Japan: Amendments to legislation on bribery of foreign public officials and updates to guidelines for the prevention of bribery of foreign public officials

The Criminal Bribery of Foreign Officials can be applied to foreign nationals – other than Japanese nationals, and has been enforced against foreign nationals in several cases. This Client Alert provides an overview of key amendments to the provisions on Criminal Bribery of Foreign Officials under the UCPA that took effect on 1 April 2024 and to the Foreign Bribery Guidelines issued by the METI in February 2024. We also discuss practical measures that companies may wish to take in response to these changes.

Harsher penalties for Criminal Bribery of Foreign Officials

Article 18 of the UCPA was amended to make the penalties for Criminal Bribery of Foreign Officials harsher. The following three points are important from the perspective of international companies.

• Harsher penalties for individual offenders: The maximum term of imprisonment and fine that can be imposed on an individual who commits Criminal Bribery of Foreign Officials were increased from five years and/or JPY five million yen to 10 years and/or JPY 30 million, respectively.
• Harsher penalties for corporations: A corporation is also subject to a fine where its representative, agent, employee, or other worker, offers a bribe to a foreign public official in connection with the business of the corporation. The maximum fine was increased from JPY 300 million to JPY 1 billion yen under the amended UCPA. In addition, the amended UCPA expands the definition of "employees" whose actions provide the basis for penalties to be imposed on a corporation to include individuals who do not have an employment agreement with the corporation.
• Longer statute of limitations: The amendments extend the statute of limitations for criminal prosecutions under the UCPA from five to seven years.

Amendments to the Foreign Bribery Guidelines

In February 2024, the METI amended the Foreign Bribery Guidelines for the first time in approximately three years in response to the increased and expanded scope of penalties for Criminal Bribery of Foreign Officials under the amended UCPA. The following key changes are most noteworthy for international businesses.

• Clarification of requirements for corporate penalties: The amended UCPA clarifies that a company will be punished for bribery committed by an "employee"¹ — now defined to include any person engaged in business directly or indirectly under the control or supervision of the business owner, irrespective of whether the person is employed by the business owner.
• Establishment of compliance system to prevent bribery of foreign public officials: The Foreign Bribery Guidelines emphasize the importance of a risk-based approach to establishing compliance systems to prevent bribery of foreign public officials and describe specific measures that should be taken in detail. The following are the most important points found in these amendments.

1. Risk-based Approach: The Foreign Bribery Guidelines contain more detailed descriptions of the specific methods for assessing and identifying bribery risks when adopting a risk-based approach. Further, bribery risks are now classified by country, business sector and third party involvement.
2. Formulation of internal rules: Internal rules are generally divided into internal procedures / judgment criteria and personnel systems. In relation to internal procedures / judgment criteria, the Foreign Bribery Guidelines recommend establishing rules imposing approval requirements, decision-making procedures and recording methods, etc. for "high-risk activities." The Foreign Bribery Guidelines go on to list social activities, provision of Small Facilitation Payments and engagement of third parties (e.g., agents) as activities for which rules should be established. The Guidelines then propose rules for each category of activity.
3. Organizational developments: The Foreign Bribery Guidelines provide examples of specific instances in which the establishment of internal consultation desks and reporting desks is required. In addition, the Foreign Bribery Guidelines emphasize the importance of having these desks ensure the confidentiality and anonymity of informants and implement robust non-retaliation policies to protect them. It should be noted that the laws of Japan and other jurisdictions must be complied with when external specialists (e.g., lawyers, etc.) are actively utilized.
4. Internal training: The Foreign Bribery Guidelines state that both employees and officers should receive internal training and that expatriates should be encouraged to attend training prior to working abroad. Furthermore, the Foreign Bribery Guidelines suggest that such training include how to respond to a request for a bribe and how to use consultation desks and reporting desks.
5. Audits: The Foreign Bribery Guidelines suggest that the service operations of business units/sites that are deemed to be high-risk be audited frequently and that these audits be wide-ranging.

Examples of enforcement cases

The following are examples of cases in which foreign nationals were prosecuted in Japan for Criminal Bribery of Foreign Officials.

• A Vietnamese resident of Japan engaged in the business of assisting a client of Vietnamese nationality obtain legal residency in Japan provided JPY 100,000 to a consul at the Vietnamese Consulate General in Osaka, and promised to provide another JPY 100,000 in exchange for improper issuance of the documents necessary for the submission of a marriage certificate. The defendants was fined JPY 500,000.²
• A Vietnamese resident of Japan engaged in the business of assisting a client of Vietnamese nationality obtain legal residency in Japan provided JPY 140,000 to a consul at the Vietnamese Consulate General in Osaka in exchange for improper issuance of the documents necessary for the submission of a marriage certificate. The defendant was fined JPY 500,000.³

In addition, in the following case, both the defendants and the company were punished for bribing an official of a foreign embassy in Japan.

• An officer and an employee of a company engaged in the business of inviting foreigners to Japan provided JPY 80,000 to an embassy official in exchange for the foreign embassy in Tokyo's performance of certification procedures in a timely manner. The two defendants were fined JPY 300,000 and the defendant company was fined an additional JPY 300,000.⁴

Practical responses

We suggest taking the following measures based on the Foreign Bribery Guidelines to improve compliance programs.

• Risk assessment review: Based on past enforcement cases, high risk areas for international companies include procedures for obtaining legal residency in Japan and certification procedures related to inviting foreign nationals into the country. Since the Foreign Bribery Guidelines emphasize bribery via third parties, international companies should exercise caution when engaging third parties in connection with the above procedures.
• Confirmation and reorganization of internal rules: It should be confirmed that internal anti-bribery rules and compliance programs include approval requirements, decision-making procedures and recording methods in connection with the above-mentioned high-risk activities. International companies should also confirm that their rules and programs comply with the new examples and requirements, etc. in the Foreign Bribery Guidelines and reorganize them as necessary.
• Improvement of responses to operational challenges: International companies may want to use the risk-based approach detailed in the Foreign Bribery Guidelines as an opportunity to mitigate the adverse effects of "compliance fatigue." They should review whether their internal rules and programs respond to the operational challenges they face and make improvements based on the results of these reviews.

In addition, international companies should gather accurate information about the operational challenges through audits conducted by various departments (i.e., internal audit departments, company auditors and legal and compliance departments) and through various education and training programs (i.e., on-site training and workshops).

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If you have any questions about this alert or need advice on improving your compliance programs, please feel free to contact us.

1 Article 22, Paragraph 1 of the UCPA.

2 Kobe Summary Court, June 2020.

3 Tsu Summary Court, July 2020.

4 Nagasaki Summary Court, August 2022.