CHAPTER I General Provisions

(Purpose) Article 1. The purpose of this Law is to compensate, following the restoration of peace with the Allied Powers, for the damage suffered as a result of the war by the property owned in Japan by the Allied Powers and their nationals.

(Definitions) Article 2. In this Law, "the Allied Powers" means the Allied Powers as provided for in Article 25 of the Treaty of Peace with Japan (hereinafter referred to as "the Peace Treaty" ). 2 In this Law, "Allied nationals" means the following: (1) Individual persons who are nationals of Allied Powers; (2) Corporations and other associations established under the laws and orders of any of the Allied Powers; (3) In addition to those mentioned in the preceding item, those corporations and other associations in which the individuals or corporations or associations mentioned in the preceding two items or this item hold the whole stock or capital investments apart from qualifying shares; (4) In addition to those mentioned in item (2), religious juridical persons, non-profit juridical persons and other similar organizations controlled by the persons mentioned in the preceding three items or this item. 3 In this Law, "Japan" means Honshu, Hokkaido, Shikoku, Kyushu, and other territory, over which the sovereignty of Japan is restored by virtue of the Peace Treaty. 4 In this Law, "the war-time special measures" means the measures toward the enemy, including but not limited to the application of the old Enemy Property Custody Law (Law No.99 of 1941), which were adopted by way of exercise of official authority by the Japanese Government or its agencies, such as the apprehension, internment or detention, of individual persons of Allied nationality, the disposal or sale of the property of Allied nationals, etc. 5 In this Law, "property" means movable or immovable property, the rights to such property, patents, utility models, designs, trademarks, debts, shares, and other property rights and interests of a similar nature.

(Principles of Compensation) Article 3. If the property owned in Japan by the Allied Powers or their nationals on December 8, 1941 (hereinafter referred to as "the time of the commencement of the war" ) has suffered damage as a result of the war, the Japanese Government shall compensate for such damage; provided that, with regard to the properties of Allied nationals, such nationals either (a) were nationals of a country declared by the Japanese Government to be an enemy country in accordance with the provisions of the old Enemy Property Custody Law, or (b) were subjected to apprehension, internment or detention or to the seizure, disposal or sale of their property during the war. 2 In cases other than those mentioned in the preceding paragraph, if property owned in Japan at the time of the commencement of the war by Allied individuals who were not physically present in Japan or Allied corporations which were not in operation in Japan during the period of hostilities, has suffered the damage mentioned in Article 4 paragraph 1 item (1) or (5), the Japanese Government shall compensate for such damage. 3 In cases where a claim for restitution has not been filed for property in a state capable of restitution within the term fixed in the Peace Treaty, no compensation shall be made for its damage;provided, however, that this shall not apply to cases where this failure in filing a claim is deemed by the Japanese Government as due to unavoidable circumstances. 4 Those who may claim the compensation mentioned in paragraph 1 or 2 shall be, unless they are the Allied Powers, those who had and shall have the status of Allied nationals at the time of the commencement of the war and at the time of the coming into force of the Peace Treaty. 5 In case where the successors in interest of Allied nationals are Allied nationals at the time of the coming into force of the Peace Treaty, they may claim the compensation mentioned in paragraph 1 or 2. However, in cases where the successors have succeeded to property which has suffered damage, this shall apply only if they have succeeded to the claim for compensation for the relevant damage as well as to such property. 6 The provisions of the preceding five paragraphs shall not apply to those public loans and debentures and the interest right accrued to them to which the provisions of the old Law relating to the Treatment of Foreign Currency Bonds (Law No.60 of 1941) have been applied.

(Scope of Damage and Location of Property) Article 4. The damage suffered as a result of the war mentioned in paragraph 1 of the preceding Article shall be the damage listed in the following items: (1) Damage caused by acts of hostility on the part of Japan or of any of the states which were at war or in a state of belligerency with Japan; (2) Damage caused by the war-time special measures or other measures of the Japanese Government and its agencies; (3) Damage on account of lack of due care on the part of the administrator or possessor of the property concerned; (4) Damage suffered owing to the inability of an Allied national to have the property insured in Japan on account of the war; (5) Damage suffered while in use of the Occupation Forces owing to lack of due care on the part of the Occupation Forces or the inability of an Allied national to insure property. 2 The cargo or baggage which had been loaded on board the Japanese ships navigating the high seas at the time of the commencement of the war and which was unloaded in Japan shall be regarded as property which was in Japan at the time of the commencement of the war.

CHAPTER II Calculation of the Amount of Damage

(Damage to Tangible Property) Article 5. The amount of damage to restituted tangible property shall be a sum of money required at the time of compensation (meaning here and hereinafter the time of payment of compensation by the Japanese Government in accordance with the provisions of Article 16 paragraph 1 or 4) for the restoration of such property as of the time of restitution to its status as of the time of the commencement of the war, in so far as the damages mentioned in paragraph 1 of the preceding Article are concerned provided that, if such property has been repaired by government expenditure after its restitution, its status upon repair shall be regarded as its status as of the time of restitution. 2 The amount of damage to tangible property which is incapable of restitution on account of its loss, substantial destruction, or its location being unknown, shall be a sum of money required at the time of compensation for the purchase in Japan of property of similar condition and value, in so far as the damages mentioned in paragraph 1 of the preceding Article are concerned. 3 The amount of damage to tangible property other than that failing under the preceding two paragraphs shall be a sum of money required at the time of compensation for the restoration of such property as of the time of the coming into force of the Peace Treaty to its status as of the time of the commencement of the war, in so far as the damages mentioned in paragraph 1 of the preceding Article are concerned.

(Damage to Use and to Lease of Immovable Property) Article 6. The amount of damage to the superficies, perpetual tenant-right, servitude, or lease of immovable property, which is incapable of restitution on account of the loss or substantial alteration of the objects of such rights shall be a sum of money required at the time of compensation for the acquisition of the rights of the same substance as such rights in Japan.

(Damage to Debts) Article 7. The amount of damage to pecuniary debts shall be a sum of money equivalent to the amount of the debts transferred or liquidated by the war-time special measures. 2 The amount of damage to debts in cases where mortgage, pledge, lien, or priority, has been extinguished by the war-time special measures or in cases where the object of these rights has been lost or destroyed as a result of the war shall be a sum of money equivalent to the amount due to the creditor which has been defaulted on account of the extinction of such right or loss or destruction of such object.

(Damage to Public Loans, Etc.) Article 8. The amount of damage to those public loans, debentures, bonds issued under special laws by juridical persons, or public loans or debentures issued by foreign states or juridical persons (hereinafter referred to as "the public loans, etc." ) which have been subjected to the war-time special measures and have not been restituted and for which the time of their redemption has arrived before the time of compensation shall be the total of the amount of the principal and the amount of the interest coupons which accompanied such public loans, etc. 2 The amount of damage to those public loans, etc. whose time of redemption has not arrived by the time of compensation and which are incapable of restitution shall be the total of their current price as of the time of compensation and the amount of the interest coupons up to the time of compensation.

(Damage to Industrial Property Rights) Article 9. The amount of damage to a patent which has had the exclusive license established (meaning here and hereinafter the right of persons who have received the license of exclusive use in accordance with the provisions of Article 5 of the old Industrial Property Rights War-time Law (Law No.21 of 1917)) shall be a sum of money equivalent to the patent working fee payable in cases where the exclusive licensee has worked the patent during the term of the patent, deducted by a sum of money equivalent to the patent fee payable to the Japanese Government, unless the Allied owner has waived right to patent working fee and damages for the said term in accordance with the provisions of Article 5 of the Order for Post-war Disposition of Industrial Property Rights Owned by Allied Nationals (Cabinet Order No.309 of 1949) as amended. 2 The amount of damage to a patent which has been cancelled or transferred by the wartime special measures or without free consent of the Allied national concerned shall be a sum of money equivalent to the patent working fee payable by the person who has worked it during the term for which it should have continued, deducted by a sum of money equivalent to the patent fee payable to the Japanese Government during such term, unless the Allied owner has waived rights to patent working fee and damages for the said term in accordance with the provisions of Article 5 of the Order for Post-war Disposition of Industrial Property Rights Owned by Allied Nationals as amended. 3 The amount of damage to a patent which has become extinct on account of the non-payment of the patent fee or the expiration of its term of continuation shall be a sum of money equivalent to the patent working fee payable by a person who has worked it during the term for which it would have continued if the patent fee had been paid or if the extension of its term of continuation had been applied for, deducted by a sum of money equivalent to the patent fee payable to the Japanese Government during such term, unless the Allied owner has waived rights to patent working fee and damages for the said term in accordance with the provisions of Article 5 of the Order for Post-war Dispositions of Industrial Property Rights Owned by Allied Nationals as amended. 4 In the case of the preceding three paragraphs, the patent working fee payable by a person who has worked the patent shall be calculated on the basis of the method of calculation of the working fee stipulated in the working contract existing at the time of the commencement of the war in case such working contract existed, and on the basis of the working fee stipulated in a working contract for a patent analogous to the patent concerned existing at the time of the commencement of the war in case there was no working contract for the patent concerned. 5 If stipulation has been made in the working contract mentioned in the preceding paragraph for the obligation to be performed by the patentee to the working-licensee or for the benefit receivable by the working-licensee from the patentee, the loss suffered by the person working the patent on account of the default of such obligation or the impossibility to receive such benefit during the term provided for in paragraphs 1 to 3 inclusive may be taken into consideration in calculating the patent working fee payable by such persons. 6 The provisions of paragraph 2 to the preceding paragraph inclusive shall apply mutatis mutandis to utility models and designs.

(Damage to Trade Marks) Article 10. The amount of damage to a trade mark which has become extinct on account of the cancellation by the war-time special measures or the expiration of its term of continuation shall be the total of a sum of money equivalent to the benefit obtained through its use by the person who has used it and a sum of money equivalent to the cost required at the time of compensation for the restoration of its good-will as at the time of the commencement of the war.

(Damage to Shares) Article 11. The amount of damage relating to shares of stock other than those of which the issuing company is an Allied national mentioned in the provisions of Article 2 paragraph 2 items (2) and (3) shall be a sum of money, which is the amount of damage to the issuing company calculated in accordance with the provision of Article 12, multiplied by the ratio of the amount of the paid up shares of the stock which were owned by the Allied national at the time of the commencement of the war to the amount of its paid up capital at the time of the commencement of the war. 2 If, in cases where a company is in the course of liquidation, distribution has been made of its net assets for its shares before restitution, the amount of their damage shall be a sum of money equivalent to the amount of the distribution made before the time of restitution, added to the sum of money mentioned in the preceding paragraph.

(Calculation of Amount of Damage to Companies) Article 12. The amount of damage to a company shall be a sum of money which is the amount of the damage provided for in Article 4 paragraph 1, calculated in a manner conforming to the provisions of Article 5 to the preceding Article inclusive in regard to the property owned in Japan by the company at the time of the commencement of the war, and deducted by the following sums of money: (1) If, in cases special loss or final loss has occurred to the company in accordance with the Enterprise Reconstruction and Reorganization Law (Law No.40 of 1946) as amended or the Financial Institutions Reconstruction and Reorganization Law (Law No.39 of 1946) as amended, such loss has been made up by writing off liabilities, the amount of such writing-off of pre-war liabilities other than the capital; (2) If, in cases where a company has decreased its capital to make up the loss suffered as a result of the war, its capital has been replenished with the capital increase through the payment by its shareholders other than Allied nationals, the sum of such replenishment; (3) If the current market value of the property owned by a company at the time of compensation, which was not owned by the company at the commencement of the war, exceeds the acquisition cost of the property, the sum of such excess.

(Amount of Damage to Shares of Company which Has Been Merged, Etc.) Article 13. The calculation of the amount of damages to shares in case where the issuing company has been merged or divided after the commencement of the war shall be made in conformity with the provisions of preceding two Articles.

CHAPTER III Payment of Compensation

(Amount of Compensation) Article 14. The amount of compensation payable to a person who may claim compensation from the Japanese Government in accordance with the provision of Article 3 paragraph 4 or 5, (hereinafter referred to as "claimant" ) shall be a sum of money which is the amount of damage calculated in accordance with the provisions of the preceding Chapter deducted by the sums listed in the following items: (1) A sum of money withdrawn by a claimant or his agent out of the funds which belonged to the Special Property Administration Account in the custody of the Bank of Japan; (2) A sum of money equivalent to the amount of the pre-war liabilities satisfied by way of the war-time special measures by property owned by a claimant at the time of the commencement of the war or its fruits; (3) If improvements have been made to property between the time of the commencement of the war and the time of the restitution of the property, and if the owner does not elect to have the improvements removed, a sum of money equivalent to the value of the improvements at the time of compensation.

(Method and Term of Claiming Compensation) Article 15. A claimant shall file a written claim for payment of compensation with the Japanese Government through the Government of the state to which he belongs within eighteen months from the time of coming into force of the Peace Treaty between such state and Japan. 2 The written claim for payment of compensation mentioned in the preceding paragraph shall be accompanied with papers which establish the status of the claimant as a person capable of filing claims according to the provision of Article 3 paragraph 4 or 5 and the substance of the claim. 3 If a claimant fails to file a written claim for payment of compensation within the term mentioned in paragraph 1, he shall be regarded as having waived the claim for payment of compensation.

(Payment of Compensation) Article 16. If a written claim for payment of compensation has been filed by a claimant in accordance with the provision of paragraph 1 of the preceding Article, the Japanese Government shall examine it and, if it has found that the sum of money claimed is payable, shall pay it to him without delay. 2 If the Japanese Government has found, as a result of the examination of a written claim for payment of compensation, that the sum of money claimed differs from that payable to the claimant, it shall notify him of the sum of money which it has found payable. 3 If there is no objection to the sum of money notified in accordance with the provision of the preceding paragraph, the claimant may demand its payment by the Japanese Government. 4 If in accordance with the provision of the preceding paragraph the payment of the sum of money mentioned in the same paragraph has been demanded from the Japanese Government, the Japanese Government shall pay it to the claimant without delay.

(Payment of Compensation in Yen) Article 17. The compensation payable in accordance with the provisions of the preceding Article shall be paid in Japan in the Yen, and its remittance abroad by recipients shall be subject to laws and orders relating to the foreign exchange. 2 In case where the amount of money of the debts, loans, etc. or patent working fee stipulated in Articles 7 to 9 inclusive has been designated in terms of currencies other than the Yen (hereinafter in this paragraph referred to as "foreign currency" ) and should have been paid in foreign currency or, although designated in the Yen, should have been paid in foreign currency at the fixed exchange rate in accordance with the term of contract the Japanese Government shall recognize its liability to make compensation in foreign currency and make it available to the claimant at the earliest date permitted by the Japanese foreign exchange position and in accordance with the laws and regulations concerning the foreign exchange. 3 If, in the case mentioned in the preceding paragraph, the claimant accepts payment in the Yen, the Japanese government may make the payment of compensation in the Yen calculated at the exchange rate at the time of compensation.

(Objection to the Amount of Compensation) Article 18. If a claimant has an objection to the sum of money notified in accordance with the provision of Article 16 paragraph 2, he may demand re-examination to the Allied Powers Property Compensation Examination Committee provided for in Article 20 within three months after the date of receipt of the notification mentioned in the same paragraph. 2 On request a claimant shall be entitled to a hearing before this Committee and to be represented by counsel if desired. 3 The provisions of the preceding two paragraphs shall not apply in cases where there is a special agreement between the Japanese Government and the Government of the Allied national concerned.

(Limitation of Payment in a Fiscal Year) Article 19. If the total of sums of money payable for compensation exceeds ten billion (10,000,000,000) yen in one fiscal year, the Japanese Government makes the payments involved in the excess in the following fiscal year.

CHAPTER IV Allied Powers Property Compensation Examination Committee

Article 20. The Japanese Government shall establish in the Ministry of Finance an Allied Powers Property Compensation Examination Committee which is to examine the demands for re-examination under the provisions of Article 18. 2 Necessary matters relating to the organization and operation of the Allied Powers Property Compensation Examination Committee shall be provided for by Cabinet Order.

CHAPTER V Miscellaneous Provisions

(Exception concerning Taxation) Article 21. No tax shall be imposed on the compensation which may be received by Allied nationals in accordance with this Law. 2 No tax shall be imposed on any Allied national in respect of compensation received in accordance with this Law.

(Furnishing of Papers) Article 22. A claimant may, if necessary for making a claim for compensation, demand the Japanese Government through the Government of the state to which he belongs to furnish papers which are necessary for establishing such claim. 2 If the demand mentioned in the preceding paragraph has been made, the Japanese Government shall furnish the papers so demanded to the claimant free of change.

(Payment of Cost) Article 23. If a claimant has defrayed in Japan necessary cost to establish his claim, he may demand its payment to the Japanese Government through the Government of the state to which he belongs. 2 If, in cases where the demand mentioned in the preceding paragraph has been made, the Japanese Government has found the amount of money reasonable, it shall be paid to the claimant.

(Collection of Reports, Etc.) Article 24. If the Japanese Government finds it necessary in connection with the investigation of the amount of damage suffered by the property of Allied nationals, it may, within the extent of such necessity, collect reports or data from those persons other than the claimant who had or have a right or an obligation in regard to such property.

(Cabinet Order concerning Enforcement) Article 25. Necessary matters in enforcing this Law may be provided for by Cabinet Order.