Chapter I General Provisions

Article 1. The Liquor Distribution Kodan shall have for its object, the performance of the business relative to appropriate and equitable distribution of all liquors in accordance with quota program and rationing, procedures set up or to be set up by the Director-General of the Economic Stabilization Board. "Liquor" as referred to in this Law shall mean "liquor" as defined in the Liquor Tax Law. The Liquor Distribution Kodan shall be a juridical person.

Article 2. The main office of the Liquor Distribution Kodan shall be established in Tokyo. The Liquor Distribution Kodan may, with the approval of the competent Minister, establishbranch offices in the localities necessary for the performance of business operation relative to distribution.

Article 3. The authorized fixed capital of the Liquor Distribution Kodan shall be 30,000,000yen. The authorized fixed capital referred to in the preceding paragraph shall be subscribed exclusively by the Government. Working capital of the Liquor Distribution Kodan shall be obtained by loan, when necessary from the Reconstruction Finance Corporation.

Article 4. The Liquor Distribution Kodan shall stipulate for the following matters in its Articles of Incorporation: 1. Object. 2. Firm name. 3. Location of Office. 4. Matters relative to capital. 5. Matters relative to officers. 6. Matters relative to business and its execution. 7. Matters relative to accounting. 8. Matters relative to public notice. The Articles of Incorporation may be revised with the approval of the competent Minister and the Director-General of the Economic Stabilization Board.

Article 5. The Liquor Distribution Kodan shall register as prescribed by Cabinet Order. The matters required to be registered as prescribed for in the preceding paragraph shall not be valid against a third person unless they are registered.

Article 6. The Liquor Distribution Kodan 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 or the Liquor Distribution Kodan. This shall not apply to the case where the Minister for Home Affairs and Minister of Finance have approved under special circumstance.

Article 7. The Liquor Distribution Kodan shall be dissolved by nullification of the Temporary Demand and Supply Adjustment Law or by the order of the Director-General of the Economic Stabilization Board. In addition to the matters referred to in the preceding paragraph those necessary for the dissolution of the Liquor Distribution Kodan shall be prescribed by Cabinet Order.

Article 8. Any person other than the Liquor Distribution Kodan shall not use the title of the LiquorDistribution Kodan or similar title in his firm name.

Article 9. The provisions of Arts.44, 50, 54 and 57 of the Civil Code and Art.35, Par.1 of the Non-litigant Case Procedural Law shall apply correspondingly to the Liquor Distribution Kodan.

Chapter II Officers and Personnel

Article 10. The Liquor Distribution Kodan shall have as its officers one president, two or less than two vice-presidents, two or more directors and one or more auditors. The President shall represent the Liquor Distribution Kodan and administer its business in accordance with the provisions of Article 15. The Vice-presidents shall, as prescribed in the Articles of Incorporation, represent the Liquor Distribution Kodan assist the President in conducting business, act for him in case he cannot take his duty, and perform his function in case his post becomes vacant. The Directors shall, as prescribed in the Articles of Incorporation, represent the Liquor Distribution Kodan, assist the President and Vice-presidents in conducting business and act for them in case they cannot take their duties, and perform their functions in case their positions become vacant. The Auditors shall inspect the business of the Liquor Distribution Kodan.

Article 11. The President, Vice-presidents, Directors and Auditors shall be appointed by the competent Minister.

Article 12. The President, Vice-presidents and Directors may, in accordance with the provisions of the Articles of Incorporation, delegate power to personnel of the Liquor Distribution Kodan who shall have authority to perform all juridical and non-juridical matters in regard to the affairs of the main or subordinate offices.

Article 13. The officers and personnel of the Liquor Distribution Kodan shall not be permitted to be stockholders, or employees or to have any beneficial interests in any company or enterprise engaged in the production, storage purchase, sale and transport of liquors.

Article 14. The officers and personnel of the Liquor Distribution Kodan shall be government officials and personnels. The ranking of the Presidents shall be the same with that of Vice-Minister of Finance. Officers other than the President shall be of first class officials. Other personnel shall be of first, second or third class officials. The competent Minister shall fix the number of above stuff. The officers and personnel of the Liquor Distribution Kodan shall be governed by all laws and ordinances relating to the Government personnel, provided cases that the competent Minister stipulates the special exception concerning the amount of salaries, service rules and any other necessary matters with the approval of the Director-General of the Economic Stabilization Board may be exempted.

Chapter III Business

Article 15. The Liquor Distribution Kodan shall perform the following business under the direction and supervision of the competent Minister in accordance with the basic policy and program regarding the distribution of liquors as set forth by the Director-General of the Economic Stabilization Board: 1. Sole purchase and sale of all liquors at prices established by the Price Board. 2. Storage and transportation of all liquors. 3. Matters incidental to the business prescribed in the preceding items.

Article 16. The Liquor Distribution Kodan at the commencement of its functioning shall establish its method of doing business and submit the same to the Director-General of the Economic Stabilization Board for approval. This shall also apply to the case where a change is to be made thereto. The Director-General of the Economic Stabilization Board shall consult with the competent Minister in case he gives approval of the preceding paragraph. In this case, the final responsibility for approval shall lie on the Director-General of the Economic Stabilization Board.

Article 17. The Liquor Distribution Kodan shall, at the beginning of the first term and the second term of each business year, establish a business program and a financial program for every six months and submit the same to the Director-General of the Economic Stabilization Board for his approval. This shall also apply to the case where a change is made thereto. The Director-General of the Economic Stabilization Board shall consult with the competent Minister in case he gives approval of the preceding paragraph. In this case, the final responsibility for approval shall rest with the Director-General of the Economic Stabilization Board.

Chapter IV Accounting

Article 18. The business year of the Liquor Distribution Kodan shall be from April each year to March of the following year, and divided into the first term and the second term.

Article 19. The Liquor Distribution Kodan shall prepare a statement of assets, a balance sheet and a statement of profit and loss for each term of the preceding Article and submit them to the Director-General of the Economic Stabilization Board for his approval within two months after the conclusion of the respective term. The Director-General of the Economic Stabilization Board shall consult with the competent Minister in case he gives approval of the preceding paragraph. In this case, the final responsibility for approval shall rest with the Director-General of the Economic Stabilization Board. The Liquor Distribution Kodan shall, when it has obtained the approval of the Director-General of the Economic Stabilization Board prescribed in Paragraph 1, make a public notice of the statement of assets, the balance sheet and the statement of profit and loss and keep them together with the Articles of Incorporation in each office. The statement of assets, balance sheet and statement of profit and loss of the preceding paragraph shall be audited and approved by the Board of Audit. The Liquor Distribution Kodan shall, when it has obtained the approval of the Director-General of the Economic Stabilization Board, pay the entire profits to the National Treasury, as determined by stipulations of ordinance. All books, documents and records of the Liquor Distribution Kodan shall be clearly written and available for inspection by the Board of Audit, the Economic Stabilization Board and the competent Minister. The Board of Audit shall make the continual and accurate audit of them as prescribed in the preceding paragraph.

Chapter V Supervision and Fostering

Article 20. The Director-General of the Economic Stabilization Board shall direct and supervise the Liquor Distribution Kodan in regard to the basic policy and program set forth in reference to the distribution of liquors. The Director-General of the Economic Stabilization Board may, when deemed necessary to secure appropriate distribution of liquors, issue for supervision a necessary order, through the competent Minister, to the Liquor Distribution Kodan. The competent Minister may, when deemed necessary to secure appropriate and equitable distribution of liquors, issue for supervision a necessary order to the Liquor Distribution Public Corporation within the quota program and rationing precedures set up or to be set up by the Director-General of the Economic Stabilization Board. The competent Minister of the Director-General of the Economic Stabilization Board may, when deemed necessary, have the Liquor Distribution Kodan 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. In case the official concerned is sent for inspection and examination in accordance with the provisions of the preceding paragraph, he shall carry an identification certificate to prove his post as prescribed by orders.

Article 21. The Liquor Distribution Kodan shall prepare pules on remuneration for its officers and personnel when deemed necessary to pay special payment to them and submit them to the Director-General of the Economic Stabilization Board for his approval. This shall apply where a change is to be made thereto. The Director-General of the Economic Stabilization Board shall consult with the competent Minister when he gives approval provided for by the preceding paragraph. In this case, the final responsibility for approval shall rest with the Director-General of the Economic Stabilization Board.

Article 22. The competent Minister may remove an officer of the Liquor Distribution Kodan in case he violates laws and ordinance, Articles of Incorporation of orders issued on the basis of this Law. The Director-General of the Economic Stabilization Board may remove an officer of the Liquor Distribution Kodan if he considers that the officer is not suitable or properly carrying out his duties in connection with the objects and business of the Liquor Distribution Kodan.

Article 23. The competent Minister may, when deemed necessary for the operation of the Liquor Distribution Kodan, order the liquidators of the Japan Liquor Sales Co., Ltd., Liquor Sales Co. Ltd. of Prefectures, the Beer Distribution Co. Ltd., the National Fruit Wine Wholesale Association and the National Miscellaneous Liquors Wholesale Association (hereinafter shall simply be referred to as Liquor Distribution Companies or Associations) to lease any or all facilities owned by the Liquor Distribution Companies or Associations to the Liauor Distribution Kodan. The competent Minister may, when deemed necessary for the operation of the Liquor Distribution Kodan, order of request the owners or the possessors of the facilities requires by the Liquor Distribution Kodan to lease them to the Liquor Distribution Kodan. A fair and adequate rental for the use of such facilities prescribed in the preceding two paragraphs shall be determined by the Director-General of the Economic Stabilization Board based on policies established by him. When the rental is determined in accordance with the provisions of the preceding paragraph, the Liquor Distribution Kodan shall lease the facilities referred to in Paragraph 1 or 2 for a period of time not exceeding its period of duration prescribed in Art.7, Par.1, with the approval of the Director-General of the Economic Stabilization Board. The competent Minister may, when deemed necessary for the operation of Liquor Distribution Kodan, order the liquidators of the Liquor Distribution Companies or Associations to hand over or transfer to the Liquor Distribution Kodan any or all materials owned by or in possession of them. In case the order of the preceding paragraph is issued the Liquor Distribution Kodan shall pay fair componsation to the parties concerned within one month of the materials, referred to in the preceding paragraph, being taken over by the Liquor Distribution Kodan. The competent Minister shall not issue the order of Paragraph 5, unless necessary rules are made for compensation of the preceding paragraph with the approval of the Director-General of the Economic Stabilization Board. The competent Minister shall be responsible for having the Liquor Distribution Kodan arrange for taking care of and when deemed necessary for insurance of all facilities leased by it. The competent Minister may order or request the Liquor Distribution Kodan or other parties concerned including any Minister to take prompt arrangement for the execution of the preceding paragraphs.

Chapter VI Penal Provisions

Article 24. Those who violate the provisions prescribed in Paragraph 1, 2 or 5 of the preceding Article shall be liable to penal servitude not exceeding five years or a fine not exceeding 50,000 yen.

Article 25. Officers or personnel of the Liquor Distribution Kodan who commit an act contrary to one of the following items shall be liable to penal servitude not exceeding 5 years or a fine not exceeding 50,000 yen: 1. Those who perform business which is not prescribed in Article 15. 2. Those who violate an order relative to supervision of Director-General of the Economic Stabilization Board or the competent Minister prescribed in Art.20, Par.2 or 3.

Article 26. All persons who fail to report as required under this Law or submit falsified reports or refuse, interfere or evade inspections shall be liable to penal servitude not exceeding one year or a fine not exceeding 10,000 yen.

Article 27. Those who commit act prescribed in the preceding three Articles may be liable to both penal servitude and a fine, in case deemed necessary from the circumstances. In case a representative of a juridical person or an agent, employee or any other person engaged by a juridical person or a person commits the violation mentioned in Article 24 with regard to the business of the respective juridical person or the person, the respective juridical person or the person shall be liable to a fine in the same Article, besides punishing the offender.

Article 28. Those who used the title of the Liquor Distribution Kodan or similar title in violation of the provisions of Article 8 shall be liable to a fine not exceeding 10,000 yen.

Supplementary Provisions:

Article 1. The present Law shall come into force as from December 11, 1947.

Article 2. This Law shall become unll and void as of April 1, 1948 or at the time of the dissolution of the Economic Stabilization Board whichever the earlier date. The Liquor Distribution Kodan shall be dissolved at the time prescribed in the preceding paragraph. In so far as the application of the penal regulations for commitments done up to that time and the liquidation of the Liquor Distribution Kodan are concerned, however, this Law shall hold good even after that date.

Article 3. When the Liquor Distribution Kodan is established, the Liquor Distribution Companies or Associations shall be dissolved. The liquidations prescribed in the preceding paragraph, of the Liquor Distribution Companies or Associations are to be finished by April 1, 1948.

Article 4. The Government shall appoint an organizing committee to take charge of works of relative to the establishment of the Liquor Distribution Kodan.

Article 5. The organizing committee shall prepare Articles of Incorporation and obtain the approval of the competent Minister and the Director-General of the Economic Stabilization Board. The organizing committee shall, when the approval referred to in the preceding paragraph has been given, demand payment of the authorized fixed capital without delay.

Article 6. The organizing committee, when payment of the authorized fixed capital has been made, shall transfer its work to the President of the Liquor Distribution Kodan without delay. When the President has taken over the work referred to in the preceding paragraph, all of the President, Vice-presidents, Directors and Auditors shall effect the registration of the establishment without delay. The Liquor Distribution Kodan shall come into being upon the registration of the establishment.

Article 7. The provisions of Article 8 shall not apply for six months from the date of the enforcement of this Law to those who use the title of the Liquor Distribution Kodan of similar title at the time when this Law is put into effect.