PRICE ADJUSTMENT PUBLIC CORPORATION LAW Chapter 1. General Provisions

Art.1. The Price Adjustment Public Corporation shall have for its object the performance of appropriate and equitable adjustment of such prices, etc. as designated by the Director-General of the Board of Price (hereinafter referred to as "designated prices, etc." ) in accordance with the fundamental policy and program set up or to be set up by the Director-General of the Board of Economic Stabilization. The Prices, etc. prescribed in the preceding paragraph shall mean and include prices, freight rates and other payments for benefits received. The Price Adjustment Public Corporation shall be a juridical person.

Art.2. The main office of the Price Adjustment Public Corporation shall be established in Tokyo. The Price Adjustment Public Corporation may with the approval of the Director-General of the Board of Price establish branch offices where essential for the purposes of carrying out business relative to adjustment of prices, etc.

Art.3. The authorized fixed funds of the Price Adjustment Public Corporation shall be \30,000,000. The authorized fixed funds prescribed in the preceding paragraph shall be subscribed exclusively by the Government. Operating funds shall be obtained by loan when necessary from the Reconstruction Finance Bank.

Art.4. The Price Adjustment Public Corporation shall stipulate the following matters in its Articles of Incorporation: 1. Object, 2. Name, 3. Location of office, 4. Matters relative to the amount of the authorized fixed funds, 5. Matters relative to officer, 6. Matters relative to business and its execution, 7. Matters relative to accounting, and 8. Methods of giving public notices. The Articles of Incorporation may be revised with the approval of the Director-General of the Board of Price and the Director-General of the Board of Economic Stabilization.

Art.5. The Price Adjustment Public Corporation shall register as prescribed by Imperial Ordinances. The matters required to be registered as provided for in the preceding paragraph shall not be valid against a third person unless they are registered.

Art.6. The Price Adjustment Public Corporation shall not be levied income tax and corporation tax. The prefecture, city, town, village and those corresponding to them shall not levy local taxes on the enterprise of the Price Adjustment Public Corporation. However, this shall not apply where the Ministers for Home Affairs and of Finance have approved under special circumstances.

Art.7. The Price Adjustment Public Corporation shall be dissolved by order of the Director-General of the Board of Economic Stabilization. The Director-General of the Board of Economic Stabilization shall inquire to the Director-General of the Board of Price, in case he issues an order by the preceding paragraph. In this case, however, the final decision and order will be the responsibility of the Director-General of the Board of Economic Stabilization. In addition to the matters prescribed in the preceding paragraph those necessary for dissolution of the Price Adjustment Public Corporation shall be prescribed by Imperial Ordinance.

Art.8. Any person other than the Price Adjustment Public Corporation shall not use the words Price Adjustment Public Corporation or similar words in his firm name.

Art.9. The provisions of Articles 44, 50, 54 and 57 of the Civil Code and Article 35, paragraph 1 of the Non-litigant Case Procedure Law shall apply correspondingly to the Price Adjustment Public Corporation.

Chapter 2. Officers and Employees

Art.10. The Price Adjustment Public Corporation shall have as its officers one president, one vicepresident, two or more directors and one or more auditors. The president shall represent the Price Adjustment Public Corporation and supervise its business in accordance with the provisions of Article 15. The vice-president shall as prescribed in the Articles of Incorporation represent the Price Adjustment Public Corporation, assist the president in conducting business of the Public Corporation, act for him in case he cannot take his duty, and perform his functions in case his post becomes vacant. The directors shall as prescribed in the Articles of Incorporation represent the Price Adjustment Public Corporation, assist the president and vice-president in conducting business of the Public Corporation, and act for them in case they cannot take their duties and perform their functions in case their positions become vacant. The auditors shall audit the business of the Price Adjustment Public Corporation.

Art.11. The president, vice-president, directors and auditors shall be appointed by the Director-General of the Board of Price.

Art.12. The president, vice-president and directors may in accordance with the provisions of the Articles of Incorporation delegate power to employees of Price Adjustment Public Corporation who shall have authority to perform all juridical and nonjuridical matters in regard to the affairs of the main or branch offices of the Public Corporation.

Art.13. The officers and employees shall not be permitted to be stockholders or employees or to have any beneficial interests in any company or enterprise which engage in the production, refining, processing, storage, purchase, sale or transport of those commodities which are the objects of the supply for designated prices, etc.

Art.14. The officers and employees or the Price Adjustment Public Corporation shall be government officials or employees. The President shall be official of the same class as the Vice-Director-General of the Board of Price and other officers shall be first class officials or employees of equivalent rank and other employees be first, second or third class officials or employees of equivalent ranks. Fixed number shall be set by the Director-General of the Board of Price. The officers and employees of the Price Adjustment Public Corporation shall be governed by established laws and ordinances relating to officialdom of the Government. Provided however, that the competent Minister will stipulate the special exceptions concerning the amount of salaries and duties, etc. with the approval of the Director-General of the Board of Economic Stabilization, these matters shall be governed by such special stipulations.

Chapter 3. Business

Art.15. The Price Adjustment Public Corporation shall under the direction and supervision of the Director-General of the Board of Price in accordance with the fundamental policy and program set up or to be set up by the Director-General of the Board of Economic Stabilization perform the following business: 1. Receiving or payment of money for the purpose of adjustment of prices, etc. based on the policy set up or to be set up by the DirectorGeneral of the Board of Economic Stabilization; 2. Purchase and resale for the purpose of adjustment of prices, etc. based on the policy set up or to be set up by the Director-General of the Board of Economic Stabilization; 3. Business in pursuance of the business prescribed in the, preceding clauses.

Art.16. The Price Adjustment Public Corporation at the commencement of its functioning shall establish its methods of doing business and submit the same to the Director-General of the Board of Economic Stabilization for approval. This shall also apply to where a change is to be made thereto. The Director-General of the Board of Economic Stabilization shall inquire to the Director-General of the Board of Price, in case he approves by the preceding paragraph. In this case, however, the final approval will be the responsibility of the Director-General of the Board of Economic Stabilization.

Art.17. The Price Adjustment Public Corporation shall at the beginning of the first and second period of every business year establish a business program for every six month and submit the same to the Director-General of the Board of Economic Stabilization for his approval. This shall also apply to where a change is to be made thereto. The Director-General of the Board of Economic Stabilization shall inquire to the Director-General of the Board of Price and the Minister of Finance, in case he approves by the preceding paragraph. In this case, however, the final approval will be the responsibility of the Director-General of the Board of Economic Stabilization.

Chapter 4. Accounting

Art.18. The business year of the Price Adjustment Public Corporation shall be from April each year to March of the following year and it shall be devided into the first and second periods.

Art.19. The Price Adjustment Public Corporation shall prepare a statement of assets, a blance sheet, and a statement of profit and loss for every period set forth in the preceding Article and submit them to the Director-General of the Economic Stabilization Board for his approval, within two months after every business year has passed. The Director-General of the Board of Economic Stabilization shall inquire to the Director-General of the Board of Price and Minister of Finance, in case he approves by the preceding paragraph. In this case, however, the final approval will be the responsibility of the Director-General of the Board of Economic Stabilization. The Price Adjustment Public Corporation shall, when it has obtained the approval of the Director-General of the Board of Economic Stabilization in accordance with the provisions of paragraph 1, make a public notice of the statement of assets, balance sheet, and statement of profit and loss and keep them together with the Articles of Incorporation in each office. The statement of assets, balance sheet, and a statement of profit and loss referred to in the preceding paragraph shall be audited by the Board of Audit for its approval. The Price Adjustment Public Corporation shall with an approval of the Director-General of the Board of Economic Stabilization pay its profits to the national treasury in accordance with the provisions of Ordinance. All books, documents and records of the Price Adjustment Public Corporation shall be entered orderly and clearly in order to be available for inspection by the Board of Audit, the Board of Economic Stabilization and the competent government offices. The Board of Audit shall arrange for a continual and accurate auditing.

Chapter 5. Supervision and Fostering

Art.20. The Director-General of the Board of Economic Stabilization shall direct and supervise the Price Adjustment Public Corporation in connection with the fundamental policy and program set up or to be set up by the Director-General of the Board of Economic Stabilization. The Director-General of the Board of Economic Stabilization, when deemed necessary to secure appropriate adjustment of prices, etc., may issue order to the Price Adjustment Public Corporation necessary for its supervision. The Director-General of the Board of Price when deemed necessary to secure appropriate adjustment of prices, etc., may issue order to the Price Adjustment Public Corporation necessary for its supervision in accordance with the fundamental policy and program set up or to be set up by the Director-General of the Board of Economic Stabilization. The Director-General of the Board of Price, or the Director-General of the Board of Economic Stabilization may, when deemed necessary, have the Price Adjustment Public Corporation submit a report or have an official concerned inspect a necessary place to examine the state of business, books, documents or any other necessary matters. The Price Adjustment Public Corporation may, when it deems necessary, demand those who engage in the business of supplying for designated prices, etc.(hereinafter called dealers), those who are in possession of the commodities owned by the dealers or those who receive the supply for designated prices, etc. from dealers to report on price adjustment, to present papers or to compile books, or it may in accordance with the provisions of ordinance let officials concerned inspect necessary places and examine the conditions of business or books, papers and other necessary matters. The officials concerned, when making inspections or examinations in accordance with the provisions of the preceding two paragraphs, shall have with them certificates identifying their status in accordance with the provisions of ordinance.

Art.21. The Price Adjustment Public Corporation shall, when deemed necessary to pay special remuneration to its officers and employees, prepare rules on remuneration for them and submit them to the Director-General of the Board of Economic Stabilization for his approval. This shall also apply to where a change is to be made thereto. The Director-General of the Board of Economic Stabilization shall inquire to the Director-General of the Board of Price and Minister of Finance, in case he approves by the preceding paragraph. In this case, however, the final approval will be the responsibility of the Director-General of the Board of Economic Stabilization.

Art.22. The Director-General of the Board of Price may remove the officer of the Price Adjustment Public Corporation in case the officer has violated laws and ordinances, Articles of Incorporation, or order issued under the present law. The Director-General of the Board of Economic Stabilization may remove the officer to the Price Adjustment Public Corporation in case he considers that the officer is not suitable for or properly carrying out his duties in connection with the objects and business of the Price Adjustment Public Corporation.

Art.23. The Director-General of the Board of Price may, when he deems necessary, order dealers to sell those commodiaties which are the objects of the supply concerned to the Price Adjustment Public Corporation in accordance with the provisions he has set forth. The Price Adjustment Public Corporation shall resell those commodities which have been sold to the Public Corporation by virtue of the order mentioned in the preceding paragraph, to the original sellers at the prices fixed by the Director-General of the Board of Price.

Art.24. The Director-General of the Board of Price may, when he deems it necessary, order those persons who receive the supply for designated prices, etc. to pay the prices, etc. to the Price Adjustment Public Corporation in accordance with the provisions he has set forth. The Price Adjustment Public Corporation shall be deemed to have been authorized by the dealers to receive the payment of the prices, etc. in cases provided for in the preceding paragraph.

Chapter 6. Penalties

Art.25. Those who have violated any order issued in accordance with the provisions of Article 23, paragraph 1 or the preceding Article, paragraph 1 shall be liable to penal servitude not exceeding five years or a fine not exceeding \50,000.

Art.26. In any of the following cases those officers or employees of the Price Adjustment Public Corporation who have committed unlawful acts shall be liable to penal servitude not exceeding five years or a fine not exceeding \50,000: 1. In case where they have carried out any business as is not prescribed in Article 15; 2. In case where they have violated any supervisory order issued by the Director-General of the Board of Economic Stabilization or the Director-General of the Board of Price in accordance with the provisions of Article 20, paragraphs 2 and 3.

Art.27. Those who have failed to make the report as prescribed in the provisions of the present law or who have made a false report, or those who have neglected to submit papers or who have submitted papers in which a false statement has been entered, or those who have neglected to compile books or who have entered a false statement in books, or those who have refused, interfered with or evaded the inspection shall be liable to penal servitude not exceeding one year or a fine not exceeding \10,000.

Art.28. Those who have committed any crime as prescribed in the preceding three Articles may be liable to both penal servitude and fine in consideration of circumstances. In case a representative of a juridical person (except the Price Adjustment Public Corporation;same hereinafter) or an agent, employee or any other person engaged by the juridical person or by a person has committed any unlawful act as prescribed in Article 25 or the preceding Article in connection with the business or the juridical persons or the person, the offender shall be liable to a penalty and the juridical person or the person shall also be liable to a fine as provided for in these Articles.

Art.29. Those who have used the name of the Price Adjustment Public Corporation or a similar name in violation of the provisions of Article 8 shall be liable to a fine not exceeding \10,000.

Supplementary Provisions:

Art.30. The present Law shall come into force as from the day of its promulgation.

Art.31. When the Price Adjustment Public Corporation is set up, control organizations which have engaged in the supply for the designated prices, etc. at any time since December 11, 1946, shall be dissolved. The liquidation of control organization prescribed in the preceding paragraph shall be completed by April 1, 1948.

Art.32. The government shall appoint an organizing committee to take charge of works relative to the establishment of the Price Adjustment Public Corporation.

Art.33. The organizing committee shall prepare Articles of Incorporation and obtain the approval of the Director-General of the Board of Price and the Director-General of the Board of Economic Stabilization to the same. The organizing committee shall, when the approval referred to in the preceding paragraph has been given, demand payment of the authorized fixed funds without delay.

Art.34. The organizing committee when payment of the authorized fixed funds has been made shall transfer its work to the president of the Price Adjustment Public Corporation without delay. When the president has taken over the work referred to in the preceding paragraph all of the presidents, vice-presidents, directors and auditors shall effect the registration of the establishment without delay. The Price Adjustment Public Corporation shall come into being upon the registration of the establishment.

Art.35. The provisions of Art.8 shall not apply for 6 months after the enforcement of this Law to these other than the Price Adjustment Public Corporation who use the name of Price Adjustment Public Corporation or similar names at the time this Law is put into effect.