Japan Implements Amendment Of The Foreign Exchange And Foreign Trade Act.

 

23 October, 2017

 

 

On October 1, 2017, an order from the Japanese Cabinet went into effect to implement amendments to Japan’s Foreign Exchange and Foreign Trade Act (“Act”), which implements Japanese import and export controls.  The Cabinet order was decided on July 11, 2017 and it also made relevant adjustments in the relevant regulations.  The cabinet order, the ministerial ordinance and the ministry’s notice, which are necessary to implement the amended Act, were promulgated on July 14, 2017. These regulations provide definition of terms in the amended Act as well as clerical and procedural measures for the implementation of the amended Act.

 

The main parts of the amendments to the Act are as follows:

 

1. Strengthen penalties for violations of import / export control regulations

 

• The criminal fine will be increased from up to JPY 10 million (approximately USD 90,000) to JPY 30 million (approximately USD 270,000);
• New heavy penalty on corporations up to JPY 1 billion (approximately $9 million); and
• Violations of conditions attached to export licenses may be subject to criminal penalty instead of an administrative penalty.

 

2. Strengthen administrative penalties for violations of import / export regulations

 

• Directors of entities that are prohibited from engaging in imports / exports are restricted from appointments as directors of corporations doing similar business;
• The upper limit of the statute of limitation for import/export prohibitions will be increase from one year to three years; and
• The scope of an on-site investigation for violations of export license etc. will be expanded to include related persons of exporters, e.g. customs brokers.

 

3. Strengthen regulations regarding inbound direct investments into Japan

 

• Scope of a prior checking of unlisted stock transfers between foreign investors will be expanded, depending on the level of national security risk; and
• Foreign investors making inbound investments without registration may be subject to executive orders, including orders to sell their holding stocks.

 

 

For further information, please contact: 

 

Junko Suetomi, Baker & McKenzie

junko.suetomi@bakermckenzie.com