Japanese businesses have issued an astonishing list of demands it wants from the UK and Europe ahead of Brexit negotiations at the G20 Summit, where Prime Minister Theresa May is starting informal trade talks.
The 18 requests covering trade ties between the countries were made in a 15 page report issued by the Japanese government on Sunday as world leaders meet in China.
Japanese firms located in Britain – which include car giants Nissan and Honda as well as banks such as Nomura and Daiwa – made the requests to Japan's government to secure existing business ties between the two countries in terms of investment, staff and regulations.
It also includes passporting rights for financial institutions which have been identified as a crucial right to maintain London's status as a banking powerhouse.
"If Japanese financial institutions are unable to maintain the single passport obtained in the UK, they would face difficulties in their business operations in the EU and might have to acquire corporate status within the EU anew and obtain the passport again, or to relocate their operations from the UK to existing establishments in the EU," warned the report.
The Japanese government said it hoped Brexit negotiations would "maintain the current business environment or alleviate the impacts of any radical changes" in the report, published as the G20 summit kicked of in China on Sunday.
Half of all investment into the UK by Japan last year flowed into the UK where Japanese firms have created nearly half a million jobs, the report said.
Japan accounted for six per cent of the UK's foreign direct investment last year, the sixth biggest in the country according to the latest EY attractiveness survey.
"We have been informed of a variety of requests from Japanese businesses operating in the UK and the EU that include clarity as to how the Brexit process is set to unfold, and, where there are institutional changes, the granting of a sufficient time for the transition and publicising of the changes, safeguarding of market integrity between the UK and the EU, and the maintenance of the free trade system," said the report.
"They have also issued the requests outlined below so that they can carry on their economic activities as freely as before, regardless of the outcome of the negotiations between the UK and the EU."
The UK government said it welcomed the report.
"We recognise the value of Japanese investment in the UK – including a recent record £24 billion investment by Japan’s SoftBank in ARM Holdings," said a spokesperson.
"With a strong economy, flexible labour market, highly skilled workforce and low taxation, the UK remains an attractive location for foreign investment."
Japan's business Brexit demands
|Request to the UK and EU|
|1.||Maintenance of the current tariff rates and customs clearance procedures|
|2.||Introduction of provisions for cumulative rules of origin|
|3.||Maintenance of the access to workers who are nationals of the UK or the EU|
|4.||Maintenance of the freedom of establishment and the provision of financial services, including the “single passport” system|
|5.||Maintenance of the freedom of cross-border investment and the provision of services as well as the free movement of capital, including that between associated companies|
|6.||Maintenance of the current level of information protection and the free transfer of data|
|7.||Unified protection of intellectual property rights|
|8.||Maintenance of harmonisation of the regulations and standards between the UK and the EU (including the maintenance of established frameworks of mutual recognition and equivalence)|
|9.||Securing the UK’s function as a clearing centre for the euro and the location within the UK of EU agencies such as the European Medicines Agency (EMA)|
|10.||Maintenance of the UK’s access to the EU budget for research and development and participation in the Japan-EU joint research project|
|Requests to the UK|
|11.||Liberalisation of trade in goods without the burdens of customs duties and procedures|
|12.||Maintenance of access to workers with the necessary skills|
|13.||Maintenance of basic policies regarding the entry of foreign capital|
|14.||Implementation of measures to promote investment|
|15.||Maintenance of the current levels of information protection and the free transfer of data in case the UK establishes its own legislation distinct from the EU’s|
|16.||Ensuring the consistency of regulations and standards between the UK and the EU|
|17.||Ensuring that the EU’s research and development budget applies to research institutions in the UK|
|Requests to the EU|
|18.||Provision of transitional arrangements for the single passporting system|