Political and Legal Screening Every government in China, Germany, France, UK, USA, and Indonesia are implementing

several import regulation to control every commodities before the goods can enter the country. All of the countries required import licenses and permits for any imported goods (see table policy comparisons for the certain regulations). The quality is becoming a special concern in all of those countries which all imported goods are evaluated by State Administration for Import and Export Commodity Inspection (China), applying Conformity to European Standards Sign (EU), implement Uniform Safety Standard in USA (Winstar Global Logistic Ltd., 2012), while Indonesian government have law (Republic of Indonesia Act No. 7 of 1996) concerning Food that controls the quality of imported product (FAS Jakarta Staff, 2009). Import Tariff is different in each country. In China the tariff is 13 17 % (Winstar Global Logistics Ltd., 2012), the average rate in Germany is 16 %, France 19.6%, UK 17.5 % (Winstar Global Logistic Ltd., 2012), USA (2 10%) , and Indonesia 5 30 % (Encyclopedia of The Nations). European Union countries imposed that every novel food which will enter the EU countries will be assessed first by European Food Safety Authority (EFSA). Furthermore, policies such as food labeling in UK were supervised by The Food Standards Agency which based in EU labeling regulations (Foreign Affairs and International Trade Canada, 2012), the Food and Drug Administration (USA), and in Germany new types of food product have to receive authorization from Federal Office of Consumer Protection and Food Safety. Same condition occurs in Indonesia which foodstuffs have to be registered in Head of National Agency of Food and Drug Control (BPOM) to assess the quality and certified as halal food from Majelis Ulama Indonesia (MUI). Both are required in order to obtain approval form (FAS Jakarta Staff, 2009). EU is also implementing the product liability law and phytosanitary standard and requirement, which the importers are responsible for the product they sell, and if the customer were hurt because of the product, the sellers have to provide compensation for the customer. Also product packaging has some restriction in EU countries due to the standard regulation from Environment Protection, Directive on Packaging and Packaging waste (Winstar Global Logistic Ltd., 2012). In France, all product labels have to be in French language and transaction above 12500 Euros must be sent through intermediary banking (due to monetary maximum restriction) and after all administration completed the commodities must be imported not longer than six month (Gauthier, Audran, & Henard, 2009). Importers such as Yamazaki Pan Company have to put several concerns before importing foods, such as receive halal certification in Indonesia, minimize the packaging usage in EU countries, and establish product quality/phytosanitary standard in all those countries before it can enter the local market. Yamazaki also have to register first the foodstuff in local food bureau, to make sure that it has fulfilled standard quality and aligned with local regulation.

There are also different situation in encountering the business regulations in China, Germany, France, UK, USA, and Indonesia. Starts up business have to face local bureaucracy before running the business. The similarities among those countries are the new entrepreneurs have to registers the companys name in local governments department (see table country comparisons) to avoid copyrights and trademark issues from other established local company. China has very complex bureaucracy in starting up new business (see Appendix 1 step by step business procedures), since it has about 14 steps and have to encounter 12 different local government bureau plus an auditing firm to conduct initial capital audit (The World Bank Group, 2012). EU countries have simpler step, such as Germany new business need to obtain Gewerbeerlaubnis (trading permit) and register at Commercial Register and the professional association, France (put initial capital in Caisse des Dpt, then publish a notice of incorporation of Company to Centre de Formalits des Entreprises (CFE), and company books needed to assessed by commercial court), and UK the Company have to register at Companies House and contact HRMC for business tax (The World Bank Group, 2012). Indonesia, France and USA implement pretty much the same business regulation, such as Importer Identification Number (Indonesia), identification number from Registre Nationale des Entreprise (France), and Employer Identification Number (USA), to identify every businessman before import activities can be done (The World Bank Group, 2012). In Indonesia there are 9 local government bureaus to encounter while in USA about 5 local Government. In all those countries, the employees have to be protected by health and social insurance or policy for employee compensation, such as Jamsostek program in Indonesia. The business tax issue must have not neglected by entrepreneurs to avoid any fraud among all those countries, and business taxes have to be paid in local tax bureau. In Indonesia, NPWP (registration number of tax payer) is required in paying tax in local tax department; while in UK business have to be registered first in Her Majesty's Revenue and Customs or HMRC (The World Bank Group, 2012). Summarizing the step by step business regulation procedures in each country, Yamazaki Pan Company have to consider the local bureaucracy before entering the market. China and Indonesia have complex procedures because we need to go to different departments and have long time to complete the procedure. With the complex procedures, Yamazaki have to be alert to indication of corruption in both countries (In Indonesia, unofficial administrative fee is needed). EU countries and USA have shorter time to complete, and the corruption risk is smaller (see table of policy comparison in appendix 2), because in USA, the bureaucracy is completed in only one place (New York State Department of State). Insurance and Tax regulation must not be neglected when starting business in each country, since all of those countries have law to protect employee with insurance and paying business tax in local tax department.

The other consideration is a political relationship between Japan and other countries (UK, Germany, France, USA, China, and Indonesia). Since Yamazaki Baking Co is Japanese corporation, the political climate of Japan and those countries becoming important things to put concern. Japan America relationship are in good condition as Japan is backing up USA to finance their national debts and Japan open up to foreign investment from USA (Cooper, 2011). Recently, Japan also participate the Trans-Pacific Partnership, a regional free trade agreement between Asia Pacific and USA (plus Australia & Chile) which reduce trade entry barriers for its member (Cooper, 2011; Ministry of Foreign Affairs of Japan, 2011). From the European Union Countries (Germany, France, UK), both of EU and Japan were agreed on free trade agreement and economic partnership agreement (European Commission, 2011). These also becoming binding agreement between two sides as political partners and make the bond stronger (Shiojiri, 2011). In the future, we believe that importing goods to EU countries are not so rigid, because of the good relationship between two of them. Good relationship also have been built between government of China and Japan, started with the discussion between Vice Premier China and Japans foreign minister which aim is to toughen economic cooperation and trade issues between both sides. One of the results is agreement of direct currency exchange means that the transaction can be conducted directly from Yuan to Yen, or vice versa, without converting into dollar first (BBC, 2011). In the other hand, the tsunami disaster in Japan in early 2011 makes China banned food commodities from Japan to avoid nuclear contamination in food. The banned policy lifted in May 2011, but some of prefectures in Japan have to attach certification of safety inspection for radioactive materials for foodstuffs (Xinhua, 2011). Indonesia have good bilateral relationship to Japan since the Indonesia-Japan Economic Partnership Agreement (IJ-EPA) were signed in 2008 (Yulisman, 2012). The impact of the agreement is that lower tariff is implemented from the product from Japan, and technology transfer occured between both sides. Moreover, China and Indonesia are much recommended for Yamazaki Baking Co to penetrate its market. China, have an advantage with the direct currency exchange agreement (See Appendix 3 summary of political condition), but the tradeoff is the very complex bureaucracy in starting up new business & the additional certification to import food. While Indonesia, from the IJ-EPA agreement its government has unveil the entry barriers from Japanese product. The rest of the countries (Germany, USA, UK, and France) have advantage in simpler bureaucracy in starting up new business and the Japanese bilateral climate is not so bad between each country, but again Yamazaki Baking Co must not forget the local policy and regulation in each country (see table of policy comparison).

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Appendix 1 Bureaucratic and Legal Considerations in Opening Business in Several Countries Every country has regulation in controlling the business to make sure the business is legal and not against the law. In this appendix, there are step by step business regulations procedures in Germany, France, UK, China, United States, and Indonesia. China The Procedure is (The World Bank Group, 2012): 1. Obtain a notice of pre-approval of the company name 2. Open a preliminary bank account, then deposit initial capital in the account in order to obtain the certificate of deposit 3. Obtain capital verification report from an auditing firm 4. Obtain registration certification business license of enterprise legal person with State Administration of Industry and Commerce 5. Approval from police department is needed to make a company seal 6. Make a company seal 7. Attain the organization code certification issued by the Quality and Technology Supervision Bureau 8. Register for both state and local tax with the tax bureau 9. Apply with the local statistic bureau 10.Open a formal bank account of the company and transfer the registered capital (after verified by auditing firm to the account 11. Apply for the authorization to print or purchase financial invoices/receipts 12.Pay for uniform invoices

13.Contact local career service center to apply for recruitment registration 14. Register with Social Welfare Insurance Center Germany The Procedure is (The World Bank Group, 2012): 1. Check uniqueness of company name at the local chamber of industry and commerce to avoid copyright 2. A notary is needed to notarizes the articles of association and memorandum of association 3. Open a bank account to deposit initial capital 4. Notary public files the articles of association with the local commercial register, which then will be set aside at local courts 5. Report the local office of business and standards of the establishment of the company 6. Apply with the relevant trade of professional association 7. Notify the local labor office of the establishment of the company 8. Register employees for health and social insurance 9. Mail out the documentation to the Tax Office

France The Procedure is (The World Bank Group, 2012): 1. Check uniqueness of company name by the Institut National de la Proprit Industrielle (INPI) to avoid copyright 2. Deposit the initial capital through notary, local bank, or Caisse des Dpt 3. issue a notice of incorporation of the company 4. apply request for a companys registration by the Centre de Formalits des Entreprises (CFE) 5. pay money for company books (minute books, inventory books, ledgers) in order to be stamped and initialed by the clerk of the commercial court Indonesia The Procedure is (The World Bank Group, 2012):

1. Obtain the standard form of the company deed (need local notary to reserve electronically) and company name have to be checked first at Ministry of Law and Human Rights to avoid copyright 2. Notarize company documents before a notary public 3. Pay the State Treasury for the non-tax state revenue (PNBP) through notary 4. Apply to the Ministry of Law and Human Rights for approval of the deed of establishment 5. Apply for the permanent business trading license (Surat Izin Usaha Perdagangan, SIUP) and the company registration certificate (Tanda Daftar Perusahaan/TDP) in Ministry of Trade 6. Register with the Ministry of Manpower (company that employed > 10 person have to be registered) 7. Apply for the Workers Social Security Program (Jamsostek Program) or independent social security program agency 8. obtain a taxpayer registration number (NPWP) and a VAT collector number (NPPKP) United Kingdom The Procedure is (The World Bank Group, 2012): 1. Check name for uniqueness to avoid copyright at companieshouse.gov.uk web site 2. Prepare memorandum and articles of association, then fill out and sign Form IN01 (application for registration) which can be obtain in the same web site 3. Apply document of incorporation by the Registrar of Companies at Companies House 4. Contact HMRC (Her Majesty's Revenue and Customs ) to apply for VAT (value added tax) 5. Contact HMRC (Her Majesty's Revenue and Customs ) and register for PAYE (pay-as-youearn) 6. Sign up for employers liability insurance United States The Procedure is (The World Bank Group, 2012): 1. Reserve the company's name and file the organizational company articles in New York State Department of State (Division of Corporation) 2. Apply for federal identification number (EIN) for tax and employer principle 3. Register to collect State sales tax in New York State Department of Taxation and Finance 4. Register as an employer with the Unemployment Insurance Division of the state Department of Labor 5. Arrange for workers' compensation insurance and disability insurance

6. Arrange for publication and submit certificate and confirmation of publication

Appendix 2

Table of Policy Comparison between Countries

* depends on every cities and states around USA ^ Value is depends on amount of the share capital

Appendix 3 Summary of Political Condition