Akasaka International Law, Patent & Accounting Office.

Japan Trade & Security Risk

Japan’s Economic Security Promotion Act, Foreign Exchange Act, Act on the Enhancement of Cyber Response Capabilities, and ongoing discussions on strengthening Japan’s anti-espionage framework — the legal landscape governing how companies invest, operate, and handle technology in a world where national security is now a business variable.

Japan has enacted a series of national security laws that directly affect how companies invest, operate, handle technology, and manage infrastructure. The Economic Security Promotion Act, the revised Foreign Exchange Act, and the Act on the Enhancement of Cyber Response Capabilities and related amendment acts each create obligations that most legal and compliance teams outside Japan have not yet mapped onto their Japan operations. In addition, discussions are actively underway on strengthening Japan’s anti-espionage framework — a development that warrants close monitoring for any company handling sensitive technology or personnel in Japan.

This is not primarily a question of US export controls or sanctions — it is about Japanese domestic law imposing new requirements on companies present in Japan: inbound investment screening, critical infrastructure obligations, technology transfer restrictions, and information security duties that now carry criminal exposure for management.

Use the checklist below to identify which areas require immediate attention for your Japan entity or Japan-related transactions.

Japan National Security Law: Readiness Checklist

JAPAN SECURITY LAW SELF-CHECK

If any item applies, start with the related articles below before taking action.

CHECK A

Economic Security Promotion Act obligations

Critical infrastructure, specified critical technologies, patent non-disclosure

  • You have not confirmed whether your Japan business falls within the Act’s scope as a “core infrastructure” operator — covering 14 sectors including energy, finance, IT, transport, and water.
  • Your company handles technology that may be designated as a “specified critical technology” under the Act, but no assessment has been done.
  • You are not aware that patent applications in certain technology areas can be subject to non-disclosure orders under the Act, affecting your IP strategy in Japan.

CHECK B

Foreign Exchange Act: investment screening

Prior notification, designated business sectors, 2026 amendments

  • Your organisation is planning — or has recently completed — an investment, acquisition, or capital increase in a Japan company, but has not systematically reviewed Foreign Exchange Act prior notification requirements.
  • The 2026 amendments tightening investment screening and extending rules to indirect acquisitions have not been reflected in your deal structuring or due diligence process.
  • You are uncertain whether the target company’s business falls within a “designated sensitive business” sector requiring advance clearance.

CHECK C

Act on the Enhancement of Cyber Response Capabilities & infrastructure obligations

Information infrastructure operators, reporting duties, OT security

  • Your Japan entity may qualify as a “specified information infrastructure operator” under the Act on the Enhancement of Cyber Response Capabilities and related amendment acts, but obligations — including incident reporting and pre-attack countermeasures — have not been reviewed.
  • The integration of OT (operational technology) systems with IT networks at your Japan facilities creates exposure under the new industrial cybersecurity framework, but no legal assessment has been conducted.
  • Supply chain security assessment requirements under METI’s new standards have not been built into your vendor management process for Japan operations.

CHECK D

Anti-espionage framework & State Secrets Act

Technology leakage, employee mobility, criminal exposure for management

  • Your Japan operations involve technology, personnel, or data that could be affected by ongoing discussions on strengthening Japan’s anti-espionage legislation or by the existing State Secrets Protection Act — but no internal risk mapping has been done.
  • Engineer and executive mobility between your Japan entity and counterparts in countries of concern has not been reviewed against technology leakage rules, which now carry criminal penalties under existing law.
  • You are not aware of recent case law (including the POSCO litigation) establishing how Japanese courts treat cross-border technology transfer disputes.

CHECK E

Security clearance system

Economic Security Intelligence Protection Act, employee clearance, government contracting

  • Your Japan entity participates in — or intends to participate in — government contracts or public-private partnerships in sensitive sectors, but the new security clearance requirements have not been assessed.
  • You have not reviewed how the security clearance system may affect your ability to second employees to or from Japan entities involved in designated projects.
  • The Japan National Intelligence Agency (established 2026) and its interaction with private sector companies in your sector has not been monitored.

CHECK F

Cross-border transactions & US/China dimension

BIS/EAR, IEEPA, China data law, Taiwan supply chain risk

  • Your Japan operations have US-origin technology or are part of a supply chain subject to US export controls (BIS/EAR), but the interaction with Japan’s own economic security framework has not been mapped.
  • You source materials, components, or services from China and have not assessed exposure under China’s revised cybersecurity and data laws, which affect Japan-based companies with China-side operations.
  • Taiwan-related supply chain risk — including technology leakage rules and economic security legislation in Taiwan — has not been incorporated into your Japan-side risk framework.

Related Articles: Japan National Security Law

RELATED ARTICLES

If any checklist item applies, the articles below provide the primary-source analysis you need. Multiple items flagged suggests a comprehensive review of your Japan entity’s exposure across investment, technology, and infrastructure obligations is warranted. We advise on project-based engagements covering these areas as an integrated framework.

01


Economic security compliance: management duty of care under Japanese law

Japanese law now requires management to treat economic security as part of their duty of care obligations. Sets out the specific obligations, scope of responsibility, and practical steps for compliance. Essential reading for CHECK A and F. (Japanese)

02


Japan Foreign Exchange Act 2026: six key questions for investors

Analyses the 2026 amendments tightening inbound investment screening and extending rules to indirect acquisitions. Covers designated business sectors, prior notification procedures, and deal structuring implications. Essential reading for CHECK B. (Japanese)

03


Planned amendments to Japan’s anti-espionage legislation and the State Secrets Act: corporate exposure and practical response

Analysis of how ongoing legislative discussions on Japan’s anti-espionage framework — and the existing State Secrets Protection Act — affect technology management, employee mobility, and management liability. Includes lessons from recent cross-border technology leakage cases. Essential reading for CHECK D. (Japanese)

04


Act on the Enhancement of Cyber Response Capabilities: key rules and obligations for companies

Covers the key provisions of Japan’s new cyber defence legislation — obligations for designated infrastructure operators, incident reporting requirements, and management accountability under the new framework. Essential reading for CHECK C.

05


Japan’s National Intelligence Agency: what it means for private sector companies

Analysis of the newly established National Intelligence Agency and its interaction with economic security obligations for companies in designated sectors. Essential reading for CHECK E. (Japanese)

06


Technology leakage: the asymmetric risk structure — from the POSCO case to Chinese patent invalidation

Examines how technology leakage disputes play out across Japan, Korea, and China — and why the legal risk is asymmetric for Japanese companies. Essential reading for CHECK D and F. (Japanese)

We advise on Japan’s national security law framework — the Economic Security Promotion Act, Foreign Exchange Act investment screening, Act on the Enhancement of Cyber Response Capabilities and related amendment acts, State Secrets Act, and ongoing developments in Japan’s anti-espionage legislation — as it applies to your Japan entity and cross-border transactions. We work with your global counsel to ensure Japan-side obligations are fully integrated into your group-level risk management.