Shipping 2026

JAPAN Law and Practice Contributed by: Jumpei Osada, Masaaki Sasaki, Takuto Kobayashi and Hiroshi Ideyama, TMI Associates

9.2 Enforcement of the IMO 2020 Rule Limiting the Sulphur Content of Fuel Oil IMO 2020 rules relating to a limitation on the sulphur content of fuel oil have been effective in Japanese territorial waters through domestic law (the Act on Prevention of Marine Pollution and Maritime Disas - ter, Articles 19–21), according to which the sulphur in the fuel oil used on board the vessel shall be less than 0.5%, and, in the specific designated area, the corresponding rate shall be less than 0.1%. For any violation of these rules, the vessel can be detained by the port state control and a fine of less than JPY10 million can be levied, for both the company and the individual person whose act or omission has caused the violation. 9.3 Trade Sanctions Japanese jurisdiction has not incorporated any of the international trade sanctions directly, but it has implemented its own domestic sanctions in the For - eign Exchange and Foreign Trade Act. Under this Act, any exporting to, or any capital transaction for, any country, region or individual which is subject to the asset freeze is required to be permitted. Penalties for breaching such sanctions include imprisonment, a ban on exports and fines of up to three times the amount of the violation. Any legal proceeding applying a significant quantity of fines is not open to the public, although some cas - es have been seen where a ban on export has been imposed, due to the export of goods to North Korea. In response to the Russia–Ukraine war, the competent authorities announced prohibitions/restrictions on the following activities: • exporting particular goods to any entity or person designated by Ministry of Economy, Trade and Industry (eg, the Ministry of the Defence of the Russian Federation and aircraft manufacturers in the Russian Federation); • exporting particular dual-use goods, goods used for industrial infrastructure and luxury goods to the Russian Federation; • importing particular goods (eg, alcoholic bever - ages, timber and electronic machines) from the Russian Federation;

• exporting to and importing from the so-called Donetsk People’s Republic and Luhansk People’s Republic in eastern Ukraine; and • making certain non-permitted payments, loans or investments related to business conducted in the Russian Federation or by Russian-related legal entities. As an exception, the competent authorities currently also have authority to approve or permit the above prohibited or restricted transactions. 9.4 International Conflict The practice areas significantly affected by an inter - national conflict are sanctions and insurance. For example, the direct impact of the war in Ukraine has been manifested in the strengthening of sanctions under the Japanese Foreign Exchange and Foreign Trade Act (see 9.3 Trade Sanctions ). If a sanctioned person is involved in insured related parties or their business, the insurance coverage might be lost. Set - ting aside sanctions, geographical area covered by insurance would become narrower once a war or a hostile attack, such as Houthis’ attacks on the vessel, is recognised. In terms of contracts such as charterparties or ship - ping contracts, there might be some disputes in a situation where vessels have been trapped in areas that are at war or where navigation is perilous and particular obligations of the parties under the agreed charters or shipping contracts have become delayed or difficult to perform due to those events. In those circumstances, frustration under the Civil Code is sometimes alleged; however, under Japanese law, the requirement(s) for the frustration is controversial and not crystal clear (see 9.1 Force Majeure and Frustra- tion ). Generally speaking, non-foreseeability of such an event would be required. This means that since suf - ficient time has passed since the outbreak of the war in Ukraine, the mere continuation of the war is unlikely to be considered a ground for frustration of a contract.

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