JAPAN Law and Practice Contributed by: Shigeyoshi Ezaki, Vassili Moussis, Yoshiharu Usuki, Takeshi Ishida and Azusa Hongo, Anderson Mori & Tomotsune
viduals are both subject to criminal liability for participation in a cartel. Firms can face a fine of up to JPY500 million for cartel violations under Article 95 (1), item 1 of the AMA while individuals can face a maximum of five years’ imprisonment or a fine of up to JPY5 million under Article 89 of the AMA. However, if the sentence is for three years or less, the court may issue a suspended sen - tence rather than an actual custodial sentence. In practice, no individual has actually served a custodial sentence for cartel violations in Japan. 5.5 History of Criminal Sanctions Please refer to 5.4 Sanctions and Penalties in Criminal Proceedings for details of criminal sanctions. No Japanese citizens have been extradited to another jurisdiction for a cartel offence, but reportedly to date, more than 40 employees involved in cartel conduct have been jailed in the United States as part of a plea bar - gain. Meanwhile, as mentioned in 1.2 Public Regula- tory/Enforcement Agencies and Penalties , the primary forms of sanctions issued by the JFTC in administrative proceedings are a cease-and- desist order and a surcharge payment order in line with Articles 7 and 7-2 of the AMA. A cease-and-desist order is issued to take “measures necessary to eliminate the violation or ensure that the violation is eliminated” in line with Article 7 of the AMA. Necessary measures vary widely according to each case. However, the JFTC often asks the targeted company to: • acknowledge that the violation has ceased; • inform consumers or users that it will perform business based on its own judgement after adopting corrective actions;
• report to the JFTC after taking corrective actions; • prepare a code of conduct concerning com - pliance with the AMA; • undertake regular training sessions for sales staff regarding compliance with the AMA; and • ensure the legal department conducts audits regularly. A cease-and-desist order is not addressed to individuals unless they are self-employed and running a business under Articles 7 and 7-2 of the AMA. Administrative fines are also not appli - cable to individuals such as officers or employ - ees of corporations. Calculation of Surcharges Where the JFTC finds that there has been an “unreasonable restraint of trade” that relates to some form of consideration, it must order the payment of a surcharge under Article 7-2 of the AMA. The amount of the surcharge is calculated by applying the surcharge calculation rate (10%) to the relevant party’s sales figures in respect of the product or service in question for the dura - tion of the violation (up to a maximum of ten years). In addition, if a wholly owned subsidiary of the relevant party has not been involved in the viola - tion but provided the product or service in ques - tion in response to instructions by the relevant party (ie, its parent company), these sales figures are also subject to the calculation for the amount of the surcharge against its parent company. Additionally, if the violator obtains financial ben - efits from an accomplice (in return for making the accomplice win the bid, for example), these ben - efits are taken into account when calculating the violator’s surcharge. If the company is “repeat offender” or took a leading role, the surcharge
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