of construction work and construction business operators, and the number of these committee members may not exceed two thirds of the total number of members.

(Mutatis Mutandis Provision)

Article 36 The provisions of paragraph (1), paragraph (2) and paragraph (4) of Article 25-3 and Article 25-4 shall apply to the members of the Central Council for Construction Business.

(Specialist Members)

Article 37 (1) Specialist members may be assigned to the Central Council for Construction Business in order to examine and deliberate on specialist matters concerning the construction business.

(2) Specialist members shall be dismissed when the examination and deliberation concerning said specialist matters is terminate.

(3) The provisions of paragraph (4) of Article 25-3, Article 25-4 and paragraph (2) of Article 35 shall apply to specialist members.

(Chairman of the Central Council for Construction Business)

Article 38 (1) The Central Council for Construction Business shall appoint a chairman. The members shall co-opt the chairman from among the members with academic experience.

(2) The chairman shall preside over the affairs of the council.

(3) If the chairman has an accident, a person co-opted in advance from among the members with academic experience shall represent him/her in his/her duties.

(Delegation to Cabinet Order)

Article 39 Apart from matters provided for in this Chapter, the affairs under the jurisdiction of the Central Council for Construction Business and other important matters relating to the Central Council for Construction Business shall be as specified by Cabinet Order.

(Prefectural Council on Construction Industry)

Article 39-2 (1) Prefectures may establish a Prefectural Council on Construction Industry in order to examine and deliberate on important matters concerning the improvement of the construction business in accordance with investigations of the Prefectural Governor.

(2) Important matters concerning the Prefectural Council on Construction Industry shall be determined by regulations.

(Examination and Deliberation, Etc., by the Social Infrastructure Improvement Council)

Article 39-3 (1) The Social Infrastructure Improvement Council shall conduct investigations and deliberate on important matters concerning the improvement of the construction business in accordance with the investigations of the Minister of Land, Infrastructure, Transport and Tourism.

(2) The Social Infrastructure Improvement Council may report its opinions on matters related to the construction business to each relevant government agency.

Chapter VII Miscellaneous Provisions

(Procedural Exceptions, Etc., Relating to Computer Processing)

Article 39-4 (1) License written applications to the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor and other procedures provided for under the provisions of the Act (including designated business analysis organizations) which are stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism (hereinafter referred to as "specified written applications") may be submitted using magnetic disk (includes media that can make true recordings of specified matters using equivalent methods, hereinafter the same) in accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(2) Specified applications conducted based on the provisions of the preceding Article shall be viewed as the submission of documents provided for under the provisions of this Act which stipulates the making of said applications based on submission of documents, and the provisions of this Act shall apply (including the related penal provisions). In such cases, recording to a magnetic disk shall be viewed as filling in a document.

(Posting of Signs)

Article 40 A construction business operator shall post a sign in each business premises and construction site in accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism in a location that is clearly visible to the public which records the name of the construction business based on the classifications in the lower column of Attached Table 1 when a license has been received for a general construction business or a special construction business and other matters provided for by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Restrictions on Signs)

Article 40-2 A person operating a construction business shall not post a sign with relation to said construction business which is clearly likely to cause the misunderstanding that the construction business operator has received a license despite not having received the license provided for in paragraph (1) of Article 3.

(Preparation, Etc., of Records)

Article 40-3 In accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism, a construction business operator shall prepare records for each office that cover the matters concerning the business stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism and shall store such records and documents concerning the business specified by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Guidance, Advice and Recommendations to Persons Operating Construction Businesses and Construction Business Trade Associations)

Article 41 (1) The Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may give the necessary guidance, advice and recommendations to a person operating a construction business or a construction business trade association reported under Article 27-37 in order to ensure the proper execution of construction work and the sound development of the construction industry.

(2) When a person operating another construction business executes all or part of the construction work that a special construction business operator contracted directly from an owner and falls into arrears in the payment of wages to the workers employed for the execution of said construction work, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who granted the license of said special construction business operator may, when found necessary, recommend that said special construction business operator provide payment of wages deemed to be of equivalent value to the work on said construction work out of the wages in arrears and take other appropriate measures.

(3) When a person operating another construction business executing all or part of the construction work contracted for by a special construction business operator directly from an owner has caused injury or damage to a third party with relation to the execution of said construction work, the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who granted the license of said special construction business operator may, when found necessary, recommend that said special construction business operator provides payment of an amount deemed to be appropriate for the injury or damage incurred by said third party and take other appropriate measures.

(Request for Action, Etc., from the Fair Trade Commission)

Article 42 (1) When a licensed construction business operator has violated the provisions of Article 19-3, Article 19-4, paragraph (1) of Article 24-3, Article 24-4, or paragraph (3) or paragraph (4) of Article 24-5, and it is found that the violation is an infringement of the provisions of Article 19 of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Anti-Monopoly Act), the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor may request the Fair Trade Commission to take the appropriate measures in accordance with the provisions of the same Act.

(2) When the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor have requested measures to be taken under the provisions of the preceding Article with regard to a subcontractor who is a small or medium sized business operator (refers to small and medium sized business operators provided for under paragraph (1) of Article 2 of the Minor Enterprises Law, Act No. 154 of 1963, hereinafter in this Article the same) and a principal contractor who has concluded a subcontract, they shall notify the Officer-General of the Small and Medium Enterprises Agency without delay.

Article 42-2 (1) The Officer-General of the Small and Medium Enterprises Agency, when he/she finds it particularly necessary for the protection of subcontractors who are small and medium sized business operators, may have the main contractor or the subcontractor make a report concerning the transaction or have his/her employees enter the offices and other locations related to the business of the main contractor or the subcontractor and examine records, documents and other articles.

(2) When employees conduct the on the spot inspection provided for in the preceding paragraph, they shall carry personal identification and produce it when requested to do so by the person concerned.

(3) When the results of the report or the inspection based on the provisions of paragraph (1) show that the subcontractor who is the operator of a small or medium sized business and the main contractor who has concluded a subcontract have acted in violation of the provisions of Article 19-3, Article 19-4, paragraph (1) of Article 24-3, Article 24-4, or paragraph (3) or paragraph (4) of Article 24-5, and it is found that the action is in violation of the Article 19 of the Anti-Monopoly Act, the Officer-General of the Small and Medium Enterprises Agency may request the Fair Trade Commission to take appropriate measures in accordance with the provisions of the same Act.

(4) When requesting the measures provided for under the provisions of the preceding Article, the Officer-General of the Small and Medium Enterprises Agency shall notify the Minister of Land, Infrastructure, Transport and Tourism or the Prefectural Governor who granted the license under paragraph (1) of Article 3 to said main contractor without delay.

(Payment of Expenses by the Prefecture)

Article 43 The prefecture concerned shall pay the necessary expenses for the Prefectural Governor to enforce this Act.

(Right of Witnesses to Claim Expenses)

Article 44 Witnesses who have appeared to give testimony under the provisions of Article 32 may claim for travel expenses, daily allowance and other expenses as provided for by Cabinet Order.

(Transitional Measures)

Article 44-2 In the event of the establishment, alteration or abolition of regulations based on the provisions of this Act, the necessary transitional measures (including transitional measures for penal provisions) may be established within the limit of what is judged necessary to accompany the establishment, alteration or abolition of regulations.

(Delegation of Authority)

Article 44-3 The authority of the Minister of Land, Infrastructure, Transport and Tourism provided for under this Act may be partially delegated to the Director-General of the City and Regional Development Bureau or the Director-General of the Hokkaido Bureau in accordance with the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism.

(Application through the Prefectural Governor)

Article 44-4 A person who wishes to apply for the license in paragraph (1) of Article 3 who is a construction business operator and a person listed in each of the items of Article 12 shall apply through the Prefectural Governor stipulated by the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism in the submission of written application documents and other documents to the Minister of Land, Infrastructure, Transport and Tourism under the provisions of regulations based on this Act.

(Classification of Duties)

Article 44-5 The duties recognized as belonging to the prefecture under the provisions of the preceding Article shall be classified as category 1 statutory entrusted functions under the provisions of item (i) of paragraph (1) of Article 9 of the Local Autonomy Law (Act No. 67 of 1947).

Chapter VIII Penal Provisions

Article 45 (1) A registered business analysis organization (or its officers where the organization is a juridical person) or its employees engaged in business analysis operations shall receive a term of imprisonment of no more than three years if a bribe related to their duties is received, demanded or promised. If they commit an unlawful act or fail to take a required act, they shall receive a term of imprisonment of no more than seven years.

(2) Persons formerly provided for under the preceding paragraph who, while in office, were solicited and committed an unlawful act or took a bribe for not taking a required act in relation to their duties, or who demanded or received the promise of a bribe, shall receive a term of imprisonment of no more than three years.

(3) Persons provided for under paragraph (1) who solicited a third party to furnish a bribe or to promise to furnish a bribe related to their duties shall receive a term of imprisonment of no more than three years.

(4) A bribe received from a criminal or sympathetic third party shall be confiscated. When some or all of it cannot be confiscated, the market value shall be imposed as a penalty.

Article 46 (1) A person who furnishes, requests or promises a bribe as provided in paragraph (1) through paragraph (3) of the preceding Article shall receive a term of imprisonment of no more than three years or a fine of no more than two million yen.

(2) When a person who committed an offense set forth in the preceding paragraph surrenders voluntarily, the person may receive a more lenient sentence or be exempted from punishment.

Article 47 (1) Persons falling under any of the following items shall receive a term of imprisonment of no more than three years or a fine of no more than three million yen.

(i) A person operating a construction business which has not been licensed in violation of the provisions of paragraph (1) of Article 3.

(i)-2 A person who has concluded a subcontract in violation of the provisions of Article 16.

(ii) A person operating a construction business in violation of business suspension penalties under the provisions of paragraph (3) or paragraph (5) of Article 28.

(ii)-2 A person operating a construction business in violation of business prohibition penalties under the provisions of paragraph (1) of Article 29-4.

(iii) A person who has received the license in paragraph (1) of Article 3 (including the renewal of license in paragraph (3) of the same Article) on the basis of false or misleading statements.

(2) Depending on the circumstances, both a term of imprisonment and a fine may be imposed on a person who has committed the offenses set forth in the preceding paragraph.

Article 48 Persons who have violated the provision of paragraph (1) of Article 27-7 or Article 27-34 shall receive a term of imprisonment of no more than one year or a fine of no more than one million yen.

Article 49 When a registered training institution, a designated examining body, a designated certification organization or a registered business analysis organization has acted in violation of an order to suspend training, examination affairs, certification work or business analysis under the provisions of Article 26-15 (including cases of mutatis mutandis application in paragraph (5) of Article 27-32) or paragraph (2) of Article 27-14 (including cases of mutatis mutandis application in paragraph (5) of Article 27-19), the officers or the employees (called "officers or employees of the registered training institution, etc.," in Article 51) shall receive a term of imprisonment of no more than one year or a fine of no more than one million yen.

Article 50 (1) Persons covered by any one of the following items shall receive a term of imprisonment of no more than six months or a fine of no more than one million yen.

(i) A person who has made false entries on the license application form provided for under the provisions of Article 5 (including cases where Article 17 applies) or documents provided for under the provisions of paragraph (1) of Article 6 (including cases where Article 17 applies) and has submitted them.

(ii) A person who has failed to submit the documents provided for under the provisions of paragraph (1) through paragraph (4) of Article 11 (including cases where Article 17 applies) or who has made false entries and submitted them.

(iii) A person who has failed to give the notification provided for under the provisions of paragraph (5) of Article 11 (including cases where Article 17 applies).

(iv) A person who has made false entries on the application forms specified in paragraph (2) of Article 27-24 or paragraph (2) of Article 27-26 or the documents specified in paragraph (3) of Article 27-24 or paragraph (3) of Article 27-26 and submitted them.

(2) Depending on circumstances, a person who has committed the offenses in set forth in the preceding paragraph may receive both a term of imprisonment and a fine.

Article 51 When any one of the following items applies, the officers or employees of the registered training institution, etc., that committed the violation shall receive a fine of no more than 500,000 yen.

(i) Discontinuing all training or operations for business analysis without the notification specified in Article 26-11 (including cases of mutatis mutandis application in Article 27-32) or discontinuing all testing or certification operations without the permission specified in paragraph (1) of Article 27-13 (including cases of mutatis mutandis application in paragraph (5) of Article 27-29).

(ii) Failing to prepare records, failing to make entries in the records, making false entries in the records or failing to store records in violation of the provisions of Article 26-16 (including cases of mutatis mutandis application in Article 27-32) or Article 27-10.

(iii) Failing to report, or making a false report when required to make a report, under the provisions of Article 26-19 (including cases of mutatis mutandis application in Article 27-32) or paragraph (1) of Article 27-12 (including cases of mutatis mutandis application in paragraph (5) of Article 27-19; the same applies below) or refusing, obstructing or evading an inspection under the provisions of Article 26-20 (including cases of mutatis mutandis application in Article 27-32) or paragraph (1) of Article 27-12.

Article 52 Persons covered by any one of the items below shall receive a fine of no more than one million yen.

(i) A person who has not assigned the chief engineer or the managing engineer specified under the provisions of paragraphs (1) through (3) of Article 26.

(ii) A person who has violated the provisions of Article 26-2.

(iii) A person who has not given notice under the provisions of the latter part of paragraph (1) of Article 29-3.

(iv) A person who has failed to make a report or who has failed to submit data or who has submitted a false report or who has submitted false documents under the provisions of paragraph (4) of Article 27-4 or paragraph (4) of Article 27-26.

(v) A person who has failed to make a report under the provisions of paragraph (1) of Article 31 or paragraph (1) of Article 42-2 or who has made a false report.

(vi) A person who has refused, obstructed or evaded the inspection stipulated under the provisions of paragraph (1) of Article 31 or paragraph (1) of Article 42-2.

Article 53 When the representatives of a juridical person or the representative employee or other staff of a juridical person or an individual person has committed an offense provided for in any of the following items with regard to the business or assets of the juridical person or the individual person, the juridical person shall also be subject to the punishuments in the relevant items, and the individual persons shall also be subject to the punishuments in the relevant Articles in addition to the offender.

(i) Article 47, a maximum fine of 100 million yen

(ii) Article 50 and the preceding Article, the fine provided for in each Article

Article 54 A person who fails to prepare financial statements, etc., in violation of the provision of paragraph (1) of Article 26-12 (including cases of mutatis mutandis application in Article 27-32), fails to enter the matters that must be recorded in financial statements, etc., or who makes false entries, and a person who refuses a request under the provision of each of the items in paragraph (2) of Article 26-12 (including cases of mutatis mutandis application in Article 27-32) without justifiable grounds shall receive a non-penal fine of no more than 200,000 yen.

Article 55 Persons covered by any one of the following items shall receive a non-penal fine of no more than 100,000 yen.

(i) A person who has neglected to give the notification under the provisions of Article 12 (including cases where Article 17 applies).

(ii) A person who has failed to respond to a request to appear under the provisions of paragraph (3) of Article 25-13 with no proper cause.

(iii) A person who has failed to post the signs provided for under Article 40.

(iv) A person who has violated the provisions of Article 40-2.

(v) A person who has failed to keep records, enter records, who has made false entries in records or who has failed to store records and documents in violation of the provisions of Article 40-3.

Attached Table 1

|General civil engineering work|Civil engineering business|

|General architectural and construction work|Architectural and construction business|

|Carpentry work|Carpentry business|

|Plastering work|Plastering business|

|Scaffolding, excavation and concreting work|Scaffolding and excavation business|

|Masonry work|Masonry business|

|Roofing work|Roofing business|

|Electrical contracting work|Electrical contracting business|

|Plumbing work|Plumbing business|

|Tiling, roof tiling and block work|Tiling, roofing and block business|

|Steel structure work|Steel structure contracting business|

|Steel reinforcement work|Steel reinforcement business|

|Paving work|Paving business|

|Dredging work|Dredging business|

|Sheet metal work|Sheet metal business|

|Glazing work|Glazing business|

|Painting work|Painting business|

|Waterproofing work|Waterproofing business|

|Interior finishing work|Interior finishing business|

|Machinery, equipment, and facility work|Machinery, equipment, and facility business|

|Heat insulation work|Heat insulation business|

|Telecommunications engineering|Telecommunication engineering business|

|Landscaping work|Landscaping business|

|Drilling work|Drilling business|

|Cabinetmaking work|Cabinetmaking business|

|Water supply facilities work|Water supply facilities business|

|Firefighting facilities work|Firefighting facilities business|

|Sanitation facilities work|Sanitation facilities business|

Attached Table 2 (Related to Article 26-6) Attached Table 2 (Related to Article 26-6)

|(1)|Subjects related to civil engineering (including theses related to agricultural engineering, mining engineering, forestry engineering, erosion control, flood control, afforestation and landscaping).|

|(2)|Subjects related to urban engineering.|

|(3)|Subjects related to sanitation engineering.|

|(4)|Subjects related to transport engineering.|

|(5)|Subjects related to architecture.|

|(6)|Subjects related to electrical engineering.|

|(7)|Subjects related to telecommunications engineering.|

|(8)|Subjects related to mechanical engineering.|

|(9)|Subjects related to forestry.|

|(10)|Subjects related to mining engineering.|