JAPAN Law and Practice Contributed by: Eri Hirata, Takunori Kono, Naoki Matsumoto and Ikki Kawasaki, Nishimura & Asahi
rity interests involving real estate other than cropland, as described in more detail in 5.5 Collateral Struc- tures and Guarantee Models . Investment Facilitation Act Fund The Act on Special Measures for Facilitating Invest- ment in Agricultural, Forestry and Fisheries Corpo- rations (the “Investment Facilitation Act”) is a law designed to promote the capital adequacy of busi- nesses in the agricultural, forestry and fisheries indus- tries and the food industry, and to promote the sound growth and development of those businesses, through special measures to facilitate investment. The Investment Facilitation Act states that when a stock company or an investment limited partnership (LPS) obtains the approval of the Minister of the MAFF, the stock company or LPS may invest in agricultur- al, forestry and fisheries corporations, acting as an “approved company” or an “approved partnership”. Approved companies and approved partnerships can receive special investments from the JFC. Therefore, in addition to allowing investors to diversify the risks of investment, obtaining the approval of the MAFF and receiving investments from approved companies and approved partnerships will increase the creditworthi- ness of agricultural, forestry and fisheries corpora- tions. Exceptions may also be granted under laws governed by the MAFF. 2.3 Key Authorities and Supervisory Bodies The MAFF The MAFF is the administrative organisation respon- sible for the stable supply of food, the development of the farming, forestry and fisheries industries, and the promotion of rural areas. It is the main regulator of agribusiness and has oversight over important laws such as the Cropland Act, the Act on the Promotion of Improvement of the Agricultural Management Foun- dation, and the Investment Facilitation Act. Agricultural Commission The Agricultural Commission is an administrative commission established by municipalities to carry out affairs related to cropland, such as granting per- mission for transfers of rights to cropland under the Cropland Act and submitting opinions in cases involv- ing cropland conversion. Of the 1,741 municipalities
nationwide, 1,693 municipalities have Agricultural Commissions, and a total of 1,696 Agricultural Com-
missions exist within Japan. Ministry of the Environment
The Ministry of the Environment is the administrative agency responsible for environmental conservation and maintenance. It is the regulator responsible for the environmental laws described in 3.3 Environmen- tal Requirements . 2.4 Interaction With Other Areas of Law Civil Law Transfers of rights that are not permitted under the Cropland Act are null and void under civil law; there- fore, the Cropland Act is not only a regulatory law, but also substantive law. Tax Law There are various tax exemptions for cropland, as described in 7. Taxation and Incentives in Agribusi- ness , and the definition of cropland to which the exemptions apply is the same as the definition in the Cropland Act. Environmental Laws and Regulations Environmental laws and regulations are not imposed simply because an entity engages in agribusiness or because land is classified as cropland; in that sense, agribusiness regulations and environmental laws and regulations are not specifically connected to one another.
3. Land Ownership, Use and Environmental Compliance 3.1 Rural Land Use Regulation
As described in 2.1 Agriculture-Sector Policies and Planning Instruments , in principle the Cropland Act requires that permission be obtained from the Agricul- tural Commission prior to acquiring agricultural land or having the right to use it. In order for a corporation to obtain this permission, it must be a Corporation Qualified to Own Cropland or a Corporation Qualified to Rent Cropland.
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