JAPAN Law and Practice Contributed by: Junichi Ueda, Etsuko Hara, Nobuto Shirane, Takahiro Hayase, Yutaka Shimoo and Miki Goto, Anderson Mori & Tomotsune
1. Legal System 1.1 Legal System and Judicial Order In general, Japan is a civil law jurisdiction. Most of Japan’s modern legal systems are based on continental European civil law systems. Howev - er, the end of World War II also saw the introduc - tion of some Anglo-American legal influences. Under the Constitution, judicial power is held by the courts, which are expressly guaranteed as being independent from other branches of the government. The Japanese court system can broadly be categorised into three tiers, as fol - lows. • In the first tier, district courts are the main court of first instance for most cases. How - ever, summary courts may act as the court of first instance for small civil claims and minor criminal offences. This tier also broadly includes family courts, which hear family and juvenile delinquency matters. District courts also act as the first level of appeal for some summary court matters. • In the second tier, there are eight high courts. These act as the general appellate court for district court cases, as well as for some sum - mary court matters. • In the third tier is the Supreme Court. The Supreme Court will generally only hear appeals of cases that involve specific ques - tions of law. Cases are generally determined by professional judges. However, in some serious criminal cas - es (eg, offences that carry a capital sentence), there is a limited use of a jury of laypersons at the court of first instance. As a civil law system, there is no principle of binding judicial precedent in Japan. That being said, Supreme Court deci - sions are considered to be strongly persuasive
and are usually taken into consideration where appropriate.
2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments There is no general requirement for approval of all forms of foreign investment. However, along with certain actions against invested compa - nies by investors, some foreign investments will require prior notification to the authorities (ie, the Minister of Finance and the competent minister). For foreign investments, investors will generally have to wait for 30 days while the authorities examine the investment. These foreign invest - ments include: • investments from countries with which Japan does not have existing treaties regarding inward direct investments, such as Iraq and North Korea; and • foreign investments in certain industries, such as agriculture, fishery, manufacturing, infra - structure projects, telecommunications and IT-related industries. There are several types of exemptions from the prior notification requirement, which depend on the category of investor (ie, qualified financial institutions or not), the category of industries and companies invested in (ie, listed or not), acquired ratio, etc. During these 30 days, the authorities can issue a legally binding order for the investment to be modified or suspended in particular cases, as explained in 2.2 Procedure and Sanctions in the Event of Non-Compliance . Therefore, the requirement for prior notification is, in practice, a form of approval.
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