Why Japan Has Bonded Exhibition Sites — The Customs Rule Written to Make an Expo Ground "Foreign"

English version of an article first published in Japanese on May 23, 2024 and rewritten in September 2026.

If an exhibition venue in Japan holds a bonded exhibition site licence, exhibits arriving from abroad go on the stand without any customs duty being paid. They are still foreign cargo — not yet imported — and in that state they are unpacked, assembled, switched on and run in front of visitors.

In the language of the law, the venue is a bonded area: a place inside Japan that, for customs purposes, the goods have not yet entered.

The system has a year of birth and a reason for it. In 1967, three years before Japan hosted its first World Expo, the Diet decided it.

Terms of the Customs Act in this article follow the English translation published in Japan's government database, Japanese Law Translation. That translation is for reference only and has no legal force: only the Japanese text is authoritative, and the translation reflects amendments up to 2018 (Act No. 16 of 2018). Every article quoted here was checked against the current Japanese text on e-Gov (as in force from June 1, 2026), and the passages quoted have not changed in substance. Quotations from the Diet record are our own translations.

A lineage that begins with the shakko
1967: preparing for the Expo
Until then, exhibits were shown under warehouse rules
What else the same law changed
The Senri Hills had become a bonded area
The one type with no fixed period
Reading it as a customs broker would
1973: two pieces fall into place
1974: a China exhibition in Osaka
From the Expo to trade fairs, and on to art fairs
The licence is not the shipper's

A lineage that begins with the shakko

The idea of a bonded area reached Japan together with the opening of its ports.

When foreign trade began, officials of the unjōsho (運上所) — the customs houses set up at Yokohama, Nagasaki and the other treaty ports in 1859, forerunners of today's customs, which took the name zeikan (税関) in 1872 — boarded every ship that arrived. Cargo could not be landed until the unjōkin (運上金), the equivalent of today's customs duty, had been paid.

As trade grew and imports with it, the foreign powers asked for cargo to be landed before the duty was paid. The answer was the shakko (借庫): a government-run storehouse where cargo could be landed and kept before its duty was paid. Following the Tariff Convention concluded in 1866 with Britain, France, the United States and the Netherlands, rules for the shakko were laid down the same year. This is the ancestor of Japan's bonded areas.

From there the system branched by function.

The Bonded Warehouse Act of 1897 allowed government and private bonded warehouses to exist side by side. Repacking and sorting landed cargo, meanwhile, was not permitted in the shakko, and separate "customs temporary storage yards" were created for that work under a law of 1900. That line passed through a 1912 act on temporary storage yards, became the Bonded Factory Act in 1927, and leads to today's bonded factories.

Curiously, the old Customs Act of 1899 contained no provisions on bonded areas at all. They developed as a body of law separate from the Customs Act, and the Bonded Warehouse Act and the Bonded Factory Act were absorbed into it only when the present Customs Act (Act No. 61 of 1954) was enacted.

Places to store, places to process. Those two lines were what the post-war Customs Act inherited as its bonded areas.

There was still no place to exhibit.

1967: preparing for the Expo

On April 19, 1967, the reasons for "a bill to partially amend the Customs Tariff Act and other acts" were explained to the Finance Committee of the House of Representatives. Among the needs listed by the Parliamentary Vice-Minister of Finance, Tatsuo Ozawa, was this:

Further, in preparation for the holding of the World Exposition, we will create a bonded exhibition site system, add open ports, rationalize the penalties for customs offences, and so on...

Expo '70 was due to open on March 15, 1970 — almost exactly three years away.

Reporting the committee's conclusions to the plenary session of the House of Representatives on May 18, Tsuneo Uchida gave the same purpose as the fourth point of the amendment:

In preparation for the holding of the World Exposition, to create a new bonded exhibition site system for foreign cargo temporarily imported for international expositions, international trade fairs and the like held in Japan.

The name of the system is general, but the motive was one particular event. To host its first World Expo, Japan found it had no system that would allow it.

Until then, exhibits were shown under warehouse rules

So how had international trade fairs been handled before?

That was exactly the question put by a member of the House of Councillors' Finance Committee on May 25: a World Exposition was soon to be held in Japan, and some special facility called a bonded exhibition site system seemed to be planned — what was it?

The answer came from the Director-General of the Customs and Tariff Bureau of the Ministry of Finance:

Until now, when an international trade fair or the like is held, and goods are imported to be displayed there, those goods are as a rule taken back to the country they came from, so there was a need to display them at the fair and take them back without paying duty on entering Japan. Under the current law this was done using the system of bonded warehouses, but even when using the bonded warehouse system, various procedural provisions were required.

In other words, there was no system for exhibiting, so exhibitions were run on the system for warehouses.

A bonded warehouse is a place to store cargo, not a place to unpack it, set it out and run it. Yet to display goods without paying duty and then take them home, there was no other vessel to use. Procedural rules piled up to make the fit work — "there were also some very inconvenient points", in the bureau chief's words.

Foreign practice was studied in designing the new system:

Abroad, too, where facilities of this kind are held, similar duty-exemption measures are taken. Having studied these in various ways, we concluded that for the various things brought into international trade fairs or World Exposition facilities, this bonded exhibition site system would be best...

Other countries already had duty relief of this kind. Japan studied them and chose a form of its own: a third type of bonded area, neither for storage nor for processing.

The bureau chief also made clear that the system was not meant for the Expo alone: "not only for the World Exposition — we have made it possible to use this bonded exhibition site system for international trade fairs and other events similar to a World Exposition." The Expo was the aim; the vessel was built to fit trade fairs too.

What else the same law changed

The amendment was not only about bonded exhibition sites. Listing what else the single bill contained gives a good sense of 1967:

Changes to the applied tariff rates on 48 items, and extensions of temporary rates on 94 items
A simplified rate for travellers' personal effects, combining customs duty and domestic consumption taxes, to speed up clearance
Five additional open ports: Ōfunato, Ishinomaki, Hitachi, Hannan and Imari
Duty exemptions for samples and souvenirs given free to visitors at an exposition, and for the materials used to build it
Rationalization of the penalties for customs offences

The bonded exhibition site was not the only Expo measure. The pamphlets and souvenirs handed out on the ground, and even the materials to build the ground itself, were brought under duty exemption at the same time.

And the part of the bill that took the most debate was not the bonded exhibition site. It was bananas.

The bill included a plan to cut the 70 percent duty on bananas by 10 points over about two years, and the debate concentrated on its effect on Japanese fruit growers and on whether retail prices would really fall. Speaking against the bill for the Japan Socialist Party on May 17, Takeshi Hirabayashi said of the amendment as a whole:

We, too, have no particular objection to its main outline. The reason we must nevertheless oppose this bill is that our grave concern lay in the reduction of the tariff rate on bananas.

In the House of Councillors, bananas also made it into the supplementary resolution. The system that supports exhibition logistics in Japan passed almost undiscussed, in the shadow of bananas.

One more small but telling change was made in the same Diet session. On June 15, the plenary session of the House of Representatives took up an amendment to the Act establishing the Ministry of Finance:

In Article 9-2, item (iv), "and bonded factories" is amended to ", bonded factories and bonded exhibition sites".

The words "bonded exhibition sites" were added to the list of customs' duties. When a system is added, the article for the office that runs it grows by a line.

1967 was also the year the Customs Business Act was enacted, replacing in full the law that had governed customs cargo handlers; the year before, in 1966, the self-assessment system had been introduced for customs duties. The rules were trying to catch up with a rapid rise in trade.

The Senri Hills had become a bonded area

Was the system actually used at the Expo three years later?

In September 1968, members of the House of Councillors' Construction Committee inspected Expo-related facilities in Osaka Prefecture. According to the report read to the committee on November 12, site preparation in the Senri Hills was almost complete, and foundation work had begun on some of the pavilions.

The headquarters building showed its steel frame, and one building of the bonded warehouse was finished, but it felt as if construction overall was only now about to begin in earnest.

The bonded building went up before the pavilions.

On April 8, 1969, asked in the House of Councillors' Cabinet Committee how duty on equipment arriving from abroad was being handled, a counsellor of the Ministry of International Trade and Industry's Enterprise Bureau explained that it was covered by the Customs Tariff Act and the Customs Act following the convention on international exhibitions. After describing the exemptions for catalogues, pamphlets, souvenirs and food samples, the answer continued:

And the site itself has been designated a bonded area under the Customs Act, so what comes into it is duty-free. When it leaves, it goes through the ordinary procedures, and if it stays in Japan it is taxed — that is how the rules are written.

That the site itself was a bonded area can be confirmed from the government's own answer.

The answer does not, however, use the words "bonded exhibition site". We could not find a customs record of the dates or scope of the licence. Nor can we tell from these records whether the "bonded warehouse" in the inspection report was a facility within the bonded exhibition site or a separately licensed bonded warehouse.

The one type with no fixed period

The Customs Act now has five types of bonded area. Set side by side, they show what kind of thing the bonded exhibition site is.

Type	Main function	Period foreign cargo may stay	How it is set up
Designated bonded area (Art. 37)	Loading, unloading, transport, temporary storage	1 month	Designated by the Minister of Finance
Bonded warehouse (Art. 42)	Loading, unloading, transport, storage	2 years (extendable)	Licensed by the Director General of Customs
Bonded factory (Art. 56)	Processing, manufacture	2 years (extendable)	Licensed by the Director General of Customs
Bonded exhibition site (Art. 62-2)	Display, use	The period the Director General of Customs finds necessary	Licensed by the Director General of Customs
Integrated bonded area (Art. 62-8)	All of the above	2 years (extendable)	Licensed by the Director General of Customs

A container yard gets one month; a warehouse or a factory, two years. The bonded exhibition site is the only one with no number.

The reason is that events run on dates. Besides the show itself there is move-in and build-up, and then dismantling and move-out. Article 62-2, paragraph (2) sets the period as "the period that the Director General of Customs finds to be necessary in consideration of the duration of the exhibition, etc." In customs practice, that means the show dates plus a suitable period for preparation and clearing up, and for an event held repeatedly, a blanket licence period of up to one year is possible.

How far "necessary" can stretch is shown by Expo 2025 Osaka, Kansai. On March 13, 2023, the Japan Association for the 2025 World Exposition obtained a licence from Osaka Customs to use the Expo ground as a bonded exhibition site: 883,234 square metres, from April 1, 2023 to April 30, 2026, covering building materials, interior materials, exhibits, display fixtures and the like.

The Expo itself ran for six months, from April 13 to October 13, 2025. For those six months, the ground existed as a bonded area for three years and one month. The length of that period also explains why, back in 1967, construction materials were added to the exemptions. Pavilions are built out of foreign cargo.

The next exposition is already in the same vessel. Customs' published list of bonded exhibition sites (as of July 1, 2026) includes the site of the 2027 International Horticultural Expo in Yokohama, licensed from March 1, 2026 to March 31, 2028.

Reading it as a customs broker would

The Customs Act is one of the subjects of Japan's national customs broker examination. Studying bonded areas for it, one starts not with the five types but with a definition — "foreign cargo" — and a single article.

Article 2, paragraph (1) of the Customs Act defines "foreign cargo" as "cargo that has been given export permission, or cargo that has arrived in Japan from abroad ... and that is in the time before permission is given for its import". To "import" is to bring such cargo into Japan. Arriving at a port is not yet importing.

Then Article 30, paragraph (1):

Foreign cargo may not be stored in any place other than a bonded area

With exceptions the article lists, such as wrecked cargo, the only place foreign cargo can be kept is a bonded area. The types of bonded area are, in effect, a list of the purposes for which foreign cargo may be kept. Until 1967, display was not on the list. So exhibits were kept under the bonded warehouse rules, and procedural provisions piled up to allow display in a place meant for storage.

There is also Article 2, paragraph (3):

If foreign cargo is used or consumed in Japan prior to its import (other than when foreign cargo is used or consumed in a bonded area in accordance with the provisions of this Act and any other case as prescribed by Cabinet Order), the person using or consuming the cargo is deemed to be importing it at the time of that use or consumption.

An exhibit is unpacked on the stand, powered up and run. By any ordinary reading, that is "use". The exception covers use "in a bonded area in accordance with the provisions of this Act". The article on bonded exhibition sites — Article 62-2, paragraph (3) — lists the acts it allows for the construction, maintenance or removal of exhibition facilities and for running the event: loading, unloading, transport or storage; normal handling operations such as checking the content, repacking and sorting; and "display or use".

A sale is written the same way. Under Article 62-4, paragraph (2), if foreign cargo brought into a bonded exhibition site is sold there (except in cases prescribed by Cabinet Order), "their sale is deemed to be importation". An exhibit sold on the stand is imported at the moment it is sold.

Finally, Article 62-6. For foreign cargo still on the site when the licence period expires, the Director General of Customs may request removal or other measures within a fixed period, and if they are not taken, "immediately collects the customs duties" — from the site licensee. Not from the shipper.

1973: two pieces fall into place

Three years after the Expo closed, the system was widened.

Among the reasons given by the Minister of Finance, Kiichi Aichi, for the 1973 bill to partially amend the Customs Tariff Act and other acts — alongside a higher duty-free limit on gifts to residents and a new exemption for artificial satellites — was this:

to relax the requirements of the system concerning bonded exhibition sites, and so on

The supplementary explanation in the House of Councillors' Finance Committee went a little further: "the requirements of the bonded exhibition site system are relaxed, so that the system can be used widely."

A system made for the Expo was being opened beyond the Expo — one actual step in the direction the bureau chief had described in 1967, when the system was said to be usable "for international trade fairs and other events similar to a World Exposition".

On August 11 of the same year, a separate law was promulgated: the law implementing the ATA Convention, Act No. 70 of 1973. It was the year Japan joined the ATA Carnet system.

One mechanism suspends duty from the side of the goods (the carnet); the other suspends it from the side of the place (the bonded exhibition site). Two answers to the same problem — exhibits brought in temporarily and taken home again — were both in place by 1973. How the carnet reached Japan is told in a separate article (in Japanese).

1974: a China exhibition in Osaka

The spread of the system shows up again in the Diet record the following year.

On March 8, 1974, in the First Subcommittee of the House of Representatives' Budget Committee, a government official was asked about bringing goods into a China exhibition to be held in Osaka, and reported the result of an inquiry to Osaka Customs:

As for the customs side of bringing in the goods, consultations are going ahead on the basis that the exhibition will be held as a bonded exhibition site, so we intend to handle it with a convenient measure, provisional clearance, that allows the goods to be processed in one sequence from their port of arrival to their entry into the exhibition site.

It was two years after the normalization of relations between Japan and China in 1972. That an idea of handling goods in one sequence from port to venue was already being voiced shows the system settling into everyday practice.

From the Expo to trade fairs, and on to art fairs

Today a bonded exhibition site is described as a bonded area licensed by the Director General of Customs as a venue for displaying and using foreign cargo at expositions, trade fairs and the like. There are requirements on the event's side as well: it must be organized by an international organization, a government, a local public body, a general incorporated association or foundation, JETRO or the like — or held under the sponsorship of one of these. An event organized by a private company can therefore qualify if it obtains such sponsorship.

The examples customs itself gives show how far the system has reached:

Expo 2025 Osaka, Kansai (organizer: the Japan Association for the 2025 World Exposition)
The Tokyo Motor Show (now the JAPAN MOBILITY SHOW; organizer: the Japan Automobile Manufacturers Association)
Tokyo Gendai (organizer: The Art Assembly; with the support of the Agency for Cultural Affairs, the Japan Tourism Agency and the City of Yokohama)

The third is a contemporary art fair. Held at PACIFICO Yokohama in July 2023, it brought together 73 internationally recognized contemporary art galleries from around the world.

Its licence came from Yokohama Customs; the licence document was handed to co-founder Magnus Renfrew at Yokohama Customs on May 19, 2023.

Art could use this vessel because of a change not to the law but to its administrative guidance. Partial revisions of the Basic Circular on the Customs Act dated December 1, 2020 and February 26, 2021 made it possible to hold art auctions, galleries and art fairs in bonded areas.

For art, the use of bonded areas has been sorted out: international auctions and galleries in bonded warehouses, international art fairs in bonded exhibition sites. On the auction side, on October 1, 2021, New Art Est-Ouest Auctions held Japan's first bonded art auction at Haneda Airport Terminal 1, offering works from abroad with duty and tax suspended. On March 30, 2022, at the same place, United Asian Auctioneers — an international alliance led by Shinwa Auction (formerly Shinwa Art Auction) — held a joint sale in which Andy Warhol's Silver Liz (Ferus Type) (1963) sold for ¥2.3 billion, the highest price ever reached at an auction in Japan. The sale totalled ¥3,145.72 million; only some of the lots were under bond.

While on the wall, a work remains foreign cargo; if it sells, duty and tax are paid and it is taken into Japan, and if it does not, it goes back abroad as it is. A vessel designed in 1967 for a World Exposition is used, half a century later, in the trade in contemporary art.

In 1992, the integrated bonded area — combining storage, processing and display — was introduced, and in 1994 the former bonded sheds (hozei uwaya, 保税上屋) and bonded warehouses (hozei sōko, 保税倉庫) were merged into the single type the official translation now calls a "bonded warehouse" (hozei zōchijō, 保税蔵置場). The function of display is built into the integrated bonded area as well.

The licence is not the shipper's

Finally, it is worth being clear about where this system sits.

The bonded exhibition site licence is held by the venue or the event. At Expo 2025 it was the Expo association that obtained it from Osaka Customs. For the Tokyo Motor Show it is the automobile manufacturers' association, for Tokyo Gendai the organizing company.

It is not something an exhibitor or shipper obtains for their own goods, and they cannot choose whether a venue is a bonded exhibition site. That is settled between the organizer and the Director General of Customs, and it reaches the exhibitor as a given, written into the exhibitor manual and move-in instructions.

And when the licence period expires, it is the licensee, under Article 62-6, who is asked for the duty on any foreign cargo still on the site.

A century after the shakko of 1866, a bonded-area system that had known only storage and processing gained a third function: display. It was added to be ready in time for an event three years away in the Senri Hills. That one provision, passed in the shadow of a banana tariff, is now in use at an art fair in Yokohama.

References

Minutes of the National Diet (National Diet Library, Kokkai Kaigiroku search system) — quotations are our own translations
- 55th Diet, House of Representatives Finance Committee, April 19, 1967 (explanation of the bill, Parliamentary Vice-Minister of Finance Tatsuo Ozawa)
- 55th Diet, House of Representatives Finance Committee, May 17, 1967 (debate, Takeshi Hirabayashi)
- 55th Diet, House of Representatives plenary session, May 18, 1967 (committee report, Tsuneo Uchida)
- 55th Diet, House of Councillors Finance Committee, May 23 and May 25, 1967 (supplementary explanation and questions; Director-General of the Customs and Tariff Bureau, Ministry of Finance)
- 55th Diet, House of Councillors plenary session, May 27, 1967 (committee report)
- 55th Diet, House of Representatives plenary session, June 15, 1967 (bill to partially amend the Act establishing the Ministry of Finance)
- 71st Diet, House of Representatives Finance Committee, March 6, 1973, and House of Councillors Finance Committee, March 27, 1973 (explanation and supplementary explanation of the bill)
- 59th Diet, House of Councillors Construction Committee, post-session meeting no. 3, November 12, 1968 (report of the inspection of Expo '70 facilities)
- 61st Diet, House of Councillors Cabinet Committee, April 8, 1969 (customs treatment of the Expo site; Ministry of International Trade and Industry)
- 72nd Diet, House of Representatives Budget Committee, First Subcommittee, March 8, 1974 (the China exhibition in Osaka and bonded exhibition sites)
Customs Act (Act No. 61 of 1954), Articles 2, 29 and 30; Chapter IV, Section 5 Bonded Exhibition Sites (Articles 62-2 to 62-7). English terms and quotations follow the reference translation in Japanese Law Translation (reflecting amendments up to Act No. 16 of 2018), checked against the current Japanese text on e-Gov Law Search (version in force from June 1, 2026).
Japan Customs, list of bonded areas: bonded exhibition sites (as of July 1, 2026)
Tokyo Gendai, press release on obtaining bonded status (PR TIMES, 2023)
Nagoya Customs, "Overview of the bonded system" (training material for the Nagoya Customs bonded area association, October 2025)
Ministry of Finance and Agency for Cultural Affairs, briefing material on the use of bonded areas (May 2021)
Japan Association for the 2025 World Exposition, "Bonded exhibition site licence obtained from Osaka Customs for the Expo site" (March 28, 2023)
Bonded area adviser, Customs and Tariff Bureau, Ministry of Finance, "Using the bonded system at international exhibitions" (Denki, Japan Electrical Manufacturers' Association, December 2023)
Partial revisions of the Basic Circular on the Customs Act (December 1, 2020 and February 26, 2021: art auctions, galleries and art fairs in bonded areas)
Japan Tariff Association, Kanzei seido no henkaku (history of the bonded system)