JAPAN Trends and Developments Contributed by: Yuhei Sakao, Ryota Saito and Shunsuke Ebihara, Miura & Partners
Amendment of the Whistle-Blower Protection Act On 4 June 2025, a further amendment to Japan’s Whistle-Blower Protection Act (WPA) was enacted (“2025 Amendment”), following the previous amend - ment (“2020 Amendment”) which came into force on 1 June 2022. The 2025 Amendment introduces several important developments and is expected to come into force on a date to be specified by a cabinet order within 18 months of promulgation (11 June 2025). The 2025 Amendment expands and strengthens cor - porate responsibilities. The key points that companies need to focus on are: • establishing thorough whistle-blowing systems and improving their effectiveness; • expanding the scope of protected whistle-blowers; • addressing factors that deter whistle-blowing; and • strengthening measures to prevent and remedy adverse treatment of whistle-blowers. Establishing thorough whistle-blowing systems and improving their effectiveness Under the 2020 Amendment, companies with more than 301 employees must establish appropriate inter - nal systems, as set out in the guidelines issued by the Consumer Affairs Agency pursuant to Article 11 (1) and (2) of the WPA. However, there remain issues with companies that have either not fully complied with these obligations or whose whistle-blowing systems are not functioning properly. To address these issues, the 2025 Amendment introduces further measures, including: • criminal penalties for failure to appoint designated whistle-blowing officers; • enhanced oversight and investigatory powers for administrative authorities; and • a new duty to inform employees and stakeholders about internal reporting channels. Expanding the scope of protected whistle-blowers The 2025 Amendment extends protection to freelanc - ers engaged in outsourced business relationships, including those whose contractual relationship has ended within the past year. Freelancers are defined by reference to the Act on Proper Transactions Con - cerning Specified Contractors. Business operators are
now prohibited from retaliating against freelancers for whistle-blowing (eg, by terminating contracts). Addressing factors that deter whistle-blowing The 2025 Amendment prohibits companies from impeding whistle-blowing or seeking to identify whis - tle-blowers. While no criminal penalties apply, civil consequences do: any contractual provisions seek - ing to restrict whistle-blowing without just cause will be deemed void. Strengthening measures to prevent and remedy adverse treatment of whistle-blowers The 2025 Amendment introduces a shift in the burden of proof in civil litigation and any adverse treatment of a whistle-blower, such as dismissal or disciplinary action, within one year from the date the whistle-blow - er made the report or the date the business operator became aware of the report, will be presumed to have been taken on the grounds of the whistle-blowing. In addition, the 2025 Amendment introduces criminal penalties for those who dismiss or discipline employ - ees based on whistle-blowing. New provisions have been established stipulating that such individuals may be subject to direct criminal penalties without prior administrative corrective measures. The penalties include imprisonment for up to six months or a fine of up to JPY300,000 for individuals, and a fine of up to JPY30 million for corporations. Introduction of the Security Clearance System Recognising that issues affecting Japan’s national security have been rapidly expanding in the eco - nomic and technological fields, in February 2023 the Japanese government established an expert panel on economic security legislation and began discussions on policies to enhance economic security. As part of these initiatives, in May 2024, the Japanese govern - ment enacted the Act on the Protection and Utilization of Critical Economic Security Information (“CESIPA”) and introduced a security clearance system. CESIPA has been in force since 16 May 2025. Under CESIPA, the security clearance system pro - vides that, with respect to information designated by government authorities as critical economic security information, only those who have undergone the secu -
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