JAPAN Law and Practice Contributed by: Makoto Terazaki, Taku Matsumoto, Suguru Yokoi, Naoko Takasaki and Jun Suzuki, Anderson Mori & Tomotsune
Establishment and Management of Facilities and Equipment Strict access restrictions must be imposed on secret protection facilities, and certain structural standards are required for ceilings, walls and floors; entrances and windows; alarm devices and perimeter fencing; and storage containers such as safes. Secret protec - tion facilities must also be subject to regular inspec - tions, access control, and the preparation of access logs. Information processing systems used to handle secrets are likewise subject to stringent requirements concerning personnel, physical security, communica - tions, and access control. Response in the Event of an Incident In the event of an incident, the relevant party must immediately confirm the facts and take measures to prevent the further spread of information, and must promptly report the matter to ATLA and the relevant Regional Defense Bureau. If a leak occurs, contractual penalties may apply, and in some cases such penal - ties may range from 5% to as much as 60% of the contract amount. In addition, legal penalties may be imposed on secret handlers under applicable laws and regulations. It should also be noted that the confidentiality obli - gations under contracts with the Ministry of Defense continue even after termination of the contract. 5.4 Critical National Infrastructure and Defence Assets Japan has a designation system for critical infrastruc - ture under the Act on the Promotion of Economic Security, and a designation system for critical infra - structure under the Basic Act on Cybersecurity; how - ever, under neither system are specific defence assets or capabilities subject to designation. 5.5 Cybersecurity Requirements for Defence Contractors The Ministry of Defense requires private companies that handle certain information held by the Ministry to comply with the Information Security Standards for the Procurement of Equipment and Services, in order to implement information security measures through - out the supply chain involved in defence procurement. These standards are positioned as a special contrac -
tion, and facilities and equipment for the protection of secrets. Personal Clearance is likewise granted by the ministry or agency disclosing the specially designat - ed secret, and the review takes into account matters such as involvement in espionage or terrorist activi - ties, criminal and disciplinary history, past misconduct in handling information, drug abuse and its effects, mental illness, moderation in alcohol consumption, credit standing, and other financial circumstances. 5.3 Classified Information and Official Secrets Sensitive government information in the defence field is broadly divided into the following categories: (i) specially designated secrets (as described in 5.2 Security Vetting and Clearance Requirements ); (ii) Ministry of Defense confidential information; and (iii) equipment-related confidential information. With respect to each of (i), (ii) and (iii), the details of the rules governing access to, handling of, and disclosure of such information are to be set forth in the contract with MOD. While the content of the restrictions may differ depending on the category of secret, the general framework is as follows. Establishment of an Organisational Structure For each category of secret, a general supervisor responsible for overall protection must be designat - ed, and managers, custodians and other responsible personnel must be assigned under that supervisor. In addition, employees who need to handle such secrets are to be limited to the minimum necessary, desig - nated as secret handlers, and reported to ATLA. Establishment of Internal Rules It is necessary to establish internal rules covering basic policies for the protection of secrets, the struc - ture of the secret protection organisation, designa - tion of secret handlers, receipt and storage of secret documents and items, inspections, secret protection facilities, and procedures in the event of an incident, among other matters. Training Secret handlers must receive training before actually handling secrets, as well as periodic training at least once a year, and records of such training must be maintained.
127 DEFENCE CONTRACTS 2026
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