JAPAN Trends and Developments Contributed by: Masayuki Atsumi and Yuhei Sakao, Miura & Partners
On 7 June 2023, the UCPA was amended to strength - en regulations on bribery of foreign public officials. The amendments increase statutory penalties for nat - ural persons and legal entities and expand the scope of punishment to include bribery by non-Japanese individuals of executives or employees of Japanese companies overseas. The amended UCPA came into effect on 1 April 2024. First, the penalty for natural persons who bribe foreign officials became more severe. The maximum amount of the fine for natural persons increased from JPY5 million to JPY30 million, which is the highest maxi - mum fine for natural persons in Japan at the time of writing. In addition, the maximum term of imprison - ment increased from five years to ten years, which is the longest term of imprisonment for economic crimes in Japan at the time of writing. As a result of the ten- year maximum term of imprisonment, the statute of limitations for prosecution increased from five years to seven years. The penalty for corporations whose employees or executives bribe foreign officials also increased. In Japan, a corporation alone is not subject to criminal penalties. A corporation is subject to criminal penal - ties only when a dual punishment provision is stipu - lated, punishing not only the executive or employee who committed the crime but also the corporation to which the executive or employee belongs. The maxi - mum fine for corporations under the dual punishment provision in the UCPA increased from JPY300 million to JPY1 billion, which is the highest maximum fine for corporations in Japan at the time of writing. In terms of the severity of the criminal penalty for both natural persons and corporations, the bribery of foreign officials has become one of the most serious economic crimes in Japan. The bribery of foreign public officials by non-Japanese executives or employees of a corporation whose prin - cipal office is in Japan has been added to the scope of the UCPA as warranting a criminal penalty. Specifi - cally, in cases where a non-Japanese employee who belongs to a Japanese corporation bribes a public official of a foreign country in connection with the business of the corporation, said employee could
be punishable even if they are not Japanese and the criminal act occurs in a foreign country. Amendment of the Guidelines in 2024 In February 2024, METI amended the Guidelines. The main points of the amendment are as follows: • reflecting the amendment to the UCPA concerning the crime of bribery of foreign public officials; • correcting the description of small facilitation pay - ments (recommending that companies prohibit facilitation payments); • clarifying cases where the parent company (head office) is punished for acts of bribery by employees of overseas subsidiaries or branches; • updating cases where the crime of bribery of for - eign public officials is applied; and • expanding descriptions regarding the establish - ment of a system to prevent bribery of foreign public officials. Despite the amendment, the purpose and main con - tent of the Guidelines have not changed. The Guidelines describe in detail a compliance system for the prevention of bribery of foreign public officials by businesses and introduce three important perspec - tives: • the importance of the attitude of, and message from, top management; • the adoption of a risk-based approach; and • the necessity of taking action at the subsidiary level based on the bribery risk. In addition, the Guidelines introduce desirable preven - tative system methodologies for businesses and rec - ommend that the following six elements be included in a preventative system: • the formulation/announcement of basic policies; • the formulation of internal rules (eg, approval rules for high-risk activities such as socialising or the appointment of third parties, and rules for discipli - nary punishment or censure); • the development of organisational frameworks; • the implementation of educational activities in the company;
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