Notice Regarding Administrative Disciplinary Action

Our company has received a notification of violation of the Customs Act from Tokyo Customs in August 2024, based on the dual liability provisions, in relation to the improper handling of cargo by one of our staff members at a bonded warehouse in 2022. As a result, we are now subject to administrative disciplinary action under the Customs Broker Act.
We take this disciplinary action seriously and are committed to strengthening our compliance system to ensure that such incidents do not occur again. We will make every effort to restore the trust of all stakeholders.

I. Overview of the Incident
In September 2022, during an inspection requested by the cargo owner of goods held in a bonded warehouse after arrival from overseas, it was found that the number of items exceeded the declared quantity. A subsequent internal investigation revealed that one of our sales representatives had, without proper declaration, removed and stored the excess cargo from the bonded warehouse without authorization to reconcile the discrepancy. Our company voluntarily reported this incident to the customs authorities.
In August 2024, the actions of the sales representative were deemed a violation of the Customs Act. Accordingly, the individual received a notification of violation from the customs office, and our company, under the dual liability provisions of the same Act, also received a notification of violation. As a result, we are now subject to administrative disciplinary action under the Customs Broker Act.

II. Details of the Disciplinary Action
Suspension of all customs brokerage operations
Period: 51 days from May 24, 2025
Scope: Customs brokerage offices in Narita, Tokyo, Yokohama, Nagoya, Kansai, and Fukuoka (6 locations)

III. Measures to Prevent Recurrence
We take this incident with the utmost seriousness and deeply regret our failure to uphold strict compliance standards. In response, we are implementing the following measures to prevent recurrence:
　1.Review of Procedures: Revise and enhance procedures for handling bonded cargo and update
　　relevant operational manuals.
　2.Fraud Prevention Measures: Conduct compliance training, establish a monitoring system to
　　detect misconduct, and reinforce awareness of our internal whistleblower system.
　3.Legal Compliance Initiatives: Conduct company-wide compliance interviews by executives
　　and provide retraining on the Customs Act.
　4.Corporate Culture Improvement: Establish a BPI (Business Process Improvement) Promotion
　　Office directly under the President and initiate cultural reform activities with the assistance of
　　external consultants.
　5.Elimination of Operational Silos: Strengthen personnel rotation and standardize operations to
　　reduce reliance on individual employees.
　6.Human Resource Development: Expand training opportunities for employees.
　7.Audit System Enhancement: Strengthen the internal audit framework.

IV. Handling of Cargo During the Suspension Period
The suspension applies solely to customs declaration operations. All other forwarding and related services will continue as usual. During the suspension period, customs declaration tasks will be outsourced to trusted partner companies, ensuring that we continue to provide the same level of logistics service as before.

V. Disciplinary Action Against Executives and Employees
The employees involved in the incident have been disciplined in accordance with internal regulations. In addition, to take full responsibility and clarify management accountability:
・The President will voluntarily return 30% of his monthly salary for a period of three months.
・Executives who were in charge at the time of the incident will voluntarily return 10% of their
　monthly salary for three months.
・As a company-wide expression of our commitment to reform, all current executives will voluntarily
　return between 5% and 10% of their monthly salary for one month.

We are fully committed to strengthening our compliance framework and will continue to evaluate the effectiveness of the measures outlined above. We sincerely apologize for the inconvenience and concern caused. We will do our utmost to ensure that such an incident never occurs again, and we appreciate your understanding and continued support.