JAPAN Law and Practice Contributed by: Makoto Terazaki, Taku Matsumoto, Suguru Yokoi, Naoko Takasaki and Jun Suzuki, Anderson Mori & Tomotsune
tual clause in contracts between MOD and private companies, and compliance is required both of the private company that is a party to the contract and of any subcontractor engaged by that company to
Under contracts with MOD, provisions are established requiring contractors to take appropriate measures in the event a security incident is suspected or detected, as well as obligations to report such incidents to MOD and provisions concerning contractual penalties. 5.8 Foreign Ownership, Control and Influence (FOCI) Mitigation In contracts requiring the handling of confidential information and protected information, the Ministry of Defense requires any business operator that wishes to participate in the bidding process to submit, at the pre-bid stage, certain documents including matters relating to FOCI to MOD, and to confirm that the busi - ness operator’s relationship with foreign entities and its system for safeguarding confidential information comply with MOD’s requirements. If MOD determines that such requirements are not satisfied, the business operator is required to take corrective measures, including the establishment of necessary rules and other arrangements, to put an appropriate protection system in place. 5.9 Interaction Between National Security Regulation and Other Regimes Export controls, economic sanctions, and FDI screen - ing are mechanisms designed to safeguard the secu - rity of the nation and its people from an economic perspective. Under Japanese law, these measures are positioned as part of the economic security legal framework and are considered to form part of the broader body of national security-related legisla - tion. In addition to the above, the economic security legal framework includes a variety of other individual regimes, such as support measures for ensuring the stable supply of critical products, the development of advanced technologies and important overseas busi - ness activities; screening systems to ensure the reli - ability of critical infrastructure; the patent application non-publication system (“secret patent” regime); and the security clearance system for information impor - tant to economic security. Such economic security legislation has been designed in a manner consist - ent with traditional security legislation in the defence sector. For example, certain technologies that can be diverted for military use are subject to export controls and the non-publication regime for patent applica -
handle the relevant information. 5.6 Supply Chain Security
In Japan, there are no laws or government guidelines that explicitly restrict procurement by specifying par - ticular countries or suppliers. On the other hand, not only in the defence field but also generally across gov - ernment agencies and related bodies, cybersecurity in IT procurement is promoted pursuant to the Memo - randum on Procurement Policies and Procedures for Goods and Services by the Government, etc in Rela - tion to IT Procurement (10 December 2018). Accord - ingly, when procuring information systems, equip - ment, services, etc, decisions are made based on the security standards set forth in that memorandum. In addition, in procurement contracts of MOD involv - ing information systems, a “Special Clause Concern - ing Supply Chain Risk Response in the Procurement of Information Systems” is included in the contract. This special clause addresses risks in the supply chain of information systems and their components, such as the embedding of malicious programmes, theft of information, and the incorporation of unauthorised functions. To this end, it provides for measures to manage information systems so as to prevent unin - tended modifications, the submission of information concerning the contractor and employees involved in the performance of the contract, the obligation to accept audits by the MOD, and compliance with specified security standards. 5.7 Counter-Espionage and Insider Threat Obligations Japan currently has no comprehensive law address - ing domestic espionage, terrorist activities, or similar threats, whether in the defence sector or more gen - erally. Measures to address such threats are taken pursuant to contracts with the Ministry of Defense, and where such threats materialise, responses are dictated not only by the relevant contracts but also by the Penal Code and other applicable laws.
128 DEFENCE CONTRACTS 2026
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