The Japanese government has expanded the scope of business categories subject to the mandatory prior notification of foreign investors to file with the competent Japanese Ministries or Agencies through the Bank of Japan (BOJ). The ordinances on 24 April 2023 issued by the Ministry of Finance and other competent ministries add certain new “core business sectors” to those designated in relation to foreign direct investments (FDI) in Japanese companies under the Japanese Foreign Exchange and Foreign Trade Act (FEFTA). According to the ordinances, these amendments to the FEFTA regulations apply to all FDI made on or after 24 May 2023 (https://www.mof.go.jp/english/policy/international_policy/fdi/20230424.html).

The newly added core business sectors mentioned above are: import of fertilizers; manufacture of permanent magnets, etc.; manufacture of machine tools and industrial robots, etc.; manufacture of manufacturing equipment of semiconductor devices and integrated circuits, etc.; manufacture of storage batteries, etc.; wholesales of natural gas; and refining of metals and minerals, manufacture of marine equipment; and manufacture of metal 3D printers.

This expansion of the core business sectors under the FEFTA has been made in response to the goods designated as “specifically designated critical commodities” by the cabinet order issued in December 2022 to enforce the Economic Security Promotion Act (ESPA), for the purpose of securing the stable supply chains of certain commodities recognized under the ESPA, as well as dealing with the risk addressed under the ESPA (e.g. leakage of sensitive technology information, diversion of commercial technologies into military use, etc.).