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
Amendments to foreign direct investment regulations on foreign investment in Japanese technology companies
Nagashima Ohno & Tsunematsu- Japan
- 24 June 2020
Amendments to the Foreign Exchange and Foreign Trade Act, which regulates foreign direct investment (FDI) in Japan, as well as its related cabinet orders, ministerial ordinances and public notifications, came into force and was fully implemented as of 7 June 2020. The amendments are a continuation of recent changes that have been made to Japan's FDI regulations. This article provides an overview of the amendments with a particular focus on topics relating to businesses in the technology field.
Employment & Immigration
Contributed by Nagashima Ohno & TsunematsuImpact 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.
Energy & Natural Resources
Contributed by Nishimura & AsahiFIP 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.
Impact of Civil Code reform on energy and natural resource transactions
- Japan
- 06 April 2020
In 2017 the Civil Code, which was enacted in 1896, was substantially amended for the first time in more than a century. Although the amendments, which came into effect on 1 April 2020, cover a broad range of issues, many were made to reflect existing case law and commonly accepted interpretations of the pre-amended Civil Code. However, there are some changes which may affect current practices in the energy sector.
Solar FIT decommissioning fee
- Japan
- 30 March 2020
Since April 2018, the Ministry of Economy, Trade and Industry (METI) has required business operators involved in solar power generation to set aside a certain amount of funds in preparation for the decommissioning of solar power plants. However, as of January 2019, less than 5% of business operators had complied with this rule. As such, METI established a working group to tackle the problems with the discretionary decommissioning reserve regime.
Cabinet approves Renewable Energy Act amendment bill
- Japan
- 23 March 2020
Cabinet recently approved the Proposal to Amend the Electricity Business Act for the Purposes of Establishing a Resilient and Sustainable Electricity System. The bill introduces a feed-in premium programme, under which energy developers developing projects after April 2022 may receive a certain premium on top of the market price for the electricity that they generate.
Impact of coronavirus on solar projects
- Japan
- 23 March 2020
It appears inevitable that the coronavirus pandemic will affect Japan's solar energy industry. For example, China's public health measures may have an adverse effect on the shipment of photovoltaic modules and other equipment manufactured there, on which many Japanese developers rely. Further, if the government declares a national emergency, this may inhibit engineering, procurement and construction contractors' ability to perform their obligations to develop and construct solar projects.
