Penalties for non-compliance
What are the penalties for non-compliance?
The CAA will investigate the activities of a retailer / promoter that it suspects is violating the AAUPMR. The CAA will give that retailer / promoter the opportunity to offer evidence in its favour and / or take measures to end the practices that the CAA views as violations. If a retailer/promoter refuses to cooperate with the CAA or provides false information to the CAA upon such investigation, the responsible individual of the retailer/promoter is punishable by up to one year's imprisonment or a criminal fine of up to ¥3,000,000 (approx. US$27,400) and the company employing the individual may be made subject to a fine of the same amount. If the CAA is not satisfied by the evidence and / or actions of the retailer it may issue a formal cease-and-desist order (CDO) to end the offending practice. Issuance of and compliance with a CDO is an involved process requiring the participation of the retailer / promoter. The enforcement hearings are often drawn out, involving multiple meetings with regulators and submissions of drafts of improvement plans.
CDOs are publicly published and can be damaging to the reputation of the retailer found in breach.
Violation of a CDO is punishable by up to two years imprisonment or a criminal fine of up to ¥3,000,000 (approx. US$27,400) for the responsible individual. In addition to the above sanctions on the individual, the company where employing the individual may be made subject to a fine of up to ¥300,000,000 (approx. US$2,739,000). However, fines and prison sentences are rarely imposed.