Japan OKs Bill to Establish Japan’s Version of CFIUS

Tokyo, May 29 (Jiji Press)–The Diet, Japan’s parliament, enacted a bill Friday that paves the way for the creation of an investment screening body similar to the Committee on Foreign Investment in the United States, or CFIUS. The bill to amend the foreign exchange and foreign trade law was approved at a plenary meeting of the House of Councillors, the upper chamber. Under the legislation, a new cross-ministerial committee will screen investments in Japanese companies by foreign capital with the aim of preventing leaks of technology and information critical to national security. The system is modeled after CFIUS, which can issue recommendations to the president to block or suspend foreign investments to the United States. The Japanese system will require the finance minister and others to seek opinions from relevant administrative agencies when examining investment projects. The panel will be co-chaired by the Finance Ministry and the National Security Secretariat, with expected participation of government organs including the trade and defense ministries. The revised law also calls for prior screenings for investments by Japanese companies controlled by foreign governments in businesses in designated industries, such as aircraft manufacturers and electricity companies. Currently, such screenings are conducted when foreign investors plan to acquire stakes in companies in designated industries. END [Copyright The Jiji Press, Ltd.]