JAPAN Law and Practice Contributed by: Makoto Terazaki, Taku Matsumoto, Suguru Yokoi, Naoko Takasaki and Jun Suzuki, Anderson Mori & Tomotsune
vision and inspection of contract performance and contractual audit, document-access and information rights. In the export-control context, METI may require reports, conduct on-site inspections, examine books and records, and question relevant persons. MOF has comparable powers in relation to financial sanctions within its jurisdiction. Where suspected conduct may constitute a criminal offence, the police and public prosecutors may conduct criminal investigations, including interviews and, with judicial authorisation where required, searches and seizures. Classified or security-sensitive information remains subject to applicable secrecy and information-security requirements during an investigation. Specially Des - ignated Secrets are subject to statutory restrictions on access, handling and disclosure, while defence procurement contracts may impose additional safe - guards for other sensitive defence information. These protections regulate the handling of the information but do not generally exempt it from a lawful investi - gation. 7.4 Dawn Raids and Unannounced Inspections MOD and ATLA do not have general statutory dawn- raid powers over private defence companies, although defence procurement contracts may provide for inspections, audits and access to relevant records. METI and the Ministry of Finance have statutory pow - ers to conduct on-site inspections under the FEFTA. Although the FEFTA does not generally require prior notice, such inspections are not typically charac - terised as “dawn raids”, and their practical conduct depends on the circumstances. By contrast, in crimi - nal investigations, the police and public prosecutors may conduct searches and seizures pursuant to a judicial warrant, and such searches may be carried out without prior notice to the entity concerned. 7.5 Legal Professional Privilege and Confidentiality Japan does not recognise a broad attorney-client privilege identical to that in some common-law juris - dictions. However, attorneys are subject to profes - sional confidentiality obligations, and civil and criminal procedure provides certain protections against com - pelled disclosure or seizure of confidential lawyer-held
information. National-security or classified-informa - tion rules do not generally extinguish these protec - tions, but separate statutory and contractual restric - tions may govern access, handling and disclosure of classified material. 7.6 Debarment and Exclusion From Future Procurement MOD and ATLA may suspend a supplier from par - ticipating in procurement (“designation suspension”) where specified grounds are met, including miscon - duct relating to procurement, bid-rigging, criminal conduct or other conduct making the supplier unsuit - able as a contracting party. The duration depends on the applicable MOD rules and seriousness of the conduct. Japan does not have a single statutory “self- cleaning” regime. Remedial measures, co-operation, recurrence-prevention programmes and other miti - gating circumstances may nevertheless affect the authority’s assessment or the duration of suspension, depending on the applicable rules. 7.7 Civil Litigation and Dispute Resolution Defence contract disputes are generally subject to ordinary civil litigation procedures, and there is no specialist court dealing exclusively with defence matters. Where criminal conduct is involved, ordinary criminal procedure applies. There is no separate litiga - tion regime specifically for defence-related classified information. However, civil procedure provides mech - anisms to restrict access to court records containing trade secrets or other confidential information and to limit the production of documents containing certain official, technical or professional secrets. In criminal proceedings, special rules may restrict the seizure of materials containing official secrets unless the rel - evant supervisory authority consents. These protec - tions operate alongside applicable secrecy legisla - tion, including the Act on the Protection of Specially Designated Secrets, and contractual confidentiality obligations. 7.8 Whistleblower Protections Japan’s Whistleblower Protection Act applies across industries, including the defence sector, where its statutory requirements are met. It protects qualify - ing workers and certain other persons against dis - missal and other detrimental treatment for protected
132 DEFENCE CONTRACTS 2026
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