Japan passes law aimed at China guarding economic security, technology, supply chains
- The law imposes tighter oversight of Japanese firms working in sensitive sectors or in critical infrastructure, and calls for more protection against hacking
- It comes after the United States imposed restrictions on technology imports, such as semiconductors, amid growing tension with Beijing
It will give Japan’s government the power to order companies to notify it of software updates and vet some equipment procurement in 14 industries, including energy, water supply, information technology, finance and transport.
The legislation also provides subsidies for companies to help them strengthen supply chains against disruption such as shortages of components shipped from overseas. It further establishes a system for government officials to make on-site inspections at firms.
The new security mechanism it sets out promises government money for research and development into key technologies deemed important for economic security.
It also establishes a system of secret patents kept in Japan to ensure technological breakthroughs are not used by other countries to development nuclear weapons or other military equipment.
The measures will take effect in steps starting next spring, Kyodo reported.
The law stipulates that Japan’s government will designate goods such as chips, pharmaceutical products and rare minerals as critical items to be closely monitored, and extend financial support to suppliers to help with procurement.
Under the new law, anyone who leaks undisclosed patent information is subject to imprisonment for up to two years or a maximum fine of 1 million yen (US$7,680).
Some businesses have raised concerns about the law’s ambiguities, as well as increased government interference in their activities, as details of the items to be screened under the bill will be separately set by ordinances that do not require deliberations in the Diet, Japan’s parliament.
A nonbinding resolution was added to the bill before it was passed stating that the independence of business activities shall be respected.
Additional reporting by Kyodo