JAPAN Law and Practice Contributed by: Raku Raku, Gen Takahashi, Yoshihiro Morisato and Taku Matsumoto, Anderson Mōri & Tomotsune
Anderson Mōri & Tomotsune Otemachi Park Building 1-1-1 Otemachi Chiyoda-ku Tokyo 100-8136 Japan
Tel: +81 3 6775 1163 Fax: +81 3 6775 2163 Email: raku.raku@amt-law.com Web: www.amt-law.com
1. Legal System and Regulatory Framework 1.1 Legal System
prefectures and cities). Local public entities have both legislative and executive powers, but not judicial pow - ers. Therefore, business entities operating in Japan may be in contact with both national level bodies and with local level legislative and executive bodies. 1.2 Regulatory Framework for FDI Certain foreign direct investment (FDI) in Japan requires the review of the Ministry of Finance and rele - vant ministries under the Foreign Exchange and Trade Act (FEFTA). Under the FEFTA, foreign investments in Japan may, in general, be freely conducted. However, investments from countries that have no treaties on inward direct investment (including some countries in Africa and Central Asia), and investments in “desig - nated businesses” and “core businesses” may require FDI notification to the Japanese government. These businesses are: • weapons, aircraft, nuclear facilities, space, and dual-use technologies; • cybersecurity, electricity, gas, telecommunications, water supply, railways, oil, and businesses related to rare-earth metals; and • heat supply, broadcasting, public transportation, biological chemicals, medical devices, security services, agriculture, forestry and fisheries, leather manufacturing, and air or maritime transportation. The category of businesses related to rare-earth met - als was added to the list in November 2021. Further,
The Japanese legal system has its origins in the civil law tradition and is mainly based on written law. Under the Constitution of Japan (1946), state power has been separated into three branches (ie, the legislative, executive and judicial branches) which are independ - ent of each other. The legislative body is the Diet. The Diet possesses the authority to appoint the Prime Minister, enact laws, approve budgets and ratify treaties. Executive power is vested in the Cabinet. The Cabinet consists of the Prime Minister and other Ministers of State, and has the power to control and supervise all administrative branches. There are more than ten Ministries under the Cabinet. The organisation and affairs of each Ministry are based on establishment law applicable to that specific Ministry. Judicial power is vested entirely in the courts. The courts consist of the Supreme Court, high courts, dis - trict courts and summary courts. The courts handle civil, criminal and administrative cases. The Japanese judicial system has a three-tier structure and appeals may, in principle, be made twice. The Supreme Court is the court of last resort for all cases. Under the local autonomy principle, administration in local areas is dealt with by local public entities (eg,
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