JAPAN Law and Practice Contributed by: Shinya Tago, Atsushi Fukasawa, Hiroshi Iida and Landry Guesdon, Iwata Godo Law Offices
human trafficking, forced labour and similar acts, while establishing remedial measures and penalties. Many of these criminal provisions also apply to acts committed by Japanese nationals abroad. Compliance As part of compliance, companies are expected to verify their supply chains. In 2022, the government released non-binding “Guidelines on Respecting Human Rights in Responsible Supply Chains”, based on the United Nations “Protect, Respect and Remedy” Framework (UN Guiding Principles) and the OECD Guidelines for Multinational Enterprises, which pro - vide for the identification and assessment of adverse impacts, vulnerable stakeholders, the prevention or mitigation of adverse impacts, etc, across the supply chain. 3.15 Artificial Intelligence and Automation Misuse No specific regulation governs the misuse of AI, algo - rithmic trading or automated decision-making (the Act on Promotion of Research and Development and Uti - lisation of Artificial Intelligence-Related Technologies enacted in 2025 does not specify prohibited acts). Those engaging in high-frequency trading activities must generally register (FIEA). 3.16 Crypto-Assets and Digital Currency Crimes Main Offences While few criminal cases have been made public, there have been cases involving the fraudulent trans - fer or misappropriation of cryptocurrency and invest - ment fraud. Classification Cryptocurrencies are defined as a type of payment instrument under the Payment Services Act (PSA). Consequently, the FIEA, which protects investors, does not typically apply to their transactions (although it may apply to investment businesses involving cryp - tocurrencies), impacting enforcement. However, dis - cussions are underway to reclassify cryptocurrencies under the FlEA. Under the PSA, cryptocurrency exchange opera - tors must register and establish proper systems and
comply with AML requirements. Non-compliance may result in corrective orders and the revocation of their registration.
4. Pleas and Defences 4.1 White-Collar Defences
There are no special defences for white-collar offenc - es. In criminal cases, the prosecutor bears the burden of proving all elements of a crime, such as: • the identity of the offender; • fulfilment of criminal legal requirements; • illegality; and • intent. There is no general rule regarding the burden of proof in administrative litigation, which is determined on an individual law basis. Aside from simple crimes, defendants often claim that their conduct was legiti - mate and based on a legitimate business purpose. These claims may be rebutted. Lack of Intent All crimes listed in 1.1 Criminal Offences require intent. To secure the conviction of a company or an individual, the prosecutor must prove the occurrence of a criminal act and sufficient criminal intent beyond reasonable doubt. A possible defence could be lack of intent. Dual-Liability In principle, only individuals are criminally liable, but a legal person can be held criminally liable if a specific statutory provision exists. A company’s liability could be discharged or mitigated if it can show that it has exercised due care in its appointment and oversight of the individual who may be criminally liable. Compliance Programme Regarding the company’s liability in a dual-liability context, the existence of a compliance programme or in-house training could be important to prove the absence of negligence. Moreover, the fact that a com - pany implements such a programme or training may be viewed favourably by the prosecutors or courts.
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