Japan, Nagashima Ohno & Tsunematsu updates

Banking & Financial Services

Contributed by Nagashima Ohno & Tsunematsu
Recent amendments to Foreign Exchange and Foreign Trade Act
  • Japan
  • 07 July 2020

In light of the global trend to further regulate foreign direct investments from a national security viewpoint, the Foreign Exchange and Foreign Trade Act of Japan (FEFTA) and regulations thereunder were recently subject to amendments which drew particular attention from Japanese stock market participants concerned about the potential negative impact thereof. This article provides a brief explanation of the amendments to the FEFTA.

Extension of filing deadlines for disclosure documents in response to COVID-19 outbreak
  • Japan
  • 12 May 2020

In response to the COVID-19 outbreak, the Financial Services Agency has announced an extension of the deadlines to file certain mandatory disclosure documents, including annual securities reports. This article explains this unprecedented measure taken in recognition of issuers' difficulties in preparing their disclosure documents in light of the current COVID-19 crisis.

Does Interest Rate Restriction Act apply to corporate bonds?
  • Japan
  • 10 December 2019

Interest rates applicable to loans made in Japan are subject to the Interest Rate Restriction Act, which is Japan's usury law. For decades, legal experts and others questioned whether this regulation also applied to corporate bonds, thereby affording bond issuers the same protections against high interest rates as those enjoyed by borrowers. This longstanding question appears to have been resolved by a recent Tokyo District Court judgment.

Public consultation on appropriate choice and use of Japanese yen interest rate benchmarks
  • Japan
  • 01 November 2019

To address the risk that the London Interbank Offered Rate may be discontinued, the Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks was established to recommend the appropriate choice and use of Japanese yen interest rate benchmarks depending on the type of financial transaction involved and develop transition plans for a new framework enabling the use of Japanese yen interest rate benchmarks. The committee recently published a consultation paper in this regard.

Public consultation on appropriate choice and use of Japanese yen interest rate benchmarks
  • Japan
  • 29 October 2019

To address the risk that the London Interbank Offered Rate may be discontinued, the Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks was established to recommend the appropriate choice and use of Japanese yen interest rate benchmarks depending on the type of financial transaction involved and develop transition plans for a new framework enabling the use of Japanese yen interest rate benchmarks. The committee recently published a consultation paper in this regard.


Competition & Antitrust

Contributed by Nagashima Ohno & Tsunematsu
Recent developments regarding attorney-client privilege
  • Japan
  • 17 October 2019

According to the Organisation for Economic Cooperation and Development (OECD), Japan is one of only three OECD jurisdictions to not recognise attorney-client privilege. In response to discussions and lobbying, the Diet has announced amendments to the Anti-monopoly Law which will partially introduce attorney-client privilege in administrative investigations pursuant to ordinances under the law or certain prescribed guidelines.

New protection for Big Data under Unfair Competition Prevention Act
  • Japan
  • 05 September 2019

The Unfair Competition Prevention Act was recently amended to afford new legal protection to Big Data. Although this new legal protection is expected to increase data use, in order to qualify as protected data, data must be managed accordingly. Thus, all parties which use Big Data in their business should review their management systems, internal rules and agreements regarding the handling of data in order to ensure that such data can fall under the definition of protected data set out in the act.

New commitment procedure under Anti-monopoly Act
  • Japan
  • 18 April 2019

A new commitment procedure was recently introduced to the Anti-monopoly Act (AMA), enabling enterprises to voluntarily resolve suspected violations of the AMA with the Japan Fair Trade Commission (JFTC). If a commitment is approved, the conduct of the enterprise concerned will not be considered a violation of the AMA and the enterprise will not be subject to legal penalties. The new procedure may lead to more active enforcement by the JFTC.

Fair Trade Commission Issues Cease and Desist Orders against Marine Hose Cartel
  • Japan
  • 13 March 2008

Study Group Report Prepares the Way for Anti-monopoly Review
  • Japan
  • 11 October 2007


Employment & Immigration

Contributed by Nagashima Ohno & Tsunematsu
Impact of COVID-19 pandemic on employment
  • Japan
  • 27 May 2020

In April 2020 the government declared a state of emergency due to the COVID-19 pandemic. In response, prefectural governors have requested certain industries to suspend their business operations. This article provides information for employers on how to handle employment matters during the COVID-19 crisis, including employment adjustment subsidies, salary reductions and dismissals.

New resident status categories for foreign nationals
  • Japan
  • 02 August 2019

Two new resident status categories for foreign nationals were recently put in place in order to cope with Japan's labour shortage. The first of these new resident categories is the specified skills 1 category, which covers individuals who have a substantial degree of knowledge or skill in the 14 initial industrial fields that require additional labour. The second, the specified skills 2 category, covers individuals who have sufficient skills in the specified industrial fields.

Amendments to regulations on working hours and paid annual leave
  • Japan
  • 10 April 2019

A number of amendments to Japan's labour and employment laws recently took effect. Among other things, the amendments concern the monitoring of employee working hours, paid annual leave, the so-called 'highly professional system' and overtime limits. Employers should ensure that their policies and practices comply with the amendments to ensure an easy transition to Japan's new employment framework.

Fixed overtime payment arrangements
  • Japan
  • 27 March 2019

Under Japanese law, employers must – in principle – pay an allowance to employees who work more than eight hours per day or 40 hours per week. As such, from an employer's perspective, it is practical to include an employee's overtime allowance in their base salary where possible. However, for an employee's overtime allowance to be validly included in their base salary, certain requirements must be satisfied. These requirements are a hot topic in Japanese legal practice.

Overtime regulation bill enacted
  • Japan
  • 17 October 2018

The National Diet recently enacted a bill relating to work style reform, which has amended the Labour Standards Act, the Industrial Safety and Health Act and relevant laws. Most amendments will come into effect on 1 April 2019. The amended Labour Standards Act stipulates that the upper limit for overtime will be, in principle, 45 hours a month and 360 hours a year. However, there are exceptions for certain business sectors.


Product Regulation & Liability

Contributed by Nagashima Ohno & Tsunematsu
Ministry relaxes rules for affixing technical standard conformity marks
  • Japan
  • 24 October 2019

Following the diversification and miniaturisation of electronic equipment, the means by which technical standard conformity marks must be affixed received significant attention from business operators that sell or import electronic equipment in Japan. As such, the Ministry of International Affairs and Communications recently relaxed the restrictions regarding marks indicating technical standard conformity certification or approval under the Radio Act and the Telecommunication Business Act.

Radio Act amended to promote innovation using foreign WiFi and Bluetooth devices
  • Japan
  • 08 August 2019

The Diet recently amended the Radio Act to provide simple procedures for using radio equipment that has not been technically certified in Japan for experimental purposes. The amendments are expected to foster innovation with regard to technology-related products by addressing the challenge faced by foreign manufacturers and other business operators that have struggled to bring prototype products with WiFi or Bluetooth capabilities into Japan for experimental purposes.

Recharacterisation of product risks
  • Japan
  • 18 April 2019

Although product compliance has always been an important issue for manufacturers, it has historically been overshadowed by safety-related product risks, and considerations regarding product compliance have typically been integrated with other product risks. However, manufacturers' awareness of the risks associated with product compliance has grown and it is now a top priority. The catalyst for this shift in attitude was a recent spate of data falsification cases.


Tech, Data, Telecoms & Media

Contributed by Nagashima Ohno & Tsunematsu
Act on the Protection of Personal Information amended
  • Japan
  • 17 April 2020

A bill to amend part of the Act on the Protection of Personal Information was recently submitted to the Japanese Diet. The bill's main provisions will come into force within two years from the date of their promulgation. This article examines the parts of the bill which are expected to have a significant impact on ongoing business practices.

Cybersecurity in Japan: being aware of your business partners' risks
  • Japan
  • 28 February 2020

A recent high-profile theft of hard drives containing sensitive personal data has highlighted the need for Japan-based companies to ensure that their cybersecurity measures include processes for disposing of personal data that has been entrusted to them and reviewing their security controls regarding business partners who may come into contact with personal data. The case involved an employee at an IP recycling company who stole nearly 4,000 data storage devices that were destined for disposal.

Personal Information Protection Commission – recent trends
  • Japan
  • 24 January 2020

In recent months, the Personal Information Protection Commission (PPC) has been proactive in publicising cases of data breaches that have had a significant social impact, together with the names of the companies, even when the PPC did not exercise its supervisory authority over the companies in question. Whether this trend will continue should be carefully monitored.

New protection for Big Data under Unfair Competition Prevention Act
  • Japan
  • 30 August 2019

The Unfair Competition Prevention Act was recently amended to afford new legal protection to Big Data. Although this new legal protection is expected to increase data use, in order to qualify as protected data, data must be managed accordingly. Thus, all parties which use Big Data in their business should review their management systems, internal rules and agreements regarding the handling of data in order to ensure that such data can fall under the definition of protected data set out in the act.

Enforcement of amended personal information protection regime
  • Japan
  • 29 August 2017

The widely publicised amendments to the Act on the Protection of Personal Information recently came into force. In addition to changing how companies must handle personal information, the amendments reflect a significant shift in how such obligations are regulated and enforced. They also mark the establishment of the Personal Information Protection Commission, which will be the regulatory body responsible for managing and ensuring compliance with the amended act.