Japan updates
Banking & Financial Services
Contributed by Nagashima Ohno & TsunematsuRecent 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 & TsunematsuRecent 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.
Corporate Finance/M&A
Contributed by City-Yuwa PartnersHow to handle the target's employment contracts in an M&A transaction
- Japan
- 27 January 2021
When conducting M&A transactions in Japan, one of the most important considerations is how to handle the target's employment relationships. In Japan, it is generally difficult for an employer to dismiss employees or change their employment conditions to ones which are disadvantageous without obtaining the employees' consent. Therefore, buyers must carefully examine a target's existing employment contracts and the effects of the M&A transaction on its employment relationships.
Scheduling M&A transactions: practical considerations regarding FDI
- Japan
- 02 December 2020
When a non-Japanese company or investor proceeds with an M&A transaction in Japan, one of the key regulations to observe is the Foreign Exchange and Foreign Trade Act (FEFTA), which regulates foreign direct investment (FDI). However, regulation under the FEFTA can delay the M&A transaction schedule. Therefore, this article sets out practical considerations relating to Japan's FDI regulations which non-Japanese companies and investors should bear in mind when scheduling an M&A transaction.
Employment & Immigration
Contributed by Nagashima Ohno & TsunematsuEqual pay for equal work: differences in working conditions between fixed-term and indefinite-term employees
- Japan
- 07 April 2021
Amendments to the Part-Time and Fixed-Term Employment Act recently entered into force, aiming to achieve equal pay for equal work. As such, employers cannot create differences in base salary, bonuses and other treatments between part-time and fixed-term employees (so-called 'irregular employees') and non-fixed-term employees (so-called 'regular employees') in light of duties, the level of responsibility and the scope of changes in their job descriptions and assignment.
Amendments to Child Care and Family Care Leave Act
- Japan
- 14 October 2020
At present, employees can take a half-day to care for a sick or injured child or family member. In order to allow employees to take such care-related leave more flexibly, the Child Care and Family Care Leave Act has been amended, effective as of 1 January 2021, to allow employees to take such time off on an hourly basis. Employers must ensure that the relevant rules of employment are amended and up to date before the amended act enters into force.
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.
Energy & Natural Resources
Contributed by Nishimura & AsahiBiomass power generation: supply and sustainability
- Japan
- 05 April 2021
Biomass-fuelled power generation facilities continue to play an important role in Japan's renewable energy portfolio. While the requirements in this respect are complex, interest in biomass renewable energy remains strong. Further, it is anticipated that as the sustainability rules applicable to woody and agricultural biomass fuels are settled, interest and investment in the biomass industry will continue to accelerate. This article provides an overview of the sustainability rules applicable in Japan.
Update on FIT certificate nullification procedure
- Japan
- 23 November 2020
A significant component of the recently approved Proposal to Amend the Electricity Business Act for the Purposes of Establishing a Resilient and Sustainable Electricity System is the nullification of feed-in tariff (FIT) certificates. The Ministry of Economy, Trade and Industry (METI) has recently published a series of notices that provide further clarity on how the nullification will take effect and METI's intention to create exemptions for certain FIT certificate holders.
METI proposes maximum procurement price of offshore wind power for four promotion zones
- Japan
- 02 November 2020
The Committee on Procurement Price Calculation of the Ministry of Economy, Trade and Industry recently announced a recommendation to set the maximum procurement price that bidders may propose in their development plans for offshore wind renewable energy power generation facilities at Y29 per kilowatt hour. This recommendation reduces the standard procurement price by approximately 20%. The reduction is not expected to affect the pre-tax internal rate of return for developers.
First tender process under new offshore wind law underway
- Japan
- 31 August 2020
The government recently commenced the first tender process under Japan's new offshore wind law for a floating wind project off the coast of Goto City. This article summarises the key elements of the Occupancy Guidelines for the Goto Offshore Area which, although specific to the Goto project, provide insight as to the Japanese authorities' general approach towards the implementation of the offshore wind law and how the tender processes for the other identified sites will proceed.
FIP programme introduced
- Japan
- 04 May 2020
The proposed amendment to the Act on Special Measures Concerning the Procurement of Renewable Energy-Sourced Electricity by Electric Utilities will introduce a feed-in premium (FIP) programme. The proposed FIP programme provides that power producers will receive a premium in addition to the market price for the electricity which they generate instead of the fixed electricity price determined by the Ministry of Economy, Trade and Industry under the current feed-in-tariff programme.
